The New Nation - Internet Edition

Staff Reporter

Finance and Planning Adviser Dr AB Mirza Azizul Islam yesterday said the dependency on foreign aid is increasing due to the mitigation of social safety net programme and minimising the losses of natural calamities by the government.

"We must accept the reality in the current perspective that the country still do require foreign aids for mitigating government imports expenditures", he said.

He was speaking as chief guest at a roundtable on ' Accra Conference on Aid Effectiveness: Perspective from Bangladesh' organised by Centre for Policy Dialogue (CPD) at the BRAC Centre Inn in the city.

Professor Rehman Sobhan, Chairman, CPD presided over and Dr Fahmida Khatun, Additional Director of the organisation presented the keynote paper.

It was also addressed among others by Abul Mal Abdul Muhit, former Finance Minister, Dr Quazi Meshahuddin Ahmed, Managing Director, PKSF, Mustafa K Mujeri, Chief Economist of Bangladesh Bank, M Saiduzzaman, former Finance Adviser, Xian Zhu, Country Director of the World Bank, Mosharraf Hossain Bhuiyan, additional secretary of ERD, Japanese Ambassador Masayuki Inoue, Siddiqur Rahman, former Finance Secretary and Prof Mostafizur Rahman, Executive Director of CPD.

The Finance Adviser said the aid dependency of the country has increased in recent years but most of it has done without donor's conditions.

He also mentioned that in the last year the International Monetary Fund (IMF) has provided financial assistance to the government that was free from condition.

"Our export earnings and flow of remittance are increasing. But these resources are not sufficient to mitigate the public expenditure", he mentioned and added that the government was itself required foreign aid for mitigating its import expenditures.

"In macroeconomic term the dependency of foreign aid is declining while the government dependency on foreign aid is increasing for mitigating the import of essential items," he added.

He said the Poverty Reduction Strategy Paper (PRSP-II) has been prepared with the consultation of the all concerned stakeholders.

Dr Azizul, however, urged the donor's countries not to add the issues of democracy and human rights as one of the prime conditions while disbursing aids to the recipient countries.

Abul Mal Abdul Muhit said Bangladesh should address for her aid debt. He said that sectoral aid is more important than project based aid.

Japanese Ambassador said capacity building and transparency of aid is very important for the development partners and the recipient countries.

Dr Fahmida Khatun in her presentation said though the share of foreign aid in GDP has been halved during 1991-2007 and the role of aid in dealing with the Millennium Development Goals (MDG's) cannot be undermined.

"Bangladesh needs its donors to use country systems and procedures to manage and account for aid," she mentioned.