The New Nation - Internet Edition

Staff Reporter

Per capita debt obligation of Bangladesh has been increasing substantially day by day due to large trade deficit, saving-investment gap, slow growth of revenue and rapid growth of public expenditure.

The per capita liability increased to US$139.91 in last fiscal from $6.59 in fiscal 1974-75, according to figures provided by the External Relations Division (ERD) of the government.

The total public sector debt has increased from $973 million in fiscal 1974-75 to about $19.42 billion in fiscal 2005-06. Moreover, fresh foreign loan and grant marked a substantial decline in recent years.

According to an annual publication of the ERD, out of the total $44.83 billion foreign aid to Bangladesh, disbursed until June 2006, the project aid accounted for $27.653 billion (61.68 per cent) while the commodity aid was $10.907 billion (24.33 per cent) and the food aid was $6.269 billion (13.99 per cent).

About 34 bilateral and multilateral donors provide loans and grants to Bangladesh for financing different development programmes. Among the donors, World Bank, Asian Development Bank (ADB), Japan, UK's Department for International Development, USA, UN, European Commission, Islamic Development Bank are the major ones.

The ERD publication reported that among the bilateral donors, Japan is on the top of the list in terms of cumulative disbursement followed by USA and Canada. On the other hand, World Bank is on the top of the list among the multilateral donors followed by ADB.

The report further said: "Over the years, significant changes have taken place in the total aid package to Bangladesh. The share of grant is declining gradually. The bilateral aid, which was 75.4 per cent of total aid in fiscal 1974-75, has decreased to 43.8 per cent in 2004-05. Multilateral aid, has risen from 24.6 per cent to almost 56.2 per cent over the same period."

About the debt service payment to the donors, the ERD report stated that though the external debt obligation in the aid package of Bangladesh has increased over the years, it is still within manageable limit compared to many other developing countries.

"The external debt service payment on total public sector debt rose from $100.9 million in 1974-75 to about $1.458 billion in 2005-06," the report said.