Unutilised foreign aid and the fallout

A substantial cut in foreign aid disbursement target, as reported in this paper, is a piece of unpalatable news. It will be considered a major setback to efforts for pursuing development projects in the country during the current fiscal. While the country is presently in a state of total disarray prompted by political violence of all perceivable kinds, the six months since the commencement of the fiscal year in July until December 2014 were calm. So, no amount of excuse on grounds of political disturbances can suffice for explaining the poor performance of the annual development programme (ADP) and hence the resultant poor disbursement of funds by the donors during this period.
The government, as the report said, has cut the disbursement target for concessional external assistance in the current fiscal due to weak project execution on the part of its various agencies. Recognising that poor project delivery was the key factor, a senior representative of the ministry of finance (MoF) has been quoted as saying that the government had no choice but to revise the aid disbursement target downward as the various project implementing agencies have performed badly. This has been so, notwithstanding several measures that were taken to energise project implementation. No wonder, when the project executing agencies fail to implement the foreign loan or grant-supported projects, disbursement of external assistance automatically decreases.
ADP implementation has been a cause of worry for years. While ill-planning is largely accountable for lacklustre delivery, the agencies responsible for execution go about briskly executing the projects at the fag-end of the fiscal year with little or no monitoring at all. A good deal of the year-end drill is done to ask the donors to disburse funds. A picture of aid utilisation over the years shows that in none of the preceding years during 2011 to 2014, full utilisation of the aid target was possible. Mid-term downward revision of the targets somehow salvaged the situation. During the years, utilisation fell short on an average by $250-$300 million as against the original targets.
On this count, the worst, however, is with the current fiscal. Disbursement of funds by donors including the World Bank, Asian Development Bank, Japan, USAID and DFID has thus been reportedly static in the first five months of the current fiscal. According to the Economic Relations Division (ERD), foreign aid commitment to Bangladesh, as a sequel to poor aid utilisation performance, dropped by 60 per cent to $896.6 million in July-November '14 compared to $1.44 billion in the corresponding period of the last fiscal. During the current fiscal 2014-15,  government agencies reportedly spent Tk 224.94 billion or 28 per cent of the Tk 803.15 billion ADP allocation. Of this, they spent 27 per cent or Tk 75.90 billion from the total foreign aid allocations in the ADP.
The picture is unpleasant in as much as it tells upon many priority development projects. It need not be reiterated that while gaining commitments from donors is important, equally important is the capacity to accomplish the jobs for which such commitments are obtained. It should thus be the sole objective of the executing agencies to put together all their efforts in order that the remainder of the fiscal experiences a much better performance.