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News Release No. 2003/001
Media Contact: In Dhaka: Subrata S. Dhar
(880-2) 9669301 Ext: 111
e-mail: sdhar4@worldbank.org

DEVELOPMENT PARTNERS COMMEND BANGLADESH’S  ACHIEVEMENTS: FURTHER PROGRESS REQUIRES BETTER GOVERNANCE

Dhaka, May 18, 2003- Participants of the Bangladesh Development Forum commended Bangladesh’s recent progress in achieving macroeconomic stability, reviving important reforms and preparing a generally sound national poverty reduction strategy.  There was broad agreement that reforms introduced during the past eighteen months had resulted in a stronger economy and had established a solid foundation for accelerating growth and poverty reduction.  However, both Government and Development Partners agreed that continued progress requires better governance and law and order.

The Forum was held in Dhaka from May 16 to May 18, 2003, co-chaired by Mr. Saifur Rahman, Honorable Minister for Finance and Planning, the Government of Bangladesh, and  Ms. Mieko Nishimizu, World Bank Vice President for South Asia Region.  The Honorable Prime Minister Begum Khaleda Zia  addressed the opening session, and Ministers from many other sectors also addressed the Forum.  For the first time, individuals from civil society were invited to share their perspectives with the Forum participants.  The Forum’s opening session was also open to the media.

Development Partners recognized the Government’s good progress in stabilizing the economy.  Initiatives  to control expenditures, mobilize additional domestic resources and take politically courageous decisions about state-owned enterprises have reduced  public deficits to more sustainable levels.  They also applauded the Government for reviving reforms in critical areas such as banking, exchange rate management, energy, telecommunications, and trade liberalization.   The initiative to establish an independent Anti-Corruption Commission was especially well-received and Development Partners expressed hope that it would become operational soon. 

Development Partners affirmed Bangladesh’s many remarkable achievements.  At 3.3 percent per year, per capita income grew three times faster than the average for low-income countries, during the 1990s.  During the same decade, income poverty of Bangladesh declined by 1 percentage point per year, a record exceeding many developing countries around the world.  Progress in improving human development indicators has been impressive.

At the Forum, the Government presented its national poverty reduction strategy, which aims to halve poverty by the year 2015 and invigorate social development in the shortest possible time.  The Government’s strategy draws upon a systematic poverty diagnosis. Extensive consultations with stakeholders were undertaken to foster country ownership. The Development Partners generally welcomed the strategy and committed their support for its implementation. 

Participants at the Forum urged the Government to further entrench the strategy in the sector ministries and build an even broader consensus, across political lines, including in the Parliament, as they proceed to prepare their full-fledged Poverty Reduction Strategy.  The PRSP should have concrete programs and specific targets, with milestones for implementation.   The Development Partners also noted that, to translate the strategy into concrete results on the ground, sharper prioritization and sequencing, as well as full costing of its interventions, in line with the medium term budget framework, are essential.  In this regard, the consolidated responsibility for finance and planning under one minister has strengthened economic management. Similar streamlining of  the cabinet would further enhance the Government’s effectiveness. The Development Partners noted that further reforms in planning, budgeting, streamlining project approval procedures and the review of the expenditure programs would be necessary to develop pro-poor programs and budgets.

Bangladesh’s achievements notwithstanding, further progress demands a comprehensive and strategic program to sustain and broaden structural reforms, as well as improve governance and law and order, and to combat corruption.  Corruption  increases the cost of doing business for everyone, but especially for those without political clout.  Corruption drains away scarce resources, delays development and saps public confidence in the investment climate. Dealing with the corruption problem will enable the donor community to enhance financial assistance to Bangladesh. 

Reforms and capacity building of  the police and the criminal justice system are equally essential.  Development Partners emphasized the importance of actually achieving results, and stressed the need for strong political leadership to support reforms and  exercise discipline against those who collude with criminals.

Delegates to the Forum concurred that the private sector is the engine of economic growth. A better investment climate requires better governance, structural reforms, improved infrastructure and an efficient financial system.  Furthermore, while the formal policy regime for local and overseas entrepreneurs in Bangladesh is investor-friendly, there is an urgent need to remove bureaucratic and administrative roadblocks facing private sector. The issue of extortion deserves further attention.  The Government also needs to adopt  a strategy for the post-Multi-fiber Agreement (MFA) situation, to ensure that exports remain competitive. 

The protection of human rights is another critical aspect of governance closely watched by the international community.  Development partners expressed concern about the limited access to justice, especially by the poor, and the human security situation in Bangladesh. Concerns were also expressed about the civil rights implication of Operation Clean Heart.  The creation of an independent Human Rights Commission, appointment of an Ombudsman and more rapid progress in separating the Judiciary from the Executive would help strengthen the protection of human rights in Bangladesh.  Recent rulings by the Courts to curb excesses are welcome measures. The Development Partners urged the Government to resolve all outstanding issues with regard to the Chittagong Hill Tracts.

In the area of human development, the Development Partners commended the Government’s achievement in ensuring access to education and gender equity.  While access to education is a success story of Bangladesh known all over the world, the Government now needs to focus on quality of education, to prepare the nation for an increasingly competitive global environment.  The Ministry of Education has already embarked on a reform program to overhaul the management and governance of the secondary education system to enhance quality.  The Development Partners urged that these reforms also be applied to the primary level.

A significant programmatic initiative is also in the offing in primary education, which will benefit from the harmonization of donor processes, including procurement, financial management,  and reporting.

There has been a lack of  consensus on the health sector reforms needed to meet the MDGs.  The Development Partners respect the Government’s judgment to reassess commitments made under the ambitious Health and Population Sector Program, but expressed their disappointment that the Government had not come forward  with an alternative program.  They expressed their desire to continue to support this vitally important sector, but a credible program to achieve the shared objective of improving health services and making them more responsive to the poor will be necessary to attract the past level of support. The Government assured  that a future road map is being developed based on wider consultation with all the stakeholders including the Development Partners.

The Government was commended for the important progress in women’s rights. However, the Development Partners pointed to  the necessity of  further government action in counteracting norms and practices that undermine women’s rights and prevent them from taking active part in the development process.

Government was urged to continue and enhance its partnership with Bangladesh’s dynamic NGO sector in implementing the poverty reduction strategy.  To this end, NGOs must be given reasonable freedoms to operate without political influence and undue bureaucratic control.  Appropriate consultations with NGOs and other stakeholders should take place prior to introducing changes into the regulatory  regime for NGOs

The Government and the Development Partners concurred on a sustained partnership based on the shared commitments for poverty reduction in Bangladesh.  They also concurred that they would work together in a programmatic approach in different sectors to address development issues holistically.  They reached agreement that the Government’s poverty reduction strategy was a sound basis for enhanced future cooperation between the Government and the Development Partners