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http://www.thedailystar.net/business/economy/unused-foreign-fund-rises-12pc-4024b-1554919
Home Business Economy
12:00 AM, March 29, 2018 / LAST MODIFIED: 12:00 AM, March 29, 2018
Unused foreign fund rises 12pc to $40.24b
Jagaran Chakma
Unused foreign assistance in the pipeline rose over 12 percent to $40.24 billion in the last eight months to February.
During the period, disbursement from the lenders increased by 75 percent year-on-year to $3.42 billion, according to data from the Economic Relations Division (ERD). However, commitments from foreign sources decreased over 46 percent year-on-year to $7.91 billion while disbursement hit $3.09 billion.
There is nothing to worry about the unused foreign loan now, Farida Nasrin, additional secretary to the ERD, told The Daily Star.
She said a country could borrow funds equivalent to 40 percent of its gross domestic product (GDP), according to estimates on external credit by International Monetary Fund. The amount of the unused foreign assistance is only 16.14 percent of Bangladesh's GDP of $250 billion, Nasrin said.
“So, Bangladesh still has the capacity to absorb more foreign funds thanks to its spiralling GDP.”
It has become a big challenge for the government to utilise the funds because of implementing agencies' inefficiency, slow disbursement and tough conditions set by the development partners, she said.
She said more would come in the pipeline as the government has become more confident of receiving foreign loans as the country has never failed in repayments.
In July 2016, Bangladesh signed a loan agreement with Russia for $11.38 billion for the Rooppur nuclear power plant project, she said.
According to the ERD data, the amount of foreign assistance in the pipeline was only $6.81 billion in 2004-05 and touched $16.32 billion in 2011-12.
As of February, the highest amount of foreign fund that remained unused—$7.8 billion—came from Asian Development Bank while $6.63 billion came from World Bank.
In case of bilateral commitments, India gave word to hand $7.09 billion, Russia $11.76 billion and Japan $1.95 billion as of February, said Ruhul Amin, joint secretary to the ERD.
However, Amin hopes that China would turn out as one of the top bilateral development partners in three years. The lending amount of Asian Infrastructure Investment Bank— which has already started its journey as a multilateral lender—is likely to increase rapidly, he said.
The utilisation of foreign loans should be increased to cut costs of development projects, said AB Mirza Azizul Islam, a former caretaker government adviser.
He also alleged that the implementing agencies were more interested in spending government funds compared to foreign ones due to their inefficiency.
Use of more foreign funds from the pipeline would lessen the pressure on domestic resources and leave a positive impact on the economy, Islam said.
Home Business Economy
12:00 AM, March 29, 2018 / LAST MODIFIED: 12:00 AM, March 29, 2018
Unused foreign fund rises 12pc to $40.24b
Jagaran Chakma
Unused foreign assistance in the pipeline rose over 12 percent to $40.24 billion in the last eight months to February.
During the period, disbursement from the lenders increased by 75 percent year-on-year to $3.42 billion, according to data from the Economic Relations Division (ERD). However, commitments from foreign sources decreased over 46 percent year-on-year to $7.91 billion while disbursement hit $3.09 billion.
There is nothing to worry about the unused foreign loan now, Farida Nasrin, additional secretary to the ERD, told The Daily Star.
She said a country could borrow funds equivalent to 40 percent of its gross domestic product (GDP), according to estimates on external credit by International Monetary Fund. The amount of the unused foreign assistance is only 16.14 percent of Bangladesh's GDP of $250 billion, Nasrin said.
“So, Bangladesh still has the capacity to absorb more foreign funds thanks to its spiralling GDP.”
It has become a big challenge for the government to utilise the funds because of implementing agencies' inefficiency, slow disbursement and tough conditions set by the development partners, she said.
She said more would come in the pipeline as the government has become more confident of receiving foreign loans as the country has never failed in repayments.
In July 2016, Bangladesh signed a loan agreement with Russia for $11.38 billion for the Rooppur nuclear power plant project, she said.
According to the ERD data, the amount of foreign assistance in the pipeline was only $6.81 billion in 2004-05 and touched $16.32 billion in 2011-12.
As of February, the highest amount of foreign fund that remained unused—$7.8 billion—came from Asian Development Bank while $6.63 billion came from World Bank.
In case of bilateral commitments, India gave word to hand $7.09 billion, Russia $11.76 billion and Japan $1.95 billion as of February, said Ruhul Amin, joint secretary to the ERD.
However, Amin hopes that China would turn out as one of the top bilateral development partners in three years. The lending amount of Asian Infrastructure Investment Bank— which has already started its journey as a multilateral lender—is likely to increase rapidly, he said.
The utilisation of foreign loans should be increased to cut costs of development projects, said AB Mirza Azizul Islam, a former caretaker government adviser.
He also alleged that the implementing agencies were more interested in spending government funds compared to foreign ones due to their inefficiency.
Use of more foreign funds from the pipeline would lessen the pressure on domestic resources and leave a positive impact on the economy, Islam said.
