Donor agencies, better called development partners, have cut financial assistance promises to Bangladesh.
According to the Economic Relations Division (ERD), such promises in the first four months of this fiscal year have marked a 50.29 per cent decline over the same period a year earlier.
ERD Secretary Mohammad Mesbahuddin said, "In a recent meeting, all who are involved in foreign assistances have been directed to intensify their activities. Donors do not make equal commitment always. It happened so earlier, too. There is nothing to be worried about it."
He however, said there is a ray of hope in the month of December as some big agreements will be executed this month.
"Of these deals, a loan amounting to $110 crore will be available. Also, in January, some other loan deals are expected. So, ERD eyes nearing the target of donor commitments by the year-end, " he added.
On this issue, Dr AB Mirza Azizul Islam, former finance adviser to a caretaker government, said, "Donors are in doubt over the overall situation. They are unwilling to pledge afresh because of uncertain political situation in the country, absence of an environment conducive to investment and slow progress in implementation of Annual Development Plan (ADP)."
ERD data show donors promised US$ 65 crore 91 lakh 80 thousand during July-October, while the figure was $132 crore 61 lakh 10 thousand in the same period in the last fiscal. Although commitments did not increase, the release of fund compared with the same period in FY 2013-14 was $10 crore more. In the four months this fiscal, donor agencies released $67 crore 86 thousand 70 thousand. Of the amount, loans were $58 crore 29 lakh 40 thousand and grants $9 crore 57 lakh 30 thousand. The fund released this period a year ago was $57 crore 68 lakh--$43 crore 24 lakh 40 thousand loan and $14 crore 43 lakh 40 thousand grants.
Officials said loan repayment during the period was not encouraging. $46 crore 16 lakh 20 thousand was repaid, of which the principal amount was $39 crore 44 lakh forty thousand, while the amount of interest was $6 crore 71 lakh 70 thousand. In the four months of FY 2013-14, $46 crore 63 lakh 40 thousand was repaid. Of this amount, principal amount was $40 crore three lakh 20 thousand and interest was $6 crore 60 lakh 20 thousand.
Of the donor agencies, World Bank released $15 crore 63 lakh 20 thousand, Asian Development Bank $14 crore 90 lakh 60 thousand, Islami Development Bank $4crore 7 lakh 80 thousand, while International Federation of Agricultural Development released $11 crore 69 lakh 50 thousand for Bangladesh.
Noted economist and former governor of Bangladesh Bank Dr Salehuddin Ahmed said, "In the first quarter (July-September) of the current 2014-15 fiscal, the rate of project implementation was 9 per cent. In FY 2013-14 this rate was 11 per cent. Donors attach importance to fund release and pace of implementation of development projects."