Record foreign debt targets in dev budget

Mahfuz Emran: The annual development program (ADP) i.e. development budget for the upcoming financial year 2024-25 has set a foreign borrowing target of Tk 1 lakh crore which is the highest in history. The foreign loan target for the current financial year was Tk 94 thousand crores. It has been reduced to Tk 83,500 crores in the revised ADP.
Economists say that 54 percent of the government’s new foreign borrowing is currently going towards interest and principal repayments of earlier loans. After 2024, repayment of big projects will start.
Then there will be more pressure on the economy. In such a situation, the foreign debt of the government has not been set such a big target.
According to Planning Commission sources, this initial size of foreign aid to ADP has been determined through a series of meetings held recently with ministries and departments. The size of the ADP will be finalized by presenting the extended initial draft of the development budget for the fiscal year 2024-25 to be held today.

According to the sources of the Economic Relations Department (ERD), a series of four-day meetings were held to determine the allocation of foreign aided projects of various ministries, departments or organizations in the ADP for the next financial year 2024-25. Before this, the idea of allocation is asked from the project concerned. After detailed discussions in the meetings, the preliminary draft of the project-wise allocation is prepared. In this, the foreign aid in the next financial year’s ADP has been increased by about 17 percent compared to the original ADP of the previous fiscal year and about 6 percent compared to the revised ADP.
An official of ERD said that the target of foreign aid has already been prepared for the implementation of the development project of the next financial year. Which will be higher than the original ADP of last financial year.
The preliminary draft has already been sent to the Planning Commission for finalisation. By reviewing the allocation of foreign aid in the ADP of the previous financial years, it can be seen that the allocation of foreign aid in the ADP of the current financial year 2023-24 was estimated at Tk 94 thousand crores. But in the revised ADP, the allocation was fixed at Tk 83,500 crore.
In the last fiscal year 2022-23 ADP, the foreign share allocation was Tk 92,020 crore, in the revised ADP the allocation was reduced to Tk 74,500 crore. However, at the end of the fiscal year, the expenditure was even less, ieTk 67,344 crores. Same picture in other years too.
In the fiscal year 2021-22, the allocation in the original ADP was Tk 88,024 crore, in the revised ADP it was reduced to Tk 72,677 crore. Tk 67,339 crores were spent at the end of the financial year.
In the ADP of the fiscal year 2020-21, the allocation for the foreign sector was Tk 70,502 crore but in the revised ADP the allocation was reduced to Tk 63,001 crore. Tk 52,516 crores were spent in the end. Similarly, the allocation in ADP of 2019-20 financial year was Tk 71,800 crores, in the revised ADP it is reduced to Tk 62 thousand crores. Tk 47,044 crores were spent at the end of the financial year.
The former chief economist of the World Bank’s Dhaka office Zahid Hossain said that it is important to increase the ability to spend money before increasing the foreign loan concession target. Special monitoring should be done to speed up the projects which have foreign loans. If you can’t spend, there is no use in allocating so much. He said that the current government is giving more importance to foreign debt waiver to overcome the dollar crisis. But if the project can’t be implemented according to the target, the government’s objective will not be achieved.