by Hello, welcome to Top News World, now whatever changes were to happen in Bangladesh have happened. Sheikh Hasina has left power and now Mohammad Yunus is running the interim government of Bangladesh.
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Now the question here is that what will happen to the loan that Bangladesh has, primarily we are Indians. Our main concern is what will happen to the loan that India has to Bangladesh. Will Bangladesh repay our loan?
We have already seen that the Indian companies that used to supply electricity to Bangladesh, there is a little doubt about this now that whether Bangladesh will continue to purchase electricity from us regularly or not.
So already, for Adani’s power plant, the government has opened an option that if tomorrow Bangladesh says cancel the contract, then you can start selling your electricity in India itself.
So on one hand, when we are doing all this, then obviously many articles are also being posted about the fact that the political terminal of Bangladesh can put at risk the four to five billion dollars given by India and apart from that.
We had given a lot of money worth billions for free to Bangladesh to generate goodwill so that people here develop positive sentiments towards India and again, some of you will say that what was the need to do this, where is this useful, it has been very successful in many countries as well.
You all should see that people of Afghanistan will find a lot of love for India, if you look at the cricket fans of Afghanistan, they never think negatively about the Indian cricket team, on the contrary, many times you will find people of Afghanistan cheering for India in India-Pakistan matches and a big reason behind this is the way those people, Apricia, created a lot of dams in Afghanistan and helped them, see in Bangladesh, the situation is a little different here.
The people of Bangladesh are not that great and thankful for India’s grants, now the question here is that the billions of dollars of loans, the grants that were given, have they come at risk, let’s discuss this topic a little in depth, now if we take a very If we look at the numbers in a simple way, there is a little bit of concern.
If we look at India’s foreign exchange reserves, you will see a very comfortable number. 600.74 billion US dollars is a huge amount. Tomorrow, whatever payment of debt etc. has to be made, we can easily do it. There will be no problem.
And looking at this amount, foreign investors also feel very comfortable in investing in India. Now if you go to find Bangladesh in this list, you will have to search very low here.
Now Pakistan, well, you will find it very very low, at the 80th spot, because the foreign exchange reserves of Pakistan are 8.8 billion dollars, but look at Bangladesh, it is not a very good number.
The foreign exchange reserves of Bangladesh keep fluctuating around 25 to 27 billion dollars. Recently, I would like to tell you that it is not that all the 27 billion dollars belong to Bangladesh only.
Out of this, two-three billion dollars are also borrowed from somewhere and kept in the foreign exchange reserves of their country so that their currency remains very strong. So that we don’t get too lost, Bangladesh shows the IMF loan of 1.15 billion dollars in its foreign exchange reserves because the money has come in dollars.
Now this is not income, this is also a loan from the IMF. It will have to be returned. But technically, for now, they are showing that this is also our foreign exchange reserves. Apart from that, they have also taken $900 million dollars from other places. So see, this amount that is visible is also quite misleading.
Now, further, we should see how much is Bangladesh’s external debt that they have to lend to foreign countries and foreign institutions. So see, it has crossed 100 billion dollars. Again, I am showing you an article from the Bangladeshi media.
Here, you will be able to see that this is an article dated March 22, 2024. Mehndi Hasan Sahib has written this here and it is written here that the external debt has crossed 100 billion dollars for the first time. Here, you will be able to see that the public sector has this much debt, the private sector has this much debt.
And you must have seen Sheikh When Hasina recently went to China, she went to ask for a loan of five billion dollars more, when your debt is already so high and your foreign exchange reserves are not so strong, you go to ask for a loan of five billion dollars from China, a country which is famous for its debt trap, so look, you can say Bangladesh is not strong in this matter, you can say there is concern in lending money to Bangladesh.
Although if you ask the World Bank, first of all the World Bank has not given this much loan to Bangladesh, compared to India, the World Bank has given very little loan to Bangladesh and when the World Bank was asked, look, this question is being raised by the Indian media that our loan was Will Bangladesh be able to repay?
Obviously, this question will be asked to the IMF, World Bank and the international creditors of Bangladesh that will Bangladesh be able to repay its loan or not. The World Bank said that look, the debt of Bangladesh is not a matter of concern.
The interim government is fine and they will take care of it. We don’t think that Bangladesh will say that we will not be able to repay your loan. Now, the case of the World Bank is different. The case of India is a little different here because we are also assuming that now Bangladesh will not be as friendly towards India as it used to be at one time.
If tomorrow the new government of Bangladesh says that the interest rate of the loan that we took from India during the time of Sheikh Hasina is very high and the conditions are very strict, what will we do in that case?
Will Bangladesh Return India’s Loan !
You will also see the article of The Hindu Business Line and various other reports about it which are available online. Many strategic thinkers are writing about it. You will find one thing common everywhere.
It is written that India is worried about the fate of an estimator of 4 to 5 billion dollars of our credit which we had given. This is by the way a soft loan at a very low interest rate, this is called a line of credit. What will happen to this loan which we had given to Bangladesh?
It is not certain that it is not known whether the government that has taken over after the fall of the outside Prime Minister Sheikh Hasina will take ownership and honour the so-called guarantees.
This can be a problem because the old government will get an excuse here that Sheikh Hasina is a dictator, see, the people of your country themselves say that she was a dictator. Now the loans taken by the dictator, the interest rates will be bad.
So revise everything. That can be a matter of concern for us. And I am telling you a very interesting fact that if we look at the region of South East Asia where India, Pakistan, Bangladesh and various countries come, here Bangladesh has the second highest loan.
The default rate is if we look at all the loans, the big loans given to the corporates, the entrepreneurs had defaulted on many loans and then what was the problem in Sri Lanka, you all will remember how India had helped them. Now, if we look at the second number, Bangladesh comes with 10.11 but the default loan rate of India is very low, around 4 per cent, which is manageable. And remember, the foreign exchange reserves are so much that if any problem arises tomorrow, we can cover it. And it is not that the foreign exchange reserves are coming from the IMF, it is our own earnings.
It is very safe. So, the coming time will be very worrying in this matter. If Bangladesh says that the loan terms have been changed or we will not be able to repay the loan, in that case, the relations between the two countries can deteriorate.
But we will have to see the event. In the coming time, there will be more clarity on this matter and keep all these things in mind. It is very important that India is exporting electricity to Bangladesh, will it keep buying it or not?
Will it keep buying our loan? Whether you will return it or not, other things are also important But sometimes we forget the main economic points that impact our economy, so I am bringing all this to your attention, obviously I will keep tracking it, if some major development comes then I will bring an update you later.
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