$300m British aid to improve service delivery, curb graft

The United Kingdom (UK) will dispense around US$ 300 million (150 million pounds) to help strengthen Bangladesh's ability to curb corruption.   

A major slice of the British aid will be channelled to the finance division as sector budget support under the six-year-long "Supporting Government Service Delivery and Anti-corruption Initiatives", the sources said.

The UK's Department for International Development (DFID) is expected to sign an agreement with the Economic Relations Division next month in this respect, the sources added. 

"Everything is finalised, and the agreement for assistance will be signed sometime next month," a source told the FE.   

"The British aid was supposed to be delivered last year.  But we could not make it happen, thanks mainly to the procedural delays on the part of various government agencies," the source regretted.

Initial areas of intervention are strengthening the governance of schools, improving accountable provisions of water supplies to slum settlements and improving water quality through a better-regulated system for arsenic mitigation.

Sources noted that although the DFID sent a project memorandum on the   to the Economic Relations Division (ERD) in 2006, the finance division dragged its feet in providing the programme framework for utilisation of budget support.

"The money was to be provided in separate tranches beginning in October 2006. As the process was delayed, now the money will be made available from the next fiscal year," the sources added.

The money is set to be spent with a set of innovative approaches, notably putting the government in the lead and supporting the government's own policy priorities and rewarding successful improvements in government that affect service delivery, and using an aid modality devised by the government.

"The approach is one of 'payment for results' with successful governance reforms triggering the Sector Budget Support to finance rolling out of service delivery improvements," says a DFID project document.

The DFID has identified poor governance, particularly graft, as the major impediment to improving quality of public services, thereby reducing poverty. 

But it feels that "sweeping" governance reforms have not worked, while incremental reforms have made headway.

"For that reason, the DFID has mapped out innovative approaches to improve governance and combat corruption," an ERD official said.

The British assistance is intended to raise the number of well-managed primary schools, reduce the use of drinking water with unacceptable levels of arsenic and enhance access to safe water.

According to the project document, the money will be spent to increase the number of "well-managed" primary schools from 100 to 4000 across the country.

The British aid is likely to be utilised to reduce the use of drinking water with unacceptable levels of arsenic in 30 per cent of all affected villages, covering 8.0 million people.

It will also ensure safe water to an additional 1.0 million poor in urban slums.   

The Ministry of Primary and Mass Education and the Department of Public Health Engineering (DPHE) will be executing the projects under the programme aid.  

The British assistance is the outcome of recognition that large-scale graft permeates the government procurement practices, where costs to major development projects are 25 per cent above the world market prices.

Rent-seeking influences public policy on taxation, expenditure and regulation, with an estimated 5.0 per cent-10 per cent of the government's non-development expenditure ending up in "speed payments."