Q1 sees 35pc decline in aid disbursement
Saturday, 14 November 2009
Nazmul Ahsan
Foreign aid disbursement declined by about $ 152 million or 35 per cent during the first quarter (July-September) of the current (2009-2010) fiscal year compared with that of the corresponding period of the previous fiscal, according to the provisional estimates of Economic Relations Division (ERD).
The total disbursed aid during the period under review was $293.96 million, against $ 445.42 million disbursed in the same period of the previous fiscal.
Of $293.96 million, $151.77 million came as loan, while the remaining $142.18 million as grant during July-September period of the current fiscal year.
The amount of aid (loan and grant) disbursed during the first quarter of the previous fiscal year was $ 445.42 million, including $408.97 million as loan and $36.45 million as grant, the ERD figure shows.
The fallouts from the global economic recession, poor rate of progress in project implementation by the ministries and other government agencies and conditions set by multilateral donors caused the decline in foreign aid disbursement, officials in the ERD said.
Finance Minister AMA Muhith last Wednesday apprised the Prime Minister Sheikh Hasina of the latest dismal situation in foreign aid disbursement in the country, sources said.
Top officials of the Ministry of Finance and revenue board were present at the finance minister's meeting with the Prime Minister Sheikh Hasina.
The recent changes brought in the Public Procurement Regulations (PPR) might have hampered the aid disbursement by major multilateral donors, officials in the ERD predict.
The decline in aid disbursement has given rise to concerns among official circles.
The ERD, officials, however, said the situation would improve when the Asian Development Bank (ADB) will disburse $180 million as budgetary support in the latter part of the current month. The ADB disburse an equivalent amount in July last as budgetary support.
'The ongoing global economic meltdown and late disbursement of aid by the ADB caused the decline in foreign aid disbursement in the first quarter of 2009-2010', a high official in the ERD told FE.
'The aid disbursement situation would have been better had the donor agencies in compliance with the Paris Declaration softened their conditionalities while releasing funds.'
The official sources, however, did not say anything about the project implementation capacity of the ministries and other government agencies.
The implementation capacity of government agencies is on the decline for the last decade, which has aggravated further in recent period, a top executive of a donor agency said.
"We often blame donor agencies for attaching strings to aid but never concentrate on improving our implementing capacities, which is worsening day by day,' an official source told the FE.
During the first quarter of the current fiscal year, the ADB disbursed $99.16 million compared with $270.36 million disbursed in the corresponding period of the previous fiscal and the World Bank disbursed $50.75 million compared with $84.78 million disbursed in the same period of the last fiscal, shows the ERD data on Foreign Assistance.
Japan disbursed $8.32 million this quarter compared with $3.51 million in the first quarter of the previous fiscal year, Canada disbursed $2.15 million compared with nil, DFID $62.99 million compared with $26.73 million, EC/EU $7.48 million compared with $10.25 million, Germany disbursed $ 27.27 million compared with $3.46 million and the World Food Programme disbursed $35 million in the first quarter of the current fiscal year compared with $35.18 million disbursed in the first quarter of the previous fiscal year, shows the estimate of the ERD.
The aid disbursement situation in the current fiscal year could worsen if the global economy failed to come out of woods, a high official in the ERD said. He said the government is trying to get extra fund from the International Monetary Fund (IMF), which was announced earlier, to help the least developed countries (LDCs) including Bangladesh, overcome the effects of the global recession.
The WB has already put on hold temporarily the local procurements in the project it finances in retaliation of the government's recent amendments to the public procurement act (PPA).
"Other donors might follow the suit," feared a high official in the ERD.
Foreign aid disbursement declined by about $ 152 million or 35 per cent during the first quarter (July-September) of the current (2009-2010) fiscal year compared with that of the corresponding period of the previous fiscal, according to the provisional estimates of Economic Relations Division (ERD).
The total disbursed aid during the period under review was $293.96 million, against $ 445.42 million disbursed in the same period of the previous fiscal.
Of $293.96 million, $151.77 million came as loan, while the remaining $142.18 million as grant during July-September period of the current fiscal year.
The amount of aid (loan and grant) disbursed during the first quarter of the previous fiscal year was $ 445.42 million, including $408.97 million as loan and $36.45 million as grant, the ERD figure shows.
The fallouts from the global economic recession, poor rate of progress in project implementation by the ministries and other government agencies and conditions set by multilateral donors caused the decline in foreign aid disbursement, officials in the ERD said.
Finance Minister AMA Muhith last Wednesday apprised the Prime Minister Sheikh Hasina of the latest dismal situation in foreign aid disbursement in the country, sources said.
Top officials of the Ministry of Finance and revenue board were present at the finance minister's meeting with the Prime Minister Sheikh Hasina.
The recent changes brought in the Public Procurement Regulations (PPR) might have hampered the aid disbursement by major multilateral donors, officials in the ERD predict.
The decline in aid disbursement has given rise to concerns among official circles.
The ERD, officials, however, said the situation would improve when the Asian Development Bank (ADB) will disburse $180 million as budgetary support in the latter part of the current month. The ADB disburse an equivalent amount in July last as budgetary support.
'The ongoing global economic meltdown and late disbursement of aid by the ADB caused the decline in foreign aid disbursement in the first quarter of 2009-2010', a high official in the ERD told FE.
'The aid disbursement situation would have been better had the donor agencies in compliance with the Paris Declaration softened their conditionalities while releasing funds.'
The official sources, however, did not say anything about the project implementation capacity of the ministries and other government agencies.
The implementation capacity of government agencies is on the decline for the last decade, which has aggravated further in recent period, a top executive of a donor agency said.
"We often blame donor agencies for attaching strings to aid but never concentrate on improving our implementing capacities, which is worsening day by day,' an official source told the FE.
During the first quarter of the current fiscal year, the ADB disbursed $99.16 million compared with $270.36 million disbursed in the corresponding period of the previous fiscal and the World Bank disbursed $50.75 million compared with $84.78 million disbursed in the same period of the last fiscal, shows the ERD data on Foreign Assistance.
Japan disbursed $8.32 million this quarter compared with $3.51 million in the first quarter of the previous fiscal year, Canada disbursed $2.15 million compared with nil, DFID $62.99 million compared with $26.73 million, EC/EU $7.48 million compared with $10.25 million, Germany disbursed $ 27.27 million compared with $3.46 million and the World Food Programme disbursed $35 million in the first quarter of the current fiscal year compared with $35.18 million disbursed in the first quarter of the previous fiscal year, shows the estimate of the ERD.
The aid disbursement situation in the current fiscal year could worsen if the global economy failed to come out of woods, a high official in the ERD said. He said the government is trying to get extra fund from the International Monetary Fund (IMF), which was announced earlier, to help the least developed countries (LDCs) including Bangladesh, overcome the effects of the global recession.
The WB has already put on hold temporarily the local procurements in the project it finances in retaliation of the government's recent amendments to the public procurement act (PPA).
"Other donors might follow the suit," feared a high official in the ERD.