Govt should remain alert while taking foreign loans
Saturday, 20 September 2008

Recently a MOU between the World Bank and the Government of Bangladesh was signed in which the WB would provide a credit of US$ 350 million for setting up power plants in Bangladesh. WB's senior energy specialist Alan.F.Townsend said that several projects, including the setting up of two 300 megawatt power plants, would be implemented from 2008 to 2016 with the money. But it is learnt that several conditions would be attached to the loan although it's a soft-loan for 40 years given under International Development Assistance but neither the Government nor the WB specify, to the media, the conditions under which these loans were obtained. The Government at the fag end of its tenure ought not to get into any commitments it cannot implement but would have to pass on to the next government. The next government, hopefully an elected one, may have other imperatives and concerns and may not see eye to eye with what this government has done but since a deal has been got into, the next government would either have to scrap it at considerable cost or implement that deal without much commitment behind it. In either case the Nation and its people suffer. This suffering is particularly acute as far as power is concerned as we have been witnessing over the last one decade; one government signs a deal and before it can be implemented the next government cancels it leaving the Nation more or less in darkness. The second and the more important point is that every time a government takes out a loan or a credit it sinks every citizen further into the morass of returning that loan with interest. Already a full 12% of our entire revenue budget is used up in servicing these loans and we simply cannot afford to increase such burdens because every penny we give out in loan servicing is a penny taken away from bettering the lives and living of a severely poverty stricken populace. The burden of servicing these loans falls directly on to the citizens because the government increases both direct and indirect taxations in order to garner sufficient moneys to return the loans as well as reduces spending on development, poverty alleviation, education, health and other important sectors. The third and the most important point is that although citizens have to directly and indirectly bear burdens on all governmental loans, there does not exist any mechanism for taking citizens consents or even opinions before taking loans. When Parliament was  functioning these issues of loans are rarely if ever brought up for thread-bare discussions and now that we don't have a parliament and the government is run by emergency fiats, the citizens are even less informed of how their national financial affairs are proceeding.

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