The Economic Relations Division (ERD) has prepared an updated database on external assistance flow to the country which will help it to manage the external debt properly and to improve its efficiency, an official said Tuesday.
"We are using an updated version of software for developing the improved database of the external assistance into Bangladesh. This system will help us to analyse the foreign debt and its sustainability," an official of the division said.
Bangladesh every year on average receives nearly $1.7 billion in foreign aid in the form of grants and loans for developing its infrastructure and socio-economic conditions.
Since 1971, the country has got around $48 billion worth of loans and grants until last fiscal year 2007-08 from different bilateral and multilateral donors.
Under a project titled "Capacity Building for Management of Foreign Aid in Bangladesh", the United Nations Development Programme (UNDP) is supporting the ERD to prepare the database through an improved software aiming to ensure proper external debt management.
The United Nations Conference on Trade and Development (UNTCAD) is giving technical support to the ERD.
Based on the database the ERD keeps its external debt records through an automated system.
"A comprehensive database is important to enhance the country's capacity to analyse its debt and aid situation and to design strategies for maintaining a sustainable debt level," sources said.
"With the database in place in ERD, the onus is now upon other stakeholders involved in macroeconomic management of the country to design strategies and formulate policies and plans that minimise Bangladesh's cost of borrowing at acceptable levels of risk exposure," they said.
"A technical adviser from the UNCTAD is supporting us to develop a sustainable debt management system. Under his supervision, the ERD has developed its database on external assistance this week. He has been working over the last one year," the ERD official said.
"Major works including developing a borrowing strategy, analysis of currency risk, debt sustainability and suitable donors for providing loans to Bangladesh will have to be done during remaining time of the project tenure," the official said.
The project tenure will end in December next year.
"Already one year of the project has been passed. The major part of the project work will have to be done in the next one year for developing a comprehensive and sustainable capacity to mange the external aid flows to the country," he said.
