No cash incentives in Dhaka’s economic bailout

March 29th, 2009 - 12:54 pm ICT by IANS  

Dhaka, March 29 (IANS) Bangladesh Finance Minister A.M.A. Muhith has said the government would prefer giving subsidies instead of cash incentives as demanded by various sectors hit by global recession.
It would be unrealistic to offer cash incentives as bailout packages to exporters at this moment since the government has limited resources, he said Saturday.

Dhaka would seek more financial aid from multilateral donor agencies to tackle the downturn.

“It would be difficult to manage the economy during recession if donor agencies do not increase financial aid,” The Daily Star newspaper quoted him as saying.

He assured that the government would “act wisely” so that inflationary pressure does not increase the prices of essentials.

“We must create employment and encourage more investment, otherwise the economy will face serious challenges in the near future,” he told a seminar.

Economists and academicians at the gathering expressed concern at the situation.

Pledging to give financial assistance to migrants returning to the country as a consequence of recession, Muhith said the upcoming budget will have a new item named “public-private participation” for the development of infrastructure and creation of more employment.

He said at present there is a substantial amount of money in the wage earners’ fund from where the government can provide financial assistance to these returnees.

The finance minister feared 2010 will be more critical because the government will have to generate more revenues while it will need to give subsidies to the affected sectors. He sought more cooperation from the banking sector to lessen the negative impacts of global recession on domestic economy.

The government will need a lot of foreign aid and pro-active public-private participation to address the harsher days ahead, Muhith added.

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