Published in The Business Standard on Saturday 20 June 2020
Limited effort towards exploring new projects to address Covid-19 emergencies. It includes only one new project related to Covid-19 titled “Covid-19 emergency response and pandemic preparedness” co-financed by The World Bank in the health sector. Also, no Covid-specific project was found in the long list of 1,347 projects of “unapproved projects without allocation”, most of which are approved by subsequent RADP
An ADP allocation of Tk205,145cr has been proposed for FY2021. It accounted for 6.5 percent of the GDP, which was 6.9 percent in the revised ADP of FY2020. It is only 1.2 per cent higher than ADP FY2020 and 6.3 for higher than RADP FY2020.
Therefore, five important observations can be made for ADP FY2021 in view of the current Covid-19 situation.
The ADP for FY2021 did not follow the required allocative priorities in view of the need to respond to the ongoing Covid-19 pandemic. The allocation concentration of top 5 sectors has increased in the new proposal. The top 5 sectors have received 70.5 percent of total ADP allocation. The shares of allocation have increased from 70.1 percent and 70 per cent in ADP FY2020 and RADP FY2020. The transport sector once again has received the highest allocation, which is 25.4 percent of the total money for the highest number of projects. The transport sector has 298 projects. Meanwhile, the physical planning, water supply & housing have received the second highest share in ADP allocation.
Surprisingly, the share of health, nutrition, population & family welfare in the ADP FY2021 remained unchanged at 6.4 percent. The allocation was the same in FY2020. The sector failed to join the top five club despite it being the most important sector right now given the current Covid-19 situation in the country.
Limited effort towards exploring new projects to address Covid-19 emergencies. It includes only one new project related to Covid-19 titled “Covid-19 emergency response and pandemic preparedness” co-financed by The World Bank in the health sector. Also, no Covid-specific project was found in the long list of 1,347 projects of “unapproved projects without allocation”, most of which are approved by subsequent RADP.
No high ambition in financing ADP from foreign aid. Project Aid will finance 34.4 per cent of total ADP in FY2021, of which Rooppur Power Plant alone accounted for 18.4 per cent of the total project aid. Besides, foreign aid expectation (in a separate list) in terms of both allocation and number of projects decreased drastically in FY2021. Only, 96 projects have been listed with expected foreign aid financing in FY2021, which was 242 in FY2020. The estimated Project Aid to be obtained from these projects sum up to $24.8 billion in FY2021, which was $ 34.2 billion in FY2020. The highest share of Project Aid expected to be obtained is in for transport, which will get 47.3 percent for 36 projects and power, which will get 23.6 percent for 21 projects – that means emphasis on infrastructure will continue!
GoB Government could not restrain itself from including and allocating funds for “carryover” and “ageing” projects in FY2021. Both of them have increased. ADP FY2021 includes 556 “carryover” projects accounting for 18.7 per cent of the total allocation – the highest since at least FY2013. Physical planning, water supply & housing sector has 120 of these projects, followed by 116 in transport, 59 in education, 34 in agriculture, and 26 in power sectors. Further, a total of 552 projects are scheduled to be concluded in FY2021, according to project completion timeline. Thus, the total number of projects which should be concluded stands to 1,108, many of which are unlikely to be completed by FY2021.
Meanwhile, the average age of 1,387 investment project is four years. At least 15.2 percent or 211 of them are more than 6 years old. This is because of the repeated extension of the projects. Besides, 39 of them are between 10-17.5 years old while 3 of them are over 15 years old. These include Tannery Industrial Estate, Dhaka (17.5 years), Third Local Government Support Project (LGSP-3) (15 years), and Construction of Bangladesh Chancery Complex in Islamabad, Pakistan (15 years) – these all were revised more than once! The average implementation rate of these three projects was about 67 percent up to February 2020. Around 20.2 percent or 280 of such projects have already been revised between 1-4 times.
The government also could not avoid taking populist projects, for example, the “symbolic projects” for transport and physical planning sectors. A total of Sixty-four projects or 4 percent under the ADP received only Tk1 lakh in FY2021. Of them, 62 projects received such allocation in FY2020 (this has been a perpetual practice!). Also, 86 percent or 55 of those have been carried over from ADP FY2020. The majority of them are also in physical planning, water supply & housing and transport sectors.
Overall, neither the government could bring the required innovation and far-sightedness concerning taking new projects, driving for foreign aid and designing sectoral priorities in view of Covid-19 nor it could restrain itself from adopting traditional malign practices that only leads to waste of scant public resources.
Thus, it is high time that the government should re-think its development programmes in view of coping and recovering from Covid-19 and make the needed adjustments through an early revision.
Mostafa Amir Sabbih, Senior Research Associate at the Centre for Policy Dialogue (CPD).