Reforms to be implemented in phases, IMF agrees: Finance Minister

Finance Minister Amir Khasru Mahmud Chowdhury has said that economic reforms will be implemented in phases, taking into account the country's prevailing economic realities.

He further said it would not be possible to introduce sweeping changes overnight and that the International Monetary Fund (IMF) had agreed with this approach.

The government would proceed by determining which reforms should be prioritised and when they should be introduced, he added.

The finance minister made the remarks today, Monday, while speaking to journalists after a meeting at the Secretariat with Ivo Krznar, the IMF Mission Chief for Bangladesh and Hong Kong.

The minister said the IMF had expressed respect for the government's programme of financial reform, its political responsibility and its approach to economic policymaking.

He added that both sides had held constructive discussions on the framework and phased implementation of a new IMF lending programme.

According to the finance minister, the two parties had reached a clear understanding regarding the principles on which the proposed new lending programme would be based.

He said the IMF had agreed with the framework and policy proposals put forward by the government.

Amir Khasru Mahmud Chowdhury further said that a democratically elected government has an obligation to remain accountable to the people and that all economic decisions would be taken while safeguarding public interests.

The IMF had acknowledged and respected this sense of political responsibility, he noted.

The finance minister also said the IMF had expressed satisfaction with the progress achieved during the current government's four months in office, particularly in financial sector reforms, improvements in the stock and capital markets, and revenue collection.

He claimed that, for the first time in the country's history, significant progress in tax collection had been achieved within just four months.

He added that both sides had also held positive discussions on the government's plans to sustain this momentum and increase the country's tax-to-GDP ratio.

Addressing the issue of subsidies, Amir Khasru Mahmud Chowdhury said no specific conditions or detailed issues had yet been discussed. For the time being, he said, the discussions had focused on establishing the fundamental framework for the proposed programme. Detailed negotiations on such matters would take place at a later stage.

The finance minister also stated that discussions with the IMF remain ongoing and are expected to resume during the World Bank's Annual Meetings in September or October.

He added that the IMF is satisfied with the reform agenda pursued by the incumbent government and that work will continue towards finalising the new programme on that basis.