The New Nation - Internet Edition

Staff Reporter

Bangladesh will get loans from the Islamic Development Bank at 1.75 per cent interest rate to finance oil import, Finance Adviser Dr AB Mirza Azizul Islam said yesterday.

The bank also raised the amount of yearly loans to US$ 1.5 billion from US$ 1 billion for Bangladesh, Aziz told newsmen on his return from Jeddah after attending the 33rd annual meeting of IDB.

Bangladesh requested IDB to double its financing for fuel oil imports to US$ 2 billion from existing US$ 1 billion annually as the country is struggling to meet the increased requirement from domestic sources.

The annual conference of IDB has decided to set up a US$ 1.5 billion fund in the IDB over next five years to assist member countries, particularly the LDC members including Bangladesh, to deal with the food security issues in view of the global price situation.

The assistance will come partly in the form of budget support and partly as developing agriculture like irrigation facilities and importing agriculture inputs like fertiliser and irrigation pumps. "Details will be worked out later," the Adviser added.

About the possibility of raising oil price at home, the Finance Adviser reiterated that the he does not know when, and how, the price would be adjusted.

Mirza Aziz hoped that the inflation rate would come down to a single digit in the next fiscal year.

The Adviser said the government would take steps to boost purchasing power of people, particularly "fixed-income" group as they bore most of the brunt of rising food prices.

"The condition of low-income people was relatively better," according to him.

Government allowances for the elderly and widows benefited them a bit," he said.

The Adviser said the social safety net would be widened in the budget. A scheme will be undertaken to ensure employment of poor people.

"The government's main target should be to feed people. Development comes next," the Finance Adviser noted.

Government employees would get dearness allowances and there would be guidelines in the Budget for fiscal 2008-09 for employers in the private sector to increase the salaries of employees, he added.

On the price hike, the adviser said the government has cut import duty on many goods including rice and wheat to zero to keep prices stable, but prices remained unchanged.

"Budget cannot cut prices. What matters most is the global market. A review on the global market shows that the situation will remain in our favour in the coming days," he said.

Mirza Aziz said he did not have the precise figure of how much of the money siphoned outside the country had been brought back. "The retrieved money was deposited in the Bangladesh Bank," the adviser added.