Govt may cut Tk12,000cr from foreign aid

The government may trim around Tk 12,000 crore from foreign assistance in the Revised Annual Development Programme (RADP) of FY2022-23 in line with austerity measures to save money, officials of the Economic Relations Division (ERD) have said.

However, the amount can go up or down following meetings with different ministries and divisions, they added.

Talking to The Business Post, a senior ERD official said that they held meetings with different ministries and divisions on Sunday. “We are now preparing the list of foreign funding for the RADP of FY23. ERD will take five-six days to finalise the list.”

According to the Planning Commission, which had sought to know about the foreign fund amount from ERD by January 15, the government has approved an ADP of Tk 2.46 lakh crore for FY23 and Tk 92,020 crore of it is supposed to come from foreign assistance.

But in the RADP, the foreign aid amount is likely to come down to Tk 80,020 crore, said commission officials.

The original ADP allocation was Tk 2,25,324 crore for FY2021-22. It was later brought down to Tk 2,07,550 crore after the commission cut Tk 17,774 crore — or 7.87 per cent of the original total — in the RADP.

In FY2020-21, Tk 17,976 crore was also cut in the RADP and Tk 9,800 crore in FY2019-20.

Zahid Hussain, the former lead economist of the World Bank’s Dhaka Office, told The Business Post that the foreign assistance amount gets reduced from ADP every year due to a lack of proper planning and implementation of the development projects.

“There are two reasons behind this. Firstly, the authorities plan projects without proper cost estimation. They also prepare project proposals without considering cost escalation,” he said.

“Secondly, the foreign-funded projects are not being implemented properly because the money remains stuck in the pipeline,” he added.

Officials said the government will not reduce the allocation from local sources because it plans to use them in projects of important ministries.

Planning Division Additional Secretary Md Sayduzzaman said, “After we get the list from ERD, we will prepare the draft RADP for FY23. Then we will finalise it at a meeting with Planning Minister MA Mannan.” Earlier, ERD held a series of meetings with 118 different ministries, departments, divisions, agencies and institutions between December 14 and 19 last year, seeking their demand for foreign funds to revise the ADP.