Bulging unutilised project aid in pipeline

FE Team | Published: March 17, 2024 20:51:49

At a time when the country is struggling to prop up its dwindling foreign exchange reserves and aggressively hunting for more foreign aid and loans to implement various projects, it is disconcerting to know that a staggering amount of $46.5 billion in foreign aid remains stuck in the pipeline due to failure of various government agencies to execute projects on time. The situation is particularly frustrating because foreign aid is shrinking globally. This disquieting development, as reported in this daily recently, should serve as a wake-up call for the authorities concerned to frame up projects pragmatically and streamline their implementation process in order to ensure efficient and maximum utilisation of foreign assistance.
The recurring issue of project implementation delays, often leading to cost overruns and the diversion of foreign funds, has been a longstanding challenge in Bangladesh. Reasons cited for this chronic problem include a lack of proper feasibility studies and transparency in project implementation, instances of corruption, faulty design, delays in hiring consultants and bureaucratic intricacies. Additionally, the capacity deficiency within government departments hinders proper planning and project design, as well as the ability to draft and award contracts that prioritise the public interest over contractors' profits. It is also an open secret that a section of corrupt officials always procrastinate when it comes to project implementation, prioritising their own kickbacks over national development. This not only delays crucial infrastructure development and poverty alleviation initiatives, but also inflates the unutilised aid in the pipeline.
The implications are far-reaching and damaging to the nation. Delayed project outputs not only hinder the nation's development goals but also pose significant repercussions for the overall economy. Foreign aid is crucial for development as well as for boosting the country's foreign reserves. Even Prime Minister Sheikh Hasina has often emphasised the need for timely implementation of projects, but to no avail. Most development projects progress at a snail's pace. When public agencies fail to implement their foreign-aided projects on time it becomes a national embarrassment, aid disbursement is blocked or suspended by the respective donors and international trust takes a dive.
The current trend, as highlighted by the Economic Relations Division (ERD) data, is particularly alarming. While development partners disbursed $4.39 billion of their confirmed aid during the July-January period of the current fiscal year, a substantial portion remains unspent. If this trend persists, the unutilised aid in the pipeline is projected to exceed $50 billion in the coming years. Utmost caution, therefore, must be taken to ensure transparency, accountability, and efficiency in project implementation to facilitate smooth release of foreign funds. The authorities have to address the root causes of project execution failures and help expedite the release of foreign aid stuck in the pipeline. Strengthening project oversight mechanisms, enhancing co-ordination between government agencies and development partners, and improving project management capabilities are essential for ensuring timely implementation of foreign-funded projects. Failure to do so will not only jeopardise the country's development goals, but also turn its economic challenges more daunting.