Record $2.08b foreign aid received in ’10

FHM Humayan Kabir

The government has received record US$2.08 billion foreign aid in the last financial year (2009-2010), $236 million up from the previous financial year, due to highest ever payment by the Asian Development Bank, officials said Sunday.

A finance ministry official said the foreign assistance is also $22 million up from the last record disbursement of $2.06 billion in FY2007-08.

"Disbursement of highest $1.08 billion loans and grants by the ADB pushed the foreign aid flow up last year," a senior official of Economic Relations Division (ERD) told the FE.

Out of $1.08 billion assistance, the Manila-based lender bankrolled $744 million credit for recovering from the impact of the global economic meltdown on Bangladesh's economy and for minimising the budget deficit.

"The foreign assistance this year could touch $2.50 billion mark if Bangladesh's largest multilateral and bilateral donors-- World Bank and Japan respectively -- provide money as per their commitments," he said.

The Washington-based largest multilateral lender World Bank (WB) disbursed only $345 million aid during the 12 months in FY2010, lowest in its six years' history.

Similarly, largest bilateral donor Japan provided only $79 million fund during the period from July 2009 to June 2010, which was also the lowest in its last three years' history.

"The foreign assistance could be higher than the amount if the government agencies were able to implement the development projects in time," the ERD official said.

"We slashed the project aid target to $1.73 billion in the middle of last financial year from the preliminary $1.85 billion estimation due to poor project implementation status in the annual development programme (ADP)," he said.

In FY2010, the government implemented 91 per cent of Tk285 billion (US$4.10 billion) ADP where the project aid (foreign aid) spending rate was only 83 per cent, planning ministry data said.

The foreign aid disbursement depends on implementation of the donor-funded projects. The donors usually provided their committed funds after execution of the development projects.

The foreign donors and lenders have disbursed loans and grants for developing Bangladesh's infrastructure and upgrading social sectors to steer its economic growth and make it a middle-income country by 2020.

Out of the record $2.08 billion foreign aid, the multilateral and bilateral donors and lenders disbursed $1.596 billion loans and $486.85 million grants in FY2010.