It's high time Bangladesh sought alternatives to IMF's funding

Since the very dawning of Bangladesh's independence, the country has struggled to achieve more than just a sovereignty. People of then East Pakistan fought a war in 1971 for their soil, but they never won control over the economy. Rather, since the 1980s, institutions like the International Monetary Fund (IMF) and the World Bank have embedded themselves deep into our national decision-making -dictating how 'we value our currency', how 'we budget our resources', and how 'we serve our people'.

 

The latest standoff between Bangladesh Bank and the IMF over the floating of the Taka is not just a matter of technical disagreement. It reveals a broader crisis: one of sovereignty, dignity, and the limits of externally imposed policy. Despite a virtual meeting this week between high-level Bangladeshi officials and IMF staff, no breakthrough occurred. The IMF continues to demand a fully flexible exchange rate in return for the disbursement of $2.4 billion-the remaining two tranches of a $4.7 billion Extended Credit Facility (ECF) package. But Bangladesh has remained unwavering in its stance of not relaxing the exchange rate policy.

 

The floating of the Taka began formally in 2003, under a so-called 'managed float' regime. While in theory this allowed the central bank-Bangladesh Bank- to intervene to prevent frequent fluctuations, in practice, the IMF influence has steadily reduced Bangladesh Bank's ability to maintain any meaningful control. The result has been devastating: the Taka has depreciated by over 30 per cent since 2022. Every month, the cost of essential imports-fuel, food, medical equipment- is continuing to rise. The poor are caught in an inflationary spiral. Wages remain stagnant while the price of onions, lentils, and rice skyrockets. Dollar liquidity in commercial banks is drying up, affecting trade and business. Yet, the IMF continues to insist, this is the inherent pain of reforms.

 

 

But we have seen such kind of pressure before in many countries. In 1997, Indonesia succumbed to IMF prescriptions during the Asian Financial Crisis. The Rupiah was floated. Fuel and food subsidies were cut. Capital markets were deregulated. Within months, inflation soared to over 80 per cent, riots erupted, and millions were pushed below the poverty line. The IMF denied responsibility, blaming domestic mismanagement. But the truth was clear: externally imposed economic liberalisation triggered systemic collapse.

 

Bangladesh now teeters on the edge of similar danger. The so-called floating of the Taka is already a de facto surrender to speculative markets. What the IMF is asking for is not just flexibility, but for Bangladesh to relinquish all command over its currency. Such a move, in the current fragile environment, will not lead to stability. It will lead to price shocks, hoarding, black markets, and despair.

 

Currently, the Taka is not merely a depreciated currency. It is becoming a symbol of valuelessness. A garment worker earning Tk 12,000 a month cannot afford basic goods that cost Tk 6,000 just two years ago. A schoolteacher finds her salary evaporated by utility bills and groceries. Middle-class savings are eroding. Fixed-income pensioners are being thrust into destitution. This is not devaluation alone. It is adjacent inflation: a form of silent robbery by which external exchange conditions impoverish an entire nation.

 

 

And yet, amid all this, the IMF sends more 'recommendations.' It recommends austerity. It recommends deregulation. It recommends 'fiscal prudence.' But what it never recommends is accountability: neither for itself nor for the political elite that enables these cycles of debt and dependency.

 

The World Bank and IMF have never been neutral institutions. Created in 1944 under the Bretton Woods system, their original mandate was to rebuild war-torn Europe and stabilise global capitalism-not to serve post-colonial nations. The conditions they attach to loans are often ideological in nature: cut public spending, privatise state enterprises, liberalise financial flows. These prescriptions rarely consider the socio-political context of recipient countries. For nations like Bangladesh, they have proven to be recipes for dependency, not development.

 

For decades, successive governments in Bangladesh have complied with these institutions: signing off on austerity packages, deregulation reforms, and market liberalisation. But where has it taken us? To debt, not growth. To unemployment, not opportunity. To hollow institutions, not capacity-building. The irony is stark: a nation born out of the cry for self-rule has handed over its economic levers to foreign technocrats.

 

It is time to say enough. Bangladesh must now begin the gradual but irreversible process of reclaiming economic sovereignty. This starts with rejecting further conditionality-based lending from the IMF. We must develop an indigenous economic model-rooted in regional cooperation, domestic production, remittance stability and controlled exchange mechanisms. There are alternatives to IMF funding. The Islamic Development Bank, BRICS New Development Bank, and regional partners, such as China, Malaysia, and Indonesia have expressed openness to bilateral arrangements without the neoliberal strings attached.

 

We must also reintroduce a managed float that genuinely serves our economy, not just satisfies global capital. Bangladesh Bank must be empowered to stabilise the currency with transparent reserve strategies, currency swaps, and strategic import controls. Most crucially, fiscal discipline must be paired with social protection. Food, medicine, and education must be protected sectors. We must use digital targeting to ensure that subsidies reach the poor without fuelling corruption.

 

Beyond financial measures, a broader reckoning is needed. We must conduct a national audit of all foreign aid, loans, and donor engagements since 1971. Where did the money go? Who benefited? Why did inequality grow despite billions in so-called assistance? A National Economic Truth Commission must be established, so that the same mistakes are not repeated under new banners.

 

And, we must name the betrayal for what it is. Many who claimed to be freedom fighters in 1971 later-on became collaborators of economic plunder. Some fought bravely in the war; others used the victory to exploit. Women were raped during the war-some by Pakistani soldiers, yes-but also by Bengali men who later-on rose to power.

 

Bangladesh must now reclaim the promise of its independence: not just politically, but economically. We need soon a new political party that stands for economic sovereignty, currency dignity, and national accountability. Our goal is simple: to end the decades-long cycle of dependency and restore the economic self-respect of our people. We will no longer be ruled by global lenders. Nor will we be governed by Dhaka's elite who serve them.

The writer is a journalist wit The Daily Observer