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Fdi In Bangladesh A Trend Essay

3755 words - 16 pages

Country Paper Aid Flow to Bangladesh and the Question of Accountability of CSOs at National Level to the People They Serve
By Shadnaz Khan*

Bangladesh, like other poor and less developed countries, has been a regular receiver of foreign aid or external assistance in order to lessen the gap between savings and investment and to mitigate the balance of payment deficit. However, there has been serious debate over the issues such as low performance in aid-utilization, donors’ stringent and one-size-fits-all conditionalities and global aid politics that are believed to undermine the potential benefits that aid could have brought to the development scenario of the country. The apprehension ...view middle of the document...

The bilateral donors include individual countries. Bangladesh has received highest amount of its bilateral aid from Japan in terms of cumulative disbursement followed by USA. International Development Association (IDA) is the largest amongst the multilateral development institutions followed by the Asian Development Bank. From the following table it is evident that IDA contributed 32.27 % of the total aid disbursed between FY01-FY06, followed by ADB which contributed 14.95 percent over the corresponding period. Japan’s contribution during that
She is a Project Associate, Unnayan Onneshan, centre for research and action on development, from Bangladesh


period is 11.81 percent followed by UK (5.27%). However, from FY 04 UK has been the largest bilateral donor to Bangladesh (following figure and table).

Table 1 : Donor wise disbursement of Foreign Aid to Bangladesh Donor FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Total % Of FY 01- Total 06 2739.98 32.27 1002.45 11.81 1269.62 14.95 117.17 1.38 294.01 3.46 5.27 2.75 2.44 100

IDA 298.82 323.39 560.88 Japan 316.15 287.43 243.36 ADB 235.68 182.01 207.12 USA 39.28 19.49 34.7 UN 23.01 51.88 37.59 Agency* UK 53.29 17.57 40.46 EU 32.3 80.18 19.28 UNICEF 49.22 46.38 38.69 Total 1368.43 1434.99 1585.03 *except UNICEF

225.22 79.38 171.97 12 36.45

696.34 45.08 208.28 7.75 33.93

635.33 31.05 264.56 3.95 111.15

93.81 85.21 156.8 447.14 21.17 7.87 72.65 233.45 29.63 25.19 18.09 207.2 1026.9 1507.23 1567.64 8490.22

Figure 1: Trends in ODA Among Major Donor to Bangladesh (FY 01 to FY 06)
800 US $ Mil lio n 700 600 500 400 300 200 100 0 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

Fiscal Year IDA Japan ADB USA UN Agency* UK EU UNICEF

Source: Bangladesh Economic review 2007

Trends in Aid flows to Bangladesh

There has been a significant change in the composition of aid to Bangladesh over the years. The key features of the changing trend has been summarized below.


• Grants and Loans The Share of grants has been decreasing steadily over the past few decades. The share of grants which was 89 percent in 1971/73 has reduced to only 31.9 percent in 2005/06. Table 2

Year 1971/73 1979/80 1984/85 2005/06
Source: ERD, Ministry of Finance,2007

Grant as a share of total Aid Package 89.0% 53.2% 55.4% 31.9%

The declining volume of grants resulted in a larger share of loans in the total aid package.
• Bilateral Aid and Multilateral Aid Bilateral aid has shown a declining trend whereas multilateral aid has increased positively over the years. Bilateral aid that was 75.4 percent of total aid in 1973/78 has declined to about 43.8 percent in 2004/05. Multilateral aid, on the other hand, has grown from 24.6 percent to about 56.2 percent in 2004/05. • Food Aid and Commodity Aid The flow of food aid and commodity aid has shown a declining trend. • The Project Aid The project aid has increased sharply from 1.3 percent of total aid in 1971-72 to 93.8 percent in 2005/06.

Table 3



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