Abu Ahmed Warns: Bangladesh Should Steer Clear of IMF Debt Trap

Professor Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB), urged the country to avoid falling into the IMF’s debt trap during a shadow parliament debate held by Debate for Democracy at the FDC in Dhaka on Saturday.

The debate, titled “IMF Loan Approval Will Bolster Development Partners’ Confidence,” focused on concerns about Bangladesh’s fiscal future and the conditions tied to international financial assistance.

Professor Ahmed expressed cautious optimism regarding the IMF’s demand for market-based exchange rates, hoping it would prevent further depreciation of the taka. However, he warned about mafia syndicates hoarding dollars, emphasizing the need for close monitoring to avoid a repeat of past economic disruptions caused by such groups.

He also lamented the massive looting in once-strong banks like Islami Bank, where foreign currency deposits were embezzled and siphoned abroad, leaving Bangladesh Bank and the nation in turmoil. Recovering the stolen assets, he noted, would be a major challenge.

The session, chaired by Hasan Ahmed Chowdhury Kiron of Debate for Democracy, featured robust discussions on economic reforms. Professor Ahmed supported ongoing tax administration reforms, including the abolition of the National Board of Revenue (NBR) and its division into separate tax policy and administration bodies. He urged that opposition to these reforms should be based on sound reasoning rather than corrupt interests, highlighting that such structures exist in many countries. He reminded the audience that Bangladesh is currently repaying a debt of over USD 103 billion, with annual payments of USD 2 to 2.5 billion expected to rise.

Kiron highlighted that IMF loans often act as a “certificate of credibility,” attracting further funding from development partners. Yet, he cautioned that mere compliance with IMF conditions does not guarantee future assistance unless transparency, accountability, democratic governance, and anti-corruption efforts are strengthened in financial institutions.

He criticized some IMF conditions, particularly subsidy withdrawals, as often conflicting with public interest. Kiron accused the previous government of borrowing from the IMF amid economic instability while beneficiaries laundered vast sums of money abroad. He alleged that during that period, a nexus of civil servants, businessmen, and politicians accumulated wealth overseas through trade-based money laundering, including over-invoicing of imports such as furnace oil, coal, scrap vessels, and fertilizers—totaling around USD 16 billion annually.

Additionally, Kiron claimed Bangladesh unnecessarily imported IT and software services despite domestic capacity, and paid over one lakh crore taka in capacity charges for electricity that was never delivered, much of which was laundered abroad.

The debate concluded with Government Shaheed Suhrawardy College winning over Presidency University. The judging panel included Professor Abu Muhammad Rais, Dr. SM Morshed, and journalists Iqbal Ahsan, Sushanta Sinha, and Arifuzzaman Mamun. Both teams were awarded trophies, crests, and certificates.