Finance Ministry objects to Foreign Ministry proposal to raise hotel allowances for ministers’ foreign trips

Discussions are underway within the government over increasing hotel allowances for ministers and state ministers during foreign tours.

The Ministry of Foreign Affairs has proposed removing the existing hotel allowance ceiling for ministers and state ministers and determining expenses on the basis of actual costs. The ministry believes the current rates are no longer aligned with reality due to rising global hotel prices and living costs.

After receiving the proposal from the foreign ministry on 8 April, the Ministry of Finance reviewed it and said that determining hotel allowances based on actual expenses would significantly increase expenditure in this sector.

Officials say it would also create disorder in verifying what the actual expenses were. According to officials, at a time of economic pressure, a dollar crisis and austerity measures in the country, approving a proposal for increased expenditure on foreign travel by ministers and state ministers could also create a negative public perception. The finance ministry is not in favour of increasing hotel allowances at this moment.

The Ministry of Finance has fixed the amount ministers and state ministers receive daily as hotel allowance during official foreign travel. An order issued by the finance ministry on 9 October 2012, states that a minister travelling to a Group-1 country would receive US$420 per day for hotel accommodation. In Bangladeshi currency, that amounts to Tk 51,240, calculated at Tk 122 per dollar.

A state minister receives a daily hotel allowance of $312, which amounts to Tk 38,064 in Bangladeshi currency. The hotel allowance is paid in dollars.

The order, titled “Travel allowances and other facilities payable in foreign currency during official foreign travel,” also specifies hotel allowances for the Speaker of Parliament, the Chief Justice, the Cabinet Secretary, members of parliament and government officials.

Thirty countries have been specifically listed under Group-1. These include Japan, Singapore, South Korea, China, Hong Kong, Bahrain, Qatar, the United Arab Emirates (UAE), Saudi Arabia, Iran, Kuwait, Australia, Canada, the United States, Brazil, Mexico, Russia, the United Kingdom, Switzerland, France, Belgium, Italy, Sweden, Germany, Greece, the Netherlands, Portugal, Spain and Türkiye. Other countries in Europe, Oceania, North America and South America are also included.

In a letter sent to Finance Secretary Khairuzzaman Mozumder, Foreign Secretary Asad Alam Siam proposed increasing hotel allowances for countries included in Group-1.

In the letter, he mentioned that hotel allowances for ministers and state ministers are currently fixed for foreign travel. However, because of global inflation and increased living costs, it has become impossible in many international cities to ensure accommodation that maintains diplomatic protocol and state dignity within the existing hotel allowance ceiling during international conferences and high-level meetings.

Referring to a recent example from his own ministry, the secretary mentioned in the letter that during a visit to London, a standard room at a five-star hotel was booked at a daily rate of $850, which was more than double the prescribed ceiling. Later, approval from the Finance Division was sought regarding the additional expenditure.

He further mentioned in the letter that in many countries there is no fixed upper limit on hotel allowances for ministers. Their hotel costs are paid based on actual expenses.

The foreign secretary believes that when ministers and state ministers represent Bangladesh internationally, ensuring suitable accommodation while considering diplomatic dignity, protocol and security is essential.

Therefore, he argued, it is necessary to relax the existing hotel allowance ceiling for ministers and state ministers in line with present realities.

The foreign secretary submitted the proposal at a time when the finance ministry has made economy-class air travel mandatory instead of business class for additional secretaries and equivalent officials travelling abroad. The Finance Division took the decision on 30 April as part of government expenditure cuts.

The order states that additional secretaries and equivalent officials of government, semi-autonomous, statutory, autonomous and state-owned institutions must travel abroad by economy class. Until now, officials at this level had been allowed to travel by business or executive class.

On 13 April, the Cabinet Division issued a circular, reducing benefits for government employees in nine areas to address the global crisis arising from the war in the Middle East.

The circular stated that fuel usage allocated monthly for government vehicles must be reduced by 30 per cent. Interest-free loans for government officials to purchase vehicles and all foreign training funded by the government would remain suspended. Domestic training expenses, excluding training costs, must be reduced by 50 per cent. Hospitality expenses for meetings and seminars must be reduced by 50 per cent. Travel expenditure must be reduced by 30 per cent.

According to the foreign ministry, under international diplomatic practice, it is important to stay in hotels close to the venues of meetings, conferences and state events. However, due to the current expense ceiling, delegations often have to stay far from event venues, negatively affecting time management, security and diplomatic activities.

The ministry futher said that ministers and high-level representatives are frequently facing difficulties while representing Bangladesh in various international conferences, meetings and diplomatic programmes. In particular, finding suitable and secure hotels within the prescribed allowance has become difficult in major cities of developed countries.

The foreign secretary requested the removal of the existing hotel allowance ceiling for official foreign tours by ministers and state ministers and the introduction of hotel allowances based on actual expenses.

A senior official of the finance ministry told Prothom Alo last Wednesday that government import costs have increased because of the war in the Middle East. The country’s economic condition is not very good. The government is reducing expenditure.

Now is not the time to increase hotel allowances for ministers and state ministers, the official said. However, if a decision comes from the government’s top level, the allowances will be increased according to the proposal.