Operational Plan 2011-2016 DFID Bangladesh Updated December 2014

Report
from Department for International Development
Published on 18 Dec 2014 View Original

Context

Bangladesh has unquestioned potential. Goldman Sachs listed it in their ‘Next 11’ economies, with high potential to become one of the world’s largest economies in the 21st century. However, the country has been sliding down the World Bank/IFC Ease of Doing Business rankings (currently 173rd out of 189 countries) in recent years. Foreign investment is relatively low, but exports exceeded $25.6bn in 2011, 48% up on 2009, largely from the garment, jute, leather, frozen fish and seafood sectors.

Achievement of the MDGs

Bangladesh has made some good progress on the MDGs, particularly in terms of reducing income poverty, getting nearly all boys and girls enrolled in primary school, and reducing child and maternal mortality. Bangladesh has strengthened its disaster preparedness and effectively leads the Least Developed Countries caucus in global climate change negotiations. It shows commitment to robust adaptation planning through innovative climate financing mechanisms using its own revenue, which is complemented by donor funds, and through active participation in a South Asia regional initiative on water resource management.

Key development challenges

Bangladesh is a poor, populous and rapidly urbanising country which is highly vulnerable to natural disasters and already experiencing the effects of climate change. High levels of poverty and inequality exist, with more than 4 in 10 people living on less than $1.25 per day and over three quarters of the population on less than $2.00. Population growth is a continuing challenge with about 150 million people living in an area the size of England and Wales. One in nineteen children die before they are 5 years old, 120,000 babies die every year in their first month of life, and over a third of children are underweight. A quarter of women are undernourished, and thousands die each year due to complications of pregnancy and childbirth. Bangladesh is most off track on MDG7 (access to water and sanitation) and was off-track on MDG 5 (improving maternal health), until data from the 2010 maternal mortality survey showed significant progress over the last decade, indicating that strategies are working; but there is much still to do.

Politics and Economy

Bangladesh is classified as a fragile state with unstable politics and weak state capacity. Widespread civil unrest and frequent strikes (hartals) were a feature of the period running up to the elections in January 2014 and following the judgements of the war crimes tribunal. The political situation has calmed somewhat but future volatility cannot be ruled out. The country suffers as a result of endemic corruption, but the economy has nonetheless grown by 5-6% a year since the early 1990s and Bangladesh has weathered recent global turmoil well. But achieving the aspiration of middle income status by 2021 requires sustained annual growth of 7-8%. The prospects of achieving this are constrained by inadequate infrastructure, bureaucratic barriers to investment and political instability.
Whilst macroeconomic policy has been generally sound, Bangladesh is acutely exposed to rising world food and fuel prices, and inflation remains a risk. A relatively loose monetary policy and poor regulation has resulted in the need for an International Monetary Fund (IMF) extended credit facility of $987 million (agreed April 2012). The IMF programme going off-track is a risk.

The UK’s influence in Bangladesh.

The UK has a long-standing and positive relationship with Bangladesh, with strong cultural ties. We have a proven development track record and highly regarded technical expertise. But we do not overestimate our ability to shape overall policy, and will focus on areas where we can make the greatest difference. As the largest grant donor, the UK plays an influential role among development partners. We will continue to support government efforts to lead donors and improve coherence with national strategies, budgets and planning. Bangladesh is not aid dependent: total aid is about 2% of GDP.

Our development partnership is central to the UK’s objectives of promoting prosperity and security, and works with the grain of Bangladesh’s own ambitions. Our programme will help more than 15 million very poor Bangladeshis by getting more children a better quality education, improving family planning and reducing deaths in childbirth, encouraging private investment, helping more people adapt for the future, and strengthening key democratic systems and institutions.