Why Bangladesh, one of fastest growing economies, is seeking IMF loan

Why Bangladesh, one of fastest growing economies, is seeking IMF loan
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Updated 28 July 2022

Why Bangladesh, one of fastest growing economies, is seeking IMF loan

Why Bangladesh, one of fastest growing economies, is seeking IMF loan
  • Bangladesh’s $416 billion economy has been one of the fastest growing in the world for years
  • Experts see the government’s move to approach the IMF as an attempt to act proactively

DHAKA: Bangladesh, one of the fastest growing economies, has joined others in the South Asian region to seek a loan from the International Monetary Fund, a move experts say is aimed at creating a buffer in its reserves to prevent a crisis situation faced by other regional countries.

Bangladesh’s $416 billion economy has been one of the fastest growing in the world for years, but globally rising food and fuel prices have put a strain on its balance of payments and the current account deficit.

Bangladeshi Finance Minister A. H. M. Mustafa Kamal told the media on Wednesday that the country had applied to the IMF to start a formal negotiation to obtain loans for balance of payments and budget assistance, even though it was “no way in trouble” in its macroeconomic situation.

Kamal has not specified the amount Bangladesh was seeking and said that “how much loan will be available will depend on them.” The IMF, which on the same day announced it was ready to engage with Bangladeshi authorities on loan program design, also did not comment on the potential amount, saying it “will be part of the program design discussions.”

Bangladesh’s request to the IMF comes as nearby Sri Lanka and Pakistan have sought IMF help.

Sri Lanka is in its worst economic crisis in memory and in May officially defaulted on its debt, while Pakistan’s reserves have fallen to as low at $8.2 billion — enough only to cover about six weeks of imports. Both have also been hit by political turmoil.

While Sri Lanka and Pakistan have applied for a bailout, Bangladesh said its situation is different.

“Why bailout? Is the country in so deep a crisis that we have to take the bailout?” Principal Secretary to the Prime Minister Ahmad Kaikaus told reporters. “We have import expenditure for more than five months in our reserve.”

But the world’s second-largest garment exporter is witnessing the destabilizing impacts of the COVID-19 pandemic and Russia’s invasion of Ukraine, which are taking a toll on financial markets and foreign reserves in the South Asian region, where inflation is sharply increasing.

Experts see the government’s move to approach to the IMF as an attempt to act proactively to prevent the situation faced by other regional countries.

“The combined effects have been devastating for the whole global economy, and Bangladesh is no exception,” Dr. Ahsan H. Mansur, executive director of the Policy Research Institute in Dhaka, told Arab News.

“The government is working in consultation with the IMF to get a program. If the measures are taken in the context of IMF program, that should help and stabilize the market.”

While Bangladesh’s inflation in June stood at 7.56 percent, Zahid Husain, former lead economist at the World Bank in Dhaka, said it is rising at a nine-year high.

“The economy is under a bit of stress,” he told Arab News. “There is pressure on the reserves because of increasing external imbalances. And as a result, we are seeing some instability in foreign exchange markets, and the official foreign currency reserves have been declining.”

Bangladesh’s foreign exchange reserves are nearly $40 billion, compared with $45.5 billion a year earlier, according to central bank data from last week.

“The main reason (to seek a loan from the IMF) is to create some buffer in the foreign exchange reserves because the IMF support comes in the form of balance of payments support and maybe some budget support as well,” he said.

“Bangladesh will need to do some reforms in order to get this support, but I think the initiative to seek IMF assistance is very timely. It takes a while to get the process completed, so before we run into some severe reserve problem, if we have an IMF program, that will give a lot of confidence to the participants in the financial markets and the foreign exchange market.”


Merkel wins UN refugee agency award over welcome of Syrians

Merkel wins UN refugee agency award over welcome of Syrians
Updated 56 min 52 sec ago

Merkel wins UN refugee agency award over welcome of Syrians

Merkel wins UN refugee agency award over welcome of Syrians
  • Under Angela Merkel’s leadership, Germany welcomed over 1.2 million refugees in 2015 and 2016

GENEVA: The UN refugee agency said Tuesday it’s giving its highest award to former German Chancellor Angela Merkel for her efforts to welcome more than 1 million refugees — mostly from Syria — into Germany, despite some criticism both at home and abroad.
Matthew Saltmarsh, spokesman for the UN High Commissioner for Refugees, said Merkel had been selected as the latest recipient for the Nansen award, which is handed out annually by the Geneva-based UN agency.
“Under the then-Federal Chancellor Merkel’s leadership, Germany welcomed more than 1.2 million refugees and asylum-seekers in 2015 and 2016, which, as you will remember, was the height of the conflict in Syria, and there was deadly violence in other parts of the world,” Saltmarsh told reporters. “Dr. Merkel helped to highlight the plight of refugees globally.”
Merkel’s decision to let in so many migrants boosted the far-right Alternative for Germany party and resulted in protests by a vocal minority. She was also blasted by some governments for being too friendly to refugees, when some European Union partner states were closing borders to refugees and asylum-seekers.
The award includes a $150,000 prize. Merkel is expected to travel to Geneva next Monday to receive the award, Saltmarsh said. Four regional winners were also announced.
The UNHCR Nansen Refugee Award honors individuals, groups or organizations that go “above and beyond the call of duty” to protect refugees, other displaced and stateless people, the agency says.
More than 60 laureates have received the award since it was founded in 1954 to celebrate Fridtjof Nansen, a Norwegian scientist, explorer and diplomat who was the first commissioner for refugees in the League of Nations — the predecessor of the the United Nations
The recipient in 2021 was the Jeel Albena Association for Humanitarian Development in Yemen, for its support for displaced Yemenis.


Russia’s Federation Council ratifies annexation of four Ukrainian regions

Russia’s Federation Council ratifies annexation of four Ukrainian regions
Updated 04 October 2022

Russia’s Federation Council ratifies annexation of four Ukrainian regions

Russia’s Federation Council ratifies annexation of four Ukrainian regions
  • Russian Federation Council unanimously ratified legislation to annex Donetsk, Luhansk, Kherson and Zaporizhzhia

MOSCOW: The upper house of Russia’s parliament voted on Tuesday to approve the incorporation of four Ukrainian regions into Russia, as Moscow sets about formally annexing territory it sized from Kyiv during its seven-month conflict.
In a session on Tuesday, the Federation Council unanimously ratified legislation to annex the Donetsk, Luhansk, Kherson and Zaporizhzhia regions of Ukraine, following a similar vote in the State Duma, Russia’s lower house, yesterday.
The documents now pass back to the Kremlin for President Vladimir Putin’s final signature to complete the process of formally annexing the four regions, representing around 18 percent of Ukraine’s internationally-recognized territory.
Russia declared the annexations after holding what it called referendums in occupied areas of Ukraine. Western governments and Kyiv said the votes breached international law and were coercive and non-representative.

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Indonesia stadium disaster death toll rises to 131

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Updated 04 October 2022

Indonesia stadium disaster death toll rises to 131

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MALANG, Indonesia: The death toll from an Indonesian football riot that turned into a stampede rose by six to 131 on Tuesday, a local health official said.
The six additional victims who succumbed to their injuries “have been sent home to their families,” said Wiyanto Wijoyo, head of the health agency in Malang Regency where the tragedy took place.
The police chief in Indonesia’s East Java province where a stadium tragedy left 131 dead at the weekend apologized Tuesday for the disaster.
“As the regional police chief, I am concerned, saddened and at the same time I am sorry for the shortcomings in the security process,” Nico Afinta told a press conference in the city of Malang.


Prison chief killed in Indian Kashmir, militants claim responsibility

Prison chief killed in Indian Kashmir, militants claim responsibility
Updated 04 October 2022

Prison chief killed in Indian Kashmir, militants claim responsibility

Prison chief killed in Indian Kashmir, militants claim responsibility
  • Body of Hemant Kumar Lohia was found at his home on Monday night in the Jammu region
  • Muslim-majority Kashmir is divided between mostly Hindu India and Muslim Pakistan which both claim it in full

SRINAGAR: The chief of the prison service in Indian Kashmir has been murdered, police said on Tuesday, as the powerful interior minister visited the disputed Himalayan region that has been riven by a decades-long insurgency.
The body of Hemant Kumar Lohia, 57, the region’s director general of prisons, was found at his home on Monday night in the Jammu region, police said.
Police said a household helper was the main suspect but an Islamist militant group said it had targeted and killed Lohia.
Muslim-majority Kashmir is divided between mostly Hindu India and Muslim Pakistan which both claim it in full.
Separatist Muslim groups have fought against Indian security forces in its part of Kashmir since the late 1980s.
Senior police officer Mukesh Singh said Lohia’s throat had been cut and his body bore burns. The initial investigation suggested it was not a “terror act” but police were investigating, he said.
The People’s Anti-Fascist Front (PAFF), a militant group that emerged after India’s government reorganized its only Muslim-majority state into two federally administered territories in 2019, said it had assassinated Lohia.
Police have blamed groups like the PAFF for targeted killing but militants have not killed any security official of Lohia’s seniority in recent years.
“This is just a beginning of such high profile operations,” the PAFF said in a statement on social media, adding that the killing were a “small gift” to Home Minister Amit Shah, who arrived in Kashmir on Monday on a three-day visit.
Reuters could not immediately verify the authenticity of the PAFF statement.


North Korea fires mid-range ballistic missile that flies over Japan

North Korea fires mid-range ballistic missile that flies over Japan
Updated 04 October 2022

North Korea fires mid-range ballistic missile that flies over Japan

North Korea fires mid-range ballistic missile that flies over Japan
  • The last time North Korea fired a missile over Japan was reportedly in 2017
  • Tokyo also confirmed the launch of a suspected ballistic missile by Pyongyang

SEOUL: North Korea fired a mid-range ballistic missile Tuesday which flew over Japan, Seoul and Tokyo said, a significant escalation as Pyongyang ramps up its record-breaking weapons-testing blitz.
The last time North Korea fired a missile over Japan was reportedly in 2017, at the height of a period of “fire and fury” when Pyongyang’s leader Kim Jong Un traded insults with then-US president Donald Trump.
South Korea’s military said it had “detected one suspected medium-range ballistic missile that was launched from Mupyong-ri area of Jagang Province at around 7:23 am (22:23 GMT) today and passed over Japan in the eastern direction.”
In a statement, the Joint Chiefs of Staff said the military was “maintaining a full readiness posture and closely cooperating with the United States while strengthening surveillance and vigilance.”
Tokyo also confirmed the launch of a suspected ballistic missile by Pyongyang, activating the country’s missile alert warning system and issuing evacuation warnings.
“A ballistic missile is believed to have passed over our country and fallen in the Pacific Ocean. This is an act of violence following recent repeated launches of ballistic missiles. We strongly condemn this,” Prime Minister Fumio Kishida told reporters.
With talks long-stalled, nuclear-armed North Korea has doubled down on Kim’s military modernization plans this year, testing a string of banned weaponry, including an Intercontinental Ballistic Missile (ICBM) for the first time since 2017.
Last week, Pyongyang fired short-range ballistic missiles on four occasions, including just hours after US Vice President Kamala Harris flew out of Seoul.
The latest bout of intense weapons testing by Pyongyang comes as Seoul, Tokyo and Washington ramp up joint military drills to counter growing threats from the North.
South Korea, Japan and the United States staged anti-submarine drills Friday — the first in five years — just days after Washington and Seoul’s navies conducted large-scale exercises in waters off the peninsula.
Such drills infuriate North Korea, which sees them as rehearsals for an invasion.
Harris toured the heavily fortified Demilitarized Zone that divides the peninsula while on a trip that aimed to underscore her country’s “ironclad” commitment to South Korea’s defense against the North.
Washington has stationed about 28,500 troops in South Korea to help protect it from the North.
“If Pyongyang has fired a missile over Japan, that would represent a significant escalation over its recent provocations,” said Leif-Eric Easley, a professor at Ewha University in Seoul.
“Pyongyang is still in the middle of a provocation and testing cycle,” he said.
“The Kim regime is developing weapons such as tactical nuclear warheads and submarine-launched ballistic missiles as part of a long-term strategy to outrun South Korea in an arms race and drive wedges among US allies,” he added.
South Korean and US officials have also been warning for months that Kim was preparing to conduct another nuclear test.
The officials said they believed this could happen soon after China’s upcoming party congress on October 16.
North Korea, which is under multiple UN sanctions for its weapons programs, typically seeks to maximize the geopolitical impact of its tests with careful timing.
The isolated country has tested nuclear weapons six times since 2006, most recently in 2017.