The donors’ consortium for Bangladesh meets today in Parts to evaluate the economic performance of jhe country and pledge assistance for fiscal 1996-97

According to official sources. the government Is likely to seek two billion US dollars as assistance for this fiscal year and will place a disbursement target of 1.706 billion dollars, 19 per cent higher than last year's revised amount. The amount includes 160 million dollars as food aid. 264 million dollars as commodity aid and 1.282 million dollars as project aid.

The disbursement generally indicates the release of funds in the form of cash, goods and services.

Twenty per cent of the disbursement will come from the aid pipeline and three per cent

from new commitments.

A six member Bangladesh delegation led by Finance Minister SAMS Klbrla left the capital Saturday night to attend the World Bank (WB) coordinated aid consortium meeting In the French capital. It will continue till September 11.

The meeting will also review the reports 'Bangladesh: Economic update, recent economic development and medium term reform agenda" prepared by the World Bank and the "Memorandum for the Bangladesh Aid Group 1996-97." prepared by the government.

Earlier, in a local consultative group meeting held in Dhaka, the WB Indicated that despite a depressing aid climate, the targeted amount could be made available against the backdrop of the new government's commitment to eco-

nomic management and reform.

The government will highlight that the political stability restored through a fair election held after a “protracted political struggle," created a window of opportunity for accelerating the pace of the much needed reforms in the areas of trade, industry, agriculture, energy, communication, law and governance, the sources said.

In its memorandum, the government argued that with the reestablishment of political stability and a "broad consensus" in the society, it could now achieve a growth rate of six per cent to seven per cent in the short and medium term.

The government will apprise the donors that its Immediate task include restoration of fiscal discipline through a 'more effective' resource mobilisation

effort coupled with a public expenditure programme that emphasises quality, productivity, and employment generation, the sources added.

It will also apprise that it would initiate steps to stop waste and misallocation of public resources, issues which the donors are persistently pressing upon the government.

About speeding up the reforms In the financial sector, the government would pledge improvement of the central bank's capability, privatisation of some nationalised banks and making the rest profitable.

Regarding Jute Sector Adjustment Credit, the largest ever credit for Bangladesh by the Bank, the government would apprise the donors its firm commitment on Implementing some key reforms as per fresh proposals. I ne government earlier made a proposal for extending the JSAC. which remained stalled since 1994.

The government side will commit that public ownership of jute mills will be progressively' reduced from 15.800 looms to 4.000 looms by closing down and privatising about 18 mills starting in fiscal 1996-97.

It will also pledge that 11 public sector textile mills will be privatised this year and 9.000 employees from the public sector textile mills will be reduced.

Regarding the energy sector, the government is expected to apprise the donors about the recent initiatives including new energy policy focusing on private investment in the power and gas sectors.

On privatisation, the government will express its commitment to strengthen the Privatisation Board.

About the Bangladesh Steel and Engineering Corporation (BSEC), the government will apprise the donors that investment for a high voltage cable and conductor manufacturing plant will be made and the BMRE of six units of BCIC will also be undertaken.

The donors are likely to insist on accelerated growth rate since the present rate of growth is too low to make a dent on the poverty level. The donors are likely to press for speeding up the reforms without which growth will stall.

Drastic improvement in the quality and efficiency of public spending will be emphasised in the meeting as the World Bank's report resented poor aid utilisation capacity of the govern ment and questioned the quality of the development programme.