Conditional Aid does more harm than good
Saturday, 02 February 2008

Staff Correspondent

Bangladesh can do without aid and the conditionalities attached to it that actually harm the economy of the country instead of helping it, said speakers on Thursday.

The gross aid is about $1.5 billion, which is 2 per cent of gross domestic product, and if aid repayment of about $700 million is considered, it comes down to 1 per cent of the GDP, said Qazi Kholiquzzaman Ahmad, chairman of the Bangladesh Economic Association.

If we add consultancy fees and other expenses which go back to the donor countries, then the amount is quite meagre,’ he pointed out at a seminar on aid effectiveness organised by the Bangladesh chapter of the Society for International Development.

The chairman of Bangladesh Unnayan Parishad said the country receives about $6 billion in remittance from workers abroad and earns quite a handsome amount from its exports.

He said if corruption comes down to a tolerable level, the amount saved would meet the aid budget. Former adviser M Hafizuddin Khan said the donors seem to forget that this country repays the aid it receives.

They should change their attitude and increase their confidence in Bangladeshis, he said. Ownership of programmes like the Poverty Reduction Strategy Paper is very important, said Mashiur Rahman, former secretary, in his keynote presentation.

The development partners should be sensitive to the macro-economic implications of the actual aid flow, he said. He, however, said that aid would continue for quite some time due to the saving-investment and foreign exchange gap. Aid has a positive impact on those countries with institutionalised checks including democratic rights, right to organise and free speech about the government’s actions, said Selim Raihan, a teacher at the economics department of Dhaka University. Aid does not benefit people as a majority of the less developed countries do not have such rights, he said.

This state will continue as long as governments in least developed countries restrict political freedom and multilateral institutions continue to sponsor them without ensuring respect for civil rights, he said.

The country must develop its capacity building to benefit from aid properly, said SM Al-Husainy, president of the Bangladesh chapter of the SID. Syed Shah Habib Ullah, Nilufar Banu and Masud Mannan of SID, Syed Yusuf Hossain, former secretary, Zaglul A Chowdhury, chief editor of the BSS, Hafiz Majumdar of Pubali Bank, among others, spoke on the occasion.

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