FE Report

The central bank governor, Dr Atiur Rahman, Saturday said Bangladesh is one of the four countries, which has successfully withstood the fallouts of the global economic crisis with the farmers playing a heroic role.

"Millions of our farmers have gifted us three successive bumper crops, helping the country achieve a better economic condition," he said while addressing a seminar in the capital.

The Bangladesh Bank (BB) governor was speaking at the seminar on 'Global Financial Recession: Causes, consequences and Responses' organised by Daffodil International University (DIU).

Dr Atiur said Bangladesh, Brazil, China and India have achieved positive growth in the face of the meltdown.

"Bangladesh has done extremely well amid the ongoing meltdown due to internal demand."

He said the central bank has increased agriculture credit by 21 per cent this year compared to that of the last year.

"We have also allocated money to sharecroppers. We have taken all necessary steps so that loans reach the farmers," he said.

The governor said Bangladesh has registered 20 per cent growth in terms of remittance due to high quality of migrant workers.

"We have even done better than India when it comes to export. Ten per cent growth in export is mind-boggling."

He said economic growth in Bangladesh has thus far been only mildly impacted by the ongoing slowdown, attaining 5.9 per cent real gross domestic product growth in 2008-09 following the 6.2 per cent growth in the previous fiscal year.

"But we did not join the bandwagon of dishing out money. Rather, we are helping the recession-hit people fight the crisis."

He said, "The road is still bumpy. But I think we will be able to cross the rest of the path successfully."

Bangladesh is well-placed to achieve 6 per cent plus economic growth in the current fiscal year, the central bank governor forecast.

He told the seminar BB has directed all banks to introduce risk management system and go for implementing Basel-II. The banks have also been told to increase their capital base.

The governor stressed the need for regional cooperation, sharing of information and lessons and coordinated surveillance for an effective response to the crisis as no single country can manage the crisis on its own.

Prof Mohammed Ariff, executive director of Malaysian Institute of Economic Research, said every country on the planet has been affected by the crisis.

"Even, countries which are not directly exposed to the financial crisis have felt it in terms of reduced flow of official direct assistance and remittance," he said.

The emeritus professor said many are now claiming that the recession is over and they can see light at the end of the tunnel. "But these claims cannot be taken without question."

"Many countries have achieved positive growth in second or third quarter of the current year. But this growth will not sustain. I think the crisis is not over and it will not go away so soon."

"We may have another dip before the final recovery."

Prof Ariff alleged the attempt to solve the crisis is creating more problems.

"Many countries have announced stimulus packages, which will require a considerable amount of money. So they are printing a lot of money. This is not a problem at the moment, but in the long run it will increase inflation."

"So the odds are that the crisis is going to come back," he added.

Md Sabur Khan, chairman of board of governors of DIU, Prof Dr Aminul Islam, vice chancellor and Prof Rafiqul Islam, director of Research Centre were present on the occasion.