Sovereign Wealth Fund on the cards

Plan to offer loan and assistance to state and businesses

For the first time, the government has decided to create a state-owned agency, named ‘Sovereign Wealth Fund’ to provide loans, guarantees and grants to the state and to businessmen to develop the country’s economy. A committee has been formed in this respect, headed by Bangladesh Bank (BB) deputy governor Shitangshu Kumar Sur Chowdhury. The committee also includes Policy Research Institute (PRI) Executive Director Dr Ahsan H Mansur and has been tasked with the preparation of a proposal to create the fund, disclosed sources in the central bank and in the Banking Division. The committee has held two meetings– one at the BB and another at the Banking Division– to hammer out the proposal of the fund, the sources added. Sur Chowdhury told The Independent that the committee was working on a proposal related to the creation of the proposed fund. He declined to make any further comment in this respect. Dr Mansur said the proposed Sovereign Wealth Fund would be created to provide funding to the public projects and the projects undertaken within the ambit of public-private partnerships (PPPs). “The state cannot use the reserves of the central bank. But after creation of the proposed fund the money in the reserve can be used,” he said. The noted economist added that the proposed fund would be created for the present generation.
A high-ranking official of the Banking Division told this correspondent on condition of anonymity that the proposed Sovereign Wealth Fund would be created on the lines of the Kuwait Fund for Arab Economic Development (KFAED), known as the Kuwait Fund, which is the State of Kuwait’s agency for the provision and administration of financial and technical assistance to developing countries.
“How the proposed fund would be created and where it would be used are yet to be finalised, though the committee members discussed these at the two meetings that were held recently,” he said.
“After preparing the proposal, the committee will place it before the finance ministry and the Prime Minister’s Office (PMO) for further steps to create the proposed fund,” he disclosed. The official explained that as the government cannot use the money in the reserves at Bangladesh Bank, a huge amount of money was lying idle.
“Once the Sovereign Wealth Fund is created, the state and even businessmen can take financial assistance from the proposed fund to implement big projects,” the official explained. Sources said the proposed fund would be conducted through a board of directors, with the finance minister or finance secretary likely to be the chief of the board. A law regarding the creation of the proposed Sovereign Wealth Fund would be enacted for its operation, the sources added.

 

Sovereign Wealth Fund on the cards

Plan to offer loan and assistance to state and businesses

For the first time, the government has decided to create a state-owned agency, named Sovereign Wealth Fund to provide loans, guarantees and grants to the state and to businessmen to develop the countrys economy. A committee has been formed in this respect, headed by Bangladesh Bank (BB) deputy governor Shitangshu Kumar Sur Chowdhury. The committee also includes Policy Research Institute (PRI) Executive Director Dr Ahsan H Mansur and has been tasked with the preparation of a proposal to create the fund, disclosed sources in the central bank and in the Banking Division. The committee has held two meetings one at the BB and another at the Banking Division to hammer out the proposal of the fund, the sources added. Sur Chowdhury told The Independent that the committee was working on a proposal related to the creation of the proposed fund. He declined to make any further comment in this respect. Dr Mansur said the proposed Sovereign Wealth Fund would be created to provide funding to the public projects and the projects undertaken within the ambit of public-private partnerships (PPPs). The state cannot use the reserves of the central bank. But after creation of the proposed fund the money in the reserve can be used, he said. The noted economist added that the proposed fund would be created for the present generation. A high-ranking official of the Banking Division told this correspondent on condition of anonymity that the proposed Sovereign Wealth Fund would be created on the lines of the Kuwait Fund for Arab Economic Development (KFAED), known as the Kuwait Fund, which is the State of Kuwaits agency for the provision and administration of financial and technical assistance to developing countries. How the proposed fund would be created and where it would be used are yet to be finalised, though the committee members discussed these at the two meetings that were held recently, he said. After preparing the proposal, the committee will place it before the finance ministry and the Prime Ministers Office (PMO) for further steps to create the proposed fund, he disclosed. The official explained that as the government cannot use the money in the reserves at Bangladesh Bank, a huge amount of money was lying idle. Once the Sovereign Wealth Fund is created, the state and even businessmen can take financial assistance from the proposed fund to implement big projects, the official explained. Sources said the proposed fund would be conducted through a board of directors, with the finance minister or finance secretary likely to be the chief of the board. A law regarding the creation of the proposed Sovereign Wealth Fund would be enacted for its operation, the sources added.