Dr S Hafeez Rahman is the director general of Asian Development Bank's South Asia Department (SARD), a post that has never been held by a South Asian. SARD that covers Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka is ADB's largest department.

Dr Rahman, who retires today from ADB after serving the organisation for nearly 20 years, was involved in a number of landmark ADB operations, including resumption of the Bank's operations in Vietnam in 1994 and Afghanistan in 20022003. He initiated ADB's assistance to Kazakhstan in 1995 in the aftermath of the collapse of the Soviet Union.

He also played a big role in ADB's stabilisation and recovery assistance to the countries hardest hit by the 1997-1998 Asian financial crisis. Dr Rahman also served as ADB's country director in Nepal during the turbulent times of civil conflict.

Prior to joining ADB, Dr Rahman worked with Bangladesh Institute of Development Studies (BIDS) and was a member of several government, regional, and international expert panels and committees. Recently, he spoke to The Daily Star on a wide range of issues -- from foreign aid to development activities, Bangladesh's economic problems at the moment, the Padma Bridge and his retirement plans -- at ADB's Dhaka office.

Development requires certain changes in mindset; there is no tomorrow in development because needs are increasing every day, Rahman said. “It must be today or yesterday. You have to reform your institutions if things are not happening today or yesterday.”

Rahman said institutions in Bangladesh are lagging seriously in project management, supervision, coordination and project approvals.

“They (institutions) need quick reforms in order to be able to focus on development,” he said.

Foreign aid is needed for many countries and it can very useful if it is used efficiently, he said. There are examples of more efficient uses of aid -- it gives you the breathing space and time unlike a commercial bank, he added.

Rahman focused on efficient aid utilisation as Bangladesh is not getting the funds promised by development partners worth over $13 billion, even though the economy is passing through a difficult time.

“You have to have the mechanism…if you are too slow, it ends up wasting resource,” Rahman said.

He cited examples of how things would get difficult for unnecessary delays in implementation. “If a drinking water project's implementation period is 5 years and if one takes 7-8 or 9 years to execute it, the amount of water you produce would be inadequate.”

He also emphasised partnerships between the public and private sector in taking development issues seriously.

“The most important indicator for a country that can be set to take development seriously is when everybody in the government and private sector starts believing that time is money and we have to be efficient.”

According to him, Bangladesh needs to show urgency that it needs foreign aid. But showing urgency is not enough, the government has to carry out reforms quickly to use aid effectively and speed up development works, he added.

He cited India's example of portfolio management that has improved significantly in the past few years. ADB disburses $2 billion in foreign aid to India annually out of a promise of $3 billion.

“It happens when the government is serious,” said Rahman. “But even 5-6 years ago, India was similar to Bangladesh in aid utilisation.”

On Bangladesh's bottlenecks in aid utilisation, he said the Economic Relations Division (ERD) knows what the problem is.

Rahman advised the government to form a coordinating body or cell that would identify bottlenecks and accordingly, take action. He said Indonesia had formed such a body in the mid 90s to accelerate development works. The body met only top ministers before taking a decision, he added.

The conditions set by donors are much-talked issues in recipient countries, said the ADG DG. He also focused on this point and said these are very common to any lender, whether it is a commercial bank or World Bank or ADB.

“We are accountable to the shareholders. Donors put taxpayers' money and we have to make sure that every dollar is spent efficiently,” Rahman said.

There are other advantages to getting involved with the donors, he said.

“Donors bring the best international practices (from design to supervision), which is the beauty of borrowing from them.”

He however said Bangladesh has improved a lot in aid utilisation than what it was 10 years ago.

The ADB top official said the Bangladesh economy has been doing well until recent months. He said the problems came from fuel import payments. But it is manageable by coordinating fiscal and monetary policies. He also said high inflation is posing a big challenge for Bangladesh.

On the Padma Bridge, Rahman said ADB has already invested in the project by conducting detailed design of the bridge. “It's a difficult issue; one has to wait till the investigation report comes.”

After a long career in ADB and other organisations in and outside Bangladesh, Rahman now thinks of his retirement. He wants to engage in research and analysis on development issues.

The Daily Star/Bangladesh/ 5th April 2012