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Bangladesh - November 21, 2023

Fear of decreasing foreign allocations

Zarif Mahmud: Due to the shock of the national elections, there is a fear that the expenditure of foreign loan will decrease. The signs are already clear. Due to the slow pace of development projects, the cost of this segment has decreased in the last four months.
Between July and October, the expenditure has been reduced by 1.66 percent compared to the last financial year. Also, even after four months, six ministries, departments and agencies could not spend a single taka. About Tk 2 thousand crore have been allocated in favor of these.
Related experts say that the election monitoring system will remain shaky for the next 3-4 months. As a result, development work will lose momentum. Normal activities may be disrupted during this period due to various reasons including political violence. As a result, the cost of foreign currency will decrease.
When asked, Planning Minister MA Mannan had earlier told that the impact of the election will not affect the implementation of the project. Because selection is a natural process. With this, those of us who will participate in the election will be busy. Meanwhile, those who are associated with the implementation of the project will not be elected. So, they will do their job. As a result, there is no reason to reduce foreign exchange due to the election. It’s a different story if it’s already reduced.
Executive Director of the Institute for Inclusive Finance and Development (INM) Mostafa K Mujeri told that the electoral movement is starting. At this time, it is normal to reduce the implementation of development projects. It has been seen in the past that such incidents have happened during election years. There is a fear that the use of foreign currency will decrease further this year. Because if violent incidents happen, then the project will slow down, it can be said. In this situation, special monitoring should be increased in project implementation.
A review of the report of the Implementation, Monitoring and Evaluation Department (IMED) shows that the allocation of foreign aid in the Annual Development Program (ADP) of the current financial year is Tk 94 thousand crore. Out of this, Tk 11,864 crore have been spent in four months, which is 12.62 percent of the allocation. In the same period of the last financial year, Tk 13,277 crore were spent, which is 14.28 percent of the total allocation of that year. According to this, comparatively less expenditure has been Tk 1,413 crore or 1.66 percent. Besides, if calculated on a monthly basis, it can be seen that Tk 4,364 crore or 4.64 percent were spent in October alone. Tk 5,335.39 crore or 5.74 percent was spent in October of the last financial year.
ERD’s former senior secretary Kazi Shafiqul Azam told that everyone will be busy with elections during this period of the election fiscal year. Monitoring will not be proper at this time. Many parties, including development partners, will wait to see what happens. Along with this, there are fears of various incidents surrounding the election. There is also uncertainty about where the situation will go. In this situation, it is normal to reduce the speed of project implementation.
Reviewing the report also shows that four months of the current financial year have passed, but six ministries, departments and organizations have not spent a single rupee. Among these, Tk 1,596.33 crore has been allocated in favor of the Ministry of Water Resources. Besides, Tk 191.91 crore in favor of internal resources department. Tk 161.69 crore in favor of Ministry of Lands. Tk 50.83 crores and of the Ministry of Public Administration. Tk 11.27 crore has been allocated to the Ministry of Industry and Tk 1.30 crore to the Ministry of Youth and Sports. They are free. Besides, seven ministries and departments still have foreign money consumption below 5 percent. Of these, the secondary and higher education department has spent 0.55 percent of the allocation. The Ministry of Shipping spent 0.89 percent, the Department of Statistics and Information Management spent 3.06 percent and the Ministry of Expatriate Welfare and Foreign Employment spent 3.18 percent. Also, Ministry of Agriculture spent 4 percent, Health Education and Family Welfare Department 4.04 percent and Ministry of Defense spent 4.62 percent of the total allocation.
IMED Secretary Abul Kashem. Mohiuddin told on Saturday, “I have spoken to the ministries about why the use of foreign money has suddenly decreased.” They said there was no cause for concern. It will be covered. And even if there is a national election, the officials will not sit. Rather, they are going to the field to inspect the project even on the closing day. Besides, the money allocation will be correct at this time. Besides, no new project is being taken. In response to a question, he said, nothing can be said about the political situation at the moment. However, our efforts will continue to ensure that project monitoring is at its highest level.

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