The World Bank yesterday termed the delay in approving and implementing the donor-funded projects in Bangladesh a tragedy.

Ellen Goldstein, the WB country director in Bangladesh, said: "In some instances, development partners are waiting one to two years after the signing of a financing agreement with the government for an approved development project proposal allowing activities to begin and money to flow."

"This is a tragedy for the people of Bangladesh. Equally frustrating can be slow procurement processes, some of which raise red flags and must be cancelled or re-bid, adding to lengthy delays," she said.

Her comments came at a meeting of Local Consultancy Group at the Economic Relations Division in Dhaka at a time when donors' money continued to pour into the country, with outstanding commitments now standing at $13 billion.

"Aid commitments are at record highs. Project disbursements are running at the same pace as last year, and are no cause for immediate alarm," she said.

She also said project disbursements could accelerate significantly above trend if structural obstacles were addressed, particularly the project approval/revision process, public procurement and staffing continuity.

"While we have no cause for immediate alarm over aid disbursements, we should be working together to accelerate implementation, particularly given the size of outstanding aid commitments and subsequent decline in the disbursement ratio."

Goldstein said their joint analysis points to a few obstacles where immediate action is needed and possible.

"Perhaps the most binding constraint for many development partners is the cumbersome project approval and revision process, embodied in the Development Project and Technical Assistance Proformas (DPP/TPP)."

The WB's Bangladesh chief said, another source of concern is frequent turnover of project staff -- often within mere months of appointment.

"Let me hasten to add that changes in donor staff and lengthy donor procedures can also cause frustration for the government."

She said growth of credit to the private sector has slowed, which could dampen investment and growth in Bangladesh.

This situation is admittedly difficult, calling for strong fiscal discipline on subsidies and other public expenditure management going forward, even as the government seeks additional support from partners to relieve fiscal pressures.

"In addition, a strong focus is needed on the quality of public spending, in order to ensure that every taka is used to maximum effect and waste is minimised."

Goldstein said the government can build confidence among development partners by redoubling efforts to strengthen public financial management and promote transparency, accountability and good governance.

"Bangladesh's development partners are committed to Paris Declaration principles calling for greater country ownership and use of country systems to implement aid-funded activities.”

The Joint Cooperation Strategy signed by 18 development partners in Bangladesh underscores this commitment, she added.

At the same time, the WB official said partners require adequate fiduciary safeguards to ensure that aid resources are used for the purposes intended.

She said the development partners are focusing on absorption of aid flows, as this has been a source of concern for the government and its partners.

"Adequate absorption is indeed a prerequisite to achieving the goals of development interventions. But it is not enough to disburse the funds. We must ensure that funds support activities that produce desirable results for intended beneficiaries."

The Daily Star/Bangladesh/ 29th March 2012