Foreign aid drops, commitment surges

Dhaka,  Fri,  21 July 2017
Published : 14 Jul 2017, 01:23:02 | Updated : 15 Jul 2017, 14:28:05
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Foreign aid drops, commitment surges

FHM Humayan Kabir
The concessional foreign aid to Bangladesh has dropped by 13 per cent to US$ 3.56 billion in the last fiscal year mainly due to a slow development work following Holey Artisan café attack in July last year, officials said Thursday.

The external development partners disbursed $ 530 million less concessional loans and grants in the last financial year (FY) 2016-17 compared to $ 4.06 billion in the same period of the previous FY 2016, provisional data of the Economic Relations Division (ERD) showed.

Meanwhile, the foreign aid commitment surged to a record high to $ 17.86 billion in the last FY 2017, a 154 per cent higher than that of the corresponding period of the previous FY 2016.

The aid commitment swelled by 154 per cent mainly due to a single-largest $ 11.36 billion state credit commitment by the Russian government for Rooppur Nuclear Power Plant project.

Meanwhile, the development partners confirmed $ 7.05 billion worth of foreign loans and grants during the period between July 2015 and June 2016.

The working development partners of Bangladesh including the World Bank, the Asian Development Bank, Japan, the Islamic Development Bank, China, India, the United Nations (UN), and the European Union (EU) usually confirm first their aid commitment.

Then they start disbursement of confirmed assistance against specific projects or programmes gradually.

A senior ERD official said: "It is a provisional data. They are yet to get data on disbursement from some small donors. The donors sometimes provide data even three months after the last month of a particular fiscal. So, the final figure of aid disbursement may increase a little bit by the final calculation."

According to the ERD provisional data, the development partners in the just-concluded FY 2017 provided Bangladesh with $ 3.06 billion worth of medium and long-term (MLT) loans and $ 331.5 million worth of grants.

In the previous FY 2016, the government received $ 3.56 billion as concessional loans and $ 539 million as grants from different development partners.

Meanwhile, out of $ 17.86 billion worth of aid commitments in the past FY 2017, the Bangladesh government received $ 17.49 billion in loans and $ 363.5 million in grants from external development partners.

In the corresponding period FY 2016, the government obtained a confirmation of $ 6.50 billion as loans and $ 546 million as grants, out of total $ 7.05 billion assistance.

The government utilises the loans and grants mainly to implement development projects and programmes of the country.

A senior ERD official said aid disbursements could be more if the Holey Artisan militant attack in July did not hinder the development works.

"Some development partners including Japan withdrew their manpower from Bangladesh immediately after the attacks. It continues for some few months which hampered the development works. So, foreign aid disbursement has been affected during that period," he told the FE preferring anonymity.

Besides, the slow progress in the Annual Development Programme (ADP) especially poor spending from available foreign assistance (project aid) has affected aid disbursement in the last fiscal, he added.

The government agencies and ministries spent 78 per cent of their Tk 357.97 billion foreign fund allocations in the Tk 1.19 trillion ADP outlay in the last FY 2017.

However, they performed better in spending the government internal funds as they utilised 93 per cent of the government's Tk 777 billion own fund in the last fiscal.

kabirhumayan10@gmail.com
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