Bangladesh Development Forum's Meet 2004

Donors end BDF meet with more aid pledge but only if law & order improves

Donors pledged to give continued support to Bangladesh's efforts towards poverty reduction under any circumstances, even if government programmes under the PRSP cannot improve the situation.

But, as per conclusion drawn at the BDF meet, they are likely to discontinue additional funding to other areas, mainly infrastructure, law and order, and governance, in case of failure in improving the situation with the foreign aid.

"We're here to support poverty-reduction programme … We'll stand by the PRSP (poverty reduction strategy paper) programme and continue our support," World Bank vice-president for South Asia Region Praful Patel said about the assistance without any strings tied to it.

He disclosed the decision in reply to a question at a press conference here today (Monday) on the outcome of the just-concluded three-day Bangladesh Development Forum meet.

"… Some donors' representatives told the meet that they would not continue support to other areas if the situation is not improved," he quoted the donors as saying about conditional lending in other fields of the country's development efforts.

The World Bank executive, however, referred to his meetings with the Prime Minister during inauguration of the meet and a separate meeting, saying that the human-security issue is very much in her mind.

The 3-day Forum, which concluded here today (Monday), brought together many of the key decision-makers in government and 32 development partners to brood over the development needs of the country as well as make a reappraisal of the jobs done this past year.

Prime Minister Begum Khaleda Zia inaugurated the Forum on Saturday.
Finance and Planning Minister Saifur Rahman and the World Bank Vice President, Praful Patel, co-chaired the meet split into seven sessions.

Patel said the development partners provided "very strong endorsement" about the resource gap to achieve the poverty and millennium development goals and utilise its potential to the full. "Bangladesh is operating at less than half its capacity," he said, blaming the drawbacks on infrastructure and law-and-order situation.

He estimated that the programmes would suffer a resource gap of 2 billion US dollars after having cumulative amount from domestic resources and an estimated investment to come from private sector subject to improvement of the investment climate.

Patel said the development partners called for involving all sections of society, including the opposition and the NGOs, in finalising the PRSP-the concept paper on the poverty-alleviation drive.

Replying to another question, he said looking into the internal issues is not development partners' cup of tea, but they urged the government to maintain law and order.

About downtrend in overseas development assistance by the donors, he called for giving a positive look to guess that the decline was due to increase in the country\\'s GDP and reduced aid dependence. The foreign aid came down to 2.8 per cent of GDP from 5.8 per cent some years back.

"There is nothing to fear about the aid shrinkage even if it goes down further. Internal resources would be enough to carry out our programme if we can govern the country through accommodative politics," Finance and Planning Minister Saifur Rahman told the joint press conference.

He, however, admitted that the country needs some foreign aid to develop infrastructure that requires huge investment.

"We could have developed ourselves a lot had there been a tolerance in politics. We would not have to depend on them (donors)," said the minister, who holds the purse strings of the coalition government, on a note of frustration over the confrontational politics.

In his opening remarks, Patel billed the BDF as a success because it was a dialogue between true partners.

Patel said the development partners appreciated Bangladesh's "extraordinary progress" in health, population and primary education as well as lauded the government for its successful macroeconomic performance.

"But we recognised that Bangladesh's growth could have been higher and its poverty reduction faster, if performance on key policies had been better," he told the press conference.

He observed that a huge "growth dividend" could come from better policies and institutions, especially better law and order, reducing the cost of doing business and improving infrastructure.

He said many of the development partners noted with concern that the country's "dysfunctional politics" might be an even sharper constraint. "Without solving the root cause of confrontational politics, Bangladesh's growth and service-delivery successes cannot be sustained."

In response to comments from civil society and donors, he said the government was re-looking at the Bill that would oversee GO-NGO relationships. "We were heartened to hear about government's commitments to a close partnership with Bangladesh's world-class NGOs."

Development partners also urged the government to quickly complete the investigations of specific NGOs against which there have been allegations of political affiliation and financial irregularities.

They also observed that government should not interfere with, or fix ceilings on, micro-credit interest rates. And the government noted that micro-finance interest rates would continue to be market-determined.

Many of the donors raised question about the poverty-reduction strategy, leaving strongly supportive its thematic approach, and welcomed the consultations with the stakeholders.

They urged the government to build a national consensus on the reforms most critical to poverty reduction.

"Our message of national consensus is a message equally targeted to the opposition," Patel said.

To survive in a post-MFA world, participants agreed, Bangladesh needs to improve its competitiveness, not just in terms of price but, more importantly, in reducing the time-to-market, and the cost of doing business, in order to ensure job growth and livelihoods, especially for women.

According to a statement of the World Bank, the coordinator of the aid club, the BDF delegates appreciated the candor and openness in discussions and would look forward to the next meeting to be held in Dhaka for a third consecutive time.

Originally styled Paris Consortium, the aid-Bangladesh club of donors used to meet in the French capital.

--UNB

Donors assure tech support for exports in post-MFA world but asks govt to ensure security of investment


3-day Bangladesh Development Forum meeting concludes

Donors Monday assured Bangladesh of providing necessary technical and fund supports for productive capacity building to boost exports as they noted that the country now operates at half its export potential.

They particularly pledged support to preparatory measures for overcoming possible fallout of the quota-free trade regime from next year, as the country sought their help at the BDF meet on the concluding day.

In this regard, the development partners took note of the investment needs in improving the country's infrastructure - power, telecommunications, roads and ports in the main - for an enabling investment climate and thus boosting external trade.

The assurances emerged from the working sessions on the concluding day on Monday of the 3-day Bangladesh Development Forum (BDF) meeting at a local hotel.

"The donors were very receptive," World Bank vice-president for South Asia Praful Patel told journalists on the sidelines, after the session on "Improving the Trade and Investment Climate", about the donors' response to the country's steps towards trade capacity building.

He also stressed the need for ensuring safety of foreign investment as well as investors and workers as a measure to attract foreign direct investment in the country, as the private sector here wants safety of their life and money.

Bangladesh apprised the donors of an 8-point action programme it has initiated to face the emerging challenges, including searching new opportunities in the developed markets, displaced workers' rehabilitation, capacity enhancement for small enterprises and technological capacity development of SMEs.

Skill and quality development, through imparting training on six areas, namely compliance norms, quality management, productivity management, marketing, merchandising and inventory management, was mentioned as one of the most important undertakings under the programme.

Other tasks are support to primary textile sector, handloom sector and forward-linkage industry.

"These are all absolutely essential," said Patel, who is leading the donors' side at the meet with Bangladesh, assuring technical assistance as well as fund support in the country's efforts to diversify exports.

"Bangladesh has a solid foundation… There is huge potential for the country to boost exports as, I said yesterday (Sunday), it is operating at half the potential," he said, suggesting Bangladesh to take the challenges.

Replying to a question, he said the development partners were very responsive about Bangladesh's call for market access to the developed countries' markets, but the issue should be taken bilaterally.

Presenting the country-position on trade and investment, Commerce Minister Altaf Hossain Choudhury requested the development partners to help Bangladesh as an LDC to obtain duty-free access to the developed markets, including USA.

In this regard, he sought Canada-modeled relaxed rules or origin that resulted in 140 percent export growth to that market in the first nine months of the current fiscal as compared to same period last fiscal.

"On the other hand, the presence of a stringent rules of origin in EU, and the denial of duty-free access to the US market are the key factors responsible for under utilisation of the export capacity," he told the donors.

The minister also sought donors' assistance for pushing the 8-point strategy being implemented at a cost worth US$40 million. "Their attitude seemed friendly to me," he told the newsmen on the sidelines, replying to a question on the donors' response.

The donors suggested Bangladesh to come up with specific ideas for market access where they would assist. "You've to have a good strategy in this regard," said one donor representative.

She said the donors also suggested Bangladesh to allow foreign investment in RMG sector outside EPZ, which could boost the country's exports.

Following the session on "Providing the Infrastructure to Support Growth and Development", State Minister for Power Iqbal H Mahmood said the donors took note of the investment needs in the country's infrastructure sector.

"The discussions were fruitful," he told the newsmen, apprising that the donors completely endorsed government's steps initiated and planned to improve the infrastructure facilities.

State Minister for Energy AKM Mosharraf Hossain apprised the donors of appointing the chief of Energy Regulatory Commission by the end of this month.

"They were more or less satisfied with the government initiatives in the energy-sector development," he said, replying a question. The donors inquired about one or two issues seeking clarification on the government programmes.

--UNB

Dhaka try to please donors by listing steps taken to improve situation

Bangladesh has assured development partners of taking additional measures, besides the already adopted ones, to improve law and order situation - one of the major issues of concern tabled by the donors.

At the same time, the country earned the donors' appreciation for the progress in poverty reduction strategy, gaining their commitment of continued support for implementation of the programmes outlined in the Interim Poverty Reduction Strategy Paper (I-PRSP).

Bangladesh gave the assurance on additional measures to tackle law and order situation at the first working-day sessions of the Bangladesh Development Forum (BDF) meeting Sunday. Prime Minister Begum Khaleda Zia inaugurated the 3-day meeting on Saturday.

Donors expressed concern over the absence of rule of law and good governance as well poor policing that are prerequisites to achieve 7-8 per cent growth rate required to reduce poverty.

"We've been assured that the government would take additional actions," World Bank Vice-President for the Asia Pacific region Praful C Patel told journalists waiting outside the meeting venue at Sonargaon Hotel.

He said the meeting would discuss in details some "specific additional measures" needed to improve law and order situation today (Monday).

Patel, who is leading the donors' side, also said that the progress of PRSP was very positive and he reiterated the donors' commitment to continue their support in implementing the PRSP. He estimated that the country would require assistance of two billion US dollars annually to implement the PRSP programmes.

Finance and Planning Minister Saifur Rahman, leading the home side at the BDF meeting, recognised the trouble being faced by the country over law and order situation with special reference to the most recent killing of a member of Parliament.

The reference came apparently in a defending manner when the minister explained the nature of criminal activities in the country, particularly with political links, meeting sources said.

Saifur, however, hastened to point out that the law and order problems also prevail elsewhere in the world, including many developed countries.

He pointed out that the crimes that take place here are usually prominently published in the newspapers, while such incidents taking place in many developed countries would hardly be reported in the press.

"So the problem is not same. We've a huge population, more than double that of Italy," he told reporters.

"Even then, we're trying our best to take measures to improve law and order," he said, elaborating different reform initiatives in police administration, including introduction of Rapid Action Battalion and enhanced budgetary allocation for strengthening the law enforcing agencies.

Finance Minister Saifur Rahman said the donors also urged speedy implementation of the reform programmes already taken by the government including setting up of Anti-corruption Commission, Human Rights Commission, ensuring Separation of Judiciary, appointment of an ombudsman and streamlining the police administration.

"The implementation is time consuming. We're going through the process," he apprised the donors.

The donors also raised the question about police repression on the streets, indicating the police action on the opposition and a newly floated political forum.

In reply, Saifur said: "The government is to govern the country… not outsiders. The government had to act in such a manner, but it tried to tackle the situation with a sense of responsibility."

Replying to a questioner, he said the government was making development efforts to satisfy the people of the country. "If donors are satisfied with it, it's good. But they cannot interfere in our internal issues," he added, indicating that he would appreciate donors' support on the home-grown programmes that would augur well for the nation.

Following the morning session of the meeting, the Finance Minister said the donors stressed on implementation of the PRSP through enhancing the process of consultation with all the stakeholders in the country, including the opposition political parties.

"We don't have any rivalry with the opposition over the PRSP. We'll try to bring them in the consultation process," he was quoted to have told the development partners, who expressed deep concern at the political non-cooperation.

Law, Justice and Parliamentary Affairs Minister Maudud Ahmed apprised the donors that the government would form the selection committee for nominating members of the proposed Anti-Corruption Commission within a day or two.

At the same time, the Criminal Procedure Code would be amended to make the Commission effective, he told a session on promoting good governance and human security.

He also told the donors that the agenda on Human Rights Commission has been put forward to the Cabinet for approval and it would be taken to Parliament after its approval.

Replying to a question, Maudud said the donors felt that the opposition did commit a mistake by refraining from the PRSP consultative process.

They (donors) also urged the government to take steps to bring back the opposition in the Parliament, he added.

LGRD and Cooperatives Minister emerging out of the session on "Enhancing Partnerships Between Government and NGOs" said the government neither wants to use NGOs politically nor it wants to see other political parties using them.

He said the donors have been apprised that there are allegations of political affiliation of some NGOs. Besides, he also pointed out allegations of financial irregularities against 5 or 6 NGOs out of around 2,000 NGOs operating in Bangladesh with foreign funds.

The government has been investigating into the allegations and legal action would be taken if the allegations prove true, he told newsmen.

Donors urged the government not to create any new provision in the NGO regulations that could hamper the government and NGOs relations.

At a session on "Human Resources Development", the donors endorsed the government programmes in the sector, meeting sources said.
--UNB

PM asks donors to take a long-drive with Dhaka to cut poverty trap

Bangladesh Development Forum meet takes off

As donors began a three-day Bangladesh Development Forum session in Dhaka Saturday, Prime Minister Khaleda Zia sought effective support in carrying forward the poverty-reduction initiatives, a top priority of her government to pull the poor up the poverty line.

"A large part of our population still lives under poverty line. In spite of significant achievements during the last two and a half years in the area of socioeconomic development, we have still a long way to go," the PM told development partners in the opening session of their annual meeting for review of the country's progress.

Inaugurating the 3-day BDF-2004 meet at Hotel Sonargaon in the afternoon, Prime Minister Khaleda reaffirmed before the development partners her administration's commitment to establish an accountable government as she unveiled some major measures to that end.

"In pursuance of this commitment we have already implemented various reforms for improving governance, law and order and investment climate," she said. "We have made utmost efforts to accelerate economic growth and reduce poverty."

The Prime Minister gave a brief account of the successes and achievements and steps in various sectors by her two-and-a-half-year-old government.

On law and order, she mentioned that a number of measures had been taken to improve the situation, such as the formation of special cell in the Home Ministry to monitor progress of sensational criminal cases. Such monitoring cells, headed by respective Deputy Commissioners, are now working in all districts.

And, of late, a law has been enacted raising Rapid Action Battalion (RAB) in order to curb crimes expeditiously.

Armed with the new law, the RAB force has gone into operation in Dhaka metropolis--and its "positive impact on overall law-and-order situation is already visible", she told the meet.

She also mentioned the Speedy Trial Act and the Speedy Trial Tribunals for quick trial, which have resulted in rapid disposal of a good number of heinous criminal cases.

"These measures have brought noticeable qualitative changes in the country's criminal justice-delivery system," the Prime Minister said.

Turning to anti-corruption drive, she informed the donors about the Independent Anti-Corruption Act 2004 and authority of the commission. Steps are underway for quick operation of the Commission.

On separation of the judiciary from the executive, she said a Judicial Service Commission had been constituted for recruitment of judicial officers.
On the good-governance score, she said a large number of measures had been taken for promoting good governance, bringing about financial discipline and accountability.

Steps have been taken to rationalise the size of government organisations and agencies, which include merger, liquidation, closure and partial closure of state-owned enterprises, the introduction of merit-based promotion and career planning to make civil service more efficient and professional.

Finance Minister M Saifur Rahman, IMF Representative Nissanke Weerasinghe, World Bank Vice President for South Asian Region Praful C Patel and ERD Secretary Mirza Tossadeq Hossain Beg also addressed the opening session of the donors' club meet.

Touching on the economic front, the PM said her government brought about macroeconomic stability through a hard-fought riddance from the serious imbalances they have inherited.

The PM said they have formulated an integrated policy framework to face post-MFA challenges. "Our pro-poor growth strategy is directed towards creation of more jobs for the poorer sections of the population and the poverty-prone regions."

"We can realistically expect that with the impressive export recovery, agriculture and industrial growth and a slowdown in inflation rate our real GDP will significantly grow in the coming years," she continued.

Informing that her government is committed to implementing the reform strategy set out in the Interim Poverty Reduction Strategy Paper (I-PRSP), the PM said they are now preparing the National Strategy for Economic Growth, Poverty Reduction and Social Development which is expected to be completed by December 2004.

Touching on health education and social welfare, she said Bangladesh achieved the highest rate of primary enrolment in the developing world. It has achieved gender parity in the enrolment at the primary and lower-secondary levels.

Infant mortality rate has been cut to half and immunisation is going better than most part of the developing world, rural women in Bangladesh have been significantly empowered through micro-credit operations, she enumerated.

She said the government made good progress in protecting and ensuring children's rights and was taking steps to create the office of Independent Children's Commissioner to further the cause of the children.

Recognising the role of civil society and NGOs in Bangladesh's development process, the Prime Minister pointed out that many of the success stories in the areas of health, education, micro-credits, women empowerment are results of government-NGO collaboration. She reminded that the NGOs in Bangladesh enjoy adequate operational freedom in carrying out development activities.

"We are committed to maintaining an enabling environment for them, so that they can be effective development partners," she said.

Begum Zia termed the development of private sector as one of the cornerstones of the government's economic policy and said that a number of measures had been taken to create an environment wherein the private sector can play its due role.

She mentioned a wide range of facilities and attractive incentives offered to investors, particularly foreign investors. "Bangladesh has been consistently liberalising its investment policies for attracting foreign direct investment ... Rules, regulations and documentation procedures have been significantly simplified, so that foreign investors feel encouraged to invest in Bangladesh."
--UNB


IMF mulls augmenting PRGF aid to Bangladesh for facing post-MFA world

International Monetary Fund is considering augmenting Bangladesh's access to Poverty Reduction and Growth Facility (PRGF) assistance under the newly established Trade Integration Mechanism (TIM) to support the country's adjustment to post-MFA world.

Nissanke Weerasinghe, Advisor for Asia and Pacific Department of the IMF, said the immediate outlook for economic growth and poverty reduction is clouded by the lifting of the quota system under the Multi-Fiber Agreement (MFA) at the end of 2004.

This impending shock will "temporarily hold down growth of exports, GDP and employment below levels attainable in the longer term".

The TIM is aimed at providing additional financial support to countries that are adversely affected in the short term by international trade liberalization, such as MFA phasing out, to allow time for adjustments, he said.

It is expected that Bangladesh's exports of readymade garments (RMG) to the US will be especially at risk from more intense competition while its duty-free access to the EU and Canadian markets should allow Bangladeshi exporters to retain some of their competitive edge there, he observed.

Delivering his statement in the inaugural session of Bangladesh Development Forum 2004 meet at Hotel Sonargaon Saturday afternoon he said Bangladesh, over the last decade, has achieved solid growth averaging 5 percent with manageable inflation and improved social indicators.

"However, it remains among the world's poorest countries, with a high poverty rate. Meeting its Millenium Development Goals (MDGs) by 2015 will require much faster economic growth and more effective pro-poor policies," he suggested.

The funding-agency executive said the IMF, together with the World Bank, the Asian Development Bank and bilateral donors, supports Bangladesh's agenda of pro-poor growth and social development through policy advice, technical assistance and financial supports.

The starting point of this support is Bangladesh's poverty reduction strategy, the outline of which was laid down in the National Strategy for economic growth, poverty reduction and social development.

On this basis, the IMF advisor said, the IMF executive board approved a three-year programme for concessional lending under Poverty Reduction and Growth Facility (PRGF).

Bangladesh has already received two disbursements under the PRGF arrangement and the authorities and IMF staffs have just concluded discussions for the second-year programme, he told the meet.

Touching on one-year achievements the IMF representative said overall economic performance had been strong, with growth anticipated to be 5.5 per cent.

This economic growth is supported by a rebound in exports and good harvests, he said. "But, unforeseen increases in import prices have pushed up inflation, which is set to reach 6 percent."

Buoyed by the strong performance of exports and enhanced remittances, official reserves have increased over the last year to the equivalent of three months' imports, he noted.

Weerasinghe said the government's sound macroeconomic policies and advances in structural reform are to be credited for the economic achievements. The fiscal deficit has been kept well under control, despite some under-performances on the tax revenue front, and the monetary policy has been cautious while providing adequate room for loans to the private sector.

He appreciated and welcomed various commitments and steps of the government on macroeconomic front and poverty reduction programme. And the IMF is prepared to be actively engaged in helping Bangladesh implement its growth and poverty-reduction strategy, through continued technical assistance and financial support under the PRGF, he said.

--UNB


IMF set to approve Poverty Reduction and Growth Facility plan for Bangladesh

IMF hints at release of 3rd installment of PRGF fund worth $70m

Bangladesh has made good progress in structural reforms despite delays in some areas and its economy gathered further strength in fiscal 2003-04, an International Monetary Fund (IMF) mission said on Saturday.

The country's economy is expected to attain about 5.5 percent growth in the current fiscal from previous fiscal's 5.3 percent, mission chief Nissanke Weerasinghe, Advisor to Asia Pacific Department of the IMF, told a press briefing at the IMF office here. 

He made the comment after reviewing the progress of the Poverty Reduction and Growth Facility (PRGF) programme of the IMF for Bangladesh.

Based on the economic achievements during current fiscal and understandings reached with the government on economic policies, the IMF Executive Board would approve the second year PRGF programme for Bangladesh.

The mission led by Nissanke Weerasinghe conducted the second review of the PRGF and discussed the second year programme under PRGF from April 24 to May 8.

IMF resident representative Marijn Verhoeven and World Bank's senior economist for South Asia on poverty reduction and economic management Sandeep Mahajan were present at the press briefing.

The 3-year PRGF arrangement was approved in June 2003, with a total SDR 347 million (Special Drawing Rights) loan, equivalent to USD 500 million at present exchange rate, which would be disbursed in seven equal installments.

Two installments were already disbursed and the third installment would be disbursed after completion of the current review, which is being made by the IMF Executive Board.

"But, inflation is running higher than expected, and prices are likely to be six percent higher in 2003/2004 fiscal than last fiscal. The higher inflation is mainly due to large increases in import payments following the worldwide rise in commodity prices. Recently, inflation have leveled off," the mission reported.

Strong demands from domestic sources and from abroad are underpinning a recovery in industrial activity and services.

Appreciating macroeconomic policies of the government, the IMF mission remarked that "fiscal and monetary policies have been appropriately tight by providing room for economic growth, and external debt policy has been prudent with bulk of foreign debt contracted at concessional terms.

"Bangladesh Bank has managed the exchange rate well since the float of taka in May 2003, with competitiveness improving as the taka depreciated slightly against the main competitors," it added.

The flexible exchange rate will provide a first line of defense against the shock the country will face after this year in quota free global trade during post multi fiber agreement (MFA), it said.

The mission criticized the government for its failure to bring reforms in privatising the state owned enterprises (SOEs) due to political resistance from vested quarters. The mission reached agreement with the government on further steps in these areas.

The mission stressed reduction of anti-export bias in the trade regime, improving investment climate in the country, continued prudent financial policies, cost effective measures to assist the readymade garments sector and its workers as well.
--BSS

IMF hints at release of 3rd installment of PRGF fund worth $70m

International Monetary Fund dropped a broad hint Saturday that Bangladesh would get the third installment of PRGF loan from the funding agency, worth over 70 million US dollars.

An IMF mission gave the indication, ending a two-week review on the country's macroeconomic, fiscal and monetary performance as well as understandings reached on economic policies for fiscal 2004-05.

"…the mission is very hopeful that the Executive Board will complete the review and approve the second-year programme," the donor agency said in a statement Saturday.

Led by IMF Adviser for the Asian Pacific Department (APD) Nissanke Weerasinghe, the mission visited Bangladesh April 24-May 8 to conduct the second review of the Poverty Reduction and Growth Facility (PRGF) and to discuss the second-year program under the PRGF.

The 3-year PRGF arrangement for Bangladesh was approved in June 2003, with a total loan amount of SDR 347 million equivalent to about $500 million at current exchange rates.

The credits would be disbursed in seven equal installments, of which the first was disbursed at the time of the approval of the loan by the IMF Executive Board and the second in January 2004 upon completion of the first review.

After the reappraisal, the mission observed that the economic recovery further strengthened in FY 2003-04 and the growth is likely to increase to about 5.5 percent, from 5.3 percent last year.

"Strong demand from domestic sources and abroad are underpinning a recovery in industrial activity and services," it said.

But, the mission said, inflation was running higher than expected, and prices were likely to be 6 percent higher in FY03/04 than last year. The higher inflation is mainly due to large increases in import prices following the worldwide increase in commodity prices. Recently, inflation pressures have leveled off.

The accumulation of foreign exchange reserves continued, standing at $2.8 billion or close to three months' import bill. This reflects the rebound in exports and continued growth in remittances, says the statement about the country's latest situation.

Prudent macroeconomic policies underlie the strong performance of the Bangladeshi economy. Fiscal and monetary policies have been appropriately tight, while providing room for economic growth, and external debt policy has been prudent, with the bulk of foreign debts contracted at concessional terms.

The IMF said Bangladesh Bank managed the exchange rate well since the float of the Taka in May 2003, with competitiveness improving as the currency depreciated slightly against Bangladesh's main competitors.

Tax revenues have under-performed somewhat, and an intensification of tax reforms and enforcement efforts is needed. Also, the mission encouraged the authorities to intensify its efforts to build an active secondary government securities and bond market. There has been good going with structural reforms, although with delays in some areas. A new Large Taxpayer Unit for income tax and a Central Intelligence Cell have been set up in NBR, controls on NCBs have been enhanced and the strengthening to their management has been initiated, although this process has moved more slowly than envisaged.

Progress in SOE reform has stalled due to political resistance from vested interests. The mission reached agreement with the government on further steps in these areas.

Looking forward, Bangladesh will face the challenge of the phasing out of quotas under the Multi Fiber Agreement as of 2005. The flexible exchange rate provides a first line of defense against this potential shock.

In addition, there is a need to reduce the anti-export bias in the trade regime, improve the investment climate, continue prudent financial policies, as well as cost-effective measures to assist the RMG sector and its workers.

The mission also took note of the progress with the preparation of the full PRSP to be completed by end-2004. It welcomed the commitment of the government to broad-based participation in the PRSP process to ensure genuine national ownership and the costing and incorporation of pro-poor policies in medium-term expenditure framework.
--UNB


Saifur for strong backing of development partners for uplift efforts

Finance and Planning Minister M Saifur Rahman today told the Bangladesh Development Forum here that the country achieved a remarkable socio-economic progress this year despite uneasy political climate created by the opposition.

He sought strong backing of the development partners in building a prosperous Bangladesh while speaking highly about the partnership between the government and the country's development partners over the past years.

Speaking at the opening of the forum attending by representatives of 32 development partners including about 15 agencies, the finance minister said the GDP growth this year is likely to exceed 5.5 per cent backed by strong macroeconomic support.

Prime Minister Begum Khaleda Zia opened the event at Sonargaon Hotel in the city. Cabinet ministers, senior government officials, academics and leaders of the civil society also attended the opening of the forum meeting.

The forum will meet in several working sessions tomorrow and Monday to discuss a host of issues related to development policies, aid utilisation and good governance.

World Bank vice president for South Asia Praful C Patel, IMF advisor for Asia Pacific Region Nissanke Weerasinghe and ERD secretary Mirza T Beg also spoke at the occasion.

Patel and Weerasinghe appreciated Bangladesh's progress in various socio- economic fronts while asking more progress in governance and improving the law and order situation in particular.

They said Bangladesh has immense development potentials and it requires more concerted efforts to move to higher level of growth which underutilised so far.

Patel said Bangladesh is only next to Sri Lanka and ahead of other South Asian countries in moving to realise its Millennium Development Goals by the year 2015.

Listing some successes at the meeting, the finance minister said agriculture grew by 4.2 per cent, fiscal deficit contained, trade surplus on current account widened and industrial production grew by 7.2 per cent in the first half of the current fiscal.

He also referred to some other indicators that said bank credit to the private sector grew by 12 per cent, agricultural credit by 10 per cent, disbursement of industrial term loan by as many as 76 per cent.

These indicators suggest a strong industrial activity taking place in the country when domestic and foreign investments grew by 20 and 85 per cent respectively in the first 10 months of the current fiscal.
--BSS

Development Forum meets today to talk Bangladesh's progress in poverty cut

Bangladesh Development Forum 2004 begins in Dhaka today (Saturday) to discuss Bangladesh's progress in poverty reduction and future course of action to meet its development goals.

The Government of Bangladesh and development partners from 32 countries and agencies will meet in the forum.

Prime Minister Begum Khaleda Zia will address the opening session along with Minister for Finance and Planning M Saifur Rahman, World Bank Vice-president for South Asia Region Praful C Patel and IMF Representative Nissanke Weerasinghe.

Co-chaired by M Saifur Rahman and Praful Patel, the working sessions of the Forum on Sunday and Monday will focus particularly on policies and programs to deliver the Poverty Reduction Strategy Program (PRSP) and the Millennium Development goals (MDGs), issues related to good governance and human security, partnerships between government and NGOs, human development outcomes, trade and investment climate, infrastructure to support development and aid governance that would help better implementation of development programs.

Over the past few years, the Forum has moved away from making any financial pledges and developed a tradition of substantive discussion of development issues where the government and development partners take lessons from the past, review the progress Bangladesh made in the preceding year and work together to decide on priorities and future directions.

The forum will be followed by press conference hosted by the Minister for Finance and Planning at Hotel Sonargaon on Monday.

--UNB

Saifur pledges development with domestic resources only

 Only 2.8 per cent of GDP came from foreign assistance

Custodian of the exchequer Saifur Rahman Wednesday pledged to ensure the country's economic development with the domestic resources only, provided there be sociopolitical stability.

"It's possible to achieve economic development with our own resources," the Finance and Planning Minister told a civil- society meeting here, calling for putting an end to confrontational politics that's dividing the nation and decelerating the pace of tapping national resources.

He sounded so upbeat amid observations at the meeting that the country should devise need-based projects with own resources to avoid donors' conditions that hinder economic growth.

Civil-society think tank Centre for Policy Dialogue (CPD) organised the dialogue on "Bangladesh Development Forum 2004: Civil Society's Perspective" at the CIRDAP auditorium, bringing together government, donors and civil-society representatives.

Donors are sitting here Saturday in the BDF meet to evaluate government policies and programmes to deliver on the PRSP, promote good governance, enhance partnership between the government and NGOs, and improve human-development outcomes and trade and investment climate.

Promoting infrastructure to support growth and development, and aid governance and implementation of development programme would also be the issues to be discussed at the Forum.

The minister rejected the criticism that the economy is dependent on the drip feeds of foreign aid as he said only 2.8 per cent of GDP came from foreign assistance.

He said all the development activities had been tagged with the I-PRSP and the government was trying to establish good governance while reforms in the financial sector were moving fast.

But reform as well as development activities were being hampered in some cases due to the confrontational politics, he added.

He apprised the meeting of steps being taken to increase investment in infrastructure development on priority basis considering the significant role of infrastructure in economic development.

Civil-society leaders identified confrontational politics, corruption and law-and-order situation as the major impediments to the economic development of the country.

Taking part in discussion, World Bank country director Christine I Wallich appreciated some of Bangladesh's achievements, particularly the macroeconomic performance and banking-sector reform.

But, she stressed the need for establishing good governance in the country while called for initiating public debate on the PRSP as it generated differences of opinion among the citizens.

She also stressed the need for reform in police, health and education sectors.

Parliament members, political leaders, academics, economists, donor representatives, business leaders, bankers, NGO activists and foreign diplomats were present at the dialogue, with Prof Rehman Sobhan in the chair.

--UNB

Law & order situation, reforms to set mood of donors meet in Dhaka

Prime Minister to open BDF meeting on May 8

The Bangladesh Development Forum (BDF) meeting to span over three days in Dhaka opened on May 8, official sources confirmed.

Prime Minister Begum Khaleda Zia will open the extraordinary meeting here that used to take place previously in Paris, at 5 pm at Sonargaon Hotel in the city. The meeting will be followed by a press conference to be held on May 10.

Cabinet members, representatives of the development partners and senior government officials will attend the opening of the meeting.

Finance Minister M Saifur Rahman will remain in the steering seat of the meeting with Vice president of World Bank South Asia Region Praful C Patel coordinating the donors side.

Ministers and secretaries of the government will take part in discussions on various issues and review of progress with the representatives of the development partners.

The ADP growth prospects, projected to be exceeding 5.5 per cent this year are also on the high side to outweigh some other issues like the law and order situation.

Representatives of 23 development partner countries and agencies, some from their local offices and others coming here from their head quarters will take part in the meeting.

Last year, the BDF meeting also took place in Dhaka breaking the past practice of holding it in Paris. The change in venue took place as the Bangladesh government was able to convince the development partners about it in view of its growing voice on policy decisions and shaping development programmes.

The meeting provides an annual forum for discussion on policy issues, implementation status of decisions of the previous forum meeting, progress in ongoing reforms and pace of resource utilization and project implementation under the ongoing ADP. 

The three-day meeting will see discussions in several working sessions on issues like trade and investment climate, governance and law and order, ports and infrastructure development, human resource development and government NGOs partnership, the sources said.
--BSS