Foreign aid utilisation hits record low

Utilisation of foreign aid has hit a record low in the current fiscal year because of the stagnation in development activities amid political unrest due to conflict between the ruling party and opposition over holding the general elections.

Finance ministry officials said only 11 per cent of total foreign aid disbursed until October was utilised, seven per cent lower than the same period of the last fiscal year.

remmitanceThe trend is the lowest in recent past as utlisation rate of foreign aid in the first four months in the last one decade was at least 15 per cent above, they said.

Donors like the World Bank, Asian Development Bank and Japan International Cooperation Agency provided loans for the annual development progarmme projects.

The amount of foreign aid is Tk 24,563 crore, or 37.30 per cent of the total ADP worth Tk 65,872 crore in the current fiscal year.

Planning ministry officials said not only the rate of utilisation was slow, but also the rate of disbursement due to the series of blockades and general strikes in the last four months.

Some 20 per cent of the ADP was disbursed in the first five months compared to 25 per cent during the same period of the previous fiscal year, they said.

Planning division secretary Bhuiyan Shafiqul Islam, however, expressed satisfaction with both the rates despite development activities were hampered due to disturbing political unrest.

He told that the disbursement rate would not improve without better utilisation rate. He hoped that implementation rate will enhance in the coming months.

The finance ministry officials, however, apprehended further fall in utilisation of foreign aids due to lingering political turmoil. The donors might feel discourage to disburse aids due to one–sided polls on January 5, already boycotted by the mainstream political parties.

Although foreign aid accounted for less than two per cent of the country’s gross domestic product in recent years, Bangladesh would still need those for low interest rate.

Former caretaker government adviser Mirza Azizul Islam said the government should look for more easy loans from the donor agencies. ‘Otherwise, the burden and dependency on costly borrowings will increase in coming days,’ he said.

As of last May, the unutilised loans, committed by multilateral and bilateral donors, stuck at $16.32 billion. The donor agencies did not release the funds blaming corruption and lack of utilisation capacity of the local implementing agencies.

The constriction of PadmaMultipurposeBridge became uncertain after World Bank suspended its $1.2 billion credit programme citing conspiracy of corruption by former communications minister Syed Abul Hossain.