Editorial
Massive under-utilisation of aid
This is indeed tragic
When so much money has been available over the years from external sources for the country's development and yet so little of it is unutilised, we need to assess the situation objectively to be able to address it effectively.
Although 35 to 40 per cent of the Annual Development Programme (ADP) is dependent on foreign assistance, the country has not yet been able to sufficiently build up its capacity for optimum utilisation of development dollars. As a result, there has been a huge pipeline bulge.
An analysis carried out by the Economic Relations Division (ERD) shows that disbursement delays can be traced to both the development partners and the government of Bangladesh (GoB).
From the government side, it has been found that in 21 per cent cases the delay involve procurement-related problems, while 25 per cent cases are due to faulty project documentation. But on the donors' side, 50 per cent of the delays occur on account of disbursement hold-ups, while in 21 per cent cases, the time is spent in appointment of consultants.
However, after the money is disbursed, the responsibility of fund utilisation rests squarely with the government, or the ministries, for that matter.
Unfortunately, as with the donor-aided projects, the poor pace of local fund utilisation does also equally stymie the implementation of development projects. The usual picture at the ministries that run most of the development projects is that the first two quarters of any fiscal year after fund allocation are wasted on paper work, while the last quarter is marked by a break-neck speed of project activities to meet deadlines. Quality becomes a casualty.
Overall, inefficient utilisation of funds means carry-over of projects with the attendant cost escalations. And in the case of foreign funded-projects, the unused dollars naturally return to their source.
It is reassuring to note that the government and the development partners have decided to set up a joint committee to find ways to resolve the bottlenecks and utilise the unutilised foreign fund.
At the same time, the government should strengthen and better equip the Implementation Monitoring and Evaluation Division (IMED) of the planning commission to ensure speedier pace of foreign aid utilisation,
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