WASHINGTON, DC, July 8, 2010 – The World Bank’s Board of Directors today endorsed a new Country Assistance Strategy for Bangladesh for the period FY2011-14. The new strategy is aimed at supporting the Government’s vision of rapid poverty reduction and middle income country status within the coming decade, as articulated in the Second National Strategy for Accelerated Poverty Reduction.
World Bank Executive Directors commended Bangladesh for a strong track record of over 6 percent economic growth in recent years, as well as sustained poverty reduction and human development over the past two decades. The country has made large strides toward achieving Millennium Development Goals for infant and child mortality, and has already met the goals for gender parity in education and primary school enrolment. Nonetheless, Bangladesh continues to face daunting development challenges, with around 55 million people below the poverty line and two out of five children suffering from chronic malnutrition. To reduce the population share living in poverty from 40 to 15 percent and to reach middle-income country status by 2021, Bangladesh will need to sustain growth of at least 8 percent per annum.
The new Country Assistance Strategy will support Bangladesh’s ambitions by contributing to accelerated, sustainable and inclusive growth, underpinned by stronger governance at central and local levels. The strategy proposes support for technical analysis of key development issues, as well as record lending for Bangladesh, totaling more than USD 6 billion in four years, based on continued strong country performance.
“This new country assistance strategy proposes a doubling of financial support for Bangladesh relative to the FY06-09 strategy,” said Ellen Goldstein, World Bank Country Director for Bangladesh. “To deliver this higher volume of support most effectively, we will work with government to shift to larger, more strategic interventions that enhance selectivity and leverage priority reforms and investments. We will seek to scale up projects and programs that have demonstrated measurable results and a high degree of country ownership.”
With respect to the first priority of accelerating economic growth, Bangladesh will need a major increase in infrastructure investment and a more conducive business environment. The Bank will ramp up investments in infrastructure, including power and gas. The new strategy includes the USD 1.2 billion support for the Padma Multipurpose Bridge, a top priority of Government to unlock the economic potential of the lagging Southwest Region. “We will also increase support for reforms to attract higher levels of private investment, working closely with the International Finance Corporation (IFC), the private sector arm of the World Bank” added Goldstein.
Mr. Shamsher G. Singh, Acting Regional Director for South Asia at the IFC, stated: “Jointly with the Bank, the IFC will continue to provide advisory support for reforms that would lead to a better business environment while exploring opportunities to expand its investment portfolio, including in infrastructure, energy, and agribusiness. IFC will also provide assistance to establish special economic zones, improve access to finance (especially for micro-, small- and medium- enterprises), help private entrepreneurs address the effects of climate change, and support Government's efforts to strengthen the public-private partnership (PPP) framework."
To ensure sustainable growth, the CAS aligns its support to address the country’s vulnerability to climate change. It includes interventions in water resource management, agricultural adaptation, environmental protection and disaster preparedness to reduce environmental degradation and vulnerability to climate change and natural calamities.
To promote more inclusive growth, the CAS will focus on improving delivery of social services. The Bank will continue supporting sector wide approaches with other development partners in primary education and health, population and nutrition services, as well as expansion of targeted social assistance. It will also support vocational training and skill building appropriate for both domestic and external labor markets.
To foster greater accountability, the Bank will support government’s commitment to decentralized service delivery and strengthening of domestic accountability at central and local levels. Such improvements will also be critical to sustaining and accelerating growth and maintaining the pace of poverty reduction.
A cross-cutting dimension of the new strategy is fostering regional cooperation. The Bank Group will build on opportunities for enhanced cooperation particularly in cross-border infrastructure networks and management of common natural resources.
The new country assistance strategy builds on the World Bank’s current portfolio of 25 active projects, with a net commitment of USD 3.2 billion. To prepare this new strategy, the World Bank held extensive consultations in four locations around Bangladesh with major stakeholders including Government, the private sector, civil society, media and other development partners. These consultations shaped a clear results framework which will serve as a basis for regular monitoring of progress towards expected results and of the contribution of the World Bank Group to priority development outcomes during the next four years.