Mega projects and banks doing money laundering19 February 2021 Editorial Desk
The foreign exchange reserve with Bangladesh Bank (BB) though many think a strength for us, is not actually a matter of happiness in any case. The current uncertainty of inbound remittance and export earnings plus another uncertainty in foreign direct investments (FDIs) hint that the reserve may not continue to swell for long. FDIs were less the last calendar year compared to the previous year.
According to a data of the central bank, Bangladesh Foreign Exchange Reserve was measured at $40.7 billion in January 2021, compared to $ 41.0 billion in the previous month. Analysts and economists have said that the reserve is growing as import is falling because demand for raw materials and capital machinery is not rising due to the prolonged pandemic.
Meanwhile, the government is mulling a plan to borrow money from the central bank's foreign exchange reserve to finance a few public sector mega projects and the BB is learnt to have already started working on it to scrutinise the possibility of lending from the $40.7 billion reserve. As per the Bangladesh Bank Order 1972, there is no scope to use the reserve in any project. However, the central bank has come up with another alternative that the government could purchase foreign currencies from the reserve directly using the Taka. But it will be too early to take the decision of lending to the government from this central reserve account.
At present, there are a lot of banks and non-banking financial institutions. Many of them were given permission to operate on political considerations. As for example, Padma Bank (previously known as Farmers Bank) was given to a former ruling party minister and Citizens Bank in to a sitting minister's mother. The question is how much these banks are contributing to the national exchequer. Rather, there are allegations that many of these banks are connected to money-laundering business.
Analysts and economists say if the government is interested, it could easily get information on who are the owners of wealth in various Swiss banks. But the government has shown no interest in this regard. Under the international law, various countries, including India, collect information about money laundering. According to a report, deposits by Bangladeshi nationals in Swiss banks in 2019 totalled Tk 5,367 crore.
Despite the emergency credit support of Tk 5,000 crore for export oriented industries by the government, workers' employment could not be ensured as 18,000 RMG workers were fired, according to Department of Inspection of Factories and Establishment data. Rather, the owners allegedly used the fund for the development of their establishments.
In the last few months, remittance inflow is increasing as the expatriates are remitting their money out of a fear that they will lose jobs or will be paid less in the coming days as the economies in the middle-eastern countries have been affected by the pandemic. Also by this time a large number of expatriates have come back to the country and many others are in queues to return.
So, because of abuse of foreign exchange earned by the sweat of poor migrants we cannot be happy at the sharp rise of remittance inflows in recent months, as there is a gloomy picture of enriching other countries by extensive laundering through big showy useless projects. This foreign exchange is used to buy loyalty for the government. The valuable foreign exchange could have been used for useful machinery for development of agriculture, education, research etc. Besides, why we cannot think of finding jobs to end the slave trade.