Muhammed Yunus-led Bangladesh govt taps IMF, World Bank, other financial institutions for $8 billion funding

Bangladesh has approached the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB) and other international lenders for loans worth $8 billion, Hindustan Times reported.

With Nobel laureate and noted economist Muhammed Yunus, leading Bangladesh's interim government, the recently troubled country has sought to steer away from the “revolution” and instead seek aid from financial institutions to navigate the economic crisis, it added.

Economic Condition Unstable

Notably, the country at present has over $100 billion of external debt and needs $3 billion from the IMF to repay foreign liabilities and another $300 million towards flood rehabilitation, the report said.

The report added that an IMF team is likely to visit Dhaka in October to "hold talks" with the interim government.

Under the toppled Sheikh Hasina government, the IMF released $2.3 billion to Bangladesh as part of the $4.7 billion loan program approved in January 2023.

To deal with the economic stress, Yunus plans to tap funding of $5 billion from the WB, ADB, Japan International Cooperation Agency (JICA), and Asian Infrastructure Investment Bank (AAIB), the report added.

Dual Economic & Political Crisis

Bangladesh is facing a dual economic and political crisis at present. With the protests giving an opening to fundamental Islamists, the ban on Jamaat-e-Islami being lifted, parties like BNP riding the Hasina ouster high, and attacks on Hindu minorities, the Yunus government is embattled.

Speaking to Hindu leaders on the occasion of Janmashtami, the celebration of Lord Krishna's birth, Yunus emphasized that Bangladesh is a large family, and it is the government's responsibility to uphold the rights of all its citizens, as reported by the Dhaka Tribune.

“Our responsibility is to establish the rights of every citizen. Our job is to ensure justice for every citizen. There can't be any divisions among people in our country. We are equal citizens. The interim government is determined to protect the rights of every citizen of the country,” Dhaka Tribune reported Yunus as saying, as he greeted the leaders at the Jamuna State Guest House.

In July, the neighbour saw its highest food inflation rise in 13 years, as it crossed 14 per cent, consumer price index numbers are dismal too.

Addressing foreign diplomats in Dhaka for the first time since his appointment, Yunus condemned Hasina’s alleged “dictatorship,” which he claimed led to the disintegration of the judiciary, suppression of democratic rights, and widespread corruption. He vowed to conduct “free, fair, and participatory” elections once his government completes its mandate to implement essential reforms across the Election Commission, judiciary, civil administration, security forces, and media.

Yunus described the state of the country as a “complete mess” and criticized the previous regime for rigging elections and allowing rampant political patronage and economic mismanagement. He emphasized his administration’s commitment to restoring macroeconomic stability, combating corruption, and ensuring good governance. The interim government has pledged to address law and order issues, with the armed forces assisting in maintaining civil control as needed.