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CPD chairman, Rehman Sobhan, speaks at a discussion on “Aid and Policy Reforms in Bangladesh” in Dhaka on Tuesday.
— NEW AGE PHOTO |
Implementation of the market-oriented policy reforms, prescribed by the lending agencies, does not guarantee increased aid inflow.
Rather, the gradual decline of foreign aid inflow coupled with increased conditions questioned the necessity of foreign aid.
The observations were made at a discussion on “Aid and Policy Reforms in Bangladesh” organised by the Centre for Policy Dialogue, a research organisation, at the BRAC Centre Inn in Dhaka Tuesday.
“The ‘90s witnessed the most extensive policy reforms fulfilling aid conditions, yet aid inflow slowed down considerably,” said Mirza Azizul Islam during his keynote presentation on the Macroeconomic Dimensions of Aid Dependence.
Referring to the cross-country comparison, he said that there was no relationship between aid and a country’s poverty status.
Per capita aid in Bangladesh was only $9 in 1999, declining from $19 in 1990 while it was $16,310 in Israel and $1,490 in Egypt in 1999, said Aziz, chairman of the Securities and Exchange Commission.
Another keynote speaker M Syeduzzaman said the government always had to accept certain conditions due to its inability to ignore the views of the lending agencies and its belief in the necessity of reforms. “Most of the reforms undertaken by successive governments will thus appear to have been implemented under pressure,” he said presenting the paper.
Syeduzzaman said the success stories of Bangladesh in many areas might be directly or indirectly linked to the policy reforms but there are numerous examples of failures also.
World Bank country director, Christine Wallich, said the donors and not the governments were in the driving seat for whatever development achieved so far in institutional capacity building.
Wallich termed institutional capacity as the key to any kind of economic management.
She stressed that effective government-donor interaction could find the means for changing the dynamics of aid.
Former ERD secretary Moshiur Rahman said reforms would be effective if the cost of the benefits could be widely distributed.
Abu Ahmed said increase of the tax-GDP ratio could not offset the decline in aid.
“There should be an initiative to increase foreign investment and private sector participation in development activities,” he said.
Chairman of Square Group Samson H Chowdhury said donors alone should not be blamed for stringent conditions as successive governments failed to implement the policy reforms.
Contesting the industrialist’s observations, former state minister for foreign affairs Abul Hasan Chowdhury said the private sector also benefited from foreign aid and policy reforms.
Finance secretary Zakir Ahmed Khan said most of the social sector reforms were undertaken by the government itself and financed from domestic resources.
Minister for Agriculture MK Anwar, speaking as chief guest, said a nation could not depend on foreign aid forever. “It is apprehended that in future, the flow of aid may become scarcer and conditions more stringent.”
CPD chairman Rehman Sobhan presided over the session. Among others, former finance minister AMA Muhit, privatisation commission chairman Enam Ahmed Chaudhury and former revenue board chairman Shah Abdul Hannan spoke.
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