Govt sets $3.0b foreign aid target for next fiscal

The government has set an 'ambitious' US$3.0 billion foreign aid target in the upcoming budget for the fiscal 2011-12 to develop the country's impoverished infrastructure and upgrade the people's socio-economic status, officials said. The officials at the Ministry of Finance said the foreign aid targeted for the next fiscal is $1.03 billion higher than the $1.97 billion target in the development budget of the ongoing fiscal (2010-11). "Now we are reviewing our proposed foreign aid target. After scrutinising different development projects, sent by the ministries, we will finalise the external resources budget," a senior official at the Economic Relations Division (ERD) told the FE. Out of the $3.0 billion target, $2.625 billion assistance is being expected against different projects under the development budget of the next fiscal, $300 million as budgetary support credit, and $75 million as food aid for the social safety-net programmes, the official said. The government usually takes loans and grants from different bilateral and multilateral donors to implement the country's development projects and ensure socio-economic development, as its local resources cannot meet the entire expenditure. The ERD official said some ministries, like communications and power, have sought more foreign fund allocations for the next fiscal, especially for the projects like Padma multipurpose bridge. The Bridge Division of the Ministry of Communications alone has sought nearly $630 million fund for building the proposed Padma bridge, he said. "We are hopeful that if the construction of the proposed Padma bridge starts in full swing in the next fiscal, the foreign aid target will be easily achieved," the ERD official said. The official, however, said the foreign aid target in the current fiscal has been brought down to $1.97 billion from the preliminary target of $2.77 billion, due to poor execution of the foreign aid-funded projects by various ministries and divisions. The government received $960 million as loans and grants from the bilateral and multilateral donors during the first eight months (July-February) of the current fiscal, down by $575 million from the corresponding period of the previous fiscal. "We are expecting an increased aid flow in the next fiscal, as the major donors, like the World Bank (WB), the Asian Development Bank (ADB) and Japan, are set to disburse higher amount of funds against the Padma bridge project, in addition to their regular aid against the development projects," another ERD official said. Since the next budget will be very crucial for the economy, amid the prevailing power and energy crises and construction of the Padma bridge, the government will welcome further support from the donors to meet the budgetary deficit, he added.