Poverty Reduction Strategy Papers are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated with annual progress reports, they describe the country’s macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document for Bangladesh is being made available on the IMF website by agreement of the member country as a service to users of the IMF website.
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A Note on this Edition: This edition is for Parliament Members and also available in the Planning Commission Web Site: www.plancomm.gov.bd for general access. Regular edition of the Sixth Five Year Plan will be published in both English (original) and Bangla, immediately after the 10th session of the 9th Parliament (Jatio Sangsad).
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List of Tables
List of Figures
List of Boxes
CHAPTER 1: DEVELOPMENT CONTEXT, SIXTH PLAN TARGETS AND STRATEGY
SIXTH PLAN CORE TARGETS IN THE CONTEXT OF VISION 2021
SIXTH FIVE YEAR PLAN STRATEGY
List of Tables
Table 1.1: Growth performance in the Five Year Plans
Table 1.2: Headcount Poverty Rate (%)
Table 1.3: Status of Millennium Development Goals in Bangladesh
Table 1.4: Sixth Five Year Plan (SFYP) Targets
List of Figures
Figure 1.1: Annual average GDP growth rate of comparators
Figure 1.2: Trend in Labor Force and Employment 1974-2009, millions
Figure 1.3: Youth unemployment rate (percent of total labor forces ages 15-24)
List of Boxes
Box 1.1: Achievements during Fifth Five Year Plan (1997-2002)
Area-Based Community Nutrition
Annual Development Programme
Alternative Dispute Resolution
Alternate Medical Care
Air Quality Management Project
Bangladesh Paribesh Andolon
Bangladesh Academy for Rural Development
Bangladesh Centre for Advanced Studies
Bangladesh Climate Change Strategy and Action Plan
Bangladesh Environmental Lawyers’ Association
Bangladesh Environment Management Project
Bangladesh Bureau of Statistics
Bangladesh Bridge Authority
Bangladesh Infrastructure Financing Facility
Bangladesh Medical Association
Bangladesh Meteorological Department
Bangladesh Medical Research Council
Bangladesh National Herbarium
Bangladesh Private Practitioners Association
Bangladesh Power Development Board
Bangladesh Technical Education Board
Climate Change Adaptation
Clean Development Mechanism
Certified Emission Reduction
(Community) Skilled Birth Attendants
Committee on the Elimination of Discrimination against Women
Country Investment Plan
Convention on the Rights of the Child
Centre for Sustainable Development
Cash for Work
Computable General Equilibrium
Chittagong Hill Tract
Contraceptive Prevalence Rate
Department of Agricultural Extension
Disaster Management Committees
Department of Environment
Department of Fisheries
Development Project Proposal
Departmental Project Evaluation Committees
Development Result Framework
Disaster Risk Reduction
Directorate of Technical Education
Environment Conservation Act
Executive Committee of the National Economic Council
Essential Service Package
Effluent Treatment Plant
Food for Works
Flood Forecasting and Warning Centre
Foreign Direct Investment
Family Welfare Visitors Training Institutes
General Economics Division
Green House Gas
Hyogo Framework for Action
Household Income and Expenditure Survey
Health, Population and Nutrition
Information and Communication Technology
Incremental Capital Output Ratio
Infrastructure Development Company Limited
Implementation Monitoring and Evaluation Department
Intergovernmental Panel on Climate Change
Institute of Public Health Nutrition
Independent Textbook Evaluation Committee
Inland Water Transport
International Union for the Conservation of Nature
Long Acting Permanent Method
Labor Force Survey
Local Government Engineering Department
Liquefied Natural Gas
Logistics Performance Index
Millennium Development Goal
Monitoring and Evaluation
Ministry of Fisheries and Livestock
Ministry of Health and Family Welfare
Medium Term Budgetary Framework
Middle Income Country
National AIDS/STD Program
National Curriculum and Textbook Board
National Council for Women’s Development
National Economic Council
New Economic Geography
Non Formal Education
National Institute of Population Research and Training
National Plan for Disaster Management 2010-15
National Policy for Women’s Advancement
National Nutrition Program
National Skill Development Council
Open Market Sales
Partnership for Environment Protection
Primary Education Stipend Programme
Palli Karma-Sahayak Foundation
Plan of Action
Purchasing Power Parity
Public Service Commission
Bangladesh Rural Electrification Board
Research and Development
Reducing Emission from Deforestation and Forest Degradation
Record of Rights
Strategic Action Plans
School Based Assessment/Skill Birth Attendant
State-owned Commercial Banks
Sixth Five Year Plan
Small and Medium Enterprises
Standing Orders on Disasters
Strengthening of Public Expenditure Management Program
Bangladesh Space Research and Remote Sensing Organization
Sundarbans Reserve Forest
Social Safety Net Program
Sexually Transmitted Diseases
Sector Wide Approach
Transparency International Bangladesh
Total Fertility Rate
UN Convention against Corruption
Urban Primary Health Care
Universal Periodic Review
Value Added Tax
Violence against Women
Village Development Party
Vulnerable Group Development
Vulnerable Group Feeding
Voice Over Internet Protocol
Vocational and Technical Education
Water Resources Planning Organization
Women in Development
World Trade Organization
Over the past 40 years since independence, Bangladesh has increased its real per capita income by more than 130 percent, cut poverty rate by sixty percent, and is well set to achieve most of the millennium development goals. Some of the underlying specific achievements include, reducing total fertility rate from 7.0 to 2.7; increasing life expectancy from 46.2 years to 66.6 ; increasing the rate of economic growth from an average rate of 4% in the 1970s to 6% in the 2000s; increasing the savings and investment rates from below 10 percent each in the 1970s to 24 percent (investment rate) and 30 percent (savings rate) in FY10; achieving gender parity in primary and secondary education; and more than tripling of the production of rice (from 10 million tonnes in FY73 to 32 million tonnes in FY10) thereby achieving near self-sufficiency in normal production years. The economy today is lot more flexible and resilient, as indicated by the ability to withstand the global financial crisis with minimum adverse effects. Bangladesh also is now much more capable of handling natural disasters with minimum loss of life. Bangladesh achieved this remarkable progress with development despite numerous internal and external constraints.
Notwithstanding this past progress, the Government recognizes that Bangladesh is still a low income country with substantial poverty, inequality and deprivation. An estimated 47 million people are living below the poverty line with a significant proportion living in households which are female headed, in remote areas, and consisting of socially excluded and other vulnerable people. Most of the labor force is engaged in informal low productivity and low income jobs. The access to secondary and tertiary education is limited and the quality of education at all levels is deficient. The poor group of the population is severely disadvantaged in terms of ownership of assets and has inadequate access to institutional finance as well as to basic services including quality education, healthcare, water and sanitation. These people, and among them especially women and children, are also disproportionately affected by natural disasters and the adverse effects of climate change. Despite expansion, publicly supported mitigating measures in the form of social protection programs are still inadequate.
In recognition of the long -term development challenges, the Government under the leadership of Prime Minister Sheikh Hasina adopted the Vision 2021. The Vision 2021 and the associated Perspective Plan 2010-2021 have set solid development targets for Bangladesh by the end of 2021. Those targets if achieved will transform socio-economic environment of Bangladesh from a low income economy to the first stages of a middle income economy. Along with higher per capita income, Vision 2021 lays down a development scenario where citizens will have a higher standard of living, will be better educated, will face better social justice, will have a more equitable socio-economic environment, and the sustainability of development will be ensured through better protection from climate change and natural disasters. The associated political environment will be based on democratic principles with emphasis on human rights, freedom of expression, rule of law, equality of citizens irrespective of race, religion and creed, and equality of opportunities. The Bangladesh economy will be managed within the framework of a market economy with appropriate government interventions to correct market distortions, to ensure equality of opportunities, and to ensure equity and social justice for all.
The implementation of Vision 2021 will be done through two medium term development plans, with the first spanning FY11-15. This Five Year Plan is the sixth in the series of development plans in Bangladesh starting in 1973. The Government recognizes that in a market economy like Bangladesh where the bulk of the economy is privately owned and managed, the role of planning is essentially indicative and strategic in nature. A key focus of the plans will therefore be on strategies, policies and institutions to help guide the private sector in helping Bangladesh achieve the goals set in Vision 2021. Yet, the experiences of Bangladesh and elsewhere show that without proper government regulations and public spending in core areas, the social and economic results can be devastating and unsustainable. The experience of the global financial crisis is a good example of this. So, ensuring a proper balance between providing incentives to private sector and instituting regulatory policies for safeguarding public interests will be a major guiding principle of the policy and institutional framework of the Sixth and the Seventh plans. Similarly, the balance between private and public spending, especially in regard to the investment programs in the plans, will receive major attention.
At the operational level the fundamental task of the Sixth Five Year Plan is to develop strategies, policies and institutions that allow Bangladesh to accelerate growth and reduce poverty. An essential pre-requisite for rapid reduction of poverty is to attain high economic growth such that it provides the foundations for sustainable productive employment and incomes for the growing Bangladeshi labor force. As is evident from international experience, productive employment is the most potent means of reducing poverty on a sustained basis. But this is not easily achieved. This requires strategies and actions on the demand side of the labor market (driven primarily by economic growth) as well as strategies and policies on the supply side (labor force growth and quality). The employment challenge in Bangladesh is not just to create any job but to create high income jobs in the formal sectors. Presently some 78 percent of the labor force is engaged in low-income, low productivity jobs in the informal sectors. The employment target for the Sixth Plan will be to create adequate number of high productivity, high income jobs not only for new entrants but also to allow a substantial transfer of labor from the informal sector to the formal sector.
On the demand side, the rate of economic growth and its composition will both matter for job creation. Acceleration of the growth rate will require a substantial increase in the rate of investment from the present 24.4 percent of GDP level to 32.5 percent of GDP by the end of the plan period. Much of the higher investment will need to be deployed to reduce and eventually eliminate the infrastructure constraint (primarily power and transport) and to finance human development. A large part of the financing will come from the domestic public resource mobilization and from higher private savings, including from remittances. This is consistent with the expected growth of national savings. Yet some critical level of financing from foreign sources that are strategic in nature and allow transfer of technology will be necessary. In addition to proper policies and institutions to provide incentives to private investment in priority areas of infrastructure and human development, strong efforts will be made to enter into Public Private Partnerships (PPP) to finance these investments.
In absolute terms, the total investment requirement under the Sixth Plan has been estimated at Bangladesh Taka (BDT) 13.5 trillion in FY2011 constant prices. Public investment would amount to BDT 3.1 trillion (22.8% of total Plan investment). Private Sector contribution has been estimated at BDT 10.4 trillion (77.2% of total Plan investment). Domestic financing is projected at BDT (90.7% of total Plan investment). External financing requirement has been estimated to be BDT 1.3 trillion (9.3% of the Plan investment) of which BDT 0.4 trillion is projected to come from FDI sources. These modest levels of foreign financing are realistic in relation to current trends and consistent with prudent external borrowing strategy of the Government.
Rapid economic growth, its composition, and absorption of labor in high productivity, high income jobs are inter-linked. Low income elasticity of basic food items, land constraint and difficulties of penetrating the world agricultural export markets limit the ability of agriculture to grow at the same pace as manufacturing or services. Presently, the average labor productivity and income in agriculture are also low. Similarly a large part of the labor force is occupied in informal services with low productivity and income. Accordingly, the economic growth process in the Sixth Plan needs to be appropriately balanced, thereby creating more employment opportunities in the manufacturing and organized service sectors and allowing a transfer of a large number of workers engaged in low productive employment in agriculture and informal services sector of the economy to these higher income jobs.
Therefore, much of the high productivity, high income jobs will need to come from a labor-intensive manufacturing sector based on domestic and export markets and from organized services. Both large and small enterprises need to contribute to this growth. Emphasis would be placed on sub-contracting system in manufacturing and diversification into products dependent on imported contents but employing large labor force. Examples of such activities include furniture, toys, foot-wear and consumer durables. The role of small enterprises is particularly important to provide the employment base. The promotion of small enterprises in rural areas needs to be a major strategic element for creating higher income and employment in the rural economy, which is critical for sustained poverty reduction.
The dynamism in manufacturing sector will benefit from greater outward orientation. Bangladesh has seen this from the highly positive experience of the Ready Made Garments (RMG) sector. Experiences from Korea, China, India, Thailand and Vietnam about the role of exports in manufacturing development are similarly positive. To increase the export potential as well as to diversify the export base, the Sixth Plan will seek to further reduce trade barriers within the context of the World Trade Organization (WTO) framework as well as to seek more effective cooperation with neighbors. Bangladesh will actively participate in concerned international and regional/sub-regional fora aimed at increasing access to international export markets, easing and eventually eliminating any non-trade barriers to Bangladeshi exports, encourage investments, increase trade in services including energy, promote regional connectivity, and establish best possible economic relations with all strategic countries including neighbors.
The growth and employment re-balancing process must be accompanied by strategies to enhance the income-earning opportunities of workers remaining in agriculture by raising land productivity and increasing diversification of agriculture production. A strong agriculture remains fundamental to poverty reduction as well as for food security. With land becoming a binding constraint in view of growing population and urbanization pressures, enhancing the productivity of land is a top priority. The emphasis on productivity improvements will also be helpful in reconciling food security objectives with farmer incentives. Consistent with the need to ensure food security, emphasis will also be placed on agriculture diversification in both crop and non-crop sectors. This diversification will help promote commercialization of agriculture and raise farm incomes. The National Food Policy (NFP) and its Plan of Action 2008-2015 (NFP/POA) provides a set of guidelines regarding inter-ministerial coordination, sectoral planning and budgeting with a view to promoting food security. In May 2010 the Government approved the Bangladesh Country Investment Plan (CIP), which provides guidance on investments to increase and diversify food availability in a sustainable manner and to improve access to food and nutrition. The proper implementation of the CIP will help attain the MDG target on hunger. This is a major step forward towards harmonizing and aligning of Government and development partner objectives in line with the Paris Declaration and the five Rome Principles on food security.
Employment abroad and associated remittances have played a major development role in Bangladesh. This element of the employment strategy will be strengthened. In addition to the current strategy to export low skilled manpower, the effort would focus on the ability to export well trained skilled and semi-skilled manpower to existing as well as new destinations. Women being a significant contributor to the domestic and export oriented industries (e.g. Ready Made Garments) are still concentrated in the low income jobs. Therefore targeted programs will be undertaken to improve their skill base. Efforts will also be made to send more migrant workers to international markets from the lagging regions of the country.
Bangladesh is currently experiencing ‘demographic transition’ as a result of slower population growth. Even so entry of young population in the labor force will continue due to demographic factors. This demographic dividend will need to be properly harnessed. The quality of labor force is weak due to low access and low quality of education; women are especially lagging behind. The Sixth Plan will seek to address these by developing and implementing a well thought out education and training strategy and associated policies and institutions. The strategy needs to be particularly sensitive to reduce the access gap of the poor, especially in the under-developed or lagging regions of the country, and to improve the skill base of women. A significant part of the additional investment for higher growth will be deployed to the development of the labor force.
Although factor accumulation (i.e. growth of labor and capital) would be the main source of economic growth during the Sixth Plan, strong efforts will be made to increase the growth contribution of total factor productivity in all areas of production including manufacturing, agriculture and services. Among the contributing policies envisaged for the Sixth Plan is the introduction of appropriate information and communication technology (ICT) based on the implementation of the ‘Digital Bangladesh’ initiative championed by the Prime Minister, transfer of technology from abroad based on strategic partnerships with foreign investors, and strong emphasis on technical education and labor training.
Along with focus on economic growth and employment, substantial attention needs to be given to reduce the growth of population. Notwithstanding past progress with the reduction in the growth of population, Bangladesh is amongst the most densely populated country in the world. Land and other non-renewable natural resources are becoming increasingly scarce as population pressures in both rural and urban areas further intensify. Renewed efforts must be made to further slow down the growth of population. Building on the lessons of the past experience, the Sixth Plan population strategy will emphasize girl’s education, female reproductive health, population control service delivery based on public-private partnership, and social mobilization.
Being one of the most densely populated countries in the world, land has become the scarcest factor of production in Bangladesh. This is reflected in galloping land prices throughout the country but especially in the metropolitan cities. Future growth strategy must take this binding constraint into account in order to ensure its sustainability. Efforts to reduce the growth of population will help, but better management of land is of paramount importance for sustaining rapid growth in Bangladesh. Sound land management also has a direct effect on people’s welfare and poverty reduction. Landless farmers are amongst the poorest of the poor. Land is also essential for housing. The rapidly expanding slum population and rising land prices in urban areas are indications of increasing difficulties Bangladesh faces in providing people with proper shelter.
The main goal of the government’s land use policy and management is to ensure best possible use of land resources and delivery of land related services to the people through modernized and efficient land administration for sustainable development including accelerated poverty reduction. The lack of coordination between different departments responsible for preparation and maintenance of Record of Rights often leads to confusion, conflicts and many instances of litigation causing suffering of the people especially the small and marginal farmers. To mitigate this problem, the Ministry of Land has already undertaken projects to conduct digital surveys and introduce e-governance. Land records will be computerized and land mutation will be made automatic. The Government intends to modify and simplify all land-related laws, which is expected to remove many of the land related disputes. A special committee will be set up to come up with recommendations in this regard. Planned use of land according to Land Zoning Maps prepared on the basis of present and potential land uses will be ensured through enforcement of the provisions of relevant laws. The provisions of the Town Improvement Act of 1953 will also be more strictly enforced. The Government will take up projects for the development of rural townships where specific areas are to be earmarked for housing, marketplaces, industries and infrastructure. Land acquisition act and policy would be rationalized along with a system of fair and equitable compensation for acquired land.
Growth experiences in Bangladesh and elsewhere demonstrates both a tendency towards urbanization as well as uneven regional growth. The urbanization problem has become particularly acute in Bangladesh owing to the primacy of Dhaka. The unbalanced growth of Dhaka shows both a large concentration of wealth and income as well as unsustainable pressure on Dhaka’s already fragile infrastructure and available land. Concerning regional disparities, the divisions of Dhaka, Chittagong and Sylhet seem to do better in terms of both growth and poverty reduction as compared with Rangpur, Barisal, Khulna and Rajshahi, The Sixth Plan will make efforts to address both these spatial dimensions of growth.
On the urbanization front the strategy will emphasize a more balanced growth of urban centers across the entire country through proper institutional reforms that involves the establishment of locally elected and accountable municipalities and city corporations. Property tax base will be reformed to strengthen their financial autonomy along with block grants from the budget based on principles of equity and population. Special emphasis will be given to improving land administration and management to arrest the spiraling urban land prices that is becoming a binding constraint to the expansion of manufacturing and modern services as well as limiting the ability to provide affordable housing.
Regarding regional disparities, the Plan would strive to address the lagging regions problems, especially focused on Rangpur, Barisal, Khulna and Rajshahi Divisions, through a strategy that involves public expenditure in infrastructure and human development, by improving the access to financial services, by promoting international migration of workers from these divisions, and by facilitating more trade and investment in the border districts with neighbors including India. Particular attention will be given in the Sixth Plan to offset the geographical disadvantage of the coastal Division of Barisal, which has the second highest incidence of poverty partly owing to the adverse effects of natural disasters. Through programs in agriculture, environment, climate change and disaster management, the Sixth Plan will seek to reduce the vulnerabilities of Barisal and other coastal belt regions. Government of Bangladesh has undertaken a task to prepare a comprehensive ten year master plan to provide a road map for an integrated development effort in Bangladesh’s coastal zone. For reducing regional disparities, especially the geographical disadvantage of Barisal Division, implementation of Padma Bridge at Mawa-Janjira will be a key instrument which will induce new income generating activities in the transportation, SME and agro business sub sector.
While rapid growth has helped lower poverty in Bangladesh, there is evidence of growing income inequality. Results show that the distribution of income is much more unequal than the distribution of consumption. Income inequality as measured by the gini coefficient for the distribution of income rose substantially during the 1980s and the 1990s. During 2000 and 2005 the income gini coefficient increased further from 0.451 to 0.467 due to an increase in rural income inequality. Thus, the rural income gini coefficient increased from 0.393 in 2000 to 0.428 in 2005. The urban income gini coefficient remained unchanged at 0.497. However, the latest data show that income gini coefficient at the national level declined slightly to 0.458 in 2010 though it was still higher than the level in 2000. The urban income gini coefficient also declined to 0.452 and it was lower than the level in 2000. On the whole, income inequality is a serious problem in Bangladesh and reversing the trend in a sustainable manner will be a major challenge for the Sixth Plan.
Inequality emerges from a combination of greatly unequal distribution of physical assets as well as human capital. Lack of factor endowment such as land, capital, credit and skills have been preventing the poor of Bangladesh to participate in productive economic activities and have compelled them to remain in a disadvantageous situation. There are also significant social barriers for women to participate more effectively in economic activities outside home. Opportunity to break the low factor endowment trap through better human capital based on utilizing essential public services (such as education, training, safe drinking water, sanitation and other health facilities) has not been fully effective due to poor people’s, and among them women and girls’, limited access to those provisions.
The strategy for enhancing the factor endowment of the poor including women in the Sixth Plan will be focused on ensuring their better access to irrigated water, fertilizer, electricity, rural roads and institutional finance. The government’s public expenditure policies and programs and the financial sector strategies and policies will pay specific attention to reducing income inequality owing to unequal distribution of physical assets and access to means of production.
The access to essential services for enhancing human capital for the majority of the population depends not only on their income levels but also on the quality and efficiency of the service delivery through the publicly funded and operated systems. Accordingly, the Sixth Plan’s strategy of poverty reduction will include substantial expansion as well as quality enhancement of the supply of these essential services. The strategy will also include developing a system of accountability and transparency in the delivery of these essential services to ensure availability of appropriate and adequate services for the poor. The human development strategy of the Sixth Plan will focus on these inclusive and holistic aspects in the design of strategies, policies and programs.
Even with higher growth, better jobs and better access to essential services, a part of the under-privileged population - among them poor women and people from ethnic groups and socially excluded groups - still will likely be left out. Additionally, substantial risks are posed by natural disasters and climate change for this vulnerable population. To address this challenge, the Sixth Plan aims at significantly strengthening the social protection programs. The strategy will be to design and implement a range of social protection programs that meets the needs of this under-privileged group. In this regard, existing programs will be reviewed and reformed to establish better targeting with a view to ensuring that all under-privileged groups including the disable, the elderly, the tribal population, and children and women at risk are given priority in the distribution of benefits. Particular attention will be given to strengthening the underlying institutions. In view of large financing needs for social protection programs, options will be explored to move towards contributory social protection schemes including participation by the private sector. Emphasis will also be given to design social protection programs that create assets and employment opportunities.
Establishing equal opportunities for women in all sections of the society with the objective of integrating them much better into social and economic sphere is a core strategic element underlying the Sixth Plan. It acknowledges the critical role of women in nation building and ensures that their needs, rights, entitlements and contributions are appropriately reflected in the Plan document. The human development and social protection strategies underlying the Plan will place particular emphasis on gender and social inclusion aspects of development. It is also recognized that women are a heterogeneous groups such that their situations, deprivations, and needs vary according to their locations within various communities, religions, and regions. Thus, along with promoting rights and entitlements of women, Sixth Plan envisages to cater to all these differential and specific requirements ensuring equal access of women to political, economic and social space.
Another key strategic element of the Sixth Plan is a firm commitment to pursue an environmentally sustainable development process. Natural resources like land and water are limited and their per capita availability is diminishing due to rising population on the one hand and also due to excessive use of common pool resources on the other hand. Excessive and indiscriminate use of our natural common pool resources has degraded them to an unusable state. The degradation of natural resources reduces the well-being of people; especially the poor and women suffer more, as they depend much more on natural common property resources for fuel and water. Thus, the focus of the Sixth Plan’s environmental management strategy would be the conservation and maintenance of natural resources, reducing air and water pollution, and liberating encroached rivers, water bodies, forest areas and khas land.
Bangladesh is a victim of climate change caused by rapid urbanization, industrialization and economic development activities worldwide. The growing evidence on climate change suggests that Green House Gas (GHG) emissions, resulting from the cumulative action of developed and emerging economies, would have serious deleterious effects in near future, unless effectively contained. It is predicted by international agencies that Bangladesh will be adversely affected by climate change in the form of melting of Himalayan glaciers, global warming and rising sea level, intensified natural calamities, and greater water scarcity leading to loss of livelihood, rising unemployment and poverty. Furthermore, a rise in the sea level, leading to coastal submergence (i.e. 17 % of Bangladesh) would cause large-scale displacement of people. Therefore, effective steps must be explored and adopted in collaboration with the international community in the Sixth Plan period to help Bangladesh address the adverse consequences of climate change. An acceptable and workable collaboration strategy must include fair and just burden sharing for mitigation as well as adaptation strategies across nations.
The challenge of ensuring good governance for sustaining development cannot be over-emphasized. Capacity constraints in public administration, occasional weaknesses in economic management, and corruption lie at the heart of overall shortcoming in national governance in Bangladesh. The Government recognizes that without fundamental reforms of core institutions, improvement in public administration capacity and a strong anti-corruption strategy, the ability to implement Vision 2021 and the underlying 5 year development plans will be seriously compromised. The Government also recognizes that these are long-term challenges and require long-term coordinated and sustained efforts.
Good governance and institutions are interlinked. Ensuring good governance requires establishing strong institutions. For the Sixth Plan the governance improvement strategy will focus on a number of key areas that require immediate attention. These include: continued efforts to ensuring equality of opportunity and full mobility for all with freedom and dignity, and without religious, social or political barriers; utmost attention will be given to the review of the national laws and their proper implementation by strengthening the law enforcement agencies and the judiciary; priority will be given to the implementation of E-governance through the ‘Digital Bangladesh’ initiative in all government offices and at all district levels to provide better and speedier service, and to improve the transparency and accountability of public service agencies; attention will be focused on developing and strengthening a number of core public institutions including the Central Bank, the Ministry of Finance, the Tax Department, the Planning Commission, Audits and Accounts, the parliamentary sub-committees, land administration, and the public utilities; emphasis will be given to improving service delivery in education, health, population, nutrition and water supply; emphasis will be placed on strengthening public administrative capacity; efforts will be made to implement the medium-term budgetary framework in all line ministries and to institute and implement an effective Monitoring and Evaluation (M&E) Framework for public programs; and finally all efforts will be made to reduce corruption in public services and take appropriate actions when corruption happens, ensuring a fair and transparent process as envisaged under the law.
The Sixth Plan’s strategy for capacity development consists of four pillars: strengthening the civil service; promoting devolution to local governments; strengthening public-private partnerships; and reforming planning and budgetary processes. Regarding the civil service, the strategy is to develop a long term program for re-building the civil service that is grounded in the socio-political realities in Bangladesh. The basic features of the reform strategy for civil service includes merit-based recruitment and promotion; strong training; ensuring a proper incentive and work environment; establishing and enforcing clear rules of business and codes of conduct; and seeking feedback on performance through a citizen’s charter.
Regarding the local government, the strategy will be to institute strong elected local governments that are vested with adequate financial autonomy and accountability for results. The local governments will be strengthened and much of the responsibility for delivering basic services such as irrigation, district roads, education, health, population management, water and sanitation services will progressively be decentralized to local governments.
Partnership with the private sector for delivery of critical economic services such as electricity and roads through PPP arrangements will be further strengthened on the basis of a well defined policy and legal framework. The opportunities for PPP arrangements in social sectors will also be explored. Additionally, the Government will build on the existing positive track record of collaboration with NGOs in the delivery of health, education and micro-credit services to further enhance this collaboration.
In an environment of weak administrative capacity and limited budgetary resources, efficient planning and budgetary systems can play an important role in helping improve the efficiency of public spending. The Government has been taking a number of steps to improve planning and budgetary processes. One major initiative is the implementation of a Medium Term Budgetary Framework (MTBF) process as a replacement for incremental budgeting. A second initiative is to move away from the traditional public-investment focused plans to more strategic and indicative planning that puts emphasis on strategies, programs and policies for the entire economy. A third initiative is to link better the medium-term development plans to the MTBF process by making the plan a living document with annual review of performance.
The Sixth Plan will further improve the planning and budgetary processes by building on the above initiatives. Specifically, following actions will be taken: (i) Annual performance review will focus on implementation of strategies and policies and look at broad economy-wide and sectoral outcomes rather than simply at financial progress of publicly funded investment projects. The results of the annual reviews will be used to determine changes in plan goals, targets, strategies and policies as necessary in light of the changing global and local economy and the results of the plan implementation. (ii) Capacities of line ministries will be substantially strengthened to do proper planning and budgeting in the context of the implementation of the MTBF. Line ministries will need to ensure that proposed projects and programs are consistent with the objectives and framework of the Sixth Plan. (iii) The project approval process will be strengthened and streamlined to reduce delays and proliferation of tiny projects. The project approval process will be substantially strengthened. All projects that go to the Planning Commission must provide a proper appraisal report along with sound analysis that shows the consistency and relevance of the project to sectoral/economy-wide objectives, strategies and policies. (iv) Proliferation of projects and long implementation lags are a perennial problem. The Sixth Plan will seek to break this logjam by doing a proper review of all approved and active projects in the pipeline in cooperation with the line Ministries. The review of this portfolio will seek to clean out dormant or irrelevant projects and help line ministries close the projects that are facing implementation problems through restructuring or through other relevant interventions. (v) Technical capacities of the Ministry of Finance, the Planning Commission, IMED and BBS will be substantially strengthened through proper staffing and training to ensure the timely implementation of the Sixth Plan and the MTBF.
The proper implementation of the Plan will require careful monitoring and evaluation of the underlying policies and programs. In the past the focus has been on monitoring public spending in terms of achieving financial targets. In the Sixth Plan the emphasis will shift to monitoring of results. To achieve this, the capacities of the Planning Commission and the line ministries to undertake results-based M&E will be strengthened. This will entail adopting proper M&E Frameworks, improving the database, and strengthening technical skills. This Framework will be monitored by GED under the guidance of the Planning Minister.
Being indicative in nature, the Sixth Plan should be considered as a living document. The implementation of the Plan will be reviewed on an annual basis. Development spending priorities and allocations will be reassessed on an annual cycle to ensure the consistency of these allocations in light of actual resources that are available, effectiveness of implementation and changing priorities in the context of a changing global environment.
The Sixth Five Year Plan document is organized into three parts. The first part (Part I) of the Sixth Five Year Plan provides the strategic directions and policy framework for implementing the main socio-economic targets of the Vision 2021. It focuses on the underlying strategies, policies and institutions for achieving the major targets for economic growth, employment, human development, poverty reduction, social protection and environmental management. The required macroeconomic framework and aggregate financing strategies and resource requirements are discussed here. Detailed sectoral strategies, plans and programs are presented in Part II of the Plan document. Indicative sectoral development resource allocations are provided on the basis of achieving sectoral plan targets. The sectoral allocations are made consistent with the overall resource envelope presented in Part I. These investment allocations are indicative in nature and will be reviewed and made consistent with the available resource envelope in the framework of the annual national budget cycle. Part III contains an annex on selected national data and a description of the general equilibrium model used for ensuring the consistency of national and sectoral targets with policies and resources underlying the Sixth Plan.
List of Tables
List of Figures
CHAPTER 2: GROWTH AND EMPLOYMENT STRATEGIES
LESSONS OF PAST GROWTH EXPERIENCE
SFYP STRATEGY FOR HIGHER GROWTH AND CREATING GOOD JOBS
MANAGING THE LAND CONSTRAINT
MANAGING THE SPATIAL DIMENSIONS OF GROWTH
List of Tables
Table 2.1: Basic Labor Force and Employment (in millions)
Table 2.2: Labor Force Participation Rate by Gender (%)
Table 2.3: Sectoral Distribution of Employment (%)
Table 2.4: The Structure of Bangladesh Manufacturing Sector, FY75-FY10
Table 2.5: GDP Contribution of the Services Sector and Others FY81-FY10
Table 2.6: Current Trade Regimes in South Asian Countries
Table 2.7: Hydro-Power Potential in Northeast South Asian Countries
Table 2.8: Growth of Transport Output and Modal Shares
List of Figures
Figure 2.1: Illustrative Growth Path for Vision 2021
Figure 2.2: Recent Growth Paths in Bangladesh and India, FY3–FY09