CAIRO, 28 October 2022, (TON): The first preparatory meeting for the forthcoming Arab Summit kicked off at the International Conference Center west of Algiers.

The preparatory session was held as a prelude to the 31st Arab summit, to be hosted by Algeria on Nov. 1-2.

The Palestinian crisis is expected to top the summit agenda, also covering relations with Africa and Europe at various levels.

Algerian officials have announced the completion of arrangements for the event.

The country’s official news agency, APS, published a video on the preparations, describing the event as the most important in the history of the Arab summits.

DHAKA, 28 October 2022, (TON): President M Abdul Hamid received the credentials of India's new resident High Commissioner to Bangladesh Pranay Kumar Verma at Bangabhaban.

Welcoming the new Indian envoy, the president said India is a tested friend of Bangladesh.

Bangladesh always gives priority to the bilateral ties with India, President's Press Secretary Md Joynal Abedin quoted the president as saying.

Thanking the government and people of India for their cooperation in the 1971 Great War of Liberation, President Hamid said “since then bilateral relations between Bangladesh and India have been gradually expanding in various fields.”

NEW DELHI, 28 October 2022, (TON): Prime Minister Narendra Modi spoke to Britain's new Prime Minister Rishi Sunak. PM Modi and his British counterpart discussed the need to close a balanced free-trade deal between India and the UK soon.

PM Modi tweeted "glad to speak to Rishi Sunak today. Congratulated him on assuming charge as UK PM. We will work together to further strengthen our Comprehensive Strategic Partnership. We also agreed on the importance of early conclusion of a comprehensive and balanced FTA.”

Mr Sunak tweeted a thank you and tagged PM Modi.

DHAKA, 28 October 2022, (TON): Bangladesh Bank (BB) Spokesperson GM Abul Kalam Azad today said “the final decision on the US$4.5 billion loan from the International Monetary Fund will come within next two weeks.

He said while talking to media "the IMF team is visiting Bangladesh as part of its regular programme. We have discussed on banking and the overall economic situation. The final decision on the $4.5 billion loan will come within two weeks.”

Members of the IMF delegation today met the central bank officials as part of the ongoing discussions on lending to Bangladesh.

DHAKA, 28 October 2022, (TON): The United States formally opened a new commercial service office at the US Embassy, which will play an important role in strengthening trade ties between the two countries.

United States assistant secretary of commerce for global markets and director general of the US and foreign commercial service Arun Venkataraman and US ambassador to Bangladesh Peter Haas announced the opening of the office. 

Venkataraman said “as the United States and Bangladesh celebrate 50 years of bilateral relations, it is an opportune moment to expand upon the strong foundation of our bilateral and commercial relationship.”

The new Commercial Service office here in Bangladesh will play an important role in strengthening trade ties between our countries, and how we support US companies doing business in such a dynamic and fast-growing economy.

By Ali Hassan

Bangladesh has two major parties that have fame and prestige in Bangladesh since its birth in 1971. The one is well known and pioneer party named as Awami league (AL) lead by Sheikh Mujeeb ur Rehman and his daughter Sheikh Hasina. Second one is Bangladesh Nationalist Party (BNP) lead by Zia ur Rehman initially and then his wife Begum Khaleda Zia after the death of Zia ur Rehman. The Bangladesh Awami League, often simply called the Awami League or AL is a centrist to centre-left political party in Bangladesh. The All Pakistan Awami Muslim League was founded in Dhaka, the capital of the Pakistani province of East Bengal, in 1949 by Bengali nationalists. On the other hand, The Bangladesh Nationalist Party (BNP) is a centre-right to right-wing nationalist, political party in Bangladesh and one of the major political parties of Bangladesh. It was founded on 1^st September 1978 by former Bangladeshi President Zia ur Rahman after the Presidential election of 1978, with a view of uniting the people with a nationalist ideology.

Since its foundation, BNP succeeded in second, fifth, sixth and eighth national elections and two Presidential elections in 1978 and 1981. The party also holds the record of being the largest opposition in the history of parliamentary elections of the country, with 116 seats in the seventh national election of June 1996. It has currently 7 MPs in parliament after 2018 general election. Although the party was initially founded on nationalistic principle, many of its leaders want an Islamic government and its main supporters are Islamists.

After the emergence of independent Bangladesh, the Awami League won the first general elections in 1973 but was overthrown in 1975 after the assassination of Sheikh Mujibur Rahman. The party was forced by subsequent military regimes onto the political sidelines, and many of its senior leaders and activists were executed or jailed. After the restoration of democracy in 1990, the Awami League emerged as one of the principal players of Bangladeshi politics. Since 2009, when the Awami League came to power, Bangladesh has experienced democratic backsliding.

Moreover, the current party leader and the prime minister of Bangladesh, Sheikh Hasina’s policy outrages let AL to suffer in negative as well. Athough undoubtedly Sheikh Hasina devoted her life for the state and party and brought many developments and changes but somehow she missed her father’s polices and legacies which were the beauty and strength of this party.

Furthermore Hasina and her party faced accusations of suppressing the opposition throughout their term in power. Many opposition members were arrested or tried, and the government at times seemed to stifle dissent and free speech. Jamaat-e-Islami, a small Islamist party key to the opposition coalition, was in 2013 banned from participating in elections, after a court ruled that its religious charter was inconsistent with Bangladesh’s secular constitution. Citing concerns that the 2014 parliamentary elections would not be free and fair, the BNP and other opposition groups boycotted the polls, and the Awami League swept the elections. Those concerns remained in place in advance of the 2018 polling, though the BNP did decide to contest the elections that year. Khaleda, still leader of the BNP, was jailed on charges of embezzlement and graft earlier that year and was not allowed to participate. The Awami League won a landslide victory, while the BNP won only a few seats. Hasina denied accusations of election rigging and dismissed the BNP’s loss as resulting from a lack of leadership within the party. This showed that Hasina wajed is more concerned about the protection of her power and party leadership than the concerns of Bangladesh and Bengali people.

Moreover Sheikh Hasina’s more inclination towards India and working closely on the agenda of Modi, the Indian Prime Minister, has created a sense of chaos in Bangladeshi people and now AL is being questioned on the basis of performance of current leader Sheikh Hasina Wajid. In  recent years, Bangladesh has seen rising anti-India sentiments among its citizens due to the Indian government's perceived anti-Muslim and anti-Bangladeshi activities like India's interference in Bangladeshi politics, killings of Bangladeshis by Indian BSF, Citizenship Amendment Act, rise of Hindutva in India as well as India's reluctance in solving the water disputes in common rivers with Bangladesh. In 2019, several Bangladeshi ministers canceled their scheduled state visits to India as a response to India's Citizenship Amendment Bill. In 2021, massive protests in Bangladesh against the state visit by Indian PM Narendra Modi to the country led to the death of at least 14 people. The democracy in Bangladesh was also at risk.

These situations have emerged questioning minds in Bangladesh. The people of Bangladesh want to restore the policies of Bangabandu and Khaleda Zia the BNP leader. So, the forthcoming elections could be expected as a regime change in Bangladesh as AL has lost most of its credibility because of pro-Indian polices.

BY S. Sultan

On 25 October 2022, the third Senior Officials Meeting between the Maldives and the European Union (EU) was held in Male Maldives. This meeting confirmed the constructive and rising impetus in the affairs between the two sides over the previous years. The Maldives and the European Union reconfirmed their robust mutual interest in further consolidating their bilateral relations, embedded in mutual values and promises, the principles of the UN Charter and international law, and to further deepening the commitment, including through the implementation of the EU Strategy for collaboration in the Indo-Pacific.

The EU applauded the optimistic helps made by the Minister of Foreign Affairs of Maldives in his capacity as the President of the 76th Session of the United Nations General Assembly and commended him for the successful completion of his term.

The EU also greeted the Government of Maldives’ commitment towards consolidation of egalitarian governance, firming the rule of law and combating corruption, upgrading and protecting of human rights and implementing improvements in the justice sector. The EU reconfirmed its incessant robust support of the Maldives’ activities and standing for these reforms to be applied.

As close partners in the multifaceted sphere, both Maldives and EU restated their purposes to enlarge the current partnership and work diligently in the UN and all related multilateral fora including to address global tasks such as peace, harmony and safety, climate change and biodiversity, water and plastic contamination.

The EU praised the Maldives on being elected to the UN Human Rights Council for the term 2023-2025 and showed hope for sturdy collaboration in the elevation and safety of human rights in the multilateral framework. The Maldives and the EU underscored the prominence committed to the freedom of expression and viewed as indispensable foundations for democracy and the rule of law. The Maldives and EU also stressed their continued resilient support to civil society.

The Maldives greeted the EU’s Multi-Annual Indicative Programme (MIP) for the Maldives in the future, the first dedicated envelope to the Maldives since 2013. With EUR 12 million (MVR 178.6 million) allocated for the period 2021-2024 under the MIP,  both the Maldives and EU agreed to deepen cooperation in the green transition, climate change mitigation and adaptation, biodiversity protection and circular economy, and continued support for good governance, rule of law and security.

Through the MIP, the Maldives would get support from the EU in crucial areas of the Strategic Action Plan 2019-2023 and the National Resilience and Recovery Plan. The Maldives especially hailed the EU’s new actions for judiciary improvements and biodiversity safety.

The Maldives and the EU agreed on the need to augment security cooperation, especially in areas of counterterrorism and preventing violent extremism and agreed to explore avenues and expand the partnership, including through a new project focused on increasing security in the Maldives. As partners in trade and investment, both the Maldives and the EU agreed to enhance economic cooperation through mechanisms such as the Business Roundtable initiative.

The EU and the Maldives are committed to the global fight against unlawful, unreported and unfettered fishing and look forward to consolidating their mutual partnership in this domain. Maintainable management of fish stocks through the Indian Ocean Tuna Commission was also discussed. The Government of the Maldives repeated its appeal to the EU to think about granting duty-free access to sustainably sourced tuna products from the Maldives. Remembering the significance of increasing people-to-people ties between the two sides.

The Maldives also reiterated its request for visa-free travel for Maldivian nationals to visit to EU Member states. The Third Senior Officials Meeting between the Maldives and the EU was held in a hybrid set-up with the debates co-chaired by the Minister of State for Foreign Affairs and Deputy Managing Director for Asia and Pacific at the European External Action Service.

By Nasria Naffin, TON Sri Lanka

The World Bank survey found that only 2% of experts thought that balance of payments issues were brought on by conflicts in central bank policy, even as Sri Lanka's rupee crashed once more in 2022 and several South Asian pegs came under pressure.

The survey also uncovered deeply held Mercantilist beliefs among regional policymakers and experts, suggesting that there are no solutions to the region's persistent monetary instability, especially when the US tightens policy and South Asian soft-pegs fail.

Approximately 85% of respondents thought that increasing import costs were to blame for balance of payments deficits. Another 76 percent of experts (who offered a variety of explanations) thought that the reason was a slower growth in exports than in imports.

This is consistent with the general criticism of importers leveled by soft-peggers and others in South Asia (there is a trade deficit). South Asian exporters are simultaneously blamed for soft peggers (this is not an export oriented economy).

Falling remittances through official channels were to blame for another 30%. This is consistent with another group of diligent earners of hard currency who are frequently held accountable by soft-peggers and other people who reject traditional monetary economics.

When liquidity is injected to suppress market rates as domestic credit increases, a reserve-collecting central bank with a policy rate (a non-credible peg) experiences balance of payments problems. In 2021, many central banks in the region lowered interest rates (Bangladesh was one of them), while others (Pakistan and Sri Lanka) established central banks that refinance funds in the style of Zimbabwe in an effort to increase credit. By buying fresh Treasury bills (deficit monetization) or old Treasury bills held by commercial banks and other holders and not rolling them over and purposefully failing bond auctions, liquidity can be added to the banking system.

In the latter stages of a currency crisis, private bank refinancing through liquidity injections to counteract dollar sales (sterilized interventions) in the forex markets picks up as increasing larger volumes of dollars are sold to defend the peg whose credibility has been damaged.

Once the peg's credibility is compromised, there is capital flight, exporters try to postpone conversions, and importers try to settle early. However, capital outflows are constrained in the majority of nations with dubious pegs.

Additionally, new money is created to sterilize outflows in order to maintain the policy rate that is incompatible with domestic policy and to fend off a contraction in the amount of reserves, which would otherwise cause domestic credit to slow down (either inflation or reserve money target).

Shock rate increases will eventually be required to stop balance of payments deficits by limiting domestic credit. By separating the reserve currency from the balance of payments, a flotation could also put an end to policy disagreements.

It is a common misconception that deficit financing occurs in Sri Lanka because such injections, which enable banks to lend without deficits, are categorized as claims on the government (net credit to government). when, in reality, they are claims against commercial banks by central banks.

During the Bullionist-Anti-bullionist debates in the UK in the 19th century, David Ricardo warned the Bank of England against sterilized interventions and referred to them as "fictitious capital."

During that time, currency printing that caused gold exports (or forex shortages in modern parlance) was typically referred to as a "super abundance of paper money."

About 37% of South Asian experts put the blame for the balance of payments problems on capital outflows. After the Reserve Bank of India was nationalized, money was printed to pay for Nehru's five-year Gos-plan-style programs, now generally referred to as stimulus, and Ceylon's currency board was broken in favor of a soft-peg, severe balance of payments problems first appearing in South Asia.

 In the 1950s, B R Shenoy was the only traditional economist to caution India against the general consensus of other "economists" and policymakers against what is now known as stimulus. According to Shenoy under the central bank policies economic freedom and individual liberties will cease to exist and ideologies like communism will develop.

The KMT remnants that fled to Taiwan established one of the world's pegged monetary authorities that consistently practiced deflationary policy (mopping up inflows to under-supply reserve money rather than over-supplying by offsetting outflows with new money), laying a solid foundation for the development of domestic capital.

Exchange controls and import control laws were implemented in Sri Lanka in 1969 after a hard peg was abolished and a soft peg modeled after Latin America was established. This ended economic freedoms and individual liberties and destroyed domestic capital through inflation and depreciation.

In 1966, more than ten years later, Shenoy forewarned Sri Lanka that import restrictions were pointless and that its inflationary central bank policy needed to be changed. At the time Sri Lanka's central bank was engaging in re-financing rural credit, and not systematically mis-targeting rates through open market operations unlike in the past decade.Several pegs which had a degree of credibility in South Asia, including Maldives, Nepal and Bhutan are now under pressure due to ‘monetary policy modernization’.

All blame is usually put on deficit financing in a knee jerk reaction including by the perpetrators of inflationary financing.

However, Shenoy explained that deficit financing simply transfers spending power from the public to the government and cannot add to new demand unless interest rates are suppressed with central bank accommodation.

However, commercial bank funding of the deficit could be inflationary if central bank reserves (a reserve short or window borrowing) were used.

WASHINGTON, 27 October 2022, (TON): US President Joe Biden and Israel’s President Isaac Herzog on Wednesday discussed the growing threat to Ukraine from Russia’s Iranian-supplied war drones, as Israel comes under pressure to help Kyiv.

Herzog told reporters at the White House after his talks that they “mainly” discussed Iran’s nuclear program, the crushing of protesters demonstrating against strict Iranian religious laws, and the issue of Tehran’s drone sales to Russia.

Herzog said “the weapons are killing innocent Ukrainian citizens.”

Israel has been reluctant to get involved in a US-led alliance helping pro-Western Ukraine to repel a bloody Russian invasion.

RIYADH: Saudi Arabia’s Crown Prince Mohammed bin Salman has announced that the Public Investment Fund will establish five more regional investment companies, in Jordan, Bahrain, Sudan, Iraq, and the Sultanate of Oman.

This comes after the launch of the Saudi Egyptian Investment Co. in August, and across all six companies the value of the targeted investments will reach SR90 billion in opportunities across various sectors.

Companies will invest in infrastructure, real estate development, mining, healthcare, financial services, food and agriculture, manufacturing, telecommunications and technology, and other strategic sectors.