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Foreign aid flow in the first six months of the current fiscal fell 40 per cent, with economists blaming the fear of donors about misuse of the funds ahead of the next general elections, reports BDNEWS.
The economists and sources in the concerned government agencies also blamed the government's inability to meet the tough conditions imposed by the donors for the low level of foreign aid disbursement during the time.
Bangladesh received a total of US$ 488 million in foreign aid during July-December period of fiscal 2005-06, down from $ 815 million during the same period of the previous year.
The country's net foreign aid receipt during the period was however only $ 237 million as it had to spend $ 251 million for repayment of earlier debts, an official of the Economic Relations Division (ERD) requesting anonymity told the news agency.
Net foreign aid received by Bangladesh during the same period of fiscal 2004-05 was over $ 500 million.
Of the $ 488 million received during July-December period of 2005-06, $ 326.643 million was available from the World Bank, $ 97.20 million from the International Monetary Fund (IMF) and the remaining amount from other donors, ERD sources said.
"Aid flow is declining gradually due to the government's failure to carry out the conditions imposed by the donors," Qazi Kholiquzzman Ahmad, president of the Bangladesh Economic Association said.
He said the country could easily reduce dependence on foreign aid by curbing corruption by 10-15 per cent.
Atiur Rahman said disbursement of donors' aid would reduce significantly in the upcoming months, as it is an election year.
"Donors will hesitate to disburse even their pledged aid fearing misuse of the fund," he added.
Finance and Planning Minister M Saifur Rahman earlier said in the parliament that the government has intensified internal resource mobilisation through strengthening tax administration to reduce reliance on foreign aid.
He said the government expects a 22.86 per cent increase in revenue collection in the current fiscal, which was 19.70 percent in 2004-05 and 12.30 per cent in 2003-04.
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