Economy shows super performance: Muhith
FE Report | Wednesday, 9 March 2011
FE Report
Finance Minister AMA Muhith came down Tuesday heavily on multilateral lending agencies including the World Bank (WB) and the Asian Development Bank (ADB) for their dilly-dally tactics about releasing funds, on grounds of some 'flimsy' corruption allegations. The minister, however, lauded the role of bilateral donors for their pro-active stance on funding the country's development projects. "The multilateral donors like the WB and the ADB take too much time in approving the lending programmes for Bangladesh and also in disbursing the fund after the approval, mainly because of some 'flimsy complaints' about corruption," Muhith told reporters after a review meeting on the state of funding for externally-aided development projects, at the conference room of the ministry of finance. "The WB and ADB involve too many people in the process of loan approval and so many tiers for a decision." Explaining the situation, the finance minister said that he had heard some complaints reaching the WB and the ADB against some projects, especially too many ones on the proposed Padma Bridge. Besides, there were also some complaints on some projects in power sector including that of the Siddhirganj Power Plant, Muhith added. He criticised the complaint-prone individuals, saying, "we are apt to lodge complaints against each other impairing the reputation of the country". The behaviour of the country's bilateral donors is more helpful than that of the multilateral capital donors as the former are flexible both about commitment and disbursement of aid funds, he noted. The finance minister said that the disbursement of project assistance might come down a little in the current fiscal year (2010-11) from that of the last one, because of slow utilisation of aid fund by government agencies. The aid commitment, on the other hand, is expected to increase by two per cent this fiscal over that of the last one, he added. Muhith said the government agencies are also responsible for slow utilisation of aid funds. The government has to borrow a large amount of fund from local sources at a higher rate of interest for the purpose of meeting the budgetary deficit, he said, while adding that the deficit might go up to five per cent of gross domestic product (GDP) in the current fiscal. "Foreign funds are helpful for us as their debt service charges are much lower than the interest payments on account of domestic borrowing from both local banking and non-banking sources," Muhith told the reporters. He expressed his particular concern over the poor progress about implementation of projects under five ministries -- power, health, local government, roads and railways and education. Reviewing the performance of the overall economy, Muhith expressed his bold optimism, noting the GDP growth rate in the current fiscal will be, at least, 6.7 per cent, despite the deficiencies in power and energy supplies. "The investors have been investing a large amount of money believing that they will get adequate supplies of power and energy by the end of 2011," the finance minister said. He said the level of investment in the current fiscal will be over 24 per cent of GDP. "The performance of the country's economy in the last two years was almost super," he stated. UNB adds: Expressing concern over lack of utilisation in project assistance meant for some 37 foreign-funded projects, the finance minister held both the government and the donors responsible for slack utilisation of the committed funds for the projects. "The government would have to improve its performance about utilisation of foreign aid for the development projects. There is also a need for internal reforms," he added. The implementation of project assistance, included in the revised Annual Development Programme (ADP) of the current fiscal year (2010-11), came up for a review at the meeting. Delays in procurement planning, re-tendering and lack of project staffs are mainly responsible for slow utilisation of funds on the part of the government, the minister observed. Besides, the donors, he added, also make delays in giving decisions especially from their headquarters. "The institutions like the World Bank (WB) and the Asian Development Bank (ADB) took much more time in giving decisions than the bilateral donors." Decisions from institutions like the WB and ADB involve too many people, even they made flimsy complaints about corruption which also cause wastage of time, he noted. Asked whether he could identify those lodging complaints, Muhith did not specify who the complainants were while adding, "I don't know. It's a very open country." Muhith said that one half of the budget deficit this fiscal should be met by foreign assistance and the other half, by local resources. He said the WB is fulfilling its commitment of assistance, but might not now give the budget support which is more likely to come at the end of the year.
Finance Minister AMA Muhith came down Tuesday heavily on multilateral lending agencies including the World Bank (WB) and the Asian Development Bank (ADB) for their dilly-dally tactics about releasing funds, on grounds of some 'flimsy' corruption allegations. The minister, however, lauded the role of bilateral donors for their pro-active stance on funding the country's development projects. "The multilateral donors like the WB and the ADB take too much time in approving the lending programmes for Bangladesh and also in disbursing the fund after the approval, mainly because of some 'flimsy complaints' about corruption," Muhith told reporters after a review meeting on the state of funding for externally-aided development projects, at the conference room of the ministry of finance. "The WB and ADB involve too many people in the process of loan approval and so many tiers for a decision." Explaining the situation, the finance minister said that he had heard some complaints reaching the WB and the ADB against some projects, especially too many ones on the proposed Padma Bridge. Besides, there were also some complaints on some projects in power sector including that of the Siddhirganj Power Plant, Muhith added. He criticised the complaint-prone individuals, saying, "we are apt to lodge complaints against each other impairing the reputation of the country". The behaviour of the country's bilateral donors is more helpful than that of the multilateral capital donors as the former are flexible both about commitment and disbursement of aid funds, he noted. The finance minister said that the disbursement of project assistance might come down a little in the current fiscal year (2010-11) from that of the last one, because of slow utilisation of aid fund by government agencies. The aid commitment, on the other hand, is expected to increase by two per cent this fiscal over that of the last one, he added. Muhith said the government agencies are also responsible for slow utilisation of aid funds. The government has to borrow a large amount of fund from local sources at a higher rate of interest for the purpose of meeting the budgetary deficit, he said, while adding that the deficit might go up to five per cent of gross domestic product (GDP) in the current fiscal. "Foreign funds are helpful for us as their debt service charges are much lower than the interest payments on account of domestic borrowing from both local banking and non-banking sources," Muhith told the reporters. He expressed his particular concern over the poor progress about implementation of projects under five ministries -- power, health, local government, roads and railways and education. Reviewing the performance of the overall economy, Muhith expressed his bold optimism, noting the GDP growth rate in the current fiscal will be, at least, 6.7 per cent, despite the deficiencies in power and energy supplies. "The investors have been investing a large amount of money believing that they will get adequate supplies of power and energy by the end of 2011," the finance minister said. He said the level of investment in the current fiscal will be over 24 per cent of GDP. "The performance of the country's economy in the last two years was almost super," he stated. UNB adds: Expressing concern over lack of utilisation in project assistance meant for some 37 foreign-funded projects, the finance minister held both the government and the donors responsible for slack utilisation of the committed funds for the projects. "The government would have to improve its performance about utilisation of foreign aid for the development projects. There is also a need for internal reforms," he added. The implementation of project assistance, included in the revised Annual Development Programme (ADP) of the current fiscal year (2010-11), came up for a review at the meeting. Delays in procurement planning, re-tendering and lack of project staffs are mainly responsible for slow utilisation of funds on the part of the government, the minister observed. Besides, the donors, he added, also make delays in giving decisions especially from their headquarters. "The institutions like the World Bank (WB) and the Asian Development Bank (ADB) took much more time in giving decisions than the bilateral donors." Decisions from institutions like the WB and ADB involve too many people, even they made flimsy complaints about corruption which also cause wastage of time, he noted. Asked whether he could identify those lodging complaints, Muhith did not specify who the complainants were while adding, "I don't know. It's a very open country." Muhith said that one half of the budget deficit this fiscal should be met by foreign assistance and the other half, by local resources. He said the WB is fulfilling its commitment of assistance, but might not now give the budget support which is more likely to come at the end of the year.