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Paper short abstract

The fascinating story of the Padma Bridge constructed by Bangladesh, challenging the funding withdrawal by WB. Reviews the lessons from this project and also from two other projects (Aswan Dam and Bokaro Steel plant) for which the original promised foreign funding failed to materialise as well.

Paper long abstract

This paper aims to review the lessons from three major challenging projects for which the foreign funding as originally expected failed to materialise: Padma Bridge of Bangladesh, Aswan Dam of Egypt and Bokaro Steel Plant of India. In particular, the governance issue as raised by the World Bank in the case of the Padma Bridge project of Bangladesh needs to be closely attended as this is often a major concern in the public sector projects in many developing countries. Also, the urgency to attend to macro-economic stability for faster economic development needs to be strongly emphasised, thus necessitating to attend to the two main gaps (the savings-investment gap and the foreign exchange gap) which have remained as major hurdles for economic development of most developing countries. So, the relevant developments as taking place in Third World countries will be closely reviewed. Indeed, there is a clear message: a developing country should not take it for granted that even if a project is economically sound, it will necessarily bring external funding. Hence the urgency to endeavour to improve its own financial capability and, in particular, make every attempt to raise its savings and also increase its foreign exchange earnings, thus ensuring its ability to close the savings-investment and the foreign exchange gaps, the two major gaps constraining faster economic growth. Indeed, without sound macro-economic management and good governance, a developing country will continue to experience difficulties, thus perpetuating its underdevelopment (see, e.g., A Clunies-Ross, et al, 2009; and M Huq, forthcoming).