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The World Bank launched its Country Assistance Strategy for Bangladesh 2006-2009 on May 13th in front of an invited audience in Dhaka.  As part of the launch the audience was given the opportunity to provide questions about the strategy to a panel of joint-strategy partners and Government. Some questions received could not be responded to due to time constraints and it was agreed that responses would be posted on the World Bank website.

The CAS launch panel consisted of:

• Saifur Rahman, Honorable Finance Minister
• Praful Patel, World Bank Vice President for the South Asia Region
• Christine Wallich, Bangladesh  Country Director, World Bank
• Alma Kanani, a Senior Economist with the World Bank.
• Hua Du, Bangladesh Country Director, Asian Development Bank,
• Masami Tamura, Charge d’Affairs, Embassy of Japan
• Sarah Sanyahumbi, Deputy Head of the Bangladesh office UK’s DIFD

In the text below the answers given by panel members during the launch are shown in italics.

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Q1. What is the difference between this Country Assistance Strategy (CAS) and previous ones?

A. The main difference between this CAS and previous ones is that while previous strategies had governance components, this CAS puts governance at the core. The mainstreaming of governance means that all World Bank interventions will be as much about improving governance as they will be about improving sector performance. This also implies that the World Bank will become increasingly open and transparent in the way it does business, enhancing disclosure and reaching out to all sections of Bangladeshi society in order to build strategic, inclusive partnerships and alliances. The Bank will also strengthen its fiduciary safeguards.

Q2. What are the most important governance reforms for Bangladesh in the next three years?

A. Bangladesh’s own development strategy, the Poverty Reduction Strategy paper (PRSP), highlights the most important governance reforms. These aim to increase transparency, institutional accountability and provide better service delivery, especially through enhanced local governance.  The Bank’s strategy takes its cue from the PRSP in its emphasis on information as a “driver for building accountability pressures and improving the governance process” and its focus on local governance as an attempt to enhance accountability by helping citizens participate in decision-making and hold service providers to account.   Priority will be given to improving public financial management and the public procurement process. The revenue effort must be enhanced and tax administration stronger, transparent and more efficient.  The courts and key institutions of accountability must be strengthened so as to function as effective restraints on the exercise of executive power, and the justice system as a whole must be strengthened so as to better settle disputes, enforce contracts and provide affordable justice for the poor. Finally, an inefficient and weak civil service remains a constraint on service delivery and implementation of reforms, and the Bank will work with the Government to reform public administration.

The Bank’s program for the coming four years reflects its mandate and comparative advantage. However the roots of the governance crisis in Bangladesh lie mainly in its political institutions. Rapid progress on governance requires reforms to electoral financing, strengthening of intra-party democracy and the regulation of political parties, improving the quality of political competition and increasing the effectiveness of parliament. We will work with other donors to tackle these issues.

Q3. What evidence is there that Bangladesh would have done even better had it not been for poor governance?

A. There are several known and widely circulated empirical studies which have attempted to quantify the impact of poor governance indicators on GDP growth.  A study by the World Bank in 2000 (Corruption in Bangladesh: Costs and Cures) looked at the impact of corruption.  It found that, other things being equal, if Bangladesh were able to reduce its corruption levels to those of the least corrupt countries in the world (Canada, Denmark, Finland, Iceland, Netherlands or Sweden), its annual average per capita growth rate could be 2 to 2.8 percentage points higher.

A study commissioned by United Nations Development Program (UNDP) (Beyond Hartals: Towards Democratic Dialogue in Bangladesh) looked at the impact of hartals on GDP growth.  It estimated that the economy loses about 3 to 4 percent of GDP annually on average because of hartals.

A forthcoming World Bank study (Sources of Growth and Productivity in Bangladesh) used cross-country comparisons to examine the impact of various policies on Bangladesh’s growth. This study found that growth would have been 2 per cent higher if economic governance had been improved, especially by strengthening the rule of law and streamlining the regulatory and administrative environment a move that would reduce the cost of starting and doing business.

More generally, several cross-country studies have demonstrated a positive relationship between economic growth and sound policies and institutions in developing countries (e.g. Burnside and Dollar, 2000).

Q4. What do you see as the main challenges in implementing the CAS?

A. Answering the question on stage Praful Patel, Vice President of the World Bank for the South Asia Region listed three challenges. First and foremost he said it was a matter of improving institutional capacity to get implementation on the ground.  The Bank was working with the government on a whole front of areas in order to expand this capacity.

Secondly Mr Patel highlighted the need for infrastructure investment, especially in the power sector. He said: “I cannot over emphasise the need to fill the shortfall in  power supply which is a huge constrain. Going forward I can see that this is a major, major challenge that needs to be addressed and it needs to be addressed with innovative solutions that will solve it  today, while at the same time setting the stage to solve it for the medium term. In other words the private sector cannot wait for two, three, four years for the government to fill in these gaps so we must find solutions to do that.”

He said the third challenge was the political situation. “I would very much hope that Bangladesh goes through the election process smoothly and that the government that emerges out of this will have a clear mandate to implement this CAS over the five years that they are in power.”

Q5. How do you plan to approach CAS implementation during the pre-election period? How will you engage with the caretaker government?

A. We hope and expect that the reform and economic development agenda will be kept above politics and not be captured by politics. It is important that reforms and development programs continue, whether government or donor-financed.

We released funds during the last caretaker government and this time there will be no exception. The Bank is prepared to work with whatever government the people of Bangladesh choose. Further, the World Bank has consulted widely to ensure that support for the CAS extends well beyond the present government.

Christine Wallich, World Bank Country Director said: “Not only in Bangladesh but in most countries, we reach out to all segments in society and to all political parties. We have been in touch with many groups in society and with the opposition."

“We try and maintain this dialogue with a broad spectrum of social groups so that our strategy is known to them. They understand the country assistance strategy’s relationship to the Poverty Reduction Strategy Paper. There are no secrets here; it is a transparent process, a dialogue with all sectors.”

Q6. During the Poverty Reduction Strategy Forum, Praful Patel indicated that further support depends on sufficient progress on the implementation of the PRSP ‘Unlocking Bangladesh's potential.’ The Minister of Finance came up with 11 action points, but 6 months later it is uncertain if sufficient progress will be achieved. What line will the World Bank take if the 11 points are not met?

During the PRSP Implementation Forum, Government and Development Partners agreed to jointly monitor progress towards 11 action points drawn from the PRSP. They are important short-term actions and a process has been put in place to jointly-monitor them.  The Government should be commended for having rapidly set up a joint Government – Donor monitoring structure that includes a joint oversight committee and eight sector focused sub-groups. The joint committee and sub-groups now provide a Government - Donor forum to track progress and discuss implementation challenges for each of these action points. The World Bank has been invited to participate in four of the sub-groups: supporting block-grants; implementing the procurement law; strengthening the Bangladesh Bureau of Statistics; and civil service reform. It should be emphasized that these 11 action points are not conditions.

Q7. How serious is the Bank about corruption? What is the risk of the World Bank suspending lending?

A. The World Bank is extremely serious about corruption. A CAS with governance at its core requires that the World Bank also does business differently. We will work to ensure transparency and openness in our operations so we are seen as a trusted partner.  We have launched an Operational Risk Mitigation Action Plan to better identify risk; carry out governance assessments; design ‘smarter’ projects; improve fiduciary oversight and ensure remedies are appropriately utilized.  To support this effort we have recently appointed a governance advisor and a legal and judicial advisor.

The World Bank is a committed long term partner of Bangladesh. However where money is misused the Bank will act swiftly to cancel contracts and demand the repayment of funds. An example of this was last November when the World Bank cancelled contracts worth $ 1,016,784 (Tk. 68 million equivalent) from three projects in Bangladesh, after investigations found evidence of inappropriate and collusive bidding practices in several contracts.

Praful Patel said: “The cost of corruption to the development of Bangladesh is huge; it’s in the range of percentage points of GDP and so it is very serious. What is new now is we are looking at a full range of interventions. For example in all new lending we are going to look at how to build the institutional capacity in Bangladesh to monitor and spot leakages of funds.

“We are looking at how we will employ our energies when we do find corruption. So if there is a power plant that is being built and we are financing that, if we find any irregularities in the procurement process we will act immediately to cancel the financing. This signal will go very fast, and it is already working.

“There is no-one who would disagree that we should try and reduce the amount of leakage that takes place in Bangladesh but this is a subject that is always skirted around. In Bangladesh everybody knows that in the power sector the biggest problem is corruption. From the World Bank side we are going to be addressing this issue.”

Q8. What exactly did the Bank Board say about the CAS, it must have been controversial given the corruption issue?

A. The Board of Directors welcomed the CAS and strongly endorsed its focus on governance. After recognizing the many development successes of Bangladesh, the Board endorsed the CAS and agreed that the strategy is well-suited to support the country’s development priorities.  Some Directors noted the innovative approach of unbundling governance to recognize both Bangladesh’s governance successes and governance failures, and the design of interventions to be as much about improving governance as they are about improving sector performance.

Directors agreed with the proposed level and composition of World Bank Group assistance to Bangladesh as well as the planned mix of lending and knowledge services, including the use of development policy lending.  While endorsing an engagement strategy, the directors welcomed the special focus on mitigating the Bank’s fiduciary risk through the Operations Risk Mitigation Plan.   

Q9. Is there any instance that Development Partners have had to bribe the counterpart in Bangladesh in the awarding of foreign aided projects?

A. We cannot comment on the experiences of other development partners. Regarding the operations of World Bank in Bangladesh, we know of no instance nor have any evidence where donor partners have had to bribe counterparts.

Q10. Can Bangladesh absorb $3bn in World Bank development assistance over the next 4 years?

The CAS envisages a stepping up in development assistance to Bangladesh in the next four years. Between 2006 and 2009 credits of up to $3 billion are potentially available, based on the Government’s continued policy and implementation performance.

The headline figure may sound large, but in fact it is relatively small compared to the scale of the Bangladesh economy. Indeed all development aid together amounts to less than 1 per cent of the country’s GDP. However this does not mean implementation will be without challenges.

Christine Wallich said: “We shouldn’t hide the fact that we do have implementation challenges, and that both the government’s Annual Development Program as well as many donor programs implement quite slowly and indeed implement more slowly in Bangladesh than they do in other countries in South Asia.

“Steps in the right direction were made a year or two ago when there were changes in the way the government approves planning documents. There are more things that can be done in streamlining the processing of capital expenditure in the budget. All of us in the donor community are working with the government to try and make that happen.”

Q11. Will the World Bank support Bangladesh to fix the energy problem? Are there any special plans to increase power supply in Bangladesh, apart from suggesting the raising of prices?

A. The World Bank is committed to helping Bangladesh solve its energy problems. In 2005 the country’s power sector generated 160 kilowatt-hours of electricity per capita, among the lowest levels in the world. In the short run the Bank will focus on expanding generation capacity to address load shedding and supply constraints. This means supporting the rehabilitation of existing generation plants as the most cost effective means of bringing additional power on line in the short term.

The Bank is currently supporting a government initiative to build a 300 MW Peaking Power Plant in Siddhirganj as well as several other power plants,  and also has a Rural Electrification and Renewable Energy Development Project – which brings light to remote rural areas and explores alternative means of energy, such as our extremely successful solar home systems. We are also supporting power distribution and transmission.

Praful Patel said: “If miraculously you were to get rid of dysfunctional politics and all these other problems would you have the basis to grow at the full potential of Bangladesh? The answer is clearly no, because there isn’t the power supply to fuel the kind of growth you are even achieving now.  I am worried that next year and even in the next 12 months, the power shortages, the gaps and the blackouts are going to be very disruptive to the growth process.

“We have worked with the government over the past 8 months or so and with the other partners to develop a framework for investing in the power sector with a full range of investments, including electricity generation, efficiency other sources of energy. We are committed to provide the funding that is required and to invest in a five years business plan to get the power sector on track, but this won’t sort the problems out overnight because it takes two to three years to deliver a new power plant.”

Q12. In the Siddhirganj Project, the Asian Development Bank’s portion has already been tendered. How soon can the World Bank allow the Electricity Generation Company of Bangladesh (EGCB) to tender the World Bank’s portion? Is there any possibility of the World Bank financing base load generation?

A. The World Bank will allow the Government to tender its portion as soon as the bidding document is reviewed by the power plant supervision consultant. This consultant is being recruited by the power cell of the Ministry of Power, Energy and Mineral Resources. Assuming the ministry acts efficiently, this review will probably be in the first quarter of 2007.

The Siddhirganj Project involves the building of two 150 megawatt peaking power plants but Bangladesh also needs more base load generation. The World Bank will work with Government to catalyze base load capacity expansion. Bangladesh IPP’s have been amongst the most successful in the world, and it is our aim to assist Bangladesh to expand its power generation capacity, inter alia, by tapping private sector resources. To do so, however, will require improved transparency of sector operations and procurement. Through its different arms, the International Development Association, the International Finance Corporation and the Multilateral Investment Guarantee Agency, the World Bank Group can support the development of base load generation.

Q13. How can the Development Partners help the Government of Bangladesh if the procurement process doesn’t result in contract award – but rebidding  and retendering?

A. This is a real challenge, as the power sector demonstrates. Over the past 7 years, some 18 power plants have been considered for construction but only 2 contracts have been awarded, of these only one plant is now providing electricity. The procurement processes followed were questionable and non-transparent and not in the interest of good outcomes for Bangladesh.  Had the initial tendering process been taken forward, two world-class project finance structures – Meghnaghat II and Sirajganj – could already be providing 900 MW of very low-cost power.

The World Bank has supported the Government’s procurement reform as part of its strategy for improving governance.  Beginning with the Public Procurement Regulations, 2003, the Bank has supported capacity building and the tracking of procurement outcomes.

The World Bank believes that the desired outcome of cost-efficient public spending and value-for-money in budgetary outlay can only be achieved with full implementation of the Public Procurement Law that still needs to be enacted by parliament.

Q14. If you are in favor of poverty reduction- how can you  favor increases in energy prices?

A. Bangladesh imports all the oil that it uses, and like all other oil-importing countries, is seriously affected by the near doubling of world prices during the past two years. At present diesel in Bangladesh is being sold at around 40 per cent less than the price needed to cover the cost of supplying it. This loss is being picked up by the Bangladesh Petroleum Corporation, BPC, which is expected to make a loss of around $500m dollars this year alone. Eventually Bangladesh will have to pay these bills.

On a macro-level, under-pricing of petroleum has adverse consequences for the balance of payments, interest rates, the exchange rate and the health of the banking sector.  Higher petroleum costs will affect prices across the economy, but it is important to keep these in perspective and not exaggerate the impact. Petroleum products account for only 3 percent of total GDP.

Bangladesh is not alone in having to grapple with surging fuel prices but many other low income countries have adjusted prices more and improved the targeting of fuel subsidies to ease the burden on the poor. Bangladesh now has the cheapest diesel among the major South Asian countries and it is not surprising that such price differences promote smuggling. Diesel that sells for 30 taka a liter in Bangladesh can be sold for 51 taka on the other side of the Indian border.

The impact of higher prices for petroleum products on poor households must be assessed. Almost all the poorest rural families and about three-quarters of the poorest urban families use kerosene for cooking and light, but this accounts on average for a relatively small share of their total monthly expenditure – about 1.5 percent.

Q15. Does the World Bank intend to provide finance for the Phulbari coal mine project in Dinajpur? If yes, can you please make your position clear?

A. The World Bank Group has not been asked to finance, and has made no commitments to finance, the Phulbari coal mine project.

Q16. Preparing a joint CAS – do the costs outweigh the benefits?

For the first time the CAS has been prepared jointly by the World Bank, the Asian Development Bank, the Government of Japan and the UK’s Department for International Development. Between them the four account for around 80 per cent of the total development assistance to Bangladesh. It has been a fruitful collaboration aimed at achieving some of the harmonization goals set at in the Paris declaration. It ensures that the joint strategy partners’ separate business plans complement and leverage rather than compete with one another.

Four partners were involved in the preparation of the CAS but it important to stress that the approach is inclusive and open to others. The aim is to ensure joint implementation and monitoring at the sectoral level with all donors involved in the sector.

Christine Wallich said: “Absolutely it has been worth it and the benefits have far out weighed the costs. It’s not one strategy, it’s not one document, it is however a common way of looking at Bangladesh, a common appreciation of Bangladesh’s successes and development achievements.  It is a common diagnosis of the drivers of poverty reduction, a common understanding of the challenges ahead.

“It is actually four business plans; we are not doing all of our lending jointly nor are we doing all of our analytical work jointly. We have individual programs and different instruments….so we look at the multiplicity of instruments and how they can be used together most effectively to support objectives.

Hua Du ADB Country Director said: “We feel that this is a landmark initiative to harmonise our assistance and follow the Paris Declaration for aid effectiveness and harmonisation…..

“From ADB’s internal management we have very strong support to work together in order to increase the leverage of our assistance, to increase the synergy impact and most importantly to reduce the transaction costs when there are so many development partners working in this country.

“This is a joint strategy between the four partners but it is not exclusive of the others, this is a completely open process and through the process we are trying to draw in all the other partners.”

Q17. Has the World Bank reviewed the Country Strategy Program of ADB regarding the transport sector (corridor development and road network)?

A. The World Bank and ADB collaborate well in the transport sector and our projects are closely integrated. Most recently the World Bank and ADB have initiated complementary work in the railway sector of Bangladesh.

Q18. Where the minimum wage is only Tk 930 a month and has been for the last 12 years, how can the World Bank become a friend of the working class? How is industrial development possible without ensuring trade union rights for the workers?

A.  The World Bank fully supports responsible trade union activities.  A recent example of this was when the Bank helped in the mediation process that resulted in the Government enacting a law defining trade union rights in the Export Processing Zones, where trade unions had previously been absent.

The World Bank is also supporting the Government’s plans to introduce a new approach to the industrialization of the country in which environmental sustainability, social responsibility and the reduction of industrial concentration in Dhaka are key goals.

Q19. How will the women of Bangladesh benefit from the CAS?

A. The World Bank is committed to mainstreaming gender across its entire program. One of the two pillars of the CAS is devoted to empowering the poor, especially women.

Women are expected to be the major beneficiaries of efforts to improve education, health and nutrition as well as the expansion of safe water supplies, sanitation and clean living environments. For example, the World Bank and its development partners are jointly supporting a Health, Nutrition and Population Sector Program which is introducing vouchers for maternal health and prenatal care and is contracting out health services - which are of great value to women and children.

The World Bank will also be seeking to empower women, by promoting women's effective participation in the country's governing process through social inclusion and transparent and accountable government.  Improvements in the regulatory framework for microfinance activities, an area where women are predominant, should also directly benefit women.

Q20. What kind of strategy are you taking to help women entrepreneurs?

A. As mentioned above, the intention of the CAS is that all its programs benefit women. In particular, women entrepreneurs are expected to benefit from the CAS's focus on improving the investment climate. The World Bank Group (including the International Finance Corporation and the South Asia Enterprise Development Facility) is seeking  to help reduce the cost of doing business, lessen administrative barriers for starting and operating enterprises, improve access to finance for small and medium enterprises, and improve vocational and higher education training opportunities.  As also mentioned above, women are expected to specifically benefit from the World Bank's support of improvements in the regulatory framework for microfinance activities – an area where women are strongly represented.

Q21. Is there a specific Bank strategy for the disabled?

A. The World Bank does not have a specific strategy for people with disabilities but mainstreams disability concerns within all projects. The Bank works with national governments, and follows government policy on disability.  The Government of Bangladesh has a Disability Welfare Act and an action plan, which is followed by Bank staff. The World Bank is also promoting inclusive primary education and the "prevention of disability” through the Health Nutrition and Population Sector Program, as well as disability friendly roads and buildings.

Q22. Are there any grants for disabled people organizations (DPO) in CAS?

A.. Disability issues are mainstreamed in the Bank's portfolio, especially in health, education, infrastructure and safety net provision. However under its rules the Bank is not able to fund NGOs or individuals directly although it does make small grants to Civil Society Organizations. The program for these grants is announced in the press and NGOs can send in applications. NGOs registered by NGO Affairs Bureau will be eligible for this fund. 

Q23. How would you integrate the voice of the community in the development process?

A. Under the CAS all new projects and programs will attempt to systematically involve beneficiaries and local communities in their design and implementation. Beneficiary monitoring of outcomes will be key to ensuring a strong focus on results.

In addition, the World Bank will increasingly rely on Community Driven Development (CDD) operations or projects in the delivery of rural infrastructure and social services, relying on communities to prioritize needs. To reduce the risks of the leakage of funds, World Bank-funded programs will increasingly institutionalize a shift in the responsibility for holding public officials accountable by external third parties.

Q24. What are the modalities through which the voice of the beneficiaries are heard and how can they participate in the decision making and implementation of programs?

A. Strengthening community driven development (CDD) in Bangladesh needs to focus on enhancing participation and ensuring the sustainability of service delivery. This means building and broadening the scope of local governance by improving the capacities of local government.

The World Bank's Social Investment Program (SIP) is helping poor communities in Jamalpur and Gaibandha districts engage in the provision of basic infrastructure, by  enabling the rural poor to identify, prioritize and co-finance local initiatives.  We are planning to use this CDD approach more comprehensively, focusing on strengthening village institutions, improving the livelihoods of marginalized and vulnerable people, and building trust and accountability between community groups and local government.

Results have already shown that the CDD approach can effectively improve service and give a voice to poor women and the most marginalized people. These initiatives, along with the direct funding to communities, will ensure decentralized management of development programs at the village level, and enable poor people to expand their role in local governance.

Q25. What is the strategy for institutional strengthening and capacity building in local government? Is there any support to improve and empower the role of city mayors?

A: The World Bank recently initiated a Local Governance Support Project (LGSP) which will provide assistance and build the capacity of Union Parishads (UPs). The project is expected to be endorsed by the World Bank Board of Directors in mid June. One of the major components of the project is the strengthening of the accountability of local government authorities to their constituencies. The project aims to make these elected officials more accountable to their communities. To support good governance, the Block Grant will act as an incentive and will be directly related to the local authorities’ financial and implementation performance.

Although the World Bank has no projects directly related to the role of city mayors at present, the World Bank is currently financing the capacity-building of urban local bodies (pourashavas as well as city corporations) and their infrastructure development through its Municipal Services Project. The Government has set up the Bangladesh Municipal Development Fund (BMDF) to provide funding to eligible urban local bodies for municipal infrastructure. BMDF along with the Municipal Support Unit, housed at the Local Government Engineering Department are providing hardware as well as training to elected municipal officials and their staff aimed at upgrading their capacities to provide better services to town-dwellers.

Q26. I would like to know about the strategies for strengthening local government. Will the Block Grant have some tags tied to it?

A. As mentioned in the previous response, the World Bank’s soon-to-be approved Local Governance Support Project will work to strengthen local government. The project will look into increasing the accountability of the UPs to their constituencies. This will be done through measures such as open budget meetings, the prioritizing of community needs in developing and implementing budgets; maintaining good office administration; protecting the environment and resolving social conflicts.  The amount of funds available in the Block Grant will depend upon the level of accountability displayed by the local authorities.

Q27. Governance is very important at local government level. How can it be possible when a high degree of political intervention is prevailing and the political parties are part of the corruption?

The World Bank is aware that the root of the governance crisis lies mainly in the poor functioning of political institutions, notably political parties, whose funding needs are one of the main sources of corruption in Bangladesh. Tackling such issues is largely outside the economic development mandate of the World Bank. At the local level the World Bank will support efforts to empower local communities so that they can, overtime, become more effective. We are working with bilateral donors and agencies to support their political governance work on issues such as the independence and integrity of the elections commission, reforming election finance, political party reform and improving the quality of political competition.

Q28. Is there a clear policy to partner with NGOs in implementation of the PRSP? Does the Legal framework of NGOs need to be revisited in order to make then poor friendly, women friendly and free of political harassment?

A: The role of NGOs in the PRSP is fairly diverse, ranging from partnerships with Government in the delivery of services to monitoring pro-poor outcomes. We agree that the legal framework for NGOs needs to be modernized. The World Bank has recently assessed these issues as part of a comprehensive review of the NGO sector and the report is available in our office. Click here to download the report from our website.

The report strongly recommends a ‘strategic compact’ (ie, stronger collaboration) between Government, NGOs, donors and clients. It also recommends that as part of this compact, the main role for Government is to facilitate the provision of quality NGO services under a modernized regulatory framework, developed in close consultation with NGOs.  In addition, donors should continue to support NGO activities in Bangladesh, both to improve pro-poor service delivery and to promote a broad-based civil society. Such donor support should ensure that accountability of NGOs to Bangladeshi stakeholders is reinforced.  Crating parallel systems does not deliver sustainability.

The report also stresses the need for NGOs to strengthen their own financial management systems and make greater efforts to coordinate with local and national Government officials as well as the private sector.

Q29. Dysfunctional institutions, corruption and political turmoil are all common in developing countries, especially in South Asia. Why is Bangladesh still lagging behind in obtaining effective results via privatization? Does the CAS provide direct assistance in regulating the process?

The Privatization Commission was set up as an institution responsible for privatizing State Owned Enterprises, however the pace of privatization has been slow.  The Bank has been actively supporting the Privatization Commission by providing technical assistance. At present the Commission is in the process of privatizing Rupali Bank and appears to have attracted several interested parties to the sale.  Among other things, the World Bank is also supporting the corporatisation of the Bangladesh Telegraph and Telephone Board as well the government’s attempts to find solutions for the problems faced by Biman Bangladesh Airlines.

Q30. The World Bank Water CAS, recognizes the need for trans-boundary water sharing and cooperation. Only when the two countries sharing international rivers ask the World Bank for assistance will the World Bank consider becoming involved: i) How does this work?

A. The World Bank strongly encourages countries to work together to ensure more efficient and equitable transboundary water sharing. The World Bank support towards transboundary water sharing is strictly governed by its internal safeguards policy on international waterways. The World Bank’s safeguards policy states that the World Bank can only finance a project on international waterways if: 
(a) the issues involved are covered by an appropriate agreement or arrangement between the beneficiary state and other riparians; or
(b) the other riparians have given a positive response to the beneficiary state or Bank, in the form of consent, no objection, support to the project; or confirmation that the project will not harm their interests; or
(c) in all other cases, in the assessment of Bank staff, the project will not cause appreciable harm to the other riparians, and will not be appreciably harmed by the other riparians’ possible water use.

The full World Bank guidelines on international rivers are attached as an annex to the recent World Bank Country Water Assistance Strategy (Bangladesh Development Series #3) 

 ii) When India asks the World Bank to develop water resources on international rivers, will the World Bank ask that India come together with Bangladesh to develop water projects such as a link canal or Hydro Electricity on common rivers?

A:  According the World Bank’s safeguards policy mentioned above, in the case of developing projects relating to water course shared by India and Bangladesh, Bangladesh would first need to be notified of India’s intention to undertake a project with World Bank support.  If Bangladesh wanted to join India in a joint water resources management project for which it had been notified by India, and if both countries requested World Bank involvement, then the request would be considered. To date, neither country has requested assistance from the World Bank in this area.