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sector might try to turn projects under public-private partnership
into Publicly Financed Private Projects. Speakers at a roundtable
in Dhaka on Wednesday raised the concern along with other budget
implementation issues while the government is busy formulating a
guideline for the PPP. Addressing the meeting, finance minister
AMA Muhith dispelled the concerns over implementation of Annual
Development Programme, PPP, revenue targets and deficit financing.
He, however, expressed concern over slow investment and
infrastructure bottlenecks as the downside risks of development.
Centre for Policy Dialogue organised the roundtable titled
'Delivering on Budget FY2009- 10: A set of Implementation Issues' at
the CIRDAP auditorium. Former finance adviser Mirza Azizul Islam,
senior bureaucrats, former bureaucrats, economists, academics, civil
society members and representatives from private sector took part in
the discussion, moderated by CPD chairperson Professor Rehman Sobhan.
CPD distinguished fellow Dr Debapriya Bhattacharya presented the
keynote paper discussing issues relating to budget implementation
from the macroeconomic perspective. CPD reminded that
implementation of the budget remains dependent on the overall state
of good developmental governance of the country. The finance
minister expressed concern over the stagnant investment scenario and
wondered as to why investment was not taking place in the country
although the 'fear factors' had been removed by now. 'There are
some uncertainties over the global recession and poor energy and
power situation,' he, however, said. In response to an
apprehension over releasing the stimulus funds, he said Bangladesh
Bank would soon make available the data in this regard. He added
that the government would review the budget after six months and
reallocate the funds, if necessary. Muhith said the government
would also review the Poverty Reduction Strategy Paper for three
years keeping in mind the goals of the 5-year plan now under
preparation. 'The biggest task now is inspiring the administration
and the people to help implement the budget.' Responding to a
criticism on the government plan to borrow money from the ADB, and
suppliers' credit from China at hard terms, he said the terms cannot
be called hard, they are rather soft loans for 10-15 years at 3.5-4.0
per cent interest. The finance minister said the proposed loan
from IMF was not for project financing, but for financing petroleum
imports at 0.25 per cent service charge. Former finance adviser
Mirza Aziz said the shifting of the tanneries from Hazaribagh to
Savar had not been taking place as the private sector did not accept
a proposal to procure effluent treatment plant with a loan for 20
years only at an interest of 5 per cent. 'It does not bode well for
the PPP,' he said, expressing concern over the private sector
attitude in case of participating in PPP projects. ' Let's not allow
PPP to turn into Publicly Financed Private Projects.' The former
finance adviser said Bangladesh experience did not show that the
government borrowing from the banking system would crowd out the
private sector borrowing. Rather, he said the global recession, law
and order situation at home and energy crisis have depressed the
investment situation. 'In this situation we cannot expect investment
and that means credit demand will remain low.' Mirza Aziz
expressed dissatisfaction over dropping the employment guarantee
scheme of the caretaker government on policy weaknesses and wondered
whether the replaced scheme in the current budget has been framed
through addressing the policy weaknesses.
