New Delhi, January 3 (IANS). With China becoming a partner in the Belt and Road Initiative (BRI), neighboring country Bangladesh has fallen into the same debt trap that Sri Lanka was once in. This information was given in a report.
According to the report of Sri Lankan news outlet Asian News Post, Bangladesh is going on the same path on which Sri Lanka once went.
Sri Lanka was headed towards default in 2022 due to excessive borrowing from China, which has created an atmosphere of chaos there.
The report said that Bangladesh is trapped in a debt trap. This has been confirmed by M. Abdur Raman Khan, Chairman of the National Board of Revenue of Bangladesh.
During this period, loan repayment has become the second largest budget expenditure of Bangladesh.
Bangladesh’s debt-to-GDP ratio has increased to more than 39 percent, from around 34 percent in fiscal year 2017-18.
According to the report, in a recent seminar, leading economist Mustafizur Rahman said that agriculture and education used to be the second largest expenditure in Bangladesh’s revenue budget after salaries and pensions, but that is no longer the case.
Furthermore, Finance Secretary M. Khairuzzaman Mojumdar has said that Bangladesh’s national budget for the current year, for the first time in the country’s history, is lower than last year.
“It’s as if an already thin person has been asked to lose even more weight,” he said sharply, according to the report.
According to the World Bank’s latest ‘International Debt Report 2025’, Bangladesh’s external debt has increased by 42 percent in the last five years. Total foreign borrowing is expected to reach approximately $105 billion by the end of 2024, up from $26 billion in 2010.
“External debt now accounts for 192 percent of the country’s export earnings, and debt service payments have grown to 16 percent of exports; indicating increasing pressure to service debt,” the report said.
Under the leadership of Mohammad Yunus, chief advisor to the interim government, Bangladesh has further strengthened its relations with China.
“However, Beijing has not placed all its bets in one place. Knowing that the interim government is a temporary arrangement, the Chinese are in constant touch with other power centers strengthening their hold in Bangladesh, including Jamaat-e-Islami; a hardline pro-Pakistan organization that has reportedly never criticized Beijing’s treatment of the Uyghur minority,” the report said.
–IANS
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