Why Bangladesh is seeking Saudi oil on credit after IMF success

Bangladeshi Foreign Minister A.K. Abdul Momen meets Saudi Ambassador Essa Al-Duhailan in Dhaka on Feb. 1, 2023. (Photo/Bangladesh Ministry of Foreign Affairs)
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Updated 04 February 2023
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Why Bangladesh is seeking Saudi oil on credit after IMF success

  • Bangladeshi government asks Kingdom to supply oil on deferred payment basis
  • Request follows IMF approval of $4.7bn stabilization package for South Asian nation

DHAKA: After securing a stabilization package from the International Monetary Fund this week, Bangladesh has asked Saudi Arabia for extended credit on oil supplies, in a move that experts say would further help its economy get back on track.

Bangladesh Foreign Minister A.K. Abdul Momen met Riyadh’s Ambassador to Dhaka, Essa Al-Duhailan, earlier this week. The foreign ministry said after the meeting that Momen had asked the Kingdom to consider supplying crude and refined oil “on a deferred payment basis” to help Bangladesh meet its energy needs.

The request came shortly after the IMF approved a $4.7 billion loan for Bangladesh.

HIGHLIGHT

Request follows IMF approval of $4.7bn stabilization package for South Asian nation.

“Bangladesh is now passing through a period of constrained foreign exchange reserves and is having difficulty in terms of opening LCs (letters of credit) and also in terms of paying for our imports,” Prof. Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue in Dhaka, told Arab News on Friday.

“If we can get Saudi oil on a deferred payment basis, it will ease up Bangladesh’s foreign exchange reserves and help Bangladesh in terms of purchasing other necessary imports which require instantaneous payment.”

The IMF’s Extended Credit Facility and Extended Fund Facility package approved for Bangladesh on Jan. 30 are likely to boost the country’s outlook among its creditors, including Saudi Arabia, and demonstrate its capacity to pay back.

Unlike other regional countries, such as crisis-hit Sri Lanka and Pakistan, Bangladesh did not ask the fund for a bailout loan. The approved arrangements are a stabilization package to fund structural reform, ensure balance-of-payment stability, and a stable and sustainable economic position.

“The IMF granting of $4.7 billion will be helpful in providing positive signals to our development partners that the fundamentals of the Bangladeshi economy remain strong, and that Bangladesh is also ready to take up reforms,” Rahman said.

“From that perspective, it will also be helpful in projecting to Saudi Arabia that while we are asking for deferred payment, the Bangladeshi economy will be able to sustain good foreign reserves and when the negotiated time comes, we will be able to pay.”

Besides taking the pressure off its dollar reserves, the extended credit on oil supplies would also help Bangladesh with energy security. The South Asian nation, which is dependent on imported liquefied natural gas, has been struggling with an energy crisis in recent months.

Since mid-July, the government has been resorting to daily power cuts amid high global prices driven up by Russia’s war in Ukraine. Industries that do not receive sufficient power to run their operations have been forced to remain idle for several hours a day. In early October, about 80 percent of Bangladesh’s 168 million people were left without electricity after a grid failure caused by fuel shortages to over a third of the country’s gas-powered units.

Saudi Arabia supplies more than half of Bangladesh’s crude imports.

“We are bringing in oil, which is our regular, normal import, because our transport sector is fully dependent on this oil, and also partially our production,” said Prof. Mohammad Tamim, dean of chemical and material engineering at Bangladesh University of Engineering and Technology.

Importing energy and ensuring its uninterrupted supply are crucial to keeping the Bangladeshi economy afloat and helping it stabilize while other reforms requested by the IMF are implemented to fix structural problems.

“There is a lot of pressure in terms of importing energy products, so it’s very important that we keep supplying oil so that there is no disruption in economic activity,” Tamim said.

“Deferred payment will definitely help Bangladesh in tackling the dollar crunch now.”


Austrian minister defies coalition ally to back EU nature restoration law

Updated 3 sec ago
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Austrian minister defies coalition ally to back EU nature restoration law

  • Gewessler’s announcement angered Chancellor Karl Nehammer’s conservative People’s Party (OVP), which opposes the law

VIENNA: Austria’s environment minister, Leonore Gewessler of the Greens, defied her conservative coalition partners on Sunday by pledging to cast Austria’s vote in favor of adopting a European nature restoration law, potentially tipping the balance in Brussels.
European Union countries’ environment ministers will discuss the bloc’s flagship policy to restore damaged nature at a meeting in Luxembourg on Monday and potentially hold a final vote on whether to enact it.
The law would be among the EU’s biggest environmental policies, requiring member states to introduce measures restoring nature on a fifth of their land and sea by 2030.
“The time for decisiveness has come. I will vote in favor of the EU Nature Restoration Law on Monday,” she told a news conference called at short notice.
EU countries had planned to approve the policy in March but called off the vote after Hungary unexpectedly withdrew its support, wiping out the slim majority in favor.
Austria’s change of position would give the policy enough support to become law if no other countries switch.
Hungary, Italy, the Netherlands, Sweden, Belgium, Finland and Poland have previously said they will not support the policy but without Austria they would be one country short of being able to block it.
“This law is on a knife-edge. A majority at the European level is in no way certain,” Gewessler said, adding that some countries were hesitating to support it.
Gewessler’s announcement angered Chancellor Karl Nehammer’s conservative People’s Party (OVP), which opposes the law. It controls the Agriculture Ministry and says that since that ministry is partly responsible for this issue, Gewessler needs its backing.
The OVP minister for EU and constitutional affairs, Karoline Edtstadler, said that if Gewessler voted in favor without the Agriculture Ministry’s approval it would be unconstitutional.
“That must and will have legal consequences,” Edtstadler said on X.


Senegalese eye elegance for Eid at half the price

Updated 38 sec ago
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Senegalese eye elegance for Eid at half the price

  • People used to be ashamed to wear second-hand clothes for fear of being mocked or denigrated

DAKAR: In a second-hand shop in the suburbs of Senegal’s capital, Seynabou Sarr was inundated with orders days before West Africa’s largest Muslim festival.
Sarr, 30, constantly answers calls while showing customers second-hand boubous — a traditional robe worn by both men and women at religious or ceremonial occasions.
Tabaski — marked by most Senegalese on Monday — is celebrated with great pomp but can put families under pressure over the need to spend on food and new clothes.
Wearing the same outfit two years running is frowned upon.
“People used to be ashamed to wear second-hand clothes for fear of being mocked or denigrated,” Sarr, also known as Nabou, said.
“But increasingly, many are becoming aware of their benefits.”
For Tabaski — the West African name for Eid — customers want boubous made from luxury fabrics adorned with pearls and embroidery — but not with a luxury price tag.
When new, some boubous can cost up to 250,000 CFA francs ($405), a small fortune in a country with a median monthly salary of 54,000 ($88).
But at the boutique, finding one for as little as 90,000 CFA francs or less is possible.
Nabou launched her business online in 2018 before opening the shop in 2022. She now has more than 80,000 followers on TikTok.
Abdou Fall has opted for a second-hand tunic — an elegant three-piece with beautiful embroidery around the neck this year.
He bought it for 60,000 CFA francs, but it would have cost 130,000.
“It was not in my plans to buy a boubou this year as I already had a lot to do with other expenses,” he said.
“But the price was so affordable that I thought I would not deprive myself.”
Another customer, Matar Sarr, says that with a little money, “you can look as good as everyone else.”
“Who can tell that it is not new? Nobody,” Sarr said.
In Senegal, second-hand success is often less due to environmental concerns and more to financial motives.
Khady Djiba is looking for a wedding dress for her sister.
She examines the quality of the fabrics, runs her hand over the seams, lingers over the beading, and finally chooses a tunic with a long train adorned with glittering pearls.
New, the dress would be out of reach, but for 75,000 CFA francs, Djiba can buy it from Nabou.
It has a few flaws, but with a couple of alterations and dry cleaning, it will be as good as new.
“It’s a good deal,” she said, smiling.

 


Frustrated Ghanaians brace for more power cuts

Ghana’s President Nana Addo Dankwa Akufo-Addo. (Supplied)
Updated 10 min 18 sec ago
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Frustrated Ghanaians brace for more power cuts

  • Nigeria provides Ghana with a percentage of the gas it needs to fire its power-generating plants

ACCRA: Exasperated Ghanaians already grappling with frequent, unplanned power outages are steeling themselves for more misery after electricity distributors announced increased disruption to the grid in the coming weeks.
The blackouts, known as “dumsor” in Ghana’s Akan language, are making it harder to run businesses that are already struggling due to the country’s economic crisis — the worst in a decade.
On Thursday, the Ghana Grid Company and the Electricity Company of Ghana, which distribute power throughout the West African country of 33 million people, said there would be three weeks of load management because of maintenance work by a gas supplier in Nigeria.

FASTFACT

The erratic power supply is tipped to become a key topic in the December presidential election campaign.

Nigeria provides Ghana with a percentage of the gas it needs to fire its power-generating plants.
The announcement came a day after WAPCo, the operator of the pipeline importing gas from Nigeria, also warned there would be a drop in the quantity of gas available because of maintenance work in Nigeria.
The news has exasperated Ghanaians, who are already dealing with frequent power cuts.
“The current unannounced power cuts are already making it very hard to keep my poultry frozen,” said Judith Esi Baidoo, a 50-year-old frozen poultry vendor in Accra.
She added: “Now, with this three-week load management plan, I fear my stock will spoil. I don’t know how my business can survive this.”
The erratic power supply is tipped to become a key topic in the December presidential election campaign.
Timothy Oddoye, who repairs mobile phones in the Accra suburb of Kokomlemle, said: “The government had failed us. They’ve had years to fix these problems, yet we still suffer from the same issues.
“How can we grow our businesses when we can’t even rely on basic electricity?”
Despite being one of the African countries where electrification is most advanced, Ghana continues to experience chronic power shortages.
Domestic electricity production — generated by power plants that are often old and poorly maintained — has struggled to expand in line with rising demand.
According to International Energy Agency figures, Ghana generates 34 percent of its electricity from hydropower and 63 percent from gas.
The country produces oil and gas but still needs to import gas from Nigeria via the 678-km West African Gas Pipeline through Benin and Togo.
“The reliance on gas, especially from external suppliers, leaves us vulnerable,” said Ben Boakye, the Africa Center for Energy Policy executive director.
“The government must prioritize investments in renewable energy and upgrade our existing hydro and thermal plants to ensure consistent power supply.”
Public frustration at the power cuts erupted on June 8, when hundreds of Ghanaians, led by prominent celebrities, took to the streets of Accra to protest against the erratic supply under the slogan #DumsorMustStop.
These power cuts are all the more disturbing for Ghanaians as the country emerges from an economic crisis that saw inflation soar to 54 percent in December 2022.
It fell back to 25 percent in April 2023 but the population still suffers.

 


Ex-leader Jacob Zuma’s party says it will join opposition in South Africa’s parliament

Updated 16 June 2024
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Ex-leader Jacob Zuma’s party says it will join opposition in South Africa’s parliament

  • ANC and largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in a coalition

JOHANNESBURG: South Africa’s uMkhonto we Sizwe (MK) party will join an alliance of smaller opposition parties in parliament in a bid to take on the African National Congress and Democratic Alliance-led coalition government, it said on Sunday.
The ANC and its largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in a coalition it called “government of national unity,” a step change after 30 years of ANC rule.
Two smaller parties, the socially conservative Inkatha Freedom Party (IFP) and the right-wing Patriotic Alliance, will also take part in the unity government.
Former president Jacob Zuma’s uMkhonto we Sizwe party came in a surprisingly strong third in the May 29 election which saw the ANC lose its majority. MK won 14.6 percent of the vote which translated into 58 seats in the 400-seat National Assembly.
However, MK lawmakers boycotted the first sitting of the National Assembly on Friday after filing a complaint at the country’s top court alleging vote-rigging, which the court dismissed as without merit.
Spokesperson Nhlamulo Ndhlela told reporters that the MK party will join the alliance called the “Progressive Caucus,” which includes the Marxist Economic Freedom Fighters (EFF) and the center-left United Democratic Movement.
This alliance commands close to 30 percent of the seats in the National Assembly, Ndhlela said, sitting next to Zuma and the leaders of a number of small parties.
“This united effort is necessary because the 2024 election has also resulted in the consolidation of right-wing and reactionary forces who are opposed to economic freedom, radical economic transformation, racial equality and land repossession,” he said.
Ndhlela said that MK had decided to take up its seats in the National Assembly after receiving legal advice and that it would continue to raise its allegations of a rigged elections in parliament and in courts.


Ukraine summit paves way for peace talks with Russia

Updated 16 June 2024
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Ukraine summit paves way for peace talks with Russia

  • Leaders and officials from more than 90 states spent the weekend for summit dedicated to resolving largest European conflict since World War II
  • Ukrainian President Volodymyr Zelensky voices hope of garnering international agreement around proposal to end the war that he could present to Moscow

BURGENSTOCK: Dozens of countries meeting for a landmark international summit on peace in Ukraine agreed Sunday that Kyiv should enter dialogue with Russia on ending the war, while strongly supporting Ukraine’s independence and territorial integrity.
More than two years after Russia invaded, leaders and top officials from more than 90 states spent the weekend at a Swiss mountainside resort for a two-day summit dedicated to resolving the largest European conflict since World War II.
“We believe that reaching peace requires the involvement of and dialogue between all parties,” stated a final communique, supported by the vast majority of the countries that attended the summit at the Burgenstock complex overlooking Lake Lucerne.
The document also reaffirmed a commitment to the “territorial integrity of all states, including Ukraine.”
The declaration also urged a full exchange of prisoners of war and the return of deported children.
But not all attendees backed the document, with India, Saudi Arabia and the United Arab Emirates among those not included in a list of supporting states displayed on screens at the summit.
After world leaders stood together to offer their support on Saturday, Ukrainian President Volodymyr Zelensky voiced hope of garnering international agreement around a proposal to end the war that he could eventually present to Moscow.
The summit focused Sunday on food security, avoiding a nuclear disaster and returning deported children from Russia as countries outlined building blocks toward ending the war.
The summit, snubbed by Russia and its ally China, came at a point when Ukraine is struggling on the battlefield, where it is outmanned and outgunned.
On Friday, Russian President Vladimir Putin demanded Kyiv’s effective surrender as a basis for peace talks.
Putin’s call for Ukraine to withdraw from the south and east of the country were widely dismissed at the summit.
But the Kremlin insisted Sunday that Ukraine should “reflect” on Putin’s demands, citing the military situation on the ground.
“The current dynamic of the situation at the front shows us clearly that it’s continuing to worsen for the Ukrainians,” Kremlin spokesman Dmitry Peskov said.
“It’s probable that a politician who puts the interests of his country above his own and those of his masters would reflect on such a proposal.”
Russia on Sunday claimed its troops had captured Zagrine village in southern Ukraine, continuing its progress on the front line.
The Burgenstock talks were framed around areas of common ground between Zelensky’s 10-point peace plan presented in late 2022, and UN resolutions on the war that passed with widespread support.
The tight remit was an attempt to garner the broadest support by sticking firmly to topics covered by international law and the United Nations charter.
Countries split into three working groups on Sunday looking at nuclear safety and security, humanitarian issues, and food security and freedom of navigation on the Black Sea.
The session on humanitarian aspects focused on issues around prisoners of war, civil detainees, internees and the fate of missing persons.
It also discussed the repatriation of children taken from occupied Ukrainian territory into Russia.
Talks on food security examined the slump in agricultural production and exports, which has had a ripple effect across the world as Ukraine was one of the world’s breadbaskets before the war.
Talks looked at not only the destruction of fertile land through military operations but also the ongoing risks posed by mines and unexploded ordnance.
Artillery attacks on ships in the Black Sea have driven up the cost of maritime transport.
The nuclear safety group looked at the fragile situation surrounding the safety and security of Ukraine’s nuclear power plants, notably Zaporizhzhia, where all of the reactors have been shut down since mid-April.
Talks honed in on reducing the risk of an accident resulting from a malfunction or an attack on Ukraine’s nuclear facilities.
“When a just and sustainable peace comes, we will all be there to help Ukraine rebuild,” Canadian Prime Minister Justin Trudeau said in the final address from invited leaders.
“The people who lost their lives, the families destroyed, they won’t be able to bring them back. That’s the most painful consequence of war: the human suffering.
“This illegal war by Russia needs to end,” he said, while accepting that “it won’t be easy.”
Minds also turned to a potential second summit, at which Ukraine wants to present Russia with an internationally-agreed plan for peace.
Swiss President Viola Amherd said in her closing remarks: “One key question remains: how and when can Russia be included in the process?
“We have heard it in many of your statements: a lasting solution must involve both parties,” she said, while acknowledging that “the road ahead is long and challenging.”
Zelensky did not say whether he was prepared to engage with Putin directly in talks to end the conflict, though he has in the past ruled out direct talks with him.
“Russia should join this process because Russia is responsible for the starting of the process that’s called the war,” Georgian President Salome Zourabichvili told reporters.