Foreign Aid
ABSTRACT
This study attempts to provide the relevant information about the management of foreign aid in third world country like Bangladesh with a brief discussion on literature review of foreign aid. Shortly foreign aid is an important for any country to develop the economy. The critical importance of foreign assistance in economic development in terms of the two-gap theory which stated that aid promoted economic development by relaxing savings and foreign-exchange constraints to capital formation and economic growth. However, subsequent research in later years shifted to other lines of thoughts whereby it was found that aid either displaced or had no impact on domestic savings. In subsequent years, the trend in aid effectiveness studies was to emphasize conditionality, better selectivity and the policy environment in the recipient countries. Then, since the recent calls for increasing aid flows to achieve the Millennium Development Goals, studies on aid effectiveness started focusing on the need for increased aid harmonization and alignment. In order to understand better this we have tried to critically analyze the foreign aid in major three sector of Bangladesh which taken from different development partner.
INTRODUCTION:
Poverty reduction has always been the major development challenge for Bangladesh. It was and still is the overarching objective of the government since independence in 1971. Sustained economic growth since the early 1990s has allowed the country to make good progress in poverty reduction and gains in Human Development Index despite a series of domestic and external setbacks. During the past decade of 2000-01 to 2009-10 Bangladesh has achieved an average GDP growth rate of 5.83 percent per year with GDP per capita reaching US$ 685 in 2010. Revenue reforms led to increased revenue/GDP ratio from 9.6 in 2000-01 to 11.0 in 2009-10. The expenditure/GDP ratio has also increased significantly during this period and remained 14.5 percent
This study attempts to provide the relevant information about the management of foreign aid in third world country like Bangladesh with a brief discussion on literature review of foreign aid. Shortly foreign aid is an important for any country to develop the economy. The critical importance of foreign assistance in economic development in terms of the two-gap theory which stated that aid promoted economic development by relaxing savings and foreign-exchange constraints to capital formation and economic growth. However, subsequent research in later years shifted to other lines of thoughts whereby it was found that aid either displaced or had no impact on domestic savings. In subsequent years, the trend in aid effectiveness studies was to emphasize conditionality, better selectivity and the policy environment in the recipient countries. Then, since the recent calls for increasing aid flows to achieve the Millennium Development Goals, studies on aid effectiveness started focusing on the need for increased aid harmonization and alignment. In order to understand better this we have tried to critically analyze the foreign aid in major three sector of Bangladesh which taken from different development partner.
INTRODUCTION:
Poverty reduction has always been the major development challenge for Bangladesh. It was and still is the overarching objective of the government since independence in 1971. Sustained economic growth since the early 1990s has allowed the country to make good progress in poverty reduction and gains in Human Development Index despite a series of domestic and external setbacks. During the past decade of 2000-01 to 2009-10 Bangladesh has achieved an average GDP growth rate of 5.83 percent per year with GDP per capita reaching US$ 685 in 2010. Revenue reforms led to increased revenue/GDP ratio from 9.6 in 2000-01 to 11.0 in 2009-10. The expenditure/GDP ratio has also increased significantly during this period and remained 14.5 percent