IMF loan conditions

The government's non-fulfilment of reform conditions for receiving development assistance and the resulting unhappiness of the donor agencies is an annual ritual in Bangladesh, but the current differences between the IMF and the government lead us to a few observations.

The first point we would like to raise is that it is high time that revenue collection is enhanced to the level that Bangladesh is not so dependent on development assistance to fund its projects. No one likes to have pressure exerted on oneself or to be told what to do, but this is an unavoidable corollary of dependence on aid from others. It is true that our dependence on development assistance is far lower than it once was, but as the present case indicates, we are still too dependent on aid to be able to ignore the chiding that comes along with assistance.

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The second point is that the reform conditions alluded to by the IMF are conditions that the government has agreed to and which are in fact very necessary for the nation's advancement. It should not require the IMF hinting that it will withhold loan disbursement for the government to move quicker to enact reforms. The government's position that the recent floods have held up the reform process is well taken, but there can be little doubt that, flood or no flood, the reforms are moving much too slowly.

In recent months the government has had pressure exerted upon it from a number of external sources. This pressure is, of course, unwelcome for a sovereign nation, and the government should not make accommodating other countries and international agencies the corner-stone of its domestic policy. Less reliance on development assistance and greater fidelity to the reform process for its own sake would greatly diminish the external pressure under which the government continually finds itself.