Click here for search results
Online Media Briefing Cntr
Embargoed news for accredited journalists only.
Login / Register

Bangladesh: Bolstering Economic Growth to Reduce Poverty

Available in: Français, Español
Studying under the light

Bangladesh: Bolstering Economic Growth to Reduce Poverty


Overview

Bangladesh has sustained an impressive track record for growth and development.  In the past decade, the economy has grown at nearly 6 percent per annum despite frequent natural disasters and the fuel, food price and global financial crises. In the past two decades, poverty was reduced by nearly one third whereas life expectancy, literacy and per capita food production have increased significantly.

Challenge

Bangladesh, with about 160 million inhabitants on a landmass of 147,570 square kilometers, is among the most densely-populated countries in the world. While poverty in both urban and rural areas declined by an impressive 19 percentage points in the last decade-and-a-half, the absolute number of people below the poverty line remains significant. With around 53 million people still below the poverty line, Bangladesh faces considerable development challenges. Bangladesh’s geographical position makes it one of the most vulnerable countries to climate change and natural calamities like cyclones and floods. Sixty percent of the worldwide deaths caused by cyclones in the last 20 years occurred in Bangladesh. Sustained growth in recent years has rapidly increased the demand for energy, transport and telecommunications services.  However, insufficient planning and investment have now resulted in severe infrastructure deficits.


Approach

The International Development Association (IDA) has supported Bangladesh since 1972, one year after the country’s independence. Since then, IDA has provided more than US$16 billion support for policy reforms and investment projects, accounting for more than one-quarter of all foreign aid to Bangladesh. Key elements of that support have been the Bank’s long-term commitment to health and education, its support for rural infrastructure, and its engagement in policy dialogues that have created conditions for broad-based economic growth. IDA’s support to Bangladesh is also comprised of a substantial body of analytical work and knowledge products that have underpinned IDA operations influenced the policy debate and ultimately, development outcomes. 

The IDA assistance spans across different sectors. Through long-standing support to education, health and family planning, successive governments have made the most of well established connections between education for girls and lowered population growth: female participation in schools has delayed the age of marriage and birth of the first child and decreased overall fertility rates. A recent Millennium Development Goal (MDG) assessment for Bangladesh notes that support for rural infrastructure (specifically roads and electricity) also seems positively correlated with health and education results. Roads improve access to schools and health clinics, reduce transport costs, but also help increase rural non-farm incomes that help pay for such services.


Results

In the past two decades, Bangladesh has experienced significant poverty reduction and profound social transformation with the widespread entry of girls into the education system and women into the labor force. Women consist of 80% of workforce of Bangladesh’s garment industry. The country is on track to meet Millennium Development Goals for infant and child mortality and has already met the Millennium Development Goal for attaining gender parity in education. On the whole, Bangladesh has made laudable progress on many aspects of human development which has been a foundation for improvements in growth, empowerment and social mobility.

  • Education: With IDA support, Bangladesh has made remarkable progress in girls’ education, with 98% of girls enrolled in primary school today. Enrolment of girls in secondary schools has also risen to over 6 million from 1.1 million in 1991.
  • Health: IDA has been working with the Government since the mid-1970s to reduce malnutrition and improve health outcomes. Assisted deliveries have helped reduce maternal mortality rates by 40% in the past decade. Today, nearly 90% of Bangladeshi children receive vitamin A supplements and over 80% are vaccinated, contributing to an impressive reduction in infant and child mortality by more than two-thirds since 1990.
  • Rural Infrastructure: IDA has contributed to the improvement of rural connectivity in 21 districts. The assistance helped to improve and maintain more than 2500 km rural roads.  An impact study by the Bangladesh Institute of Development Studies shows that female employment increased by 50%, the share of farmers’ nonagricultural assets increased from 25 - 50%, and the poverty reduction rate almost doubled in the project areas.
  • Energy:  IDA has supported public-private partnerships in small power plants as well as the construction of two large-scale independent power plants that account for 20% of Bangladesh’s installed capacity and up to 30% of power generated in the country. Moreover, 630,000 rural homes are connected to the national grid while more than 750,000 households in remote rural areas have installed solar home systems.

Voices


We used to eat only once a day. Now we can eat three times a day, and I can afford to educate my two children.

— Shyamoli Rani Pal


Bank Support

IDA commitments to Bangladesh have grown rapidly in the past five years, topping US$1 billion for the first time in FY09. The World Bank’s present portfolio in Bangladesh amounts to US$ 4.8 billion and includes 28 projects. The World Bank’s Country Assistance Strategy for FY 11-14 is supporting the Government’s vision of rapid poverty reduction and middle income country status through accelerated, sustainable and inclusive growth, underpinned by stronger governance at the central and local levels. The indicative allocation for FY11-14 is about US$6 billion; actual new commitments depend on continued strong country performance.

To ensure better outcomes, the World Bank’s strategy seeks to scale up on-going operationswith demonstrable results, engage in larger, more strategic interventions with a transformative impact and innovate through small pilots with strong country ownership.

 

Partners

IDA’s aid coordination in Bangladesh is a crucial function, given the very large number of donors working in the country. The main mechanism for in-country donor coordination is the Local Consultative Group (LCG), composed of 32 bilateral and multilateral donors and the External Relations Division of the Ministry of Finance. The LCG’s goal is to ensure effective and efficient use of external aid in line with the government’s Poverty Reduction Strategy Paper.

IDA also collaborates closely with donors, funding together large sector programs in health and education, as well as transformative investments in infrastructure, such as the Padma bridge.

 

Bank Strategy

The Country Assistance Strategy for FY11-14 supports Bangladesh’s ambitions by contributing to accelerated, sustainable and inclusive growth, underpinned by stronger governance at central and local levels.

The main areas of strategic objectives are:

  • Accelerated Growth: Massive infrastructure investment and a more conducive business environment are needed--even to sustain recent levels of private sector growth. The World Bank Group will increasingly invest in transport (including logistics and ports) and power infrastructure that can overcome severe infrastructure deficits, transform lagging areas of the country, create agglomeration economies in urban areas and foster broader regional networks. Investment will be accompanied by support for reforms to strengthen sector governance, financial sustainability and private sector participation in infrastructure provision and maintenance. The strategic objective is to increase transformative investment and
  • Enhance the Business Environment
  • Sustainable Growth: Bangladesh is among the most densely-populated countries in the world, already vulnerable to natural disasters and now becoming highly-affected by climate change. Water resource management, agricultural adaptation, environmental protection and disaster preparedness will be critical areas for intervention. The strategic objective is to reduce environmental degradation, and vulnerability to climate change and natural disasters.
  • Inclusive Growth: The strategic objective for more inclusive growth under the CAS is defined as improving social service delivery. This will include the Bank’s second-generation support for sector-wide approaches with other partners in primary education, and health, population and nutrition services, as well as expansion of targeted social assistance through an Employment Generation Program for the Poorest.
  • Stronger Governance: Bangladesh has made slow but steady progress in many areas of governance in the past five to ten years, but—as in much of South Asia—governance remains weak by global standards. The World Bank Group will build on the Government’s interest in strengthening the investment climate as an entry point for dialogue on governance reforms, with the International Finance Corporation spearheading advisory work in this area through its Bangladesh Investment Climate Fund. This will be complemented by an IDA-funded Private Sector Development Project. On the public sector side, the Bank will support more decentralized service delivery, coupled with strengthening of domestic accountability at the central and local levels. Overall, the strategic objective is to enhance accountability and promote inclusion.

Additional dimensions that cut across the strategic development objectives of the IDA in Bangladesh include fostering regional cooperation, strengthening gender mainstreaming and partnering for aid effectiveness.

 

Toward the Future

The World Bank’s Country Assistance Strategy for FY11-14 is supporting the government’s vision of rapid poverty reduction and middle-income country status through accelerated, sustainable and inclusive growth, underpinned by stronger governance at the central and local levels. To ensure better outcomes, the World Bank’s strategy seeks to scale up on-going operations with demonstrable results, engage in larger, more strategic interventions with a transformative impact and innovate through small pilots with strong country ownership.




Permanent URL for this page: http://go.worldbank.org/HIDY7QJZL0