Chief Advisor Muhammad Yunus has said Bangladesh’s economy is not merely at “zero” but has sunk below it, blaming “rampant corruption, bribery, and money laundering” under the Awami League government for the deepening financial crisis.
Speaking at the Chatham House on the second day of his UK visit on Wednesday, he said the economy is under “immense debt pressure”, with foreign reserves nearly exhausted and the banking system already collapsed.
During the post-conversation Q&A, he addressed queries on elections and the Awami League, as well as the economy, expatriates, and corruption.
DEBT PRESSURE
“This is very tough job for us,” Yunus said when asked about the economy. “While the world is going through all these problems, we are going through another set of problems.”
“We are at the zero level of our economy, or negative level of our economy. Not only zero–zero still means you have a positive thing that you can move.
He added, “We have huge bills to pay because all the mega projects they took on were designed to generate kickbacks,” he said. “Those loans are now maturing, and we simply don’t have the money to pay them.”
Yunus referred to a taskforce report that claimed nearly $234 billion had been siphoned off from both bank and non-bank channels.
He explained that the country’s foreign exchange reserves are “at the bottom–because they’re empty”, and the banking system has “completely collapsed”.
The interim head described how entire bank boards were forced to resign under pressure, replaced by handpicked officials who issued loans to allies with the understanding that the money was a “gift”–no collateral, no repayment was expected.
“This is the banking system we inherited,” he said, adding that restoring it is now essential.
The government is under “pressure” to meet outstanding payment demands from creditors who, Yunus warned, are prepared to take legal action.
“That would not be good for us,” he added.
Yunus said the country was rescued during the crisis by overseas Bangladeshis, particularly those in the UK, Middle East, and other regions, who continued to send large amounts of remittances.
“That saved us,” he said. “The economy was saved by them. The remittance kept growing, and today our balance of payments situation has completely changed.”
IMF SUPPORT, GLOBAL AID
Yunus said the interim government, formed three days after the Awami League was ousted by a mass uprising, has received support from the International Monetary Fund (IMF) and the wider international community.
He added that it has also received an “amazing” response from governments around the world.
“Enormous support,” he said, noting that many countries expressed relief that a transitional authority is now in place–one they feel they can engage with.
“They said ‘Any support you need, please tell us–we’ll be very eager to do that’.
He described this as a major moral boost for the administration. “We are not abandoned.”
The remarks came in response to a question about whether the caretaker administration would be able to meet IMF expectations, particularly on tax reform and broadening the tax net before a new elected government takes over.
Yunus said the IMF had asked Bangladesh to let the exchange rate be determined by the market. “At first we were worried,” he said, “but they told us ‘You can handle it’.”
He noted that the IMF’s role had been constructive, not coercive. “It’s not like they’re trying to push us into trouble over some rigid principle. We were not willing to jump into the water–they said ‘Come on, you can do it’.
“And finally, we made it. That’s it. So we are thankful to the IMF.”
Asked about shifting ties with India and China, Yunus said, “We are reaching out to everyone. All the governments of the world have been extremely supportive, and we’re very thankful.
“We’re now trying to build stronger relationships and asking for support in ways we didn’t before–support that wasn’t available earlier,” he added.