achieving results together: 25 years bangladesh resident

3 OVERVIEW 5 Bangladesh and ADB 6 Bangladesh Resident Mission: In Retrospect 8 Key Functions of BRM10 Bangladesh Quarterly Economic Updates

12 BANGLADESH: DEVELOPMENT CHALLENGES13 Evaluation at ADB13 Focusing on Results

14 INFRASTRUCTURE AND GROWTH14 Urban Infrastructure Development16 Mitigating Flood Damage through Emergency Support17 Transport18 The Padma Bridge: Realizing Dreams20 Power for Development21 Gas Infrastructure: Making Gas Visible

22 SOCIAL DEVELOPMENT22 Sustaining Growth through Education24 Health: Strengthening Human Development

25 TOWARD INCLUSIVE GROWTH25 Agriculture and Natural Resources26 Water Resources Management26 Rural Infrastructure Development

27 FINANCE

27 THEMATIC ISSUES27 Governance for Development Effectiveness28 Developing a National Involuntary Resettlement Policy28 Regional Cooperation: Growing Together29 Gender and Development30 Private Sector Development31 Telecommunications and Poverty Reduction31 Partners in Progress: NGOs and Civil Society

The Asian Development Bank (ADB) celebrates 41years of fruitful cooperation with the governments andpeoples of the Asia and Pacific region in 2007. Openingin late 1966 in Asia, ADB helped its developing membercountries (DMCs) progress from what were then largelyagricultural economies.

ADB's vision is a region free of poverty. Its mission isto help its DMCs reduce poverty and improve thequality of life of their citizens. ADB’s main instrumentsfor helping its DMCs are policy dialogue, loans, equityinvestments, guarantees, grants, and technical assistance.ADB lends to governments and to public and privateenterprises in its DMCs.

ADB's operations are diverse, covering agriculture andnatural resources; education; energy; finance; health,nutrition, and social protection; industry and trade;law, economic management, public policy; transportand communications; and water supply, sanitation, andwaste management.

Bangladesh joined ADB in 1973 andbecame one of the largest borrowers ofconcessional Asian Development Fund

(ADF) resources. Cumulative public sectorlending to Bangladesh by the end of 2006

amounted to about $8.3 billion for 176loans, and technical assistance grants

amounted to $170.95 million for318 projects in key sectors, including

energy, transport, social infrastructure, andagriculture and natural resources. ADBhas also supported eight private sector

projects worth $242.18 million, includingthe Meghnaghat Power Project, the firstbuild-own-operate power project in the

country, and GrameenPhone, whichsubstantially expanded rural access to

mobile phone services.

Bangladesh and ADBUnder the country strategy and program (CSP) for 2006–2010, ADB is contributing to theenergy, transport, education, urban health, governance, and urban water supply andsanitation sectors. In other areas, such as agribusiness, water resources management, andfinancial sector and small- and medium-sized enterprise development, ADB is supportinginitiatives led by other development partners (DPs). Disaster mitigation, regional cooperation,gender, and environment continue to be addressed as key cross-cutting issues. ADB’s privatesector operations have been oriented to complement public sector operations to addresscritical infrastructure and policy constraints to mobilizing private investment, both domesticand foreign. In recent years, ADB has played a significant role in encouraging a constructivedialogue to lead reforms in the energy, transport, and education sectors. ADB policy dialogueon governance has focused on reducing corruption and on improving financial management,procurement, and institutional capacity. The results-based CSP was developed as a landmarkharmonization initiative jointly with the Department of International Development (DFID)of the United Kingdom, the Government of Japan, and World Bank, which together provideabout 80% of all development assistance to Bangladesh. The CSP is fully aligned with thevision, strategies, and priorities of the Bangladesh National Strategy for Accelerated PovertyReduction. Implementation of the CSP has deepened progress made in harmonizing andaligning external assistance. In conjunction with the lending program, ADB continued toactively pursue various forms of partnership arrangments and seek cofinancing from grantand concessional loan sources. Close coordination has been maintained through regularcontact and dialogue with the major DPs, and special efforts are made to involve the DPsearly in the identification stage of new projects. Commercial cofinancing is being exploredto enhance financial resources from capital markets and to mitigate political and/or creditrisk. In addition, ADB's guarantee resources will be utilized as required.

ACHIEVING RESULTS TOGETHER 5

The Bangladesh Resident Office, as it was originally named,was opened on 22 July 1982, after ADB signed an agreementwith the Government on 16 July 1982. BRM was establishedas an experiment intended to improve working relationshipwith the Government, complement ADB’s aid cooperationefforts with other development partners, and focus attentionon implementing ADB-assisted projects.

Operations of ADB’s first resident office in Dhaka started atthe Hotel Sonargaon with nine staff members. As itsresponsibilities and staff expanded, the resident officetransferred locations several times. Finally, on 30 October2002, the BRM laid the first foundation stone of its ownbuilding. BRM then relocated to the new building upon itscompletion in 2004. Growing steadily over the years, BRMis now one of ADB’s larger field offices with over 50 staffmembers. Having the BRM experience proved theeffectiveness of the resident mission concept, ADB hasestablished 19 resident missions, 3 subregional missions,a special liaison office, and 3 representative offices in Europe,North America, and Japan to liaise with its donor countries.

Bangladesh Resident

In RetrospectMission:

The Bangladesh Resident Mission (BRM) has thedistinction of being ADB’s first field office.

BRM Chronology

22 October 1981 ADB Board of Directors approved theestablishment of Bangladesh ResidentOffice (BRO)

16 July 1982 ADB and the Government of Bangladeshsigned the agreement establishing BRO

22 July 1982 Operations started in temporary rentedspace in Hotel Sonargaon

22 October 1982 Premises at the 2nd floor of BangladeshSteel and Engineering Corporation (BSEC)Bhaban at Kawran Bazar wereinaugurated. Song Chil Lee was the firsthead of office of the BRO

August 1988 BRO relocated to the 7th floor of BSECBhaban

January 1995 BRO renamed Bangladesh ResidentMission (BRM)

15 August 1996 BRM transferred to the 3rd floor of BSLOffice Complex, Hotel Sheraton AnnexBuilding

30 October 2002 Foundation stone of BRM office buildingwas laid at Agargaon, Sher-e-Bangla Nagar, Dhaka

22 June 2004 ADB President Tadao Chino and FinanceMinister to the Government of Bangladeshofficially opened BRM office buildingBRM office building


• country programming;• economic, thematic, and sector work and studies;• processing loans and technical assistance projects;• managing the portfolio of ongoing loan and technical

assistance projects;• processing loan disbursements;• managing relations and undertaking policy dialogue with

the Government and other national stakeholders,including the private sector, academia, and nongovernmentorganizations (NGOs);

• seeking cofinancing from grant and concessional loan sources and coordinating with other development partnersactive in Bangladesh; and

• external relations and information dissemination.

KEY FUNCTIONS��of

As of September 2007, ADB’s assistance portfolio for Bangladesh consistsof 44 ongoing loans with a net loan amount of $2.9 billion. BRM hasdelegated responsibility to administer 70% of the ongoing projects, withthe balance administered by ADB headquarters sector divisions. This isthe highest level of portfolio delegation among all ADB resident missions.Also ongoing are 31 technical assistance (TA) projects, amounting toabout $22.37 million in grant funding. The ongoing portfolio in publicsector lending is dominated by four sectors: energy (43%), transport andcommunications (17%), education (12.3%), multisector (11.2%), andagriculture and natural resource (7.78%). Lending in other sectors includingwater supply, sanitation and waste management, industry and trade,finance and health operations has been small, although these sectorshave been given more prominence in recent years. The sectoral distributionof ADB’s public and private sector lending and TA grants are presentedin figures 1–3.

ADB’s partnership withBangladesh is set out in a

country strategy and program(CSP) for 2006-2010. The CSP,now referred to as the country

partnership strategy, inaccordance with ADB’s current

operational guidelines, isprepared typically every 5 years

to support nationaldevelopment priorities.

The CSP was formulatedthrough an extensive process ofconsultation with theGovernment and other nationalstakeholders, in coordinationwith other developmentpartners. It is preceded by aseries of analytical studies onthe current status andchallenges in key developmentsectors and areas. A 3-yearrolling business plan outliningADB’s assistance program oflending and technical assistanceoperations is reviewed andupdated annually.


BRM regularly publishes the Quarterly EconomicUpdate (QEU) featuring up-to-date assessment ofmacroeconomic developments in the country. QEUsassess real sector developments, fiscal management,monetary and financial developments, balance ofpayments, inflation and exchange rates, and capitalmarkets. Being one of the few regular publications ofits kind, QEUs have a large readership and areconsidered by the Government, development partners,private sector, and the academia as a dependablesource on macroeconomic assessment in Bangladesh.Since the first issuein March 2001, theQEUs have steadilygained popularityand acceptance,and are widelyreferred to in thepress, electronicmedia, anddocuments ofvarious nationaland internationalagencies. Also eachissue of the QEUscontains essaysanalyzing keypolicy, sectoral, anddevelopment issues relevant to Bangladesh. Some ofthese essays provided valuable insights into theformulation of policies and adoption of desired actions.

Bangladesh QuarterlyEconomic Update

Responsibilities have been delegated to BRMfor undertaking analysis and preparing reportson Bangladesh macroeconomic, social, andsector developments to support ADB’soperational activities. Among its widely regardedpublications is the Bangladesh QuarterlyEconomic Update.

Figure 1:Cumulative ADB Public Sector

Lending in Bangladesh,as of December 2006 (in $ million)

Figure 2:Cumulative ADB TA Grants

for Bangladesh,as of December 2006 (in $ million)

Figure 3:Cumulative ADB Lending

to Private Sector in Bangladesh,as of December 2006 (in $ million)

ABD Lending in Bangladesh,as of December 2006

Agriculture & Natural ResourcesEnergyHealth, Nutrition & Social ProtectionMultisectorWaters Supply, Sanitation &Waste ManagementEducationFinanceIndustry & TradeTransport & Communications

1.0%

21.5%

12.1%

5.6%2.0%

3.3%

19.9%

10.2%

24.3%

Agriculture & Natural ResourcesEnergyHealth, Nutrition & Social ProtectionLaw: Economic Management &Public PolicyWaters Supply, Sanitation &Waste ManagementEducationFinanceIndustry & TradeTransport & CommunicationsMultisector

7.7%

16.4%

7.0%

2.7%2.5%

8.4%

30.5%

10.2%

11.6%

3..2%ADB TA for Bangladesh,as of December 2006

0.2%

10.2%26.2%

15.8%ADB Lending to PrivateSector in Bangladesh,as of December 2006

EnergyFinanceIndustry & TradeTransport & Communications

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BRM’s external relations unit oversees the implementation of ADB’spublic communications policy in Bangladesh, disseminating information

on ADB operational activities to the public through a quarterlynewsletter and press releases, and organizing press tours and briefingsto mark special occasions, including visits by high-level officials and

publication of key reports such as the Quarterly Economic Updateand Asian Development Outlook. A public information center, with

Internet facilities, is also available in BRM to enable public access toADB publications, reports, and information resources.

BRM regularly consults with key national stakeholder groups,usually quarterly, to exchange views on current developmentissues and brief them on ADB’s operations. Stakeholders includerepresentatives of the private sector; civil society and NGOs;

and academia, research institutions, and think tanks.

BRM actively participates in the local consultative group (LCG) ofdevelopment partners to coordinate external assistance, and is a

permanent member of the LCG executive committee. The LCG comprises22 active sector and thematic working groups, and provides a forumfor exchanging views on development and policy issues, with a plenary

co-chaired by the Economic Relations Division of the Ministry ofFinance. BRM plays a lead role in coordinating development partners’assistance to support the Government’s reform initiatives in the transport,

energy, education, and urban sectors, as the chair of the respectiveLCG subgroups.


Bangladesh has made impressiveprogress in reducing poverty andfostering human development overthe past 15 years. Poverty incidencedeclined to 40.0% in 2005 from48.9% in 2000, showing a decline of1.8 percentage points a year comparedwith 1 percentage point a year declinein the preceding decade. The decline

in poverty was fueled by higher grossdomestic product (GDP) growth

and a steady rise in access ofthe poor to microcredit,workers’ remittances, andsocial services. If the currenttrends continue, povertyincidence will decline to

22% by 2015. Good progress has beenmade in several other MillenniumDevelopment Goals. Over these 15years, under-5 mortality was halved,life expectancy rose from 56 to 66years, and underweight children under5 years of age declined from 66% to48%. Most children attend primaryschool, and gender parity has beenachieved in primary and secondaryeducation. Despite the significantprogress achieved, vast developmentchallenges remain.These include improving socialservices, upgrading infrastructure,raising revenue collection, andimproving governance.

BANGLADESH:DevelopmentChallenges

Implementation of the results-based CSP jointly withstrategy partners (DFID, Government of Japan, andWorld Bank) has enhanced coordination among the

partners and effectiveness of policy dialogue with the Government in key sectors. Thejoint partnership collaboration has enabled ADB to strengthen engagement in sectors,namely, railways, Dhaka/Chittagong water supply and sanitation, and power wherereforms are difficult but are important to economic growth and poverty reduction. Inaddition to the joint CSP monitoring focused on results, ADB helps the Governmentadopt managing for development results as an explicit public sector managementpractice. Technical assistance for capacity building in results-based project monitoring,and evaluation is being provided for the implementation, monitoring, and evaluationdivision of the planning ministry and the foreign-aided project audit directorate of thecomptroller and auditor general’s office. ADB is also strengthening capacity in results-based management for four government agencies under a regional technical assistance.Each agency has undergone an institutional readiness assessment for results-basedmanagement and will receive capacity building support, including identification oforganizational results based on sectoral and national targets, key performance indicators,and strengthening of information systems for monitoring and evaluation.

Focusing on Results

All ADB-funded projects are evaluated to assess theirdevelopment effectiveness. There are two levels of evaluation—self-evaluation and independent evaluation. All projects are self-evaluatedby the relevant ADB operations department in project completion

reports, which are publicly disclosed and are available on ADB’s website. Clientgovernments are also required to prepare their own project completion reports. ADB’sOperations Evaluation Department (OED) evaluates a proportion of completed projects.All OED reports are publicly disclosed although some evaluations of private sectoroperations are edited to protect commercially confidential information. The reports arealso made available on ADB’s website. Evaluation is carried out to facilitate learningfrom past successes and failures, and for reasons of accountability.

��


In Bangladesh, infrastructure development is a priority area ofADB’s assistance program. As of the end of 2006, the share ofthe energy and transport sectors in ADB’s public sector lendingto Bangladesh was 45%. ADB’s strong support to the energy andtransport sectors has proved especially beneficial over time,combining programs of incremental reform with capacity buildingand investment support. ADB will continue to focus on efficientpublic investment in essential infrastructure and services, whichwill be needed to bolster investor confidence and expandopportunities for subregional trade and investment. Over thepast decades, the Government and the private sector underinvestedin infrastructure assets. Thus, Bangladesh faces the most severepower shortages in the region.

Urban Infrastructure DevelopmentBangladesh has over 140 million people, a quarter of whom livein urban areas. The urban population is growing at 2.5% peryear and more than half of the urban population is concentratedin Dhaka and the three metropolitan areas of Chittagong, Khulna,and Rajshahi. ADB has been a lead agency in supporting urbandevelopment in Bangladesh, with initiatives at the policy andoperational levels, through projects on urban infrastructure,water supply and sanitation, and integrated urban flood protectionand emergency flood rehabilitation.

Infrastructure and Growth

Since 1982, ADB has assisted Bangladesh in developing urban infrastructurethrough four projects amounting to over $150 million. These includeprojects to improve water supply and sanitation in 14 pourashavas(municipalities or secondary towns) and strengthen their administrationand financial management, and improve the urban environment andliving conditions in another 32 pourashavas. The ongoing UrbanGovernance and Infrastructure Improvement Project will benefit about2.5 million people by improving living conditions using an integratedapproach that includes provision of basic urban services—such as accessto water supply, drainage, sanitation, and solid waste management—andsupporting health and literacy development activities.

Besides focusing on secondary towndevelopment, ADB is collaboratingwith Danish International DevelopmentAgency, DFID, Government of Japanand World Bank to support a medium-term program of policy and institutionalreforms, capacity building andinvestments required to deliverimproved water supply, and sewerageand drainage services on a sustainablebasis in the major metropolitan citiesof Dhaka and Chittagong.


ADB has helped Bangladesh quickly recoverfrom the devastation caused by recurringnatural disasters through eight emergencyrehabilitation projectsfollowing the floods in1988, 1998, 2000, and2004, and the cyclone of1991. In response to thedevastating floods in 2004,ADB, with the WorldBank, assessed flooddamage and provided theEmergency Flood DamageRehabilitation Project withcofinancing from theSwedish InternationalDevelopment CooperationAgency (Sida) and theGovernment of theNetherlands. The projectwas implementedsuccessfully and completed ahead of its2-2-year time limit. The project focused onrehabilitating damaged infrastructure (roads,bridges, railways, and water resources) inpriority areas identified in consultation with

the Government, public and private sectorstakeholders, civil society, and affectedcommunities. During rehabilitation,

appropriate and cost-effective flood-proofingmeasures and improveddesign standards wereadopted to minimizefuture flood damage.

The project's results areclearly evident, as trafficnow flows on rehabilitatedroads and railways; ruraltowns are being served byrebuilt water supply,sanitation, and drainageinfrastructure; villages areprotected by repairedflood embankments; andfarmers are harvesting

crops on previously flooded land. Becauseof its transparency and efficiency ofimplementation, the project has beenrecognized as the best-performingdevelopment project by the Government.

Mitigating Flood Damagethrough Emergency Support

ADB is helping Bangladesh improve road subsector performancethrough policy support, sector governance reforms, and increasedprivate sector participation. ADB works closely with the Governmentto realize the approved reform actions in the subsector, including byapproving an integrated multimodal transport policy, preparing a20-year transport master plan, addressing acute transport problems inDhaka, and approving the Road Fund Act to secure predictable andsustainable road maintenance funding. ADB is supporting improvementsin the Dhaka–Chittagong transport corridor, including the railway andthe highway. ADB is assisting in the feasibility study of theDhaka–Chittagong Expressway proposed for implementation throughprivate sector participation.

At Chittagong Port, ADB is providing investment funds and technicalassistance to develop the infrastructure and introduce modern automatedsystems for better management and improved governance in the portand the Customs House of Chittagong.

ADB is partnering with World Bank and the Government of Japan toimprove the performance of the railway sector in Bangladesh. The focusis on (i) implementing policy and institutional reforms to make BangladeshRailway more commercially focused and to improve governance andaccountability; and (ii) investing in infrastructure and rolling stockcapacity improvement in commercially important corridors such asDhaka–Chittagong and Dhaka–Darsana–Khulna. Improving the efficiencyof the railway will not only support higher economic activity insideBangladesh, but will also create opportunities for cross-bordertransportation of passengers and goods in the region and facilitatemajor cross-country investment.

ADB has provided substantial assistance to Bangladeshto improve transportation infrastructure, such asroads, bridges, railways, and ports, amounting to over$1.4 billion. This includes support for the JamunaMultipurpose Bridge, Jamuna Bridge Railway Link,Chittagong Port, and key sections of the country’s nationalroad transport network.

Jamuna Multipurpose Bridge and its railway linkcontributed to lifting over a million people out of poverty.Besides stimulating the socioeconomic development ofthe less-developed northwestern region, the JamunaBridge greatly reduced transport costs, boosted trade,and increased opportunities in the labor market. Throughthe bridge and with support from the ADB-assisted GasTransmission and Development Project, gas supply willbe provided through a pipeline crossing the Jamuna Riverto serve industries and domestic customers in the westernregion, including the cities of Rajshahi and Khulna, forthe first time.

Transport


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THE PADMA BRIDGE

Realizing DreamsThe project preparatory technical assistancealso confirmed that the bridge is expected togenerate substantial benefits for economicdevelopment, particularly of the relativelyunderdeveloped western region of the country,and provide a sound basis for subregionaltransport connectivity. It will have significantimpact on the national economy by facilitatingan increase in production, employment, andincome, thus helping reduce poverty. It willalso contribute at the subregional level byproviding Bangladesh with a second access fortransit of goods among its South Asian neighbors,including Bhutan, India, and Nepal. ADB isfinancing the detailed engineering design of thePadma Multipurpose Bridge, including an in-depth analysis of the scope for public–privatepartnership in constructing the bridge.

B uilding on the success of the JamunaMultipurpose Bridge, ADB and other

development partners are preparing tosupport the construction of the $1.5

billion Padma Multipurpose Bridge. ADBprovided technical assistance in preparing

the bridge project, which verified thefindings of a feasibility study by the JapanInternational Cooperation Agency that

construction of the Padma Bridge wouldincrease GDP growth by 1.2%, and

create over 700,000 jobs.

ADB has been helping the Government achieve itsgoal of providing reliable electricity to the entire countryby 2020, focusing on transmission, distribution, andpeaking power plants, and helping the Governmentcarry out specific reforms. Since Bangladesh joined

ADB in 1973, thepower sector hasreceived about

$1.7 billionto improvethe capacityand qualityof powersupply andanother 23technicalassistancegrants,totalingabout $14.6million.

ADB's power subsector strategy for Bangladesh focuseson changing the business environment throughcorporatization, commercialization, and increasingpublic–private partnership, institutional improvementsin key power sector entities, enlarging the scope forrural electricity supply cooperatives, and strengtheninglong-term planning and regulatory processes. ADB willalso continue to support the Government in improvingsector governance and in implementing its power sectorreform plans while promoting a regional approach to

harness the power generation potential with cross-border trading.

The Ninth Power Project(1996) and the DhakaPower System UpgradeProject (1999) helpedcreate commerciallyoriented corporateentities, rationalize thearea between distributionentities, and promoteprivate sector participationin power generation. TheWest Zone Power System Development Project (2001)helped supply electricity to the district towns andvillages in southwestern Bangladesh, and facilitatedprivate sector participation in distribution.

Under the Sustainable Power Sector DevelopmentProgram (2007), ADB, together with GermanDevelopment Cooperation, is assisting the Governmentimprove the sustainability of the power sector byfacilitating further reforms; and expanding andimproving clean energy generation capacity, production,transmission, and distribution systems. Under theproject a national action plan for power sector reformswill be prepared, sector entities will be furtherrestructured, and private sector participation andpublic–private partnerships will be promoted. WithADB's support, unbundled power entities—Power GridCompany of Bangladesh and Dhaka Electric SupplyCompany Ltd—have demonstrated improvedmanagement and operational efficiencies, as reflectedin significantly reduced system losses and improvedrevenue collection.

��

ADB has helped Bangladesh develop major gasfields (Titas, Habiganj, and Bakhrabad), gastransmission systems, and most distributionnetworks across the eastern part of the country,with over $676 million in loans and $5 million intechnical assistance grants since 1975. The ThirdNatural Gas Development Project (1993) improvedinfrastructure, increased gas supply, and introducedstructural reforms in the gas sector. The DhakaClean Fuel Project (2002) is focusing on advancingthe use of domestic resources for the transportsector by creating the initial infrastructure for thesupply of compressed natural gas (CNG) fuel inDhaka as well as establishing the initial criticalnumber of CNG-fueled vehicles. It will also helpimprove Dhaka's air quality. Under the GasTransmission and Development Project (2005),four gas transmission pipelines totaling 353kilometers will be constructed to transport about360 million cubic feet of natural gas per day to theless developed western region of the country, witha population of nearly 15 million.

ADB’s operational focus in the gas sector is tocreate an enabling environment for privateinvestment, segregate the functions of sectorregulation and operation, help make sector entitiesfully autonomous, strengthen the regulatoryframework, rationalize prices, reduce system losses,and improve efficiency. ADB will promote regionalcooperation and assist the Government developpolicies to maximize the economic benefit of gasresources and connect major reserves in the region.

Gas Infrastructure

�� Natural gas accounts for morethan 70% of commercial energy

in Bangladesh. TheGovernment’s Gas Sector

Master Plan (2006) estimatesthat the demand for gas will

increase at about 7% annually,attaining 5.6 billion cubic feet

per day by 2025, requiringsubstantial investments. About$7.7 billion will be required todevelop additional gas reservesof 24 trillion cubic feet to meet

this demand.


SOCIAL DEVELOPMENT

ADB has played a lead role in improving the education sectorin Bangladesh, encompassing primary, secondary, nonformal,and distance education. Since 1990, ADB has assisted inconstructing primary schools, improving teachers’ education,and providing students with free educational materials,through two primary education sector projects.

The Government is now implementing the Second PrimaryEducation Development Program (PEDP-II) under a sector-wide approach supported by 11 development partners, withADB as the lead development partner. Launched in September2004, PEDP-II aims to provide quality primary education toall eligible children in the country and contribute to sustainablesocioeconomic development and equity as envisaged in theMillennium Development Goals.

Sustaining Growth

PEDP-II promotes comprehensive policy reforms,including improving governance and results-based monitoring, focusing on quality, equity,and institutional reforms. Key program policiesfocus on developing and implementing strategiesand action plans for inclusive education,establishing a national assessment cell toconduct national student assessment tobenchmark student achievements, establishinga primary education cadre, and devolvinggreater authority to schools to improveaccountability and service delivery. PEDP-IIsupports classroom construction, teacherrecruitment, teacher and school managementtraining, timely supply of instructional materials,and filling critical vacancies.

• Some tangible achievements of PEDP-II in 3 years are:

i) recruitment of over 12,000 new teachersout of a target of 35,000;

ii) training of over 45,000 teachers out of atarget of 90,000;

iii) distribution of over 60 million textbooks (full set) annually to all eligible primary school children; and

iv) construction of over 15,000 classrooms out of a target of 30,000.

• Focus is now at the school level to improve teaching and learning, including through:

i) provision of second-round supplementaryreading materials,

ii) expansion and implementation of second-round innovative grants,

iii) fast-tracking of school-level improvementplans and upazila primary education plans,

iv) development and establishment of time-series data on school-level indicators, and

v) social mobilization and advocacy program.

A strategic objective of PEDP-II is to promoteharmonization in line with the Paris Declaration,with a focus on reducing transaction coststhrough the sector-wide approach that requirescontinuous reflection and improvements.Harmonization among the Government anddevelopment partners has improved, and furtherimprovements are envisaged as the processmatures further. Current achievements includeprogress in common procurement, financialmanagement, monitoring and reporting,auditing, annual planning and budgeting, andjoint review.

In non-formal education, ADB assistance beganin 1996, under which the Governmentestablished a Directorate of Non-formalEducation, supporting about 2.9 million learnersof whom 57% were women. A follow-up projectbeginning in 2001 was reformulated to supportthe newly established Bureau for Non-formalEducation within a newly approved Non-formal

Education Policy Framework to better integrateliteracy with skills by engaging NGOs inBangladesh.

A unique contribution of ADB to the educationsector of Bangladesh is the establishment of theBangladesh Open Universityin 1992, which broughtbenefits through distanceeducation to rural people andadults who must work tosupport their families whilepursuing education.

Since 1999, ADB has helpeddevelop policies to reformthe secondary educationsector through strategicplanning, managementdecentralization, anddevelopment ofperformance-basedmanagement. The SecondaryEducation SectorDevelopment Program, afollow-up project approvedin 2006 to supportimplementation of thereforms across the nation,helps improve sectorgovernance and teacher education, furnish andequip schools, and upgrade the curricula. Itwill also assist the Government modernize themadrasah (Islamic schools) education curriculumby introducing contemporary subjects such asscience and computers so that graduates havebetter employable skills.

through Education


In Bangladesh, ADB has supported an arrayof successful projects in the health sector.In the early 1990s, the ADB-assisted Firstand Second Health and Family PlanningServices projects improved selected districthospitals, teaching hospitals, nursinginstitutions, family planning, and healthservices. The Urban Primary Health CareProject supported urban primary healthcare provision by contracting out servicesto NGOs in four city corporations. Underthe first phase, the project established healthcare centers in the low-income areas offour major cities. It has supported preventiveand curative health care and family planningservices; and provided advice, counseling,and health and hygiene advocacy. Buildingon the success of the innovative program,a second phase was taken up in 2005 toexpand into two more cities and five smallermunicipalities. The follow-up project, with

co-financing from DFID and SIDA, focuseson targeting the poor (at least 30% of allthe services have to be accessed by poorhouseholds), HIV/AIDS, sexually transmittedinfections, and reproductive tract infections.

In collaboration with the United NationsFood and Agriculture Organization andWorld Health Organization, ADB pioneeredinitiatives in 2005 to assist Bangladeshprevent and control avian influenza as partof its initiatives in tackling a possible avianinfluenza outbreak in Asia and the Pacific.ADB assistance was critical when avianinfluenza was detected in Bangladesh inearly 2007. The Government initiated anumber of preemptive and proactive actionsto eliminate any possibility of its furtherproliferation. At least 150,000 birds wereculled as further spread of the avianinfluenza was contained.

Health:StrengtheningHuman Development

Agriculture andNatural Resources

Over 500,000 people—mostlywomen—were able to putmore food on the table,educate their children, andeven save enough to lease orbuy agricultural land. TheNorthwest Crop DiversificationProject (2000) is helping raisefarm outputs and incomes,accelerating poverty reduction,and stimulating the economyof the relatively less-developednorthwest region by tappingthe enormous potential ofhigh-value crop production,value addition, andagribusiness. The AgribusinessDevelopment Projectapproved in 2005 promotesagribusiness activities to createjobs and helps reduce poverty.ADB’s forestry sectorinterventions assistedBangladesh in naturalresources management,improving the environment,and creating jobs.

Agriculture constitutes 21% of the country'sGDP and employs about 52% of the totallabor force. Because over 80% of the country'spoor live in rural areas, progress in reducingrural poverty continues to be the key challengefacing the country. To help Bangladesh meetthese challenges, ADB has supported policyreforms and innovative interventions forincreasing food grain production, diversifyingcrops, and developing the livestock andfisheries sectors. ADB has also assisted inconserving the environment, creating irrigationsystems, fostering small-scale water resources,building flood protection, and ensuring villagepeople’s greater access to markets.

A series of rural infrastructure enhancements,water resources improvement, andmicrofinance projects have contributed toreducing rural poverty. The Food CropsDevelopment Program (1990) was instrumentalin deregulating and privatizing input markets.ADB’s support to the Bangladesh AgriculturalInputs Program (1987) has helped sustain foodgrain production by providing timely availabilityof diesel fuel and pesticide supplies to farmers.The Participatory Livestock DevelopmentProject (1997) particularly supported womenfarmers in subsistence livestock production.

25

TOWARD INCLUSIVE GROWTH

Bangladesh is a lower riparian country locatedwithin flood plains of three great rivers—theGanges, Brahmaputra, and Meghna. Over90% of the rivers’ catchment area lies outsideBangladesh. As a result, huge inflows ofwater, over which Bangladesh has no control,enter the country. It is a challenge forBangladesh to manage floods in a mannerthat mitigates its adverse effects but preventslosing the beneficial effects.

ADB has been a major development partnerof Bangladesh in the water sector. ADB’swater sector assistance, with co-financingfrom the Government of Netherlands andother development partners, contributed tothe establishment of policy and institutionalframeworks for decentralized andparticipatory water management, includingsustainable operations and management bywater management associations. Theinterventions also contributed to agricultural

and rural growth, market orientation, andincreased farmers’ access to irrigation water.ADB-assisted projects—such as theGanges–Kobadak project, Pabna Irrigationand Rural Development Project, andMeghna–Dhonagoda Irrigation Project—havesubstantially improved flood plainmanagement in Bangladesh. In recent years,ADB has pioneered or led in some areas suchas strengthening irrigation water managementassociations and infrastructure through amultisectoral approach. The Small-ScaleWater Resources Development Sector Project(2001) is supporting the Government’s poverty

reduction efforts by increasing sustainableagricultural and fisheries production, applyingprinciples of community-driven development,and promoting effective participation ofwomen in decision making and sustainableenvironmental management.

The Jamuna–Meghna River Erosion MitigationProject (2002) established cost-effective,innovative, and sustainable riverbankprotection by pilot-testing low-costtechnologies (sand-filled geo-textile bags)and establishing the management systems toprovide protection in an adaptive manner tothe natural river processes.

The Secondary Towns Integrated FloodProtection Project II (2005) is promotingeconomic growth and reducing poverty innine selected pourashavas by providing aflood-free and secure living environment.

ADB has extended support to Bangladesh to improverural infrastructure including the Chittagong Hill Tractsregion. Since the First Rural Infrastructure DevelopmentProject was approved in 1988, ADB has provided atotal of six loans amounting to about $440 millionADF, with another $172 million in grant cofinancingmobilized from several development partners. Withimproved rural roads and associated infrastructure,people gain improved access to markets, tradingcenters, and social services. ADB also supported thegovernment’s efforts in strengthening local governmentunits to enable them to plan, manage, and maintainthe infrastructure.

The Rural Infrastructure Improvement Project approvedin 2002 is reducing rural poverty in 16 districts ofKhulna and Barisal Divisions in southwesternBangladesh, by increasing economic opportunities forthe poor through participatory planning andrehabilitation of sustainable rural infrastructure, socialand gender development, and improved rural localgovernance. Based on the project’s success, a follow-up project replicating the activities in 23 districts ofcentral and northwest Bangladesh was approved in2006 with cofinancing from DFID and GermanDevelopment Cooperation.

Rural InfrastructureDevelopment

Water Resources Management

Over the past decade, ADB has largely concentrated in the financial sector focusingon the development and reform of the capital market. This has been done throughthe Capital Market Development Program approved in 1997 at the outbreak of theequity market scam in 1996, and through several technical assistance (TA) grantsand, more recently, a TA loan. ADB also facilitates the provision of finance to smalland medium-sized enterprises (SMEs). The key objective of ADB's financial sectorassistance in Bangladesh will continue to be on establishing a healthy and operationallyefficient financial system. The focus is on securities market, rural microfinance, andSME development through improved financial access.

In 2004, ADB approved a program to help the Government implement a newnational policy for SME development, and further strengthen the newly establishedSME foundation charged with improving access to development finance for SMEs.The program also addresses specific regulatory, information, market access, andtechnology bottlenecks to broaden SME operations, and supports reforms andcapacity building of financial intermediaries relevant to SME development. TheFinancial Market and Insurance Governance Improvement TA loan approved in2006 will improve good governance practices in the financial system.

Under the CSP for Bangladesh for 2006–2010, ADB will help Bangladesh promotegood financial sector governance and expand its focus on policy and institutionalreforms for the banking subsector in close cordination with the International MonetaryFund and World Bank.

FINANCE

Good governance, including anticorruption actions, is criticalfor achieving higher economic growth and rapid povertyreduction. ADB, as one of the major development partners,has made good governance one of the strategic priorities inits assistance to Bangladesh. ADB has been focusing oncatalytic support to address critical constraints to coregovernance, including continuing support for effectivefunctioning of the anticorruption commission; developinga national integrity strategy and corruption preventionmeasures in line ministries and agencies; reforming thejudiciary with a focus on performance, transparency, andaccountability; and building governance managementcapacity in cooperation with other development partners.

In Bangladesh, ADB traditionally focused on sectoralgovernance reforms and played a key role in encouragingincremental improvements in sectors, including education,health, energy, power, and transport. ADB continues tosupport improving sector governance by strengtheningfinancial management systems, internal controls and audit,and accounting and procurement practices in differentsectors. ADB has adopted a number of measures to furtherenhance governance of ADB-assisted sectors. It also helpsimprove local governance by building local governmentcapacities in planning and delivering local services throughpartnerships with the private sector and civil society. To moreeffectively support ADB’s assistance in core and sectoralgovernance initiatives, a governance unit was establishedin BRM in 2005.

Thematic IssuesGovernance forDevelopment Effectiveness


The policy is being formulated through broadstakeholder consultation addressing broadersocial and economic impacts of landacquisition and resettlement. These includeland replacement or land compensation paidas replacement cost; income restoration;relocation assistance and allowances;consultation and grievance redress; assistanceto vulnerable groups such as indigenouspeople, informal settlers or squatters, female-headed households, the elderly, and disabled;and provision for resettlement sites and services.

The policy will set standards and provide thelegal and administrative framework for efficientresettlement management in implementingdevelopment projects. It will also ultimatelystrengthen the institutional capacity ofinfrastructure agencies in better planning andmanagement of resettlement.

Developing aNational InvoluntaryResettlement Policy

ADB recognizes economic cooperation as an importantmeans of achieving more efficient use of regional resources;making economies more complementary and promoting theorderly expansion of foreign trade, in particular, subregionaland interregional trade. Improving connectivity, facilitatingtrade and investment, developing regional tourism, facilitatingcooperation in energy to meet growing regional energyneeds, and promoting private sector cooperation are the keystrategic objectives of ADB’s regional cooperation strategyand program (RCSP) 2005–2008 for South Asia.

ADB’s RCSP focuses on the need to accelerate economic cooperationbetween Bangladesh, Bhutan, India, and Nepal. Subregional projectsbeing formulated include improving road networks connecting theparticipating countries, and regional railway and power networks. TheADB-supported South Asia Subregional Economic Cooperation (SASEC)program identifies several multiregional projects and initiatives. Othersubregional groupings, such as the Bay of Bengal Initiative forMultisectoral Technical and Economic Cooperation (BIMSTEC), areadvancing rapidly and will serve to broaden the regional cooperationfocus from South Asia to parts of East and Southeast Asia.

Deficiencies in key infrastructure and a lack of transit rights frustrateopportunities for economic integration with Bangladesh’s near neighbors.Improvements in regional initiatives under the South Asia Associationfor Regional Cooperation (SAARC) and, particularly, bilateral agreementsbetween Bangladesh and India are required to facilitate trade in energy,enhance cross-border transit trade, effectively promote environmentalcooperation, including cross-border watershed management and disastermanagement, and combat trafficking of women and children.

Regional Cooperation

Growing TogetherADB is assisting Bangladesh developa national policy on involuntaryresettlement to complement the presentAcquisition and Requisition ofImmovable Property Ordinance II(1982).

Through its country program, ADBis assisting Bangladesh to participateactively in subregional cooperationinitiatives. This is done by providingregional technical assistance andknowledge products aimed atbuilding the capacity to respond tocross-border challenges (such astrafficking and disastermanagement), and by establishingan integrated subregional transportand energy network to enhanceBangladesh’s position as a transportand transhipment hub. Keyinvestment priorities expected tohave important regional integrationpayoffs include (i) upgrading anddeveloping key transport corridors,including Dhaka–Chittagong, andbuilding capacity at the Chittagongport to facilitate trade; (ii) improvingthe network and management ofstrategic transport links, includinghighways, the Padma Bridge, railsystem, and ports to better integrateBangladesh’s multimodal transportwith neighboring states; and (iii)providing the knowledge andexpertise needed to improve publicpolicies and institutionalarrangements to support regionalenergy trade. With the opening ofthe Jamuna Bridge and developmentof the Padma Bridge in the nearfuture, the Dhaka–Chittagongtransport corridor and other strategictransport corridors can link thenortheastern states of India toBhutan, Nepal, and West Bengal.

In the past decades, Bangladesh womenhave made substantial progress inaccessing education, health, economicresources, employment, and inparticipating in the political process asa result of interventions by theGovernment and civil societyorganizations. Yet women continue toface both deprivation and gender-basedviolence and discrimination, andcontinue to have a limited political andeconomic voice.

To reduce the gender gap, ADB’s strategyfor Bangladesh focuses on:

• increasing the return on women’s labor (through improved skills, jobs in nontraditional sectors, accessto credit markets, improved access to infrastructure, and appropriate technologies);

• facilitating women’s empowerment;• strengthening the capacity of

institutions to facilitate women’s participation in decision making, particularly within local governmentand executing agencies;

• fostering women’s human development, including health andeducational attainment;

•providing livelihood support to women who are most vulnerable toeconomic and social shocks; and

• promoting a positive image of, androle for, women as agents of social change and positive contributors toa prosperous economy.

Gender andDevelopment

ADB-supported projects contributesignificantly to narrowing gendergaps by ensuring that womenparticipate in project and programactivities; influence decisionsconcerning the selection,management, and maintenance ofproject outputs and benefits; andfoster wage parity. In theinfrastructure sector, particularemphasis is given to women’sneeds in infrastructure design andprovisions for women to ensurethat they benefit equitably fromemployment opportunities.Women’s economicempowerment is promoted bydeveloping women’s marketcorners, which has increasedfemale presence in rural markets—the heart of the rural economy—and their participation incommerce. Special training onbusiness management for femaleshop owners is provided. Accessof poor rural women in the openspaces of rural markets has beenensured for trading. This hasboosted women’s earnings andhelped change attitudes andawareness on the role of womenin the rural distribution sector.Women’s participation in higher-value agriculture activities andagribusiness has significantlyimproved their status in the familyand society.

ADB considers private sector development crucial to economic growth, job creation, and povertyreduction in the Asia and Pacific region. ADB’s private sector window extends financial assistanceto private sector projects in the infrastructure, capital markets, and financial sectors by mobilizingfunds from local and foreign sources. ADB’s public sector operations support private sectordevelopment by encouraging reforms; creating business-friendly policy and regulatory environment;and improving infrastructure, human capital, and governance. Public sector projects also offerspecific opportunities for private sector participation.

Private Sector DevelopmentGender andDevelopment

In Bangladesh, ADB has financed private sectorprojects in the power, mobile telephone, textile,cement, capital market, and leasing sectors.Through its public sector interventions, ADBhas been supporting efforts to strengthencapacities of key capital market institutions andimproving the legal and regulatory environmentin the capital markets. ADB is also keen to assistauthorities in developing a bond market inBangladesh. To address difficulties in projectfinances arising out of likely currencymismatches, ADB is exploring possibilities ofextending local currency financing in Bangladeshby issuing local currency bonds and arrangingcross-currency swaps.

ADB’s assistance in developing the country’sinfrastructure, such as transport, energy, urbaninfrastructure and utilities, is improving theenvironment for private investment by enhancingproductivity and removing constraints on growth.ADB’s support in the social sectors is helpingcreate an educated, skilled, healthy, andproductive workforce, essential for increasedprivate investment.

ADB’s public and private sector operations workin harmony to improve the enabling environment

to make Bangladesh more attractive to foreigndirect investment, and to widen opportunitiesfor public–private partnerships. ADB’s supportin improving public policies, regulatory regimes,

and governance is creating a conduciveenvironment for materializing higher rates ofprivate investment. ADB’s assistance indeveloping the small and medium sized-enterprise sector and facilitating the restructuringand privatization of selected state-ownedenterprises will expand the scope of privatesector operations in the country.

ADB recognizes civil society organizations, includingNGOs, as important partners in development, andcooperates with them to improve the impact,sustainability, and quality of its services. NGOsprovide value-added services in promotingsustainable development, which is characterizedby innovation, accountability, responsiveness,participation, and sustainability.

Recognizing thatNGOs inBangladesh havevaluableexperience in awide range ofareas, BRMperiodically bringstogether NGOrepresentatives tobrief them on ADB

activities and to solicit feedback. The CSP forBangladesh 2006–2010 was prepared through activeand extensive consultations with NGOs and civilsociety. Besides providing inputs for countryprogramming and country portfolio review missionsevery year, civil society organizations and NGOsare playing important roles in implementing ADBloans, technical assistance grants, and otherinitiatives. In recent years, ADB has prepared twomajor policy documents, ADB–Government–NGOCooperation: A Framework for Action, 2003–2005,and the Public Communications Policy throughmultistakeholder consultations.

ADB has extended support to boost the telecommunications infrastructurein Bangladesh. The GrameenPhone Telecommunications Project helpedfinance the construction, expansion, and operation of a nationwide cellulartelephone system that provides cellular telephone services in the maincities, and a village pay-telephone service in the rural areas. It reaffirmsADB's role in the information and communication sector by supportingthe private sector to lead information technology (IT) networks development;encouraging government to create a predictable, transparent, andnondiscriminatory policy and regulatory environment; and ensuring thatIT-related rules and practices are responsive to the emerging revolutionarychanges in the way people conduct business.

Massive investments in mobile telecommunications have financed rapidnetwork expansion—now covering 97% of the country’s population and82% of the land area. It has become one of the most vibrant servicessubsectors in the economy. Subscribers doubled in 1 year—up from 11million in 2006 to over 23 million in mid 2007, and is forecast to rise to44 million by 2009. This industry directly employs 14,000 and indirectlycreates jobs for 650,000. The rapid growth in mobile telephone subscriptionshas raised the country’s telecommunications density to over 16% fromonly 7% a year ago.

Availability of phones in rural areas has created new opportunities forincome generation and self-employment by providing villagers with accessto modern technology—offering real-time business and market information,promoting health care awareness, developing agribusiness, and raisingsocial status. Innovative value-added services such as community informationcenters—providing Internet access, voice communications,videoconferencing, and other IT services—have facilitated connectivity.It has broadened access to banking, education, and entertainment services;and stimulated the growth of other businesses.

Telecommunicationsand Poverty Reduction

NGOs and Civil SocietyPartners in Progress:


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