DHAKA: After a 2.5% first-quarter decline on the MSCI frontier index as the only losing Asian component, Bangladesh shares continued to be shunned by foreign investors on the headline Rohingya refugee influx now at 800,000, and banking sector balance sheet and management woes with bad loans at 10% of the total. Elections are also due this year with the opposition party leader unable to compete under corruption charges, and sporadic street violence erupting among rival political camps amid Islamist terror threats and military takeover rumors. The fifth anniversary of the Rana Plaza garment center collapse, which injured and killed thousands, also focused attention on unresolved worker safety issues in the mainstay export industry, as remittances from abroad remain uncertain with renewed local employment emphasis in the Middle East and elsewhere.
The spring IMF-World Bank meetings passed without a breakthrough on international development agency (IDA) support for the refugee emergency, after long-serving Finance Minister Abul Maal Abdul Muhith, due to retire in his mid-80s, tabled an urgent plea in Washington. The World Bank has a dedicated $2 billion window in its poor-country IDA affiliate for global displacement, and Bangladesh may follow Jordan’s previous model and enter a separate “compact” which could promise labor reforms and other investment incentives in exchange for expanded duty-free preferences and aid from major trade partners. In February the minister also revealed a higher recapitalization bill for half a dozen ailing state and private banks, after rescuing Farmers Bank at the end of last year following a depositor run on alleged fraud.
