Idiotic Sinking state of Bangladesh

karn

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No when you increase minimum wage it creates inflation.
No . When you increase minimum wage it eliminates jobs that are only viable below said minimum wage . Businesses either go for automation or just close down or outsource to places where the minimum wage isn't there . Inflation is always a monetary phenomenon .
Watch this related to inflation ..

Watch this for effects of minimum wage
 
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Physx32

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Time To Reform: Lack Of Transparency May Worsen Economic Situation In Bangladesh

byPratim Ranjan Bose-Aug 12, 2022 02:54 PM +05:30 IST
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No government is perfect and every economy has its share of skeletons in the cupboard. However, for a democratic nation, Bangladesh made it a norm to remain opaque in its economic affairs. The lack of transparency is now proving the biggest stumbling block for the country to avert a crisis and return to the growth path.

The trouble starts with the basic economic data. Even a simple question like devaluation has no easy answer. If you take Dhaka’s official version based on interbank exchange, Taka depreciated by 10 per cent from 86.27 to 94.95 between 4 May and 10 August.

This is the rate at which the government imports essentials like energy, fertiliser etc. Naturally, it has a direct and indirect bearing on key macroeconomic fundamentals involving the fiscal status of the country, inflation, adequacy of the foreign reserve, and growth potential.

However, the official rate is a figment of imagination, as is exposed by the recent crisis and that raises questions about the authenticity of many tall claims that Dhaka has been making in recent times.

Between 21 July and 10 August, the official value of the Taka depreciated by 1.06 per cent, but the kerb (unofficial) rates were down by 14 per cent to Taka 120. The gap between official and unofficial rates widened from 12 per cent to 26 per cent.

Lying between official and unofficial is the rate at which banks open LCs (letter of credit) for private importers. Since 21 July, the LC rate slid by 6.7 per cent from Taka 103 to Taka 110.

However, the LC rate is not representative, as Dhaka imposed heavy import restrictions for nearly a month. Also, the central bank is making every effort to keep the optics intact. Treasury chiefs of at least six banks have been sacked over the last week allegedly for high rates.

Lack of transparency

Dhaka blames hoarding for rapid slide in kerb rates. But even an undergraduate student of economics will understand that the key problem lies in the lack of transparency. Going beyond the scope of forex rates, that’s exactly the problem of the Bangladeshi economy, and it’s not new.

If the exact value of the import in local currency is not reflected in the government books, then who is mitigating the gap? Apparently, the government resorted to this tactic to make its accounts look more presentable. But what happened to the monetary and financial system?

Part of the answer is now known. The same government that has been boasting of ‘adequate forex reserve’ and has reported GDP numbers well above the World Bank projections even in the Covid year, is now running from pillar to post for bailout packages.

According to newspaper reports, Dhaka has so far sought support worth $7.5 billion - $4.5 billion from IMF and $1 billion each from World Bank, Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) – equivalent to a month’s import bill.

The desperation of the Sheikh Hasina government can be understood from the recent decisions to hike farm-end Urea fertiliser prices by 25 per cent and the shock increase of auto-fuel prices by over 50 per cent.

The revision was due as auto-fuel prices in Bangladesh were among the lowest in Asia. However, the entire episode lacked transparency.
Global crude prices surpassed the five-year high in October 2021 and breached the 10-year high in March this year. Accordingly, pump prices of petrol and diesel soared everywhere. But Dhaka was sitting tight, happily reporting the lowest inflation numbers in the subcontinent.

Now that crude prices plunged by 30 per cent in the last two months, amidst fears of global recession and inflation, numbers are coming down in major economies. At such a time, the Sheikh Hasina government increased auto-fuel prices on 6 August.

There is no way to know how the wild devaluation of Taka, stiff import restrictions and sharp rise in fuel and fertiliser prices are impacting the economy. The growth numbers are published once a year and June inflation is pegged at 7.5 per cent, which no one trusts.

Unofficially everyone can see the impact. Prices are soaring in local markets, and although there has not been much public protest to date, as the principal Opposition Bangladesh Nationalist Party (BNP) became too weak, the people are said to be fuming.

Situation may worsen

Bangladesh is far from safe and the situation may worsen in no time. If it’s not reflected in official data, the fault lies elsewhere. The stock market was on a tailspin in July. The fall was broken by imposing artificial barriers (floor price).


Such shortcuts will not take the economy too far. Over and above the recessionary trends in Western markets, rising costs and artificially high Taka are fast eroding the cost competitiveness of the export-oriented readymade garments industry.

The sector is notorious for arm-twisting. During the first phase of Covid lockdown in 2020, they sent workers packing to extract cash handouts from the government. Any such trick may create a serious problem this time.

Bailout packages might help Bangladesh to survive the short-term problems. But thorough reform is mandatory to avoid snowballing of the crisis.
Dhaka piled up huge debt over the last decade.

According to ‘Prothom Alo’, loan agreements worth $36 billion were signed with China ($17.54 billion), Russia ($11.38 billion) and India ($7.36 billion). Indian loans are the cheapest.

This is over and above huge funding by multilateral agencies in infrastructure projects. Commercial agreements - like $1.6 billion easy Indian finance in 1,320 MW ultra-super-critical Maitree Super Thermal Power Project in Bangladesh – are extra.

A good part of the loans is directed to prestige (read white-elephant) projects like the upcoming $12 billion Rooppur nuclear power plant. Built under Russian support, the generation cost of the plant is currently estimated to be 70 per cent higher than comparable Indian projects.

China is funding 12 exorbitantly costly infrastructure projects. Some of them, like the underwater Karnaphuli tunnel, have already witnessed 20 per cent cost escalation, which is a norm in Bangladesh.

To cut the story short, Bangladesh is staring at an exponential jump in its loan repayment obligations in the next two to three years.

Between the fiscal year 2016-17 (FY17) and FY22, the country’s annual repayment (against past long-and-medium term loans) increased by 80 per cent to $2 billion. Exports increased by 30 per cent, indicating structural stress on the system. According to World Bank, the external debt stock to export ratio was 174 in 2020.

On average, lenders now disburse $4-5 billion in loans a year. With the grace period of new loans coming to end, repayment is now set to move up sharply.

‘Prothom Alo’ (1 August 2022) estimated repayment obligation for FY23 at $2.78 billion (39 per cent year-on-year), $3.28 billion in FY24 (18 per cent), $4.02 billion in FY25 (22.5 per cent). Assuming Bangladesh doesn’t take any fresh loans, the repayment obligations will peak at $5.15 billion in FY30.

A potential drag force

During the last decade, Bangladesh and CLMV (Cambodia, Laos, Myanmar, and Vietnam) region together were considered a pull factor for the regional economy. The dream now stands shattered. Myanmar exhausted its forex reserve. Laos is on the verge of collapse, and Bangladesh is facing hiccups.


It's not a happy time for the regional economy. Bangladesh is crucial for India due to its high degree of exposure (total assistance including sovereign loans, commercial loans and aids will be near $10 billion), huge exports ($14 billion in 2021), and geographic location.

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On top of gdp growth % they fudged inflation data, exchange rates and even fuckin' forex reserves! What else could go wrong? Now watch them struggle for loans and beg like pakroaches because nobody trusts their figures.

When crude is falling they are increasing fuel prices; this is what peak stupidity looks like ......

Now wait for the fiscal to end. BBS' 69th gen inter-galactic economists and statisticians will explain how exactly they grew by 9% yoy even amid a forex crisis, hehe. This is the economic tiger that Indian left media used to simp for; sometimes I feel pity on these MSM chaps.
This a sanghi hitjob against the fastest growing and most adbhanced economy of south Asia. bD doesn't need any loans, just wait till next year when bd will have $1 trillion gdp.
 

Blademaster

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Yeah right. As long as she keeps hosting leaders in her party that wants to kill Hindus, she can very well fuck off.
 

Indx TechStyle

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Bangabandhus now have a new Abbu- Indonesia.

Also they think they can manufacture rail coaches, lol.

View attachment 166785

This is the Indonesian coach factory they keep harping about.


This is MCF, Raebareli- far more modern & automated.


"But but muh daddy Indonesia has far better facilities" :rofl: :rofl:
"Making rail coaches is not high tech... just cutting and welding sheet steel per plan."
Even containers for goods have much more things to do than welding, leave alone passenger wagons and metro trains you idiot. Even building a simple shipping container is no less than rocket science for 90% countries in world.

Bilal seems to be brutally uneducated and incompetent about engineering, economics and geopolitics and bad part is that he's too nationalist, boastful and confident about his incompetency. He will regret reading his posts when he grows older (or he always remains incompetent).

I remember old days of DFI and Indian trolls. Pakistani trolls today are at that stage and Bangladeshis are pro max in that bakchodi.
 

Dr_Deep

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India Vs Bangladesh On Economics — How Frequent Comparisons In The Media Lack Context

Even the Bhajpao Times have started calling out on BD's fake economic Success...Think they will beg our Arch Enemy China to come and build bridges and highways...wont control the Rabid Islamists as they promised instead be silent on the killings of Bengali Hindus in BD...thing putting Bhajpao in a difficult political position domestically on how they can be the Hindu Samrat Party while actively with friends with a nation where such things happen...
Now that they are broke on Sri Lanka like situation..mujhe lagta hai..South Block wale kadi kothi suna rahe honge..

Also this article explains ..why Bangladesh textile exports is profitable that India's. Its due to GSP benefit and LDC catergory..now that both are about to get expired...and BD has to complete with India on same level playing field..Ab dekhte hai kisme hai kitna dum..
We have the raw matrials, machinery etc everything to create a ecosystem for textile industry. This along with PLI Scheme..will eat a lot of market share from BD manufacturers..if global brands start giving orders to Indian companies..
 
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karn

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Looks like bilol was right.
Literally a RAA agent.
 

Butter Chicken

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