Foreign assistance slash in revised ADP

An allocation of Tk 7,000 crore has been cut from the foreign aid portion of the Annual Development Program (ADP) in the current fiscal year due to deadly coronavirus pandemic.

It is a matter of relief as this amount of slash is less than that in the last financial year. It may be mentioned that in the last financial year, Tk 9,600 crore was cut from the foreign aid portion of ADP.

The allocation for the current financial year was Tk 70,502 crore. The allocation for the revised ADP has been reduced to Tk 63,000 crore mainly due to the failure of ADP implementation.

The cuts in the ADP seem to have become a tradition in every year. The failure to implement the ADP rests mainly with the concerned ministries and departments.

An official of Economic Relation Division subject to anonymity said “Not being able to fully spend the ADP allocation means that the allocation of the concerned ministry in the revised ADP is reduced, a lot of money is returned as it could not be spent.”

As a result, the money cannot be spent on many important and necessary projects by these ministries. People will be deprived of the benefits in consequence, he also said.

The official also pointed out “This is sad. The inability to spend the allotted money is obviously the incompetence of those concerned. There are many excuses for this. Maybe this time, the excuse will not be the epidemic”.

The volume of foreign aid is going to witness a 10.64% drop in the revised ADP in the 2020-21 fiscal year because of slow progress in spending.

Although, the government had targeted to use Tk 70,501.72 crore in foreign aid in the current fiscal year, the amount will drop to Tk 63,000 crore in the revised ADP.

Most of the allocation amounting to Tk 4,960 crore will be dropped from for the Rooppur Nuclear Power Plant Project. Besides, the Dohazari-Cox's Bazar Rail Line and Shahjalal international Airport Expansion projects will see a drop of Tk 5151 crore and Tk 656.74 crore respectively.

Sources said there is not much tendency to cut allocations for low priority projects.

Former Adviser of International Monetary Fund Dr Reza Kibria said “Coronavirus pandemic has had a negative impact around the world.

In the context of the global COVID-19 pandemic, there are many arguments in favor of this year's foreign aid cuts compared to the previous fiscal year, he said. He however said that those concerned should try to ensure full implementation of the ADP. If not, the question arises, why the ambitious goals are not implemented?

He told that in many cases, the ADP was prepared on the basis of concept letters from a development partner to another development partner about a project. Later, it has been seen that the donors were not interested in that project and the debt no longer comes.

So we think it is inappropriate to take on projects without considering far-reaching plans and future contexts. In addition, market analysis is required for project adoption.

The institutional capacity of the implementing agency must also be considered, he said.

“We think that the weakness remains in the preparation for the implementation of the ADP. Therefore, work on a project should be started following sufficient home work”, he said.

Even then, if there is no desired progress in any project, it is necessary to find out the cause and solve it. In this case, the monitoring system needs to be strengthened, he pointed out.

Economists also said that Ministries and Divisions that lack implementation capacity need to be identified and addressed. Those who fail will have to be held accountable.

After a series of meetings with the ministries and Divisions concerned, the Economic Relations Division set the new target of foreign loans for the current fiscal year. It sent the revised allocation proposal to the Planning Commission last week.

ask/wi