In the first six months of the current fiscal year, foreign aid fell by 45 percent compared to the same period of the previous fiscal year due to a delay by government agencies in implementing foreign-aided projects and curtailed budget support.

The Economic Relations Division (ERD) identified 35 problematic foreign-aided projects and will hold a meeting with different ministries next week to find the specific causes for their failure.

The overall balance of payments that ran a huge surplus in the last fiscal year has showed a deficit now.

During July-December period, Bangladesh received foreign aid of $818 million which was $ 1.48 billion in the same period of the previous year, according to a Bangladesh Bank report.

Contacted, ERD Secretary Musharraf Hossain Bhuiyan said the Asian Development Bank provided large budget support in the last fiscal year, which is missing this fiscal year.

If the historical trend is taken into account, he said, foreign aid did not fall much in the current fiscal year. The Asian Development Bank gave $635 million budget support in the first six months of last fiscal year.

Musharraf said no budget support has yet been received this fiscal year

but talks are on with the development partners, and if assistance is available at the end of the year the total assistance will weigh heavier.

According to BB statistics, Bangladesh received foreign aid ranging from $1.43 billion to $1.66 billion a year from fiscal 2004-05 to fiscal 2008-09. The year 2007-08 was an exception though, when the figure was $1.95 billion. In fiscal 2009-10, Bangladesh received a high foreign aid of $2.16 billion.

In the annual development programme (ADP) for the first six months of the current fiscal year, the implementation of foreign funded projects was low. The project aid utilisation was Tk 2,776 crore or 18 percent of the total allocation, which was Tk 3,579 crore or 28 percent of the allocation in the last fiscal year.

The planning minister has recently held a meeting with all ministries on ADP implementation.

The ministries told the meeting that the foreign aid utilisation was delayed due to the conditions imposed by donors.

But ERD's initial findings showed that the delay in bidding and other causes delayed the use of aid money. The ministries have lowered their demands for foreign fund in the said 35 projects.

As the foreign aid flow fell, the overall balance deficit in the first six months of the current fiscal year was $584 million, which was a $2.16 billion surplus in the same period of the previous fiscal year.

The deficit was also caused by negative growth in remittance this fiscal year. Slight positive trends, however, were apparent in the foreign direct investment and portfolio investment scenarios. In the first five months of the current fiscal year, the net FDI inflow was $320 million which was $285 million in the same period of last fiscal year.