Govt may amend PRSP

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FHM Humayan Kabir
The government facing a fund shortage of Tk 1160.41 billion is going to amend the three-year poverty reduction strategy paper (PRSP), now under implementation.
The PRSP, adopted in 2008, will be implemented by FY2011, officials said.
Pledges made in election manifesto by the ruling Awami League have burdened the revised PRSP with widening gap between resources and expenditure, a senior planning ministry official told the FE.
The estimated public expenditure for achieving the strategic goals and targets set out in the revised PRSP is Tk 3750.86 billion against the total estimated income of Tk 2590.45 billion from the domestic resources, leaving Tk 1160.41 billion (US$16.58 billion) in fund shortage.
In the original PRSP, adopted by the last caretaker government in October 2008, the resource gap was Tk 630.94 billion against the total public spending target of Tk 3108.27 billion.
After taking over in January this year, the Awami League-led government decided to amend the second PRSP, which has already completed one and a half years of execution period.
After completion of the proposed amendment, the planning ministry Wednesday placed the country's lone development guideline before the cabinet.
The cabinet has decided to place the revised development document before parliament after bringing some minor changes to it. The cabinet has already asked the planning ministry to make the changes.
"We hope to place the revised PRSP before parliament during its ongoing session," a senior planning ministry official said.
He said the resources gap, as recommended, should be minimised through external borrowing.
Experts termed the expenditure target as "very high and unrealistic" as it will be difficult to make up the resources shortfall through mobilizing from external sources.
Former finance adviser Mirza Azizul Islam said Friday: "Mobilising from the external sources to make up the shortfall is quite impossible."
"If there is such massive resources gap the goals in country's economic development will be difficult to achieve," he told the FE.
The government should be more realistic to maintain six or six per cent plus GDP (gross domestic product) growth of the country, Mr. Islam said.
Research director of Bangladesh Institute of Development Studies (BIDS), Zaid Bakth said: "Deficit financing projected in the PRSP is too high. Mobilising the money will be very challenging for the government."
"I don't think that the government will be able to mobilise such huge $16.58 billion dollar, means $5.50 billion every year, from the foreign sources as the country in financial year 2007-08 received highest $2.1 billion," he told the FE.
Implementation period of the first three-year strategy paper ended in FY07. Then the government prepared the extended version of PRSP for FY08.
The PRSP has been formulated at the behest of the country's development partners, mainly the World Bank, which wants the country to adopt its only development plan, instead of being forced upon by the donors.