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Paris meet will be asked for $2.4b aid pledge : Saifur

Additional help for post-cyclone rehabilitation to be sought

Star Economic Report
The Government will apprise the Aid Club members tn the May 29-30 Paris meeting of the needs for external resources support for an elaborate post cyclone reconstruction and rehabilitation programme. The request for additional support will be in general terms without any concrete and specific amount mentioned.
This was stated by Finance and Planning Minister M Saifur Rahman at a press conference on Friday at National Economic Council building at Sher-e-Bangla Nagar in the city.
He told the newsman that the Government would seek fresh aid pledges for 2.4 billion dollars for 1991-92 at the Aid Club meeting. This amount will include 1550 million dollars In project aid. 520 million dqllars in commodity aid and 330 million dollars in food aid. he ’added.
Asked about aid already tn the pipeline, he said that the pipeline at the end of FY 1990-
91 comprising earlier commitments would include 5156 million dollars as project aid. 490.9 million dollars as food aid and 152 5 million dollars "" Salfur1itahman told a questioner that the fresh aid pledges for 1991-93 would be sought keeping in view the aid disbursement target of 1885 million dollars for the year The aid disbursement target for 1991-92 includes 1200 million dollars as project aid. 500 million dollars as commodity aid and 185 million dollars as food aid This target was set before the cyclone and does not include needs for additional donor support for cyclone rehabilitation and reconstruction." he added
The Minister said a joint Task Force, comprising representatives of the government, the World Bank and the United Nations agencies, would require more three weeks time to complete a detailed assessment about the extent of loss
caused by the century’s worst cyclone and tidal surge of April 29 Any specific request. will have to wait until the assess me nt is complete, he ob-
Saifur Rahman leaves Dhaka for Paris today as the bead of . six member team to the annual Aid Club meeting, being held tn about two months' time after a representative govern ment has been Installed tn power following the free and fair elections in February last
• The other rhembers of the Bangladesh team Include Prin cl pal Finance Secretary Kor shed Alam. Economic Relations Division (ERD) Secretary Enam Ahmed Chowdhury. Planning Commission mem ben Dr Sheikh Moqsud All and Dr Ekram Hossain and Internal Resources Division (IRD) Sec ret ary N H Khan who is also the chairman of National Board of Revenue
At the press conference on the eve of the Aid Club meet Ing. the Minister indicated that a three-year time-frame would be required for Imple mentation of cyclone rehabilitation programme after it was drawn up on completion of assessment of loss and specific needs by the Joint Task Force. Some changes in on-going projects in the coastal areas and off-shore islands will also be needed to accommodate the needs for cyclone rehabilitation and reconstruction, he said.
Replying to a question, he said the reconstruction programme would require a larger development outlay In 1991-92 fiscal year (FY). "We will make requests for commitments of additional resources by the donors at the Paris meeting because the Annual Development Programme (ADP) in next FY will be higher in size by about Taka 500 crore to Taka 600 crore ”, he added.
He said he had already discussions with the representatives of the donor countries and agencies in Dhaka about the cyclone rehabilitation and reconstruction needs, besides the external support for the normal development activities. They want that components of the cyclone rehabilitation programme should by and large be integrated within the overall ADP framework, he added.
The firm-up figures about the cyclone action plan covering the broad spectrum of activities Including rehabilitation and reconstruction will be ready before the ECOSOC, a UN agency, meets in Geneva sometime in July to consider Issues concerning natural disasters, the minister said.
He told the newsmen that foreign assistance in cash to meet the exigencies in the aftermath of the cyclone amounted so far to 40 million
US dollars, of which 16 million dollars came through the governmental channel and the rest 16 million dollars through non-governmental organisations (NGOs). This amount does not include Saudi offer of 106 million dollars, the modalities and composition of which have not yet been made clear.
Cash assistance, the minister noted, by the international community for the cyclone victims is not much. Food assistance, either committed or disbursed so far, will be a part of the emergency relief, recovery and other related intervention operations by the Government.
The minister told a questioner that natural disasters would entail an additional budgetary cost of Taka 500 crore in 1990-91. The Ministry of Finance has released the entire amount, of which Taka 300 crore is meant for various kinds of relief operations and the rest Taka 200 crore for meeting emergency repair and short term recovery needs, he added. He said the revised ADP for 1990-91 would be sized between Taka 6100 crore and Taka 6200 crore.
When asked about aid disbursements in 1990-91. he said. 1723 million dollars of external assistance are expected to be disbursed in the current year. The amount will Include 1050 million dollars as project aid. 406 million dollars as commodity aid and 267 million dollars as food aid.
Replying to a question about aid conditionality, the minister said the principles for good economic management should be followed by any government This, he noted, is all the more a pressing need for a chronic aid dependent economy. Economic mismanagement In past several years in the country has entailed a stringent set of
donor conditionalities, he added.
He pointed out that initiatives and moves for economic reforms and adjustments should come from within the country. There is nothing wrong with many of terms and conditions, as set by the donors but the prescriptions for sound economic management should have been mooted by ourselves, he added while noting that this was unfortunately the case with Bangladesh under the fallen autocratic regime.
The minister was however critical of some of the donor conditionalities and mentioned in particular about the agricultural sector reforms package proposed by the donors. "Such conditions do not fit into our socio-economic environment and are not realistic in the process", he observed. The present government, he added, is holding discussions with the donor agencies in this connection.
About cases of economic mismanagement, he mentioned about the system loss In electric power sector, leakages of utility bodies and deficits of Railway and other public sector organisations. When revenues qf these concerned and bodies are stolen and huge investments fall to generate matching incomes or earnings, fresh funding support for the related bodies and organisations has no justification whatsoever. he observed.
He stressed -the need for enforcing strict discipline in the financial sector. It is unbearable that 20 big defaulters had taken a large chunk of bank credits and do not care at all about their repayment obH-gations. he noted. He said new Investment activities In the private sector could not be supported by the development
finance Institutions (DFls). because some 1100 borrowers remained defaulters In repayment of loans for long. None will be allowed to frolic with bank credits however Influential he may be. he asserted while stating that the Government would not further allow denial of credit support to the new Investors or sponsors because of credit delinquency by others.
He said the list of defaulters was being published by Bangladesh Bank and other commercial banks and DFIs. "The action has already brought some encouraging results and wc shall wait for sometime to decide the next course of action against the defaulters', he told a questioner.
The Finance Minister noted with optimism that the international development partners and donor community had shown tremendous goodwill and support for the new representative government In Bangladesh. "With our determined efforts to Improve overall economic management practices, we can count upon their support for our development activities", he added.
He told the newsmen that the Government would ’ make efforts to raise the level of investments. curb unproductive expenditures, generate more domestic resources and strengthen the development infrastructure. The rote of the Government will be limited to supporting operations while the main thrust will be placed on promotion and growth of an efficient and competitive private sector, he added.
He said the accountability process would be strengthened, Irrespective of the form .of government under a democratic political system. Corruption will be checked with an Iron hand, he added.