The World Bank
Electronic Newslettter, Issue # 3, July 2006 Message from the Country Director: Dear Friends, Thank you for you overwhelming support and comments for our electronic newsletter. I am pleased to send you our third issue. This edition of the E-newsletter highlights the World Bank's support for the financial sector, in particular, modernization of Bangladesh's nationalized commercial banks. The E-newsletter also features a recent report on the Economics of NGOs in Bangladesh, and showcases a World Bank-supported project for girls' education. The E-newsletter concludes with a note on the role of media in environmental governance issues. As always, we are eager to hear from you on ways to improve our newsletter. Please e-mail us at wbdhakanews@worldbank.org with anyfeedback you may have. Best wishes,
Christine I. Wallich
Country Director *********  Table of Contents 1. Modernizing Bangladesh's Nationalized Commercial Banks (NCBs) 2. Economics and Governance of NGOs in Bangladesh 3. Girls' education in Bangladesh 4. Reflections on the Environment,Governance and the Role of Media 5. World Bank Supported Projects in Bangladesh 6. Further World Bank Reading (Please visit us at http://www.worldbank.org.bd to download these and other documents)
1. Modernizing Bangladesh's Nationalized Commercial Banks (NCBs) Since 1990, the World Bank has been assisting the Government of Bangladesh to create a more efficient banking system that ensures credit reaches the productive sectors of the economy, a key factor in ensuring the country’s continued development. To this end, GOB has committed itself to the process of reforming the four National Commercial Banks (NCBs) Sonali Bank, Agrani Bank, Janata Bank, and Rupali Bank Limited. Rupali Bank is on its way to being privatized but the reform process in all four NCBs is challenging and new efforts are needed to ensure success. The NCBs were created to meet the financing needs of the country and have had to satisfy many differing goals, not only that of their own commercial well being. As a result, they have a high level of non-performing loans that are not fully provisioned as per Bangladesh Bank guidelines. The provision shortfall when applied to the meager capital base of the NCBs result in substantial negative net worth which potentially becomes the fiscal liability of the Government. To correct this situation, the government has adopted a reform strategy aimed at: (i) stemming the flow of nonperforming loans through a strengthening of bank management; and (ii) developing and implementing bank-by-bank strategies to resolve the longstanding problems of these banks. As part of this program, GOB requested the World Bank for assistance in reforming these institutions.  Based on the NCB Resolution Strategies of the Government, the World Bank is providing support through the Enterprise Growth and Bank Modernization Project which was approved in June 2004. The project provides US$250 million of IDA funds. In order to ensure reforms in the four NCBs were on track, the World Bank carried out several Supervision Missions. The last mission confirmed that the goals of resolving governance problems, speeding up loan recoveries, and improving operational efficiency through staff and branch rationalization have not been achieved. In order to reach the goals the World Bank suggested that the Finance Ministry: i) Provide sufficient flexibility to the NCB management in human resources policies so that rationalization of staff, improvement in work processes, and the introduction of new processes such as IT and computerization, can be implemented. ii) Delegate sufficient powers to the Managing Directors (MDs) of the NCBs so that they can implement the recommendations to improve operational efficiencies. At the same time, the MDs should be made responsible or achieving specific and monitorable performance indicators. iii) Reconstitute the NCB Boards to include at least two Directors with skill and experience in banking, accounting, and business. iv) Make up the losses of the NCBs, caused by directed lending to State Owned Enterprises, from the budget. To read more, please click on this link To read and download documents on the project, please click on this link
2. Economics and Governance of NGOs in Bangladesh Bangladesh has made striking progress on a range of social indicators over the last 15 years - an achievement which is credited to the country’s pluralist service provision regime, including the large network of NGOs. A recently released report by the World Bank titled ‘Economics and Governance of NGOs in Bangladesh’ recognizes these contributions and addresses the current debates surrounding NGOs. In order to further capitalize on the potential of the NGO sector, the report argues for a ‘strategic compact’ between Government, NGOs, donors and clients. The implicit compact would be where each actor strengthens various areas that are within their own mandate. The combined impact of these improvements will go a long way in achieving the common goal of improving services to the poor in Bangladesh and help achieve the Millennium Development Goals. To read more, please click on this link Todownload the report, please click on this link
3. Girls' education in Bangladesh In the last decade the situation has transformed and the country is now a global leader in girl’s education. Educational attainments for girls in Bangladesh were among the lowest in the world up until the early 1990s. Behind the change is a Government stipend program launched in 1993 to support female secondary education. The benefits to the country from improved female attainment are many and can already be measured in falling birth rates and a falling number of teenage marriages. Stipend is only one of a range of methods used to increase female schooling, with teacher training, and sanitation also playing a key role. The World Bank has been a keen supporter of the initiative from the start, funding a large share of the program. Under the Female Secondary School Assistance Project (FSSAP), the Government's stipend program is supported by the World Bank in 119 upazilas of the country. The total project cost is US$144.6 million of which the World Bank is providing credit of US$120.6 million. The project aims to improve the quality of, and girls’ access to, secondary education in rural areas, and to improve both the Ministry of Education’s management capacity and monitoring and accountability mechanisms. Female graduates are also getting fellowship support to continue their education beyond secondary level. The project also introduced an SSC incentive award to boost SSC pass rates. The project is also encouraging out-of-school girls living in remote areas to attend secondary schools. This is being done through A Family Attractiveness Program targeting poor families living in remote areas. To read more, please click on this link To read and download documents on the project, please click on this link
4. Reflections on Environment, Governance and the Role of Media (Speech given by Country Director, Christine I. Wallich at a meeting of World Water Forum Journalists) A World Bank report of last December estimated that the clean water needed in Bangladesh’s expanding urban centers will jump from 10,000 million liters a day to over 35,000 million liters a day in the future. As we see daily in Dhaka, providing safe water and a functioning sewerage system is already a major challenge. The city’s sewerage system serves only 27 per cent of the population. The Bank estimates that up to $8 billion dollars will be needed to correct the country’s water supply and sewerage system over the next 20 years. So what is the role of the media in dealing with this? Most simply, it is to find out and report on what is happening, even if the results are unpalatable to those in power. The World Bank applauds those Bangladeshi journalists who have already taken up this challenge. The photographers who get the pictures of the land-grabbers filling in the city’s waterways, the journalists who name and confront the wrongdoers.  Only by bringing publicity to such issues can momentum for change grow. Yet with power also comes responsibility. For example air quality in Dhaka has recently worsened again, offsetting some of the gains from the successful banning of two-stroke engines from the city. Should one then say that the ban on two-strokes was a failure? Not at all. Responsible journalism would give credit, as well as criticism. Dhaka has grown,creating new problems that need to be tackled, and further measures are needed. The recently launched Bangladesh Country Assistance Strategy which will frame the World Bank’s program for Bangladesh over the coming years focuses on governance is something which should interest the media. Increasing transparency and accountability is one important aspect of improving the governance of institutions that deliver water to Dhaka residents. One cause of Dhaka’s water supply problems today is a shortage of electric power to drive the pumps, a shortage which can be directly traced to governance issues in the power sector. Tackling these sector governance issues, enhancing accountability, would bring direct benefits to the city’s poor residents and water users. The media has an important role to play in explaining these cause-and-effect relationships, analyzing and highlighting root causes of a problem, and giving voice to realistic, viable solutions. Governance is also about the enforcement of sensible regulations. Here the media also has a role. Powerful economic interests may be able to persuade enforcement agencies to ignore so called ‘victimless crimes’ such as brick factories with chimneys below regulation height, pumping their fumes into residential areas, with everyone, in fact, a victim. Journalists can shame the law enforcers into action. To read the entire speech, please click on this link:
5. World Bank supported projects in Bangladesh To read and download a short description of each active project in Bangladesh, please click on this link To read and download detailed descriptions of active projects in Bangladesh and related documents, please click in this link
6. Further reading from the World Bank in Bangladesh Please click on the following titles to download the Bangladesh Development Series reports If you require hard copies of the report, please contact Ms. Razia Rouf at the World Bank Office Dhaka, Tel: 8813101-28: 1. Bangladesh PRSP Forum Economic Update-Recent Developments and Future Perspectives 2. End of MFA Quotas: Key Issues and Strategic Options for Bangladesh Ready Made Garment Industry 3. Bangladesh Water Country Assistance Strategy 4. Comparative Advantages of Health Care Provision 5. Targeting Resources for the Poor in Bangladesh 6. Revitalizing the Agricultural Technology System in Bangladesh 7. Bangladesh Integrated Nutrition Project, Effectiveness and Lessons Learned 8. Social Safety Nets in Bangladesh: An Assessment 9. Bangladesh Country Assistance Strategy 2006-2009 10. Economics and Governance of NGOs in Bangladesh Forthcoming Publications Strengthening Management and Governance in the HNP Sector of Bangladesh Evaluation of Recent Health Decentralization Initiatives Dhaka Urban Poverty Study Strategy for Growth and Employment
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