Questioning Aid : Bangladesh Perspective
By Ahmed Swapan Mahmud

Since its independence, Bangladesh has been facing serious crisis to be a self-reliant country, free from conditions, policy prescriptions and dependency imposed by the donors. For more than three and a half decades, international financial institutions (IFIs) and corporate agencies of rich countries determine the economic policy for a county's development in the name of development. It has been observed that policies are framed in such a way so that the institutions that prescribe mainly get the benefit out of policy impositions and aid conditionalities instead of improving the socio-economic status of a country. In fact, the poverty reduction rate is not satisfactory which is around one per cent. The question is then, where does the money given by the donors go? The recent trend shows that though the aid flow is decreasing, interestingly, aid conditionalities are increasing.

In this age of capitalist globalization, the marginalization is increasing. The people's struggle for life and livelihood is also dangerously aggravating the interventions of donors in national development policy framework as well as in the political sphere. Some of the major reasons for not changing the poverty situation in Bangladesh are the policy impositions and interference by the donors. For more than 36 years, development history has clearly indicated that foreign aid can't solve the problems, rather in most cases, creates a market for the companies of the rich countries, leads public service sector to privatization, and forces developing countries adopt policy decisions of the donors which mainly keep the interest of the rich countries. With this point of view, it is clear that lending policies, together with strategic documents such as the Poverty Reduction Strategy Papers (PRSP) which have been produced without the participaton of the people, will not reduce the poverty situation at all.

Foreign aid must be condition-free to be effective and help countries to become self-reliant. Foreign aid to Bangladesh's Gross Domestic Product (GDP) dipped in the last 20 years. Foreign assistance constitutes 10% of the GDP in the 80s, which now stands at 2.4 per cent. It is also observed that the donors' money returned to them in a raft of ways. A study shows that 75% of the aid money have been returned back to the donor agencies or countries. Such aid money is comprised of 13% for consultancy and 12% for equipment and suppliers' fees, among others. Besides, various vested interest groups plundered the money including bureaucrats and politicians of the country who took 7% of the total amount. And most of the remaining amount gobbled up by their local mediators. And the conditionalities also cripple the process and aid hardly puts any effective impact on the ground for which it is designed for.

IFIs like the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB) and the United States Agency for International Development (USAID) play dominant role and put conditions even in granting loans that is crippling the political decision-making process of the government. Donor agencies and rich countries play a double-standard role in granting loans and aid to developing countries.

In formulating a national policy or even for any national issue, there is a need for healthy debate bringing together politicians, NGOs, professional experts, academics, researchers, activists, citizens' groups and local communities. But hardly, any meaningful participation by different stakeholders takes place in the formulation of policy decisions. Any formulation of a national policy must provide space for participation, where people from all walks of life, including geographical variances, can voice out their opinion which must be respected.

But decisions are usually being made in closed-door meetings where people don't have access to and do not, at the least, provide a venue for sharing people's views and opinion. Donors and bureaucrats define guidelines and formulate policies for national development. Foreign aid has made the country indebted and burdened with huge foreign debt liabilities instead of benefiting the people.

Besides, people demand from the donors -- in the spirit of honesty, transparency, and good governance -- to provide the public of Bangladesh with information about each project they fund, such as: the percentage of project funds which are believed to have been lost due to corruption at different levels, a breakdown of which groups are the immediate recipients of the funds (e.g. donor country citizens, local consultants, different income groups in Bangladesh), an independently conducted benefit incidence analysis giving a breakdown of who are the ultimate beneficiaries of the project, a clear statement of the specific conditionalities for the project, and a signed declaration stating whether disbursement of the project funds may be used as leverage for other concessions or favors from the Government of Bangladesh.

Aid, in the neo-liberal framework, can't be effective, and can rarely provide positive impacts on the ground for which it is supposed to work for, the development of the poor people in particular.

How governments of developing countries can maximize the utilization of aid, effectively denouncing imposed conditions is important. Holding donors and recipient country accountable to the people is also important. And for an aid to be effective, there must be real commitments to realize ownership, harmonization, alignment, managing for results and mutual accountability that have been emphasized in the Paris Declaration on Aid Effectiveness.