A little relief from debt burden
Japan recently relieved Bangladesh of repaying a debt of Tk 8,395 crore ($1.46 billion). The Bangladesh government has been exempted from the repayment of principals and interests for the loan agreements signed with Japan Bank for International Cooperation (JBIC) before 1988. Japan has proved itself a great friend of Bangladesh in need. The Japanese ambassador said:
"The people and the government of Bangladesh have made great efforts towards social and economic development of the country. There are a number of challenging issues for furthering good governance, law and order, public sector reforms, economic growth and poverty reduction, and social development. The Government of Japan has been observing and respecting the efforts made by Bangladesh"
However to have an idea of how much Bangladesh is indebted to other countries, here is an analysis of its 2003-2004 Budget:
The total outlay of the budget is TK 51980 crore where the total revenue expenditure is Tk. 28969 crore (1 US$ = Tk. 59 average). The main source of government earnings is taxes. In FY 2003-04 from taxes government has proposed to earn Tk.27750 crore of which indirect taxes constitute 22478 crore which is 81 per cent of total National revenue Board earnings, while 5273 crore taka as direct taxes. In FY 2003-04 total revenue receipts fixed at 36171 crore Tk, but government total expenditure fixed at 51980 crore taka. For filling the gap foreign grants, loan and borrowing from domestic banking system have been liberally proposed. This is not therefore surprising that interest payment accounts to 22% of the total revenue expenditure (Taka 6437 crore). The amount proposed for foreign loan and grants comes to 10301 crore taka. According to the Economic Association of Bangladesh and other studies 75 per cent of foreign loans and grants have been looted and used for private accumulation by the local and foreign vested interest groups during the last three decades.
There are not many friends as Japan who would waive loans unconditionally. But each day every Bangladeshi wake up with their additional burden of the national debt.