Bangladesh’s international minister mentioned corporations making “runaway revenue” from the conflict in Ukraine ought to compensate affected, much less developed nations.
“On this conflict, some corporations are making runaway revenue… power corporations and the protection corporations,” AK Abdul Momen instructed CNBC’s Tanvir Gill on the sidelines of the G-20 international ministers summit in New Delhi.
“Due to this fact, we’ll argue that these corporations which are making runaway revenue, they need to dedicate not less than 20% of the revenue to these international locations which are most affected like us,” he added, with out naming particular corporations.
His feedback come a bit over a 12 months after Russia’s invasion of Ukraine. The World Financial institution estimated Ukraine’s economic system shrank by as a lot as 35% prior to now 12 months.
The conflict has additionally had main international financial ramifications, particularly for international locations like Bangladesh which imports most of its power. The international minister mentioned about 95% of the nation’s power is imported.
“Naturally, we purchase power from overseas. The price of power has shot up, leading to excessive inflation. We try to manage the inflation by offering subsidies and it’s costing the federal government,” mentioned Momen.
“Due to this fact, we would like the top of the conflict. We consider in peaceable negotiations.”
The international minister additional famous the G-20 international locations ought to make this compensation “obligatory.”
“That is the G-20 leaders — they’re the leaders of the world … If I ask, they won’t give a rattling to it,” mentioned Momen. “However G-20 leaders, they will make it obligatory for all these corporations to pay a proportion of their runaway revenue to essentially the most affected international locations.”
Final 12 months, a United Nations report highlighted the fallout from Ukraine’s conflict may dramatically worsen the financial outlook for growing international locations already grappling with debt financing associated to the Covid-19 pandemic.
“Rising commodity costs and commerce disruptions are exacerbating inflationary pressures and dampened development expectations are weighing on the restoration from Covid-19, with extreme implications for among the poorest and most susceptible international locations,” mentioned the report.
“For a lot of growing international locations already at excessive threat of debt misery, the spillover results of the conflict might additional worsen debt vulnerabilities because of the rising balance-of-payments and monetary pressures,” the UN mentioned.
In late January, Bangladesh secured $4.7 billion in loans from the Worldwide Financial Fund to assist cushion the blow of a looming monetary disaster.
It’s going to get $3.3 billion underneath the IMF’s prolonged credit score facility and associated preparations, with a direct disbursement of about $476 million. The IMF govt board additionally authorized $1.4 billion underneath its newly created resilience and sustainability facility for local weather investments for Bangladesh, making it the primary Asian nation to entry it.
“Bangladesh’s strong financial restoration from the pandemic has been interrupted by Russia’s conflict in Ukraine, resulting in a pointy widening of Bangladesh’s present account deficit, depreciation of the Taka and a decline in international alternate reserves,” the IMF mentioned in a press release.
Bangladesh’s international minister additionally mentioned meals safety is one other downside the nation is fighting that the G-20 leaders must deal with. He was additionally crucial of the Western sanctions imposed on Russia, saying the measures are hurting the growing international locations essentially the most.
“We’re actually upset additionally as a result of this conflict …. has damaged the availability chain in addition to monetary transition mechanism. And these are hurting us, it is hurting the poor growing international locations rather a lot,” mentioned Momen.
“Subsequent time, once they provide you with the sanctions and counter sanctions they need to not less than seek the advice of with folks like us — the growing international locations — to get some concept as how a lot it would harm them. And will create a mechanism in order that the international locations that might be hurt- that they need to be compensated with.”