Bangladesh’s foreign minister said corporations making “runaway profits” from the war in Ukraine should compensate the affected less developed countries.
“On this war, some corporations are making runaway profits… energy corporations and defense corporations,” said AK Abdul Momen Tanvir Gill of CNBC on the sidelines of the G-20 foreign ministers summit in Recent Delhi.
“Due to this fact, we’ll argue that those corporations that make runaway profits should allocate no less than 20% of the profit to countries which can be most affected, like us,” he added, without naming specific corporations.
His comments come just over a yr after Russia invaded Ukraine. The World Bank estimated that Ukraine’s economy has shrunk by as much as 35% over the past yr.
The war also had major global economic consequences, especially for countries like Bangladesh, which imports most of its energy. The foreign minister said that around 95% of the country’s energy comes from imports.
“In fact we buy energy from abroad. The price of energy soared, leading to high inflation. We’re trying to manage inflation through subsidies, and that costs the federal government,” Momen said.
“That’s the reason we wish the war to finish. We consider in peaceful negotiations.”
The Foreign Minister further noted that G-20 countries should make this compensation “mandatory”.
“These are the leaders of the G20 – they’re the leaders of the world… If I ask, they will not care,” Momen said. “But G-20 leaders could make all of those corporations pay a share of their runaway profits to the countries most affected.”
Fallout of war
Last yr, a United Nations report highlighted that the results of the war in Ukraine could dramatically worsen the economic prospects of developing countries already fighting debt financing related to the Covid-19 pandemic.
“Rising commodity prices and trade disruptions are exacerbating inflationary pressures, while weakened growth expectations are hampering the recovery from Covid-19, with severe consequences for among the poorest and most vulnerable countries,” the report said.
“For a lot of developing countries already at high debt risk, the spillover effects of war could further worsen debt vulnerability attributable to growing balance of payments and financial pressures,” the UN said.
At the top of January, Bangladesh secured loans of $4.7 billion International Monetary Fund to mitigate the results of the approaching financial crisis.
It should receive $3.3 billion in IMF prolonged credit and related arrangements, with a right away disbursement of roughly $476 million. The IMF board also approved $1.4 billion within the newly created Resilience and Sustainable Development Facility for climate investment for Bangladesh, making it the primary Asian country to have access to it.
“Bangladesh’s robust post-pandemic economic recovery has been interrupted by Russia’s war in Ukraine, resulting in a pointy widening of Bangladesh’s current account deficit, the depreciation of the Taka and a fall in foreign exchange reserves,” the IMF said in an announcement.
Food security
Bangladesh’s foreign minister also said that food security is one other problem the country faces and the G20 leaders must address it. He also criticized the Western sanctions have been imposed on Russia, claiming that the measures harm developing countries probably the most.
“We’re also really upset because this war… has broken the availability chain in addition to the financial transformation mechanism. And that hurts us, it hurts poor developing countries so much,” Momen said.
“The following time they provide you with sanctions and counter-sanctions, they should no less than seek the advice of people like us – developing countries – to see how much it is going to hurt them. And so they should create a mechanism whereby countries that might be harmed – that they should be compensated.”