The World Bank in Bangladesh
Electronic Newsletter, Issue # 5, November 2006 Message from the Country Director: Dear Friends, Like many others in Bangladesh and around the globe, I was overjoyed to hear the news that Professor Mohammad Yunus and Grameen Bank are this year's recipients of the Nobel Peace Prize. Professor Yunus and the bank he founded are worthy winners and the World Bank congratulates both wholeheartedly. Between them they have turned a vision of micro credits into a financial tool that has improved the lives of tens of millions of poor people, especially women. The widespread availability of micro credits is one reason for the sharp fall in the proportion of the population in Bangladesh now living in poverty, a development you can read about below. This will be the last edition of the newsletter I will be involved in, as after three and a half years as Country Director in Bangladesh I will be leaving Dhaka for Washington D.C. to take up a senior position at the World Bank's headquarters. I leave Bangladesh determinedly hopeful about its prospects. This is not just because I am an optimist. It is a view based on the creativity of the people and the enormous strides this country has already made in both social and economic terms. Since the 1990’s Bangladesh has achieved steady economic growth of 5-6 per cent annually, low inflation and indebtedness, and stable interest and exchange rates. In terms of per capita growth it has substantially outperformed the average for all low income countries. Many social indicators show remarkable progress. In education, there is near universal enrollment, in health, the fastest reduction in infant and child mortality among the world’s developing countries. These gains have come despite widely held perceptions of poor governance. This is the Bangladeshi paradox. How is it possible to achieve such impressive results against such a backdrop? The key is to recognize both the successes and the failures in governance. The challenge for Bangladesh is how to build on the successes and tackle the failures. The World Bank's new Country Assitance Strategy which will guide the Bank's operations in Bangladesh for the next four years aims to help the Government do this. Prepared jointly with other major donors it is built on two pillars, improving the investment climate and empowering the poor, and is strongly focused on governance. To halve poverty by 2015 economic growth will have to accelerate to 7-8 per cent a year. This is not a huge jump. Just imagine the boost the country would receive if the power supply was improved, if the railways and ports could be modernized, if the state banking sector provided the finance to fuel growth rather than being a drain on government resources. My time in Bangladesh has been an enriching experience. I would like to thank all those who have made my work possible. I strongly believe in Bangladesh’s ability to rise to the challenges it faces. By supporting programes and policies determined by the Government and people of Bangladesh the World Bank will remain a strong and reliable partner. As always, I look forward to hearing your comments on this newsletter. Please e-mail us at World Bank Dhaka News with any feedback you may have. Best wishes, Christine I. Wallich
Country Director Read World Bank President's Paul Wolfowitz's letter to Professor Yunus Â
What will the Nobel Prize mean for micro credit? Read more Country Director, Christine Wallich's departure press release and statement
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Highlights 1. Sharp Fall in Proportion of Population in Poverty
2. Increasing Access to Rural Finance
3. Donors Join Together to Back Health Sector
4. Lessons to Speed Achievement of MDGs
5. Tackling Indoor Air Pollution More from the World Bank 6. World Bank Bangladesh Country Assistance Strategy
7. World Bank Supported Projects in Bangladesh
8. Reports and Analysis on Bangladesh from the World Bank
9. Global Reading from the World Bank =====================================================================
1. Sharp Fall in Proportion of Population in Poverty The proportion of people in Bangladesh living in poverty, measured by household income and expenditure, has fallen sharply in the past five years, according to figures compiled jointly by the Bangladesh Bureau of Statistics (BBS) and the World Bank. From 2000 to 2005 the proportion of poor in the population fell to 40 per cent from 49 per cent, with the proportion of those classed as very poor falling to 25 per cent compared to 34 per cent in 2000. The decline in poverty by around two percentage points a year was much faster than in India and Pakistan during the period. Rural poverty fell from 53 per cent to 44 per cent, while urban poverty decreased from 37 per cent to 29 per cent. There were significant regional variations, with the decline in poverty fastest in the Dhaka and Chittagong regions, while there has been little change in Barisal and Khulna. To calculate the number of poor, researchers compared household income against the cost of buying a basket of foods that would give 2122 kcalories a day. Added to this was spending on some basic non food items. Inequality, as defined by the commonly-used Gini index did not change when measured using household consumption but did rise marginally when household income is used. Further research needs to be done into the reasons for the fall in the proportion of the population living in poverty and regional differences. Read more about Poverty Reduction in South Asia
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2. Increasing Access to Rural Finance Rural Bangladesh accounts for 80 per cent of the country's population but farmers and small businesses in rural areas struggle to access finance. Instead the banking sector is focused on medium and large enterprises in urban areas with Dhaka and Chittagong accounting for 78 per cent of total lending. In order to tackle this problem the Government of Bangladesh, the UK's Department for International Development, the Japan Bank for International Cooperation and the World Bank are designing a strategy to increase farmers and rural micro and small enterprises access to finance. Based on survey results it is estimated that there are around 1 million small businesses able to borrow between TK50,000 and TK3 million, but only seven per cent of potential borrowers have loans outstanding with financial institutions. Commercial banks miss this market as their procedures are inappropriate and cumbersome. The survey showed that a typical small business loan requires 29 steps, 9 meetings with clients, 10 different payments from the clients (such as paying an accountant, for a property valuation, paying for registering the collateral etc) 50 documents, with 200 pages. In addition 9 bank staff are involved, plus 5 external persons, such as accountants, and the client needs to spend around 20 hours with the bank. more>> Read the story in Bangla      Â
======================================================================== 3. Donors Join Together to Back Health Sector The Government of Bangladesh and the World Bank have signed the Multi-Donor Trust Fund Grant Agreement for the Bangladesh Health, Nutrition and Population Sector Program (HNPSP), a way of channeling US$ 460 million of development partner grant funds into the country’s health sector. The HNPSP (2003-2010) is designed to modernize the country’s health sector and accelerate progress towards reaching the health related Millennium Development Goals and is supported by US$ 4.3 billion in Government and donor funding over the period. Five development partners have pooled their finances for the program in a Multi-Donor Trust Fund administered by the World Bank. These agencies are the UK’s Department for International Development (DFID), the European Commission (EC), the Embassy of the Kingdom of the Netherlands (RNE), the Swedish International Development Cooperation Agency (Sida), and the United Nations Fund for Population Activities (UNFPA). The Federal Republic of Germany through KfW has also pledged to pool their financing. Pooling reduces Government transaction costs and avoids the duplication of donor oversight functions. If successfully implemented over the next five years, HNPSP has the potential to avert at least half a million infant deaths and around 20,000 maternal deaths. It will ensure the treatment of an additional 600,000 tuberculosis patients and keep HIV rates at low epidemic levels. Use of the health service by the poorest 40 per cent of the population will increase by 45 per cent. These are just a sample of the concrete improvements in the nation’s health care provision that a well functioning HNPSP aims to deliver. more>> Read the story in Bangla | Country Director's Speech  ========================================================================= 4. Lessons to Speed Achievement of MDGs Bangladesh has made impressive gains across a range of social indicators and is enjoying strong economic growth. Contrary to popular belief, Bangladesh is on its way to achieving most of the Millennium Development Goals (MDGs). The World Bank has prepared a report to be issued shortly, which analyzes how Bangladesh can increase its rate of progress towards the MDGs. The report specifically looks into infant and maternal mortality - two of the most difficult MDG targets for Bangladesh - but in doing so it analyzes a broad range of institutional issues which will affect almost all the MDG outcomes Bangladesh has made remarkable progress on both infant and child mortality measures over the three decades - the rate is now lower than in India. If current trends persist, the child mortality MDG target will be met. Unfortunately the same cannot be said for maternal mortality. Although Bangladesh has the lowest rate in South Aisa, South Asia itself compares poorly with the rest of the world. One of the major barriers to better maternal health is the current state of public health services. However, there are successful models for service delivery in Bangladesh. The report shows how the public sector can learn lessons from these successful models. Both downward and upward accountability of public health services is required to achieve maternal mortality targets. This means that public service providers need to be proactive in reaching out to their communities. Communities and elected local governments will also constantly need to monitor the level of service provided. The report is expected to be finalized by November 2006 with public dissemination sessions planned for December onwards. Read previous MDG reports | More on MDGs | UN's site on MDGs ========================================================================= 5. Tackling Indoor Air Pollution Poor households in Bangladesh rely heavily on wood, dung and other biomass fuels for cooking. This practice exposes inhabitants to smoke which when inhaled can severely damage their health. Indoor air pollution is estimated to account for 8 per cent of the total burden of disease in the country and according to a soon to be published World Bank Study titled: Bangladesh Country Environmental Analysis,is one of the leading causes of infant deaths. To address this challenge the Government of Bangladesh, with support of the World Bank, is preparing the Bangladesh Indoor Air Pollution Pilot that will use a community-led approach to address the problems associated with conventional cooking practices and their direct health risks. The Local Government Engineering Department (LGED) will implement this pilot initiative. more>>       ==========================================================================  More from the World Bank
6. World Bank Bangladesh Country Assistance Strategy
The World Bank’s Country Assistance Strategy will guide the Bank’s operations in Bangladesh during the period 2006-2009. It is strongly focused on governance and is aligned with Bangladesh’s Poverty Reduction Strategy Paper (PRSP). The strategies’ two pillars, improving the investment climate and empowering the poor, reflect the focus of the World 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. Download the entire CAS | Summary in English | Summary in Bangla
====================================================================== 7. World Bank supported Projects and Programs in Bangladesh
The World Bank supports 27 ongoing government projects in Bangladesh and is active in a wide range of sectors including health, education, transport, water and sanitation, agriculture, local government and financial sector reform, as well as public procurement and financial management reform. Detailed description of active projects | Brief description of active projects
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8. Reports and Analysis from the World Bank
The aim of the Bangladesh Development Series (BDS) is to distribute the World Bank's country analytical work on Bangladesh. BDS is a valuable source of information for strengthening policy dialogue and developing and implementing country strategies.
Please click on the following titles to download these Bangladesh Development Series reports: Economics and Governance of NGOs in Bangladesh  ; Summary: English | Bangla Bangladesh Country Assistance Strategy 2006-2009 ; Summary:English | Bangla   Social Safety Nets in Bangladesh: An Assessment Bangladesh Integrated Nutrition Project, Effectiveness and Lessons Learned Revitalizing the Agricultural Technology System in Bangladesh ; Summary: English | Bangla Targeting Resources for the Poor in Bangladesh ; Summary: English | Bangla Comparative Advantages of Health Care Provision ; Summary: English | Bangla Bangladesh Water Country Assistance Strategy ; Summary: English | Bangla End of MFA Quotas: Key Issues and Strategic Options for Bangladesh Ready Made Garment Industry ; Summary: English Bangladesh PRSP Forum Economic Update - Recent Developments and Future Perspectives Forthcoming Publications Bangladesh Country Environment Analysis
Strengthening Management and Governance in the HNP Sector of Bangladesh
An Evaluation of Recent Health Decentralization Initiatives
Dhaka Urban Poverty Study
Bangladesh: Strategy for Growth and Employment ======================================================================
9. Global reading from the World Bank The World Bank is also a "Knowledge Bank", each year producing a steady flow of publications and research. Over 15,000 documents and publications are available free of cost on our website.Â
Search and Download global World Bank publications Recent highlights World Development Report 2007: Development and the Next Generation (summary) Doing Business 2007: How to Reform (summary) http://www.doingbusiness.org/ ----------------------------------------------------------------------------------------------------------
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