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Budget should benefit the poor

WB's lead economist shares his expectations from the upcoming budget

Md Fazlur Rahman
The upcoming budget should aim to reduce the large number of people living below the poverty line and achieve a level of economic growth that opens up opportunities for all, a top economist said.
"We expect the budget to be friendly towards the poor," Zahid Hussain, lead economist of World Bank's Dhaka office, told The Daily Star in an interview recently.
About 60 million live below the poverty line, and he expects the fiscal 2014-15 budget, set to be announced today, to reduce this number by addressing the specificneeds.
"We also want the budget to be growth friendly. The budget will have to make sure that the growth is inclusive—that it opens up opportunities and make those opportunities available to all."
To make the growth inclusive, the country needs to spend on education, health, sanitation system and malnutrition, so that the capability of the people to participate in the market improves.
The upcoming budget is expected to be 16 percent more than the current year's revised outlay, and Hussain said that on surface it seems to be a "fairly large rise" but in reality it is the need of the hour.
"We have to recognise that Bangladesh is a developing country, which has vast development needs," he said, while citing the need to maintain and expand roads, health facilities and education system as a casein point.
The development economist went on to refer to a recent World Bank study which stated that the country will have to spend $7.4 billion to $10 billion a year until 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growi ng po pu 1 ati o n.
"But the size of the next annual development programme is $11 billion. If you consider that then you will say that the budget is not large enough, as we need to
spend more."
Hussain thinks the main constraint of the budget lies in its implementation.
"Are we maintaining the public assets that we have built? For example, roads depreciate, so we need to spend some money to maintain and repair them. But, the government does a very bad job of it. We maybe unconsciously following a model - Build, Neglect and Rehabilitate."
"That middle part is the problem because if you don't neglect, then the expenditure that you have to make on maintenance would be much less. When the problem becomes very severe, then you say that I will have to do something about it. This is almost akin to building a new road."
He said Bangladesh has one of the highest road fatalities in the world, and it is not just because of bad maintenance, although it is an important area.
Hussain said the country does not provide enough funding for maintenance. "We are not very good at maintenance management—we need to address the problem." The WB official said financing is not a problem for Bangladesh. "When you don't have enough revenue on your own, you can borrow from institutions like the World Bank, your own ban king system, and there are other donors as well."
As of now, there is $19 billion of committed aid money which is waiting for the government to be used in the next for four to five years, he added.
"We can't use them in a single year. But if we can use one-fourth of the committed aid money, it will be more than we are targeting in aid for next year."
ADP is another area where Hussain also finds weaknesses. At present, there are more than 1,035 ongoing projects under ADP.
"There is also a long list of unapproved projects at the start of the year, which take off hurriedly during the year and without a proper design and implementation arrangement." "So, the focus is lost. We have numerous projects, but we can't include them. We include them for non-economic reasons."
There should be a gateway of adequate scrutiny before the projects get the approval, he said.
"We need to focus on those high-priority transformative projects and concentrate our limited implementation capacity on getting the work done."
fazlur.rahman@thedailystar.net