Dear members of the media, colleagues and other stakeholders:
· Welcome to the launch of the Spring 2019 edition of the Bangladesh Development Update: Towards Regulatory Predictability. The report provides an assessment of the economy, outlook, risks, and key reform challenges and opportunities. The special focus of this update is on regulatory predictability.
· Bangladesh continues to be one of the fastest growing economies in the world. Robust growth in the industrial and services sectors, supported by higher public and private consumption, boosted growth. After the modest performance during fiscal year 2018, export earnings so far this year from ready-made garments expanded by double digits, and non-garment exports also bounced back. Officially recorded remittances have been robust, sustaining consumption and helping the rural economy grow faster. Inflationary pressures have been contained. Overall macroeconomic stability has been maintained. The government kept the budget deficit below 5 percent of GDP and the debt to GDP ratio is well within sustainability thresholds.
· As highlighted in the report, however, sustaining rapid economic growth to meet Bangladesh’s development aspirations will require significant reform efforts, including increasing the predictability of regulation. Initiatives are needed to address several challenges, particularly in boosting private investment and diversifying exports. The banking sector is struggling with non-performing loans, and private sector credit growth slowed. Domestic revenue mobilization is well behind target so far this year.
· Bangladesh’s low rankings on indices of competitiveness, logistics, and the ease of doing business point to the need and opportunity for major improvement. Lowering barriers to investment by ensuring financial stability, strengthening revenue mobilization, improving infrastructure, investing in human capital, and enhancing the effectiveness and predictability of regulation are critical for sustaining jobs and productivity growth.
· Reform initiatives are also needed to continue Bangladesh’s extraordinary trajectory of reducing extreme poverty, which fell from 31.5 percent in 2010 to 24.3 percent in 2017, according to the most recent Household Income and Expenditure Survey. Despite strong progress, some of the drivers of poverty reduction appear to be weakening, and vulnerability remains a concern.
· In this context, Bangladesh has shown remarkable generosity in sheltering and providing for the basic needs of nearly one million Rohingya in two of the poorest Upazilas in Cox’s Bazar. Reaching the poor with better public services and opportunities, caring for the Rohingya as long as needed, and mitigating vulnerability remain top priorities.
· The World Bank Group is committed to the continued development progress of Bangladesh. For example, we are supporting the government’s policy and institutional reform efforts aimed at strengthening job creation and underpinning inclusive growth through a $750 million, three-year program of Development Policy Credits (the first in a decade). Measures supported by the program include operationalizing the One-Stop-Shop Act, modernizing the customs regime, improving the efficiency and accessibility of the Special Bonded Warehouse system, bolstering the pension system, strengthening relevance and coordination of skills development, expanding services to overseas migrants, and increasing access to child care for working women.
· To help Bangladesh care for the Rohingya and mitigate the impact on host communities, the World Bank mobilized nearly half-a-billion dollars on grant terms, of which $240 million has already been committed. Ongoing projects are bringing another $200 million in support to the Cox’s Bazar district to enhance disaster resilience, build basic infrastructure, strengthen social protection, improve collaborative forest management, and increase income generation opportunities for the host communities.
· The World Bank Group’s relationship with Bangladesh continues to deepen. We are the largest development partner in Bangladesh, providing more than $30 billion in grants and interest-free credits since independence. Bangladesh is fully utilizing its IDA18 core country allocation and accessing different IDA windows for additional financing, and now has the largest IDA program totaling $12.6 billion in commitments.
· Let me close by reiterating our continued support with results-oriented projects and quality technical assistance, as well as advisory work, like the Bangladesh Development Updates, based on evidence and rigorous analysis.