Japan’s nearly US$1.2 billion worth of soft loan for five development projects is facing delay despite Bangladesh government’s aggressive effort for confirming the assistance, officials said Wednesday. Insiders said gloomy business and political environments and increased dependence on a certain bilateral donor country are cited as major reasons behind the delays. The loans are arranged under the Tokyo-assured 36th development aid package. “Deal on the nearly $1.2 billion assured loan was scheduled to be signed with JICA (Japan International Cooperation Agency) by March this year. Political impasse and government’s increased dependency on a Japanese rival country are the key reasons for the delay,” said a senior government official. The Japanese donor agency, to mention, had completed negotiations with the Bangladesh government nearly six months back and assured confirming the loan by March this year. “Bangladesh has requested repeatedly JICA’s Dhaka office to finalise the 36th ODA (Official Development Assistance) package as soon as possible. But the Japanese side is neither giving a schedule for signing nor informing any reasons behind the delay,” said a Ministry of Finance (MoF) official. “We are in trouble with the Japanese loan as we have so far failed to get any confirmed date from the JICA,” he told the FE, requesting anonymity. Another MoF official said a JICA mission is expected to visit Dhaka within next 2.0-3.0 days. During that time, the issue of the pending aid-package deal will be raised. A special economic zone (SEZ) exclusively for Japanese investment is the priority one among the five infrastructure-development projects Japan has chosen in Bangladesh under the 36th ODA package. Government officials said the main objective of the proposed Japanese financial support is to develop an exclusive SEZ in Chittagong to bring in investment from the world’s third-largest economy. The four other projects in the package are: Dhaka-Chittagong national power grid strengthening; western Bangladesh bridge improvement; maternal, neonatal and child health care; and local government improvement. A top government official delves deep to specify some dampers on the Japanese mood, which include government’s bonhomie with China in matters of cooperation — apparently as Tokyo was in a sort of cold war with Beijing over the South China Sea. “The government has recently ignored some of Japan’s financing proposals for some development projects. But the government has accepted the Chinese financing proposals on the same projects. This incident may irk Japan,” he says. Meanwhile, a mission from the JICA visited Dhaka in September last year to work out detailed financing plan for the five proposed projects. The MoF official said: “We are desperately waiting for the loan-signing ceremony. Since Japan is our best bilateral development partner, we are eagerly waiting for their positive decision.” He also cites problem on the political front as another cause of concern holding back the investment clearance. “This is a reality that the latest political deadlock had delayed the loan signing further. The three months of political deadlock between January and March affected not only the Japanese assistance but also other external cooperation,” he said. Analysts are of the opinion that a breakthrough in the political standoff over poll issues could unleash a spree in investment and economic activity in the country that holds high potential in various sectors.
