new bangladesh - world bank · 2016. 7. 8. · 1980 1985 1990 1995 2000 2005 2010 2015) national...

BangladeshCreating More and Better Jobs for Poverty Reduction

World Bank Group

Consultations for Country Partnership Framework

October 2015

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WB406484

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Bangladesh’s development track record

Key challenges

Findings from Systematic Country Diagnostic Transformational Priorities Foundational Priorities

World Bank Group – Current Support

Proposed Country Partnership Framework Objective and Key Features Areas of Focus and Results Framework Envisaged WBG support

Outline

Pace of GDP growth has risen by about 1 percentage point per decade

Development Track Record (1)

0.0

1.0

2.0

3.0

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5.0

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7.0F

Y8

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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FY

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Per

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ovin

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age)

GDP Growth Trend ( 5 years moving average)

GDP Growth Per-capita GDP Growth

1990s

Average GDP Growth 4.7%

Per Capita growth 2.6% 2000s

Average GDP Growth 5.6%

Per Capita growth 4.2%

1980s

Average GDP Growth

3.7%

Per Capita growth 1.0%

… leading to significant progress with poverty reduction in recent years


58.5

51.7

57.1 58.8

51.0

48.9

40.0

31.5

60.6

55.3

66.7

70.2

60.9

58.6

50.5

43.3

25

30

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70

75

1980 1985 1990 1995 2000 2005 2010 2015

Po

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rty H

ead

co

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ate

(p

erc

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National Poverty Line PPP$1.25 Poverty Line

Bangladesh’s human development achievements

Bangladesh performed better than expected since independence in 1971 It will partially achieve MDGs for poverty reduction and primary enrolment, and is on track for gender

parity in education, child mortality, maternal health, HIV/AIDs and tuberculosis This resulted from attention to health outcomes, primary education, family planning, and gender

equality (especially in education and workforce participation), supported by female grass-roots workers and organizers mobilized by the GoB and world-leading NGOs


Social indicators for Bangladesh, India and sub-Saharan Africa

Indicator Bangladesh India Sub-Saharan Africa

1971* 2011 1971* 2011 2011

GDP per capita (PPP$) n/a 1,883** n/a 3,876** 2,367

Life expectancy at birth 39 69 50 66 55

Infant mortality rate 150 37 114 44 69

Under-5 mortality rate 225 46 166 65 109

Total fertility rate 6.9 2.2 5.4 2.5 4.9

Access to improved sanitation (%) n/a 55 n/a 35 30

Mean years of schooling, age 25+ 2 4.8 2 4.4 n/a

Literacy rate, age 15-24 (%)

Female 27 80 40 [74] 65

Male 44 77 66 [88] 76

Prevalence of undernourishment

(%)35 17 27 18 25

Child immunization rates (%)

DPT 1 96 6 72 71

Measles 1 96 1 74 74

Notes: *or earliest available **2012; [..] estimate; Source: World Development Indicators

GDP per capita, PPP (current international $)

GNI per capita, PPP (current international $)

1980 2012 CAGR 1980 2012 CAGR

India 425 3870 7.1 430 3820 7.1

Sri Lanka 750 6146 6.8 760 6030 6.7

Indonesia 662 4876 6.4 640 4730 6.5

South Korea 2398 30011 8.2 2360 30180 8.3

Thailand 1075 9660 7.1 1070 9280 7.0

Philippines 1356 4339 3.7 1340 4380 3.8

China 253 9083 11.8 250 9040 11.9

Bangladesh 319 1851 5.6 310 2030 6.0

Source: WDI

Bangladesh has done well, but other countries did even better


*CAGR: Compound Annual Growth Rate

Infrastructure deficiencies pose serious impediments to growth

Ranking of Bangladesh in

Global Competitiveness

Indicators

2009 2010 2011 2012 2013 2014 2015

Rank/133 Rank/139 Rank/142 Rank/144 Rank/148 Rank/148 Rank/140

Overall Rating 106 107 108 118 110 109 107

Quality of overall infrastructure 125 130 129 131 134 130 124

Quality of port infrastructure 113 107 113 121 104 93 93

Quality of electricity supply 128 134 135 136 133 124 120

Mobile telephone subscription --- 126 127 125 128 128 119

Source: The Global Competitiveness Report (2008-2015)

Growth Constraints (1)

• Acceleration of the growth rate will require a substantial increase in the rate of investment

from the present level of 28.7 percent of GDP (FY14)

• Much of the higher investment will need to be deployed to reduce the infrastructure

constraint (primarily in the power and transport sectors)

• Bangladesh has potential to generate more productive job opportunities at home

• The availability and reliability of power supply is a key concern for businesses

• Only 31 percent of adults in Bangladesh have access to a bank account

Top-Most Concerns of Businesses in Bangladesh

Private sector continues to face binding constraints to job creation


Key governance and public sector challenges


• Divisive and confrontational politics can create policy uncertainty and impede efforts to

address critical problems requiring long-term engagement

• Bureaucratic red-tape and widespread rent-seeking impede growth and investment

• Many Bangladeshi institutions, established when the country was at much lower levels of

income, are not adequate for a country that joined middle-income status

o Many utilities do not operate on a commercial basis

o There is no integrated financial management information system

o State-owned commercial banks have recently been plagued with several financial scams

Bangladesh’s fluctuating CPIA rating

2.7

2.9

3.1

3.3

3.5

3.7

3.9

4.1

4.3

2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4

CP

IA S

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AT

ING

Economic Management

Structural Policies

Social Inclusion/Equity

Overall CPIA

Public Sector Management and Institutions

SCD Findings: More and Better Jobs Needed for Faster Progress on Twin

Goals

Jobs top the development agenda in Bangladesho Labor force growing by 3.1 percent per yearoOutput per worker nearly four times higher in industry, services vs. agriculture

o 45% of workforce in agriculture (which contributes 20% of GDP)o 34% in services (contributes 50% of GDP) o 20% in industry (contributes 30% of GDP)

o 21m people projected to enter work force 2015-2025

Effective public policy needed to help create jobs with higher value addition in the economy by:oRemoving binding constraints to growthoPromoting conditions for strong private sector-led growth job creation

SCD identifies priority areas of action for policymakers:o Transformational Priorities: key public policy areas where concerted action over

next 3-5 years could have marked impact on progress toward twin goalso Foundational Priorities: pre-requisites for faster job creation and growth--areas

where Bangladesh has done generally well and must sustain that progress

Systematic Country Diagnostic (1)

SCD : Transformational Priorities for Bangladesh

ENERGY

• Increase supply of electricity and natural gas.

• Diversify sources of power supply.

• Retire polluting and expensive emergency diesel generators.

• Eliminate energy subsidies (and resulting fiscal burden).

• Eliminate distorted market signals.

INLAND CONNECTIVITY & LOGISTICS

• Upgrade and integrate key transport corridors (esp. Dhaka-Chittagong highway).

• Improve management of Chittagong port.

• Revive inland water transport.

• Improve maintenance of existing assets.

REGIONAL & GLOBAL INTEGRATION

• Tap considerable potential to capture higher share of manufacturing jobs moving out of higher-income countries by reviving stalled trade reform agenda.

• Move up to higher value added manufacturing;

• Make migration more remunerative, affordable, inclusive, and safe.

URBANIZATION

• Improve urban competiveness and livability, especially for the poor (e.g. connectivity, efficient land use, public services).

• Reduce environmental externalities (air & water pollution).

• Promote agricultural productivity and diversification.

• Enhance long-term planning for better land and water use and natural resource management.

• Revitalize and strengthen key infrastructure to protect the population, reduce vulnerability, and secure growth


ADAPTIVE DELTA MANAGEMENT

SCD : Foundational Priorities for Bangladesh

MACROECONOMIC STABILITY & RELATED CROSS-

CUTTING CHALLENGES

• Achieve higher revenue mobilization through tax policy & tax administration reforms.

• Better implementation of Annual Development Program.

• Improve health of financial sector and enhance financial intermediation.

HUMAN DEVELOPMENT

• Reduce malnutrition

• Improve quality of public service delivery (including workforce skills).

• Increase public funding for health and moving towards universal health coverage.

• Extend coverage of social protection to urban poor.

INSTITUTIONAL & BUSINESS ENVIRONMENT

• Stronger institutions needed to:

• Manage larger and more complex economy,

• Meet aspirations of more diverse and heterogeneous population

• Ensure business environment is conducive to higher investment and growth.


Bangladesh Country Partnership Framework for FY16-FY20

Systematic Country Diagnostic

Country Partnership Framework

Performance & Learning Review

Completion & Learning Review

• Overarching goal is to create more and better jobs for Bangladesh.

• Unified across the World Bank Group. All CPFs are Joint.

• Bangladesh first country in South Asia to develop CPF

• For greater impact on achieving twin goals, CPF proposes selective engagement based on:Consistency with Government’s 7th Five Year Plan to ensure strong country

ownership;

Alignment with policy priorities identified in the SCD; and

WBG comparative advantage, taking into account knowledge and financing support provided by other development partners.

Country Partnership Framework (1)

Proposed Areas of Focus and Results Framework

• Improved access and quality of education (primary, secondary, tertiary)

• Improved access to quality health services

• Improved social protection coverage for the poor

• Enhanced income opportunities for the poor

Growth and Competitiveness Social Inclusion

• Increased resilience to natural disasters (urban/coastal)

• Improved water resource management for climate resilience

• Increased adoption of sustainable agriculture practice

Climate & Environment Management

• Increased power generation capacity & electricity supply

• Improved transport connectivity

• Improved delivery of basic services by local government

• Enhanced business environment for regional & global integration

• Increased financial intermediation

Governance & Institutional Strengthening Foundation

• Revenue mobilization and public financial management, at central and local levels• Public sector reform, including procurement, auditing and oversight


World Bank Group in Bangladesh

IDA has a portfolio of $8.3 billion and includes 36 projects

• About 40 percent of current program involves infrastructure

• In FY15, the World Bank board approved $1.92 billion new IDA financing.

• Since independence, IDA has committed nearly $20 billion in interest-free credits (40 year maturity, 10 year grace period)

• In FY15, IDA disbursements reached $882million.

IFC has a committed portfolio of $802 million

MIGA has $251 million of exposure

• Portfolio has grown expanded from $100M to over $800M over the past 5 years; number of projects grew to over 40.

• Bangladesh is one of IFC’s top 20 portfolios (by vol). • In FY15, investment commitments totaled $650 million • Bangladesh has IFC’s largest country-specific advisory programs, with focus on

investment climate, RMG sector safety and sustainability, inclusion and agriculture.


Indicative IDA Lending Program for FY16-FY18

Standby

Fiscal Year Project Name Amount (USD Million)

IDA17

(FY16-17)

River Management Improvement 600

Skills & Training Enhancement (Additional Finance) 100

Siddhirganj (Additional Finance) 179

Ghorasal 4 Power Generation Efficiency 235

Pro-Poor Slums Integration 50

Health Sector Development Program (Additional Finance) 150

Programmatic Development Policy Credit 250

Modernization of State-owned Financial Institutions 220

Insurance Sector Development 80

Climate Services 75

Public Procurement (Additional Finance) 10

Regional Connectivity 1 60

Colleges 100

Total 2,109IDA18

(FY18)

(subject to availability

of IDA resources)

Private Sector Development 2 144

Dhaka-Chittagong Inland Waterway 220

Health Sector Development Program 2 300

National ID (Additional Finance) 175

Total 839


Addressing Critical Infrastructure Gaps

• Power –generation and transmission

• Fuel Supply—natural gas and LNG

• Inland waterways, Ports, Logistics Hubs

• Special Economic Zones

• Urban Infrastructure

• Telecom/ICT

Financial Inclusion

• Diversify sources of finance

• Access to financial services for the underserved, including MSMEs and women

• Capital markets development, e.g., Taka bond issue

• Strengthening the commercial banking sector

• LT and STF finance for trade and priority sectors

Manufacturing Diversification/ Strengthening

• Diversification into white goods, ceramics, pharmaceuticals, and high value food processing

• Enhancing environmental and social sustainability of the RMG sector

Enhancing Business Enabling Environment

• Support PPP approaches

• Modernize and reform legal and regulatory framework that governs private sector

• Remove bottlenecks in Infra Policy

Climate Smart Solutions

• Water and energy efficiency enhancements

• Promote adoption of sustainable climate smart agribusiness technologies and practices.

• Renewable energy and energy efficiency projects

• Environmentally sustainable investments

Social Inclusion

• Agribusiness—diversification to higher value crops

• Critical commodities financing

• Access to quality health care facilities

• Organized retail outlets for agri/food products

Key Areas of IFC Focus: Enhancing Competitiveness


Energy Sector

• Power –generation and transmission

Inland Connectivity & Logistics

• Public transport

Key Engagement Areas for MIGA


ধন্যবাদ Dhonnobad

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