Written by The Banking Post
Planning Adviser Dr Wahiduddin Mahmud has said Bangladesh will no longer take foreign loans simply because they are available, stressing that external borrowing will be reserved for essential projects aligned with national priorities.
“Accepting loans from the World Bank, IMF, ADB or others just because they’re on offer is not sound economic policy,” he told reporters after Wednesday’s ECNEC meeting. “We don’t want to burden the country with debt for projects that lack merit.”
As Bangladesh moves toward graduation from Least Developed Country (LDC) status, concessional loans with low interest and long repayment periods will gradually shrink, the adviser noted. This calls for careful selection of schemes for external financing.
“If a project is not a genuine priority, we are not interested in taking a loan. But for essential initiatives, concessional finance will be considered,” he said, revealing that several large loan-backed projects are now on hold pending review.
Rising costs of mega projects are also a concern. Citing metro rail and highway schemes, he said Bangladesh is paying more per kilometre than neighbouring countries, often due to pressure from vested groups at home and abroad.
“Foreign financing doesn’t guarantee efficiency,” Dr Mahmud said. “From now on, we’ll design projects according to our priorities first — and then approach development partners for funding, not the other way around.”
