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Last Updated: Thursday, 12 June, 2003, 17:30 GMT 18:30 UK
Bangladesh budget takes aim at poverty
By Alastair Lawson and Waliur Rahman
In Bangladesh

The Bangladeshi finance minister Saifur Rahman has presented his budget before parliament.

The emphasis was on poverty reduction, and there were big increases in education, information technology and defence spending.

The budget was presented as the opposition called a one-day countrywide general strike. Demonsrators clashed with police in the capital Dhaka and at least two people were injured.

The Bangladeshi finance minister said he wanted to halve poverty in his country by 2015.

It is a tough task because it is estimated that half the population of 135 million live below the poverty line.

Pay rise

Armed with two large loans each of $500m (300m) from the World Bank and International Monetary Fund, he was able to announce big increases in spending in nearly all main areas of government, but despite the generosity of international donors, Mr Rahman said he wanted to rely less on foreign aid.

He said this could be done by expanding the tax base within Bangladesh.

The minister said the country remained economically stable with a reduced budget deficit, low inflation and a high level of foreign exchange reserves.

He said that better economic management had allowed him to significantly increase spending on education and information technology.

Government officials will get a 10% pay rise from next month. And the finance minister proposed a corporate tax reduction for the ready-made garment and textile sectors to help them become more competitive.

Law and order worry

He also said domestic industry and the agricultural sector would be protected through tax measures. The subsidy to the agricultural sector has been raised by 50%.

Mr Rahman said he wanted to achieve 5.5% economic growth next year, marginally up from this fiscal year, but his ultimate target is to hit a 6.5% growth rate within two years.

While the budget itself has not been explicitly criticised by the opposition, other areas of government policy have.

An eight-hour general strike was held on Thursday in protest over what they say is the deteriorating law and order situation across the country.


SEE ALSO:
Bangladesh gets funding boost
27 May 03  |  Business
Bangladesh seeks $2bn in aid
15 May 03  |  Business
Bangladesh floats taka
29 May 03  |  Business


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