Bangladesh has an impressive track record for growth and development, aspiring to be a middle-income country by its 50th birthday. The World Bank has supported Bangladesh since 1972, providing more than $15 billion in support. Read More »
Bangladesh has maintained an impressive track record on growth and development. In the past decade, the economy has grown at nearly 6 percent per year, and human development went hand-in-hand with economic growth. Poverty dropped by nearly a third,coupled with increased life expectancy, literacy, and per capita food intake. More than 15 million Bangladeshis have moved out of poverty since 1992.
While poverty reduction in both urban and rural areas has been remarkable, the absolute number of people living below the poverty line remains significant. Despite the strong track record, around 47 million people are still below the poverty line, and improving access to quality services for this vulnerable group is a priority. There are also many people who could fall back into poverty if they lose their jobs or are affected by natural disasters.
With nearly 150 million inhabitants on a landmass of 147,570 square kilometers, Bangladesh is among the most densely populated countries in the world. Sustained growth in recent years has generated higher demand for electricity, transport, and telecommunication services, and contributed to widening infrastructure deficits. While the population growth rate has declined, the labor force is growing rapidly. This can be turned into a significant demographic dividend in the coming years, if more and better jobs can be created for the growing number of job-seekers. Moreover, improving labor force participation and productivity will help to release the potential of the economy. Exploiting the potential of regional cooperation and making trade policy more conducive to a deepening and diversification of exports will also play a vital role in the growth process.
Bangladesh aspires to be a middle-income country by 2021. This will require increasing GDP growth to 7.5 to 8 percent per year based on accelerated export and remittance growth. Both public and private investment will need to increase as well. Growth will also need to be more inclusive through creation of productive employment opportunities in the domestic economy. To sustain accelerated and inclusive growth, Bangladesh will need to manage the urbanization process more effectively, as well as prepare for adaptation to climate change impacts.
Becoming a middle-income country will require substantial efforts on many fronts. These include maintaining macroeconomic stability; strengthening revenue mobilization; tackling energy and infrastructure deficits; deepening financial-sector and external trade reforms; improving labor skills, economic governance, and urban management; and adapting to climate change. Bangladesh can become an export powerhouse, with its labor-intensive manufactured and service exports growing at double digits on a sustained basis, if it speeds up government decision-making. Without timely action, other countries (such as Vietnam and Myanmar) will take the markets being vacated by China.
The Vision 2021 and Sixth Five-Year Plan have set solid development targets for Bangladesh. Recognizing that development is a long-term process, the Five-Year Plan is cast in the context of a long-term development vision defined by the government’s Vision 2021 and the Perspective Plan (2010-2021).
Those targets, if achieved, will transform the socioeconomic environment. Along with higher per capita income, the government’s Vision 2021 presents a development scenario where citizens will have a higher standard of living, be better-educated, face better social justice, and have a more equitable socioeconomic environment, and the sustainability of development will be ensured through better protection from climate change and natural disasters.
IDA commitments to Bangladesh have grown rapidly in the past five years, topping $1 billion for the first time in FY 2009. The World Bank’s present portfolio in Bangladesh amounts to $4.2 billion and includes 32 projects.
The World Bank’s Country Assistance Strategy for FY11-14 is supporting the government’s vision of rapid poverty reduction through accelerated, sustainable, and inclusive growth, underpinned by stronger governance at central and local levels. To ensure better outcomes, the World Bank’s strategy seeks to scale up ongoing operationswith demonstrable results, engage in strategic interventions with a transformative impact, and innovate through small pilots with high country ownership.
Key areas of intervention are:
Accelerated Growth: Infrastructure investment and a more conducive business environment are needed to sustain and increase recent levels of private sector growth. The World Bank Group will support reforms to strengthen sector governance, financial sustainability, and private-sector participation in infrastructure provision and maintenance. It will also support efforts to enhance regional cooperation as a means to accelerate exports and increase foreign direct investment.
Sustainable Growth: Bangladesh is among the most densely populated countries in the world, already vulnerable to natural disasters and increasingly affected by climate change. Water resource management, agricultural adaptation, environmental protection, and disaster preparedness will be critical areas for intervention.
Inclusive Growth: With around 47 million people below the poverty line, improving social service delivery is a priority. The Bank plans to provide second-generation support for sector-wide approaches with other partners in primary education and health, population, and nutrition services, as well as expand support for targeted social assistance.
Stronger Governance: Bangladesh has made gradual progress in many areas of governance in the past five to 10 years. The International Finance Corporation will focus on governance issues related to the private sector (such as how to strengthen the investment climate), while IDA will focus on decentralized service delivery, strengthening social accountability, and supporting transparency through the Right to Information Act.
The International Development Association (IDA) has been supporting Bangladesh since 1972, just after the country’s independence. Since then, IDA has provided more than $15 billion in support for policy reforms and projects, accounting for more than one-quarter of all foreign aid to Bangladesh.
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:
Rural Infrastructure: IDA has been a major partner in the development of Bangladesh's rural infrastructure, having funded three rural road improvement projects. A recently completed rural road project has helped to improve and maintain more than 2,500 km of rural roads in 21 districts. These roads have improved access to schools and health clinics, reduced transport costs, and helped increase rural non-farm incomes. They also led to the creation of over 47,000 person-years of employment in the project area, with female employment increasing by 50 percent. The overall poverty effect of road improvement was significant, with poverty falling by about 1% and the poverty reduction rate almost doubling in project areas.
Agriculture: Bangladesh has made impressive achievements over the last 30 years in narrowing the gap between food crop production and the needs of the population, in large part due to expansion of irrigation. The country is nearly self-sufficient in rice (the main staple food) with production reaching more than 35 million metric tons per year. IDA is an active partner in the agriculture sector in Bangladesh, focusing support on technology and research and on rehabilitation of infrastructure for flood control, irrigation and drainage. 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.
Energy: Bangladesh suffers from shortages of reliable electricity and natural gas service compared to demand. Total installed capacity is 8,050 MW, and IDA has contributed to more than 1,515 MW of that capacity, with another 335 MW under construction. IDA has supported public-private partnerships to build small power plants as well as large-scale independent power plants, such as the Haripur and the Meghnaghat plants. In addition, access to electricity is being provided in rural areas through off-grid technologies, and consumption of energy is being reduced through distribution of energy-efficient CFLs with IDA support. For example, more than 850,000 solar home systems have been installed through May 2012 in remote villages, and every month about 50,000 new homes and shops in rural areas are being connected toelectricity through the installation of these systems.
Education: Bangladesh has made impressive gains in improving access to education, reaching the Millennium Development Goal of gender parity at school enrollment well ahead of time. Today, the female primary school enrollment rate of 98% in Bangladesh is higher than those in Pakistan, Nepal and Bhutan and about the same as in India. Six million girls attend secondary school in Bangladesh today, rising from just 1 million two decades ago. IDA has contributed to these achievements by supporting both formal and informal education service delivery programs, including innovative models to improve performance and involve difficult-to-reach groups. Currently, IDA supports active projects in the primary, secondary, and tertiary sectors, including an initiative to bring out-of-school children back to school and a skill-building project to help develop a more competitive labor force.
Health: IDA has been a close partner of the government of Bangladesh to improve health, HIV and nutrition outcomes since 1975. The World Bank currently supports implementation of the government’s Health, Nutrition, and Population Sector Development Program in partnership with other development partners to strengthen health systems and improve health services, particularly for the poor. With World Bank support, 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 more than 80% are vaccinated, contributing to an impressive reduction in infant and child mortality by more than two-thirds since 1990. The country is on track to meet the Millennium Development Goal targets for health, and received the 2010 United Nations Award for MDG 4 achievements. Nutrition, however, remains a challenge, as more than 40% of under-5 children are either moderately underweight or moderately stunted or both.
Livelihoods: IDA has been supporting community-driven development plans aimed at improving livelihoods; quality of life; and resilience to climate variability, natural hazards, and other shocks for the rural poor. Around 3.5 million people in about 1,000 villages have benefited from improvements in community infrastructure, such as access to drinking water; roads and bridges; and credit, markets, and opportunities for income generation.
Local governance: With IDA support, all 4,504 Union Parishads of Bangladesh have been provided with increased resources and delegated responsibility to deliver local services. For the first time, female Union Parishad members are managing 30% of the funds and plans. More than 35,000 community plans generating employment for poor people have been implemented so far, including construction or rehabilitation of roads, culverts, drainage and embankment systems; water and sanitation facilities; and schools and clinics. Current program innovations include performance-based grants to expand resources available to local governments.
Water supply and sanitation: In partnership with the government, IDA has contributed to providing access to safe and arsenic/pathogen-free water and improved sanitation services to 1.25 million people in rural areas and small towns. IDA is also supporting improvements in water supply and sanitation in Dhaka and Chittagong, two of the largest cities in the country.