Mirza Aziz dispels fears of stress in budget as donors tighten purse strings
Wednesday, 26 November 2008
FE Report
Finance adviser Dr Mirza Azizul Islam said Tuesday there is unlikely to be 'a dramatic increase' in international aid the poorer nations as world leaders meet in Doha this week to navigate a way-out for development financing.
He, however, insisted that the country's national budget, at nearly Tk 1.0 trillion, would not fall under stress, even if donors' squeeze funds in the aftermath of the worst financial crisis in the developed world since the Great Depression in the 1930s.
"I'm not optimistic about a dramatic rise in ODA (overseas development assistance)-particularly at this critical juncture," Mr Islam said, referring to the global financial meltdown.
"I'm sure there will be a lot of declarations (there). We've seen so many declarations. (But) to what extent, those will be implemented, only future can tell," the finance adviser, a former United Nations economist, added.
His apprehension comes at a time when the world's major economies, traditionally also major donors, announce multi-billion-dollar stimulus packages to bail out their crisis-ridden economies, the steps could have a negative impact on their aid budgets for impoverished nations including Bangladesh.
Bangladesh, however, is increasingly reducing its reliance on hand-outs by donors as aid falls, now at less than 1.0 per cent of GDP.
Experts say Bangladesh could see a decline in its aid flow in the coming months averaging US$1.5 billion a year.
A follow-up international conference on Financing for Development (FfD) will be held between November 29 and December 02 in Qatari's capital Doha.
Back in 2002, the United Nations held the first International Conference on Financing for Development in Monterrey , Mexico to consider new approaches for financing more equitable global development.
The resulting Monterrey Consensus "resolved to address the challenges of financing for development" and "to eradicate poverty, achieve sustained economic growth and promote sustainable development."
The finance adviser noted that ODA as percentage of the GNP (gross national product) of developed economies has been stagnant for years, and even gone down in magnitude and scale.
Speaking at a workshop on the evaluation of medium term budgetary framework, Mr Islam said the potential aid decline would not impinge on the government's budgetary implementation.
He underlined the need for gearing up the drive to increase internal resources mobilisation and involve the private sector, given the dwindling foreign aid.
"Internally, we've still scope for mobilizing resources to boost spending on infrastructure, particularly in health and education," the finance adviser said.
He said shortage in investments in infrastructure could be filled in with the help of private sector.
Country representative of UK 's DFID (Department for International Development) Chris Austin said achieving sound financial management is an even greater challenge than normal during the ongoing global economic crisis.
He heaped praise on the government for its improved macro-economic forecasting, integration of policy into the planning process and improvements in revenue and tax collection.
Mr Austin, however, underscored the need for continued progress in areas related to managing subsidies, controlling recurrent spending and facilitating exchange rate flexibility.
He said regular performance monitoring of budgetary implementation will give Bangladesh government a clear view of its fiscal performance.
"This in turn can be communicated publicly through the Public Accounts Committee, when it becomes operative again after the forthcoming elections," Mr Austin added.
Finance adviser Dr Mirza Azizul Islam said Tuesday there is unlikely to be 'a dramatic increase' in international aid the poorer nations as world leaders meet in Doha this week to navigate a way-out for development financing.
He, however, insisted that the country's national budget, at nearly Tk 1.0 trillion, would not fall under stress, even if donors' squeeze funds in the aftermath of the worst financial crisis in the developed world since the Great Depression in the 1930s.
"I'm not optimistic about a dramatic rise in ODA (overseas development assistance)-particularly at this critical juncture," Mr Islam said, referring to the global financial meltdown.
"I'm sure there will be a lot of declarations (there). We've seen so many declarations. (But) to what extent, those will be implemented, only future can tell," the finance adviser, a former United Nations economist, added.
His apprehension comes at a time when the world's major economies, traditionally also major donors, announce multi-billion-dollar stimulus packages to bail out their crisis-ridden economies, the steps could have a negative impact on their aid budgets for impoverished nations including Bangladesh.
Bangladesh, however, is increasingly reducing its reliance on hand-outs by donors as aid falls, now at less than 1.0 per cent of GDP.
Experts say Bangladesh could see a decline in its aid flow in the coming months averaging US$1.5 billion a year.
A follow-up international conference on Financing for Development (FfD) will be held between November 29 and December 02 in Qatari's capital Doha.
Back in 2002, the United Nations held the first International Conference on Financing for Development in Monterrey , Mexico to consider new approaches for financing more equitable global development.
The resulting Monterrey Consensus "resolved to address the challenges of financing for development" and "to eradicate poverty, achieve sustained economic growth and promote sustainable development."
The finance adviser noted that ODA as percentage of the GNP (gross national product) of developed economies has been stagnant for years, and even gone down in magnitude and scale.
Speaking at a workshop on the evaluation of medium term budgetary framework, Mr Islam said the potential aid decline would not impinge on the government's budgetary implementation.
He underlined the need for gearing up the drive to increase internal resources mobilisation and involve the private sector, given the dwindling foreign aid.
"Internally, we've still scope for mobilizing resources to boost spending on infrastructure, particularly in health and education," the finance adviser said.
He said shortage in investments in infrastructure could be filled in with the help of private sector.
Country representative of UK 's DFID (Department for International Development) Chris Austin said achieving sound financial management is an even greater challenge than normal during the ongoing global economic crisis.
He heaped praise on the government for its improved macro-economic forecasting, integration of policy into the planning process and improvements in revenue and tax collection.
Mr Austin, however, underscored the need for continued progress in areas related to managing subsidies, controlling recurrent spending and facilitating exchange rate flexibility.
He said regular performance monitoring of budgetary implementation will give Bangladesh government a clear view of its fiscal performance.
"This in turn can be communicated publicly through the Public Accounts Committee, when it becomes operative again after the forthcoming elections," Mr Austin added.