The Role of Foreign Aid in Human Resource Development

There is no denying the fact that the International Bank for Reconstruction and Development, which can be expressed as the decision-making body of global capitalist system, was in a good shape in pre-1971 Pakistan. It “came to be intimately well-known with the regime of President Ayub Khan during the 1960s. Along with the Harvard Advisory Group, they conceived and underwrote Pakistan’s development strategy of the 1960s” After emergence of Bangladesh, initially the World Bank along with the United States was considered as anti-Bangladesh elements because of their close relations with Pakistan in 1971. The tour of Robert McNamara, the Bank President, in early February of 1972 was not a very pleasant experience for him.

on the other hand, the World Bank, after initial humiliation, managed to reappear in Bangladesh as an integral part of development thinking. After a brief period of hostility the World Bank soon regained its position and it did not face any difficulty to set its strong foot on the wet land of Bangladesh specially after formation of Bangladesh aid consortium by the World Bank ‘on the same lines as the Pakistan consortium’.

It may be summarized the Bank’s share of lending by which its pattern of priority can be understood. He made his analysis for the period of 1972/73 to 1992/93, and of ‘146 loan agreements with the World Bank, involving $4.2 billion of disbursed amount’. His analysis comes to the conclusion that the largest share (more than 27 %) accrued to import payment support. Among the rest, the rest, the top three sectors are energy and natural resources (16.7 %), agriculture and rural development (12.8 %), and water management flood control and cyclone reconstruction (10.6 %). The industry, including private sector support, accounted for 9.8 %, Education and training received 6 %, transport and communication: 5.8 %, public administration: 4.4 %, population and health: 3 % … It shows that import support occupies a central place in the Bank’s aid portfolio. The real economic sectors occupy an intermediate position. Finally, flow of fund from the Bank to the social sectors is quite modest” (Bhattacharya 1994 cit. By Muhammad et al 1998).

It is noteworthy that the World Bank, from the very beginning, emphasized policies to ensure expansion of import and for that matter “it had been supporting Bangladesh with an annual Import Programme Credit (IPC) since 1973. he Bank also plays the role of a ‘functional catalyst’ by dint of its position of the coordinator of ‘aid consortium’, that influences other bilateral loans. It also influences foreign direct investment through, International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) (Muhammad et al, 1998).

Human resource plays a significant role in long-term development. Long-term economic development involves four fundamental processes: the exploitation of increasing returns to specialisation, the transition from household to market productions, knowledge and human-capital accumulation, and industrialisation (Goodfriend and McDermott, 1995). In the context of human resource development, the need for foreign aid cannot be denied. Hundreds of millions of people have had their lives touched, if not transformed, by access to schools, clean water, sanitation, electric power, health clinics, roads, and irrigation - all financed by foreign aid (Dollar and Pritchett, 1998).

Apart from the above development assistance has over the years followed a specific pattern, with multilateral agencies tending to support infrastructural development and bilateral agencies placing a higher priority on human resource development and social development. It is significant, however, that multilateral agencies are now according Human Resource Development due priority (Wamalwa, 1995). Today the central importance of human resource development (HRD) is universally agreed. In a series of important report, UNDP has highlighted “human development” as a central concept and has done some very interesting work to measure a Human Development Index (HDI) (Serageldin, 1995).