Finance and Planning Minister M Saifur Rahman expressed Sunday dissatisfaction over the delay in the release of funds by the donor agencies saying that such procrastination is putting pressure on the country's balance of payments.
"Due to delays in the release of funds by the donors, the country has to use its reserve to procure petroleum products," Saifur told reporters at the end of a meeting that reviewed the Annual Development Programme (ADP) for the current fiscal year (2005-06).
"As a result, the balance of payments has come under tremendous pressure," he added.
Saifur hinted at a major revision of the projects under this year's ADP if the donor agencies especially the World Bank (WB) did not release funds within next one month.
"We will have no option but go for a major recasting of the ADP," he added.
According to the finance minister, the WB alone has been making delay in releasing funds amounting to $300 million in two sectors -- $200 million in communications sector and $100 million in education sector -- due to various reasons.
Besides, the development activities in sectors like power, health have been affected due to irregular disbursement of aid money.
The WB cited faulty tendering procedures as the reasons for the delay in the release of funds.
The Asian Development Bank (ADB) and the British Department for International Fund (DFID), however, accepted such procedures for tendering and have already released their respective funds, said Saifur.
The review meeting has decided to form an independent body to monitor the monthly payment order (MPO) to some 0.56 million non-government teachers in schools, colleges and madrasas.
The body will be put in place to earn the confidence of the donors who have for long been complaining about 'political use' of the MPO. The government spends about Tk 21 billion annually against the MPO.
Sources in the education ministry, however, claimed that said a body to monitor the MPO spending was already in existence. The terms of reference for that body were changed a number of occasions in the past. Yet another change in line with the suggestions of the donors is in the offing, sources added.
The size of the ADP for 2005-06 is Tk 245 billion. A total of 856 projects, including 144 under technical assistance and 29 new projects, will be implemented in the current fiscal year.
The share of foreign aid in the financing of the ADP is Tk 118.5 billion or 42 per cent. The rest will come from local sources.
The country's major donor agencies under the banner of the joint Country Assistance Strategy (CAS) identified four constraints that have been adversely affecting the country's performance in utilisation of grants and loans.
The constraints are: delays in preparation and approval of the technical assistance paper, procurement and recruitment of consultants, and laxity in financial management, monitoring and evaluation.
Three donor agencies and a rich developed country - the ADB, WB, the DFID and Japan -- have prepared the joint CAS last July, aiming at harmonising their support in Bangladesh.
Accountability of both donors and the government will increase following the finalisation of the joint strategy under which the donors will continue their lending programme for the next four years.
Four development partners are expected to make a coordinated approach for carrying out the ADP programme.