5:13 pm - Tuesday April 18, 4615

Foreign aid commitments down by 41pc in July-Jan

Foreign aid commitments plunged 41 per cent in the first seven months of the current fiscal as development partners pledged funding US$ 1.29 billion less than that of the corresponding period of last fiscal, officials said Wednesday.

Economic Relations Division (ERD) officials said multilateral lenders and development partners working with Bangladesh confirmed US$ 1.55 billion in loans and grants in the Jul-Jan period of the current fiscal year (FY) 2013-14 compared to that of $ 2.84 billion in the corresponding period of the FY 2013, reports the Financial Express (FE).

“Political turmoil and lack of the expected level of confidence of the donors are the major reasons behind the less-than-expected aid commitment by the development partners,” a senior ERD official told the FE.

remmitanceThe government was yet to restore its image and this has affected the aid commitments from multilateral and bilateral development partners, he told the FE seeking anonymity.

During the last Jul-Jan period, no significant financing deals were signed with the major donors like the World Bank, the Asian Development Bank, Japan, the UK’s Department for International Development (DfID) and the USAID which kept the foreign aid commitments low, the official said.

However, disbursement of foreign aid through the government channel remained almost static during the period under review compared to the corresponding period of the FY 2013.

According to ERD statistics, the bilateral and multilateral donors disbursed $ 1.55 billion in loans and grants during the first seven months of the current fiscal, up by only $14 million from that of the corresponding period of the last fiscal.

Of the major donors, the World Bank in the first seven months disbursed $ 588.20 million, Asian Development Bank $339 million, Japan $ 224 million, China $ 113 million and the UN systems $ 74.53 million.

In the FY 2013 the government had received $ 2.78 billion in assistance from all the multilateral and bilateral donors.

That level of growth in aid inflow would not only affect development work, but also impede the country’s higher economic growth, the ERD official said.

The government last month revised its foreign aid target downward to $ 2.95 billion from the earlier US$ 3.30 billion as was estimated in the current budget for the sake of implementing key development projects.

The revised foreign aid target in the current fiscal is up by only US$ 170 from the $ 2.78 billion received in aid in the FY 2013.

The government made repayments of its foreign debt worth $ 589.18 million on account of principal and interest amounts during the period under review.

In the corresponding period of the FY 2013, the government paid back $ 593.28 million to the lenders, ERD data showed.

Another ERD official said: “Since the country saw political turmoil during the last few months, utilisation of foreign aid was affected. The implementation rate of foreign-aided development projects was also poor this time resulting in lower aid disbursement.”

According to Implementation, Monitoring and Evaluation Division (IMED), the government ministries and agencies had spent only 33 per cent of the Tk 658.72 billion Annual Development Programme, 33 per cent funds of which would come from foreign assistance.