Home ›› 15 Dec 2021 ›› Front
The country has seen remarkable progress in reducing dependency on grant funding for economic development as efforts are underway to get completely rid of the age-old practice.
The grant-dependent economy of Bangladesh has turned into an aid-dependent economy in the last 50 years.
The commitment and disbursement of grants from development partners deceased significantly whereas the commitment and the disbursement of foreign aid went up.
In Fiscal Year 1971-72, the total aid commitment by foreign donors was $ 610 million, of which $ 512.71 million was grant and $ 98 million was in the form of loan.
Of the commitment, development partners disbursed $ 270 million in total, of which $ 245.16 million was grant and $ 25.63 in loans, according to the data of the Economic Relations Division under the Finance Ministry.
In Fiscal Year 1972-73, the total commitment was $ 878.41 million, of which $ 483.70 was grant and $ 394.71 million was in the form of loan.
A total of $ 551.44 million were disbursed, of which $486 million came in the form of grant and $ 65 million loan.
Conversely, in FY2020-21, Bangladesh received $ 7.106 billion as foreign aid from its development partners. A total of $ 6.77 billion was foreign aid and $ 334.2 million grant. The total commitment was $9.35 billion. The country repaid $ 1.91 billion owed to development partners.
The FY21 foreign disbursement was the second highest in amount as an external assistance in a fiscal year.
The highest was recorded in FY2019-20 when the incoming foreign fund amounted to $ 7.27 billion. In FY2018-19, the total foreign aid was $ 6.54 billion.
At present, foreign aid about $ 50.4 billion is in the pipeline while the World Bank, the Asian Development Bank and other development partners have expressed their intent to provide budgetary support to Bangladesh’s economy to better manage the pandemic whirlwind.
Finance Minister AHM Mustafa Kamal said foreign donors and international lending agencies are very much positive to give loan to Bangladesh in various development projects which are going on in full swing.
There will be a huge amount of foreign aid in the pipeline, he added.
“Bangladesh has now become a hub of foreign investment. In the last 12 years, development partners and international lenders have given commitment of huge loan for the country that is now capable of repaying loan,” according to the minister.
Kamal argued that Bangladesh is a land of huge business opportunities – be they Greenfield, Brownfield, joint ventures, and/or any other mode of foreign direct investment.
“We look forward to future sustainable development of Bangladesh. Our growth potential is now recognised worldwide. As per the Centre for Economics and Business Research of UK, Bangladesh will become the 25th largest economy in the world by 2035,” he maintained.
“In fact, we aspire to be a rich country as that of G-20 countries by 2041.”
Planning Minister MA Mannan said the major international donor agencies like the World Bank and the Asian Development Bank now consider Bangladesh as a miracle due to its massive socio-economic progress over the last 10 years.
“The picture of foreign aid for the country has been changing over the last two decades,” he pointed out.
In Fiscal Year 1981-82, the total commitment was $ 1,922 million, of which $ 805 million was grant and $ 1,117 million was loan. During the period, $ 1,239 million was disbursed, of which $ 653 million was grant and $ 585 million was loan.
In Fiscal Year 1991-92, donors pledged $ 1,915 million, of which $ 1,140 million was grant and $ 775 million was loan.
Of the commitment, $ 1,611 million was disbursed, of which $ 817 million was grant and $ 794 million was loan.
In Fiscal Year 2001-02, the total commitment was $ 878 million, of which $ 401 million was grant while $ 476 million was loan. But foreign donors disbursed $ 1,442 million. Of the disbursement, $ 478 million was grant and $ 963 in the form of loan.
In Fiscal Year 2011-12, the total commitment was $ 4,764 million. Of the amount, $1,441 million was grant and $ 3,323 million was loan. Some $ 2,126 million was disbursed, of which $ 587 million was grant and $ 1,538 million was loan.
