Concessional foreign assistance

$ 36.54b still unutilised

Concessional foreign assistance in the pipeline swelled to USD 36.54 billion and remained unutilised until last January. Government agencies have allegedly failed to utilise this amount because of a number of factors, including inefficiencies among the implementing entities, slow disbursement of aid on the part of donors and the number of conditions.
Planning minister Mustafa Kamal said on Monday that the implementing entities have been unable to utilise the total allocation of project assistance in the annual development programme (ADP) because of a lack of efficiency.
He also said the government plans to reduce foreign fund spending by 17.5 per cent in the revised ADP (RADP) for FY 2016–17, even though the unused money in the pipeline has reached a new high of USD 36.54 billion till date.
About the big pipeline, the planning minister partially conceded that the implementing agencies were not capable of utilising the project assistance, which is a big challenge before the government. He further pointed out that the pipeline would further increase when they start to implement mega projects.
Unused foreign aid in the pipeline totalled USD 22.24 billion on June 30 last year, a figure that has risen to USD 36.54 billion at present, Mustafa Kamal said. He also said in the first seven months of the current fiscal year, USD 14.66 billion was received in new commitments, while USD 1.46 billion was disbursed and USD 13.2 billion remained unused.

In July last year, Bangladesh signed a loan agreement with Russia to obtain USD 11.38 billion for the Rooppur Nuclear Power Plant, Mustafa Kamal said. According to the data of the Economic Relations Division (ERD), the pipeline started to plump from fiscal year 2004-05 with USD 6.81 billion. It reached USD 16.32 billion in FY 2011–12, USD 18.14 billion in 2012–13, USD 19.09 billion in FY 2013–14, USD 20.17 billion the next fiscal year, and USD 21.99 billion in FY 2015–16.   
Former Bangladesh Bank (BB) governor Dr Saleh Uddin Ahmed alleged that the project implementing agencies were more interested in spending government funds compared to foreign funds due to their inefficiency and the different conditions stipulated.
He also urged the government to address the quality of project directors, negotiate with the development partners as well as build up capability to expedite the utilisation of foreign funding.
If the government is able to utilise the big pipeline, it would reduce the pressure on domestic resources, he iterated.
Policy Research Institute (PRI) executive director Dr Ahsan H Mansur said leaving such a huge amount of confirmed soft loans unused is “really bad news” for the economy. About the big pipeline, he observed that the amount was equivalent to eight Padma Bridges, adding, “If the government were able to utilise this pipeline in time, the GDP rate would definitely increase to 10 to 12 per cent.”
He blamed those implementing the projects for not appointing experienced project directors. Dr Mansur also suggested that the government should take a special initiative to utilise the money for development works and ensure quality of such works.
From the donors’ side, lags in project approval and appointments of experts or consultants held back the start dates, he said, adding: “All these problems ultimately snowball into delayed disbursement of aid in the pipeline.”

Concessional foreign assistance

$ 36.54b still unutilised

Concessional foreign assistance in the pipeline swelled to USD 36.54 billion and remained unutilised until last January. Government agencies have allegedly failed to utilise this amount because of a number of factors, including inefficiencies among the implementing entities, slow disbursement of aid on the part of donors and the number of conditions. Planning minister Mustafa Kamal said on Monday that the implementing entities have been unable to utilise the total allocation of project assistance in the annual development programme (ADP) because of a lack of efficiency. He also said the government plans to reduce foreign fund spending by 17.5 per cent in the revised ADP (RADP) for FY 201617, even though the unused money in the pipeline has reached a new high of USD 36.54 billion till date. About the big pipeline, the planning minister partially conceded that the implementing agencies were not capable of utilising the project assistance, which is a big challenge before the government. He further pointed out that the pipeline would further increase when they start to implement mega projects. Unused foreign aid in the pipeline totalled USD 22.24 billion on June 30 last year, a figure that has risen to USD 36.54 billion at present, Mustafa Kamal said. He also saidin the first seven months of the current fiscal year, USD 14.66 billion was received in new commitments, while USD 1.46 billion was disbursed and USD 13.2 billion remained unused. In July last year, Bangladesh signed a loan agreement with Russia to obtain USD 11.38 billion for the Rooppur Nuclear Power Plant, Mustafa Kamal said. According to the data of the Economic Relations Division (ERD), the pipeline started to plump from fiscal year 2004-05 with USD 6.81 billion. It reached USD 16.32 billion in FY 201112, USD 18.14 billion in 201213, USD 19.09 billion in FY 201314, USD 20.17 billion the next fiscal year, and USD 21.99 billion in FY 201516. Former Bangladesh Bank (BB) governor Dr Saleh Uddin Ahmed alleged that the project implementing agencies were more interested in spending government funds compared to foreign funds due to their inefficiency and the different conditions stipulated. He also urged the government to address the quality of project directors, negotiate with the development partners as well as build up capability to expedite the utilisation of foreign funding. If the government is able to utilise the big pipeline, it would reduce the pressure on domestic resources, he iterated. Policy Research Institute (PRI) executive director Dr Ahsan H Mansur said leaving such a huge amount of confirmed soft loans unused is really bad news for the economy. About the big pipeline, he observed that the amount was equivalent to eight Padma Bridges, adding, If the government were able to utilise this pipeline in time, the GDP rate would definitely increase to 10 to 12 per cent. He blamed those implementing the projects for not appointing experienced project directors. Dr Mansur also suggested that the government should take a special initiative to utilise the money for development works and ensure quality of such works. From the donors side, lags in project approval and appointments of experts or consultants held back the start dates, he said, adding: All these problems ultimately snowball into delayed disbursement of aid in the pipeline.