Home ›› 22 May 2020 ›› World Biz
The government has sought budget support $4.57 billion from four multilateral lending agencies and four foreign states including the European Union to cover the deficit in the next three fiscal budgets including the revised one.
Manila-based Asian Development Bank (ADB) and Beijing-based Asian Infrastructure Investment Bank (AIIB) have disbursed $850 million for budget support and immediate response of Covid-19 pandemic.
The budget, seeking foreign assistance for next three consecutive fiscal years’, was presented by Finance Minister AHM Mustafa Kamal to Prime Minister Sheikh Hasina recently.
Multilateral leaders are World Bank, ADB, AIIB and IsDB while the state development partners Japanese agency JICA, European Union, France AFD (Agence française de développement) and Germany Agency for International Cooperation (GIZ).
Finance division’s presentation to Prime Minister also reads “It is a government strategy to seek funds from development partners for an immediate disbursement for next fiscal year budget. But this assistance will be utilized in health and jobs creation in the country along with the implementation of PM-announced incentive packages.
On May 18, after meeting with several top executives of the development partners and foreign ambassadors, Finance Minister AHM Mustafa Kamal said he has received “positive response” from the donor agencies over the loan assistance.
“We need a lot of money to offset the economic losses,” he said, pointing out that revenue collection, export, import, remittance and every other sector received a blow from the coronavirus pandemic.
An official of finance division, who is involved in the budgeting process, said, “We have expected more than Tk 80,000 crore from development partners in the foreign assistance.”
They may give new loan to Bangladesh as most of the big economies are engaged in cushioning the adverse impact of coronavirus, an official said.
According to the presentation submitted to the Prime Minister, Japan International Cooperation Agency (JICA) and the Jeddah-based Islamic Development Bank (IsDB) have agreed to provide budget support to Bangladesh to meet its ballooning expenditure needs in the face of the coronavirus pandemic, which has firmly taken hold in the country's economy.
Most interesting matter neither JICA nor IsDB give budget support to Bangladesh, but the two development partners have to come forward to pitch in with $1 billion and $190 million respectively. JICA has promised to provide $500 million each for next 2020-21 and 2021-22 fiscal year.
The government has asked for $500 million from the AIIB for the current fiscal year and another Tk 1000 million for the next two fiscal years. A day ago Chinese leader declared $250 million in credit to soften coronavirus blow.
It also sought $1.5 billion from the ADB in budget assistance. However, ADB disbursed $100 million for immediate use of fund to absorb the Covid-19 shock.
The Japanese government donor agency normally provides project aid to Bangladesh and now would call the planned support as budget aid, which came after Dhaka looked for it.
Officials of the Economics Relation Division said the budget aid would not, however, affect the ongoing financing to JICA-supported projects in Bangladesh.
As per finance division presentation, the government has sought $280 million from development agencies of the European Union, France, and Germany.
Distinguished fellow of Center for policy Dialogue (CPD) Dr Mustafizur Rahman said the government would lobby hard to get more foreign loan at low interest rate for next fiscal budget amid coronavirus pandemic.
“We can pursue for our old multinational donors’ loan written off due to Covid-19 fallout,” he said.
ask/wi
