Form panel to tackle panic over Middle East crisis: economists

Bangladesh’s top economists have suggested forming an inter-ministerial crisis committee to address public panic over the potential economic shock from the Middle East crisis.

They recommended that the committee provide regular briefings to prevent unnecessary alarm. The proposal came during a meeting between the Bangladesh Bank governor and eight leading economists at the central bank headquarters today.

Deputy governors, members of the Monetary Policy Committee, and the chief economist of Bangladesh Bank also attended the meeting.

Md Mostaqur Rahman, the new governor of Bangladesh Bank, convened the discussion in light of the ongoing Middle East crisis.

Central bank officials said the economists advised against using foreign exchange reserves under any circumstances. Since reserves are limited, alternative methods of paying for oil imports must be explored.

“If necessary, agreements should be reached with exporting countries such as Saudi Arabia. Opportunities for deferred payment should be sought, or loans could be taken from the Asian Development Bank or other sources to settle fuel import bills,” they said.

The meeting also emphasized the need to encourage remittances during this period. Incentives may be offered to motivate expatriates to send money through formal channels.

Cutting the policy rate should not be considered at this time, given the current situation.

Among those present were Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD); Fahmida Khatun, executive director of CPD; former chief economist of Bangladesh Bank Mustafa K Mujeri; Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID); Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM); Masrur Reaz, chairman of Policy Exchange Bangladesh; AK Enamul Haque, director general of the Bangladesh Institute of Development Studies (BIDS); and Nazmus Sadat Khan, senior economist at the World Bank’s Dhaka office.