Bangladesh FM Mustafa Kamal urges developing nations to be wary of Chinese loans under BRI

Banglesh's Finance Minister AHM Mustafa Kamal has issued a warning to developing nations about risks of taking ditional loans through China's Belt and Ro (BRI) Initiative as pressure on heavily indebted emerging markets is increasing due to global inflation and sluggish growth. He also stated that China needed to be more stringent in assessing its loans amid concerns that poor lending decisions run risk of driving nations into a debt crisis. Kamal also cited example of Sri Lanka, where infrastructure projects sponsored by China failed to produce returns, which has led to a catastrophic economic crisis in island nation. 

"Whatever situation that is going on worldwide, everybody will be thinking twice to agree to this project (BRI). Everybody is blaming China and it cannot disagree. It's ir responsibility," Bangleshi minister stated in an interview with Financial Times.

He claimed that China has not been cautious enough in selecting which projects to support, which is clear from ongoing crisis in Sri Lanka. Kamal also vised China to do "comprehensive research" before lending to a project. 

In July, Banglesh became Asian nation to request financial assistance from International Monetary Fund (IMF) as skyrocketing prices of commodity have put pressure on its foreign reserves. According to reports, Banglesh, which is a BRI participant, owes Beijing $4 billion, or 6% of its entire foreign debt. According to Kamal, Banglesh requested first installment of $1.5 billion from IMF as part of a $4.5 billion package that would also include funds to support its budget and help it finance programmes to help country apt to climate change. 

Banglesh seeks up to $4 billion in funds from various global lenders

Bangleshi Finance Minister furr stated that country has also sought up to $4 billion in funds from various or multilateral and bilateral lenders, such as World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, and Japan International Cooperation Agency. He also expressed optimism about nation's ability to obtain loans from m.

"Everybody is suffering and we're also under pressure. Banglesh is not at risk of defaulting like Sri Lanka. re is no way to even think of a situation like that," minister Kamal told British daily. 

IMF to contribute to climate change-related projects of Banglesh

In a statement, IMF noted that its new "Resilience and Sustainability Trust" would contribute to long-term financing for climate change-related projects as part of Banglesh's loan programme. "Unprecedented global shocks present countries like Banglesh with significant uncertainties," UN financial body stated. In recent deces, Banglesh's economy experienced remarkable growth, going from being among poorest in region to having a per capita income of $2,500. However, low-lying nation of 160 million faces a serious threat from climate change, making it susceptible to flooding, unpredictable monsoon rains, and increasing sea levels.

Image: Facebook/AHM Mustafa Kamal/AP