IMF approves $4.5b loan for Bangladesh

[Indos]

IMF condition is always about fiscal discipline like curbing subsidy (BD has raised fuel price at 50 %) and spending (Prudently managing fiscal deficit).

They also usually suggest the currency to be handed to market mechanism

 

[Bilal9]

I truly understand the statement of Dr. Reaza Kibria that the visiting IMF staff has no power to sanction loans. They came to estimate the ground reality of BD and will report them to the IMF Head Office.

After this, the IMF executive board will decide if it will grant any loans. However, our great newspapers published immature news.

I will echo @bluesky bhai's statements.

This is relevant - because Dr. Reza Kibria was in a more or less senior post at IMF.

Instead of the half-educated Hasina suck-ups.

 

[Abu Shaleh Rumi]

@bluesky , @Bilal9 Bhai , what's your take on this video of Dr Reza kibria?

When it is about economy, Dr Reza Kibria's words are Gospel of Truth!

We need his wisdom to steer our economy in this volatile time...

 

[bluesky]

I will echo @bluesky bhai's statements.

This is relevant - because Dr. Reza Kibria was in a more or less senior post at IMF.

Instead of the half-educated Hasina suck-ups.

But, the main question remains to be answered what Hasina Bibi will do with the IMF $1.3 billion initial loan when the BAL govt has successfully mismanaged and stolen the all-time high FER of $48 billion that our women workers have earned with hard labor and small salaries.

BAL cronies have found or created all the loopholes to drain that reserve. Very sad!!

I recommend a Nobel Prize shared by Mustafa Kamal and Hasina Bibi.

 

[Turingsage]

The problem is, it's easier said than done.

China cornered this market completely. Only bits and pieces are now left. I honestly don't see a way out for any of these countries. The world cannot accommodate another China.

Most of the third world will grow to some extent, but hardly any will ever reach middle class level. All of them will get stuck at somewhere between $5000-8000 GDPPC.

That in itself will still be a significant improvement over their current situation, but the third world as a whole simply won't ever break the $10000 mark.

Leaving Bangladesh out of this for a moment I would partially disagree with you.
The problem is that of imagination.
If you can think ONLY in terms of looking at China or Korea or Japan and think there is only one road, that of manufacturing at a cheaper price than the guy next door, then you are lost.
There are a thousand different industries WAITING to be discovered and imagined that offer a way out of the cul de sac of low incomes and underemployment.

Elon thought up PayPal reusable boosters, giga factories etc.
Info sys started by a guy with $200 borrowed from his wife, a company now worth over a $100 billion.
There are many niches that start small and balloon into the next big $100 billion industry

 

[Realtalk108]

Leaving Bangladesh out of this for a moment I would partially disagree with you.
The problem is that of imagination.
If you can think ONLY in terms of looking at China or Korea or Japan and think there is only one road, that of manufacturing at a cheaper price than the guy next door, then you are lost.
There are a thousand different industries WAITING to be discovered and imagined that offer a way out of the cul de sac of low incomes and underemployment.

Elon thought up PayPal reusable boosters, giga factories etc.
Info sys started by a guy with $200 borrowed from his wife, a company now worth over a $100 billion.
There are many niches that start small and balloon into the next big $100 billion industry

The problem isn't that we won't grow. Rather it's a question of mass employment.

I can fully believe that in 20 years time, Mumbai will be a highly productive dynamic city with excellent infra. One that can compete with any world city.

The problem is, it still won't cover even 1% of India's workforce. The fact of the matter is, you really don't need that many people to run a factory today. Things are largely automated. Domestic consumption alone can't provide mass employment. You would have to export like China did. The numbers are simply not adding up. I can best hope we are heading towards Latin American level of development.

Technological innovation? Sure. That's bound to happen and as I mentioned in my post, most of the improvement in living standards is likely to come from that only. But it will take decades before mass poverty is removed from India.

 

[Realtalk108]

IMF condition is always about fiscal discipline like curbing subsidy (BD has raised fuel price at 50 %) and spending (Prudently managing fiscal deficit).

They also usually suggest the currency to be handed to market mechanism

Fuel subsidy is a major reason why both Pak and BD got in trouble. It badly distorts the economy. Pakistan in particular massively subsidized petrol for years.

A fully floating currency would be a good thing, but politically impossible. Most likely BDT will remain at managed float but will be significantly devalued to discourage import.

 

[Indos]

Fuel subsidy is a major reason why both Pak and BD got in trouble. It badly distorts the economy. Pakistan in particular massively subsidized petrol for years.

A fully floating currency would be a good thing, but politically impossible. Most likely BDT will remain at managed float but will be significantly devalued to discourage import.

In Indonesia we also face similar problem, subsidized fuel price is increased around 30 % in the first day of September. Even for Indonesia we cannot hold our big fuel subsidy just like Malaysia who still has net oil trade (export is bigger than import). Indonesia oil production (600-700.000 barrel per day) only can provide half of what we consume.

This is very sensitive issue for Indonesia but AlhamduliLLAH our people doesnt act like how Iranian and Iraqis do when their government raise the subsidized fuel price. Demonstration did exist during last September, but only conducted by university students and labor union. The pressure has faded away this November, no demonstration any more.

Jokowi approval rating in October is 70 %, stronger than even before we raised fuel price in September.

Currently our program is to blend 40 % of solar fuel by Biodiesel (palm oil), expected to be implemented in January 2022 and we dont allow expensive cars to buy subsidized fuel. Indonesian has subisidized and non subsidized fuel. We can manage this restriction well since our state owned energy company, Pertamina, dominate retail sales of our fuel.

Next program I could say is to ban all cars in using subsidized fuel, regardless it is expensive or not expensive cars. Only public transportation and motorcycle can use subsidized fuel. Parliament has supported the idea, but government hasnt yet implement it

 

[bluesky]

The problem isn't that we won't grow. Rather it's a question of mass employment.

I can fully believe that in 20 years time, Mumbai will be a highly productive dynamic city with excellent infra. One that can compete with any world city.

The problem is, it still won't cover even 1% of India's workforce. The fact of the matter is, you really don't need that many people to run a factory today. Things are largely automated. Domestic consumption alone can't provide mass employment. You would have to export like China did. The numbers are simply not adding up. I can best hope we are heading towards Latin American level of development.

Technological innovation? Sure. That's bound to happen and as I mentioned in my post, most of the improvement in living standards is likely to come from that only. But it will take decades before mass poverty is removed from India.

When a country cannot employ its people in its factories and people remain unemployed or underemployed, it is the govt-sponsored many infrastructure construction projects throughout the country that creates employment evenly.

People get jobs, earn money and spend it to buy daily necessities, and at the same time, rural/ urban people's living conditions/ standards keep on improving surely though slowly.

It is a time-proven way to distribute wealth among the populace.

 

[Bilal9]

But, the main question remains to be answered what Hasina Bibi will do with the IMF $1.3 billion initial loan when the BAL govt has successfully mismanaged and stolen the all-time high FER of $48 billion that our women workers have earned with hard labor and small salaries.

BAL cronies have found or created all the loopholes to drain that reserve. Very sad!!

I recommend a Nobel Prize shared by Mustafa Kamal and Hasina Bibi.

You are funny @bluesky bhai.

In Indonesia we also face similar problem, subsidized fuel price is increased around 30 % in the first day of September. Even for Indonesia we cannot hold our big fuel subsidy just like Malaysia who still has net oil trade (export is bigger than import). Indonesia oil production (600-700.000 barrel per day) only can provide half of what we consume.

This is very sensitive issue for Indonesia but AlhamduliLLAH our people doesnt act like how Iranian and Iraqis do when their government raise the subsidized fuel price. Demonstration did exist during last September, but only conducted by university students and labor union. The pressure has faded away this November, no demonstration any more.

Jokowi approval rating in October is 70 %, stronger than even before we raised fuel price in September.

Currently our program is to blend 40 % of solar fuel by Biodiesel (palm oil), expected to be implemented in January 2022 and we dont allow expensive cars to buy subsidized fuel. Indonesian has subisidized and non subsidized fuel. We can manage this restriction well since our state owned energy company, Pertamina, dominate retail sales of our fuel.

Next program I could say is to ban all cars in using subsidized fuel, regardless it is expensive or not expensive cars. Only public transportation and motorcycle can use subsidized fuel. Parliament has supported the idea, but government hasnt yet implement it

All great steps - great to learn from and emulate.

I am sure Mr. Jokowi has very astute financial advisers and policy planners.

 

[Turingsage]

The problem is, it still won't cover even 1% of India's workforce. The fact of the matter is, you really don't need that many people to run a factory today. Things are largely automated. Domestic consumption alone can't provide mass employment. You would have to export like China did. The numbers are simply not adding up. I can best hope we are heading towards Latin American level of development.

This is exactly what I mean by failure of the imagination.

 

[Indos]

All great steps - great to learn from and emulate.

I am sure Mr. Jokowi has very astute financial advisers and policy planners.

Jokowi is very economic oriented leader, he will calculate every penny of government spending. Indonesia politics also has tendency to only pick professional for the Minister of Finance. Sri Mulyani Indrawati is his trusted Minister. This lady is hated by so many Indonesian defense fanboys who wants Prabowo defense acquisition program to materilize LOL

Jokowi trusted entrepreneur, economic scholars and professional more than any other

This man sitting near Sri Mulyani is our Health Minister, but he is not Medical Doctor but former Mandiri Bank CEO

Our Education Minister is not Professor of Education, but Nadiem Makarim, the owner of Gojek

Bukalapak former CEO, Rahmat Kaimudin, is also now among leading strategist in Indonesia, he is still in early 40's. He is recruited by government and become very important person in this administration.

---------------------------------

Leaders (President, Prime Minister) should only be for 10 years term

Jokowi goods at his time, but Indonesian doesnt want him to continue into third term. As Indonesian I also dont want Jokowi to continue into third term. I want Indonesia implement Habibienomics for 2025 forward, Habibie wants economic based on technology with high value addition. Jokowi is great to some extent, but in term of research and development and many high tech programs, he is not too keen.

Jokowi expel R 80 program from Government Priority program and almost make Indonesia out from KF21/IFX program. Despite so Jokowi does make great policy in medium value addition with his downstreaming policy in nickel, tin, bauxit, palm oil, etc and he still has some sense on Habibienomics with his policy to set holding SOE company in defense and make Indonesia Battery Corporation (IBC) that has made JV with LG Chem, CATL, Foxcon, and soon will likely with British company ( JV contract is likely signed during G20 meeting )

After 2024, I think Indonesia is ready to implement Habibienomics.

I have voted for Jokowi three times, when he wanted to be Jakarta Governor, President Election in 2014 and Presidential Election in 2019. But I and many Indonesian believe that leader can only be good for 10 years. Every leader has their own strategy, the new leader with his strategy can compensate the weakness of previous leader. I would say all three important Indonesia President after Soekarno and Soeharto are Habibie, SBY, and Jokowi. The three of them are the best Presidents on their time.

SBY, our former leader, for instants is good at improving our democracy and set up many defense programs that is important to our defense industry growth, like submarine, propellant, rockets, KFX/IFX, N219 program. Any way, Sri Mulyani was also our Finance Minister during SBY administration (2004-2014).

Both SBY and Jokowi has improved government efficiency quite significantly. The stake of SBY in improving our government efficiency is because starting at his time our Anti Corruption Body (KPK) runs amok and catched many Corruptors that even sit in position like Central Banks and Ministers. While Jokowi improves our government efficiency through his strong will to reform the government from the inside.

Jokowi will likely lay down good infrastructure and economic fundamental to Indonesia economy once he leaves his office in 2024 November. His period will likely be remembered as very successful. He will come back home to Solo, Central Java when he retires as President. He doesnt have political ambition as his own party, PDI-P, is basically owned by Soekarno family. He cannot go against Megawati Soekarnoputri as Megawati has helped him become Indonesia President,

Habibienomics

Habibienomics is not approriate to be implemented during 1999-2019, we dont have capable companies to do so during that period but with the capacity Indonesia would like to have in 2025 forward, I think we are ready for it. Starting to triple our research fund in Government Research Agency and SOE universities, putting minimum research budget in Minister of defense at least 6 % of our total defense budget must be the start I would like to see 2025 forward. What is Jokowi wants to do interm of high tech is to link government research agency and state owned university research into our industry, particularly state owned enterprises whose asset is 630 billion USD (2021) which is half of Indonesian GDP.

I doubt Indonesia can have private companies that can compete with Boeing, Lockheed Martin, and Hyundai shipbuilder for example, we only have chance to do it by growing our SOE and linked them with our Gov Research Agency and our SOE universities (the best universities in Indonesia). Jokowi has set up Indonesia Battery Corporation (IBC) which is SOE as well with good financial backing from Pertamina, PLN, Antam, and Mind ID. These I see Jokowi has also seen what I see.

But in digital economies, our private sector is indeed quite competitive like Goto, Gojek, Tokopedia, Bukalapak etc and they can raise huge capital for their own research

SOE in strategic sector (Defense ID, Krakatau Steel, IBC, Bosma Indra, INKA, Barata, etc) and our private sectors in digital, technology, electronics and heavy engineering sector should be nurtured and must be hand in hand in boosting Indonesian competitiveness in high tech sector.

 

[Bilal9]

Jokowi is very economic oriented leader, he will calculate every penny of government spending. Indonesia politics also has tendency to only pick professional for the Minister of Finance. Sri Mulyani Indrawati is his trusted Minister. This lady is hated by so many Indonesian defense fanboys who wants Prabowo defense acquisition program to materilize LOL

View attachment 896173

Jokowi trusted entrepreneur, economic scholars and professional more than any other

This man sitting near Sri Mulyani is our Health Minister, but he is not Medical Doctor but former Mandiri Bank CEO

View attachment 896174

Our Education Minister is not Professor of Education, but Nadiem Makarim, the owner of Gojek

View attachment 896175

Bukalapak former CEO, Rahmat Kaimudin, is also now among leading strategist in Indonesia, he is still in early 40's. He is recruited by government and become very important person in this administration.

---------------------------------

Leaders (President, Prime Minister) should only be for 10 years term

Jokowi goods at his time, but Indonesian doesnt want him to continue into third term. As Indonesian I also dont want Jokowi to continue into third term. I want Indonesia implement Habibienomics for 2025 forward, Habibie wants economic based on technology with high value addition. Jokowi is great to some extent, but in term of research and development and many high tech programs, he is not too keen.

Jokowi expel R 80 program from Government Priority program and almost make Indonesia out from KF21/IFX program. Despite so Jokowi does make great policy in medium value addition with his downstreaming policy in nickel, tin, bauxit, palm oil, etc and he still has some sense on Habibienomics with his policy to set holding SOE company in defense and make Indonesia Battery Corporation (IBC) that has made JV with LG Chem, CATL, Foxcon, and soon will likely with British company ( JV contract is likely signed during G20 meeting )

After 2024, I think Indonesia is ready to implement Habibienomics.

View attachment 896176

I have voted for Jokowi three times, when he wanted to be Jakarta Governor, President Election in 2014 and Presidential Election in 2019. But I and many Indonesian believe that leader can only be good for 10 years. Every leader has their own strategy, the new leader with his strategy can compensate the weakness of previous leader. I would say all three important Indonesia President after Soekarno and Soeharto are Habibie, SBY, and Jokowi. The three of them are the best Presidents on their time.

SBY, our former leader, for instants is good at improving our democracy and set up many defense programs that is important to our defense industry growth, like submarine, propellant, rockets, KFX/IFX, N219 program. Any way, Sri Mulyani was also our Finance Minister during SBY administration (2004-2014).

Both SBY and Jokowi has improved government efficiency quite significantly. The stake of SBY in improving our government efficiency is because starting at his time our Anti Corruption Body (KPK) runs amok and catched many Corruptors that even sit in position like Central Banks and Ministers. While Jokowi improves our government efficiency through his strong will to reform the government from the inside.

Jokowi will likely lay down good infrastructure and economic fundamental to Indonesia economy once he leaves his office in 2024 November. His period will likely be remembered as very successful. He will come back home to Solo, Central Java when he retires as President. He doesnt have political ambition as his own party, PDI-P, is basically owned by Soekarno family. He cannot go against Megawati Soekarnoputri as Megawati has helped him become Indonesia President,

Habibienomics

Habibienomics is not approriate to be implemented during 1999-2019, we dont have capable companies to do so during that period but with the capacity Indonesia would like to have in 2025 forward, I think we are ready for it. Starting to triple our research fund in Government Research Agency and SOE universities, putting minimum research budget in Minister of defense at least 6 % of our total defense budget must be the start I would like to see 2025 forward. What is Jokowi wants to do interm of high tech is to link government research agency and state owned university research into our industry, particularly state owned enterprises whose asset is 630 billion USD (2021) which is half of Indonesian GDP.

I doubt Indonesia can have private companies that can compete with Boeing, Lockheed Martin, and Hyundai shipbuilder for example, we only have chance to do it by growing our SOE and linked them with our Gov Research Agency and our SOE universities (the best universities in Indonesia). Jokowi has set up Indonesia Battery Corporation (IBC) which is SOE as well with good financial backing from Pertamina, PLN, Antam, and Mind ID. These I see Jokowi has also seen what I see.

But in digital economies, our private sector is indeed quite competitive like Goto, Gojek, Tokopedia, Bukalapak etc and they can raise huge capital for their own research

SOE in strategic sector (Defense ID, Krakatau Steel, IBC, Bosma Indra, INKA, Barata, etc) and our private sectors in digital, technology, electronics and heavy engineering sector should be nurtured and must be hand in hand in boosting Indonesian competitiveness in high tech sector.

Mr. Jokowi has a great team - all very well qualified and all are technocrats. I will review this further and maybe open a discussion thread later.

Thanks for writing in such detail, I truly appreciate this. More on this when I have a bit more time.

 

[UKBengali]

Agreed, but I don't see that happening of course. In fact even to reach $5000, these countries will need decades. And then of course, the average figure is misleading. There is bound to be huge income inequality.

Technological improvements and production efficiency will make life a bit easier. That's about it.

The population numbers are simply too large in the subcontinent. My guess is that only 20-30% of Ind-Pak-BD will become somewhat affluent, and they will have to subsidize the rest, for a long time.

Pakistan is unlikely to even move into 2nd world status going by it's economic performance over last 75 years.

India will end up like you describe as a high middle-income country with pockets of first-world status in some states like Gujarat etc.

BD is different as it's culture and unitary status will give it the best chance of being the first and maybe only developed country in S Asia.

 

[Abu Shaleh Rumi]

LOL, Bangladesh will never become a developed country. At max we will be able to maintain a better HDI then Srilanka. Thats it.

Brain drain in Bangladesh is mind blowing....