Donors' conditions cause surge in inflation

Asking the government for reducing dependency on donors' conditional aid, speakers at a roundtable in Dhaka made an observation that the conditioned assistance leads to more poverty and discrimination in society.
The roundtable on World Bank and IMF in Bangladesh: Declining Foreign Aid, Rising Policy Dependence was organised by the weekly Ekota at its office.
The speakers came down heavily on the present government for accepting donors' conditional aid like its predecessor political government.
They also thought that the conditional aid contributed to the surge in inflation over the year.
Economist Abu Ahmed said the inflation rate was 4.5percent in 2005, which now reached over 7percent because of following the International Monetary Fund (IMF) and World Bank prescriptions.
He also felt it urgent to halt the IMF intervention in the country's monetary policy.
Ahmed also criticised the central bank's recent monetary policy and said although governor of the bank claimed the policy as cautious, but there is no term in economy like cautious monetary policy.
"A monetary policy could either be tightening or relaxed. There is no option between these criteria," he said.
Abu Ahmed, also a professor of Economics at the Dhaka University, suggested that Bangladesh should learn something from India, which sustained strong economic growth without following any diktat on monetary policy from the two multilateral lending agencies.
Prof M M Akash of Dhaka University presented a keynote paper on IMF and World's Bank activities in Bangladesh.
In his presentation, he said World Bank's Poverty Reduction Strategy Paper (PRSP) and IMF's Poverty Reduction and Growth Facility (PRGF) are not viable for poverty reduction in Bangladesh.
These two donors imposed such strategies to make the country an open market of the developed nations, he said, adding that poverty reduction ratio is yet to be significant after following their prescriptions.
Quoting from an article written by the present finance adviser in 2003, he said the adviser himself admitted that dependency on donors' aid had reduced significantly after 1990s.
When the adviser was cautious about aid inflow, how he now allows huge conditions for getting donors' aid, he questioned.
Columnist Syed Abul Maksud was also present at the discussion.