Foreign funding ebb affects dozens of dev projects

BD's Asian dev partners on 'wait-and-see' stance

FHM HUMAYAN KABIR | Published: December 28, 2024 00:02:23

Foreign-aid flow into Bangladesh is affected particularly for a 'wait-and-see' stance of some major Asian development partners over the post-uprising interim administration in the country, when it needs much to recharge forex reserves. Officials have said the eastern development financiers going slow on funding during the rule of the interim government include China, India and the Asian Infrastructure Investment Bank (AIIB).
None of the trio has made commitment of a single penny, and one of them has released a tiny amount of funds during the first four months (July-October) of the current fiscal year (FY) 2024-25, they said.
Such antipathy in fund disbursement has already affected implementation of dozens of ongoing development projects, some civil servants and project implementers told the FE Friday.
However, the multilateral development partners and the biggest bilateral financier, Japan, have maintained their normal economic relations with Bangladesh's newly installed government headed by Prof Muhammad Yunus, insiders said.
"The multilateral lenders have kept their economic relations and communications with this government as usual. While key bilateral lenders -- China, India and the China-led Asian Infrastructure Investment Bank -- had been observing situation during the early months of this government," says a senior official of the Ministry of Finance (MoF).
He says China has already started communication with the ERD while India is still not in the scene from the economic-relations front.
According to the Economic Relations Division (ERD), China and India had not made any aid commitment during the first four months of the interim government installed after the toppling of the Awami League government in the August-5th student-mass uprising.
The Beijing-based AIIB had also not made any fund commitment during this four months period, official data showed.
Meanwhile, although India has disbursed a small amount of assistance, the second-largest East Asian bilateral development partner, China, had not released a single penny during the July-Oct period of the this fiscal.
India disbursed US$63.83 million in loan and the AIIB only $6.63 million during July-October of this fiscal while China didn't yet open account, ERD statistics showed.
Asked about the financing dilemmas, a senior ERD official said they have set a target to get released $2.24 billion worth of medium-to long-term overseas loans (MLTs) and grants from China, India and the AIIB.
Meanwhile, the ERD has set a target of having $10.82 billion worth of loans and assistance disbursed during this FY2025.
But the Asian donors and lenders had not confirmed any funds during the four months, the official added.
"However, we are expecting some big leaps in the second half (January-June) of this fiscal from the major development partners, including China, India and AIIB," the ERD official said.
Another ERD official says the multilateral lenders like the WB, the ADB and the largest bilateral donor, Japan, have come forward with their big chunks of support to the Bangladesh government over the last four-five months.
The World Bank has already disbursed $178.16 million, the ADB $266.11 million, Japan $266.30 million, and Russia $194.53 million worth of loans and grants, he said, quoting the ERD data.
Meanwhile, all the foreign developments partners and lenders to Bangladesh released $1.20 billion worth of MLTs during the July-October period.
The ERD official says some project-implementing ministries, including Railways, Road Transport and Bridges, and Shipping, had already informed them about the plan of surrendering some funds allocated in their annual expenditure plan under the Annual Development Programme (ADP).
"We have already boosted communications with China, India and AIIB so that they come forward with the highest effort to Bangladesh. We are getting result from the communications in recent months," he said, on a note of optimism about a breakthrough in the stalemate.