The New Nation - Internet Edition

Staff Reporter

The country's trade deficit during the first eight months of the last fiscal stood at 2098 million dollars despite measures to narrow the gap in recent years. The reason of trade deficit owes mainly to more import costs than export earnings. Economists fear that the import costs will further increase in view of the price-hike of some major products including petroleum. At present the price of oil is hovering between 90 dollars and 100 dollars a barrel in the international market. Meanwhile, the Energy and Mineral Resources Division has sought taka 50 billion afresh to import oil to avert crisis of any kind. Bangladesh Petroleum Corporation's monthly loss amounts to taka 2.50 billion, and if the price is not adjusted, loss will rise further.

But the moment the government will adjust the oil price, prices of the transport fare and that of some of the food and non-food items will also increase to be eventually borne by the people, meaning further pressure in their costs of living. The foreign exchange reserve now stands at $ 5.2 billion after payment of $ 462 million to the Asian Clearing Union (ACU). The payment has been made in line with the provision of 8-member ACU. Under the provision, the settlement of balance with accrued interests is made at the end of every two months.

The position of the foreign exchange reserve largely depends on the inward remittances sent by the Bangladeshi expatriates working in different countries of the world.

Of the total remittances, about 39 percent flows from Saudi Arabia alone, indicating that Bangladesh must maintain a very cordial relations with the kingdom and nothing should be done that makes the relations strain. The other day, Saudi Arabia promised to export 1.2 million metric tonnes of rice for the people of Bangladesh.

Meanwhile, the country received $ 214.26 million foreign assistance during the first quarter of the current fiscal against $ 128 million received during the corresponding period of the 2006-07 financial year. The most sensitive issue is the high inflation, which has already journeyed beyond two digits. Rising of inflation hoists the costs of living.

However, the overall economic condition of the country is not yet shaky as the immediate past four-party coalition government left a strong economy in respect of GDP, GNP, foreign exchange reserve, inward remittances, export earnings, reducing export expenditures, per capita income i.e. in all the branches.

The odd situation that embarrassed the past government was its failure to control the market price and involvement in corruption by some of the cabinet members and aides. Though the progress in each of the branches is slow at the moment, the four months' story does not reflect the whole year's picture.

The people of Bangladesh experienced that the three past governments survived the havoc of three floods that struck the country in 1988, 1998 and 2004. The interim government too successfully overcame the losses arising out of recent back-to-back floods.