Literacy

Economists, business community support Sovereign Wealth Fund

DHAKA, Feb 6, 2017 (BSS) - Leading economists and business leader today observed that the newly approved Bangladesh Sovereign Wealth Fund (BSWF) is time-befitting in view of effectively using the foreign currency reserves during the time of needs.

The cabinet today approved in principle a Finance Division proposal to create Bangladesh Sovereign Wealth Fund with an authorized capital of US$10 billion. The fund will be created in five years by contributing $2 billion each year from the forex reserves.

Talking to BSS, World Bank lead Economist in Dhaka Dr Zahid Hussain, executive director of Centre for Policy Dialogue Mustafizur Rahman and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Abdul Matlub Ahmed said the approval for creating a fund from the forex reserves for investing in multifaceted purposes, including infrastructure development, payment of international trade and disaster management, is a positive initiative for the economy.

"It is a good decision but proper fund management is the key challenge for ensuring its fruitful use for the economy as the implementation of a project is a major problem than financing," said Zahid Hussain.

He underscored the need for constituting fund's management with skilled and experienced manpower and said the government can form the management through sharing experiences from other countries.

"The government should not take any quick decision about the management of the fund," he added.

Mustafizur Rahman also emphasized on formation of a good management to use the fund transparently.

"It is a good initiative but an experienced management is needed to handle such a fund as maintaining transparency, integrity and honesty are urgent for ensuring the effective use of the fund for the economy," said Mustafizur Rahman.

He said the forex reserves are huge and the amount needs to be used through proper planning for infrastructure development with a low cost.

"There are huge forex reserves remaining idle and if the government is able to use this money for infrastructure development, it would be good for the economy as cost for such fund the interest-remains low," he added.

Mentioning the initiative as a time-befitting, FBCCI Abdul Matlub Ahmed said the country needs investment for the development of infrastructures and if the government takes loan from the reserves for this purpose it would certainly be a good initiative for the economy.

"It would not create any problem if the government keeps $25 billion in hand and uses surplus amount for development," he added.

According to Bangladesh Bank, the reserves hit a record of $32 billion in 2016 which is good enough to

clear import bills for the next nine months.

Source: Bangladesh Sangbad Sangstha (BSS)