Dhaka, Oct 1 (V7N): Bangladesh experienced a dramatic 98% drop in foreign loan commitments during the first two months of the fiscal year 2024-25 (FY25), largely due to recent political instability and the interim government's review of foreign-funded projects, according to Economic Relations Division (ERD) data.

From July to August 2024, Bangladesh secured only $20.16 million in foreign aid commitments, a steep decline from $1.14 billion during the same period last year. The significant reduction coincided with the nationwide Anti-Discrimination Student Movement and the resignation of former Prime Minister Sheikh Hasina, which led to widespread political unrest.

ERD officials attributed the drop to the interim government’s decision to reevaluate ongoing and proposed foreign loan-funded projects. As a result, no new agreements with development partners were signed during the review period. However, officials assured that once the review is completed, foreign aid commitments are expected to rebound, potentially leading to record-breaking aid levels this fiscal year.

The interim government is prioritizing projects that are essential, while discontinuing those deemed unnecessary. ERD has asked government agencies to submit priority lists for ongoing foreign-funded projects, detailing the rationale, feasibility, and progress of each by the end of this month.

Planning Advisor Professor Wahiduddin Mahmud confirmed the urgency of reviewing and selecting pipeline projects, noting that while foreign funding is crucial, not all projects are guaranteed to be beneficial.

In the previous fiscal year (FY24), Bangladesh secured $9.88 billion in foreign aid commitments, marking an 8.92% increase compared to FY23.

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