Decent development spending amid extenuating circumstances

Decent development spending amid extenuating circumstances
Sometimes, one just needs to resign to reality.

Bangladesh's development expenditure fell to a 27-year lower in the just-concluded fiscal year.

But, unlike in previous years, a feeling of indignation over another lacklustre implementation of the gross annual development programme seems misplaced this time.

Development activities almost halted after the government was forced to implement a countrywide shutdown from March 26 to rein in the rising cases of coronavirus infections, creating ADP implementation to virtually collapse in the next 8 weeks, when spending typically gets hotter showing a flattering result for the entire year.

ADP expenditure fell 38.79 % to Tk 16,581 crore in May and 40.27 % to Tk 8,136 crore in April.

But implementation was ramped up in June when the federal government lifted the shutdown. About Tk 45,579 crore was spent last month, down 3.13 % year-on-year.

Subsequently, the ministries and divisions finished up spending Tk 161,000 crore in fiscal 2019-20, that was 80.18 % of the full total allocation, said a senior official of the Implementation Monitoring Evaluation Division (IMED) of the planning ministry.

This was the lowest ADP implementation rate since fiscal 1993-94 and the second-lowest because the 1980s, that official statistics were available immediately.

The prior lowest was recorded in fiscal 1992-93 when the federal government managed to spend 80 % of the allocation, in line with the Bangladesh Economic Review 2004. 

Only twice in the last four decades, Bangladesh's ADP execution was below 90 %.

The lower ADP implementation rate was expected given the extraordinary situation due to the pandemic, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.

What surprised him was that it was still a good 80 %. "It could have already been much lower."

ADP implementation rate was 45.08 % in the first 11 months of the fiscal year and there have been little work in April and could.

"The figure rose substantially on the trunk of the implementation in June. That is surprising," Mansur said.

The IMED data is not prepared based on some of the work done. Rather, it is prepared on the disbursement of the funds, he added.

Expenditure for the large projects have been almost on hold from March, aside from small projects, said Zahid Hussain, a former lead economist of the World Bank Dhaka office.

"So, the slowdown has been expected."

Because of the highly contagious disease, persons weren't keen to come back to work, particularly in the construction sector, he said. 

The slowing trend of development spending may continue in the current fiscal year aswell because the cases of coronavirus infections have already been on the rise.

It is also uncertain when the pandemic would peter out, not merely in Bangladesh however in also almost all of the world.

Bangladesh is the 17th worst-affected country in the world regarding the quantity of cases.

Some 3,163 persons tested positive for COVID-19 within the last a day, said the Directorate General of Health Services yesterday. This took the coronavirus caseload to 190,057 and the death toll to 2,424.

The uncertainty around the health crisis prompted the federal government to divert funds to meet the immediate needs for propping up the economy that was caving under the burden of the global pandemic.

The ADP for the new fiscal year is Tk 205,145 crore, up only 6.33 % from last year's revised development budget.

Health, agriculture and employment creation have given priority while allocating resources for the ADP.

A critical element will be the utilisation of foreign aid through faster-paced ADP project implementation with good governance, said the Centre for Policy Dialogue recently.
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