Covid Aid to India, Financial Aid to SL: Bangladesh shows economic boom
From providing India with Covid relief supplies to providing financial aid to Sri Lanka in this time of crisis, Bangladesh has started to show its economic boom and use it to forge closer ties with its neighbors.
Earlier this week, Bangladesh agreed to extend a $ 200 million currency swap facility to Sri Lanka. This will help boost their economy while allowing Colombo to weather the massive debt crisis it is currently facing, diplomatic sources told ThePrint.
Sri Lanka’s external debt situation is at a critical juncture, leading to massive balance of payments problems. Sri Lanka is said to have an external debt of $ 3.7 billion maturing this year, hence this cooperation from Bangladesh should be a lifeline for their economy.
According to sources, the deal was finalized during Sri Lankan Prime Minister Mahinda Rajapaksa’s visit to Bangladesh in March this year.
A currency swap is a transaction in which two parties exchange an equivalent amount of money with each other, but in different currencies. It helps reduce the cost of borrowing in a foreign currency at favorable rates.
The Sri Lankan economy has been in great difficulty since the Easter attacks of 2019 and the subsequent outbreak of the coronavirus pandemic which wreaked havoc on its tourism industry and other sectors.
Bangladesh is also among 40 countries that have twice sent Covid relief to India as the country battles the second wave.
On May 18, Dhaka handed over 2,672 boxes of various antiviral drugs and Covid protective gear to India. Before that, Dhaka had sent 10,000 vials of Remdesivir to India on May 6.
Bangladesh, which is expected to record a GDP growth rate of 5.8 percent this fiscal year, has even gone under the United States’ radar because of its strategic location in the Indo-Pacific region.
In April of this year, the US Chamber of Commerce launched the US-Bangladesh Business Council which examines the investment potential of US investors in this country and also improves bilateral trade.
The Bangladesh government led by Prime Minister Sheikh Hasina has also received praise from its arch rival Pakistan for its growing economic prowess.
âEvery government in Pakistan, including the current one, has gone around the world with a begging bowlâ¦ It was unthinkable, 20 years ago, that Bangladesh’s GDP per capita in 2020 would be almost double that of Pakistan. Bangladesh could be a powerhouse in 2030 if it grows at the same rate as in the past. If Pakistan continues its poor performance, it is possible that we will seek help from Bangladesh in 2030, âAbid Hasan, former advisor to the World Bank for the Pakistan Program, said in an opinion piece in one of the major dailies. nationals of Pakistan.
The new “Royal Bengal Tiger of Asia”
According to Prabir De, professor at the Research and Information System for Developing Countries (RIS), the main reason for Bangladesh’s economic growth is that it continues to benefit from the Generalized Preferences Program (GSP) of the European Union and other trade preferences.
“It is through this continued support through the EU’s GSP scheme that Dhaka has been able to derive considerable income from strategic exports. In addition, Bangladesh also receives a good amount of remittances,” said Of.
Bangladesh Securities and Exchange Commission commissioner Mizanur Rahman told ThePrint that Bangladesh’s foreign exchange reserves reached $ 45 billion in 2021, up from around $ 9 billion in 2010, while remittances reached $ 200 billion. billions of dollars.
“Bangladesh believes in behaving responsibly with its neighbors and reaching out to those who need their help. Dhaka now envisions deeper integration with its neighbors without harming others,” said Rahman.
De added: “Bangladesh is the new Royal Bengal Tiger of Asia. They speak one language in all areas and have well structured governance.”
He also said that Bangladesh is now trading with major ASEAN countries, while also seeking to make trade deals with some of the ASEAN countries and join connectivity projects.
[The article was originally published in Indian news portal The Print on May 28]