Editorial
Burden of Debts
The per capita debt obligation stood at U$ 124.2 in 1995-96 fiscal reflecting an increase by nineteen times from the bench-mark year 1973-74. It is creeping close to the per capita income estimated at U$ 240 or thereabouts. We are in a debt-trap that threatens to mortgage the country's economic future. Read this with another frustrating scenario: the increase we have achieved in the GDP growth rate, or in food output, to be specific, would have meant so much for us if the growth in population were contained to below 2 per cent per annum.
The national indebtedness figure released by the Economic Relations Division (ERD) of the Ministry of Finance does not present a complete picture about this. For, as the ERD has very candidly pointed out, the total disbursement figure did not include credits from the IMF and some special borrowings by the Ministry of Food and Bangladesh Shipping Corporation. Moreover, assistance for defence, NGOs and some other private sector organisations has not been taken into account in estimating the obligations. In otherwords, the debt-burden could be larger than U$124.2 per ca-pita.
The drastic decline in the grants component of foreign aid package - from 90.5 per cent in 1971-72 to 46.8 per cent in 1995-96 - has brought about the manifold increase in debt-burden. There is going to be a further shrinkage in the inflow of grants given the fact that aid-givers are having to respond to competing requests for assistance from a large number of candidates in the new era of detente. So it will be more of project aid with strings attached that we shall have to make do with as the years go by.
The noose tightens around us more and more not merely as we contract fresh loans but also because the debt service obligation keeps increasing owing to the expiry of grace periods and exchange rate fluctuations. As a way out of this vicious circle we suggest that the wasteful public sector which accounts for much of this indebtedness be thoroughly streamlined. Disinvestment is the key word. Downsizing will be complementary. Rather than crying pitifully for having the debts written off, we need to look inwards and ensure efficient management of our enterprises.
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