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Lenders’ reps admit failure to judge quality of projects

By voice - Posted on 10 July 2008

Staff Correspondent, 10 July 2008
Overseas funding agencies and countries providing aid have not always shown due discretion in judging the quality of projects and spending mechanisms of recipients including Bangladesh, admitted two donor representatives on Wednesday.
At a multi-stakeholder consultation on ‘Aid Effectiveness’ in Dhaka, they said the voice of Bangladeshis had not been reflected in development planning and formulating policy documents such as the Poverty Reduction Strategy Paper, especially in the absence of a functional parliament.


Bo Sundstrom, head of corporate business in the UK Department for International Development in Bangladesh, mentioned that the biggest mistake in the PRSP was the lack of its independent evaluation when the strategy document was not operational.
‘We do not have a lot of patience [while providing aid]; we remain under pressure from our governments,’ said Jan Moller Hansen of the Danish embassy in Dhaka, dwelling on the mistakes and errors of judgement in disbursement of foreign aid. He urged Bangladeshi citizens and civil society organisations to question the various activities of the government, including spending of the funds received as aid.
Terming the disbursement of aid inadequate, the president of the Bangladesh Economic Association, Quazi Kholiquzzaman Ahmad, pointed out that the donors and lenders were often ignorant of, or did not care about, the ground reality. He alleged that by imposing various conditions, lenders such as the World Bank had been violating the Paris Declaration which emphasised freedom of the recipients in using aid.
Three non-government organisations — VOICE, Aid Accountability Group and The Reality of Aid — organised the consultation on ‘Road to Accra: Paris Declaration and Aid Effectiveness’ ahead of the upcoming conference in the Ghanaian capital to review the use of foreign aid.

Hansen opined that the overseas donors and lenders could not change the people’s condition entirely, but could only facilitate the recipient countries like Bangladesh to attain the development goals. He further admitted that wholesale privatisation was not a solution and could not bring about the economic emancipation of the people.
Sundstrom went one step forward, saying Bangladesh was nowadays not dependent on foreign aid which, amounting to $1.7 billion, was about 2 per cent of Bangladesh’s gross domestic product.
Emphasising the need for mutual accountability, the DfID official said Bangladesh’s development partners were going to develop joint cooperation strategies to ensure effective use of aid. He also termed the holding of the general elections in Bangladesh a major challenge.

In each $100 that came to Bangladesh as aid, 25 per cent went to donors, 30 per cent to the bureaucrats, contractors, politicians and commissioning agents, 20 per cent to rural and urban elite and only 25 per cent to the poor, noted Ahmed Swapan Mahmud while presenting his paper.

World Bank official Kate Krackerberger also acknowledged insufficient investment, ineffective delivery and unpredictability of donor financing in achieving the UN Millennium Development Goals.

Economist Atiur Rahman and rights activist Royeya Kabir said small non-government organisations were being excluded from the process of aid disbursement as big fishes having remained dominant in receiving the donors’ attention.
Atiur stressed the importance of debt cancellation because of the tremendously adverse effects of climate change on Bangladesh.

Kholiquzzaman recommended proper payment of taxes, making official information to the public, investing remittances in small and medium enterprises and facilitating devolution of power by strengthening local government institutions to make the country self-reliant.