Secys told to step up coordination with donors for quick aid release

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Syful Islam The secretaries to the government have been asked to step up efforts for coordination with the development partners for expeditious release of foreign aid fund, officials said Sunday. Besides, they have been told to take prompt decisions on preparation of donor-aided projects and programmes and ensure their prompt approval. The directives came in the backdrop of slow disbursement of foreign aid from the pipeline by the development partners. The level of disbursement of external assistance witnessed a decline by US$ 113.28 million duringthe July-October period of this fiscal (2011-12) to $329.97 million from $443.25 million during the corresponding period of the The Planning Commission recently issued the directives, asking also the officials concerned to give priority to implementation of the foreign-aided projects. It also called upon the secretaries concerned to form an inter-ministerial taskforce to help remove the bottlenecks, hindering particularly the implementation of donor-funded projects. Furthermore, the directives were given to make the matching funds in local currency available for timely implementation of the projects so that progress about their execution do not get stuck up due to the lack of government funds. Statistics show that donors made commitment about releasing $1.84 billion during the July-October period of this fiscal against $1.77 billion of the same period of the last one. Against this commitment for the four-month period, $1.53 billion was in the form of loans and $309.67 million, as grants. As the foreign aid flow has markedly declined, the government has been taking greater recourse to the banking sector than before for an increased amount of borrowing to meet its expenses. Finance Minister AMA Muhith recently said foreign aid has become stuck up in the pipeline. He also said usually aid disbursement remains low at the beginning of a fiscal year which, he considers, will speed up in the coming months. About government's high level of dependence on borrowing from the domestic sector, the private sector has sharply reacted adversely to this development, fearing its crowding-out effect on economic activities, including new investment, in the private sector. The President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), AK Azad, Saturday urged the government to stop borrowing from the banking system, saying the 'unbridled loan-taking' by the government 'may crowd out the private sector'. "The banks should provide loans to the private entrepreneurs in order to help boost the growth rate of the economy to a double-digit level," Mr. Azad said. The government's borrowing from the banking sector has already crossed Tk 200 billion, meeting its annual target in less than five months.