Hasina orders more cost-cutting measures as the dollar crisis lingers on

Prime Minister Sheikh Hasina has ordered more measures to cut spending amid a shortage of the US dollar fuelled by high import costs due to the Russia-Ukraine war amid the coronavirus pandemic.

The government has already postponed many projects, halted needless foreign trips of public servants, cut fuel allocation for them, and brought back rolling power outages as part of desperate efforts to ease pressure on the foreign currency reserves.

She issued several other instructions at the cabinet meeting on Monday. Cabinet Secretary Khandker Anwarul Islam said she ordered officials to cut costs of projects.

The government has categorised the projects as A, B and C, based on their priority, according to him. The projects listed in the A category will be implemented fully. Authorities will be able to spend up to 75 percent of the allocation for the B category projects. The C category projects will remain halted for now.

For government purchase, Hasina said only the urgently needed goods will be bought now. Other procurements will be suspended, said Anwarul.

No foreign travel on the public purse will be allowed now. Officials may travel abroad if a contractor agrees to pay the bills.

“She [Hasina] repeatedly asked all for a little help, to refrain from unnecessary spending on energy, because we don’t know what lies ahead of us. A deal [to reopen ports for grain export] was signed the day before yesterday, and yesterday Ukraine’s Odesa port was bombed.”

“We can’t control these events. However, the government is trying to bring fuel, food and fertilisers from different sources,” the secretary said.

He said the prime minister also emphasised increasing the production of crops.