Written evidence submitted by the Department
for International Development
ACRONYMS
|
| AL | Awami League |
| BNP | Bangladesh National Party
|
| BRAC | Building Resources Across Communities (formerly Bangladesh Rural Advancement Committee)
|
| CDMP | Comprehensive Disaster Management Programme
|
| DAC | Development Assistance Committee
|
| ERD | Economic Relations Division, Finance Ministry
|
| JCS | Joint Cooperation Strategy
|
| MDTF | Multi-Donor Trust Fund
|
| SME | Small and medium sized enterprise
|
|
EXECUTIVE SUMMARY
1. Bangladesh is one of the most densely populated countries
in the world, with more than 142 million people living in
a country the size of England and Wales. Bangladesh has made significant
progress in reducing poverty in recent years, but the challenges
remain significant. Some 110 million people survive on less
than $2 a day. Almost 15 million are extreme poor, living
on the equivalent of about 20p a day. 67 million people (47% of
the adult population) are illiterate—42 million of
whom are women. More than 12,000 women die each year (more
than one every hour), due to avoidable complications of pregnancy
and childbirth. Climate change will lead to sea level rises, more
extreme and less predictable weather patterns, more severe flooding,
drought, and more intense cyclones and tidal surges.
2. Successive Bangladesh Governments have signalled their
commitment to reducing poverty, as laid out in Poverty Reduction
Strategies since 2005. Politics and weak governance remain obstacles
to more effective poverty reduction. Economic growth is its main
driver but growth is not automatically translated into reductions
in poverty, let alone inequality. The new Government's vision
is for Bangladesh to attain Middle Income Country status by 2021.
Making the vision a reality will require significant investment
in basic social services, skills for better paid jobs, and an
expanded power supply.
3. These challenges closely reflect the issues presented
in the UK Government's recent White Paper, Eliminating World Poverty:
building our Common Future (Cm 7656). In Bangladesh, there are
strong links between climate change, economic prosperity and security
and strength of democracy. Moreover, making further progress against
the MDGs in Bangladesh will require even more effective and coherent
international aid.
4. The UK Government is the largest bilateral grant donor
to Bangladesh. We have spent almost £470 million over
the last four years, directed at reducing extreme poverty; improving
access to and quality of basic health, education and water services;
supporting private sector development and jobs for the poorest;
and improving governance.
5. Specific achievements include: 10,000 more classrooms
and 14,000 new primary teachers recruited; one million boys
and girls provided basic schooling through NGOs; one million extremely
poor people (90% women) helped to improve their livelihoods; more
than two million people provided with clean drinking water, and
nine million with access to sanitation; four-fifths of children
fully vaccinated, leading to a halving of under five deaths; and
more than 180,000 jobs created, mostly for unskilled labourers
who had been living on $1 a day.
6. The new Country Plan, launched in July 2009, outlines
how UK aid will help Bangladesh reduce poverty and live with climate
change, aligned with the Bangladesh Government's national priorities.
Future bilateral aid allocations are £125.14 million
in 2009-10, and £150 million in 2010-11.
7. This will deliver progress towards the Millennium
Development Goals, particularly MDGs one (poverty and hunger);
two (primary education); and five (maternal health). We will work
towards more effective delivery of aid, particularly through the
key multilateral organisations and across the system. The development
programme also contributes to wider HM Government priorities,
including improved democracy, reducing the risks of radicalisation,
and helping Bangladesh play a constructive and active role in
the region and beyond.
KEY QUESTIONS
1. The appropriate size and scope for DFID's programme
in Bangladesh?
1.1 The UK development budget for Bangladesh is £125.14 million
for 2009-10 and £150 million for 2010-11. Allocations
in later years will be determined after the next Comprehensive
Spending Review. Commitments to existing programmes, typically
multi-year, total about £1 billion.
1.2 Country allocations are informed by DFID's resource
allocation model, which assesses relative country need and governments'
policy performance in reducing poverty. Allocations also take
account of other donor flows, effectiveness of past aid, competing
demands on the aid budget, and strategic choices about type of
funding mechanism (bilateral, multilateral, global). Bangladesh
is not aid dependent, with aid accounting for only 2.2 %
of GDP. But it is equivalent to just under half of the Government
of Bangladesh's annual development programme.
1.3 Bangladesh clearly warrants continued high levels
of UK grant aid, given the high incidence of poverty, population
and climate change pressures; strong policy commitments to tackling
poverty and inequality; and effectiveness of previous UK aid.
That said, we aspire to improving the effectiveness, efficiency
and impact of UK aid to Bangladesh.
1.4 The Government of Bangladesh's National Strategy
for poverty reduction and the UK's recent White Paper set the
framework and priorities for the UK development programme. UK
aid is focused on improving quality of basic services, private
sector, governance, and tackling extreme poverty. Improving the
economic and social status of women and girls is a priority throughout
our programme. To improve the effectiveness of our operations,
and the efficiency of DFID itself, the number of discrete projects
has been more than halved over the past four years. Instead, programmes
are designed and implemented in conjunction with other donors,
through challenge funds managed by third parties (allocating grants
to implementing agents), and through pooled funds.
1.5 In 2005, the UK formed a Joint Strategy Partnership
with the Asian Development Bank, World Bank and Japan—representing
some 80% of aid flows to Bangladesh at the time. This included
a shared results framework, coordination on policy dialogue and
some shared/joint programmes. A joint evaluation in 2008 found
that the Partnership had made some progress in improving aid effectiveness;
but there was scope to do more. Aid effectiveness across the system
is limited by fragmentation amongst donors, and geographical concentration
of projects and programmes in certain areas. We are following
up the findings in the context of a new Joint cooperation Strategy
approach, with government and 14 other bilateral and multilateral
partners.
1.6 The Country Plan launched in June sets out the strategic
direction for the UK aid partnership with Bangladesh for the next
five years. There is a sharper focus on improving governance,
improving basic social services, supporting private sector growth,
and helping climate change adaptation. Improving the status of
women and girls will remain a key theme of all our work.
1.7 Over the next six years, our support will have helped
lift 6.5 million people out of extreme poverty and eliminate
seasonal hunger. Four million pregnant women will have been looked
after by skilled birth attendants. Five million more Bangladeshis
will be registered as taxpayers, increasing government revenue.
Four million more children will have completed five years of quality
basic education. And 15 million poor people will be better
prepared to adapt to and deal with the impacts of climate change.
Public financial management will be stronger, and democratic institutions
stronger, with more vibrant democratic debate.
1.8 The UK development programme is one key element of
the UK Government's work in Bangladesh. DFID is directly engaged
on HMG priorities of supporting and strengthening democracy, governance,
prosperity and tackling Climate Change. We work closely with other
UK Government departments as part of HMG's overall engagement
with Bangladesh. High quality joint economic and political analysis
informs all elements of HMG work. A joint British High Commission
and DFID Bangladesh Communications team offers novel opportunities
for strong cross HMG working and presentation of UK's partnership
with Bangladesh.
2. DFID's support for more effective governance and institution
building in Bangladesh
2.1 Better government is key to poverty reduction. The
UK is helping to strengthen important government capabilities—to
manage public finances, collect revenue, ensure security and access
to justice, and deliver basic health and education. We are helping
to strengthen government accountability through support to the
Election Commission and Parliament. We support civil society advocacy
for improved government accountability and transparency. We also
work with NGOs to ensure basic services reach the poorest, to
supplement and support government services. We work closely with
the US on political participation; with the UN and EC on security
and access to justice; and with the World Bank on public financial
management and civil service strengthening.
|
| (£ million) | Last 4 years
| 2009-10 | 2010-11
|
|
| Media and elections | 13.4
| 6.2 | 2.2
|
| Public financial management | 9.9
| 4.0 | 3.0
|
| Tax administration | 5.9
| 0.1 | 1.0
|
| Civil service strengthening | 4.6
| 2.5 | 3.0
|
| Police reform/justice sector | 10.7
| 0.1 | 3.5
|
| Civil society voice | 17.4
| 7.5 | 8.1
|
| Total | 61.9
| 20.4 | 20.8
|
|
2.2 UK support to the Election Commission contributed
to free and fair elections in 2008. We provided £16 million
(about one-third) of donor funding for an accurate electoral roll
with photographs, which registered over 81 million voters,
including those in remote places. Voter turnout was an unprecedented
80%. Over the next five years, with the US and EC we will provide
funding and technical advice to the Election Commission, Parliament,
political parties and civil society to ensure poor people are
adequately represented, legislation fully scrutinised, and government
held to account. This is designed to achieve a substantive increase
in public confidence in politics, more membership and constituency
voice within political parties and parliament, and further free
and fair local, regional and national elections.
2.3 The UK does not provide direct budget support as
fiduciary risks remain substantial and the risk of corruption
remains high. We are helping to build government systems and capacity,
and include financial safeguards in all operations. With the World
Bank and other EU donors, we are providing technical support to
public financial management. Over the past five years, we have
supported financial planning in 20 line ministries; this
will be extended to all 45 ministries and agencies over the
next five years. We have supported the computerisation of the
budget across the whole of government. Further, we have helped
ensure the government budget is more responsive to the poor and
sensitive to gender issues.
2.4 UK-funded technical assistance to the National Board
of Revenue has helped raise government's tax revenue by strengthening
and simplifying arrangements for collection of tax from larger
taxpayers. But much remains to be done. We will fund further technical
assistance to increase the number of registered taxpayers from
three million to five million by 2014.
2.5 We are also supporting the Ministry of Establishment
to address a lack of skills and capacity across government. Out
of a total of 4,100 civil servants in the administration
cadre, UK-funded support has already trained over 800 and
will target a total of 2,000 senior staff across all departments.
The programme also addresses other problems that undermine government
performance such as frequent staff rotation and weak performance
management.
2.6 Many people in Bangladesh experience insecurity.
Crime prevention, deterrence and justice mechanisms are weak.
The lowest tier of Bangladesh's justice system only operates effectively
in around 10% of the country, and NGO delivered community legal
services are only available in about 35% of the country. UK-funded
technical assistance over the past three years has helped the
police improve its organisation and their sensitivity to community
needs. This has contributed to more positive perceptions about
the police, highlighted by a 70-90% increase in the willingness
of the public to report crimes and ask for help, albeit from a
low base. Over the coming five years, the UK and other donors
will support government development of a national justice strategy,
to lay the foundations for more accessible justice. In the shorter
term, we will provide funding for local civil society organisations
that is expected to benefit over 400,000 people through community
legal aid clinics, and support 3,000 victims of domestic
violence and human trafficking through victim support shelters.
3. DFID's strategy for reducing poverty and inequality,
including gender inequality
3.1 We are supporting Bangladesh to reduce poverty through
four core strands of work: (i) providing direct support to the
extreme poor, through safety nets and help with increasing incomes
and assets, allowing people to taking greater control of their
lives and offering a route out of the poverty trap; (ii) improving
provision of basic education, health, water and sanitation, and
skills; (iii) providing technical/policy advice to government;
and (iv) supporting private sector development— including
jobs for the poorest, a more enabling business environment, better
access by small enterprises to finance, improvements to the banking
system for remittances (on which many poor families depend)—to
help stimulate growth.
3.2 Social exclusion is tackled through improving access
to livelihoods, assets and basic services for the poorest and
excluded groups. Specific support is provided to the poor, including
members of minority groups, on issues of land access and human
rights. Gender inequality is being tackled in three ways: (i)
policy dialogue with Government, other donors and civil society;
(ii) targeting through specific programmes, with sex disaggregated
data to track progress; (iii) improving/helping with gender budgeting.
Targeting the extreme poor
3.3 The extreme poor cannot work their way out of poverty
without an initial investment. We provide assets such as a cow,
goat, chickens or seeds, with which they can begin to build their
livelihood. Such assets are shown often to double in value within
a year. We also facilitate access to basic services and engagement
in community dialogue on key development issues. Government support
is not yet reaching many of the poorest, so a key element of our
approach is advocacy for greater service provision, and the provision
at scale of social safety net programmes based on our successful
models.
|
| (£ million) | Last 4 Years
| 2009-10 | 2010-11
|
|
| Rural poverty reduction | 70.0
| 29.5 | 38.0
|
| Urban poverty reduction | 5.0
| 4.0 | 7.0
|
| Challenge fund for innovation | -
| 1.25 | 2.0
|
| Lesson learning and sharing | -
| 0.28 | 0.22
|
| Policy support to government | -
| 0.28 | -
|
|
3.4 The UK, with Australia and Canada, is supporting
BRAC[21] to lift over
4.3 million people out of extreme poverty by providing productive
assets (usually in the form of livestock, seeds and tools, sewing
machines etc) plus training in their use, along with a small cash
stipend. The programme provides access to health care and brings
women together into community groups where they can discuss common
problems and work together to find solutions.
3.5 Over one million Bangladeshis, amongst the very poorest,
live on sandbank river islands (called Chars). Few have any access
to government services or protection against a high risk of severe
flooding. The UK has helped provide assets (usually in the form
of livestock) and cash stipends directly to 70,000 char women
over the past four years; and provided additional services such
as training in income generating activities like market gardening,
the establishment of saving and loan groups, veterinary services
and access to health, education, clean water and improved sanitation.
UK funding has also helped the local population raise 80,000 homesteads
above the high flood level, directly providing employment and
reducing the risk of meagre possessions being washed away in the
monsoon rain.
3.6 Through a Challenge Fund established in 2007, the
UK is supporting local and international NGOs to develop and scale-up
innovative approaches to tackling hunger, land reform, water and
sanitation, shelter and vulnerability to climate change. The programme
aims to help one million of Bangladesh's poorest and most vulnerable
people to lift themselves out of extreme poverty and build sustainable
livelihoods. A proactive programme of lesson-learning, communication
and advocacy is targeted at government, donor and NGO policies
and programmes.
3.7 Bangladesh is primarily an agrarian society with
over 80% of the population in rural areas. However rapid urbanisation
and the effects of the changing land patterns have led to predictions
that Dhaka will be a city of 30 million people by 2015. Urban
poverty is increasing in Bangladesh as people migrate to towns
and cities in search of employment. Most end up living in overcrowded
slums. This will strain already over burdened local services,
and lead to an increasing number of urban poor. Increased employment
opportunities and improved services will be essential. The UK
is supporting the formation of Community Development Committees
which are able to engage with municipal authorities to gain improved
access to basic services such as education and water/sanitation,
better housing and more secure land tenure. UK funding has provided
grants to keep children in schools, and apprenticeships for more
than 3,000 young people (48% young women).
Food and Agriculture
3.8 Forty-three million people (30% of the population)
suffer chronic food insecurity and are under-nourished. Seasonal
hunger—"Monga"—affects two million people
each year after the annual floods when agricultural work is scarce.
UK programmes directly targeting the extreme poor, as well as
education and health interventions, have a strong focus on food
and nutrition security. Technical support from UK and others recently
supported policy briefings design to inform stronger, smarter,
more strategic government food policy. This will encourage better
targeting of subsidies, improvements to government safety net
programmes, and stronger emphasis on nutrition.
3.9 Agriculture contributes 13% of Bangladesh's GDP and
employs around half of the population. Agriculture provides a
safety net for the majority of poor people but incomes are low,
and work is seasonal. Support to agriculture is incorporated into
our social protection, livelihoods and private sector programmes.
We provide assets, technical assistance and legal support, with
a focus on supporting single women-headed households and other
vulnerable groups. The UK also supports agricultural research
and the development of markets for small producers.
Health
3.10 Bangladesh has made significant achievements on
child health and is on track to meet MDG 4. But progress on improving
the health systems needed to achieve MDG 5 on maternal health
is lagging. Public health spending averages only US$12 per
person per year, against a WHO recommendation of US$34 minimum.
Governance problems, and a shortage of skilled health workers
outside of cities, reduce the efficiency and effectiveness of
the public health sector. Delivery of primary health care through
NGO networks reaches many, but building a sustainable government
health system is essential if MDGs are to be met.
3.11 The UK is following a twin track approach, strengthening
government services and supporting NGO provision of primary health
care. NGOs are the only health service provider in many areas.
A key focus of our approach is to build the links between government
and NGO systems.
3.12 The government's five-year Health, Nutrition and
Population Sector Programme (multi-donor trust fund; UK £132 million
2005-11) is achieving results. We have seen improved coverage
of basic services, with significant, sustained improvements in
immunisation, TB detection and treatment, and Vitamin A distribution.
There are early indications that a pilot voucher scheme for pregnant
women is significantly increasing access to maternity care through
skilled birth attendants at home and in health facilities.
3.13 We have reached 9.4 million poor people in
urban areas through a maternal health programme implemented by
UN agencies. This has renovated obstetric facilities and improved
access by ensuring that skilled birth attendants are there around
the clock. We have improved home based maternal and child care
by training community birth attendants on when and how to get
women to hospital if a life-threatening situation develops. In
pilot areas, this is a crucial link directly to the government
voucher scheme mentioned above.
|
| (£million) | Last 4 years
| 2009-10 | 2010-11
|
|
| Government health systems | 51.9
| 12.0 | 11.5
|
| NGO direct provision | 0.5
| 1.5 | 2.0
|
|
| Education and Skills Development |
3.14 Progress towards MDG 2 on universal primary
enrolment and MDG 3 on gender equality is on track. However,
only 55% of children reach Grade 5. Education for children with
disabilities and from ethnic minority groups is still neglected.
Skill shortage is an obstacle to individual earning capacity and
national economic growth.
3.15 As for health, we are following a twin-track approach
by strengthening of government services over the longer term,
and funding NGO provision of education services to ensure poor
children get access now. The UK has committed £150 million
over eight years (2004-11) to support basic education. Our contribution
to the government's Primary Education Development Programme II
has provided basic education to over 600,000 children in
2008-09, recruited 4,000 teachers, and constructed 10,000 classrooms.
Low quality teaching is a major obstacle to learning and school
attendance. A key element of the programme is to strengthen teacher
training and teaching methodology. The UK also supports the country's
largest non-formal education programme, which provides basic education
to around one million girls and boys each year.
3.16 Our support to language and vocational skills training
has meant that over 10,000 urban slum children have received
general, technical and vocational education to improve their employment
prospects—on average doubling their incomes as a result.
English language skill training is an integral part of government
strategy of further integrating Bangladesh into the global economy.
|
| (£million) | Last 4 years
| 2009-10 | 2010-11
|
|
| Government education systems | 52.0
| 3.0 | 3.0
|
| NGO support for basic education | 32.0
| 15.0 | 3.5
|
| Skills development (inc English) | 11.0
| 14.0 | 12.0
|
|
| Water and sanitation |
3.17 Almost 100 million people in Bangladesh have
no access to improved sanitation and over 30 million are
without adequate supplies of safe drinking water. Naturally occurring
arsenic in groundwater threatens the water supplies of around
20 million people. Nonetheless the government has set itself
the ambitious targets of safe water for all by 2011 and sanitation
for all by 2013. UK approach focuses on direct provision of services,
training and education, and advocacy to improve the reach and
quality of public services.
3.18 UK support has provided more than 2.4 million
people with access to clean drinking water and 9.4 million
people with access to hygienic latrines. Training and education
has been provided to individuals and communities to adopt safer
hygiene practices (such as handwashing) that significantly reduce
health risks. We have supported provision of targeted technical
advice to Government, including the revision of the Government's
Sanitation Development Plan.
|
| (£million) | Last 4 years
| 2009-10 | 2010-11
|
|
| Government support for water, sanitation and hygiene education
| 16.7 | 4.0
| 8.0 |
| NGO support for water, sanitation and hygiene education
| 15.6 | |
|
|
| Inequality: gender and social exclusion
|
3.19 Tackling inequality and social exclusion are fundamental
to the development story of Bangladesh. Gender inequality is a
major obstacle to achieving poverty reduction and social equality.
The status of women and girls is low. Extreme poverty is higher
amongst women and in female-headed households. UK support particularly
focuses on challenging the formal and informal "rules of
the game" which marginalise women and other excluded groups.
3.20 Empowering women economically, through the provision
of basic services and through involvement in community leadership
and debate is a common thread throughout our programmes. Our extreme
poverty programmes specifically target women as the primary beneficiaries
who receive assets and stipends. A strong emphasis on tackling
maternal health ensures women's needs are prioritised within discussions
on health. Gender parity in primary enrolment has been achieved,
but challenges remain in ensuring girls attend and complete their
schooling. This is a key focus of our education programmes. Water,
sanitation and hygiene programmes specifically target women, who
tend to collect water and prepare food. Our support for public
financial management has established a budget data base that can
track government expenditure with a gender focus. The UK, with
Denmark, Sweden and Norway, is also supporting a major nationwide
MDG 3 Economic Empowerment of Women Media Campaign, raising
awareness and stimulating debate on gender equality and women's
empowerment issues.
3.21 UK supported NGO programmes have advocated for the
rights of excluded groups. Campaigns have contributed to Bangladesh's
ratification of the Optional Protocol of UN Convention on the
Rights of Persons with Disabilities in 2008; and the incorporation
of the issues of disabled and dalit rights in the election manifesto
of both national political parties for the first time in 2008.
Our partners have helped over 11,000 landless families receive
land rights to over 9,000 acres of government-owned land.
4. The management of climate change impacts and support
for disaster risk reduction
4.1 The impacts of climate change are not just an abstract
future concern for Bangladesh, they are a current reality. Climate
change and frequent natural disasters are a major threat to Bangladesh's
development progress and security. Sea level rise and changes
in rainfall could mean floods affecting up to 70 million
people annually, and droughts affecting 12 million people
annually, with parts of the country permanently inundated. Cyclones
and tidal surges that often hit the coast are likely to get more
intense and damaging.[22]
Bangladesh faces additional natural hazards, such as riverbank
erosion and sedimentation leading to water logging. It also faces
earthquake risks. High levels of arsenic in the groundwater pose
serious health risks to millions of people.
4.2 An integrated approach is therefore essential. Bangladesh
has demonstrated sustained political will to tackle the impact
of global climate change since the early 1990s, and has been a
vocal spokesman for affected developing countries.
4.3 Helping Bangladesh live with climate change is a
central plank of the UK development programme. We provided technical
support to help Bangladesh develop a 10 year Climate Change
Strategy and Action Plan, and we have supported the establishment
of a multi—donor mechanism (to which the UK has pledged
£60 million) to help implement the strategy. Support
to the government's Climate Change Cell has built capacity across
government and civil society, and produced influential climate
change research. With Denmark, the UK is supporting Bangladesh
climate negotiators to prepare for and participate in all UN climate
negotiation meetings, including the UN Convention on Climate Change
scheduled for December in Copenhagen.
4.4 We have also helped improve Bangladesh's capacity
for disaster risk reduction, planning and disaster management.
Major achievements include helping prepare the Disaster Management
Act and Action Plan; developing tools for community based risk
mapping and action plan development; helping vulnerable communities
build and repair embankments; protecting homes, livelihoods and
community areas from flooding; and piloting climate resilient
crops.
4.5 The UK is working with the government and the UN
system to improve post-disaster humanitarian response.
4.6 All DFID programmes have been assessed to identify
climate vulnerability. "Climate proofing" is now being
undertaken across the portfolio. Examples include vulnerable houses
in flood-prone areas being raised on plinths; the introduction
of a new cyclone resistant design for Government primary schools
(which can double as cyclone shelters) in vulnerable areas; a
study (currently underway) to assess vulnerability of health systems.
5. The role of community led initiatives in reducing poverty
and increasing access to basic services
5.1 Bangladesh possesses a strong legacy of community
led development and a vibrant NGO community. NGOs of global repute
such as BRAC and the Grameen Bank grew out of community led initiatives
and now represent some of the country's major service providers.
A key challenge is in ensuring that community led organisations
are genuinely responsive to the needs of the poor; and that NGO
provision of basic services are well linked to government systems.
5.2 A community led approach is central to much of our
work. We are working closely with communities, including through
civil society organisations, to help strengthen service delivery
and hold government to account. With UK support, the government
has developed mechanisms to help ensure greater voice and accountability
in the management of schools, or in the provision of pre and neo
natal health services. With other donors, we support BRAC's nationwide
programmes that provide basic education, health care, social protection
and income earning opportunities for the poor and vulnerable.
5.3 Community level groups play a key role in raising
awareness of rights. There are already many examples of groups
working together through our support to prevent early marriages,
domestic violence, and to advocate for important issues such as
equal wages and recognition of land rights. UK-funded work to
strengthen political participation will work directly with civil
society, amongst others, to ensure the voices of poor people are
fully reflected in political life. UK supported work on police
reform and accessible justice will strengthen the community focus
of the police, the provision of legal services within the communities,
and raising awareness of rights through community groups.
5.4 UK-funded programmes themselves rely on community
organisation and leadership for much planning and implementation.
Local committees play a key role in identifying beneficiaries
for livelihoods support, establishing priorities, and agreeing
how communities can contribute to their own development. Discussions
on water and sanitation, education, health, income generation,
savings or micro finance take place in these committees at village
level.
6. Growth and Private sector development
6.1 Bangladesh has the potential to become a Middle Income
Country within 20 years, if growth can be increased from
5-6% p.a. to 7-8%. Constraints to growth include a shortage of
power for industries, a poor investment climate, limited access
to finance, and a low skills base. Population growth also puts
stress on the job market, with two million young workers joining
the labour force every year.
6.2 The UK's approach is to address some of the critical
constraints that inhibit the growth of business, and thus the
creation of additional jobs, by: (a) improving the general conditions
for doing business; (b) providing access to finance; and (c) improving
the competitiveness of micro, small and medium enterprises. There
is also a strong focus on ensuring that economic gains be translated
into significant reductions in poverty.
6.3 With UK support, the Bangladesh Investment Climate
Fund has simplified licensing procedures for export-oriented companies,
resulting in a net savings of over £1,000 every year
for each firm. The South Asia Enterprise Development Facility
has established monitoring mechanisms for industry-wide social
standards compliance for the ready-made garments sector, affecting
three million workers, of whom 80% are women.
6.4 We have also enabled more than 450,000 extremely
poor people to receive financial services. More than 400 microfinance
institutions have been brought under a new regulatory framework
to ensure depositors' safety. Accredited training has begun for
workers in all microfinance institutions. Regular seminars and
discussion sessions have begun to bring key microfinance issues
to the limelight. More than 150,000 SMEs have been given
help to access finance to start or expand their businesses.
6.5 The UK is also supporting the Bangladesh Bank to
simplify the remittances transfer mechanisms, and modernise the
national payment system. The programme has already raised awareness
about the importance of migrants' remittances to the Bangladeshi
economy (worth around six times development assistance flows).
Commercial and government banks, previously ignoring migrant communities
have now been encouraged to provide products appropriate for this
untapped customer base so that they use formal banking/remittance
channels as opposed to informal systems.
6.6 With Switzerland and The Netherlands, we support
a market development programme which has programme contributed
to the creation of more than 180,000 jobs, and improved market
access for 100,000 farmers.
|
| (£million) | Last 4 years
| 2009-10 | 2010-11
|
|
| Business environment | 6.80
| 2.70 | 10.80
|
| Financial services | 10.01
| 4.00 | 5.00
|
| Market development | 11.34
| 3.00 | 2.75
|
| Remittances and banking | 5.84
| 5.84 | 1.70
|
|
| August 2009 |
21
BRAC-largest Bangladeshi NGO, now operating internationally. Founded
in 1971. Building Resources Across Communities. Back
22
Over the last 20 years Bangladesh has been hit by six major
disasters (four floods and two cyclones) affecting millions of
people. In 1991 the cyclone alone killed 138,000 people.
In 2007 the combined flood and cyclone affected almost 15 million
people. Back
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