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Overview

  • Bangladesh has made remarkable progress in poverty reduction, supported by sustained economic growth. It has been among the fastest growing economies in the world over the past decade, thanks to a demographic dividend, strong ready-made garment (RMG) exports, and stable macroeconomic conditions. 

    As a result, Bangladesh reached lower-middle-income status in 2015 and is on track to graduate from the UN’s Least Developed Countries (LDC) list in 2026. Poverty declined from 44 percent in 1991 to 15 percent in 2016, based on the international poverty line of $1.90 a day (using 2011 Purchasing Power Parity exchange rate). Moreover, human development outcomes improved along many dimensions.

    The COVID-19 pandemic impacted Bangladesh profoundly. In addition to the impact on health, GDP growth decelerated, and poverty increased. The pandemic may also have long term economic implications as a result of reduced female labor force participation, learning losses, and heightened financial sector vulnerabilities. 

    Challenges

    Resolving longer term structural challenges could accelerate the post-COVID-19 recovery. Reform priorities include a diversification of exports beyond the RMG sector, deepening the financial sector, improving urbanization, and strengthening public governance. Addressing infrastructure gaps would accelerate growth and reduce spatial disparities in opportunities across regions and within cities. Human capital development remains a priority as well. While Bangladesh’s ranking on the Human Capital Index is higher than the South Asian average, it is below the levels observed in comparator countries.

    Addressing vulnerability to climate risks would support the resilience of economic development to future shocks. Pivoting towards green growth could support the sustainability of development outcomes for the next generation.   

    With the right policies and timely action, Bangladesh can accelerate its recovery from the economic downturn and continue to progress towards upper-middle income status.

    Last Updated: Mar 30, 2021

  • The World Bank has been a longstanding partner of Bangladesh since its independence. Since then, the World Bank through its concessional lending arm—the International Development Association (IDA)—has committed more than $30 billion in grants, interest-free and concessional financing credits to Bangladesh. In recent years, Bangladesh has been among one of the largest recipient countries of the IDA fund with the largest ongoing IDA program.

    The World Bank has also been the largest external funder of Bangladesh providing over a quarter of all foreign aid to the country.

    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.

    COUNTRY PARTNERSHIP FRAMEWORK

    The World Bank Group’s Country Partnership Framework (CPF) for Group’s Country Partnership Framework (CPF) for 2016-2020  has been extended to FY2021 after the Program Learning Review (PLR) to support Bangladesh in achieving its vision of reaching middle-income status by its 50th birthday in 2021. The PLR reaffirmed the three CPF focus areas: (1) growth and competitiveness; (2) social inclusion; and (3) climate and environment management. It also recognized the recent program adjustment in response to the Rohingya refugee crisis, and recommended greater attention to human capital, climate resilience, and digital transformation. Considering the COVID-19 pandemic, the preparation of CPF has been deferred and at present the Bangladesh CPF has been adjusted in response to COVID-19.

    During the period, the World Bank Group’s technical and financial assistance focuses 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 which covers the same period.

    The World Bank has also consulted with its stakeholders -- government, civil society, and the private sector -- for Systematic Country Diagnostic (SCD) as a first step of preparation for the new CPF, which will be for FY 23-27.

    THE WORLD BANK PROGRAM and Support to Fight COVID-19:

    The COVID-19 pandemic has severely disrupted economic activity and created an unprecedented challenge globally and in Bangladesh. This is likely to worsen poverty in the short term. The disruption of the supply chains and the depression in the US and the European markets significantly impacted Bangladesh’s exports.

    Bangladesh government took fast public health measures and announced a package of support programs to help the poor and vulnerable households with cash transfer and food programs, provide stimulus package to firms to sustain employment in key sectors. In addition to extending financial assistance, the government helped reduce regulatory burdens on businesses. 

    As Bangladesh’s long-standing partner, the World Bank stepped up to provide quick support. Within three weeks of detection of the first COVID-19 case in Bangladesh, the World Bank approved $100 million to help Bangladesh prevent, detect, and treat COVID-19 and strengthen national systems for public health preparedness. Addition to that, the World Bank has made significant contribution to assist Bangladesh government through the approval of $500 Additional Financing for vaccines procurement and effective vaccine deployment. Further, since the pandemic started, the World Bank approved $2.7 billion to support Bangladesh with the aim of “building back better,”  including an agenda for reforms and effective investments which will leverage the private sector, help job recovery, create job, boost human capital development and strengthen protections for the vulnerable people.

    The World Bank support for Bangladesh for FY21–22 is aligned with the World Bank Group’s Approach Paper on “Saving Lives, Scaling-up Impact and Getting Back on Track.”

    Total IDA commitments as of today stands at 14.78 billion for 55 ongoing projects. Bangladesh is currently the largest IDA borrower globally.

    Last Updated: May 27, 2021

  • Education

    Bangladesh has made remarkable gains in ensuring access to basic and secondary education in the past two decades. In 2018, the country’s net enrollment rate at the primary school level reached above 97 percent, and that at secondary school level, around 69 percent.

    With nearly 8.1 million girls in secondary schools in 2018, Bangladesh is among the few countries to achieve gender parity in school enrollment and has more girls than boys in secondary schools. Improving the quality of education remains the largest challenge for Bangladesh at all levels. However, around 18 percent of children ages 6-11 remain out of school – either having never enrolled or dropped out before completing grade 5. Socio-economic issues coupled with less women-friendly environment at the post-secondary level also marks slow gains in female labor force participation.

    Due to high level of early drop outs in Bangladesh in previous years cumulative size of youth who are Not in Education, Earning or Training (NEET) with less than primary education is estimated at around 12 million at this moment, most of whom are women from rural areas. Bangladesh is actively aiming at providing non-formal education and basic skills development to support to this group including basic knowledge on hygiene practices, social coherence, road safety, economic opportunities and so on.

    The World Bank is playing a role in training Bangladeshi youth for jobs through its skills, higher education and college financing projects. The country is gradually overcoming the issue of equitable access and quality at the post-secondary level with a combination of policy change and participation of the private sector. But more policy initiatives from the government and development partners would be critical for quality education access to all.

    Government spending on education has ranged between 2.2%-2.4% 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 and vocational education and training, and education for the hard-to-reach children.

    The World Bank is supporting the Government respond to the COVID-19 impact and build back a better and resilient education system through new and existing operations. These operations support remote learning, safe school reopening, student learning assessment and remedial education, enhancing digital connectivity and capacity building for better prepared school teachers and management at local and central levels.

    Health, Nutrition and Population

    Bangladesh has embraced the Sustainable Development Goals (SDGs), including SDG 3, encompassing universal health coverage. Progress on maternal and child health and nutrition, as well as fertility, has been better than would be expected given Bangladesh’s low level of public expenditure on health. While there is some evidence that improvements in maternal and infant mortality have slowed recently, reductions in child malnutrition have been faster than elsewhere, although on average one-third of children are stunted. Thus, there is a significant unfinished agenda for improving basic primary health, nutrition and population (HNP) services.

    While many service utilization indicators, such as immunization coverage, have reached high levels, it is necessary to maintain those gains, achieve still higher coverage, improve quality, and reduce socio-economic and geographic inequalities.

    At the same time, as it transitions to a middle-income economy, the country needs to address rapid increase in Non-Communicable Diseases, and possible social and economic shocks caused by emerging infectious diseases such as the ongoing COVID-19, very low public spending on health, governance, and quality of health services.

    The World Bank is aligning financing and technical support to Bangladesh in order to meet these challenges. The Bank supports the government’s fourth HNP sector program for the period 2017-22, strengthening health system governance and management capacities, and delivery of  essential services, with a focus on the lagging regions of Sylhet, Chittagong and Barishal Divisions. With financing from IDA, the Global Financing Facility (GFF), Sweden, the Netherlands, the United Kingdom, Canada, and Gavi, the Vaccine Alliance, the Health Sector Support Program contributes $700 million to the government’s program. The GFF is fostering collaboration between the HNP and education sectors to improve adolescent health and nutrition.

    In addition, the World Bank is working with the government of Bangladesh through the Health and Gender Support Project for Cox’s Bazar District and the Additional Financing for Health Sector Support Project to provide essential health services, education, and life skills training, and basic services for the one million displaced Rohingya and the host communities in Cox’s Bazar, one of Bangladesh’s poorest districts.

    The COVID-19 Emergency Response and Pandemic Preparedness Project is helping selected health facilities and laboratories to detect, manage and treat suspected and confirmed COVID-19 cases, support screening in Bangladesh’s designated health facilities and entry points. The Bank has recently approved an additional financing for the COVID-19 Emergency Response and Pandemic Preparedness Project for procurement of COVID-19 vaccines and strengthening the health systems for COVID-19 vaccine deployment and population vaccination.

    Rural Infrastructure

    IDA has been a major partner in the development of Bangladesh’s rural infrastructure, having funded three consecutive rural road improvement projects. By improving the livelihoods of rural women, around 820 km of Upazila and Union roads have been improved along with maintenance of almost 4,500 km rural roads in 26 districts, as well as dredging of 46 km of rural waterways.

    Additional financing will also promote road safety engineering measures and community road safety campaign in project districts. All these activities have improved safer access to schools and health facilities, reduced transport costs, increased rural non-farm incomes, and generated employment in project areas, for both women and men.

    Further, IDA support has helped build piped and non-piped water sources that provided safe and arsenic-free water to nearly 1.48 million beneficiaries including 1.38 million beneficiaries who gained access from non-piped water points. Water connections were created for 21,802 households, resulting in an estimated 98,109 people gaining access to safe water through new piped schemes. A total of 20,475 deep tube wells, rain water harvesting structures, pond sand filter and ring wells were constructed. In addition, 247,500 10,24,090 people received improved sanitation access from 55,000 new latrines.

    The Bangladesh Rural Water, Sanitation and Hygiene for Human Capital Development Project will help about 600,000 people avail safe and clean water through large and small piped water schemes in rural areas. It will also provide access to improved sanitation services to over 3.6 million rural people.

    Energy

    Bangladesh has made considerable headway in increasing access to electricity and power generation capacity. The access to electricity reached to 97% (grid and off-grid) and the current installed generation capacity has increased to 23,548 MW including captive power and renewables. However, the sector is still facing challenges in ensuring reliable power supply mostly because of distribution breakdowns, inefficiency related to aged system and inadequate transmission and distribution networks. In the last decade, energy demand in Bangladesh has increased on an average of 10 percent per annum.

    The World Bank has $1.83 billion of ongoing support in the energy sector to enhance capacity, generate clean energy, improve efficiency in generation and transmission & system operation, reduce technical losses, improve transmission and rural distribution network as well as increase access to both grid and renewable electricity. IDA support has so far added 2,652 MW electricity to the national grid, and 181 MW in off-grid areas through installation of solar home systems, solar irrigation pumps, solar mini-grids and installed more than two million improved cookstoves. Another 310 MW capacity will be added to the national grid through ongoing grid-tied solar projects.

    The World Bank- IDCOL Solar Home System Program was the world’s biggest access to energy program. About 14 percent of Bangladesh, or 20 million people, obtained electricity services through the SHS Program. 

    Bank has also been engaged in promoting power sector policies and institutional capacity building 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.

    The COVID-19 pandemic brought down the demand for electricity initially. The Bank remains strongly engaged with the sector to build back better.

    Agriculture

    Despite high population density, decreasing arable land, and frequent natural disasters, Bangladesh has made remarkable progress in achieving food security and reducing poverty. Agricultural production value has increased faster than most of the country's regional peers at 3.54% per year in the two recent decades (1999-2019). However, self-sufficiency is continuously threatened by a decrease of arable land by 0.4% per year, an increasing population, and declining output growth with the share of agriculture in total GDP decreasing from 22.7% in 1999 to just 12.7% in 2019. This has contributed to a decline in employment growth and to a slowdown in poverty reduction.

    The major challenges that contributed to the recent slowdown in agricultural growth include the lack of agricultural diversification, rice-focused agricultural policies, poor logistics and transportation, limited processing and commercialization, weak food safety and quality regulations, recurrent natural disasters and climate change negative effects. The COVID-19 pandemic has affected Bangladesh agriculture, especially non-crop sectors (such as dairy, poultry and fish farming), but the aftermath could spur policy change and innovation to build back better and improve Bangladesh’s resilience and participation in global value chains.

    The World Bank’s strategic framework in Bangladesh aims to support the government of Bangladesh towards climate resilient diversification, value addition for greater job creation, entrepreneurship and more efficient food systems. The World Bank is helping over 1 million rural households modernize farm practices and use new climate smart technologies and 2 million household farmers, small and medium-scale agro-entrepreneurs to improve livestock production sustainably, with higher productivity and better market access. Simultaneously, the World Bank supported 500,000 households to increase grain reserves to meet their post-disaster needs, and is helping the country improve the quality and efficiency of grain storage management.

    The World Bank is helping Bangladesh address food insecurity in challenging times, such as frequent climate-induced disasters or crisis situations like the current COVID-19 pandemic. For example, the Modern Food Storage Facilities Project is increasing the storage capacity of Bangladesh’s national strategic grain reserves by 535,500 tons for 4.5 million households. During the COVID-19 crisis, the Livestock and Dairy Development Project has activated one of the largest Contingent Emergency Response (CERC) in World Bank history to help business continuity for 620,000 among the most vulnerable households in the livestock sector. 

    Climate Change

    Bangladesh’s geographical position renders it especially vulnerable to the adverse impacts of climate change. The Global Climate Risk Index ranks Bangladesh as the world’s seventh most affected country over the period 2000-2019 (Germanwatch 2021). The estimated average annual losses of Bangladesh to disaster is at around US $3 billion, or around 1-2 percent of GDP (UNISDR 2014). 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 continues to help Bangladesh address climate change impacts and disaster risk management. The country has 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 US$1.3 billion supporting Bangladesh to build resilience against natural disasters and climate change impacts. Key interventions so far include - more than 1,100 repaired or newly constructed multi-purpose disaster shelters, over 350km of climate-resilient roads built for last-mile connectivity, rehabilitation of more than 700km of embankments, restoration or construction of over 440 hydraulic structures for sustainable water management, and 340 ha in 9 coastal polders afforested with 331,500 seedlings, following a social afforestation approach. All of these are benefiting more than 5.5 million people in climate-vulnerable coastal Bangladesh.

    Moreover, 37,000 hectares of block plantations and 3,000 km of strip plantations have been completed in climate vulnerable areas with additional 60,000 hectares of plantations in the pipeline in coastal and hilly areas to increase climate resilience. Around 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 and currently further 180,000 individuals of 600 forest dependent villages are receiving similar support. In addition, 65,000 poor climate vulnerable coastal fisher families in 450 fisher villages are receiving livelihood support, training and credit and 600 shrimp farming clusters will be supported with climate smart technology market linkages. 

    During the COVID-19 pandemic, the Bangladesh Sustainable Coastal and Marine Fisheries Project also mobilized funding for cash transfer to 78,000 fish farmers.

    Local Governance

    Local government institutions in Bangladesh traditionally had a limited role in delivering services to their citizens due to limited responsibilities coupled with 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 (the lowest tier of elected local government). The block grant enables Union Parishads to decide and spend on local priorities. Since 2006, the discretionary funds that a Union Parishad receives annually has grown by more than ten-fold and has benefitted 130 million people.

    Hundreds of community schemes generating employment for the poor have been implemented, including construction or rehabilitation of rural roads, culverts, drainage and embankment systems; water and sanitation facilities; and schools and clinics. Thirty percent of the schemes are women-preferred schemes. Under the ongoing third project, IDA is assisting to institutionalize the block grants with the government’s own resources and supporting a pilot for an urban fiscal transfer system in 16 municipalities, to be scaled-up across all Urban Local Bodies through future World Bank operations.

    Last Updated: Mar 29, 2021

Api


LENDING

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

*Amounts include IBRD and IDA commitments

MULTIMEDIA



Additional Resources

Country Office Contacts

Plot E 32
Sher-e-Bangla Nagar,
Agargaon, Dhaka 1207,
Bangladesh
(880-2) 5566-7777
bangladeshinfo@worldbank.org