UK donor agency DFID has imposed tough conditions in releasing its earlier pledged grant worth £27.5m for implementing a project for the poor in Bangladesh.
The project titled “Business Finance for Poor in Bangladesh’’ aims at developing rural economy along with diversification of exports. The goal of this programme is to promote inclusive economic growth and to improve income and livelihood opportunities for poor men and women.
The purpose and expected outcome of the programme is to improve access to financial services for medium and small enterprises in Bangladesh. DFID Country Representative Sarah Cooke sent a letter to Finance Minister AMA Muhith last week, seeking his opinion about the recently imposed two conditions and implementation of the new project.
The conditions are the signed Memorandum of Understanding (MoU) can be terminated with a three-month prior written notice by either side, and, if at any stage, the government should become aware of, or suspect, any misappropriation or diversion of funds or any possible fraud or corruption related to project activities funded by the DFID grant, the government of Bangladesh must report the matter immediately to DFID.
As per the draft project titled “Business Finance for Poor in Bangladesh” the concept notes for which has been approved by both DFID and Bangladesh government. The grant will start from January 2014 and will end on January 2019, according to the proposal.
“The foreign lenders put tougher conditions in the wake of corruption charges raised by World Bank on tender process of Padma Bridge,” said a senior official of the Economic Relations Division.Because of the Padma Bridge corruption syndrome, the Department for International Development (DFID) imposed two major inflexible conditions at a time of holding a questionable election, he said.
“Development partners are not questioning about the economic situation and the Padma bridge corruption issue, rather they are now questioning about holding a fair poll and how the next poll would be held,” Muhith told the Dhaka Tribune on Sunday. Meanwhile, foreign aid disbursement increased only 2% year-on-year in the first five months of the fiscal year due to slow project implementation as a fall out of the political turmoil ahead of the national election held on January 5.
Between July and November, some $987m of foreign aid was disbursed, which is 29% of the target for the fiscal 2013-14, according to Economic Relations Division (ERD).
Despite the increment, the disbursement target of $3.37bn is unlikely to be met due to the political turmoil, said an ERD official, requesting not to be named.
