Bangladesh learns lesson from Sri Lanka, Djibouti over China borrowings: report
ECONOMYNEXT – Bangladesh has learnt from the experience of Sri Lanka and Djibouti on borrowing from China, and it will not borrow what cannot be repaid, advisor to the Bangladeshi Prime Minister Gowher Rizvi has said in a media interview.
“We do not want to create a situation where we have borrowed more than we can repay,” Rizvi was quoted as saying in an interview with India’s Indian Express newspaper.
“We have learnt from Sri Lanka, we have learnt from Djibouti. So we keep a very balanced, calibrated investment policy.”
He said the Bangladesh calls tenders for projects.
Rizvi said Bangladesh cannot build all the required infrastructure on its own. However any relationship with China was not at the expense of India, he said.
Sri Lanka had leased Hambantota Port built with Chinese loans to a Chinese firm. Sri Lanka has suffered several currency crises over the past 7 years is in the midst of a another balance of payments crisis with its credit downgraded to ‘CCC’.
Maldives which has also borrowed from China for infrastructure has been downgraded, though the Maldives Monetary Authority has given greater monetary stability.
Bangladesh also has better central bank which has given the country a long period of monetary stability so far without triggering currency crises from monetary stimulus, analysts say.The State Bank of Bangladeshi has avoided a currency crisis for almost a decade.
“Like India, we also have a huge balance of trade deficit with China,” Rizvi sadi.
“But it is in the nature of trade.”
Bangladesh also has a large trade deficit with India.
Imports from the cheapest sources such as India and China, allows citizens to use their foreign earnings to maximum effect and improve their living standards quickly. (Colombo/Mar28/2021)