Helping India with Covid relief to extending financial support to Sri Lanka, Bangladesh would be the next economic powerhouse

Bangladesh has begun to display its economic progress and use it to establish deeper relations with neighbors, from giving Covid relief items to sending financial aid to Sri Lanka in its hour of distress.

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Helping India with Covid relief to extending financial support to Sri Lanka, Bangladesh would be the next economic powerhouse

According to The Print news, Bangladesh agreed earlier this week to extend a $200 million currency swap facility to Sri Lanka. This would help to strengthen their economy while also allowing Colombo to overcome the severe debt problems it is currently facing. Sri Lanka’s foreign debt situation is at a crucial point, threatening a catastrophic balance of payment crisis. Sri Lanka has allegedly $3.7 billion in foreign debt maturing this year, thus Bangladesh‘s cooperation is considered to be a lifeline for the country’s economy.

According to sources, the agreement was reached during Sri Lanka Prime Minister Mahinda Rajapaksas March visit to Bangladesh. A currency swap is a transaction in which two parties exchange the same amount of money in different currencies. It aids in lowering the cost of borrowing in a foreign currency at favourable interest rates.

Also Read: Bangladesh sends second consignment of medical assistance to India

Sri Lanka’s economy has been in serious danger since the Easter bombings in 2019 and the subsequent emergence of the coronavirus epidemic, which has caused havoc on the country’s tourism industry and other industries.

Bangladesh is also one of the 40 countries that have supplied Covid humanitarian aid to India twice as the country fights the second wave. Dhaka handed over 2,672 boxes of anti-viral medications and Covid protection gear to India on May 18. Previously, on May 6, Dhaka delivered 10,000 vials of Remdesivir to India.

Bangladesh, which is predicted to grow at a 5.8 per cent annual pace this fiscal year, has even caught the attention of the United States due to its strategic location in the Indo-Pacific region. In April of this year, the US Chamber of Commerce established the US-Bangladesh Business Council to examine the investment prospects for American investors in Bangladesh and to improve two-way commerce.

Bangladesh’s government, led by Prime Minister Sheikh Hasina, has also received accolades from archrival Pakistan for its expanding economic prowess.

According to Prabir De, a professor at the Research and Information System for Developing Countries (RIS), the key reason for Bangladesh’s economic progress is because the country continues to profit from the European Union’s Generalised Scheme of Favours (GSP) programme and other trade preferences.

“It is because of the EU’s GSP system that Dhaka has been able to generate significant income from critical exports.” Furthermore, Bangladesh receives a significant quantity of remittances,” De added.

According to Mizanur Rahman, Commissioner of the Bangladesh Securities and Exchange Commission, Bangladesh’s foreign reserves would reach $45 billion in 2021, up from roughly $9 billion in 2010, and inward remittances would exceed $200 billion. “Bangladesh believes in being responsible to its neighbours and reaching out to those in need of assistance. Dhaka is now considering stronger cooperation with its neighbours while not undercutting others, according to Rahman.

He also stated that Bangladesh is currently doing commerce with major ASEAN countries and that it is considering trade pacts with several of the ASEAN countries as well as participation in connectivity projects.

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Helping India with Covid relief to extending financial support to Sri Lanka, Bangladesh would be the next economic powerhouse
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Bangladesh has begun to display its economic progress and use it to establish deeper relations with neighbors, from giving Covid relief items to sending financial aid to Sri Lanka in its hour of distress.
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THE POLICY TIMES
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