Md. Muzibur Rahman :
Bangladesh is going to be a developing country and it needs a huge capital/fund for implementation of its mega development projects. Development needs internal and external finance. We shall have to finance our heavy infrastructures like bridges, deep sea-ports, roads communications, maritime resources explorations and exploitations, ship-buildings, big power plants and other big manufacturing plants.
For internal source of funding, we depend on our banks, other financial or non-financial institutions, revenue collections like tax (direct and indirect tax), excise tax, VAT (Value Added Tax), export-import duties and revenue income from others taxable areas. For external sources of funding, we generally depend on borrowing from foreign countries like foreign aid, grants, soft loans or loans with interests etc. Some foreign loans bear interests on financings with certain conditions to implement or for executing the development projects.
The budget of recent years shows a trend of steady decline of dependence on external assistance. But principal and interests repayment for received loans by Bangladesh is gradually increasing. According to latest data Bangladesh external borrowing hits 27.90 percent to GDP last year. Experts and Economists attributed the increased borrowing from foreign sources mainly to lower interests rates compared to that of domestic sources and non-availability of funds for big projects. Most local banks cannot finance large projects due to their limited capital base. They also opined that the debt would also increase significantly following mobilization of fund for different mega projects.
In this situation, we shall have to be careful for utilising these loans/ funds within the stipulated timeframe. Otherwise, nation will have to bear the excess burden of debts/loans or the burden of tax/interest increases if it is not implemented within the stipulated timeframe. The development projects taken by the government either by internal sources or by foreign funds directly or indirectly helps to increase production, income, addressing unemployment problems and poverty reductions as well. The poor and vulnerable peoples get benefits from these undertaken projects in the long run.
Government borrows both from domestic and external sources to meet the social welfare expenditure, unexpected expenditures in emergencies, development planning expenditures and increase investment also. But these borrowings cost increases many times if they are not properly utilised in time. Media news of Tk 60 billion foreign-funded projects not started in nine months of the financial year (FY) hurts us and raises questions over our capacities and capabilities to utilize foreign funds in our development projects.
The news explains and acknowledged us that the implementations of at least half a dozen of foreign-funded projects involving more than 60 billion has become uncertain due to delay or slow execution of these projects. Nine months already been completed of the current financial year but no contract is signed with donors in this respect. So, it is impossible to implement the projects within three months’ time (source news: Daily Industry-18-04-2019). Recently World Bank (WB) forecasts that Bangladesh is among world’s top five fastest growing economies in the world. The report titled ‘The Bangladesh Development Update April 2019: Towards Regulatory Predictability’ published recently, said this growth, despite of insufficient private sector investment, has been attributed to stable macro and export-oriented industry-led growth.
Overall, the economy is moving forward, growing at a decent pace by Bangladesh’s own historical as well as international standards. But Bangladesh will have to go a long way by utilising its domestic and external finance with carefully and timely. WB is aiding and financing different projects in Bangladesh and is unhappy in delay implementations of ongoing development projects. The WB has warned that it will reconsider its financing projects unless the authority expedites implementation of the projects. The global lender may even withdraw funds if the agencies fail to speed up the execution process of the WB-aided projects. It has underscored the need for undertaking necessary actions to implement the ongoing projects within the timeframe to facilitate growth of Bangladesh.
Bangladesh is also attracting foreign direct investment for its mega projects for speedy executions and implementations. We should be careful for utilising every foreign penny, proper and timely of foreign funds especially for Annual Development Projects (ADP), ADB (Asian Development Bank) and WB projects because these projects directly or indirectly help to increase GDP (Gross Domestic Products) growth and development. The GDP of Bangladesh is increasing year after year. The GDP growth was 6.06 percent and 6.55 percent in the financial year 2013-2014 and 2014-2015. It was above 7 percent (7.11%) in the FY2015-2016 and 7.24 percent in 2016-2017.
We hope it will be up to 8-10 percent in the coming financial years. We shall have to work hard for achieving this goal. With a view to accelerating implementation of the projects in time, we should ensure transparency, accountability and efficiency in every sphere. A strong review and monitoring activities can play a vital role for timely implementation and executions of these foreign funded projects for our own interests. A coordinated national policy will help and accelerate the continuous development and future increase of GDP growth of Bangladesh and to reach the target of being a middle income country by 2021 and sustainably developed by 2030.
(Md.MuziburRahman, Freelancer; writes on Development and Economic issues; email: [email protected])
