Foreign aid inflow drops by $113m in July-Oct

FHM Humayan Kabir Foreign aid inflow has shrunk by US$ 113 million to $ 330 million in the July-October period this fiscal compared to that of the same period of the last fiscal adding further pressure on the country's balance of payments (BoP), officials said Wednesday. Economic Relations Division (ERD) statistics showed that the donors operating in Bangladesh disbursed $ 443.25 million worth of assistance during the same period last fiscal (2010-11). "Weak project implementation performance of the ministries and divisions has affected the foreign aid inflow as they have failed to spend donor committed funds for development works," a top ERD official told the FE. During July-October this fiscal, the donors including the World Bank, the Asian Development Bank (ADB) and Japan had made commitment of disbursing $ 1.84 billion worth of assistance, $ 66 million higher than that of the same period of the last fiscal. According to the ERD statistics, the government has received only $ 27.81 million fund from its largest bilateral donor Japan in the first fourth months of the current fiscal. "We are yet to receive any budget support. Moreover, the ailing project implementers have failed to execute foreign aid supported schemes in time which has caused fall in the inward flow of external funds," the ERD official said. Usually, the donors disburse committed foreign assistance for the schemes after implementation of the development works by the government project implementing agencies partially or fully. Out of $ 330 million foreign loan and grants in the July-October period, the World Bank has disbursed $ 97.57 million, ADB $ 86.38 million, United Nations Development Programme $ 22.32 million and European Union $ 15 million, the ERD data showed. The poor aid utilisation by the project implementers has already hit hard the development works as well as the country's BoP. The Planning Commission Wednesday in a meeting asked the ministries and divisions to expedite project execution so that the country can realise more foreign assistance. The government project executing agencies have spent only Tk 12.50 billion, seven per cent of the total project aid (foreign aid) outlay from the Tk 460 billion ($ 6.57 billion) annual development programme (ADP) budget. Meanwhile, the agencies have performed well in spending the government funds allocated from the internal resources as they have utilised Tk 55.10 billion, 20 per cent of the outlay. The government in the Tk 460 billion ADP has allocated Tk 186.85 billion funds as project aid (financial support from the donors). The ERD official said the shocking aid disbursement by the donors in the July-October period this fiscal will affect the government's $ 3.0 billion external fund target in the current year's budget too. "If the government agencies can speed up their project implementation in the remaining period of the current fiscal, the aid target from the donors can be achieved," he added.