Bangladesh gets a record $2.78 bln foreign aid

Bangladesh surpassed its record of foreign aid receipts in 2012-13 fiscal,  despite the tug-of-war with the World Bank over the Padma bridge project.

Abdur Rahim Badal Chief Economic
Published : 1 August 2013, 05:51 AM
Updated : 1 August 2013, 07:19 AM

Analysts credit both the government and the donors for being 'alert' on the issue.

Different donor countries and agencies disbursed over $2,78 billion to Bangladesh which is 37 percent higher than the year before.

The net foreign aid stands at over $1.88 billion, 34 percent higher than the previous fiscal, -- of which around $899.5 million was spent in paying interests on earlier loans.

The net foreign aid is calculated deducting the earlier loans along with interest paid during a period from the aid received.

According to data from the Economic Relations Division (ERD), the donors had never in the past disbursed such a large amount of money in forms of loan and grants. It is also a record in terms of net aid.

Former caretaker administration advisor Akbar Ali Khan believes both Bangladesh government and the World Bank were alert due to the complexities surrounding the Padma bridge finance. The government tried to implement its projects with clarity and accountability while global lender continued disbursing money in other projects to avert a fresh decline in relations with Bangladesh.

Finance Minister Abul Maal Abdul Muhith says he is ‘satisfied’ with the current flow of foreign aid.

Speaking to, he said the Washington-based lender wanted to provide $1.2 billion credit for the Padma project but after long engagements, the government withdrew its funding request.

“Many had thought our relations with the World Bank would decline over the Padma project loan and as a result our foreign aid would decline. But in contrary, the foreign aid has increased. The World Bank and others are disbursing more money,” he said.

The minister said although Bangladesh was not taking money from the global lender in the Padma project, the World Bank was providing the equal amount in three other projects.

“It clearly proves that our relation with the World Bank has not declined.”

An analysis of the ERD data showed that $20 million was provided as food assistance and the rest as development aid.

Of the $2.03 billion aid received in 2011-12, $69.2 million was food assistance. A total of $785.5 million was spent as payback for earlier loans.

The net aid amounted to around $1247.8 million.

The previous fiscal saw a 34 percent increase in net assistance.

According to the World Bank, it had disbursed $620 million in different projects in 2012-13 period, which is 20 percent higher than what it had provided during the same period in the 2011-12 fiscal.

An official of the global lender’s Dhaka office told the World Bank is currently financing 36 projects worth $4.5 billion in Bangladesh.

The country received a total $1777.2 million in foreign assistance with the net aid standing at $1049.6 million.

In 2009-10 Bangladesh got $2164.4 million but the net aid amount was $1477.