Bangladesh hikes development budget to record $3.8 billion

Bangladesh Sunday increased development spending by 21 percent to a record 3.8 billion dollars for the new fiscal year to create more jobs and cut poverty ahead of general elections, a senior official said.
The National Economic Council led by Prime Minister Khaleda Zia approved the 260 billion taka (3.8 billion dollar) annual development programme for the fiscal year starting July 1, Planning Secretary Akhter Ahmed Khan said.
"This is the biggest development budget ever for the country and the aim is to eradicate poverty and create more jobs. This spending will boost the country's economic growth," Khan said.
The highest increase in the development budget, which is passed separately from the federal budget due on June 8, is for education followed by communications, power and rural development, Khan said.
Development spending is a key issue for Bangladesh, one of the world's poorest countries where almost half of the 144 million population live on less than one dollar a day.
The 21 percent increase comes ahead of federal elections due by January 2007 in which Zia's four-party coalition will face the main opposition Awami League.
An analyst criticised the budget as "populist."
"It's ambitious and populist. Its size will please a lot of people during this election year. But the government will face a very tough task to mobilise such a big amount of money," said economist Atiur Rahman of the independent think tank, Development Co-ordination.
Rahman said the government should have earmarked the most money for electricity generation as the country faces a huge shortfall of power which has affected economic growth.
The development budget has earmarked 12.2 percent of the funds for electricity projects.
Bangladesh, where only 25 percent of the population has access to electricity, faces a daily shortfall of 700-800 megwatts which can rise to 1,800-2,000 megwatts, or half the country's generated power.
The shortages have led to protests, with 17 people killed in three incidents recently in northern Chapainawabganj district when police shot at farmers trying to storm electricity offices to demand power for irrigation pumps.