Contacts: In Dhaka: S.M.Rezwan-ul-Alam (880-2) 8159001 Ext. 4242 salam3@worldbank.org In Washington: Erik Nora (202) 458 4735 enora@worldbank.org WASHINGTON, March 29, 2006 — The new Country Assistance Strategy (CAS) for Bangladesh, discussed today by the World Bank’s Board of Executive Directors, places governance at the heart of the institution’s program of support to this South Asian nation. The CAS covers the period 2006-2009 and envisages a program of around US$3 billion over four years. Bangladesh has recorded impressive economic and social gains in the past decade. The country has doubled per capita growth and taken strides towards reaching many of the Millennium Development Goals (MDGs). It outperforms most low-income countries ─ as well as its South Asian neighbors with the exception of Sri Lanka ─ across a range of social indicators. Gender parity in school enrollment at both primary and secondary level has been achieved, child mortality has been halved, and life expectancy has increased significantly since the 1990s. These gains have taken place despite widely held perceptions of weak and deteriorating governance. “To explain this conundrum we must unbundle governance and recognize that Bangladesh has had both governance successes and governance failures,” said Praful Patel, World Bank Vice President for the South Asia Region. Among governance successes, Bangladesh has shown important gains in public accountability, with three successive free elections, an assertive Supreme Court, sound public procurement regulations, an active civil society, and a relatively free media. Successive governments have allocated substantial budget resources to areas such as health and education. Microfinance has expanded with strong Government support and financial sector governance is improving. Government has also forged strong partnerships with NGOs, especially in health, nutrition and education, which have contributed to the development gains. There are also serious governance weaknesses across sectors and in core government functions. Addressing these is critical for improving the investment climate, enhancing growth, increasing access to information, and improving delivery of government services. The Bangladesh Poverty Reduction Strategy Paper (PRSP) recognizes these challenges and highlights good governance as a main thrust. CAS Pillars and Governance The Bank’s strategy, strongly focused on governance, is aligned with the PRSP. The CAS’ two pillars, Improving the investment climate and Empowering the poor, reflect the focus of the Bank’s programs across sectors. These programs will address sector governance issues in both pillars, as well as ‘core’ governance, such as public procurement, public financial management, and judiciary reform. This mainstreaming of governance implies that all Bank Group interventions will be as much about improving governance as they will be about improving sector performance. “The CAS puts governance at center stage. Governance will be the core focus in every sector we engage, and sector governance reform will be the target of every Bank-supported project,” said Christine Wallich, World Bank Country Director for Bangladesh. The CAS is designed around three main themes: Improving the investment climate: The World Bank will support governance reforms and investments in the power sector, water and sewerage, roads, railways and urban development. The program will further trade liberalization efforts by reducing non-tariff barriers, improving the competitiveness of the textile and garment sectors and improving trade transport infrastructure. Likewise, the CAS focuses on reducing administrative barriers by streamlining regulatory processes, facilitating infrastructure services through industrial zones, and building capacity of Government agencies such as the Board of Investment and Export Processing Zone Authority.
Empowering the poor: The program will support governance reforms and investments in health, education, sanitation, local government strengthening and safety net approaches. These initiatives are central to Bangladesh meeting the MDGs and improving the quality and efficiency of social service provision to the poor. Similarly, enhancing voice and participation as a way to strengthen accountability and governance is an important underlying theme, particularly through innovative local governance and community driven development programs.
Core governance: Beyond strengthening sectoral governance, the strategy aims to enhance accountability and transparency by strengthening ‘core’ governance institutions. These include the Comptroller and Auditor General, Public Accounts Committee, Bangladesh Bank, the Public Service Commission, Securities and Exchange Commission, as well as the ‘core’ governance processes of public financial and budgetary management, public procurement, the National Board of Revenue, and legal and judicial reform.
The CAS was prepared jointly with the Asian Development Bank, the United Kingdom’s Department for International Development, and the Government of Japan. This joint approach reflects a shared vision for helping Bangladesh achieve its development goals, and entails a mutual diagnosis of poverty reduction and common sector strategies. Where appropriate it will also include complementary programs jointly with other donors beyond these four. The central objective of the collaborative effort is to harmonize collective donor efforts, improve the coherence of policy dialogue, and leverage development programs. The CAS envisages an IDA[1] program of around US$ 3 billion over four years, based on continued policy and implementation performance. In the CAS period, the Bank’s program will comprise both policy-based lending to support reforms as well as sector-specific investment projects. To support the Bank’s program from a fiduciary perspective, the CAS also outlines a strengthened risk management program designed to address corruption risks to the Bank’s own projects. This will include systematic analysis of risks through economic and sector work and during project preparation, improved project design, strengthened implementation oversight, and enhanced information disclosure. Additionally, the Bank is expanding governance expertise and will carry out governance assessments in critical sectors. The goal is to ensure Bank Group programs that are aligned with, and robust to, the development challenges of Bangladesh. For more information on the World Bank in Bangladesh, please visit: www.worldbank.org.bd & www.worldbank.org [1] The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries reduce poverty by providing interest-free loans and grants. |
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