Preview

Is the Foreign Debt Problem for Bangladesh

Satisfactory Essays
Open Document
Open Document
650 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Is the Foreign Debt Problem for Bangladesh
9/9/13

Is Foreign Debt a Problem for Bangladesh? - Research Paper - Shourvmaruf1
The document you uploaded was removed. To view all 1,200,000 documents please upgrade your account or see 6000 by uploading a new document.
Hi Shawoon

Essays

Book Notes

AP Notes

Citation Generator

More

Search 1 400 000 Essays

Is Foreign Debt a Problem for Bangladesh?
By ShourvMaruf1, April 2013 | 13 Pages (3,055 Words) | 135 Views| Report |

Upgrade to access full essay

This is a Premium essay for upgraded members

Is Foreign Debt a Problem for Bangladesh? Part-A Foreign debt in Bangladesh Introduction: External debt is one of the sources of financing capital formation in any economy. Developing countries like Bangladesh are characterized by inadequate internal capital formation due to the vicious circle of low productivity, low income, and low savings. Therefore, this situation calls for technical, managerial, and financial support from Western countries to bridge the resource gap. On the other hand, external debt acts as a major constraint to capital formation in developing nations. The burden and dynamics of external debt show that they do not contribute significantly to financing economic development in developing countries. In most cases, debt accumulates because of the servicing requirements and the principal itself. In view of the above, external debt becomes a self-perpetuating mechanism of poverty aggravation, work over-exploitation, and a constraint on development in developing economies. Public borrowing can be seen by private investors as a warning signal of the government becoming bankrupt within the foreseeable future. They may also fear that government will impose higher taxes in future in order to facilitate the repayment and servicing of the loan. In that case private investors will become less enthusiastic to invest. However, policy makers have to know whether public borrowing is followed by any crowding- out effect on investment, through whatever channel,
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Article Analysis: On the Contradictions of the New International Financial Architecture: Another Procrustean Bed for Emerging Markets?
    • 1391 Words
    • 5 Pages

    Article Analysis: On the Contradictions of the New International Financial Architecture: Another Procrustean Bed for Emerging Markets?

    External debt and domestic financial crises generate substantial social costs. As it happens, poor sectors of society pay a substantial share of the costs of adjustment to debt crises, whereas they benefit rather marginally from financial booms. The experience of many developing countries in several regions of the world also indicates that the social effects of debt crises continue to afflict countries even after several years of successful economic restructuring and recovery. The recent crisis has demonstrated a fundamental problem in the global economy: the enormous discrepancy that exists between an increasingly sophisticated and dynamic international financial world, with rapid globalization of financial portfolios, and the lack of a proper institutional framework to regulate it. In summary, existing institutions are inadequate to deal with financial globalization. This systemic deficiency and the…

    • 1391 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Foreign Direct Investment in Bd
    • 3140 Words
    • 13 Pages

    Foreign Direct Investment in Bd

    Economic supremacy is the foremost feature of the current world. In order to survive, Bangladesh has no other options but to attain economic development. Foreign Direct Investment (FDI) is recognized as a key component for economic growth for Bangladesh. Being one of the Least Developed Countries (LDC) with insufficient domestic savings rate for investment after fulfilling its basic needs, the importance of foreign investment is…

    • 3140 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Good Essays

    Consequences Of Troika
    • 1043 Words
    • 5 Pages

    Consequences Of Troika

    As it has been described in the previous part, the developing countries due to inability to serve their debts were forced to borrow funds from the IMF and the World Bank and accept the severe structural adjustment programs bound to the loans. The same happened to the developed European countries, which were badly hit by the global financial and then by the Eurozone sovereign debt crises in 2008 and 2010 respectively. The debt crisis has shown that the problem of indebtedness is no longer exclusive for developing countries.…

    • 1043 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    foreign debt
    • 1169 Words
    • 5 Pages

    foreign debt

    In recent years, Australia's debt to the rest of the world has increased, and grew on average by 6.1% per year between June 1999 and June 2009, increasing from $15,400 to $27,900 in 2007-08. The growth in a country's foreign debt can reflect several related influences. The value of its imports and other current payments to foreigners may exceed the value of its exports and other current receipts from foreigners, is this is the case then the nation experiences a deficit on its current account. The value of foreign debt is also influenced by exchange rate and price fluctuations and the current composition of the debt. Australia's net foreign debt is the net outcome of Australian liabilities to overseas and also the foreign liabilities to Australia.…

    • 1169 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    Does Financial Sector Development Increase Income Inequality? Some Econometric Evidence from Bangladesh
    • 1748 Words
    • 7 Pages

    Does Financial Sector Development Increase Income Inequality? Some Econometric Evidence from Bangladesh

    This paper is an attempt to examine the relationship between financial development and income inequality. In doing so, we have used Bangladeshi data for the period 1985-2006. We have employed auto-regressive distributed lag (ARDL) methodology for cointegration. We have also carried out sensitivity analysis and stability tests. Our findings suggest that financial development increases income inequality. Economic growth seems to equalize income distribution. Inflation and trade openness also worsen income inequality. Finally, income inequality is being increased by social spending in the country over long run. This study provides new directions for policy makers to reduce income inequality to share the fruits of economic development among the wider spectrum of the society.…

    • 1748 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Should One Student Study Two Universities
    • 291 Words
    • 2 Pages

    Should One Student Study Two Universities

    The document you uploaded was removed. To view all 1,200,000 documents please upgrade your account or see 6000 by uploading a new document.…

    • 291 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Best Essays

    External Public Debt and Economic Growth: Empirical Evidence from Bangladesh, 1974 to 2010
    • 4455 Words
    • 18 Pages

    External Public Debt and Economic Growth: Empirical Evidence from Bangladesh, 1974 to 2010

    RESEARCH METHODOLOGY Methods & Techniques, 2nd Edn., New Delhi: Wishwa Prakashan. Krugman, Paul (1992). MARKET-BASED DEBT REDUCTION SCHEMES. CURRENCIES AND CRISES, Paul Krugman. Cambridge, Massachuettss, London, England: The MIT Press. Malik, Shahnawaz, et.al.,(2010). External Debt and Economic Growth: Empirical Evidence from Pakistan, International Research Journal of Finance and Economics, 44: 88-97. Ogunmuyiwa, M.S (2011). Does External Debt Promote Economic Growth in Nigeria?, Current Research Journal of Economic Theory 3(1): 29-35. Paudel, R., et al., (2009). Foreign Debt, Trade Openness, Labor Force and Economic Growth: Evidence from Sri Lanka, The ICFAI Journal of Applied Economics, 8 (1): 57-64. Rocha, Fabiana (2006). Are error correction models the best alternative to assess capital mobility in developing countries?, Economia Aplicada, 10(2): 267-285. Were, Maureen (2001). The Impact of External Debt on Economic Growth in Kenya, Discussion Paper 2001/116, United Nations University/World Institute for Development Economics Research. Wijeweera, Albert, et.al., (2005). Economic Growth and External Debt Servicing : A Cointegration Analysis of Sri Lanka, 1952 to 2002, Working Paper Series in Economics, University of New England, School of Economics.…

    • 4455 Words
    • 18 Pages
    Best Essays
    Read More
  • Powerful Essays

    Debt Sustainability in Developing Countries
    • 7969 Words
    • 32 Pages

    Debt Sustainability in Developing Countries

    Fosu, A. K. 1996. The Impact of External Debt on Economic Growth in Sub-Saharan Africa. Journal of Economic Development. pp 93-118.…

    • 7969 Words
    • 32 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Devolopment of Bond Market in Bangladesh
    • 8355 Words
    • 34 Pages

    Devolopment of Bond Market in Bangladesh

    Purpose: A corporate bond is a bond issued by a corporation. It is a bond that a corporation issues to raise money in order to expand its business. The term is usually applied to longerterm debt instruments, generally with a maturity date falling at least a year after their issue date. The study focuses on Bond market development in Bangladesh, an emerging market. The policy environment for bond market development in Bangladesh is studied with the initiatives by various sectors over the past decade (2001 – recent year). This paper also aims at understanding the hurdles Bangladesh is facing in developing its own local currency bond market over last decade. Design/ Methods: The study uses published secondary data from various relevant sources and the researchers have used personal observation and experience regarding the country’s socio economic and political background and their impact on the bond market. Findings: Developing bond markets is more complicated than developing equity markets. They operate best when they have money market and longer-term benchmarks. Numerous factors suggest that Bangladesh could not develop an active, local-currency, and fixed-income market. The obstacles include improper regulations, unwilling investors and borrowers, lack of market confidence and ineffective infrastructure. The market participants in Bangladesh are skeptical whether the government can succeed in this endeavor. Practical Implications: Because of large quantum of long-term fund requirement with the liberalization of the energy and communication sectors, major infrastructure sectors like oil & gas, power, telecommunications, shipping, airlines and port development, the government financing for such sectors would be lesser in the days to come. Existing financial system of the country does not have either the capability or the instruments to support these sectors. The rational…

    • 8355 Words
    • 34 Pages
    Powerful Essays
    Read More
  • Good Essays

    The Role of Lease Financing in Bangladesh
    • 553 Words
    • 3 Pages

    The Role of Lease Financing in Bangladesh

    Bangladesh is a least developed country in the world with per capita GDP Tk.11.284 (USD 230).She suffersfrom poverty, imperfection in both, factor and product market, continuous in equilibrium in the economy,defective administrative structure in both financial and non-financial sector, inappropriate tax structure,heavy dependence on assistance from World Bank including other International Lending Agencies andDonor Countries, lack of capital stock, massive unemployment, political turmoil and unhealthy environmentfor investment. With the emergence of Bangladesh as an independent country in 1971, the thenGovernment nationalized all commercial Banks with the hope of accelerating industrial growth throughfinancial, fiscal and other supports. Since the inception of independent Bangladesh, Commercial Banks,Development Financial Institutions and Investment Corporation of Bangladesh have been the major sourcesof industrial finance in the country. These Banks were predominately serving the public sector by extendingsupport in the form of long term loan, working capital finance, bridge finance etc. and had limited…

    • 553 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Public Sector Reform in Lesotho
    • 6839 Words
    • 28 Pages

    Public Sector Reform in Lesotho

    KHAN, Z., THORTON, N AND FRAZER, M. (2000) ‘EXPERIENCE OF A FINANCIAL REFORMS PROJECT IN BANGLADESH’, PUBLIC ADMINISTRATION AND DEVELOPMENT 20 (1): 33-42.…

    • 6839 Words
    • 28 Pages
    Powerful Essays
    Read More
  • Good Essays

    Bangladeshi Banking System
    • 3370 Words
    • 14 Pages

    Bangladeshi Banking System

    The Bangladeshi banking system is one of the weakest in emerging Asia, with a weak operating environment contributing to persistently poor performance and solvency issues, especially among the systemically important state‐owned commercial banks (SOCBs). The system is undermined by very weak asset quality, inadequate provisioning for loan losses, poor capitalisation and constrained profitability. The operating environment in Bangladesh is characterised by a weak macro economy and political instabilities, both of which pose significant risks. The weakness in the operating environment is further exacerbated by frequent natural disasters. Bangladesh’s banking system is made up of 48 banks, which include four SOCBs, 30 private commercial banks, nine foreign commercial banks and five development banks. The four SOCBs accounted for 33% of the banking system assets at end‐2007 (1997: 68%). Although the SOCBs are still the most dominant, they are fast losing market share to private banks (52%) and to a lesser extent foreign banks (8%). Despite the various steps taken to turn around the ailing SOCBs — such as privatisation attempts, conversion into limited liability companies (LLCs) and the appointment of new management — progress has been slow. In addition to the challenging operating environment, Fitch Ratings notes that the very weak asset quality in Bangladesh (reported gross NPL ratio of 13% in June 2008) is also influenced by weak standards of corporate governance, underdeveloped risk management systems and directed lending. Asset quality in the SOCB sector is of greater concern given their very high reported gross NPL ratio of 29.3% at end‐ September 2008 (1999: 41%). Fitch also notes that 80% of system NPLs are in the loss category with low probability of recovery, while provision coverage of NPLs was well below the regulatory minimum, as a result of which the system’s net…

    • 3370 Words
    • 14 Pages
    Good Essays
    Read More
  • Powerful Essays

    Economic Condition of Bangladesh
    • 3619 Words
    • 14 Pages

    Economic Condition of Bangladesh

    Bangladesh has made remarkable progress in macroeconomic management. Acceleration of economic growth, gradual decline of budget deficit, high rate of export and import growth, steady rise of foreign currency reserve at a satisfactory level are some of the major achievements that Bangladesh attained during the past few years until FY2007-2008. Success in achieving these significant milestones is largely attributable to a set of policies and reforms implemented in order to attain macroeconomic stability accompanied by acceleration of economic growth. With continued economic growth Bangladesh Economy has established itself on solid foundation.…

    • 3619 Words
    • 14 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Impact of Global Economic Crisis on Bangladesh
    • 1278 Words
    • 6 Pages

    Impact of Global Economic Crisis on Bangladesh

    The financial crisis that started in the US in March of this year has now turned into a full-fledged economic crisis that has pushed the European Union, Japan, Hong Kong and others into recession…

    • 1278 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Impact of Public Debt Burden on Economic Growth of Bangladesh: a Var Approach
    • 5063 Words
    • 21 Pages

    Impact of Public Debt Burden on Economic Growth of Bangladesh: a Var Approach

    Bangladesh, a young country burdened with scant natural resources and a burgeoning population, has always depended on loans and grants…

    • 5063 Words
    • 21 Pages
    Powerful Essays
    Read More

Related Topics