Dhaka, Aug 12 (bdnews24.com)-Thegovernment received more than $ 2 billion in foreign aid in the last fiscalamid uncertainties over the World Bank funding of the Padma bridge, but as muchas 40 percent of the money was spent on interests and instalments of previousloans.
As a result of which thegovernment had only $ 1.25 billion to spend on development projects.
According to the EconomicRelations Department of the Ministry of Finance, donor countries and agenciesdisbursed aid worth $ 2.03 billion over the 2011-12 fiscal.
The amount is 14.41 percent morethan what was received in the previous fiscal (2010-11), $1.78 billion; ofwhich $ 73 million was spent in payback, leaving $1.05 billion to funddevelopment initiatives.
Of the aid received in 2011-12, $6.92 million came in as food assistance and the remainder as development aid.The government spent $79 million as payback for previous loans.
Finance Minister Abul Maal AbdulMuhith said the complication over the Padma bridge project funding by the WorldBank did not have impact aid from donors.
He told bdnews24.com: "Eventhe World Bank has is disbursing funds for the running projects other than thePadma bridge. In fact, their aid disbursement was more than it was the previousyear."
No negative effect was also seenin the disbursement of funds from other donor agencies including the AsianDevelopment Bank, Japan International Copperation Agency and IslamicDevelopment Bank.
Senior Economist for the WorldBank, Jahid Hossain, said even though aid disbursement was low in the start ofthe fiscal, it spiked near the end.
The World Bank on Jun 29cancelled its pledged $1.2 billion fund for Padma bridge project costing nearly$2.9 billion, raising graft allegations in the execution of the project.
However, ERD records show thatJune saw an inflow of aid amounting to $ 29 million, the second highest on amonthly basis for the fiscal. The maximum funds were disbursed in December -$45 million.
"Since our loans rose overthe years, it is only normal that repayment would also increase. And since weare still unable to find an alternative to foreign aid, we will have tocontinue paying back over the years," former caretaker government advisorA B Mirza Azizul Islam said.