Funds unspent and uninvested

It is estimated that there is over Tk 10,000 crore of excess liquidity in the country's commercial banking sector, awaiting investment. However, the entrepreneurs are reluctant to set up businesses, due to many factors. We have written many times in the past about the extortion, corruption, and over-regulation, that tie the hands of the business community, and serve as a disincentive to pursuing investment opportunities within the country. Banks are similarly hesitant to commit capital to any enterprise in this unpropitious business climate, and understand that the direct and indirect costs of doing business in Bangladesh are so high that almost any venture would be a risky one.

However, the excess liquidity in the commercial banking sector is nothing compared to the Tk 36,000 crore of foreign aid funds that remain in the pipeline and undistributed. Every year the Annual Development Programme remains unfulfilled and the funds for it underutilised. It is estimated that in the first nine months of this fiscal year, only 45 per cent of the ADP has been implemented.

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It is bad enough that the investment climate is so poor that banks are unwilling to risk their ample capital reserves inside the country and that private individuals are likewise reluctant to commit their own capital. But there can be no excuse for the government being unable to fully utilise funds that have been earmarked for development, when so much of the nation's infrastructure lies in a shambles, and there is so much scope for improvement. The problem is clearly the administration's apparent inability to perform even the most basic tasks of governance.