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Education and Planning Advisor Dr Wahiduddin Mahmud stated that significant changes are coming in budget management. This year, foreign financing will make up a larger portion of the development budget (ADP) compared to domestic funding. Foreign loans will account for approximately 60% of the development budget, while domestic funding will make up 40%. This shift is due to the stagnation in revenue collection, although efforts will be made to increase revenue.
He made these remarks during a briefing after the National Economic Council’s Executive Committee (ECNEC) meeting on Sunday. The meeting, chaired by Chief Advisor Dr Muhammad Yunus, was held at the NEC Conference Room in Sher-e-Bangla Nagar, Dhaka. Planning Secretary and other members were also present during the briefing.
Dr Wahiduddin Mahmud further commented that Chinese contractors had become overnight millionaires, and efforts are underway to change that situation.
Regarding a Chinese-funded project at the Mongla Port, Dr Mahmud said that they have reviewed the loan conditions and contractor selection to ensure there were no weaknesses or irregularities. He confirmed that no issues were found and the project was approved considering its importance. The project was initiated by the previous government.
He added that despite taking more foreign loans, efforts will be made to utilise them in productive sectors. The loans will primarily be allocated to export-oriented industries.
Dr Mahmud emphasised that ongoing projects will continue, though infrastructure-related spending will be reduced in favor of human resource development. For example, medical colleges and various universities are seeing infrastructure development, but there is a shortage of necessary equipment and qualified teachers. Technical institutions also face a lack of skilled teachers, with 80% of teaching positions vacant. Therefore, efforts will focus on developing skilled human resources.
In response to a question, Dr Mahmud said that the mega-projects from the previous government have increased the pressure on paying foreign loan interest, starting from this fiscal year. In the coming years, the principal repayments will significantly rise. However, he clarified that foreign loans are not necessarily detrimental. He cited Vietnam, which took on a substantial amount of foreign debt but did not face major issues. He stated that if foreign loans help generate both public and private sector investments, they can be beneficial.
