Overview

  • Bangladesh has made substantial progress in reducing poverty, supported by sustained economic growth.  Based on the international poverty line of $1.90 per person per day, Bangladesh reduced poverty from 44.2 percent in 1991 to 18.5 percent in 2010, and is projected to decrease to 12.9 percent in 2016.

    The country achieved the MDG 1 on halving poverty five years ahead of time, with 20.5 million people rising out of poverty during the 1991-2010 period. In parallel, life expectancy, literacy rates and per capita food production have increased significantly.  Progress was underpinned by strong economic growth, with 6 percent plus growth over the decade and reaching to 7.1 percent growth in 2015/2016. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2014.      

    However, sustained growth has rapidly increased the demand for energy, transport and urbanization. Insufficient planning and investment have resulted in increasingly severe infrastructure bottlenecks. To sustain growth, Bangladesh needs urgently to implement structural reforms, expand investments in human capital, increase female labor force participation, and raise productivity through increased global value chain integration.  Reducing infrastructure gaps and improving the business climate would allow new productive sectors to develop and generate jobs.

    Bangladesh is both an inspiration and a challenge for policymakers and practitioners of development. While the poverty reduction efforts to date have been extraordinary, Bangladesh faces daunting challenges with about 28 million people still living below the poverty line. The country is at an important juncture, when with the right policies and timely action, it can move up within the middle-income bracket.

    The World Bank has identified job creation as the country’s top development priority. Bangladesh needs to create more and better jobs for the 2.1 million youths entering the job market every year. But to do so, Bangladesh will need to remove the barriers to higher growth posed by low access to reliable and affordable power, poor transportation infrastructure, limited availability of serviced land, rapid urbanization and vulnerability to climate change and natural disasters, among others. 

  • The International Development Association (IDA) has supported Bangladesh since 1972, just after the country’s independence. Since then, the World Bank through its concessional lending arm has committed nearly $26 billion in grants and interest-free credits to Bangladesh. In the recent years, Bangladesh has been among the largest recipient countries of the IDA fund; the World Bank has also been the largest external funder of Bangladesh.  The World Bank has been supporting the government efforts in economic development and growth, power, infrastructure, disaster management, climate change, human and social development and poverty reduction.

    The World Bank Group’s Country Partnership Framework (CPF) for 2016-2020 supports Bangladesh to achieve its vision of reaching middle-income status by its 50th birthday in 2021. From 2016 to 2020, the World Bank Group’s technical and financial assistance to Bangladesh will focus on (i) accelerating growth by helping to remove bottlenecks to growth and shift more financing to increase electricity supply and improve transport connectivity; (ii) foster social inclusion by building on Bangladesh’s impressive gains in human and social development; and (iii) strengthen climate and environmental management with the aim to enhance Bangladesh’s resilience to natural disasters, improving water and natural resource management and modernizing agriculture. The framework is anchored in the government’s seventh Five Year Plan, and aligned with the World Bank Group’s Systematic Country Diagnostic (SCD) for Bangladesh.

     IDA’s portfolio in Bangladesh as of April 10, 2017 stands at $10.1 billion in 41projects. 

     

    Last Updated: Apr 26, 2017

  • The International Development Association (IDA) has been supporting Bangladesh since 1972, just after the country’s independence. Since then, IDA has provided more than $19 billion support to advance Bangladesh’s development priorities.

    The World Bank support has helped Bangladesh to reduce poverty and improve human development. 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 has also included a substantial body of analytical work and knowledge products that have contributed to the policy debate, IDA-supported operations, and, ultimately, development outcomes. Forty years of partnership have built a solid foundation for improvements in growth, empowerment, and social mobility.

    Highlights of IDA’s engagement in Bangladesh include:

    • Education: Bangladesh has made remarkable gains in ensuring access to education in the past two decades. As of 2015, the country’s net enrollment rate at the primary school level is above 90 percent, and secondary school level is around 62 percent. With nearly 6.4 million girls in secondary school in 2015, Bangladesh is among the few countries to achieve gender parity in school enrollment, and has more girls than boys in secondary schools. However, the country still faces the challenges of equitable access and quality of education. Government spending on education is only around two percent of the GDP, one of the lowest among countries at similar levels of development. IDA is the largest external funder in the education sector covering the primary, secondary, and tertiary levels, as well as technical training and vocational training, and education for the hard to reach children. The World Bank recently completed an Education Sector Review, which recommends medium terms policy measures in the areas of equity, education quality and skills development. 
    • Health: Bangladesh has experienced substantial improvements in key health, nutrition, and population outcomes and achieved MDG 4-Reducing Child Mortality. Between 2000 and 2014, the maternal mortality ratio declined by 40 percent to 194 from 320 per 100,000 births. Between 2007 and 2014, child undernutrition declined from 41percent to 32.6 percent; the proportion of 2-year-old children covered with recommended vaccinations rose from 82 to 84 percent; proportion of deliveries in health facilities increased from 17 to 37 percent; and pregnant women receiving ante-natal care from a medically trained provider rose from 55 to 64 percent. Despite Bangladesh’s success in reducing maternal and child mortality, and improving child nutritional status, the number of stunted children –36 percent of children under age of 5 in 2014 -- is among the highest in the world. The poorer children bear a disproportionate burden of stunted growth. The World Bank is committed to providing support to ending stunting in Bangladesh. The other challenges in health sector are:  non-communicable and communicable diseases; regional inequalities in service access and utilization, as well as the increasing and changing demand for health services, influenced by population dynamics, urbanization and climate change. Since 1998, the World Bank has mobilized resources from other development partners (DPs) in support of the government’s health program, one of the largest sector-wide programs in the world. The program has entered its fourth phase in 2017. IDA will continue to provide support to sustain gains, achieve still higher levels of utilization, improve quality, and reduce inequalities.
    • Rural Infrastructure: IDA has been a major partner in the development of Bangladesh’s rural infrastructure, having funded three rural road improvement projects. The ongoing Second Bangladesh Rural Transport Improvement Project is helping build 800 km of new roads and maintain 4,500 km rural roads in 26 districts. These roads have improved access to schools and health clinics, reduced transport costs, helped increase rural non-farm incomes, and generated employment in project areas, for women and men both. Further, IDA support has helped build piped and non-piped water sources that provided nearly 1.1 million people access to clean water in rural areas with high arsenic and salinity infiltration.
    • Energy: Energy demand in Bangladesh has increased on an average of 8 percent per annum in the last decade with peak demand reaching more than 9,000 MW. The current installed generation capacity is 13,000 Mega-Watt (MW), while the available capacity is about 9,000 MW. Unreliable power supply is estimated to cost the country about 2 percent of GDP.The World Bank has $1.6 billion of ongoing support in the energy sector to enhance capacity, generate clean energy, improve transmission, reduce technical losses, as well as increase access to electricity. The IDA support has so far added 2,147 MW electricity to the national grid, and 100 MW to off grid through solar home systems. Another 505 MW capacity will be added soon once the ongoing projects are completed.  With the support from IDA and other development partners, more than 4 million households and shops in remote rural areas have installed solar home systems. Following the success of solar home systems, IDA support has expanded to pilot solar irrigation pumps, solar mini grids and other renewable energy options. IDA has also been working to improve the transmission network in the countryside, as well as power sector policies and create effective institutional capacity within the Government, power and gas utilities and Bangladesh Energy Regulatory Commission (BERC) with the aim to improve the financial health, investment and service quality.
    • Agriculture: Despite high population density, decreasing arable land, and frequent natural disasters, Bangladesh has made remarkable progress in achieving food security. While having one the fastest rates of agriculture productivity growth in the world since 1995 (2.7 percent per year and second only to China), this self-sufficiency is continuously threatened by a decrease of arable land by at least one percent per year, an increasing population and stagnating yields. The World Bank is helping over 1 million farmers modernize farm practices and use new technologies. About 30,000 farmers have received training in different crops, livestock and fisheries. Bangladesh is one of the first countries to receive a grant from the Global Agriculture and Food Security Program, with project results focused on enhancing agricultural productivity and livelihoods in two of the most agro-ecologically constrained areas of the country.
    • Climate Change: Bangladesh’s geographical position renders it especially vulnerable to the adverse impacts of climate change. The 2014 Climate Change Vulnerability Index ranks Bangladesh as the number one economy at risk to climate change. The vicious circle of natural disaster and poverty, whereby each new calamity risks poor becoming poorer and slows development, is a major challenge to poverty reduction efforts in Bangladesh. The World Bank has supported Bangladesh in becoming a forerunner in climate-related damage rehabilitation and adaptation. The country has gradually built stronger disaster-coping mechanisms and these have significantly reduced the impact of recent storms, cyclones, and floods in terms of numbers of deaths and economic losses. IDA has an ongoing portfolio of $1.5 billion supporting Bangladesh to build resilience against natural disasters and climate change impacts. So far, 501 solar irrigation pumps have been installed; 17,500 hectares of  block plantations and 2,000 km of strip plantations have been completed in climate vulnerable areas; 40,000 people residing in saline, flood and drought prone areas have received adaptive basic needs (house, water, agriculture, health ) and livelihood support; about 6,000 poor and forest dependent households in 200 communities have participated in the alternative livelihoods support programs; 240 new cyclone shelters have been constructed; and 387 km of embankment has been repaired.
    • Local governance: Local government institutions in Bangladesh traditionally have had a lesser role in delivering services to their citizens due to limited responsibilities and lack of adequate resources. Most government services have often been delivered in a top-down manner, with little accountability to local communities.  Over the past decade, the World Bank has been supporting the government’s move towards a stronger and more accountable local governance system. Since 2006, IDA has been supporting a nationwide program that augments the government’s block grants provided to all 4,504 Union Parishads (UPs, the lowest tier of elected local government in Bangladesh).  The block grant enables UPs and their communities to decide upon local development priorities and implement the schemes. The discretionary funds that a UP receives annually has grown by more than ten-fold since 2006 and has benefitted 130 million people. Female UP members are managing 30 percent of the funds and the selected schemes. More than 35,000 community plans generating employment for poor people have been implemented so far, including construction or rehabilitation of rural roads, culverts, drainage and embankment systems; water and sanitation facilities; and schools and clinics under the two local governance support projects. Under the third project, IDA will support a pilot for an urban fiscal transfer system in 16 municipalities spread across the eight divisions of the country.

     

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LENDING

Bangladesh: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

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