Bangladesh development partners have cut their aid commitments due to the long spell of political unrest in the country.
Ending in November, the foreign aid commitment stood at US$1.5bn for the first five months of the current fiscal year. A sharp drop of 21% compared to the $1.9bn which was offered during the same period las year, according to the Economic Relations Division.
The donor agencies are complaining that the targeted objectives would not be achieved with the commitment amount accumulating due to the long political turmoil, said an official.
“The government’s spending is very slow too.” the official added.
Development partners such as the World Bank and Asian Development Bank (ADB) have repeatedly been urging the government to strengthen the spending capacity and make the implementation mechanism dynamic.
In the last couple of months, no significant foreign aid commitments were signed with major donors such as WB, ADB, Japan, UK’S Department for International Development (Dfid) and USAID, officials said.
Foreign aid disbursement by the government also suffered during the current political turmoil, as it remained static during the period. According to ERD, the donors had disbursed $989m in loans and grants in the July-November period of this fiscal, only $18m higher than the same period a year ago.
The lower growth of aid flow to the country would not only affect the development work, it would also impede economic growth. The foreign aid target in the current fiscal year is $520m more than the $2.78bn received.
Since the country has been passing through political turmoil over the previous months, utilisation of foreign aid was affected. The implementation rate of foreign-financed development projects was also poor, resulting in lower aid disbursement.
According to the Implementation Monitoring and Evaluation Division, the government ministries and agencies had spent 20% of the Tk658 crore annual development programme, in which 33% of funds came from foreign assistance.
Former Finance Adviser Mirza Azizul Islam said foreign aid flow might decline further in future.
“Recent stance of USA and EU countries about the Bangladesh political issue might influence major donors like World Bank and IMF about aid disbursement,” he said.
The international community - particularly the USA and the EU - have already reacted to one-sided election by refraining from sending observers.
The former finance adviser said project implementation will be slowed down in days to come, as supply of administrative machineries would be disrupted by the political programmes.
