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Saturday, April 11, 2009

Dhaka preparing its claim on G-20 stimulus package

The Financial Express

The government will seek higher financial assistance from major donors, including the International Monetary Fund (IMF), to ward off any adverse impact of the global recession on the country's economy, finance ministry officials said Friday.

"The government is working out details on seeking funds from the stimulus package offered by G-20 in their summit. It will also appeal for budgetary support from the major multilateral donors," economic relations division (ERD) secretary M Musharraf Hossain Bhuiyan told the FE.

"Since the G-20 nations have recently offered a $1.1 trillion fund for the developing countries to face the recession, we could ask for some financial assistance from the stimulus package, he said.

The G-20 nations in the London Summit on April 2 has offered one trillion dollars financial package to contain the impact of economic recession, worst since the great depression of the 1930s.

An IMF mission is expected to arrive in Bangladesh soon to find out the country's need for financial support to face the global shocks, Mr. Bhuiyan said.

"As the next financial year will be very crucial for Bangladesh, the additional financial assistance from the developed nations and multilateral donors is imperative," said the secretary.

Due to the global financial plunge, Bangladesh's steady growth trend, over six per cent per year, has also come under threat this year.

Another finance ministry official said they were also working to seek more budgetary support from the World Bank and the Asian Development Bank (ADB) for the FY2010 in a bid to weather the economic odds.

The government expects to get some US$400 million budgetary support from the World Bank and the ADB this financial year to offset the budget deficit, which was projected at 4.9 per cent of the total gross domestic product (GDP) of the country.

"The World Bank has assured us of its assistance to Bangladesh to stave off any effects of the global recession. But it will review--how the country is responding to the global crisis," the ERD secretary said.

Besides, the ADB had assured of providing budgetary support in the next financial year, he said adding, "it is not possible to determine at this moment the quantum of possible budgetary support we will be getting."

"But I can say that the volume will be higher than that of the ongoing financial year," he added.

A finance ministry official requesting anonymity said as the country has started to be affected by the global economic meltdown, it needs additional financial support from the donors to sustain its export sector and infrastructure development.



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