The ongoing negotiations between the government of Bangladesh and the International Monetary Fund (IMF) centring around the former's request for a US$4.5 billion loan have drawn the attention of economic experts and media to an unprecedented degree.
Not that the country has sought financial assistance from the multilateral lender for the first time. It has drawn more than SDR1.7 billion (equivalent to USD1.37 billion) under, at least, ten credit facilities having an aggregate value of SDR 2.8 billion (USD 2.19billion) since 1974.
The reason behind attracting wider attention this time is the size of the loan---the largest ever---and the circumstances that have forced the government to seek what many be described as a bailout facility. Given the reserve still available with the central bank, there should be no justified reason to look at the proposed loan as a 'rescue package'. The availability of the IMF loan would make the situation a little more comfortable for the government.
However, more than anything else, the issues that are being raised by the IMF's negotiating team during its discussions with various government agencies are being followed by the media with intense interest. Most points the IMF has been raising are nothing new. The Article IV mission that holds annual discussions with the relevant government agencies asks the latter to carry out reforms in various sectors of the economy. Usually, identical issues also came up even more prominently during negotiations over various credit facilities. The government has been slow in implementing most reforms, which are painful and, in most cases, resisted by the vested quarters.
The IMF appears serious about reform measures and other issues that concern proper economic management.
Economic data generated by the Bangladesh Bureau of Statistics, the state statistical agency, is one issue the IMF has picked up for serious discussion.
On occasions, experts raise questions about the quality of a few macroeconomic data, as those hardly represent the situation on the ground. Thus, the quality of data gathered and compiled by the BBS and other government agencies often comes under the scrutiny of experts and development partners.
The inflation data released by the BBS in recent months have raised serious doubts. The organization took longer time than usual to publish the inflation data for August last. The IMF, during its parleys with the BBS, sought to know the reason for the delay. The answer that came from the BBS must have been taken by the IMF with a grain of salt.
The IMF team has suggested the BBS release the GDP data quarterly instead of in annual reporting practice. It also reportedly advised the BBS to change the base year of the consumer price index (CPI) and inflation calculation. The response of the BBS top notches to the IMF's suggestions is not known. But they should make serious efforts to prepare quality and credible data that concern the economic well-being of the country and its population, and try to uphold the independence of the national statistical organisation. They should also resist undue interference designed to manipulate important economic data.
No planning at the national level can be perfect and deliver results if the quality of data remains poor or imperfect. So, improvement in macroeconomic data quality is a must.
