Ministry matters

Kamal’s interview: FT publishes a reply from the Ministry of Finance

AHM Mostafa Kamal. Photo: collected.

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AHM Mostafa Kamal. Photo: collected.

The Financial Times published a rejoinder from Bangladesh’s Finance Minister AHM Mustafa Kamal on Thursday in relation to an interview published by the London-based daily on August 9.

The newspaper published the full text of the reply sent by Gazi Towhidul Islam, public relations officer of the Ministry of Finance.

The rejoinder, as published in the FT, said the ministry believed the report’s title “Bangladesh finance minister warns against China’s Belt and Road loans” did not properly reflect the real position of the minister.

He said the FT report mentioned Sri Lanka, which defaulted on its sovereign debt in May and is in negotiations with the IMF.

The report also said the BIS loans had “exacerbated a serious economic crisis” in that country, but it did not say that the Chinese loans had led to the default; rather, the problem stemmed from sovereign debt, according to the reply.

Mustafa Kamal in the interview clarified that any project in any country could be funded if proven financially viable through rigorous study, the FT’s rejoinder said.

The Minister emphasized that Bangladesh would never accept funding from any authority if it was not feasible. He did not in any way warn against Chinese loans, the rejoinder states.

To be clear, Bangladesh owes about $4 billion to China – an insignificant amount compared to Bangladesh’s gross domestic product of $416 billion and its external debt of $51 billion (2021 figures), mentions the replica.

The FT report said “[Bangladesh] foreign exchange reserves have also fallen to less than $40 billion from more than $45 billion a year ago”.

The reply says it should have been clarified that reserves were only $32.7 billion in June 2019. By August 2021, they had increased by 47% to $48.1 billion, the highest ever recorded in the history of Bangladesh.

Today, reserves stand at $40 billion, enough for more than five months of import payments and beyond the risk threshold prescribed by the IMF, the reply adds.