FHM HUMAYAN KABIR
Japan tops the list of foreign aid disbursers as the donor has enhanced the release of its funds to Bangladesh over the years, officials said on Tuesday.
Historically the largest donor of Bangladesh, Japan disbursed the highest $610.98 million during the July-November period of this fiscal year (FY), 2023-24.
The sum total was nearly one-and-a-half times higher than that of two other giants — the Asian Development Bank and the World Bank, according to the Economic Relations Division.
The Manila-based ADB disbursed $387.93 million worth of assistance and the Washington-based WB $444.27 million during the period in question.
In FY23, Tokyo also provided higher than the ADB’s and almost similar to the WB’s, the latest ERD data showed.
Japan disbursed $1.90 billion worth of loans and grants in FY23. But the ADB released $1.56 billion and the WB $1.93 billion.
“Japan has emerged as the biggest development partner of Bangladesh in recent years, as its fund disbursement is rising year on year,” said a senior ERD official.
“The amount of loans of Japan is higher than two other larger DPs—the WB and the ADB,” he added.
According to another ERD official, Japan is currently bankrolling some mega and larger projects in Bangladesh which need pots of funds every year.
The Japan is financing MRT-01, MRT-05 and MRT-06, the rail bridge over the Jamuna, and the third terminal at the Hazrat Shahjalal International Airport in Dhaka.
For the Uttara-Motijheel MRT-06, the Japan International Cooperation Agency (JICA) made a commitment of providing $2.1 billion.
In June 2022, the JICA confirmed $979.8 million (JPY 133,399 million) in loans for building MRT-05 from Hemayetpur to Vatara in Dhaka.
For Airport-Kamalapur MRT-01, Dhaka will receive a $1.10 billion loan from Tokyo as they signed an agreement in 2021 for the construction of Dhaka’s first underground metro rail project.
For the third terminal project, Japan has recently signed an agreement for providing some $517.27 million (JPY 76.635 billion).
Earlier in August 2020, the JICA confirmed nearly $750 million (JPY 80 billion) aid as the first instalment for the same project.
Meanwhile, the JICA provided a record $2.314 billion worth of aid in FY22, some $1.945 billion in FY21 and $1.69 billion in FY20, the ERD data showed.
JICA’s support has started to rise since FY18 when it disbursed $1.54 billion in foreign aid, up by $899 million from FY17, an FE analysis has found.
Japan disbursed $1.195 billion in FY19 and $1.544 billion in FY18, according to the ERD.
Meanwhile, the country’s biggest multilateral lender WB disbursed $1.42 billion in FY18, $2.03 billion in FY19, $1.51 billion in FY20, $1.64 billion in FY21, $1.739 billion in FY22 and $1.93 billion in FY23.
The second-largest lender ADB released $938 million in FY18, $1.25 billion in FY19, $1.70 billion in FY20, $1.30 billion in FY21, $2.628 billion in FY22 and $1.56 billion in FY23.
Japan is also is the third-largest donor among its peers operating in Bangladesh.
In 2012, Japan became the largest bilateral donor for Bangladesh.
Japan provided $17.5 billion of ODA in 2022, representing 0.39 per cent of GNI (gross national income), a rise of 19 per cent in real terms in volume and an increase in share of GNI from 0.34 per cent in 2021, said the Ministry of Foreign Affairs of Japan.
In 2022, Japan ranked third in terms of ODA volume and 15th among Development Assistance Committee (DAC) countries when ODA is taken as a share of GNI.
Japan has so far provided financial support worth $31.84 billion for the socio-economic development of Bangladesh since the independence in 1971.
The interest rate of the Japanese loan is also cheapest among all the development partners in Bangladesh.
The Japanese lending rate will be 1.30 per cent for construction, 0.20 per cent for consultancy and 0.2 per cent as the front end fee (at a time).
The repayment period of its loan is now 30 years, including a 10-year grace period.
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