Bangladesh faces mounting fiscal pressures as escalating debt servicing costs drain resources from development priorities, leaving minimal funding for poverty reduction efforts. Economist Selim Jahan, previously with UNDP's Human Development Report Office, warns that rising external debt obligations and interest payments threaten the country's economic stability, particularly after losing access to concessional financing following its graduation from least developed country status.
The taka's depreciation from 84 to over 123 per dollar within four years has compounded borrowing expenses, requiring substantially more local currency to service foreign obligations. Jahan advocates comprehensive reforms, including strengthening the tax-to-GDP ratio through direct taxation, diversifying exports, rationalizing imports, and improving remittance channels to bolster foreign reserves. He recommends postponing non-essential infrastructure projects while maintaining investments in the education and healthcare sectors.
The economist emphasizes that authorities must halt large prestige projects lacking clear economic returns and establish a coherent strategy for long-term debt sustainability.
The taka's depreciation from 84 to over 123 per dollar within four years has compounded borrowing expenses, requiring substantially more local currency to service foreign obligations. Jahan advocates comprehensive reforms, including strengthening the tax-to-GDP ratio through direct taxation, diversifying exports, rationalizing imports, and improving remittance channels to bolster foreign reserves. He recommends postponing non-essential infrastructure projects while maintaining investments in the education and healthcare sectors.
The economist emphasizes that authorities must halt large prestige projects lacking clear economic returns and establish a coherent strategy for long-term debt sustainability.
