Mustafa Murshed

Foreign aid is an essential part of public financial management. Bangladesh, a typical LDC significantly depends on external sources due to the crisis in domestic resources. Two-gap Model is a well-known technique to evaluate the necessity of foreign aid in the economic development of an economic entity. Bangladesh is suffering from continuous savings-investment and export-import gaps which require external resources to maintain its desired level of development. This study ensures the inevitability of foreign aid in the economic development of Bangladesh. It also tries to evaluate the performance of the different governmental systems. One of the key factors in external resources management is negotiation. In this era of globalization the aid architecture has got a new dimension which is by and large fulfilling the donors’ interest. There is little room for the debtor countries to make the negotiation in favour of their desire. This study found no significant difference in the process of aid negotiation by the political parties i.e. whatever the governmental structure; recipient country has nothing to say in aid negotiation rather to a great extent it is determined by the donors.

Governance is a complex issue due to its wide range of dimensions. To uplift the quality of the government there are some international agencies those use to extend their cooperation. But the nature and way of providing advices are sometimes misleading and incorrect. The reason behind the provision of inaccurate and biased recommendations is the authoritative behavior of the international organizations. The dominance of some of the developed countries and weak economy of the aid recipients’ countries are also responsible for this. Whatever the form the governance possesses it is a pre-requisite for economic development for all economic entities. Based on secondary evidences this paper makes an attempt to analyze the role of the World Bank and other International Organizations in the context with aid. To ensure a realistic level of development the countries must have appropriate guidelines for setting its strategy. The World Bank and other influential international organizations may aim to provide suitable development outlines to ensure this the existing international organizations should be come into an accountable framework.

Regular contributor of monthly Market Pulse, the top financial magazine in Bangladesh.