Bangladesh’s foreign minister said companies making “lost profits” from the war in Ukraine should compensate affected LDCs.
AK Abdul Momentn told CNBC’s Tanvir Gill on the sidelines of the G-20 foreign ministers’ summit in New Delhi: “In this fight, some companies are making high profits… energy and defense companies. “.
“So we would argue that those companies that are making terrible profits, they should give at least 20% of their profits to the hardest hit countries like us,” he added without saying. Name specific companies.
His comments come more than a year after Russia invaded Ukraine. The World Bank estimates that Ukraine’s economy has shrunk by as much as 35% over the past year.
War has also had major global economic consequences, especially for countries like Bangladesh, which import most of their energy. The foreign minister said about 95% of the country’s energy is imported.
“Naturally, we buy energy from abroad. Energy prices have skyrocketed, leading to high inflation. We are trying to control inflation by providing subsidies and that is causing the government to pay the price,” said Momen.
“So we want the war to end. We believe in peace talks.”
The foreign minister further noted that G-20 countries should make this compensation “mandatory”.
“These are the G-20 leaders — they are the leaders of the world… If I asked, they wouldn’t care,” said Momentn. “But G-20 leaders, they can oblige all those companies to pay part of their runaway profits to the countries most affected.”
fallout of war
Last year, a United Nations report highlighted how the fallout from the war in Ukraine could significantly worsen the economic outlook for developing countries already grappling with ocean-related debts. Covid-19 pandemic.
Rising commodity prices and trade disruptions are exacerbating inflationary pressures and dampening growth expectations that are weighing on the post-Covid-19 recovery, the report said. severe impact on some of the poorest and most vulnerable countries”.
“For many developing countries already at high risk of becoming indebted, the spillover effects of war could exacerbate balance of payments debt vulnerabilities,” said the UN. and growing fiscal pressure”.
At the end of January, Bangladesh secured a $4.7 billion loan from International Monetary Fund to help cushion the blow of an impending financial crisis.
It will receive $3.3 billion under the IMF’s extended credit facility and related arrangements, with an immediate disbursement of approximately $476 million. The IMF Executive Board also approved $1.4 billion in newly created sustainability and resilience for climate investments for Bangladesh, making it the first Asian country to follow. near it.
The IMF said in a statement: “Bangladesh’s strong economic recovery from the pandemic was disrupted by Russia’s war in Ukraine, which resulted in a sharp increase in Bangladesh’s current account deficit, a depreciation of the Taka. and foreign exchange reserves decrease”.
Food safety
Bangladesh’s foreign minister also said food security is another issue the country is struggling with that G-20 leaders need to address. He also criticized the West sanctions imposed on Russia, saying they are doing the most damage to developing countries.
“We are also really sad that this war… has disrupted the supply chain as well as the financial transformation mechanism,” said Momentn. And these things are hurting us, it’s hurting a lot of poor developing countries.”
“Next time they come up with sanctions and counter sanctions, they should at least consult with people like us – developing countries – to know what will happen. And there should be a mechanism for countries to get hurt – that they should be compensated.”
