Bangladesh's foreign aid receipts in July-April of fiscal 2005/06 fell 12 percent compared with the year-ago period, finance ministry officials said. Bangladesh received 979.11 million dollar in foreign aid during the first 10 months of 2005/06, down from 1.112 billion dollar in the same period a year earlier, the officials said.
However, the country's net foreign aid receipts stood at 586.11 million dollar in that period after repaying 393 million dollar in debt. A year earlier, net foreign aid was $736.40 million.
Economists and analysts said the slowdown was partly caused by Bangladesh not fulfilling conditions set by aid donors such as the World Bank and International Monetary Fund. "If government do not comply with the conditionalities, it is obvious that donors will not also disburse the committed amount," Muzaffar Ahmed, professor of economics at the Dhaka University, told Reuters on Saturday.
"For example, World Bank has been continually stressing on transparency of power sector procurement policy. Having no satisfactory response from Bangladesh, they (the World Bank) held back their committed assistance," he added. Ahmed also urged against adopting hefty development plans that require substantial foreign assistance.
"We should try to identify priorities and set up the (development) schemes accordingly. If we can do that, we would not be compelled to revise the spending targets down because of non-availability of aid money," Ahmed said. Bangladesh expects its 260 billion taka (3.7 billion dollar) Annual Development Programme (ADP) for fiscal 2006/07 to be funded 57 percent with local resources and the rest through foreign assistance.
Bangladesh cut the size of ADP for the fiscal year 2005/06 to June 30 from 245 billion taka (3.5 billion dollar) to 215 billion taka (3 billion dollar). The ADP also had to be slashed in the previous financial year, officials said.
Analysts say the foreign aid flow to Bangladesh is unlikely to increase soon since overseas donors are watching the country's political situation ahead of the January 2007 parliamentary election.
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