The foreign aid commitment by donors has plunged by 22 per cent as the donors have confirmed US$ 408 million less in assistance in July-November period this fiscal year (FY) compared to the same period last year, officials said Friday.
Economic Relations Division (ERD) officials said the development partners working in Bangladesh have confirmed loans and grants worth US$ 1.44 billion in the said period compared to that worth $1.85 billion in the same period in last FY 2013.
"Political turmoil is the major reason behind the reduced aid commitment by the development partners of Bangladesh," a senior ERD official told the FE.
In the last couple of months, no significant financing deals were signed with the major donors like the World Bank (WB), the Asian Development Bank (ADB), Japan, the UK's Department for International Development (DfID) and USAID which affected the 'foreign aid commitment', he said.
When a donor and a government sign an aid deal for disbursing loans or grants against any project or programme, it is called a 'commitment'.
Meanwhile, disbursement of foreign aid through the government channel has also been recorded as almost static in the July-November
period of the current FY 2014 compared to the corresponding period in last FY 2013.
According to ERD, the donors have disbursed $987.26 million in loans and grants during July-Nov period this fiscal, only $18 million up from the same period last fiscal.
The lower growth of aid inflow to the country would not only affect the development work, it will also impede the economic growth of the country, the ERD official added.
The government has set a target to mobilise foreign assistance worth a record US$ 3.30 billion as per the current national budget, in a bid to implement key development projects.
The foreign aid inflow target in the current fiscal year is US$ 520 million more than the $2.78 billion aid received in FY 2013.
Another ERD official said: "Since the country is passing through political turmoil over the last couple of months, utilisation of the foreign aid has been affected. The foreign-financed development projects' implementation rate was also poor this time resulting in lower aid disbursement."
According to Implementation Monitoring and Evaluation Division (IMED), the government ministries and agencies had spent only 20 per cent of Tk 658.72 billion Annual Development Programme, in which 33 per cent funds would come from foreign assistance.
Foreign aid disbursement by the Asian Development Bank has dipped drastically as the Manila-based lender has provided only $108.13 million's worth assistances in July-November period this fiscal.
Other donors, including the World Bank, USAID, DfID and IDB, have not signed any major loan deals in the last couple of months, the ERD official added.
India, which made the commitment of US$ 1.0 billion worth of assistance in August 2011, has also not disbursed funds in the last two months, he said.
The government in the last FY 2013 received assistance worth $2.78 billion.
