The Financial Express

Japan propels higher aid inflow to Bangladesh

| Updated: November 01, 2020 09:57:11

Japan propels higher aid inflow to Bangladesh

The inflow of foreign aid to Bangladesh jumped by 55 per cent in the first quarter (Q1) of this fiscal after Japan released a big chunk of budget support to help the economy recover from the Covid-related devastations, officials said on Wednesday.

The bilateral and multilateral development partners disbursed US$1.45 billion worth of medium and long-term loans and grants in July-September period of the fiscal year 2020-21, provisional statistics of the Economic Relations Division (ERD) showed.

The country received $931.04 million worth of assistance from the external sources at the same time in FY2020, according to the ERD data.

"The release of $320 million worth of budgetary support from Japan last month has fattened the overall foreign aid inflow into the country in the first quarter," a senior ERD official told the FE.

Japanese donor-JICA-alone disbursed a record $555.41 million worth of assistance, including the budget support in the Q1, he added.

Besides, longer term loans and grant disbursement by other major development partners, including the World Bank (WB), the Asian Development Bank (ADB) and China were also remarkable, the official said.

The Washington-based lender disbursed $329.65 million credit, the ADB $201 million and China $246.37 million during the first three months of the current fiscal, which will conclude in June 2021.

Of the total foreign aid, the development partners released $1.38 billion worth loans and $60.3 million worth grants during July-September period.

Meanwhile, the foreign aid commitment was lower during the Q1 in the current fiscal.

The development partners made $797.47 million aid commitment during the first three months of the current fiscal, the ERD provisional data showed. In the same period of FY2020, the foreign donors and lenders confirmed $2.02 billion worth aid.

Out of the total commitment, the development partners had confirmed $636.87 million in loans and $160.6 million in grants.

The senior ERD official said, "Since a big Chinese loan (nearly $1.0 billion) deal was signed in early last FY2020, the commitment figure was higher than that of this year."

But no such big chunk of foreign aid deal has yet to be signed during FY2021 resulting in a weaker balance sheet in longer term loans and grant commitment in the government accounts, he added.

"Although commitment has been showing a downward trend in the first few months, it will pick up in the last half of this fiscal," the ERD official said.

Meanwhile, the government serviced debt worth US$ 508.25 million against the total longer term loans during July-September period the FY2021.

In the same period of FY2020, it serviced debt worth $495 million -$351.61 million in principal and $143.58 million in interest.

Development partners, including the WB, the ADB, the JICA, the UKAID, China and the Islamic Development Bank disburse concessional and non-concessional loans and grants every year for the development of Bangladesh.

In FY2020, the government received a total of $7.3 billion worth of foreign aid from the development partners.

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