Slow execution of projects makes future Japanese aid flow uncertain
Saturday, 2 January 2010
Munima Sultana
Japan's future development assistance to Bangladesh is at stake as the government has failed to speed up implementation of Japanese-funded projects.
The slow implementation of projects is also slowing down the disbursement of Japanese loans committed to development projects in Bangladesh.
Japan International Cooperation Agency (JICA), the development arm of the world's second largest economy, assessed that the Japanese government could disburse only 30 per cent of its target to spend 12 billion yen (approximately US$ 130 million) for implementing the ongoing JICA-funded projects.
JICA officials said 3.5 billion yen was disbursed until November last against the commitment of 12 billion yen during the Japanese fiscal year that began from April.
"Japan is now worried about how the government would catch up with the remaining 70 per cent of the target in next three months," said Mayumi Endoh, senior representative of JICA.
She said the disbursement rate of Japan's loan in Bangladesh drops significantly every year making it among the lowest in the world.
In 2008, disbursement of Japanese loan was only 6.0 per cent, said Mayumi, in-charge of the JICA office here.
JICA statistics shows that Bangladesh was able to disburse 15 per cent of the ODA in 2005 which was reduced to 12 per cent in 2006 and 10 per cent in 2007.
Ms Mayumi said six per cent disbursement rate was very low in comparison with the international trend of JICA loan disbursement.
Though the average rate of disbursement of Japanese loan in the world was 15 per cent, she said, Asian countries including India and Sri Lanka were able to keep it above 20 per cent.
"Performance of ongoing projects is affecting our future assistance," Ms Mayumi told the FE adding that it had gradually been difficult for the JICA office to convince its government of increasing the Japanese loan for the upcoming projects including the Padma bridge.
JICA recently sent a letter to the Bangladesh government voicing concern over some of the projects. Officials of Economic Relations Division (ERD) termed the move unusual, saying Bangladesh's development programme might face a setback if the country's largest bilateral donor halted its financial assistance - a large chunk of which is soft loan and the rest grants.
The Japanese government is now supporting 10 ongoing projects in the current fiscal year committing 71 billion yen in loans. Of the commitment, the government fixed 12 billion yen to be disbursed to implement those projects.
Of the ongoing JICA-supported projects, Eastern Bangladesh Bridge Improvement project, Eastern Bangladesh Rural Infrastructure Development Project, strengthening of solid waste management in Dhaka city, New Haripur Power Plant Development Project, New Bheramara Power Plant Project, Telecommunication Network Development Project are significant.
A JICA official said though the Japanese government considered investment in infrastructure development crucial for economic growth of Bangladesh, it could not commit to increase loan assistance for important infrastructure projects like the Padma bridge.
"At this moment, the situation is becoming difficult for us to ask for additional money for the Padma bridge," he said.
"We are now in consultation with the government on transport sector development of Dhaka as the city's traffic has been at the optimal point of development. But the government should move definitely to speed up implementation of the ongoing projects improving the disbursement projection," the JICA official said.
Japan's future development assistance to Bangladesh is at stake as the government has failed to speed up implementation of Japanese-funded projects.
The slow implementation of projects is also slowing down the disbursement of Japanese loans committed to development projects in Bangladesh.
Japan International Cooperation Agency (JICA), the development arm of the world's second largest economy, assessed that the Japanese government could disburse only 30 per cent of its target to spend 12 billion yen (approximately US$ 130 million) for implementing the ongoing JICA-funded projects.
JICA officials said 3.5 billion yen was disbursed until November last against the commitment of 12 billion yen during the Japanese fiscal year that began from April.
"Japan is now worried about how the government would catch up with the remaining 70 per cent of the target in next three months," said Mayumi Endoh, senior representative of JICA.
She said the disbursement rate of Japan's loan in Bangladesh drops significantly every year making it among the lowest in the world.
In 2008, disbursement of Japanese loan was only 6.0 per cent, said Mayumi, in-charge of the JICA office here.
JICA statistics shows that Bangladesh was able to disburse 15 per cent of the ODA in 2005 which was reduced to 12 per cent in 2006 and 10 per cent in 2007.
Ms Mayumi said six per cent disbursement rate was very low in comparison with the international trend of JICA loan disbursement.
Though the average rate of disbursement of Japanese loan in the world was 15 per cent, she said, Asian countries including India and Sri Lanka were able to keep it above 20 per cent.
"Performance of ongoing projects is affecting our future assistance," Ms Mayumi told the FE adding that it had gradually been difficult for the JICA office to convince its government of increasing the Japanese loan for the upcoming projects including the Padma bridge.
JICA recently sent a letter to the Bangladesh government voicing concern over some of the projects. Officials of Economic Relations Division (ERD) termed the move unusual, saying Bangladesh's development programme might face a setback if the country's largest bilateral donor halted its financial assistance - a large chunk of which is soft loan and the rest grants.
The Japanese government is now supporting 10 ongoing projects in the current fiscal year committing 71 billion yen in loans. Of the commitment, the government fixed 12 billion yen to be disbursed to implement those projects.
Of the ongoing JICA-supported projects, Eastern Bangladesh Bridge Improvement project, Eastern Bangladesh Rural Infrastructure Development Project, strengthening of solid waste management in Dhaka city, New Haripur Power Plant Development Project, New Bheramara Power Plant Project, Telecommunication Network Development Project are significant.
A JICA official said though the Japanese government considered investment in infrastructure development crucial for economic growth of Bangladesh, it could not commit to increase loan assistance for important infrastructure projects like the Padma bridge.
"At this moment, the situation is becoming difficult for us to ask for additional money for the Padma bridge," he said.
"We are now in consultation with the government on transport sector development of Dhaka as the city's traffic has been at the optimal point of development. But the government should move definitely to speed up implementation of the ongoing projects improving the disbursement projection," the JICA official said.