Report No. 7596B-D

BangladeshRecent Economic Developmentsand Short-Term ProspectsMarch 13,1989

Asia Country Department I

FOR OFFICIAL USE ONLY

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Document of the World Bank

This docum~erit has a restricted distribution and may be used by recipientsonly ini the performance of their official duties. Its contents may not otherwisebe disclosed vvith~out World Bank authorization.

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CUHRRENCY EQUIVALENTS

The external value of the Bangladesh Taka (Tk) is fixed in relation to a basketof reference currencies, with the US Dollar serving as the intervention currency.The official exchange rate on January 1, 1989 waS Tk 32.27 per US Dollar.

US$ 1 - Tk 32.27'k 1 - US$0.031

In this report, US$ is sometimes abbreviated to $.

WEIGHTS AND MEASURES

I acre - 0.405 hectare (ha)1 mscf - 1 million standard cubic feetl tpy - 1 ton per year1 crore - 10 willion

FISCAL YEAR (FY)

July 1 - June 30

BANGLADESH

RECENT ECONOM1IC DEVELOPMENTS AND SHORT-TERM PROSPECTS

TABLE OF CONTENTS

Country Data

Executive Summary i

A. Recent Developme_rts - Macro Economic Performance . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . I

Progress in Macro-economic Adjustment . . . . . . . . . . . . . . . 2

Macroeconomic Balances and Savings and Investment Trends . . . . . 3

The Incentive Framework . . . . . . . . . . . . . . . . . . . . . . 5

B. Production Trends and Short-Term Economic Management . . . . . . . . 8

Growth and Composition of Production . . . . . . . . . . . . . . . 8

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Foodgrair Management . . . . . . . . . . . . . . . . . . . . . . . 13

Poverty Alleviation . . . . . . . . . . . . . . . . . . . . . . . . 16

Wage and Employment Developments . . . . . . . . . . . . . . 18

Impact of floods on the poor . . . . . . . . . . . . . . . . 19

Industry and Trade Policy Reforms . . . . . . . . . . . . . . . . . 20

Budgetary Developments . . . . . . . . . . . . . . . . . . . . . . 23

Balance of Payments . . . . . . . . . . . . . . . . . . . . . . . . 27

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

C. Short-Term Prospects . . . . . . . . . . . . . . . . . . . . . . . . 35

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

The Impact of the Floods . . . . . 35

The Government's Response to the Crisis . . . . . . . . . . . . . . 36

Economic Prospects in FY89 . . . . . . . . . . . . . . . . . . . . 41

Prospects for Economic Growth . . . . . . . . . . . . . . . . 42

Food Management . . . . . . . . . . . . . . . . . . . . . . . 43

Budgetary Prospects . . . . . . . . . . . . . . . . . . . . . 45

Prospects for the Balance of Payments . . . . . . . . . . . . 47

D. Economic Management in the Near to Medium Term . . . . . . . . . . . 49

Economic Management in the Short Term . . . . . . . . . . . . . . . 52

Economic Management in the Medium Term . . . . . . . . . . . . . . 55

Exploring innovative empioyment generation .. . . . . . . . 65

E. Foreign Aid Trends and Aid Requirements for FY90 . . . . . . . . . . 67

Foreign Aid Trends. . . ........... 67

Aid Recommendations for FY90 . . . . . . . . . . . . . . . . . . . 69

Statistical Appencaix 74

Map

List of Text Tables

Table 1.1: KEY MACROECONOMIC INDICATORS, FY81-FY88 . . . . . . . . . . . 3Table 1.2: MACROECONOMIC BALANCES, FY81-FY88 . . . . . . . . . . . . . . 4Table 1.3: KEY INCENTIVE INDICATORS, FY81-FY87 . . . . . . . . . . . . . 6Table 1.4: GDP GROWTH BY SECTORS, FY73-FY88 . . . . . . . . . . . . . . 9Table 1.5: TRENDS IN AGRICULTURAL PRODUCTION AND V.ALUE ADDED,

FY81-FY89 . . . . . . . . . . . . . . . . . . . . . . . . . 11Table 1.6: SUMMARY OF THE FOODGRAIN SITUATION, FY81-FY89 . . . . . . . . 14Table 1.7: TRENDS IN REAL WAGES FOR UNSKILLED LABOR, FY80-FY88 . . . . . 18Table 1.8: INCOME AND EXPENDITURE OF THE CENTRAL GOVERNMENT, FY81-FY89 . 24Table 1.9: BALANCE OF PAYMENTS, FY81-FY89 . . . . . . . . . . . . . . . 28Table 1-10: PATTERN OF EXPORTS, FY81-FY89 . . . . . . . . . . . . . . . . 30Table 1.11: TRENDS IN IMPORTS, FY81-FY89 . . . . . . . . . . . . . . . . 32Table 1.12: REHABILITATION AND RECONSTRUCTION PROGRAM . . . . . . . . . . 39Table 1.13: KEY ECONOMIC PkOJECTIONS, FY88-FY91 . . . . . . . . . . . . . 51Table 1.14: EXTE"NAL AID - TRENDS IN COW{ITMENTS AND DISBURSEMENTS,

FY81-FY89 . . . . . . . . . . . . . . . . . . . . . . . . . 68

FOR OMCIAL USE ONLY

List of Abbreviations and Acronyms Used

ADP - Annual Development Program

BBS - Bangladesh Bureau of StatisticsBJNC - Bangladesh Jute Mills CorporationBOI - Board of InvestmentBRAC - Bargladesh Rural Advancement CommitteeBRDB - Bangladesh Rural Development BoardBSCIB - Bangladesh Small and Cottage Industries BoardBTTB - Bangladesh Telephone and Telegraph Board

CDST - Customs D.lties and Sales Taxes,

DEDO - Duty Drawback and Exemption OfficeDFI - Development Finance Inastitution

EPZ - Export Processing Zone

ERD - External Resources Division

FFW - Food For Work

GDI - Gross Domestic InvestmentGDP - Gross Domestic ProductGOB - Government of Bangladesh

RES - Household Expenditure Survey

ILO - International Labor Organization

LLP - Low Lift Pump

NGO - Non-Government OrganizationNIP - New Industrial Policy

O&M - Oneration and Maintenance

PE - Public EnterprisePFDS - Public Food Distribution SystemPFP - Policy Framework PaperProshika - Rural Development Center

RIP - Revised Industrial PolicyRPP - Rural Poor Program

SABRE - System for Autonomous Bodies Reporting and EvaluationSTW Shallow TubewellSwarnivar - Self-reliance Movement

TA - Technical Assistance

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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UNDP - United Nations Development ProgramUSAID - United States Agency for International Development

VCD - Vulnexable Group Development

UFP - World Food Program

XP?S - Export Performance Benefit Scheme

TITLE: RECENT ECONOMIC DEVELOPMENTS AND SHORT-TERM PROSPECTS

COUNTRY: BANGLADESH

REGION: ASIA COUNTRY DEPARTMENT I

SECTOR: COUNTRY ECONOMIC

R8PORT TYPE CIASSIF MM/YY LANGUAGES7596-BD CEM Restricted 03 89 English

PUBDATE: 8903

ABSTRACT: In the mid-eighties, Bangladesh made good progress instabilizing its economy, achieving a reasonably goodrate of economic growth with some improvement in thepoverty situation, and initiating much needed policyreforms in many areas. Ir. the last two years, however,floods of unusual severity dealt a major setback to theeconomy. Although the Government handled the immediatecrisis caused by these disascers very well, the floods,as well as insufficient attention to short-term economicmanagement, contributed to a deceleration of economicgrowth, a slowdown in the policy reforms and an apparentreversal in the improving trend in the poverty situationobserved in the mid-eighties. Given widespread poverty,however, Bangladesh will need to reorient its economicpolicies from a preoccupation with stabilization toresuscitate the economy quickl3, to accele:ate economicgrowth to at least 5% per annum, and to take meaningfulsteps to alleviate poverty. Against this background,this report evaluates Bangladesh's recent economicperformance and short-term prospects; neededimprovements in economic management in the short-term;policy reforms required over the medium term to achieveeconomic growth and poverty alleviation objectives; andexternal aid requirements in FY90 to assist theseefforts.

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COUNTRY DATA - DANGLADESH

AME PCitnUCI0 (1985) DEPSITY (198S)

143,998 km2 100.6 million 699 per km2 of total areaRate of Growth: 2.4 1.062 per km2 of cultivable lISM

POPULATION HARACTERISTICS (1985) REALSH '.fCrude Birth Rate (per 000) 39.0 Population per physician: 5.900

Crude Death Rate (per '000) 15.0 Population per hospital bed: 3,600

Infant Mortality (per .000 live births) 125.0

INCOME DISTRIBUTION (1982) DISt.IBRUTION OF LAND OWNERSHIP (1978)

X of natlonal incom. ttSheet quinttle: 42 2 owned by top 102 of owners: 49

X of nAtional income, lowest quintile- I: owned by smallest 10S of owners: 2

ACCESS TO PIPED WATER (1980) ACCESS TO ELECTRICITY (1980)

X of population - urban: 26 2 of population - urban. 3.5

X of population - rural 40 2 of population - rural:

NIUTRISION (1983) EDUCATION

Calorie intake as 2 of requirements: 84 Adult literacy rate (2) (1980181) 292

Per capita protein intake (8ramas) 42 Primary school enrollment (X) (1985) 602

GNP PER CAPISA IN 1986; USS160 I-

GROSS DOMESTIC PRODUCT (1987188) ANNUAL RATE OF GROWTH (2. constant prices)

mill. USS FY75-80 FY81-85 F-88 --

GDP at Market Prices 19.325 100 7.5 3.8 3.5

Gr.ss Domestic Investment 2,319 12 0.1

Gross National Saving 1,217 6

Current Account Balance -1,112 -6

Exports of Goods, fob 1,231 6 4.7 2.5 13.5

Imports of Goods, cif -2,987 -15 6.2 1.1 2.7

OPUT. LABOR FORCE. AND PRODUCTIV1SY IN 1987188

Value Added lb Labor Force L V. A. Per Worker

mili US$ 2 mLIL X USS X

Agriculture 8,884 46.0 16.8 59 529 78

Industry 2,632 13.6 3.1 11 849 125

Services 7 S09 40.4 8.6 30 908 134

Total/Average 19,325 100.0 28.5 100 678 100

CENTRAL GOVERNMENT FINANCE Le

(bill. Taka) X of GOP

Current Revenues 53.26 8.8 8.8

Current Expenditures 49.19 4.7 8 0

Current Surplus 4.07 4.1 0.8

Capital Expenditures 50.08 12.7 8.3

External Assistance (net) 44.22 7.6 7.2

L* World Bank Atlas methodology, base 1983-85.

Lk At market prices.

/Civilian labor forces 1983/84 data. Sectoral distribution data shown are extrapolated from

available data on distribution of employed persons.

Id 1983184 data.

/e Provisional.

- Not available.

- Not applicable

Page 2 of 2COVTRY DATA - BANOLADESH

MONEY CREDIT AND PRICES Jgn L.19 JunoL1981 Jun. 1982 Jun- 1983 June 1984 Iun- SW June 1986 June 1987 Jun 198(billion TSka outatnding, end of period)

Money and Quasi Money 34.3 41.3 45.5 59.0 83.9 105.3 123.4 138.5 164.1Bank Credit to PublicSector 25.4 36.9 43.9 44.4 50.0 55,7 65.1 64.0 65.1

Bank Credit to Privete

Sector 14.3 17.6 23.6 31.0 49.1 68.9 83.6 89.6 108.9

(Percentages or Index Numbers)Money and Quasi Money

as S of GDP 17.3 17.8 17.2 20.5 24.0 25.3 26.7 25.7 27.6General Price Index

(1973114-100)1- 226.6 255.0 296.5 325.9 357.5 396.6 436.0 481.2 53 .0Annual percentage

charges in:

Ce *ral Price Index /a 18.53 12.5 16.3 9.9 9.7 10.9 9.9 10.4 11.4Bet L credit to Public

Iector 39.6 45.3 19.0 -1.1 12.6 11.4 16.9 -1.7 1.7B-an credit to Private

Sector 30.0 23.1 34.0 31.3 58.4 40.3 21.3 7.2 21.5

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (1987188T(mill. USS)

19S0ES1 1987188 mill USS 1Exports of Goods, fob 711 1,231 Raw jute 81 7Imports of Goods, cif -2 033 2.9S7 Jute goods 301 24Trade Gap (deficit - -) -1,822 -1.756 Tea 39 3Ron-factor services, net 38 -11 Leather 147 12Workers' Remittances 379 788 Fish & shrimps 145 12Other Factor Payments (net) -23 -133 Garments 434 35Current AccotUnt Balance -1,428 -1,112 Others 84 7Direct Foreign lavestnunt - - Total 1,231 100Net MLT Borrowing 502 621

(Dlsbursements) 584 813(Amortization) 82 197 EXTERNAL DEBT. December 31. 1987

mill. USSCapital Grants 563 823IMF facilities, net 193 -18 Public Debt. nel. Guaranteed Private Debt 8 351Other Capital, not 146 -170 Non-Guaranteed Private Debt

Total Outstanding L Disbursed 8,851Change in Reser-es - * increase) 24 -144

DEBT SERVICE RATIO FOR 1987188Gross Reserves (and of year) 251 896

Public Debt, icl. Guaranteed Private Debt 16.5RATE OF EXCRANCE (March 1, 1989) Non-Guaranteed Private Debt

Total 16.5USS1.00 - Tak 32.27

IBRDIIDA LENDING. December 1987 (million UISS)

Outstanding & Disbursed 70.2 2.985.5Undisbursed - 1.534.1Outstanding, il. Uadisbursed 70.2 4,519.6

n not available.

March 1989

EXECUTIVE SUMMARY

i. Introduction. In the mid-eighties, Bangladesh made good orogressin stabilizirg its economy, achieving a reasonably good rate of economicgrowth with some improvement in the poverty situation, and initiating muchneeded policy reforms in many areas. This advance, however, was rudelyinterrupted in the last two years, as floods of unusual severity in both 1987and 1988 (and a localized cyclone in December 1988) devastated the country.These disasters dealt a major setback to the economy by reducing economicgrowth in the short term; diverting the Government's attention, energies andresources from development to short-term crisis management; and slowing downthe reform process. Although the Government handled the immediate crisiscaused by these disasters very well, short-term economic management aimed atreviving economic growth and development activity has not received sufficientattention; unless quickly reversed progress achieved in the mid-eighties willbe undermined. As the economy stagnated, the modestly improvir.g trend in thepoverty situation observed in the mid-eighties appears to have been reversedover the past two years. This has increased the urgency to resuscitate theeconomy quickly, to accelerate economic growth to at least 5% per annium, andto take meaningful steps to alleviate poverty, especially among the landlessand assetless. Against this background, this report evaluates Bangladesh'srecent economic performance and short-term prospects; needed improvements ineconomic management in the short-term; policy reforms required over the mediumterm to achieve economic growth and poverty alleviation objectives; andexternal aid requirements in FY90 to assist these efforts.

ii. The Background - Economic Trends in the Eighties. In the earlyeighties, faced with a severe deterioration of its terms of trade and aprospective sharp reduction in external aid inflows on which it is heavil)dependent, Bangladesh embarked on a major stabilization program. Over thenext four years, demand management policies and broad-based reforms insectoral policies helped to restore macroeconomic viability, reducing externaland fiscal deficits from 10-12% of GDP in the early eighties to 6-7% of GDP byFY87. To reduce the budget deficit, public expenditures were scaled backsharply; the cuts fell primarily on the development budget which contractedfrom 13% of GDP in FY83 to only 9% in FY87, while current expenditures rosefrom 6.6% of GDP to 7.7% over the same period. Credit growth was restrictedfrom the mid-eighties, with efforts to improve cred't discipline. Thesemeasures, along with restraints or. imports, import substitution in energy andfertilizer, and rapid growth of non-traditional exports and remittances fromabroad, helped to reduce the external deficit. Eccnomic growth, though belowthe economy's potential, averaged 4% per annum over this period; while asubstantial redirection of Government food distribution programs and bettertargeting of food subsidies, together with a rising trend in real wages in therural sector, contributed to a modest improvement in the poverty situation.On the policy front, significant efforts were made to increase privateinvolvement in economic activity through deregulation of investment approvalprocedures and a major denationalization of public enterprises. The incentivesystem was improved through a substantial devaluation of the real effectiveexchange rate (in the second half of the eighties), strengthened exportincentives, reductions in subsidies, and market-oriented pricing policies foragricultural inputs and outputs and for energy products. A beginning was madein FY87 to reduce pervasive quota restrictions and import bans.

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iii. Although macroeconomic management during this period wascommendable, performance at the sector and subsector level was lesssatisfactory. The rate of growth in the productive sectors--agriculture andindustry--barely kept pace with population growth; which itself, at 2.5% p.a.was still high, despite some progress in strengthening programs in thepreceding decade. Ia agriculture, the momentum of the foodgrain productiondrive initiated in the early eighties appeared to have petered out by the mid-eighties. In industry, although export oriented new industries (such asgarments and shrimp-processing) did well; jute, the traditional leadingsubsector, as well as most industrial sub-groups producing for the domesticmarket, performed poorly. Similarly, despite the improving trend in thepoverty situation, the absolute numbers of the poor still kept increasing.

iv. Domestic resource mobilization remained weak, but perhaps moresignificant was the increase in current expenditures from 6.6% of the GDP inFY83 and FY84 to an estimated 8.1% in FY88. This rapid growth was only to asmall extent due to higher expenditures for natural calamities. At the sametime, development expenditures, which were above 10% of GDP at the beginningof the decade have come down to 6.7% in FY88. Moreover, this has happenedwhile net foreign financing increased rapidly. While total governmentrevenues and net foreign financing increased by about 73% (revenue: 86%;foreign: 59%), current government expenditures increased by 114%, whiledevelopment expenditures increased by only 35%. This situation has beenfurther exacerbated in FY89 when the development program has been again cutback sharply. While the floods contributed to this trend, it is a reflectionof a more fundamental macro-economic problem which needs to be addressedexpeditiously by the Government. This points to very serious problems for thesustainability of growth in the Bangladesh economy for the future. It alsohas implications for budgetary allocations and types of aid. This trendshould be reversed so that more funds are allocated to development activity.Thus, as discussed below, the case for more commodity aid to Bangladesh shouldbe considered In the context of whether or not the Government is providingmore local resources for the development budget and other high priority areassuch as O&N and current cost finanicing of social sector programs which are nowheavily underfunded. Commodity aid should provide additionality to, and helpexpand, development activity, rather than replace the Government'scontribution to financing the development budget. While there areimplementation bottlenecks which also need to be rectified; the "soft-budget"option of relying on foreign aid to finance the development program, when theGovernment's own resources are committed to low priority current expenditures,at the expense of investment, has to be corrected.

v. Economic Performance in FY88. Notwithstanding structuralproblems, at the beginning of FY88 Bangladesh, with success!ul economicstabilization behind it, seemed ready to take more purposeful steps toaccelerate economic development. However, floods in the summer of 1987--considered to be the worst in 40 years--seriously undermined theseexpectations. The 1987 floods destroyed $285 million in economicinfrastructure, caused extensive damage to the summer crop estimated at nearly1.6 million tons, and took 1,600 lives.

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vi. The Government responded to this crisis with an extensive programto assist farme_.s in replanting damaged crops, (it succeeded in replanting 90%of crop arsa), and intensify production of winter crops--boro rice and wheat.It also took steps to increase food availability by importing a record 2.9million tons of foodgrain, with emergency assistance from donors and largecommercial purchases from its own resources. A rehabilitation program torepair damaged infrastructure was also launched, with complementary efforts tomobilize additional revenues, restrain expenditures and re-prioritize thedevelopment program.

vii. These steps helped to recoup some of the losses of the summercrops; and along with a record winter rice crop, foodgrain production reached16.5 million tons, the same level as in the previous year. This, togetherwith record imports and increased foodgrain distribution from the PublicFoodgrain Distribution System (PFDS), helped to ensure food security andstabilize food prices from the second quarter of FY88. However, a buUld-up infood stocks (to 1.4 million tons) prevented sutfficient domestic procurement tosupport prices to farmers; which fell sharply in the final quarter of FY88,exacerbating income losses in agriculture. Despite the recovery inproduction, value-added in agriculture declined by over 1% in FY88. There wasalso no growth in the manufacturing sector (which had grown by 6.4% in FY87)due to weak domestic demand for most industries--textiles, tobacco, basicm*eals etc. Thus, overall GDP growth decelerated sharply to only 1.8% in FY88*rom 4.0% in the preceding year.

viii. As noted, inadequate resource mobilization, coupled with continuedgrowth of current expenditures and manifestly low priority accorded to thedevelopment program had led to a continued decline in development expendituressince the mid-eighties. In FY88, the disruptions caused by the floods andpolitical unrest further affected the implementation of the developmentbudget, as current expenditures and allocations for replanting andre'habilitation activities rose, at the expense of the planned developmentprogram. However, budgetary management exacerbated these difficulties. At atime when fiscal policy had to play a more positive role to offset thecontraction in the economy, the budget accumulated an unexpected cash surplus,depriving the development projects of local currency needed to utilizeavailable external project aid. Consequently, the development program (ADP)was cut back by IS% below the FY88 budget target and by 12% below FY87actuals, in nominal terms; and the project aid disbursement ratio fell to 19%from 21% in the previous year; while the overall budget deficit was reduced to7.5% of a (smaller) GDP from a planned 8.2%. On the other hand, the slowdownin the economy and tight budgetary management helped to strengthen the balanceof ga=ets position in FY88. A 1% decline in non-food imports, in realterms, and rapid growth of non-traditional exports (mainly garments) andremittances from abroad limited the current account deficit to 5.7% of GDPcompared to 5.5% in FY87, while gross foreign exchange reserves increased byUS$144 million to $896 million, the equivalent of 3.6 months' imports.

ix. Impact of the 1988 Floods. Before the economy could recover fromthe impact of the 1987 floods, Bangladesh was swamped by an even greater floodin the summer of 1988--regarded as the worst in living memory. It inundated84% of the land area, affecting 45 million people, with over 1,600 deaths

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directly attributed to it and another 735 deaths caused subsequently bydiarrheal diseases. Damage to summer rice crops is estimated at about 1.8million tons, with a more localized cyclone in December 1988 causing furthercrop losses of 0.2 million tons. Flood damage to physical and economicinfrastructure has been extensive: about 2,500 km of flood controlembankments, 23,500 units of minor irrigation equipment, 10,000 km of localroads, a substantial proportion of national roads, highways and railways,several hundred bridges, over 19,000 educational institutions, 1,468 healthstructures, and 3.7 million of (mainly low quality) housing units. Widespreaddamage was also reported to fish and shrimp hatcheries, and industrial units,both large and small scale. Preliminary estimates made by a joint task forceof the Gov3rnment and UN agencies in October placed total rehabilitation andreconstruction needs resulting from the floods (excluding housing, assessed bythe Government at $1.1 billion, and a recently initiated Dhaka floodprotection project which is estimated to cost another $100 million), atapproximately $1.1 billion over a threa-year period--the equivalent of nearly85% of this year's development program.

x. The Government's ResRonse to the Crisis. The Government movedrapidly and decisively to deal with the crisis by launching: a massive reliefeffort to provide immediate assistance to flood victims; an internationalappeal for additional food aid together with substantial commercial purchasesfrom its own resources to ensure adequate food availability; an extensive cropreplanting and recovery program to recoup aman crop losses and enhance wintercrop production; steps to assess damage to infrastructure and housing andimplement a phased program of rehabilitation; and bilateral and internationalinitiatives to seek longer-term solutions to the flood problem.

xi. Given the magnitude of the disaster, the relief effort, involvinga major collaborative exercise by the Government, local NGOs and individualsand external donors, was handled efficiently and successfully. To ensureadequate food supplies, VGD, relief and Food-for-Work programs for the needywere expanded, and open market sales were increased; and imports of over 2.2million tons of foodgrain has been arranged. To mitigate price pressures, theGovernment postponed a ration price increase due in September. The croprehabilitation and intensification program aims at increasing production ofvegetaoles, pulses, and broadcast rice in the fall; and enhancing winter cropproduction--boro and wheat--by 730,000 tons by substantially increasingacreage under winter crops and the availability of inputs. Accordingly, freedistribution of seeds and fertilizer, repair and rehabilitation of over 25,000units of minor irrigation equipment and rental programs for low lift pumps(LLPs) have been arranged; while time limits for obtaining crop loans havebeen extended and repayments falling due postponed. These measures areexpected to increase the boro rice crop to about 5.3 million tons (up from 4.7million tons last year), and total foodgrain production to about 16.3 milliontons in FY89, still 1% below last year's level. The rehabilitation program isstill being firmed up through detailed assessments at the sector and sub-sector level. Up to now, programs for about Tk 4.4 billion (about $135million) have been included in this year's ADP, of which Tk 2.6 billion hasbeen carried over from last year's program, and Tk 1.8 billion represents newprojects, mainly for crop rehabilitation and Dhaka city flood prevention.

xii. A number of initiatives have been taken by the Government, withassistance from UNDP and bilateral donors to examine the causes of the floodsand ways of mitigating their effects. In addition to studies undertaken byGovernment itself, the UNDP is financing a Flood Policy Study being undertakenjointly by international and Bangladeshi experts; joint bilateral task forcesand study teams have been formed between Bangladesh and India, Nepal, Chinaand Bhutan; a team of engineers, financed by the (overnment of France isundertaking a feasibility study of flood control embankment proposals for theGanges and Brahmaputra Rivers; and USAID is sponsoring a study of watershedmanagement in the Ganges and Brahmaputra Basins in response to a request fromCongress. In addition to these activities Government, in cooperation withUNDP and IDA, is initiating a flood preparedness project designed tostrengthen procedures for early warning, enhance public awareness andinstitute other programs to mitigate the effects of floods. The Governmentwill wish to review the recommendations and proposals in these stAiescarefully, as a basis for formulating a coherent and well designed longer-termstrategy for addressing the flood problem.

xiii. Economic Prospects for FY89. The disruptions caused by the floodsand the cyclone, to a lesse- extent, will seriously affect economic growthagain this yesr. As noted, foodgrain production will be about 1% below lastyear's level; while jute, livestock, forestry and fisheries have also beenaffected by the floods. Income losses associated with these setbacks andreduction in gainful employment will have a depressing effect on demand (whichis unlikely to be offset by public expenditure policy), for manufactures,which have also been affected by closure of factories during the floods anddamage to equipment. These developments will exacerbate the structuralproblems of industries such as jute (hampered by weak external demand) andtextiles which suffer from overcapacity, excess labor and lack ofcompetitiveness. Accordingly, overall growth of the economy is expected to beabout 1-2% in FY89, even though reconstruction and rehabilitqtion activitieswill help to increase value-added in construction and services sectors.

xiv. The Government has so far handled the short-term food situationsuccessfully. Domestic food availability is excellent; and the situation isexpected to remain comfortable during the remainder of FY89. As noted, theGovernment has already arranged for imports of over 2.2 million tons, of which630,000 will be cash imports. Although this level of imports represents asubstantial reduction from earlier import plans, it may still prove to beexcessive. With planned domestic procurement of about 0.49 million tons andlikely PFDS distribution of 2.6 million tons, this would leave PFDS stocks atover 1.4 million tons by end of FY89, creating serious stock managementproblems, reducing the s.ope for domestic procurement and eroding incentivesto farmers. (The effective storage capacity in the country is around 1.4million tons.) Given the tight constraints on the budget and the need tosupport rural incomes and economic activity through an aggressive domesticprocurement policy, the wisdom of building up PFDS stocks, especially throughcash imports, should be reconsidered.

xv. The budgetary outcome for FY89 is likely to be adversely affectedby a number of factors. Revenues are now expected to be about Tk 2.0 billionless than original FY89 budget estimates, because of lower customs duty and

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sales tax receipts on imports and reduced exercise duty collections fromnatural gas and manufacturing production. On the other hand, currentexpenditures are expected to increase by about Tk 2.5 billion due to higherallowances and pension payments, increased losses of the railways, and largerallocations for O&M and relief payments (in cash) after the floods. Anadditional Tk 3.0 billion will be needed for food operations because -f higherimport prices and volume, a higher than planned level of stocks and thepostponement of an increase in ration prices due in September. A shortfall ofTk 2.2 billion in disbursements of commodity aid below the level of $500million planned in the FY89 budget is also anticipated. The cumulative impactof these developments would be to reduce the availability of local resourcesfor the developmert program (ADP) by about Tk 8-9 billion, or about 33-36%below the Ff89 budget estimates, in nominal terms. While this has created asevere shortage of counterpart funds for development projects, it has beenexacerbated by poor short-term economic management, as even the limitedavailable resources have not been fully used. (As of December 1988,government local currency expenditures were about Tk 6.0 billion belowpermissible expenditure ceilin- agreed with the IMF.) As a result,implementation of the ADP has be, adversely affected, with disbursements ofproject aid in the first half of FY89 lagging by about 20% in nominal termsbelow the level of a year ago. This in turn has meant that the stimulus thatcould have been provided to a flagging economy through public expenditurepolicy has not so far materialized. A continuation of this policy stance islikely to accentuate che current depressive trends in the economy, and raisesserious questions about short-term economic management under presentcircumstances (see below).

xvi. The floods have had an adverse impact on the balance of Daymentsby reducing exports and increasing imports. Due to flood reLatedinterruptions to production and shipments of garments, shrimp and leatherexports, total exports will be only about $70 million or 6% higher than inFY88, in nominal terms. But increased requirements of foodgrain, edible oiland construction materials, and a general rise in import prices are expectedto add about $163 million to the import bill. However, because of theexpected decline in investment and ger.erally weak import demand, the currentaccount deficit is expected to rise to only 6% of GDP in FY89 from 5.7% of GDPin FY88. Aid disbursements are oxpected to decline substantially below lastyear's level of $1,640 million to $1,470 million (in large part due to lowerproject aid disbursements). However, this level of aid disbursements togetherwith special emergency assistance of $95 million received earlier in thefiscal year from the International Monetary Fund, would help to fully financethe projected current account deficit (of $1,232 million); and increase grossexternal reserves to about $1.0 billion, the equivalent of 3.8 months ofimports.

xvii. While there are questions about the accuracy of current estimatesof poverty, (which indicate that 51% and 56% of rural and urban populationrespectively in FY86 were below the Roverty line), the general consensus isthat poverty still remains overwhelming, especially among women who accountfor a large share of the poor in both urban and rural areas. Some modestimprovement took place during FY81-FY86 as a result of economic growth in thatperiod, as well as an expansion in targeted government programs with

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complementary activities by NGOs. Nonetheless, in the last two years, themodest improvements in the early to mid-eighties seem to have been reversed asa result of two key developments: a slowdown in production and 'nvestment inthe dominant agriculture sector, resulting in a reduction of rural incomes andpossibly increased unemployment; and the direct impact of the floods of 1987and 1988 on the poor. Given that most of the rural poor are virtuallyassetless, especially women, and rely heavily on wage employment for theirlivelihood, the slowdown in agriculture in turn appears to have put downwardpressure on real wages, not only in agriculture but sectors related to it,such as the small-scale rural industry. The floods of 1987 and 1988compounded the situation as it caused extensive losses of assets and increasedtemporary unemployment, and led to an exacerbation in morbidity and childmortality.

xviii. In summary, in the early to mid-eighties, Bangladesh successfullystabilized its economy and achieved a reasonable ra;e of economic growth withsome improvements in the poverty situation. The past two years, however, havewitnessed a slowdov-n in many areas. Although macroeconomic managementremained tight, and the disruptions caused by recurring disasters wereeffectively handled, economic growth decelerated, the implementation ofdevelopment programs suffered and the earlier improving trend in the povertysituation appears to have been reversed. To some extent, these setbacks couldbe attributed to two major floods which disrupted economic actibity. However,deficiencies in economic management exacerbated these problems; while thereform process particularly with regard to weaknesses in the energy, financiale::d public enterprise sectors slowed down. Moreover, the disruptions causedby the floods have masked emerging problems of a longer-term nature relatingto resource mobilization and utilization noted earlier, which unless addressedeffectively, now threaten to undermine the success achieved over the mid-eighties. Although small and incremental progress continued to be made inmany areas, there were considerable delays in the preparation for andimplementation of needed reforms.

xix. The Government's reluctance to move forward more rapidly witheconomic reforms in an environment characterized by crises is understandable;and ri-htly under the circumstances, priority had to be given to crisismanagement, though short-term economic management still could have beenbetter. Nevertheless, the disruptions and setbacks and shortcomings ineconomic management last year and this year have heightened the urgency foraction, to permit the economy to grow more rapidly without underminingmacroeconomic stability. In the short term, more imaginative and forwardlooking policies will be needed to avoid further deepening the currentstagnation. Over the medium term, purposeful action will need to be taken irmany areas if substantial improvements in economic growth and povertyalleviation are to be realized.

xx. Economic Management in the Short Term. The immediate challenge toeconomic management in the short term is to ensure that public policy willhelp stimulate recovery rather than exacerbate the depressive trends in theeconomy. This means that budgetary policy should not aim at furtherstabilization, but facilitate more rapid implementation of the developmentprogram by providing local currency to the maximum possible extent, consistent

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with macroeconomic stability. At the same time, existing planning proceduresshould be used more effectively to assist project implementation and aidutilization; while food management should be more supportive of domesticprocurement and prices to farmers.

xxi. Fiscal management both last year and this year has beenovercautious. Last year, the budget generated a cash surplus, while this yearagain government expenditures through end December 1988 were well below theexpenditure ceilings agreed with the IMF, especially at a time when thedevelopment budget is being adversely affected by resource shortfalls. Tothat extent, the local currency shortage is self-created, exacerbating aproblem which could be alleviated by discretionary action. There is strongjustification in the short term for not only fully utilizing bank creditavailable within the credit ceilings, but also for additional governmentborrowing to support the development program and domestic foodgrainprocurement. If necessary, reallocations of credit should be made withinoverall credit ceilings for this purpose. This should help improve projectimplementation (leveraging disbursements from the large existing aidpipeline), increase incomes and imports, and, with some time lag, helpgenerate additional revenues for the budget. The external reserve position ispresently strong enough to accommodate some additional imports; and with aslowdown in inflation to an annual rate of 9% in recent nonths, the latter isnot a serious concern at the moment. Over the medium term, however, recourseto continued bank borrowing should be limited, since it will put pressure onreserves, or increase inflation; and the Government (as discussed below) musttake steps to mobilize more domestic resources.

xxii. Recognizing the seriousness of the situation, the Government hasinitiated some actions in early March aimed at mitigating the potentialdisruption to the development program caused by the floods and insufficientattention to short-term economic management. Steps have been taken toreprioritize the ADP and to provide local currency resources to the ADP to themaximum extent feasible within the agreed credit ceilings for the rest of thisfiscal year. It is expected that aided projects included in the approved coreprogram will be provided up to 95% of their original taka allocations for thisyear, with the objective of maximizing project aid disbursements in the secor.dhalf of t1,e year. Allocations for crop replanting, Dhaka flood protection andtekhnical assistance programs will also be fully funded. However, allocationsfor (.ther sectors and projects will be scaled back by an average of 36%, (withlarger cuts in industry), while block allocations for upazilas andmunicilalities will be reduced by about 40%. If available resources are fullyutilized in the remaining four months of the fiscal year, it should bepossible to achieve an ADP of around Tk 40 billion in nominal terms, includingproject aid disbursements of about $750 million--roughly 10% below last year'slevel of aid disbursements.

xxiii. Improvements in the Goveinment's planning and resource managementprocedures should help increase drvelopment spending both in the short and themedium term. The innovations intfoduced in the early eighties to improve ADPimplementation (by setting up a resource committee to periodically assessresource availabilities, a core program to insulate priority projects fromresource shortfalls and automatic release of local funds for approved projects

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in the first three quarters of the year) have become increasingly ineffectiveover the recent past. For example, this year, despite early evidence of majorresource shortfalls, and increased demands for rehabilitation andreconstruction, a realistic assessment of the resource situation was notfinalized till January. Similarly, the reprioritization of the ADP, includingfirming up of rehabilitation programs to be included in this year'sdevelopment program, was not completed until late February/early March. Asnoted, overcautious budget management and lack of coordination amonggovernment agencies responsible for the financing and revision of the ADP(Ministry of Finance, Bangladesh Bank and the Planning Commission) contributedto these delays and consequent slowdown in development activity. (While thereasons for these shortcomings--such as lack of effective monitoringcapability at the ministry level, concerns regardiug the quality of projects,and whether borrowed funds would be used productively, etc.--areunderstandable, these should be addressed through public expenditure reformsin the medium term). The core programming process, as it is now work,ng, alsodoes not ensure sufficient local resources for priority projects, because ofovercautious fiscal management, the inclusion of too many projects in the coreprogram and substantial taka allocations for lower priority projects. To helpimprove implementation of the development program in the future, earlycompletion of resource assessment, establishing priorities for the ADP andrehabilitation work, and providing sufficient local resources for priorityprojects is essential.

xxiv. Food management could be improved (without jeopardizing foodsecurity) by more realistic assessment of PFDS offtake and providing greaterflexibility in import planning, particularly commercial purchases. As noted,PFDS stocks could again rise this year to unduly high levels, pre-emptingdomestic procurement and depressing domestic foodgrain prices. TheGovernment, therefore, should postpone some of the planned commercialpurchases (for example, scheduled to arrive in May and June); but if this isnot possible, at least delay some of the import (including aid-financed)arrivals, to make room for domestic procurement. However, if purchases havebeen made abroad already, additional financing to support domestic procurementwill be needed.

xxv. Economic Management in the Medium Term. In view of the currentstagnation of the economy, Bangladesh will need to revive and accelerateeconomic growth as soon as possible. Without it, it will be virtuallyimpossible for Bangladesh to make even modest strides in alleviatingwidespread poverty. Recognizing this need, the Government's most recent(third year) Policy Framework Paper (PFP), prepared in consultation with theIMF and the World Bank, articulates a macroeconomic framework and policyreforms required to achieve such a goal. The PFP reviews recent performanceand policy improvement in many areas; but also notes that policy reforms haveslowed down in a number of areas and need to be strengthened. It recognizesthat, to accelerate economic growth to at least 5% per annum, it will beessential to significantly improve economic performance in the key productivesectors--agriculture and industry--(to generate incomes, employment and exportearnings) which have been lagging in recent years. At the same time, it alsorecognizes that special efforts through targeted programs would be needed toimprove the conditions of the extremely poor who might not directly benefit

from the growth process. The PFP outlines broad directions of policy reformsand investment and resource needs (both domestic and external) over the nextthree years to achieve these objectives. In addition, significantimprovements in mobilization, management and utilization of limited resourcesby the Government will also be needed.

xxvi. To increase agricultural production to 3.5-4.0% p.a., theGovernment will need to address the problems which have caused stagnation inthe sector even before the recent floods. The Government accordinglyinitiated a study, with UNDP assistance, to review the constraints toproduction and identify solutions; this study is nearing completion. Anaction program to help improve agricultural growth should be formulated assoon as possIble with appropriate policies, drawing on the findings of thisstudy and others on the foodgrain sector.

xxvii. Given Bangladesh's continued dependence on foodgrain imports andits importance in the agriculture sector, continued priority to foodgrainproduction over the next few years is still appropriate, although over thelonger term, efforts must be made to diversify agricultural production. Toincrease foodgrain production, however, it is necessary to provide access toinputs (such as high quality seeds, fertilizer and credit) and ensuresufficient incentives to farmers, together with complementary investments inirrigation, research and extension services. Private sector participation ininput distribution will need to be increased, especially in fertilizerdistribution and supply of minor irrigation equipment. (For thrs purpose, theprivate sector should be allowed to import TSP and MP and to make wholesalepurchases of urea domestically at the factory level; to increase the privatesector's role in the supply and servicing of minor irrigation equipment,restrictions on the imports of engines should be eliminated, direct andindirect subsidies to BADC sales should be reduced and private operatorsshould be allowed to compete in the servicing of DTWs.) The role of publicsector institutions responsible for delivery of inputs and services should bestreamlined (along the lines of the recent report on reorganizing theBangladesh Agricultural Development Corporation), and their efficiencyimproved. Due regard should also be paid to the sustainability of chosenpolicies. For example, measures adopted in recent crash programs (such as,input subsidies, and postponement of credit recoveries), cannot be sustainedwithout substantially reducing resources available for other priorityinvestments, and reintroducing new distortions in the allocation of resources.If subsidies are required for particular groups or purposes, they should becarefully examined and targeted. Finally, it will be necessary to provideeffective support prices to farmers, through better foodstock management byphasing out import arrivals to ensure that the PFDS will have both physicalcapacity and financial resources to undertake substantial procurement.

xxviii. The problems of lute--the main cash crop--should receiveattention. A government task force set up to identify the issues in the jutesector and formulate policy reforms, finalized its report in December,building on the recommendations of a Bank report earlier on the jute sector.An action plan to assist the jute sector, as recommended by the task force, bystabilizing prices to producers through a buffer stocks scheme and exporttaxes, establishing programs to improve jute yields and to divert surplus

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acreage to alternative crops (mainly rice) and rationalizing capacity andproduction of jute manufactures should be given consideration.

xxix. Rapid growth of industry is needed to help absorb an expandinglabor force, diversify the economic structure and further expand exports. Forthis purpose, steps will be needed to improve efficiency, competitiveness, andexport-orientation of the industrial sector. Continued commitment to tradeliberalization (by rationalizing the tariff structure and eliminating quotarestrictions) to improve economic signals to investors and the allocation ofresources, and flexible exchange rate management to ensure incentives forexport production are essential in this regard. To promote furtherdiversification of non-traditional exports, improving incentives to attractforeign (and domestic) capital for export production and to ensure qualitystandards and access to markets, and increasing skills through specialvocational training programs will also be required. To promote investment inthe industrial sector, further improvements in the regulatory environment (byreducing the 'discouraged list" and restrictions and licensing requirements onimports for industrial users), improving access to essential infrastructure,such as power connections, and increasing availability of financing shouldreceive high priority. In the latter context, strengthening financialinstitutions, giving them operational freedom to set lending rates accordingto risks and costs of lending and implementing loan recovery programs will bemore important than providing low interest rates to borrowers. In thetraditional manufacturing sector, specific problems of major subsectors, suchas jute and textiles (which suffer from a variety of problems such asovercapacity, poor investment decisions, accumulated debt problems and lack ofcompetitiveness), will need to be addres-ed. Assistance programs should bedeveloped to rationalize and restructure the operations of those producers whocan become competitive in both jute and textiles manufacturing, withoutresorting to import bans (e.g., for textiles).

xxx. To improve the performance of public enterorises (PEs), clearerdefinition of their objectives and roles; separating commercial from sociallyoriented functions; increased autonomy of management, for example overpricing, employment and wage bargaining decisions; establishing clearlyunderstood criteria for performance; together with cost-control mechanisms;and accountability for management decisions and performance will be needed.Recent initiatives in these a.-eas should be expanded to cover the majorcorporations and implemented as early as possible. At the same time, stepsshould be taken to clean up the debt structure of enterprises, reduce intra-enterprise liabilities and hold them accountable for payment of their debtservice obligations. A clear policy framework is also required for thepartial divestment program.

xxxi. Bangladesh will need to increase overall investment from thecurrently depressed level of less than 12% of GDP to over 14% over the nextthree years. There is a need and room for both private and public investmentto rise. The latter, however, is expected to grow more rapidly over the nextthree years, because of the particularly low level of economic and socialinfrastructure in Bangladesh, rehabilitation and reconstruction requirementsas a consequence of the floods, and uncertainties surrounding the pace ofrecovery of private investment in the near term. An increase in oublic

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eggenditug can also play a catalytic role over the next year by helping tostimulate demand and the level of economic activity.

xxxii. However, the scope for increasing public expenditures isconstrained by the severe shortages of local currency and procedural andimplementation problems which inhibit effective absorption of aid. Thisproblem can be effectively handled only by making vigorous efforts to mobilizedomestic resources and to alleviate the implementation constraints; and bystreamlining and reprioritizing the expenditure program so that availableresources are utilized more efficiently. The need for reprioritizing the ADPhas become urgent because demands on public sector resources have increasedsubstantially; for example, in addition to the ongoing investment program andrehabilitation and reconstruction needs, potential large new projects areunder various stages of discussion. However, given the limited availabilityof local resources, the inclusion of too many projects will only exacerbateimplementation problems. There is, therefore, an urgent need to reassesspriorities in the public expenditure program, in particular to resistpressures to include too many new projects (unless they are fully externallyfunded), and to cut back unproductive recurrent expenditures. At the sametime, a re-examination of existing projects in the ADP is needed. Manyprograms are cost-effective and should be increased: for example, operationand maintenance of existing and new assets, water resource development andresearch and extension services in agriculture, transmission facilities in thepower sector; rural roads, urban development and water supply ininfrastructure and recurrent expenditures for health and education, andgenuine rehabilitation work. But, there are also expenditures which could becurtailed in other areas, such as power generation and industry, as well ascurrent expenditures in lower priority areas; while cost savings could be madeby transferring activities to the private sector (e.g., in fcrtilizerdistribution and road transport), withdrawing support from programs which havebeen proven inefficient or ineffective (e.g., agricultural cooperatives andcommercial fishing activities). A careful review should also be made of thebridge construction program in the transport sector (including the JamunaBridge) and other proposed large projects in the broader macroeconomiccontext. Such projects are large enough to have a significant macroeconomicimpact on the economy by absorbing scarce local currency resources and limitedmanagerial and administrative capacity and increasing the external debtservice. Therefore, the timing and phasing of such projects should beconsidered carefully.

xxxiii. While above measures can help to improve the efficiency andeffectiveness of public expenditures, steps will need to be taken to addressthe perennial problems which have slowed down project implementation and aidutilization in Bangladesh. Improving project preparation and planning;reducing delays with regard to procurement, technical ass!-tance, landacquisition and recruitment and staffing of project entities; acceleratingcommodity aid utilization; and improving the budgeting, monitoring andexpenditure control procedures, are some of the priority areas in this regard.Much greater commitment and a sense of urgency to find solutions to theseproblems are needed if progress is to be made in these difficult areas.

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xxxiv. The only way to alleviate the local currency constraint in themedium term, apart from modest possibilities for restraining currentexpenditures, is to significantly improve domestic resource mobilization. Atthe same time, efforts should be made to allocate such increases in domesticresources to the development program and other priority expenditures notedearlier. If this is done, increased public and private savings should helpincrease overall investment levels in the economy, with additional externalassistance supplementing these efforts. In the public sector, implementing aphased program of structural reforms to improve the revenue elasticity andequity of the tax system will help increase revenues over the medium term. Inthe near term, there is scope for increasing non-tax revenues by improvingpublic sector debt management, red-acing large subsidies to public enterprisesin the transport and communications sectors (railways, post office and theairlines), improving pablic enterprises' pricing policies and greater emphasison self-financing of investments by such enterprises.

xxxv. The implementation of reforms in the financial sector will becritical for mobilizing private savings, improving resource allocation andincreasing the flow of credit especially for investment. Proposals currentlyunder consideration by the Government include measures to strengthen financialinstitutions by restructuring their capital base and providing them greaterautonomy over decisions concerning their lending operations and risks; permitgreater flexibility of interest rates to reflect costs and risks of lending tovarious sectors and borrowers; reduce the scope of mandated lending at lowinterest rates; and co improve monetary management and supervision capabilityof the Central Bank. Sustained efforts to improve loan recoveries and creditdiscipline is an integral part of this reform process. Without such efforts,the viability of the financial institutions could be further endangere-, evenif other re.orm measures are implemented, with adverse consequences formacroeconomic stability and prospects for economic recovery.

xxxvi. A greater sense of urgency is needed for improving and expandingprograms aimed at the alleviation of widespread poverty, which is one of thehighest priorities in the Government's agenda. A resumption of a reasonablyhigh rate of economic growth would facilitate progress towards this objective;but, some of the urban and rural poor, particularly the landless, assetless,women and unskilled, may receive only modest benefits from such growth.Accordingly, the Government needs to strengthen its poverty alleviationprograms to increase their medium-to-long-term impact. For example, existingtargeted programs such as the FFW and VGD, which are mainly targeted at poorwomen, need to be refocused from their predominantly relief orientation toinclude activities such as literacy, family planning and health, credit andskills training. In view of the Government's limited financial resources andqualified staff, its efforts could be supplemented by encouraging greaterparticipation by NGOs, especially in the area of credit and the creation ofincome generating opportunities and services, such as training, health careand education to selected groups of poor people. The conventional humanresource development programs (family planning, health and education) wouldalso need strengthening to support the Government's poverty alleviationobjectives. Finally, in the medium-to-long-term, the only self-sustainingmeans to reduce poverty is employment generation. In the search forinnovative employment opportunities, special attention needs to be paid to

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rural employment generation, targeted at the assetless/landless who form thecore of the poor. Speedy formulation and implementation of poverty orientedprograms already under consideration is an important step in harnessingexternal support for governmert initiatives in this area.

xxxvii. The policy agenda to stimulate economic growth with more equitabledistribution of its benefits is well established, and recognized by theGovernment. However, its implementation has slowed down in the past twoyears, in part due to the floods and preoccupations of key policy makers withcrisis management, mobilizing more external assistance for perceived needs andseeking longer-term solutions aimed at flood prevention anu disastermanagement. Most of these initiatives are understandable and necessary; butsome clearly need closer scrutiny to ensure that they are worthy of support.At the same time, given the importance of resuscitating the economy andalleviating widespread poverty, the objectives of establishing a sound basisfor sustained development by implementing necessary economic reforms outlinedabove, and particularly mobilizing more domestic resources, refocusingexpenditure priorities and giving greater priority to the development program,improving project implementation and ensuring effective utilization ofexternal assistance potentially available to Bangladesh, should receive equalattention from the Government.

Aid Recommendations for FY90

xxxviii. Despite continuing concerns with the pace of projectimplementation and aid utilization, the need for external assistance toBangladesh should not be a matter of debate. Given the structure of theeconomy and widespread poverty, Bangladesh will need to continue to depend onsuch assistance, even with significant efforts to mobilize domestic resources.This need, apart from necessary support for the public.exp4nditure program,can also be justified on balance of payments grounds. Although the balance ofpayments situation has strengthened considerably in the past two to tbreeyears, this trend is likely to be ephemeral. A revival in the economy willincrease import demand; while the growth of exports and remittances is likelyto slow down. Accordingly, the balance of payments current account deficit isexpected to widen to about 7% of GDP over the next three years. To financethis deficit and to maintain gross reserves at the modest level of theequivalent of three months' imports, the Government's Policy Framework Paperestimates that disbursements of external assistance will need to inclease byabout 5% per annum in the next three years over FY88 levels.

xxxix. Aid commitments for next fiscal year (FY90) should be guided notonly by the need to support growth and development over the medium term, butalso to help improve the implementation of the development program and aidutilization in the near term. Accordingly, the Government, on its part, willneed to take steps to provide more local currency support for the developmentprogram, and establish priorities within the ADP as soon as possible. TheGovernment has recently made some initiatives in this direction to minimizedisruptions to this year's ADP. These efforts should be continued next year,given the increased needs for rehabilitation and reconstruction and thelimited availability of taka resources and absorptive capacity constraints.Donors, on their part, will need to work closely with the Government in

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adapting their aid programs to the Government's revised priorities, sincereprioritization of the expenditure program will inevitably affect donor-financed projects also. In this regard, donors also have a responsibility inassisting Bangladesh to achieve its development goals by helping to ensurecorrect expenditure choices, particularly in the case of new projectcommitments at this juncture.

xl. The analysis contained in this report and the PER indicates that,given the limited availability of local resources, a significant amount of newproject aid commitments will adversely affect the implementation of theongoing program, unless efforts are made to mobilize more domestic resources,resources are reallocated tc high priority projects, and/or donors themselvesprovide more local currency resources for the development program. In thepresent circumstances, essential rehabilitation should receive high priority.Commitments for other new projects should therefore be limited to highpriority areas. Where commitments for new projects are made, donors shouldconsider financing a larger proportion of total costs (including local costs)to minimize the demands on local currency resources. Donors would also needto consider financing of incremental recurrent expenditures in the social

j sectors for programs in health, education and family planning, wheresubstantial real increases in recurrent expenditures would be needed over thenext ten years to achieve program objectives. While this would represent anew approach to most donors, it would directly support the poverty alleviationand social development goals. Given the implementation constraints noted

j above, new project aid commitments of about $1.1 billion are recommended (thisamount excludes possible financing for the proposed Jamuna Bridge, theeconomic justification of which is still under review); but, within thistotal, a substantial increase in donor funding of local costs should beconsidered. In parallel, however, the Government also must make every effortto mobilize more local resources, and to allocate such resources to highpriority development activities.

xli. The primary justification for commodity aid is to support thebalance of payments by providing quick disbursing funds needed to pay foressential imports. A secondary reason is that such aid generates counterpartfunds which are needed to implement the development program. Over the mediumto longer term Bangladesh must mobilize more domestic resources for thedevelopment program, so that its own contribution to financing the ADP canincrease over time, helping to reduce the presently high dependence oncommodity aid. In the meantime, however, there is still need andjustification for more commodity aid, particularly if the Government succeedsin reviving economic activity in the near term. Although the balance ofpayments situation has strengthened, over the next year imports (and the needfor financing such imports) are expected to increase, provided that theGovernment takes the necessary steps to ensure economic recovery byaccelerating the implementation of the development program. In addition, itwill be necessary to demonstrate that the Government attaches high priority tothe development program (by restraining less essential current expendituresand mobilizing more domestic resources for the ADP and high priority O&6expenditures), and that additional commodity aid will be fully committed tosupporting development activity. If this does not happen and the economycontinues to stagnate, the case for continued high levels of commodity aid

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will weaken. In the expectation that the Government will give priority tosignificantly stepping up development activity next year, it is necessary toplan for L-mmodity aid disbursements of at least $550 million in FY90. Thiswould mean that new commitmerts of about $600 million will be needed nextyear. To achieve this level of commitments exceptional efforts will be neededon the part of the Government to finalize prospective commitments frommultilateral institutions associated with plannued adjustrent programs in keyareas. Bilateral donors also will need to increase the proportion of quickdisbursing commodity assistance in their aid programs, to relax theprocurement, pricing and commodity restrictions attached to such programs, andto finalize the aid agreements as early as possible, so that disbursementsfrom such new commitments could be made more rapidly. In the case of foodaid, additional commitments of about $300 million (equivalent to about 1.6million tons of wheat at present prices) will be required to meet plannedimport needs and to provide some flexibility to the Government to meetunforeseen contingencies.

Recent Economic DeveloDments and Short-Term Prospects

A. Recent Developments - Macro Economic Performance

Introduction

1. In the early and mid-1980s, Bangladesh responded reasonably well to adeterioration in its external economic environment, which, together withnatural calamities (such as droughts and floods) damaged growth prospects andled to unsustainable macroeconomic imbalances. A major stabilization andadjustment effort was launched aimed at reducing external and fiscal deficits,limiting domestic inflation and achieving a satisfactory rate of economicgrowth. Cautious fiscal and monetary policies and flexible exchange ratepolicies were pursued, trade and industrial policies were significantlyliberalized, and efforts were initiated to reform the financial system. Atthe same time, the internal food distribution system was improved, and supportprograms for the poorer and vulnerable groups were expanded. These effortsyielded positive results through improving macroeconomic balances andsustaining a modest rate of economic growth of about 4% per annum. However,growth performance continued to be below the economy's potential, andinsufficient for achieving a significant alleviation in poverty, which,despite a marginal improvement in the first half of the decade, is stillextensive; and remains perhaps the most pressing development problem facingthe country.

2. The successful stabilization efforts of the mid-eighties had, itseemed, paved the way for Bangladesh to undertake more vigorous efforts tostimulate economic growth and alleviate poverty. However, a succession ofnatural disasters--devastating floods in 1987 and 1988 and a localized cyclonein late 1988--have undermined these expectations. These developments havereduced economic growth in the short term; and generally impeded theadjustment effort by diverting the Government's attention, energies andresources from development to short-term crisis management; exacerbating aslowdown in the reform process and deficiencies in short-term economicmanagement which have become evident over the last year. The Government,however, recognizes the need to sustain the momentum of efforts aimed ataccelerating economic growth and development; and has just recently initiatedsome actions to deal with these problems (para. 90). Nevertheless, much moreattention will need to be given to improving economic management; while asdiscussed below, some modifications in the Government's macroeconomic targetsand its medium-term development strategy, and significant improvements in themobilization and management of domestic resources will be required.

3. Against this background, the report evaluates Bangladesh's economicperformance over the past year (FY88) and near-term economic prospects for

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FY89.11 The analysis of recent performance takes account of significantpolicy changes and shortcomings in important areas and sectors of the economy.The report also focuses on the short-term economic management issues, whichneed to be addressed by the Government in the aftermath of the floods, andpolicy improvements required in the medium term to sustain the adjustmenteffort. The concluding section of the report reviews external assistanceneeds and recommendations for FY90. The implications of the floods for publicexpenditure policy in the medium term, as well as broader public expendituremanagement issues in the context of Bangladesh's medium-term developmentstrategy, are discussed comprehensively in a companion report--"Bangladesh:Public Expenditure Review.'

Progress in Macro-economic Adjustment

4. Bangladesh's key macro-economic performance indicators are summarized inTable 1.1. Despite the disastrous floods in the summer of 1987, the improvingtrends in the external and fiscal balances, which were achieved throughearlier stabilization efforts, were sustained in FY88. The external currentaccount deficit, which averaged over 10% of GDP in the early eighties, waslimited to 5.7% of GDP in FY88, only marginally higher than the 5.5% recordedin FY87. Continued growth of non-traditional exports and workers' remittancesfrom abroad and stagnation of non-foodgrain imports, (due to low incomegrowth, disruptions caused by the floods and cautious budgetary and monetarymanagement by the Government), contributed to this result. The overall budgetdeficit declined from 8.4% of GDP in FY87 to 7.5% in FY88, due to continuedrestraints on development spending, rather than to an improvement in revenuemobilization. Domestic credit, which increased by 9% in FY87, expandedsomewhat more rapidly by 13% in FY88 reflecting increased financing needs ofthe private sector following the floods; however, net credit to the Governmentactually declined by 3% below FY87 levels, compared to a planned increase of4%. Supply disruptions as a result of the floods generated pressure onprices, especially in the early part of FY88, leading to an estimated 11% risein consumer prices in FY88, compared to a 10% increase in FY87. The floods,and to a lesser extent the political disturbances in the first half of FY88,seriously hampered economic activity. GDP growth in FY88 is estimated at only1.8%--well, below the trend in economic growth achieved in recent years andthe rate of population growth. With repeated major flooding in the summer of1988 and a further reduction in prospective economic growth to only 1-2% inFY89, a significant decline in per capita incomes over the two-year (FY88-89)period now seems inevitable. As discussed below, although the Government hastaken a number of measures to provide relief and employment to the mostvulnerable and needy groups, it appears that the floods and economic setbacksover these two years have arrested the marginally improving trend in povertyalleviation that had beer- observed in the early and mid-eighties (para. 27).

I/ A detailed assessment of Bangladesh's economic performance over the FY81-87period was made in the Bank's economic report last year ("Bangladesh:Adjustment in the Eighties and Short-Term Prospects"; Report No. 7105-BD;March 10, 1988); and is therefore not repeated in this year's economic report.Similarly, medium-term development prospects for Bangladesi' and theirimplications for public expenditure policy are addressed in a companion reportentitled "Bangladesh - A Public Expenditure Review"; Report No. 7545-BD, 1989.

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Table 1.1: KEY MACROECONOMIC INDICATORS, FY81-FY88(in percent)

FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88

Cur. Acct. Balance/GDP -10.0 -12.0 -8.4 -6.7 -8.2 -7.0 -5.5 -5.7Govt. Budget Balance/GDP -9.1 -8.7 -11.2 -9.2 -7.5 -7.2 -8.4 -7.5Domestic Credit Growth 27.4 23.8 11.6 30.9 26.2 16.6 8.7 13.4Domestic Inflation Rate /a 12.5 16.3 9.9 9.7 11.0 10.0 10.4 11.4Overall Inflation Rate /b 10.8 12.7 6.0 16.4 14.9 5.8 12.2 9.8GDP Growth (real) 6.8 0.8 3.6 4.2 3.7 4.7 4.0 1.8Overall Export Growth (volume) 11.4 4.0 4.8 4.7 -3.4 11.0 21.4 7.9(non-trad. export growth) 59.1 -0.3 20.0 30.7 39.9 10.2 42.2 29.5

/a Based on movements in the urban middle class consumer price index.Lb Based on changes in the GDP deflator.

Source: Bangladesh Bureau of Statistics and staff estimates.

Macroeconomic Balances and Savings and Investment Trends

5. Reliability of data on consumption, savings and investment continues tobe a problem in Bangladesh. Subject to their limitations, available data(Table 1.2) show that the reduction in the current account deficit,(equivalent to the investment-savings gap), from 10% of GDP in FY81 to lessthan 6% of GDP in FY87, was achieved primarily through a reduction ininvestment, rather than through an appreciable improvement in the savingsrate. Given Bangladesh's low level of development, a higher investment rateand a higher investment-savings gap would be warranted, and would besustainable on the basis of existing and projected aid inflows; but, asdiscussed elsewhere in this report and in the Public Expenditure Review, thiswould need to be complemented by greater efforts to mobilize domestic savings,particularly public savings, to provide for local cost financing ofdevelopment projects. However, the domestic savings rate has been virtuallystagnant since FY81; although there has been a slow but perceptible rise inthe national savings rate, due to sustained inflows of factor incomes fromBangladeshi workers abroad.

6. Preliminary estimates indicate that aggregate investment continued todecline in FY88, with a substantial reduction in public investment.Reallocation of funds for relief, and increases in current expendituresfollowing the 1987 floods adversely affected the implementation of thedevelopment program, which declined by 12%, in current prices, below its FY87level. But, this cutback was larger than necessary, since the Governmentbudget unexpectedly accumulated a surplus in its end-year cash position(para. 45). At the same time, private investment also declined; althoughprivate investment in housing reconstruction after the floods and in

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agriculture, particularly in minor irrigation equipment to support a majorexpansion in winter crops, increased somewhat, it was offset by a reduction inprivate investment in other areas of the economy, especially in industry. Onthe other hand, overall consumption appears to have increased slightly, as theGovernment significantly expanded the Food for Work (FFW) and Vulnerable GroupDevelopment (VGD) programs to provide food and employment for the poor; and arecord level of foodgrain imports together with a bumper boro crop helped toincrease food availability and reduce food prices in the cecond half of theyear. Correspondingly, the domestic savings rate declined from 3.5% of GDP inFY87 to an estimated 2.6% in FY88; while the national savings rate also fellfrom 6.9% of GDP to 6.0% of GDP over the same period.

Table 1.2: MACROECONOMIC BALANCES, FY81-FY88(as percent of GDP in current prices)

FY81 FY82 FY84 FY86 FY87 FY88

Gross Domestic Product (GDP) 100.0 100.0 100.0 100.0 100.0 100.0Resource Balance -12.5 -13.9 -10.8 10.0 8.9 9.1

Resource Availability 112.5 113.9 110.8 110.0 108.9 109.1

Consumption 96.6 98.9 98.5 98.2 96.5 97.4Private n.a. 91.9 91.9 89.5 87.8 88.3Public n.a. 7.0 6.6 8.7La 8.7 9.0

Gross Investment (GDI) 15.9 15.0 12.3 11.8 .4 12.8Private 9.5 8.9 6.7 6.3 6.0 5.9Public 6.5 6.1 5.6 5.5 6.4 5.9

Annual Growth RatesGross Domestic Product 6.8 0.8 4.2 4.7 4.0 1.8

Memo ItemsDomestic Savings/GDP 3.4 1.1 1.5 1.8 3.5 2.6National Savings/GNP 5.8 3.4 5.4 4.7 6.9 6.0Foreign Savings,&/GDP 10.0 12.0 6.7 7.0 5.5 5.7Foreign Savings/GDI/c 62.9 76.7 55.0 59.2 44.2 51.3

Za Substantial part of the increase reflects wage increases to governmentemployees which would add to private incomes and consumption.

ii Equals current account balance./Lc Ratio of foreign savings to domestic investment.

Source: Bangladesh Bureau of Statistics and staff estimates.

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The Incentive Framework

7. In recent years Bangladesh has roade significant efforts to improve pricesignals and incentives for domestic production and exports. In FY88 furtherprogress was made in this direction (Table 1.3). In accordance with theGovernment's flexible exchange rate policy, the official exchange rate (whichis pegged, within margins, to a basket of currencies of major tradingpartners) was depreciated by 2%, in nominal terms, in FY88 vis-a-vis the USdollar; and by a further 2.4% against the US dollar so far in FY89. GivenBangladesh's somewhat higher inflation rate compared to its trading partners,this was only sufficient to maintain the real effective exchange rate (whichhad depreciated by about 23% between FY85 and FY87',a' at the FY87 level.Further progress was also made towards unifying the dual exchange rate system.As noted, the official exchange rate, in nominal terms, was depreciated, whilethe exchange rate in the secondary market appreciated slightly by 0.3%, innominal terms, over its FY87 level; in effect, the premium in the secondarymarket iver the official exchange rate was reduced from 6.5% in FY87 to 4.5%at the end of June 1988, and to 2.0% in November 1988--a level which theGovernment considers necessary to encourage exports and the repatriation ofearnings of Bangladeshi workers through the secondary market. Simultaneously,the list of imports and exports transacted through the secondary market wasexpanded, thereby providing easier access to foreign exchange for the privatesector.11 This shift was facilitated by increased workers' remittances fromabroad, continued provision of foreign exchange by Bangladesh Bank from itsreserves to meet anticipated demand in the secondary market, and thechanneling of commodity aid (provided under IDA's Industrial Sector Credit)for the first time through the secondary market.

8. Domestic deRosit rates have remained largely unchanged from the levelsset in the early eighties; and with a pick up in domestic inflation in recentyears, real interest rates on short-term deposits (i.e., three months fixeddeposits with commercial banks), have been gradually eroded, so that they arenow barely positive. However, real interest rates on medium to longer-termdeposits are substantially higher--about 4-5% p.a. for 3-year deposits withbanks and over 8-10% p.a. for 6-year savings certificates. In addition, thereare a number of fiscal incentives to encourage savings and investment.

2/ However, the real effective exchange rate (REER) appreciated by 13% betweenFY81 and FY85; so that over the FY81 87 period as a whole it depreciated byonly 13%. In contrast, REER depreciated by 27% in India, and 23% in Thailand(and by 61% in China), over the same period.

2/ Under the Export Performance Benefit (XPB) scheme, the list of commoditiesentitled to the exchange rate premium in the secondary market and the rates ofentitlement have been progressively raised, so that in FY88 earnings from allexports other than raw jute and wet blue leather could be converted at orclose to the secondary market rate. The share of imports channeled throughthe secondary market was also increased from 23% of all imports in FY85 (and34% in FY87) to about 40% in FY88. Since aid disbursements finance 50-60% oftotal imports, the proportion of non-aid imports channeled through thesecondary market is very high--85 to 90%.

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Domestic real lending rates for a variety of purposes, such as loans forcommerce, urban housing and agriculture, are also positive at about 5-6% p.a.However, real lending rates on a substantial part of bank lending (over 30% ofthe banks' portfolio) which is heavily subsidized, are close to zero ornegative. While rising inflation has generally reduced the real cost ofborrowing, a current review of interest rates by the Government aimed atrationalizing the interest rate structure is expected to lead to a moreflexible and realistic interest rate policy, which is essential for improvingsavings mobilization and efficient allocation of investible funds.

Table 1.3: KEY INCENTTUE INDICATORS, FY81-FY87

FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88

1. Real Effective Exchange RateIndex 1980-100 98.9 94.2 93.3 101.2 112.7 92.9 87.0 86.7Annual Change -1.1 -4.8 -1.0 8.5 11.4 -17.6 -6.5 0.3

2. Real Interest RatesShort-term Deposit Rate -0.5 -4.3 2.1 2.3 1.1 2.0 2.4 0.6Long-term Lending Rate 1.5 1.8 4.6 4.6 3.6 4.6 1.4 0.4

3. Index of Real Wages (1980-100)Agriculture 105.4 95.7 98.9 101.1 110.7 129.0 124.7 114.2Industry (Jute, Textiles) 114.4 105.6 111.1 104.4 95.6 117.8 121.1 115.0

4. Ratfos of Domestic Atricultural Prices to International PricesRice 0.72 0.70 0.76 0.90 1.06 1.04 1.04 0.95Wheat 1.00 0.90 0.85 0.88 0.91 0.93 1.05 1.07Jute 0.90 0.95 1.05 1.15 0.80 0.90 n.a.

5. Fluctuations in Domestic PricesJute (Index 1980-100) 89.5 120.2 133.3 220.2 464.9 171.1 150.0 243.9

6. Commodity Terms of TradeIndex 1980=100 77.7 66.1 74.9 87.0 109.0 83.3 89.0 92.9Annual Change -22.3 -14.9 13.3 16.2 25.3 -23.6 6.7 4.4

Source: Staff estimates.

9. In recent years, foodgrain pricing policies have been flexibly managedto ensure remunerative prices to producers and stable prices to consumerswhich more fully reflect economic costs. Both procurement prices for farmersand offtake prices for foodgrain issued to consumers through the PublicFoodgrain Distribution System (PFDS) have been reviewed and increased eachyear, while international prices for foodgrains generally declined. As aresult, in recent years domestic prices to farmers for both rice and wheat,adjusted for quality differences, have been comparable to internationalprices. However, in FY88, domestic prices as a proportion of internationalprices (calculated as three-year moving averages), fell somewhat, asinternational foodgrain prices rose sharply. In addition, as the level ofdomestic procurement remained low (although procurement increased in FY88, itstill accounted for less than 4% of the marketed supply), its effectiveness asa price support mechanism to farmers has been limited, particularly at timesof bumper crops (para. 25). On the other hand, public foodgrain distributionwhich. accounts for about 27% of the marketable supply, has had a considerable

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impact on stabilizing prices to domestic consumers (para. 24). Annual upwardadjustments in ration prices to consumers and the steady decline ininternational grain prices over the past few years have helped toprogressively reduce the food subsidy until FY88. However, a sharp increasein international prices, together with the postponement of a ration priceincrease due last September is expected to substantially increase the foodsubsidy in FY89.

10. Pricing of iute, the main cash crop, remains problematic. As theprincipal supplier of jute in the world market, Bangladesh's domestic pricesto farmers closely reflect international prices. However, domestic (andinternational) prices have fluctuated widely, leading to instability of rawjute supply from year to year (Table 1.3). An effective buffer stockmechanism for stabilizing raw jute prices and supply needs to be developed.

11. Over the past few years Bangladesh has taken important steps to improvethe investment climate for private investment, to liberalize investmentapproval procedures, to reduce quantitative restrictions on internationaltrade and reform tariff policies and to improve pricing policies of publicsector enterprises and agencies. Although much more needs to be done in theseareas, the progress achieved in FY87 and FY88 (as discussed in paras. 36-38),represent a continuing effort to reduce distortions in the policy frameworkand improve signals for economic decision making in Bangladesh.

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B. Production Trends and Short-Term Economic Management

Growth and Composition of Production

12. Economic growth, which averaged 4% per annum in the early and mideighties, faltered in the last two years, in large part due to adverseexternal events (Table 1.4). After reaching a high point of 4.7% in FY86, therate of growth of GDP decelerated to 4.0% in FY87, reflecting a sharp (22%)decline in raw jute production in response to a collapse in world jute prices.GDP slipped further to 1.8% in FY88, and to an expected 1-2% in FY89(para. 74), mainly as a consequence of unprecedented flooding in 1987 and1988.

13. In FY87, substantial increases in value-added in the manufacturing,construction, utilities and services sectors helped to achieve a GDP growth of4.0%. Sustained external demand for non-traditional exports, improvedavailability of raw macerials and revival in domestic demand for textiles dueto certain special factors helped to increase manufacturing production. Arecovery in public investment--public sector capital expenditures ondevelopment projects rose by 27%, in nominal terms, in FY87--contributedsignificantly to higher levels of construction activity. Energy output alsorose sharply, with further expansion of natural gas production and electricitygeneration capacity. However, value added in the dominant agriculture sectorremained virtually unchanged, as a modest increase in grain production wasoffset by the setback to raw jute production.

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Table 1.4: GDP GROWTH BY SECTORS, FY73-FY88

(percent growth per annum, constant FY73 prices)La

FY73- FY81- Share Lf GDP/c

FY80 FY86 FY86 FY87 FY88/b FY81 FY88

Agriculture 3.5 2.9 4.0 0.1 -1.1 48.7 43.4

(Crop Sector) (4.0) (2.8) (4.4) (-0.2) -1.8 (38.6) (33.6)

(Others) (1.6) (3.3) (2.8) (1.2) (1.5) (10.1) (9.8)

Manufacturing 13.9 3.0 1.8 6.4 -0.7 10.6 9.8

Construction &Utilities 7.4 9.8 3.0 8.6 14.3 4.3 6.6

Services 7.6 5.1 6.6 7.4 3.7 36.4 40.2

GDP at MarketPrices 5.8 4.0 4,7 4.O 1.8 10.Q 10Q.O

La A consistent series of natioaal accounts data covering the present decade

is available only on the basis of FY73 prices. The Government has just

issued a preliminary set of national accounts data, based on FY85 prices,

for the FY85-88 period. However, this series needs to be extended back to

early eighties and the quality of some of the estimates improved, before

it can be used as a basis of comparison of growth performar.ce over the

entire decade.i~ XPreliminary estimates.Ic At constant prices.

Source: Bangladesh Bureau of Statistics; staff estimates.

14. Preliminary estimates indicate that the slowdown in GDP growth to 1.8%

in FY88 was principally due to continued stagnation in the agriculture sector.

Floods in the summer of 1987 had a disastrous impact on aman--the main rice

crop. Although government programs to encourage replanting and increase

production of winter crsps (see below) eventually helped crop production to

reach the same level as in FY87, value added in the agriculture sector as a

whole fell by over 1%, as persistently low domestic prices led to a further

30% decline in raw jute production. In addition, output in the livestock sub-

sector was also adversely affected by flood damage, while value-added in

forestry rose by only about 1%. As discussed below, the continued poor

perfotinance of the agriculture sector is a matter of serious concern.

Manufacturing production also declined due to weak domestic demand (as a

consequence of the stagnation in rural incomes), and effects of the floods and

political unrest and strikes which hampered production, especially in the

first half of the year. As in FY87, the principal sources of growth in FY88

were the construction and utilities and services sectors. Although public

sector construction through the ADP was less than in the preceding year, pos:

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flood rehabilitation of infrastructure and housing, especially by the privatesector, led to an increase in total construction activity. In the utilitiessub-sector, rapid growth of natural gas and electricity production andcommencement of sales of liquified natural gas increased value addzd by 27%.

15. In recent years significant changes have taken place in the structure ofmanufacturing in Bangladesh. Since the early eighties, ready made garmentsand shrimp processing by the private sector, and natural gas based fertilizerproduction in the public sector have expanded rapidly, while the tradicionalmanufacturing sector dominated by the jute, textiles and light consumer goodshas been afflicted by a number of problems, particularly weak domf.stic andexternal demand. However, official data (based on the FY73 index) does notadequately reflect the rapid growth of these new industries, and seriouslyunderstate the extent of value added in the manufacturing sector.

16. The slowdown in manufacturing growth in FY88, as measured by officialdata, was due to a combination of weak external and domestic demand,compounded by unfavorable domestic developments. In the jute sub-sector,(which has a weight of 24% in the official manufacturing index), fallingexport prices and weak external demand led to cutbacks in production,exacerbating problems of overcapacity, over-manning, and low productivity.Falling jute prices and the effects of the floods which dampened agriculturalgrowth and income generation affected domestic demand for a wide range ofindustries producing for the domestic market, such as tobacco, sugar, basicmetals, beverages, paper, matches, paints and varnishes, etc. Other factorshampering manufacturing growth included industrial disputes and frequent workstoppages, interruptions in the flow of raw material imports caused by thehigh priority given to offloading food imports at the ports and limited accessto bank credit ior the private sector. The Government's trade liberalizationpolicy also co,ntributed to a measure of industrial rationalization and some 50medium and large scale industries, mostly in jute, have had to shut down. Inthe textile industry, recent census data show that about 40% of the installedhandlooms have remained idle because of dearth of yarn and dyes, lack ofinstitutional credit and marketing difficulties linked to competition frommill-made and imported cloth. The Government has now introduced severalmeasures to assist the textile industry, including easier access to loom loansand other inputs, and regulating competing imports. On the other hand,fertilizer production increased sharply because of a major expansion ofcapacity and substantially increased demand for fertilizer due to cropintensification and rehabilitation programs (noted below). Export orientedindustries such as ready-made garments and shrimp processing also expandedrapidly.

Agriculture

17. In agriculture, the Government responded to the 1987 flood disaster bylaunching a three-pronged program to rehabilitate crop production. First, anextensive recovery program for aman, which was severely damaged by the floods,was introduced. The program included free distribution of inputs, such asseeds and fertilizer and provision of new crop loans; agricultural loansfalling due in FY88 were rescheduled for 6 to 12 months. Second, a cropintensification program aimed at maximizing winter crop production (boro rice

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and wheat) provided for additional seeds, pesticides, and repair of damagedand installation of new irrigation equipment, distribution of power tillers,increased credit allocations for agriculture, and temporary reintroduction ofrental programs on low lift-pumps (LLP). Third, to rehabilitate damagedinfrastructure, the Government also initiated a short to medium-term programwith assistance from external donors, to repair roads, bridges, and floodcontrol and irrigation structures. To provide funds for these programs on apriority basis, new revenue measures were introduced, current expenditureswere curtailed and reallocations of funds were made from the ADP.

Table 1.5: TRENDS IN AGRICULTURAL PRODUCTION AND VALUE ADDED, FY81-FY89

--------------------------------------------------------- __------------------__----------------------------

FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89ta----------------------------------------------------------------- __----------__----------------------------

Production (million tons unless indicated otherwise)__________

Foodgrains Lk 14.97 14.59 15.30 15.87 16.21 16.19 16.59 16.55 16.35Rice 13.88 13.63 14.21 14.51 14.62 15.04 15.41 15.41 15.15Aus 3.29 3.27 3.06 3.22 2.78 2.83 3.13 2.99 2.85Aman 7.96 7.21 7.60 7.93 7.93 8.54 8.27 7.69 7.00Boro 2.63 3.15 3.55 3.35 3.90 3.67 4.01 4.73 5.30Wheat 1.09 0.96 1.09 1.21 1.46 1.04 1.09 1.05 1.20Others la n.a. n.a. n.e. 0.15 0.13 0.12 0.09 0.09 n.a.

Jute ('000 bales) 4943 5 4881 5216 5111 8610 6753 4700 4500Cotton ('000 bales) 10 55 58 46 29 29 22 0.37 n.a.Pulses La 0.53 0.51 0.50 0.49 0.52 n.a.Oilseeds a 0.47 0.48 0.42 0.44 0.45 n.a.Sugarcane 6.60 7.14 7.48 7.29 7.00 6.64 6.90 7.21 n.&.Potatoes 1.00 1.08 1.17 1.19 1.18 1.10 1.07 1.28 n.a.Sweet Potatoes 0.70 0.69 0.73 0.72 0.68 0.61 0.55 0.56 n.a.Tea (thousand tons) 40.00 39.00 41.00 42.00 38.00 43.00 38.00 41.00 n.a.Tobacco (thousand tons) 48.00 51.00 51.00 49.00 50.00 46.00 40.00 42.00 n.a.

Real Growth in Value Added (2 p.a.)__________________________

Crops 5.90 -0.70 4.90 1.10 1.20 4.40 -0.20 -1.88 -Livestock 2.50 5.80 2.40 1.90 2.30 2.40 2.50 2.52 -Forestry 7.90 10.50 1.90 9.30 -6.50 6.00 -1.30 -1.37 -Fisheries 0.20 5.80 6.80 0.70 2.30 0.80 1.30 1.24 -Total Agrieulture 5.30 0.90 4.60 1.60 0.90 4.00 0.10 -1.19 -1.00----------------------------------------------------------------- __----------__-----------------------------

hEa Estimate.Lk Total includes other cereals.Ic Beginning with FY84 data have been revised. Comparable figures for prior years not currently available.

Sources: Bangladesh Bureau of Statistics; Ministry of Agriculture; WorldFood Programme, Dhaka, and staff estimates.

18. These measures, as well as efforts by farmers to recove; flood-relatedlosses, had a positive impact on input use and agricultural production.Fertilizer consumption increased by 14%, the highest rate of annual increaseachieved in the eighties. High yielding seeds distributed by BADC alsoincreased by 40%. Gross disbursements of credit to farmers nearly reached theFY87 level; but because of extensive rescheduling noted earlier, net creditdisbursements to farmers incre.ased substantially by Tk 0.6 billion in FY88, ascompared with net repayments to banks of Tk 4.4 billion in the preceding year.However, the recovery rate of crop loans fell significantly to 24% from 40% inFY87. (It is, therefore, essential that while rescheduling is undertaken only

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under exceptional circumstances, as in the case of recent major floods, theloan recovery program should ba reinstated as quickly as possible.) Sales ofminor irrigation equipment which have been declining since FY84, improved by60% largely because shallow tubewell (STW) sales almost quadrupled.Significant price reductions for some of STWs and simplified sales procedures(such as permitting bulk purchases by private traders and withdrawal ofprevailing regulations which required prior &pproval by Upazila IrrigationCommittees before sinking STWs) by BADC helped to increase STW sales. Thereintroduction of the rental program for LLPs also helped to increase LLPrentals by 7300 urtits in FY88, but had a depressing effect on LLP sales whichfell by 34%.

19. As a result of these efforts, 90% of the affected aman area wasreplanted. Aman production reached 7.7 million tons, 7% less than FY87production level, but substantially higher than the early post-floodestimates. The crop intensification program also had a szlutary effect on theboro crop which reached 4.7 million tons, or 18% above the previous record of4.0 million tons achieved in FY87. This increase in .'oro production wasalmost exclusively due to an expansion in acreage by 18%, made possible byincreased irrigation; boro yields stagnated at about 2.4 tons per hectare.However, wheat production declined by 3.9% because of the early onset of warmweather which adversely affected yields. Nevertheless, total foodgrainproduction reached 16.5 million tons in FY88, almost the same level ofproduction achieved in the preceding year.

20. The success achieved by the Government through its crash programs torehabilitate crops in both FY88 and FY89 (see below) contrasts markedly withthe poor performance of agriculture in the preceding two to three years. Therecent experience demonstrates the potential for growth in the agriculturalsector, especially for winter crops, with effective programs in minorirrigation and support services. However, a number of measures adopted duringthe recent crises to increase production (such as heavy subsidization ofinputs and extensive rescheduling of loans) cannot be duplicated during normaltimes on a sustainable basis to promote agricultural growth (para. 109).

21. Jute remained a major source of instability in Bangladeshi agriculture,because of sharp fluctuations in Jute prices and production. GivenBangladesh's dominant position in the international Jute market, and in thetbsence of an effective stabilization scheme, fluctuations in Jute productionin Bangladesh lead to major swings in external and domestic jute prices;these, in turn, induce changes in production in the opposite direction, oftenleading to costly market disruptions. Because Jute is the main source of cashincomes for farmers, disruptions in Jute production seriously affect theirpurchasing power which is transmitted to the rest of the economy throughreduced demand for agricultural inputs and consumer goods. FY88 witnessedanother example of this instability. Continued fall in international pricesin FY87 reduced Jute acreage from 772,000 ha in FY87 to 512,000 ha in FY88,and raw jute production (which declined by 22% in FY87) fell by a further 30%in FY88. However, the solutions to these problems are complex. A governmenttask force, set up in 1987 to identify the issues in the jute sector andformulate recommendations for policy reform, finalized its report in December1988, building on the recommendations of a Bank report earlier on the Jute

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sector. These recommendations are now being reviewed by the Governmentz and

it is hoped that this review will provide the basis for an action plan for the

jute sector.

Foodgrain Management

22. Prolonged flooding from July to September 1987, combined with a low

level of stocks (of about 750,000 tons) in the public foodgrain distribution

system (PFDS) created considerable apprehensions about a possible food

shortage in early FY88. The Government made commendable efforts to avoid a

major crisis by (a) arranging for additional food imports promptly,

(b) expanding PFDS operations to increase grain supplies in the market, and

(c) as discussed above, initiating programs to recoup crop losses and maximize

winter crop production.

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Table 1.6: SUMMARY OF THE FOODORAIN SITUATION, FYS8-FY89

(thousand metric ton., unless stated othervise)

FY81 FY82 PY83 FY84 FY85 FY86 FY87 FY88 FY89 /f________________________________________________________________________________________________________________-

Domestic productionGross 15,026 14,650 15,361 15,748 16,124 16,084 16,501 16,460 16,350Net la 13,523 13,185 13,825 14,182 14,512 14,475 ;4,851 14,814 14,715

Domestic supply, net lb 13,431 13,066 13,696 14,216 14,315 14,602 14,725 14,643 14,550--------------------------------------------------------------- __------------__---------------------------------

Government operations:Domestic procurement 1,033 302 192 270 344 349 190 376 493Imports 1,076 1,256 1,843 2,059 2,590 1.202 1,763 2,911 2,244

- own resources 264 100 700 569 1,236 113 343 1,134 632- aided 812 1,136 1,143 1,488 1,354 1,089 1,430 1,777 1,612

Total distribution 1,546 2,067 1,937 2,052 2,580 1,541 2,120 2,495 2,600

Ra%ion sales: 1,141 1,468 1,324 1,334 1,459 730 1,1t4 1,080 994

Statutory rationing 348 312 308 293 282 160 210 188 166Priority groups 611 665 648 641 712 467 668 585 502Modified rationing 182 491 368 400 465 ln3 257 307 326

Vulnerable group programs: 406 441 495 587 708 673 728 1,071 1,276

Relief 94 1C3 23 55 113 136 72 292 371Vulnerable Group Feeding 23 39 67 92 23 152 176 3 1 335Food for Work 289 299 405 440 572 385 480 468 370

Market sales /c - 176/d 118 286 357 138 257 344 330

Losses 10' 104 103 88 137 52 62 126 142

Closing stocks 1,249 616 630 803 1,004 976 751 1,417 1,412

Total availability 13,914 14,831 15,441 15,998 16,551 15,780 16,658 16,842 le 16,657

Population, mid-year, million 89.34 91.67 94.05 96.50 99.01 101.53 104.07 106.57 109.13

Per capita availabilitykglyear 156.1 161.8 164.2 165.8 167.1 155.4 160.1 158.0 152.6glday 428 443 450 454 458 430 439 433 418ounces/day 15.1 15.6 15.9 16.0 16.2 15.2 15.5 15.3 14.7

Public distribution as Xof total availability 11.1 13.9 12.5 12.8 15.6 9.8 12.7 14.8 15.6

------------------------------------------------------------------- __--------__---------------------------------

la Gross production minus 102 for feed and waste.lb Adjusted for crop cycle overlap with fiscal year. Overlap: boro 27X, wheat 16.Ic Includes market operations.Id Includes export sales of 20,000 M.T.Ie Includes private imports of 80,000 M.T.If Estimate.

Scurces: World Food Program.a USAtD: Ministry of Food and staff estimates.

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23. To improve the immediate supply situation, the Government contractedcommercial imports of 1.1 million tons from its own cash resources and throughdeferred paymer.ts, and launched a special request for emergency food aid tomembers of the Bangladesh Aid Group. Donors responded positively to thisrequest and 1.8 million tons of aid-financed foodgrain imports were arranged,resulting in record level of imports of 2.9 million tons. Given the limitedport and transportation capacity in the country, highest priority was given tohandling foodgrain imports at the ports and to movement of foodgrain todeficit areas, especially in the first half of the fiscal year. At the sametime, foodgrain distribution through the PFDS was stepped up considerably (by18% over FY87 level) to 2.5 million tons--the second highest level on record--accompanied by improved targeting of distribution to the needy. Thus, theshare of non-monetized distribution outlets (FFW, VGD and relief) which servemainly the rural poor and unemployed, increased from 34% of total PFDSdistribution in FY87 to 45% in FY88 (Table 1.6); while other channels (such asstatutory rationing and priority groups) which serve relatively well-offpublic employees and personnel of armed forces were corresponding curtailed.

24. Initially in the wake of the floods, domestic foodgrain prices rosesharply by 10-20% during July-September 1987 over the corresponding period inthe preceding year. But, when it became clear that the Government wasmanaging the food situation competently, price pressures began to subside.Increased distribution from PFDS stocks, especially through open market salesand a Government decision to postpone an increase in ration prices, which wasscheduled to take effect in September 1987 also helped this process. (TheGovernment subsequently raised ration prices for rice and wheat by 8% and 3%respectively in January 1988 when the supply situation improved and by 2% and3% respectively again in June 1988; these adjustments, together with a declinein import prices, helped to eliminate the food subsidy for FY88.) In thesecond half of FY88, as harvesting of better than expected aman and recordboro crops commenced, foodgrain prices declined significantly below previousyear's levels. For the year as a whole, wholesale prices for rice rose byonly 4% and retail prices by 8% over FY87 levels, although the sharp increasein food grain prices in the first half of the year did contribute to anacceleration in the inflation rate in FY88.

25. While government policy was remarkably successful in ensuring foodsecurity and stabilizing food prices, the management of procurement policy toensure incentives to producers was less than satisfactory. In view of thecritical food situation early in the year, the Government correctly accordedhigh priority to ensuring food availability; but overestimation of crop lossesand expected rFDS offtake led to large scale imports of foodgrain whichsubstantially exceeded eventual requirements. As the crop situation improved,offtake from public (PFDS) stocks declined from a planned 3.1 million tons to2.5 million tons; and although the Government rescheduled some plannedfoodgrain import arrivals, PFDS stocks increased sharply (from 0.75 milliontons in early FY88) to over 1.4 million tons by end of the year, therebyseverely limiting the scope for domestic procurement. Thus, boro procurementhad to be suspended because of the lack of storage capacity; and market pricesfell by as much as 25% below the procurement price, adversely affectingincentives to farmers. This situation, however, was predictable; and could

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have been avoided with more realistic planning of imports without endangeringthe food security objective. As discussed below, a similar situation isexpected to arise again this year; and this calls for more effectivecoordination of food stock management and procurement if the Government'sobjectives of accelerating foodgrain production and income growth are to berealized.

Poverty Alleviation

26. With a per capita income of $170 per annum, Bangladesh is one of thepoorest countries in the world. Its limited resource base, large population,and vulnerability to frequent natural disasters have all contributed towidespread poverty. Current estimates based on the FY86 Household ExpenditureSurvey (HES), conducted by the Bangladesh Bureau of Statistics (BBS),41indicate that 44.2 million rural and 7 million urban people representing 51%and 56% of rural and urban population, respectively, were below the povertyl'ne (defined as 2,122 calories/day/person). While there are questions aboutthe accuracy of these estimates, the general consensus is that poverty stillremains overwhelming,51 especially among women who account for a large shareof the poor, in both urban and rural areas. In the FY81-FY86 period, somemodest improvement in the poverty situation evidently took place, due tosustained economic growth in this period, increased provision of health andsocia'l services, as well as an expansion in targeted government programs, withcomplementary activities by NGOs. As discussed in the Bank's economic report

i/ Report of the Bangladesh Household Expenditure Survey, 1985-86, BangladeshBureau of Statistics, Dhaka, October, 1988.

,j The FY86 HES estimates show a substantial decline in poverty from the FY82HES estimates which indicated that 60.9 million rural (74% of population) and6.4 million urban (66% of population) were below the poverty line. However,as pointed out in last year's .-.conomic rer,ort, the two surveys are notstrictly comparable because of: (a) differences in sample coverage (thesample size was reduced from 9,563 households--out of about 17 millionhouseholds for the country--to 3,840 households); (b) modifications in thestructure of questionnaires and response periods; and (c) definitional andmeasurement differences, for example, in the imputation of rental values ofowner-occupied and rent-free accommodations.

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last year, improving trerds in real wages and employment and underemploymentdata also supported this conclusion.f1

27. However, even this modest improvement in the early eighties seems tohave been reversed during the last two years- -FY87 and FY88. Two keydevelopments account for this deterioration: (a) a slowdown in agriculturalproduction and investment and an associated decline in real wages and anincrease in unemployment; and (b) the direct impact of the floods of 1987 and1988 on the poor.

28. As discussed in para. 12, the overall rate of economic growthdecelerated sharply since FY86, while value-added in the dominant agriculturesector, (which accounts for nearly 60% of employment), stagnated in FY87 anddeclined in FY88. The floods also led to substantial losses in seasonalemployment in rural areas. Although the Government attempted to offset theselosses through an intensified crop replanting and rehabilitation program and asubstantial expansion of Food for Work (FFW) and Vulnerable Group Development(VGD) programs (both directed largely at poor women), public investment(through the Annual Development Program) was cut back sharply, providinglittle stimulus to a depressed economy (para. 45). The net effect of thesedevelopments were to reduce rural incomes and possibly increase unemployment.Given that th3 large majority of the rural poor are virtually assetless,especially women, and rely heavily on wage employment for their livelihood,these developments in turn appear to have put dowmward pressure on real wages(Table 1.7).

j/ GDP grew by an average of 4% per annum, in real terms, during FY81-FY86,with agriculture growing by 2.9% per annum--both ahead of population growth.Employment and underemployment improved somewhat during the period, despitegrowth in the labor force, in part due to growth in non-traditional exportsand traditional industrial and services sectors, where productivity improved.Thus real wages for unskilled workers increased. Although per capitafoodgrain availability and per capita cereal consumption did not showsubstantial improvements, the available evidence suggest that total per capitafood consumption probably increased because of some substitution in the foodbasket between cereal and non-cereal consumption (see Atiq Rahman & TrinaHaque, 'Poverty and Inequality in Bangladesh in the Eighties: An Analysis ofSome Recent Evidence," April 1988). Finally, the Government, as well as anumber of NGOs (with donor support), strengthened and implemented a number oftargeted poverty alleviation programs (such as the FFW and VGD) whichcontributed toward ameliorating poverty. The allocations from the PFDS forvulnerable group programs (FFW, VGD and relief operations) increased from 26%in FY81 to 44% in FY86; these allocations amounted to nearly 1% of GDP inFY86. See World Bank Report No. 7105-BD 'Bangladesh: Adjustment in theEighties and Short-Term Prospects," March 10, 1987.

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Table 1.7: TRENDS IN REAL WAGES FOR UNSKILLED LABOR, FY80-FY88

FY80 FY82 FY84 FY86 FY87 FY88

Indices of Real Monetary Wages:FY74-100 /a

Agriculture (without food) 93 89 94 120 116 106Fishery 112 121 93 101 108 115Match 101 105 1ll 98 96 114Cotton textile 136 132 138 147 147 162Jute textile 90 95 94 106 109 103Engineering 109 119 128 166 139 116Vegetable oil 115 114 105 108 107 113Small scale rural 118 118 154 169 185 175Construction 124 125 122 134 139 151

Indices of Wages in Terms of WageGoods for Unskilled Rural Labor /b

Wage good (wheat) .. 100 115 156 149 142 (p)Wage good (rice) 100 113 125 171 154 150 (p)

La Based on Statistical Appendix Table 9.7.ab Appendix 4 and 5 of WFP (1988) op.cit.(p) Projected.

Source: Bangladesh Bureau of Statistics, World Food Program, andstaff estimates.

29. Wage and Employment DeveloDments. Table 1.7 summarizes trends in realwages in terms of monetary payments as well as wage goods (wheat and rice) forunskilled labor in agriculture and selected industries. The data indicatethat real wages in agriculture peaked in FY86 and have been declining since,although they are still above the levels attained in FY80. The information onthe trends in real daily wages for unskilled labor in other sectors- on theother hand, shows mixed results. Real wages fell in jute textiles,engineering and small scale rural industries, but registered substantial gainsin other sectors, especially in construction. Since the bulk of the poor areemployed as unskilled labor in those sectors where real wages declined, thedata suggest that, on average, the purchasing power of the poor has fallensince FY86, especially in FY88. This conclusion is supported by an analysis

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conducted by the World Food Program (WFP)21 which reports that between FY82and FY86, there was a 56% increase in the quar.tity of wheat purchasable withthe prevailing daily wage rate for rural unskilled labor. However, realwages, in terms of wheat, after peaking in FY86, declined by about 4% p.a. inboth FY87 and FY88. A similar conclusion can be drawn from the analysis ofthe purchasing power of the prevailing agricultural wage with regard to rice.

30. Preliminary data on employment generation in the past three years alsopoints to a continuing high level of unemployment and underemployment. On thebasis of a benchmark employment figure of 19.3 million person-years and acivilian labor force of 31.1 million persons in FY85, the unemployment ratewas estimated at 38% in mid-1985. Recent estimates by the Planning Commissionsuggest that employment of 21.6 million person years was created by mid-1988.Assuming that the labor force increased at the rate of 2.5% per annum and thelabor force participation rate remained unchanged, this would suggest that theunemployment rate improved marginally to 36% in FY88. It is, however, morelikely that the unemployment rate is higher than this estimate, especially inview of the fact that more women are now entering the labor force (asmanifested by the expansion in the Food-for-Work program); and both the laborforce participation rate and the growth rate of the labor force are higherthan assumed by the Planning Commission (for example, as shown by BBSestimates). When allowance is made for these factors, it appears that theunemployment rate may have even increased somewhat in FY88.

31. The combined effect of declining growth in the critical agriculturalsector, the weakening of real wages and stagnating unemployment points to anincrease in poverty over the last two yedrs. This has been probablycompounded by the negative direct effects of recent floods on the poor.

32. Impact of floods on the poor. The short-term effects of repeated floodsin 1987 and 1988 on the poor included extensive losses of assets, increasedtemporary unemployment noted earlier, and an exacerbation in morbidity andchild mortality. The floods in 1987 displaced 30 million people and led toover 1,800 deaths; the floods of 1988 displaced an estimated 45 million people(or 40% of the population) and led to an equal number of deaths. Losses ofassets, including housing, personal effects, agricultural stock and livestock(which form an important source of income generation for poor women) weresevere. BBS estimates, on a basis of a sample survey, indicated that over 3million rural housing structures were damaged in the 1988 floods, most ofwhich belonged to the poor. The floods also extensively damaged more than 2million hectares of crops in 1988. Although the swift response of theGovernment and farmers in both 1987 aiid 1988 in replanting crops avertedsubstantial declines in production, the impact of losses of poultry andlivestock on small and marginal farmers and poor women by reducing theirincome-earning opportunities could be significant.

1/ WFP, "Analysis of Rural Wage Rate Movements Over Time in Bangladesh,"Dhaka, February 1988 (mimeo). The analysis covered the period December-Mayeach year when the FFW program is in operation.

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33. Intensified crop replanting and rehabilitation efforts by the Governmentfollowing both the 1987 and 1988 floods helped to recoup employment losses inagriculture. However, corresponding recovery of lost employment opportunitiesis unlikely in the industrial sector, which continues to be hampered by weakdomestic demand. The Government estimated that in the industrial sector,about 88% of industrial assets, including plant, machinery, raw materials andinventory, for the small and medium-scale enterprises in the flood affectedareas was damaged to some extent, leading directly to about half a millionperson-years of employment loss. Flood damage to infrastructure (especiallyrural roads, embankments, bridges and culverts) was also heavy, reducingeconomic activity. The combined effect of losses of homesteads, agriculturalcrops and livestock, and the damage to rural and urban economic infrastructurethus probably seriously reduced employment and incomes, further aggravatingwidespread impoverishment.

34. The displacement of a large number of people into flood-relief camps andthe disruption of normal social services directly contributed to an increasein the incidence of morbidity and child mortality. Although available data inthis area are inadequate, preliminary indicators show that the cumulativeeffect of floods and other disasters increased infant mortality from 111.9deaths/thousand in 1985 to 116.6/thousand in 1986 with a slight decline to112.7/thousand in 1987. The situation was worse in the rural areas where theinfant mortality rate increased from 114.2/thousand in 1985 to 122.0/thousandin 1986, declining only marginally to 120.3/thousand in 1987. Apart fromreported deaths directly attributable to the floods of 1988, health effectsincluded a sharp increase in diarrheal diseases, which peaked at around 80,000reported cases a day in September 1988, compared to an average of 30,000/dayreported in normal circ-umstances.

Industry and Trade Policy Reforms

35. Recognizing the need to increase foreign exchange earnings and employ-ment opportunities outside agriculture, the Government has initiated reformsin industrial and trade policies since the early eighties. These reformswhich are closely interrelated, have included a major denationalization of(once dominant) public enterprises; deregulation of government controls andprocedures and gradual liberalization of the import regime to encourageprivate sector participation in manufacturing and to improve economic signals;improving export policies and exchange rate management to encourage exportproduction, especially by the private sector; and efforts to increase theefficiency of enterprises that have been retained in the public sector. InFY88, steps were taken to extend the reform process, although progress was notuniform in all areas.

36. Under the New Industrial Policy (NIP) of 1982, Bangladesh carried outone of the largest denationalizations undertaken in developing countries.Over 650 public enterprises were transferred to the private sector, leavingonly 160 in public hands, and reducing public sector share of fixed industrialassets from 85% in FY81 to 40% in FY86. (This exercise, however, has hadmixed results: a number of privatized enterprises were closed down, andseveral others have faced continuing problems, in part due to the weak demandfor jute and textiles, and accumulated liabilities and debt servicing

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problems). The Revised Industrial Policy (RIP) of 1986 continued thisprocess, by shifting the emphasis from divestiture to the formation of mixedpublic/private corporations, by selling 49% of shares of selected publicenterprises to the private sector. Sixteen such enterprises have beenidentified for partial sale, of which six were successfully marketed in FY87and FY88. The program, however, is being implemented slowly because of theneed to strengthen the financial position of earmarked enterprises beforemarket placements are made. Efforts are also needed to identify otherpotential candidates for partial or full divestment (which could benefit frominfusion of private capital and managerial skills); and a Bank study currentlyunderway is expected to assist the Government in this area.

37. The NIP and the RIP have opened for private investment 125 out of 144industrial subsectors.!' Moreover, investment approval vrocesses wereliberalized and approval limits were progressively raised to facilitate speedyprocessing.2' Private sector's access to foreign exchange was alsosubstantially improved by simplifying licensing procedures for importing rawmaterials and machinery (by specifying broad categories of eligible imports ofraw materials and spare parts and requiring a passbook for record purposes),and by expanding the secondary market for those who want to make such importsat the (premium) secondary market exchange rate (para. 7). As a result, thebulk of private investment and (raw material and capital goods) imports forthe private seator have been substantially freed from official regulationwhich was widespread earlier. However, further simplification is stillfeasible and needed in these areas.

38. In the early eighties Bangladesh had a very restrictive import regimechacacterized by extensive quota restrictions and bans and a positive listwhich narrowly defined eliylble imports (in addition to limited access toforeign exchange through the tightly controlled official market). In FY86,the import policy was relaxed by replacing the positive list by negative andrestricted lists of imports; while the tariff structure was simplified byreducing the number of tariff rates from 24 to 11, with a view to establishinga more uniform structure of protection among industries and improving export

I/ The 1986 revision of industrial policy restricted public investment todefense; electric power (excluding standby generation); mechanized forestextraction; telecommunications, air transport (excluding cargo) and railways;atomic energy; and currency printing and minting. (However, if privateinvestment is not forthcoming in the free sectors, public sector agencies mayset up industries, either by themselves or jointly with the private sector,for eventual privatization.) A supplementary "discouraged list" of industriessuffering from underutilization of capacity also exists.

2/ Thus, official approval is no longer necessary for self-financed projectsand for those which have an import content of raw materials of less than 50%.Projects which need approval can be sanctioned by development financeinstitutions (DFIs) up to Tk 60 million, by Director General of Industries andcommercial banks up to Tk 30 million, and Bangladesh Small and CottageIndustries Board (BSCIB) up to Tk 15 million, without referral to the mainregulating body --- the Investment Board.

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orientation and resource allocation. Over the next two years, the list ofbanned items has been progressively reduced from 39% of import categories atthe four-digit SITC level at the end of FY86 to 28% at the end of FY88; andthe restricted list was reduced from 28% to 24% over the same period.(Additional items liberalized included agricultural and food preparations andselected finished manufactured goods). At the same time, as a part of athree-year program to rationalize the tariff structure, in FY88 the maximumnominal tariffs for final goods in the textile, steel and engineering,chemicals and electronics sectors were reduced from over 200% to 125%; whilecommensurate adjustments were also made to rates for raw materials andintermediate imports in these sectors. As noted in para. 51, in order tostrengthen export incentives, access of exporters to banned or restrictedimports for export production was improved. Despite these improvements,however, banned and restricted imports (about half of the four-digit SITCcategories) are still substantial; and need to be reduced in accordance withthe Government's three-year phased program.

39. These, together with measures to promote exports (discussed inpara. 51), helped to increase grivate investment in manufacturing,particularly in ready-made garments, textiles and food processing. Thepattern of foreign exchange financing of capital goods also changeddramatically; about 80% of foreign exchange for such imports are now obtainedthrough the secondary market, compared to only about 20% in FY81. However,private investment in manufacturing has stagnated in the last three years, inpart due to rapid expansion of capacity in the mid-eighties in ready madegarments and weak domestic demand for most manufacturing subsectors.Inadequate availability of credit resulting from necessary enforcement ofcredit discipline (including intensified efforts to collect overdues anddenial of credit to those with poor repayment records), unwillingness of banksto provide term loans at low interest rates which do not fully reflect thecosts and risks of such lending, and institutional problems particularly amongthe development financing institutions, also contributed to this decline ininvestment for production for the domestic market in both FY87 and FY88.

40. Along with the scaling back of public enterprises (PEs) throughdivestiture, the Government has endeavoured to improve the performance ofremaining units through financial and physical rehabilitation, and variousmeasures designed to improve management autonomy, pricing policies andperformance monitoring. Thus, the capital and debt structure of a number ofenterprises have been improved by conversion of debt to equity and substantialinfusions of additional equity. Under the Public Enterprise (Management andCoordination) Ordinance of 1986, substantial autonomy to adjust prices havebeen granted to public enterprises, except for those producing a small numberof "monopoly and sensitive" items. Significant pricing adjustments were madein a few cases, notably public enterprises in natural gas and electricityproduction, where rates have been increased by 50% and 15% p.a. respectivelyover the last three years. However, in a large number of cases, thisflexibility has not been utilized and price adjustments have been insufficientto offset increases in input costs. To improve budgetary control andmonitoring, a system for autonomous bodies reporting and evaluation (SABRE)was introduced in ten enterprises in FY87 and another ten enterprises in FY88;a new performance evaluation system (designed with UNDP assistance)

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identifying monitorable performance targets and action programs at the plantlevel, was introduced on a pilot basis in two enterprises in FY87, andextended to three more in FY88. The implementation of these programs,however, has been slow, and more needs to be done before these systems canbecome widely operational.

41. Despite these efforts, the financial performance of public enterprises(PEs) remains poor, with total losses increasing to Tk 1.4 billion in FY88from Tk 1.1 billion in FY87. The losses of Bangladesh Jute Mills Corporation(BJMC), which increased from Tk 0.4 billion in FY87 to Tk 1.04 billion inFY88, accounted for the larger share of these losses; but most of the otherPEs also fared badly. The Petroleum Corporation, however, benefitted fromhigh domestic output prices relative to import costs, and its profits helpedto partly offset losses of other corporations. While BJMC's problems havebeen largely due to external market fluctuations and commitments to provideprice support to Jute farmers, a number of reasons have contributed to thecontinuing poor performance of others: multiplicity of corporate objectives;insufficient commercial orientation and inadequate pass-through of input costincreases; over-employment; a centralized wage determination process unrelatedto productivity, worker incentives and the financial position of PEs; lack ofmanagerial autonomy, accountability and incentives for cost control; and weakfinancial structure of PEs. As discussed in para. 115, the Government willneed to consider further measures in these areas in order to improve theperformance of PEs and to sustain the implementation of ongoing reforms.

Budgetarv Developments

42. Fiscal policy since the early eighties has been largely oriented towardsmeeting the stabilization objective and the overall budget deficit wasprogressively reduced from 11% of GDP in FY83 to about 8% in FY87. Thisreduction in the deficit was achieved principally through restraints ondevelopment (capital) spending, and to a lesser extent through a marginalimprovement in revenues. Thus, total government expenditures, as a proportionof GDP, were reduced from nearly 20% in FY83 to 17% in FY87. The developmentbudget took the brunt of this cutback, falling sharply from 13% of GDP to 8.6%over the same period, while current expenditures increased from 6.6% of GDP inFY83 to 7.7% in FY87--not a healthy trend for building future capacity of theeconomy. Recognizing the need to increase public spending (which became moreapparent subsequently with the devastation and economic stagnation caused bythe floods), the Government sought to increase total expenditures in the FY88budget by 12% over FY87 levels, including a 9% increase in the developmentbudget (ADP).10Y To help finance increased expenditures, new taxes of Tk 3.8billion, equivalent to 0.6% of GDP or 8% of total revenues, were announced,

JQ/ In FY87, the ADP turned out to be unexpectedly large (Tk 46 billion)because of the early completion of a large project (Chittagong Urea) whichadded about Tk 6 billion to the ADP and project aid disbursements. When thedisbursements on the urea plant is subtracted from FY87 ADP, the planned FY88ADP represented a substantial real increase.

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Table 1.8: INCOME AND EXPENDITURE OF THE CENTRAL GOVERNMENT, FYB1-FY89

FY81 FY83 FY84 FY85 FY86 FY87 FY88 FY89

Budget Estimate Budget Estimate------------------------------------------------------------- __--------------__------------------------------------------------

(In billions of take)

Total revenue 21.88 25.40 28.60 35.93 42.28 48.00 54.44 53.26 63.42 61.54

Tax 17.99 21.08 23.70 28.87 32.98 38.77 44.94 43.63 52.15 50.96Non-tax 3.99 4.32 4.90 7.06 9.30 9.23 9.50 9.63 11.27 10.58

Total expenditure 43.01 57.80 60.65 65.89 77.42 93.03 104.14 99.21 112.30 107.79

Current expenditure 13.00 19.20 23.03 26.61 34.97 41.59 45.46 49.19 53.30 59.39Food account defieit 4.67 6.56 3.80 4.26 1.58 0.13 3.51 5.84 1.27 3.28

of whichs foodatock change (2.75) (-0.03) (0.27) (1.96) (0.27) (0.12) (3.04) (6.00) (0.37) (1.00)Annual Development Program (ADP) 23.69 29.80 30.11 30.40 36.50 46.30 50.46 40.76 53.15 40.20Other capital expenditure and

not lending la 1.65 2.24 3.71 4.62 4.32 5.01 4.70 3.48 4.58 4.92

Overall budget deficit 21.15 32.40 32.05 29.96 35.19 45.03 49.70 46.01 48.88 46.25

Excluding foodgrain stocking 23.90 32.43 31.78 28.00 34.92 44.91 46.66 40.01 48.51 45.25

Net foreign finan ing lb 15.23 28.25 27.87 28.67 31.51 40.35 45.16 44.22 44.02 41.75

Project aid 8.00 13.44 13.31 14.40 20.17 29.63 26.82 25.98 29.85 24.37Coamodity aid 5.64 9.00 9.63 9.62 11.64 11.13 16.00 15.12 14.24 14.00Food aid 2.80 6.40 6.97 4.92 4.99 6.94 7.21 7.89 6.79 9.39Coaeercial food borrowing n.a. 1.23 -0.41 2.56 -2.27 -2.94 -0.11 0.10 -- 0.59Debt amortization n.a. -1.82 -1.63 -2.83 -3.02 -4.40 -4.76 -4.87 -6.86 -6.60

Net domestic financing 5.90 4.15 4.18 1.30 3.68 4.68 4.53 1.79 4.86 4.50

Banking system 5.00 0.65 4.27 -1.90 0.95 3.37 -- -0.71 0.65 2.00Other domestie 0.90 3.50 -0.09 3.20 4.63 1.31 4.53 2.50 4.21 2.50

(Annual percentage change)

Total revenue 25.7 9.5 12.6 25.6 17.7 13.5 12.6 11.0 19.1 15.5Total expenditure 11.3 25.3 4.9 8.6 17.6 20.7 13.5 6.7 13.2 10.8

Current expenditure 20.2 29.7 20.0 15.5 29.9 16.8 16.5 15.4 8.4 20.7ADP 13.8 11.2 1.0 1.0 20.1 26.8 5.8 -12.0 30.4 -1.9

(In percent of GDP)

Total revenue 9.3 8.8 8.2 8.6 9.2 8.9 9.0 8.8 9.4 9.0Tax revenue 7.7 7.3 6.8 6.9 7.1 7.2 7.4 7.2 7.7 7.5Non-tax revenue 1.7 1.5 1.4 1.7 2.0 1.7 1.6 1.6 1.7 1.5

Total Expenditure 18.4 19.9 17.3 15.8 16.8 17.3 1 .2 16.3 16.6 15.7Current expenditure 5.6 6.6 6.6 7.4 7.9 7.7 7.5 8.1 7.9 8.7AD? 10.2 13.3 8.6 7.3 7.9 8.6 8.3 6.7 7.9 5.9

Overall budget deficit -9.1 -11.2 -9.2 -7.2 -7.6 -8.4 -8.2 -7.5 -7.2 -6.8Excluding food stockLng -10.2 -11.2 -9.1 -6.7 7.5 -8.4 -7.7 -6.5 -7.2 -6.6

.la Comprises non-ADP project expenditure, the Food for Work program, miscellaneous investment (non-development) end notloans and advances. A major part of gross lending by the Government is included within the ADP.

/b Including foreign grants.

Sourcesi Bangladesh authorities, end staff estimates.

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while a substantial (12%) increase in external aid receipts was alsoenvisaged.

43. The budget outcome, however, deviated substantially from initialexpectations due to a number of factors which increased current expendituresand reduced revenues. Current exoenditures increased particularly sharply bya further 8% from a budgeted Tk 45 billion to Tk 49 billion. The floodsnecessitated additional expenditures for VGD and relief operations (Tk 1.8billion, financed by food aid); but, current expenditures also increased inother areas: post-budget increases in festival and other allowances to publicsector employees (Tk 1.0 billion), maintenance of law and order (Tk 0.2billion) in a period characterized by frequent strikes and political unrestand conducting of parliamentary elections (Tk 0.2 billion). In addition, thedeficit on food operations rose sharply from a budgeted Tk 3.5 billion tonearly Tk 6.0 billion, primarily because of a build up of PFDS food stocks (byan additional 700,00 tons) noted earlier. The food subsidy of Tk 0.5 billion,included in current expenditures, was eliminated due to a combination ofhigher issue prices and falling import prices. However, as noted earlier, thefood subsidy has re-emerged in FY89 due to a reversal of international pricetrends and lagging offtake prices this year.

44. To mobilize additional revenues to finance post-flood expenditures, theGovernment in September 1987 announced supplementary fiscal measures amountingto Tk 1.1 billion or 0.2% of GDP. These, together with earlier tax increases(of 0.6% of GDP) announced in the budget, represented a major effort toenhance revenues in a single year. Nevertheless, total revenues in FY88 fellby Tk 1.2 billion or 2% below budget estimates. As a result, the revenue/GDPratio declined from a budgeted 9.0% of GDP (and 9.2% of GDP in FY86) to 8.8%in FY88. While continued weak domestic demand and sluggish imports, andreductions in tariffs as a part of trade liberalization (para. 38) contributedto this revenue shortfall, the latter highlights the persistent problem of theinelasticity of the tax system and persistent problems of improving financialperformance of enterprises and enforcing cost recovery and debt servicingobligations. Resulting shortages of local currency have been a majorconstraint to improving project implementation and effective utilization ofexternal aid. As discussed below, high priority needs to be given toimproving the revenue effort through structural reform of the tax system andefforts to increase collections of non-tax revenues.

45. The shortfall in revenues and increases in current expenditures whichwere mainly in local currency (except for VGD and relief expenditures whichwere largely externally funded) significantly reduced resources fordevelopment spending. Accordingly, the ADP was cut back by 19% below the FY88budget target and 12% below FY87 actuals, in nominal terms. This cutback,however (as discussed below), was larger than warranted by the circumstances.Admittedly, the disruptions associated with the floods and political unrestcontributed to delays in project implementation. Following the floods, theGovernment, in order to mobilize local currency resources for rehabilitationand reconstruction work, suspended disbursements on development projectsbriefly, pending an internal review of the ADP. This process initially sloweddown disbursements; however, its impact on the implementation of externallyfunded projects over the year as a whole (by redefining priorities and

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ensuring early reallocation of resources to priority projects), was positive.Project aid disbursements which were sluggish in the first half of FY88,recovered somewhat in the second half of the year, so that the ratio ofdisbursements (to opening project aid pipeline) reached 19.2% although it wasstill lower than the 20.9% rate achieved in FY87. Thus, while the localcurrency shortages associated with the floods contributed to the decline inthe ADP, it was, however, exacerbated by overcautious budgetary management.The Government accumulated an unanticipated cash surplus of Tk 0.7 billionwith the banking system (as against a planned bank borrowing target of Tk 1.0billion) especially at a time when projects were starved of local currencyresources'll and a depressed economy needed some stimulus from publicexpenditure policy. Thus, the development budget was cut back more thannecessary; and led to an unexpectedly large reduction in the overall budgetdeficit to 7.5% of GDP from 8.2% planned in the FY88 budget and 8.4% in FY87.

46. The experience in FY88 serves to illustrate the more longer termproblems of implementing the development program which have become moreserious in the last two years. As noted earlier, over the past few years theADF has been given relatively low priority and squeezed of resources, evenwhen government revenues, in current prices, increased substantially. Thus,in the FY84-88 period, although total revenues rose by nearly Tk 26 billion,this increase was fully absorbed by increases in current expenditures. (Therapid growth in current expenditures was due mainly to increases in pensions,retirement benefits and salaries, administration, defense, local governmentand debt service payments and relief. However, essential current expendituresfor operations and maintenance and for the social sectors have beenunderfunded. Thus, as discussed in the Public Expenditure Review,restructuring of current expenditures, with tight restraints in lessproductive areas combined with increased allocations to more productive areaswill be needed in the future.) As a result the Government's local currencycontribution (revenue surplus) towards financing the ADP has fallen steadilyover time. The Government simultaneously reduced domestic borrowing for thebudget, even achieving a cash surplus, as noted, in FY88. This in turnexacerbated the local resource shortage and implementation difficulties of thedevelopment budget, which was also constrained by other procedural problems(see Public Expenditure Review). In effect, the development budget was fullyexternalized, with external aid inflows financing the entire ADP as well asthe deficit of Tk 3.4 billion in the Government's current operations. As aresult, development expenditures continued to decline from 13.3 of GDP in FY83to 8.6% in FY87 and to 6.7% in FY88, while current expenditures increasedsteadily from 6.6% in FY83 to 7.7% in FY87 and to 8.1% in FY88.

47. These developments raise important concerns regarding the manifestly lowpriority accorded to the development program and the need to refocus currentexpenditures and to restrain its growth in low priority areas, to provide moreresources for priority expenditure programs. They also indicate the

11/ A recent review by Implementation, Monitoring, and Evaluation Division(IMED) of the Planning Commission indicated that in FY88 local currencyshortages accounted for over half of project implementation delays - faroutweighing all other contributory factors combined.

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desirability of better coordination of programming of development expenditureand budget management, and developing an improved system of reporting andmonitoring expenditure data in the Finance Ministry. More importantly, asdiscussed (in para. 143) below, they raise fundamental questions regarding therole of external donors in Bangladesh--whether they should continue to fullyfinance the development program through additional commodity and project aid,unless there is tangible evidence of an increased commitment on the part ofthe Government to provide more domestic resources for the development budget.

Balance of Payments

48. The external sector constitutes a relatively small though important partof the Bangladesh economy, with exports and imports representing 7% and 16% ofGDP respectively. Since the early eighties the balance of payments hasundergone significant structural improvements and strengthened considerably.Dampening of import demand associated with the adjustment effort andrelatively slow growth of the economy, together with rapid and morediversified growth of exports and workers' remittances helped to reduce theexternal current account deficit from 11% of GDP in FY81 and FY8z to less than6% in both FY87 and FY88. Merchandise exports and remittances now cover 68%of the import bill, compared with only 43% in FY81. However, externalassistance continues to be a critical element of balance of payments (andbudgetary) support; and rising levels of aid disbursements, along withstructural improvements noted above, have helped to generate overall balanceof payments surpluses since FY86. Consequently, the (gross) external reserveposition strengthened steadily to nearly $900 million, equivalent to 3.6months imports at the end of FY88, compared to barely 1 month's imports inFY81, providing some much needed cushion to a highly disaster-prone economy.

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Table 1.9: BALANCE OF PAYMENTS, FY81-FY89

(USS million)------------------------------------- _-----_----.--------------__----_-------___-----__-__-------------

FY81 FY83 FY84 FY85 FY86 FY87 FY8S FY891a----------------------------------------------------------------- __----------__------------------------

Merchandise Exports, f.o.b. 711 686 811 934 819 1,074 1,231 1,300Merchandise Imports. c.i.f. -2,533 -2,246 -2,353 -2,647 -2.364 -2,620 -2,987 -3,150

Trade Balance -1,822 -1,560 -1,542 -1,713 -1,545 -1,546 -1,756 -1,850

Services, Net 15 -113 -33 -78 -125 -151 -143 -182Receipts 274 230 279 286 260 262 310 336Payments -259 -343 -312 -364 -385 -413 -453 -518

Private Transfers (net) 379 653 627 477 586 731 788 800

Current Account Balance -1,428 -1,020 -948 -1,314 -1,084 -966 -1,111 -1,232

Aid Disbursements 1,147 1,345 1,268 1,267 1,306 1,595 1,641 1,470

Food Aid 194 255 277 244 203 225 300 289Comodity/Program Aid 393 452 439 432 393 403 509 431Project Aid 560 638 552 591 710 967 832 750

M&LT Amortization -50 -74 -72 -110 -117 -154 -166 -220Trust Fund, Net -- -1 -8 -13 -25 -30 -31 -23Aircraft Loans, Net -- -- 53 13 -1 -7 -11 52Food Credits, Net lb -- 47 -9 91 -69 -96 8 18

Borrowing (57) (51) (190) (13) (0) (43) (35)Repayment (-10) (-60) (-99) (-82) (-96) (-35) (17)

Short-term and otherBorrowinRs, Net 28 -36 -65 -35 1 -140 -155 15

IMF, Net Purchases 193 48 27 -6 -3 164 13 63

Other Including Errors& OmissLons 86 -74 -126 -36 91 -109 -44 -36

Changes in Gross Reserves(- increase) 24 -235 -182 144 -99 -257 -144 -107

Memorandum Itemst________________

Gross Reserves (end FY) 251 358 540 396 495 752 896 1,003(as months of imports) 1.2 1.9 2.7 1.8 2.5 3.4 3.6 3.8

Current Account Deficitas X of GDP -10.0 -8.4 -6.7 -8.2 -7.0 -5.5 -5.7 -6.0

Terms of Trade Index (FY81-100) 100.0 96.5 112.1 140.4 107.3 114.6 119.7 114.5Teoms of Trade Annual Change (2) -14.9 13.4 16.1 25.2 -23.6 6.8 4.4 -4.3Debt Service Ratiolc 19.7 16.8 16.3 24.5 28.2 27.8 22.6 23.5

la Estimate.lb Commercial borrowings on account of food imports incurred by GOB.la Debt Se.;vice as a percentage of expo.t of goods and serviees and private transfers.

Sources: Bangladesh Bank, Bangladesh Bureau of Statistics and staff estimates.

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49. In FY88, exports increased by $157 million, or 15% in nominal terms,principally due to continued expansion of garments exports, while remittancesfrom abroad increased by another $57 million. However, the import bill alsorose by $367 million, or by 14%, in nominal terms, largely due to additionalfood imports necessitated by the floods; and the current account deficit rosemarginally to $1.1 billion or 5.7% of GDP from 5.5% in the previous year. Arising level of net aid inflows, equivalent to 8% of GDP, fully financed thisdeficit and helped to improve gross external reserves by $144 million.

50. The growth of export earnings in FY88 stemmed principally from a 45%increase in exports of ready-made garments (additional $123 m'llion) and to alesser extent from increased earnings from urea fertilizer (additional $20million) and shrimp (additional $9 million). Consequently, the value ofBangladesh's non-traditional exports exceeded that of traditional exports forthe first time, with garments easily surpassing jute and jute goods as thelargest single category of merchandise exports (Table 1.10). The volume ofgarments exports increased by about 30%, as Bangladesh continued to enjoyfavorable access to the US market; and available quotas were fully utilizedfor several product lines. Currently efforts are being directed towardsdiversifying export markets through increased sales to both western andeastern European markets and moving into higher value product lines. Recentexpansion of domestic production capacity also enabled Bangladesh to exportsubstantial quantities of urea, valupc at $25 million. Prospects for furtherexport growth in this area are promising in view of planned additions tocapacity and availability of low-cost natural gas. Considerable potential forexpanding production for export also exists in frozen food, especially shrimp,where productivity is currently low,/1 but could be significantly increased.In FY88, however, shrimp exports increased by only 6% due to flood damage tohatcheries in the summer of 1987. In contrast, earnings from traditionalexports stagnated, because of continued decline in export prices and volume ofraw jute and jute goods. The latter, which averaged over $500 million a year,ec ivalent to 70% of Bangladesh's export earnings in FY80 and FY81, providedonly $380 million or 30% of export earnings in FY88. Falling export pricesover the past few years and high production costs due to overcapacity, excesslabor, poor management and an accumulated debt overhang have reduced thecompetitiveness of the jute industry and led to large financial losses.

JV/ Per hectare yield in Bangladesh is only 150 kg, compared to 1,200 kg inMalaysia and 2,000 kg in Korea.

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Table 1.10i PASTERN OF EXPORTS, FY81-FY89

--------------------------------------------------------- __------------------__-------------------------------------------

Share of Exports

FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89/o FY81 FY8S

In Current Prices - Value 'USS million)---------------------------------------

Traditional Exports 583 495 533 628 672 511 571 568 550 82.0 46.1

Raw Jute 119 102 110 117 151 124 104 81 96 16.7 6.6Jute Goods 366 292 318 357 390 293 302 301 293 51.5 24.4Tea 41 38 47 69 61 33 30 39 46 5.8 3.2Leather 57 63 58 85 70 61 135 147 113 8.0 11.9

Non-Traditional Exports 128 132 153 183 262 306 503 663 750 18.0 53.9

Fish and Shrimp 40 53 72 77 87 113 136 145 175 5.6 11.8Ready-Made Garments 3 7 11 32 116 131 299 434 475 0.4 35.3Other 85 72 70 74 59 60 68 84 100 12.0 6.8

Total Exports 711 627 686 811 934 819 1074 1231 1300 100.0 100.0

FY8I-88 AverageIn Constant Prices - Annual Growth (X) -----------

Total Exports 11.4 4.0 4.8 4.7 -3.4 11.0 21.4 7.9 1.7 7.7Tradltional Exports 4.5 5.1 1.6 -1.4 -17.5 11.5 10.0 -7.4 0.9 0.8Non-Traditional Exports 59.1 -0.3 20.0 30.7 39.9 10.2 42.2 29.5 4.3 28.9

Memo Item:__________

Export Price Index (tY81-100) 100.0 84.8 88.6 101.3 119.3 94.1 101.6 108.0 112.7

I/ Staff estimate.

Sourcet Planning Commission, Bangladesh Bank and staff estimates.

51. The growth of non-traditional exports in recent years has beenfacilitated by improvements in government policies and facilities provided toexporters. Apart from a flexibly managed exchange rate policy and incentivesprovided through the export performance benefit (XPB) scheme, exporters alsobenefit from export credit guarantees, and various arrangements designed toensure exporters access to imported inputs duty-free or at low duty rates.U'A Duty Exemption/Drawback Office (DEDO) within the National Board of Revenuewas established in December 1987 to rationalize and improve the duty exemption

f/ For example, there are bonded warehouse facilities for duty-free import ofraw materials, concessional import duty rates on machinery and spare parts,duty drawbacks on imported raw materials, refunds of excise duty on packingmaterials, and selected income tax rebates. An inland back-to-back letter ofcredit system established in April 1987, under which firms with export ordersmay pass on to their domestic suppliers the benefits of duty-free imports andexport credits. Imports of certain previously banned and restricted items byexporters' suppliers were permitted in the Import Policy Order 1987/88;previously imports were allowed only on a case-by-case basis.

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and duty drawback schemes. Also, in December 1987, the working capital of theExport Guarantee Scheme was increased significantly to expand exportfinancing. Tc further promote garment exports, an Export Monitoring Unit wasestablished within the Export Promotion Bureau with the task of monitoringgarment exports to countries with quota limitations in order to ensure fullutilization of such quotas; and this has helped considerably in fillingavailable quotas and guiding export production into higher value productlines.

52. Record foodgrain imports to meet anticipated crop losses and toreplenish PFDS stocks, exceeding the previous year's level by 70% in volumeand by $216 million in value, accounted for nearly three fifths of theincrease ($367 million) in the total import bill in FY88. Import paymentsalso rose by $21 million for fertilizer (TSP) to provide for the requirementsof the crop rehabilitation program; and for edible oil (by $22 million), crudepetroleum and petroleum products (by $42 million) and raw cotton (by $38million) due to significantly higher import prices. Residual imports.axcluding capital goods) also increased substantially in value terms; but thebulk of this increase is believed to be imports for garment production forexport. Thus, non-food imports for the domestic market, affected by acombination of factors such as weak domestic demand, interruptions inindustrial activity caused by strikes, and priority given to unloading of foodimports etc., showed little increase. On the other hand, capital goodsimports declined sharply by 23% in value terms, due partly to the substantialreduction in public investment (ADP) noted earlier. Thus, although totalimports, in constant (FY81) prices, rose by 12% in FY88 (this increase mainlyreflected higher food imports), non-food imports declined by about 1%,reflecting the stagnation in the economy.

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Table 1.11: TRENDS IN MPORTS, FY81-PY89

--------- _----------_---_------------_----------------------__---------------__-----------------------------------------------_

1 of Imports

FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88/a FY89/n FY81 Y88----- _----------------------_---------------------------------------__-------__------------------------------------------------

In Current Prices - US$ million_______________________________

Capital Goods 689 615 655 599 616 691 1003 774 750 27.2 25.9

Food 342 356 469 485 601 355 388 626 584 13.5 21.0

Foodgralna 250 285 386 398 498 220 273 489 394 9.9 16.4EdLble Ol. 92 71 83 87 103 135 115 137 190 3.6 4.6

Major Intermediate Goods 781 788 656 641 662 609 416 514 586 30.8 17.2

Petroleum 503 547 456 356 359 342 230 272 266 19.9 9.1Fertilizer 104 104 66 75 137 108 25 46 77 4.1 1.5Raw Cotton, Yarn 141 106 90 173 140 102 97 136 164 5.6 4.6Cement 31 31 44 37 26 57 64 60 79 1.3 2.0

Other lb 721 745 466 628 768 709 813 1073 1230 28.5 35.9

Total Imports 2533 2504 2246 2353 2647 2364 2620 2987 3150 100.0 100.0

(Non-Food Imports) 2191 2148 1779 1868 2046 1755 2232 2361 2566 86.5 79.0

In Constant Prices - Indices (FY81-100) Grovth Rate FY8I-88

Capital Goots 100.0 89.6 89.5 91.0 93.9 96.0 122.6 86.7 81.8 -2.0Food 100.0 111.1 169.6 162.4 244.9 130.3 185.7 300.0 222.3 17.0Intermediate Goods 100.0 98.0 91.5 97.3 105.1 116.3 98.0 106.3 119.4 0.9(Petroleum) 100.0 97.0 88.8 80.6 86.1 101.5 96.7 99.6 99.6 -0.1

Other 100.0 103.9 74.0 91.5 112.3 94.2 98.6 118.8 133.3 1.6Total Imports 100.0 99.2 96.6 102.7 123.0 106.4 116.7 130.7 127.1 3.9

(Excluding Food) 100.0 97.3 85.1 103.4 103.9 102.6 105.4 104.3 112.2 0.6

memo Item:

Import Price Index 100.0 99.7 91.8 90.4 85.0 87.7 88.6 90.2 97.9

------------------------------------------------------------------- __--------__--------------------------------------------------

a Estimate.1b Consumer and other intermediate goods not separately shown.

Source; Planning Commission. Bangladesh Bank and staff estimate.

53. Private transfers, predominantly workers' remittances have increasedsteadily in recent years; and in FY88 rose by another 8% to $788 million. Thenumber of Bangladeshi workers going abroad has averaged about 70,000 annuallyin recent years. Aithough reliable data on returning immigrants are notavailable, it is likely that the total stock of Bangladesh workers abroad isstill increasing slowly. In response to changing demand pattern for immigrantlabor in the Middle East, the Government has also initiated programs in recentyears, with assistance from the International Labor Organization (ILO), toimprove skills of, and provide limited vocational training to, an increasingnumber of migrant workers; and this has contributed to the improving trend inaverage remi..tances per worker. The Government's flexible management ofexchange rate policy and the secondary market has also helped to channel anincreasing share of workers' remittances through official channels. However,in view of the changing preference for skilled workers and pressure on wage

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rates in the Middle East and the limited scope for sustaining the number ofworkers gaining employment abroad, it is necessary to substantially expandexisting skill development programs and to continue to manage the exchangerate policy flexibly in order to maintain the inflow of remittances at highlevels.

54. In the capital account, ai.d disbursem~nts rose by only 3%, in nominalterms, over FY87 level to $1641 million in FY88. However, the composition ofaid changed significantly, with an acceleration of food and commodity aiddisbursements reflecting the special needs created by the floods, and a 14%decline in project aid. (These c:rends are discussed in more detail inparas. 135-136).

55. With net capital inflows exceeding the current account deficit, thebalance of payments recorded an overall surplus in FY88, and gross reservesclimbed to $896 million, equivalent to 3.6 months' imports--a comfortablethough not an excessive reserve level in view of the disaster-proneness andextreme volatility of the Bangladesh economy.

56. Bangladesh's external debt at the end of FY88 stood at $8.96 billion,equivalent to 47% of GDP. Nearly all of it is over 10 years maturity, bearingconcessional rates of interest. In FY88, Bangladesh repaid substantialamounts ($115 million) of short-term debt incurred earlier and $40 million offoreign exchange deposits which Kuwait provided in the early eighties tobolster Bangladesh's meager foreign exchange reserves at that time.Nevertheless, debt service payments in FY88 as a ratio of export of goods andservices and private transfers declined to 22.7% from 27.9% in the precedingyear. This fall in the debt service ratio was due to increased exportearnings and remittances and lower IMF repurchases in FY88, and a bunching ofrepayments of food credits and other short-term debt and substantialrepurchases from the IMF which raised the debt service ratio to unusually highlevels in FY87.

57. Summary. The preceding discussion pointed out that Bangladeshsuccessfully stabilized its economy in the early to mid-eighties, reducingunsustainable fiscal and external balances to manageable levels and achievinga reasonable rate of economic growth with some improvements in the povertysituation, through a combination of careful macroeconomic management,expansion of targeted programs for the poor and broad-based economic reforms.The past two years, however, have witnessed a slowdown in this momentum inmany areas. Although macro-economic management remained tight, and thedisruptions caused by recurring disasters were effectively handled,(particularly lay ensuring food security and mitigating the hardships for thedisadvantaged groups), economic growth decelerated, the implementation ofdevelopment programs suffered and the earlier improving trend in the povertysituation appears to have been reversed. To a considerable extent, thesesetbacks could be attributed to two major floods (and political uncertainties)which disrupted economic activity and created considerable damage. However,deficiencies in economic management also contributed to the recent economicstagnation. The necessary transition of perceptions from managingstabilization to a more active role of promoting faster growth and developmenthas been difficult to achieve; and fiscal management remained overcautious,

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food management at crucial times failed to provide price support to farmers(reinforcing the economic stagnation), while the reform process generallyslowed down. Moreover, as discussed in the Public Expenditure Review, thedisruptions caused by the floods have masked emerging problems of a longerterm nature with regard to resource mobilization and management, which unlesseffectively addressed, now threaten to undermine the successes achieved overthe mid eighties. No doubt, in the more recent past, small and incrementalprogress continued to be made in many areas; but there were also considerabledelays in the preparation for and implementation of needed reforms.

58. The Government's reluctance to move forward more rapidly with economicreforms in an environment characterized by crises is understandable; andrightly under the circumstances, priority had to be given to crisismanagement, though short-term economic management still could have beenbetter. Nevertheless, the disruptions and setbacks of the last year and thisyear have heightened the urgency for action, to build on the successes of themid-eighties, without allowing the economy to stagnate. There is an urgentneed to strengthen the reform process in key areas and to start newinitiatives to permit the economy to grow more rapidly without underminingmacroeconomic stability. The prospects for the economy during the currentfiscal year, as discussed in the following section, are not bright; and moreimaginative and forward looking policies can help overcome problems which loomahead and avoid further deepening the current stagnation. Over the mediumterm, as discussed below, purposeful action will need to be taken in manyareas if the objectives of achieving substantial improvements in growthperformance and poverty alleviation are to be realized.

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C. Short-Term Prospects

Introduction

59. Before it could recover from the impact of the 1987 floods (consideredto be the worst in the preceding 40 years), Bangladesh was swamped by an evengreater disaster. Floods in late August and September 1988, generallyregarded as the worst in living memory, inundated 84% of the land area,inflicting extensive damage on life, property and infrastructure. Soon afterthe floods receded, Bangladesh was again hit by a more localized cyclone inlate November. These calamities have had a severely disruptive impact on theeconomy in the current fiscal year--FY89--and on economic growth prospects forthe near to medium term. Against this background, the rest of this reportdiscusses the impact of these adversities on the economy, the Government'sresponse to the crises, short-term prospects for economic growth anddevelopment, key economic management issues facing the Government in the nearto medium term, and Bangladesh's external assistance needs for the next fiscalyear (FY90).

The ImRact of the Floods

60. An unusual concurrence of events is believed to have caused floods ofunprecedented magnitude in late August and September 1988. A storm systemclose to the northern border of Bangladesh which led to a rapid rise in waterlevel of the Brahmaputra coincided with heavy flooding in the other majorriver systems (Ganges and Meghna) which drain through Bangladesh. At the sametime, spring tides in the Bay of Bengal delayed recession of flood waters fromthe lower reaches of the rivers, contributing to prolonged inundation of thedelta for over a month.)4

61. The duration and extent of flooding and the magnitude of the damagecaused by the 1988 floods were much greater than the consequences of the 1987floods. In 1988, 122,000 square kilometers or 84% of the country's land areawas submerged, directly affecting 45 million people, with over 1,600 deathsdirectly attributable to floods, and another 735 deaths caused subsequently bydiarrheal diseases. (In contrast, the 1987 floods affected 35% of the landarea and 30 million people, and resulted in over 1,800 deaths.) The damage tocrops and livestock has been correspondingly larger. Aman--the main rice cropplanted in the summer-suffered most from the floods, as 22% of the area underaman was affected. The cyclone in early December again damaged about 20% ofthe total planted/replanted aman area, although the crop loss on this accountalone is estimated at only 0.2 million tons. Together with losses (of about0.15 million tons) in the aus crop (harvested in July/August) which wasdamaged by localized flooding earlier, total crop losses due to the floods andthe cyclone are now estimated at about 2.0 million tons, or 17% below the FY89target for the aman and aus crops; or about 0.8 million tons or 18% below lastyear's (flood damaged) actual production. While this estimated loss is not as

Xi/ A UN mission visited Bangladesh in November to ascertain the causes of thefloods and appropriate actions Bangladesh will need to take domestically todeal with future recurrences. Its report is expected shortly.

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high as the Government's early estimates in October (which suggested a2.5-3.0 million crop loss) it is still a major setback. Although a Governmentinitiative to increase winter crop production is expected to yield record boroand wheat harvests, total foodgrain production for FY89 is presently estimatedat about 16.35 million tons, or about 1% below last year's actual production,and nearly 7% below the original FY89 production target. Damage to othercrops and livestock was also severe. Ten percent of the jute harvest isestimated to have been damaged; and in the forestry sector, both private andpublic nurseries suffered extensively. Livestock losses are estimated to beclose to 200,000 large and small ruminants and 420,000 poultry; with shortagesof animal feed adding to malnutrition and weakening of draught animals.

62. Flood damage to physical and economic infrastructure is estimated to befar greater than last year. About 2,500 km of flood control embankments,23,500 units of minor irrigation equipment, 10,000 km of local roads, asignificant proportion of national roads and highways and railways, severalhundred bridges, over 19,000 educational institutions, 1,468 healthstructures, and 3.7 million of (mainly low quality) housing units wereaffected. Widespread damage was also reported to fish and shrimp hatcheries,and industrial units, both large and small scale. Preliminary estimates ofdamage assessment made by a joint task force of the Government and UN agenciesin October placed total rehabilitation and reconstruction needs resulting fromthe floods, (excluding housing and the recently initiated Dhaka city floodprotection scheme) at approximately $1.1 billion over a three-year period;although these estimates overstate rehabilitation and reconstructionrequirements, the damage caused by the floods is still likely to be far higherthan the $285 million estimated after the 1987 floods.

63. The Government moved rapidly and decisively to deal with the crisis bylaunching: (a) a massive relief eefort to provide immediate assistance tomillions of flood victims; (b) an international appeal for additional food aid(and relief supplies) together with substantial commercial purchases from itsown resources to ensure adequate food availability; (c) an extensive cropreplanting and recovery program to recoup aman crop losses and enhance wintercrop production; (d) steps to assess damage to infrastructure and housing andimplement a phased program of rehabilitation and reconstruction; and(e) bilateral and international initiatives to seek longer-term measures todeal with the flood problem.

64. Given the magnitude of the disaster, the relief effort, involving amajor collaborative exercise by the Government, local NGOs and individuals andexternal donors, was handled efficiently and successfully. A Flood ReliefMonitoring and Coordination Cell was set up within the President's Secretariatto oversee and direct relief operations; while civilian and military personnelwere deployed to conduct relief operations. Substantial emergency assistanceprovided by external donors (including medicines, clothing, water purificationtablets and animal vaccines and feed), and emergency food supplies providedthrough the PFDS were distributed as smoothly and effectively as could beexpected, given the scale of the disaster. Credit should be given to theGovernment for handling the crisis effectively and averting a major

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catastrophe, and to the international community1 l for providing timelyassistance to the Government.

65. As the floods receded, the Government initiated a crog reglanting andintensification program designed to minimize, and regain part of, t-he lossesin the aman crop, and to substantially increase winter crop production. Theprogram aimed at recovering at least 730,000 tons of the loss in foodgrains,mainly by increasing the acreage and enhancing the availability of inputs forthe winter crops, particularly boro rice. Unlike in FY88 when nearly 90% ofthe aman area was damaged by the 1987 floods, the scope for aman replantingthis year was much more limited, because of the slow recession of flood water.Accordingly, this year's program for the aman season (through December)includes, in addition to aman replanting where feasible, production ofadditional 100,000 tons of vegetables, smaller quantities of blackgram andsorghum on an experimental basis, and broadcast paddy on land that would haveotherwise remained fallow during the October-December period. Theintroduction of maize in the crop recovery program is a significant step inthe direction of crop diversification; and will be supported by procurement byPFDS at guaranteed minimum prices. The program includes free distribution ofseeds/seedlings and fertilizer to over 50,000 small farmers. The secondcomponent of the program to intensify the production of boro rice, wheat,maize, potato, and vegetables in the winter season include (a) freedistribution of seeds and fertilizer; (b) repair and rehabilitation of over25,000 units of minor irrigation equipment; and (c) procurement anddistribution of over 3,600 new LLPs under rental programs for small farmers,aimed at increasing crop acreage. The Government has also taken steps toensure availability of high quality seed through imports. As with last year,time limits for obtaining crop loans have been extended, while repaymentsfalling due have been again postponed by 6-12 months. As noted, thesemeasures are expected to raise foodgrain production to 16.3 million tons inFY89 or 1.2 million tons below the original target. However, given thelikelihood of a record boro crop of about 5.3 million tons, skillfulmanagement of the foodstock situation and an effective procurement drive in

15/ The UN system played a very active role in assisting the Government duringthe crisis. The Secretary General of the United Nations immediately announcedan appeal, and designated as his Special Representative the Under-SecretaryGeneral and UNDRO Coordinator, who visited Bangladesh from 13 to 18 September1988. The UNDP Resident Representative was designated as Local SpecialRepresentative. The offices of the UN Organizations in Bangladesh (UNDP, WFP,UNFPA, UNIDO, UNICEF, FAO, ILO, WHO, World Bank and IMF), supplemented byadditional staff from respective Headquarters and from the other UNspecialized agencies, provided immediate assistance to the Government for itsrelief effort, in assessing damage, and in preparing a program ofrehabilitation and reconstruction. The resident mission of the World Bankconvened a Local Consultative Group (LCG) meeting to discuss possiblecoordination of donor responses to assisting the Government's rehabilitationeffort. A number of countries also sent special delegations to review withthe Government of Bangladesh how they might assist in relief andrehabilitation efforts.

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the last quarter of FY89 will be needed to ensure remunerative prices tofarmers (para. 81).

66. The Government also initiated an assessment of flood damage andpreparation of a medium term program for rehabilitation and reconstruction,with assistance from UN agencies and bilateral donors. According topreliminary estimates (summarized in Table 1.12), the costs of the program,excluding housing, are likely to exceed $1.1 billion over the next thr.eyears, of which $425 million (equivalent to T-k 13 billion, or nearly 25 ofthe planned level of the ADP for FY89) would have to be incurred this fiscalyear to provide for urgently required rehabilitation. It should be noted,however, that these are very rough estimates, which need to be firmed up bymore detailed assessments at sector and subsector levels, which have onlyrecently begun. In a number of cases, the estimates include not only thecosts of repair and rehabilitation, but also upgrading and 7.,w investment; andcareful scrutiny by the Planning Commission would be needed before the hard-core rehabilitation program could be finalized. This work is currentlyunderway. Nevertheless, even after substantial pruning, the rehabilitationprogram is likely to be a substantial claim on limited resources, particularlywhen rehabilitation of private housinglAl is also taken into account. TheGovernment also recently initiated a Dhaka flood protection project which isestimated to cost an additional $100 million.

16/ As noted, estimates by BBS indicate that about 3.7 million housing unitswere damaged or destroyed, requiring considerable resources (mainly private)for rehabilitation.

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Table 1.12: REHABILITATION AND RECONSTRUCTION PROGRAM

Immediate (FY89) Longer Term Total$ mn Tk mn $ mn Tk mn $ mn Tk mn

Agriculture 34.6 1.094 133.4 4.216 168.0 5.310Crops 24.4 771 91.2 2,884 115.6 3,655Other 10.2 323 42.2 1,332 52.4 1,655

Flood Control/Irrigation 53.8 1,700 72.8 2.300 126.6 4.000

Infrastructure 133.8 4.229 384.6 12.154 518.4 16.383Roads and Highways 39.8 1,256 125.0 3,951 164.8 5,207Railways 28.9 915 52.3 1,652 81.2 2,567Inland Waterways & Ports 4.6 144 16.3 515 20.9 659Civil Aviation 7.0 221 36.0 1,138 43.0 1,359Posts & Telecom. 23.2 734 78.2 2,472 101.4 3,206Power 8.8 280 46.4 1,465 55.2 1,745Urban Infrastructure 21.5 679 30.4 961 51.9 1,640

Industry 124.4 3.932 100.8 3.186 225.2 7.118Small & Cottage Industry 75.5 2,387 70.7 2,235 146.2 4,622Medium & Large Industry 47.7 1,508 27.0 879 75.5 2,387

Health & Education 74.7 2,359 21.0 664 95.7 3,023

Rural Water & Sanitation 3.2 102 - - 3.2 102

Total 424.5 13.416 712.6 22.520 1.137.1 35.936

Source: Report of the Joint Task Force of the Government of the People'sRepublic of Bangladesh and United Nations on the 1988 Floods;November 1, 1988.

67. To free up resources of this magnitude for immediate rehabilitation workhas been extremely difficult. A block allocation (of Tk 150 million) providedin the FY89 budget for unspecified work in the agriculture sector andunutilized funds from donor-financed rehabilitation and reconstructionprojects initiated after the 1987 floods which were incorporated in the FYb6budget, provided some room for the Government to embark on programs in suchareas as crop rehabilitation, repair and restoration of infrastructure andschools on a priority basis. However, substantial additional reallocations ofresources had to be made; and since current expenditures also increasedsimultaneously, the ADP has had to be cut back again this year (para. 89).Moreover, the manner in which these adjustments in the ADP have been made sofar this year has proved to be more disruptive to ADP implementation thannecessary. Each Ministry was asked to accommodate priority rehabilitation

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work within its original ADP allocation, without necessarily changing theinter-ministerial allocations in the ADP and cutting back on less desirableprojects in the ADP as necessitated by the Pew priority given torehabilitation. This appears to have led to a general slowdown in ADPimplementation this year. On the other hand, an early reallocation ofresources within the ADP on the basis of a systematic, but quick, review ofresource availabilities and expenditure priorities, would have helped tominimize the disruptive effect of the cutback in the ADP; and while this wasdone last year after the 1987 floods, as discussed below, this processreceived much less attention this year. These problems contributed to anacute shortage of local resources for the ADP and slowdown in projectimplementation, which the Government has recently began to address.

68. The Government launched an appeal to external donors last October tohelp finance the rehabilitation and reconstruction effort; and a specialmeeting of the United Nations was convened on November 16 to discuss theemergency in, and provide assistance to, Bangladesh. The donors haveresponded to this request and an earlier appeal for food aid by providingadditional 300,000 tons (valued at approximately $78 million) of foodgrain;commodity assistance (including edible oil, medicines, relief goods andbuilding materials) valued at about $87 million; and support forrehabilitation and reconstruction work both through new project aidcommitments and reallocation of funds within existing aid programs."/ It wasestimated at the conclusion of the UN special meeting that total assistancepledged by donors to Bangladesh in response to the disaster (includingemergency food aid and relief supplies) will amount to about $500 million.However, not all of this is likely to be additional; in many cases, it has notbeen clear whether the pledges of assistance are a part of ongoing aidprograms, or transfers into this year's programs from commitments/programs forthe next fiscal year, or reallocations from other projects in the aidprograms, or truly additional. On the basis of presently availableinformation, it appears that the substantial part of the required financingfor the rehabilitation effort is still to be arranged.

69. The Government took decisive steps to increase food availability andensure food security. During the floods and the following months, a majoreffort was made to distribute adequate food supplies to flood victims and theneedy through VGD, relief and Food-for-Work channels of the PFDS, and toincrease foodgrain supplies in the market through open market sales. In thethree-month period September-November 1988, total PFDS distribution reached785,000 tons, of which 348,000 tons or 44% was issued through VGD, FFW andrelief channels. To mitigate price pressures, the Government also postponedan increase in ration prices scheduled for September. Steps were also takento replenish PFDS stocks through an appeal to external donors for additionalfood aid and large commercial purchases (of approximately 630,000 tons or430,000 tons more than pre-flood plans) out of its own resources.Consequently, foodgrain imports this year are projected to exceed 2.2 million

V/ A number of donors indicated that they would review with the Governmentand reprogram and increase existing aid programs on the basis of bilateraldiscussions.

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tons. In November and December alone, 876,0000 tons of foodgrain wereimported. Priority was given to handling foodgrain imports at the ports.

70. These measures helped to control and stabilize domestic foodgrainprices, which had risen sharply in August and September above the pre-floodlevels. With the arrivals of imports, and increased assurance of continuedavailability of adequate supplies through the PFDS, market prices began todecline in October; and have remained below or close to the previous year'slevels since late October.

71. Although the Government has been very successful in handling theimmediate crisis, ensuring food availability and stabilizing foodgrain prices,food stock management continues to pose problems. Understandably, theattainment of food security has become a matter of the highest priority in aperiod characterized by recurrent natural disasters. However, the manner inwhich this objective has been pursued is likely to contribute to an erosion ofincentives to farmers (para. 81).

72. A number of initiatives have been taken by the Government, withassistance from UNDP and bilateral donors to examine the causes of the floodsand ways of mitigating their effects. In addition to studies undertaken byGovernment itself, the UNDP is financing a Flood Policy Study being undertakenjointly by international and Bangladeshi experts; joint bilateral task forcesand study teams have been formed between Bangladesh and India, Nepal, Chinaand Bhutan; a team of engineers, financed by the Government of France isundertaking a feasibility study of flood control embankment proposals for theGanges and Brahmaputra Rivers; and USAID is sponsoring a study of watershedmanagement in the Ganges and Brahmaputra Basins in response to a request fromCongress. In addition to these activities Government, in cooperation withUNDP and IDA, is initiating a flood preparedness project designed tostrengthen procedures for early warning, enhance public awareness andinstitute other programs to mitigate the effects of floods. The Governmentwill wish to review the recommendations and proposals in these studiescarefully, as a basis for formulating a coherent and well designed longer-termstrategy for addressing the flood problem.

Economic Prospects in FY89

73. The floods have necessitated significant revisions in the Government'seconomic goals and targets for the current year. Before the floods, 6%overall economic growth was envisaged, with substantial increases inagricultural production (6%) and manufacturing (7%). A recovery of cropproduction from the disruptions created by the 1987 floods, an expansionarypublic expenditure policy which aimed at stimulating economic activity andraising investment levels (supported by a significant new tax effort), and arevival in demand for manufacturing production as a result of these factorswere expected to provide the basis for higher growth. The balance of paymentssituation was expected to strengthen, with improved supply availabilities(through both increased domestic production and imports) contributing to amoderation of domestic inflation.

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74. Prospects for Economic Growth. It is now clear that many of thesetargets will not be realized. Despite the crop recovery and rehabilitationeffort, agricultural. production will be substantially less this year. Incomelosses associated with this setback and reduction in gainful employmentopportunities will have a depressing effect on demand (which is unlikely to beoffset by public expenditure policy), on the manufacturing sector which hasalso been directly affected by closure of factories during the floods anddamage to equipment and inventories. The stagnation and even decline in thekey productive sectors will limit the overall growth of the economy to about1-2% in FY89, even though reconstruction and rehabilitation activities in thepublic and private sectors will help increase activity levels in constructionand services sectors.

75. Agricultural production and value added will be corsiderably less thanlast year's, due to production losses in most of the subsectors. Theshortfall in production will be mainly In the aman crop, ravaged by the floodsand the cyclone, currently projected at 7.0 million tons, compared to7.7 million tons achieved in FY87 and 8.27 million tons in FY86. The auscrop, already harvested in the summer, was also only 2.85 million tons,compared to 2.99 million tons in FY87 and 3.13 million tons in FY86. Theselosses are likely to be partly offset by increased winter crop production--boro rice and wheat--which will benefit from the crop intensification drive,expansion in cultivated acreage and improved soil fertility and residualmoisture from the floods. The boro crop is currently expected to be about 5.3million tons or 0.7 million tons more than the FY88 harvest, itself a record;while wheat production is projected at 1.2 million tons or 0.15 million tonsmore than in FY88. If these targets are realized, total foodgrain productionwould be about 16.3 million tons, but still 1% below FY88 production level.As noted, production of jute--the main cash crop--as well as of livestock,fore;try and fisheries has also been affected by the floods; although therewill be some gains in minor crops such as vegetables, potatoes and pulses.Notwithstanding these gains, given the sizable losses in foodgrain productionand additional costs incurred in replanting, value added in the agriculturesector is expected to decline by about 1%.

76. The manufacturing sector will be affected both directly and indirectlyby flood damage and further weakening of domestic demand. The floods led toclosure of many factories for an extended period, resulting in losses inproduction; and caused considerable damage to plant and equipment andinventories, especially in the small-scale sector. While some of theproduction losses could be made up during the year, this is unlikely to besignificant in many cases because of continued weak domestic demand. Apartfrom substantial losses in rural incomes, an unusually large proportion ofpersonal incomes and savings is likely to be pre-empted by necessaryrehabilitation of damaged housing on a priority basis this year. Conse-quently, the demand for consumer goods, such as textiles, tobacco, and foodand beverages, is likely to be adversely affected; while jute manufacturingcontinues to be hampered by weak external demand and low-quality of rawmaterials (in part due to the floods). Major exceptions to this overall trendwill be industries which will benefit from increased rehabilitation activityin both agriculture and construction, such as chemical fertilizer andbuilding materials and those geared to continuing strong export demand such as

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ready-made garments. Nevertheless, overall manufacturing growth is likely tostagnate again this year.

77. Value added in the utilities sector which has grown rapidly in recentyears, is expected to be significantly lower this year, due mainly tointerruptions in the production of natural gas and electricity generationduring the floods. However, the construction and services sectors are againexpected to continue to grow steadily as last year by about 11% and 4%,respectively, in response to increased private and public rehabilitation andreconstruction activity.

78. With overall GDP growth at only 1-2% this year, per capita incomes willhave declined sharply for the second successive year. Thus, although theGovernment is making special efforts to assist th.e very poor, the livingstandards of the majority of the people in Bangladesh who are already quitepoor, are likely to fall again this year. As discussed below, an importantobjective oi the Government's short-term economic management will need to beto minimize such a decline and to ensure an early recovery to the extentpossible.

79. Food Management. Despite disruptions to foodgrain production, theGovernment has so far handled the short-term food situation successfully.Domestic food availability is excellent; and the situation is expected toremain comfortable during the remainder of FY89. Availability of plentifulstocks at the time of the floods, prompt actions by the Government inarranging additional imports and additional food aid from donors in responseto the Government's appeal have contributed to this result. As noted, theGovernment has already arranged for 2.24 million tons of imports. However,this level of imports is likely to be excessive, creating seriousdisincentives to producers, and undermining the objectives of encouragingagricultural production (see below).

80. The Government's early estimates of imports for FY89 (based on a grosscrop loss of 2.5 million tons, partly offset by an expected increase of 0.5million tons in winter crops and an anticipated reduction in consumption of1.1 million tons) suggested the need for an additional 1.0 million2 1 tons ofimports (to 2.6 million tons) to provide for a projected PFDS distribution of3.1 million tons. Consequently, aid-financed imports were expected to risefrom 1.4 million tons to 2.0 million tons, and the Government's own commercialpurchases from 0.2 million tons to 0.6 million tons. As the crop outlookimproved in recent months, these import plans have been scaled back somewhat,mainly by reducing aid-financed imports. Aid-financed imports are nowexpected to be about 1.6 million tons, while commercial purchases will beabout 630,000 tons. Of the latter, approximately 363,000 tons have arrived byend-January, with additional arrivals of approximately 270,0C0 tons scheduled

1f/ Government's original balance of payments projections assumed thatfoodgrain imports would reach 1.8 million tons, of which 1.6 million would beaid financed. However, because of increases in world prices, only 1.4 milliontons could be imported under existing food aid commitments.

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for the March to June period. PFDS offtake, allowing for increaseddistribution under VGD, relief, FFW and recently expanded modified rationing(para. 82) channels, and distribution of a further 1.0 million tons in theFebruary-June 1989 period,1 91 is now expected to be about 2.6 million tons.Consequently, (PFDS) stocks, which were rebuilt to a comfortable level of 1.2million tons at the end of December 1988, are expected to exceed 1.4 milliontons by the end of June 1988. However, if offtake were to be lower, as in thecase of last year, end year stocks could reach 1.5 million tons.

81. Such a build-up of stocks, especially at a time when record boro andwheat crops are harvested, are likely to create serious stock managementproblems and disincentives to farmers. Given the limited effective storagecapacity in the country--around 1.4 million tons--this will reduce the scopefor procurement to support the announced procurement prices; and ifsubstantial procurements are not made, farmgate prices may again fall sharply,as was the case last year. A build-up in PFDS stocks, whether through importsin the form of commercial purchases by the Government or domestic pro^urement,will adversely affect the budget and the development program by pre-emptinglimited taka resources which would otherwise be available for budgetaryfinancing. However, domestic procurement will help to support farmers'incomes and agricultural production and help stimulate domestic demand,particularly at a time when the economy remains severely depressed; while foodimports will not generate such benefits. Given the tight constraints on thebudget and the need to support economic activity and provide stimulus to theeconomy through effective management of budgetary resources, the wisdom ofutilizing such limited resources to build up PFDS stocks through importsshould therefore be reconsidered, especially when such a policy will adverselyaffect domestic farmers' prices and incomes. It should be pointed out thatthe present level of stocks--over 1.2 million tons--provides plenty of cushionfor the Government to meet any unexpected contingencies, without jeopardizingthe food security objective. As discussed below, the Government can achieveboth objectives of achieving food security and supporting domestic agriculturesimultaneously by using available resources to support domestic procurement ofboro and wheat crops rather than to procure abroad through commercial imports.

82. The Government has continued to make improvements in the PFDSdistribution during this fiscal year. Targeted distribution to the very poorthrough VGD, relief and FFW channels is expected to reach a record 1.28million tons or 49% of total PFDS distribution, compared with 1.07 milliontons or 43% last year. The Government also broadened the scope of the VGDprogram by introducing partial monetization, i.e., permitting part of thefoodgrains allocated to this program to be sold in the market and utilizingthe proceeds to provide credit to beneficiaries of the program for undertakingincome-earning activities. Changes were also announced in the modified

2/ Traditionally, PFDS offtake falls off sharply in May and June of eachyear, when the winter crops come into the market.

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rationing program to target it more effectively to the rural poor.l21 Thesechanges will correspondingly reduce the share of statutory rationing and otherpriorities which generally provide for relatively better-off consumers.

83. Budgetary Prospects. The FY89 budget, announced in June 1988, sought toincrease public expenditures to stimulate economic activity and raiseinvestment levels, particularly through a 30% nominal (or 18% real) increasein development expenditures over FY88 provisional actuals (Table 1.8).Expenditure allocations for agriculture, infrastructure and the social sectorswere increased significantly. To provide for these increases in expenditures,new taxes of Tk 6.0 billion, equivalent to 0.9% of GDP, were introducedhelping to raise total revenues by a projected 19% in nominal terms. At thesame time, the deficit on the food account was expected to decline by nearlyTk 4 billion, principally due to a planned reduction in PFDS stock.Consequently, the overall budg-t deficit and external aid receipts to financethis deficit were both expected to remain at their FY88 levels in nominalterms. However, as a proportion of GDP, the budget deficit was expected todecline to 7.2% of GDP from 7.5% in FY89 due to a 6% growth GDP and domesticinflation.

84. The budgetary outcome for FY89 is likely to be adversely affected by anumber of unforeseen factors: (a) flood-related reductions in revenues andincreases in expenditures; (b) higher than projected foodgrain import prices;and (c) possible shortfalls in commodity aid. However, as discussed below(para. 88), the adverse impact of these developments on the budget has beenexacerbated by poor short-term economic management.

85. The key assumptions underlying revenue projections in tne budget (6%overall GDP growth and 7% increase in industrial production) will not berealized. As noted, economic growth is expected to be only about 1-2% thisyear; and due to continued weak demand and low levels of economic activity,imports are projected tc fall substantially short of initial estimates.(While some categories of imports are expected to rise as a consequence of thefloods, for example, duty-exempt foodgrain and relief items, these will notcontribute to revenues.) As a result, revenues from customs duties and salestaxes on imports are expected to decline below budget projections. The floodsalso affected industrial production, resulting in lower excise dutycollections on a number of items. Given the depressed state of the economy,it is unlikely that these revenue losses could be recouped over the comingmonths. Consequently, a revenue shortfall of about Tk 2.0 billion belowbudget estimates is now anticipated.

86. Government current expenditures are also likely to increasesubstantially over budget estimates. In part, this is due to increased in-kind allocations for VGD and relief operations, which will be largely financed

ZQ/ Under the revised program, an estimated 4.5 million rural beneficiaries(below a cut-off income limit) will be issued ration cards which entitle themto one and a half kilograms of foodgrain per week; the subsidy rate will bekept to 25%.

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by food aid. However, additional cash payments of about Tk 0.1 billion havealso been incurred for relief purposes; while higher allowances and pensionpayments (Tk 1.1 billion), increased losses of the railways and the postoffice (Tk 0.3 billion), larger allocations for operations and maintenancefollowing the floods (Tk 0.6 billion) and increased food subsidies (see below)will also add to current expenditures.

87. The original budget envisaged that the food budget will have a smallnegative impact on domestic resource availability for financing the ADP.However, higher than budgeted import prices, increased import needs, slowerofftake than projected by the Government and the Government's decision todelay an increase in ration prices due in September are likely to lead to asubstantial increase in budgetary resources for financing fcod operations.Current import prices for wheat are roughly $50-60 per ton more than thebudgeted figures, while imports, at these higher prices, will exceed budgetestimates by over 0.4 million tons. The combination of higher import prices,imports of over 2.2 million tons coupled with planned domestic procurement ofabout 0.49 million tons and offtake of 2.6 million tons would lead toadditional net outlays of roughly Tk 3.2 billion for financing foodgrainoperations, with an equivalent reduction in resources for the ADP. (Of thisamount, about Tk 2 billion will represent food subsidies.)

88. The budget is also likely to be adversely affected by a significantshortfall in commodity aid receipts below the planned level of $500 million.The opening commodity aid pipeline at the beginning of FY89 is unusually low--only about $390 million--partly due to low levels of commitment over the lasttwo years and partly due to transfers to food aid by donors at Government'srequest to meet past emergency needs. Although new commitments this fiscalyear are expected to exceed $600 million, most of these commitments will befinalized in the second half of the fiscal year. Accordingly, toitaldisbursements during the year are likely to be only around $431 million,resulting in a possible shortfall in the availability of counterpart funds ofabout Tk 2.2 billion.

89. The cumulative impact of these developments would be to reduce theavailability of domestic resources for the ADP by roughly Tk 8-9 billinn, orby about 33-36% in nominal terms below budget estimates. In addition, theGovernment has made allocations of about Tk 1.8 billion for new projects andprograms after the floods--Tk 1.0 billion for high priority crop replantingand rehabilitation program and Tk 0.8 billion for the Dhaka city floodprevention scheme. Consequently, domestic resource availability for financingthe originally approved ADP is likely to be extremely tight. This situation,however, has been exacerbated by poor short term economic management, as eventhe limited available resources have not been fully utilized up to now. Atthe end of December 1988, government local currency expenditures were aboutTk 6 billion below permissible expenditure ceilings agreed with the IMF(indicating that not only the agreed borrowing limit of Tk 4 billion, but apart of the Government's own revenues were not utilized). As a result, theimplementation of the ADP has been adversely affected, with disbursements ofproject aid in the first half of FY89 lagging by about 20% in norminal termsbelow the level a year ago. This in turn has meant that the stimulus thatcould have been provided to a flagging economy through public expenditure

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policy has not so far materialized. Indeed a continuation of this policystance is likely to accentuate the current depressive trends in the economy.

90. Recognizing the seriousness of the situation, the Government in earlyMarch initiated steps to reprioritize the ADP and to provide local currencyresources to the ADP to the maximum extent feasible within the agreed creditceilings. It is expected that aided projects included in the approved coreprogram will be provided up to 95% of their original taka allocations for thisyear, with the objective of maximizing disbursements of project aid in thesecond half of the fiscal year. Allocations for crop replanting, Dhaka floodprotection and technical assistance programs will also be fully funded.However, allocations for other sectors and projects will be scaled back by anaverage of 36%, (with larger cuts in industry and power and gas), while blockallocations for upazilas and municipalities will be reduced by about 40%.This reprioritization has been based on a project-by-project analysis which isjust completed. If available resources are fully utilized in the remainingfour months of the fiscal year, it should be possible to achieve an ADP ofaround Tk 40 billion in nominal terms, including project aid disbursements ofabout $750 million--roughly 10% below last year's level of aid disbursements.

91. ProsRects for the Balance of Pavments. The 1988 floods have had asubstantial adverse impact on the balance of payments by reducing exports andincreasing imports. As a result of this development and a deterioration inthe terms of trade, soon after the floods it was estimated that the currentaccount deficit would widen to about 7.2% of GDP in FY89 from 5.7% of GDP inFY88. However, the current account deficit is now expected to be much smaller(only about 6% of GDP), due to some improvement in exports and a significantshortfall in imports below post flood estimates. Although aid disbursementsare expected to fall significantly below last year's level, the shortfall inimports and emergency assistance (of $95 million) received from theInternational Monetary Fund earlier in the fiscal year are expected to morethan offset this shortfall. Consequently, external reserves are expected torise to about $1.0 billion by the end of this fiscal year, equivalent to about3.8 months' imports.

92. Export earnings for FY89 are currently projected at about $1,300million, $70 million or 6% higher than last year's in nominal terms. Volumegrowth, however, is expected to be only about 2%, because of flood-relatedlosses in jute and leather goods, shrimp and garments exports which haveincreased rapidly in recent years. (The shortfall in export earnings inrelation to the Government's export target, which has been usually fulfilledin recent years, is about $100 million.) Initially, substantial losses inexport earnings from ready-made garments were projected; but these are nowexpected to be partially made up by increased shipments to the US and Europeanmarkets and some improvement in the product mix and prices.

93. Imports, on the other hand, are now expected to increase by only about$163 million or 5%, in nominal terms, over last year's level. Much of thisincrease reflects the impact of the floods as well as an escalation of importprices, especially for foodgrain. Imports of foodgrain, edible oil,fertilizer for winter crop production, cement and other construction materialsare expected to increase by about $184 million above pre-flood estimates to

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provide for flood-related needs. (However, even allowing for thisunanticipated need, foodgrain imports in FY89 will still be 26% lower involume terms than in FY88, because of record imports of 2.9 million tons madelast year. In value terms, however, foodgrain imports will be $95 million or19% lower than last year, because of higher import prices this year.) Asubstantial part of the increase in the import bill is also attributed to ananticipated increase (of $157 million) in residual importF (including inputsrequired for export production of ready-made garments). Imports of capitalgoods are expected to be about $25 million less than last year's level innominal terms, but will fall by about 6%, in real terms, reflecting thedepressed level of investment in the economy. Overall, total imports, inconstant FY81 prices, will be about 3% below last year's level.

94. Remittances are expected to rise marginally, by only about $12 millionover last year's level, (or by $25 million over pre-flood es,imates, maintlydue to flood-related contributions from private sources and voluntaryorganizations abroad). Allowing for the increase in imports, the currentaccount deficit will increase marginally by about $121 million over last yearto 6.0% of GDP this year. Aid disbursements, towards financing this deficit,will be only about $1,470 million, substantially less than last year's level.Disbursements of food aid, in nominal terms, are expected to fall short oflast year's level of $300 million by about $11 million, while commodity aiddisbursements are expected to be substantially below expectations, mainlybecause of an inadequate opening pipeline. The cutback in the developmentprogram will also mean that there will be a significant deceleration ofproject aid disbursements, in nominal terms to about $750 million. However,with special assistance of $95 million from the IMF and slower than expectedgrowth of imports, the current account deficit will be fully covered; and, asnoted, the level of gross reserves is expected to rise to about $1.0 billion,equivalent to 3.8 months of imports.

95. Bangladesh's terms of trade, following slow improvement in the last twoyears, is expected to deteriorate somewhat this year, due to higher importprices, especially for foodgrain; and still weak export prices for traditionalexports. This would be an added burden on a country recovering from majordisasters. The debt service ratio is expected to remain at about 23% ofexports of goods and services, about the same level as last year.

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D. Economic Management in the Near to Medium Term

96. The preceding sections of the report reviewed Bangladesh's recenteconomic performance and short-term prospects. It was pointed out thateconomic performance through the mid-eighties has been good; but that over thepast two years economic growth and development have suffered setbacks. To alarge extent the deceleration of economic growth can be attributed to a seriesof natural disasters (and to political unrest in FY87). However deficienciesin economic management also contributed to this process. For example, fiscalmanagement has been overly tight considering the exigencies of the situation,and insufficient attention has been given to protecting the developmentprogram, further exacerbating project implementation problems in FY88 when amore accommodating fiscal stance was needed to provide some stimulus to aflagging economy. This situation was repeated in the current year, especiallyin the first half of the year when available limited domestic resources werenot fully utilized to ensure ADP implementation to the maximum extentfeasible. Lack of urgency in expediting assessment of resource availabilities(which, despite a clearly evident resource shortfall, continued to be on itsnormal late January schedule), lack of coordination among key Governmentagencies responsible for the financing and revision of the ADP, andestablishing priorities in tne ADP quickly to minimize disruptions to moreimportant projects in the program also have slowed down the implementation ofthe development program this year. Another example is food management wherestock accumulation through imports (sometimes using own cash resources) hasoften coincided with planned bumper harvests of winter crops, pre-emptingeffective local procurement and depressing prices to farmers, and conflictingwith the objectives of enhancing agricultural production and stimulating theeconomy. Finally, as noted elsewhere, the process of economic reform, aftermaking rapid strides in the mid-eighties, has slowed down over the past 12-18months.

97. However, Bangladesh will need to revive and accelerate the momentum ofeconomic growth and development as soon as possible. The economic stagnationof the last two years makes this need even more imperative than before.Without significant acceleration of econe '' growth it will not be possible,given widespread poverty and still high r , of population growth inBangladesh, to make even modest strides ii alleviating extreme poverty andimproving the living standards of the vast majority of the population. TheGovernment fully recognizes this need; and its most recent Policy FrameworkPaper (PFP), prepared in zonsultation with the IMF and the World Bank,articulates a macroeconomic framework (summarized in Table 1.13) and requisitepolicy reforms to achieve such a goal. The PFP recognizes that, to accelerateeconomic growth and development it will be essential to significantly improveeconomic performance in the key productive sectors--agriculture and industry--(to generate incomes, employment and export earnings) which have been laggingin recent years; at the same time, it also recognizes that special effortsthrough targeted programs would be needed to improve the conditions of theextremely poor who might not directly benefit from the growth process. ThePFP outlines broad directions of policy reforms and investment and resourceneeds (both domestic and external) over the next three years to achieve theseobjectives. As discussed below, it will be virtually impossible to attainthese goals without substantial additional resources; but, at the same time

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significant improvements in the mobilization, management and utilization oflimited resources by the Government also will be needed. This is likely to beespecially important because as discussed below, public expenditure policywill need to play a particularly crucial catalytic role in promoting theprocess of growth and development in the present circumstances in Bangladesh,both in the very short term and the medium term. The remainder of thissection outlines key areas where the Government's short-term economic manage-ment needs to improve to support a revival in the economy and broad directionsof policy reforms which are needed in the medium term. The report concludeswith an assessment of Bangladesh's external resource needs for the next fiscalyear--FY90--to support a revival of the economy and continued policy reform.

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Table 1.13: KEY ECONOMIC PROJECTIONS, FY88-FY91

FY88 FY89 FY90 FY91Estimate -------Projections-------

GDP growth rate 3.OLa 2.OL& 5.8 4.8GDP deflator _b 9.8 11.5 8.0 7.0Consumer prices fb 11.4 11.5 8.0 7.0GDP per capita growth rate -0.7 -0.5 3.3 2.3Consumption per capita growth rate

Gross investment/GDP 12.0OL 12.8j" 13.5 14.2Domestic savings/GDP 2.2 1.3 3.4 4.0National savings/GDP 6.3 5.2 7.0 7.4Marginal national savings ratePublic investment/GDP Lc 5.9 6.4 6.9 7.4Public savings/GDP Lc 0.6 -- 0.9 1.1Private investment/GDP Lc 6.1 6.4 6.6 6.8Private savings/GDP /c 1.5 1.3 2.5 2.9Ratio of public/private investment

Government revenue/GDP 8.8 9.2 9.5 9.8Government expenditure/GDP 16.3 1o.8 17.2 17.5Deficit (-)/GDP -7.5 -7.6 -7.7 -7.7

Export growth rate 14.6 2.5 14.9 11.4Non-traditional export growth rate 32.5 6.5 21.7 18.5Exports/GDP 6.3 6.1 6.4 6.5Non-traditional exports/GDP 3.3 3.3 3.7 4.0Import growth rate 14.0 15.5 1.9 10.9Imports/GDP 15.3 16.6 15.4 15.7Current account (in US$ m) -1,111 -1,575 -1,472 -1,689Current account/GDP -5.7 -7.6 -6.5 -6.8

Aid disbursements (in USS m) 1,641 1,677 1,707 1,908Aid disbursements/GDP 8.4 8.1 7.5 7.7Debt service (in US$ m) 526 568 652 103Debt service ratio id 22.6 23.8 25.1 25.1Debt service/GDP 2.7 2.7 2.8 2.8

/a The Policy Framework Paper estimated growth in FY88 at 3.0, but this isnow revised to 1.8% on the basis of BBS data; similarly, for FY89, 2% isthe upper range of the CEM estimate of 1-2%. More recent estimates arealso lower for investment and savings ratios.

b Percentage increase in annual average price level.Xc Owing to data limitations, operating surpluses and deficits of public

enterprises are included in private savings, while a portion of publicenterprises' investments (that which is channeled through the ADP)is included in public sector investment.

/ Debt service as a percentage of receipts from exports of goods andservices; and private transfers.

Source: Bangladesh: Policy Framework Paper, 1988/89-1990/91,November 14, 1988.

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Economic Management in the Short Term

98. The immediate challenge to economic management in the short term is toensure that the disruptions caused by the recent disasters are handled in away that minimizes their adverse impact, so that public policy will helpstimulate recovery rather than exacerbate the depressive trends in theeconomy. As noted, there are number of areas where improvements are needed inthis regard. FiLst and foremost is the need to implement the developmentprogram as rapidly as possible. As observed earlier, the process of assessingresource availabilities, preparing detailed rehabilitation programs at thesubsector level, and reordering the size and priorities (for sectors as wellas individual projects) in the ADP has been quite slow; even though specialefforts to accelerate it would have been warranted given the extent ofdisruption to the development program. It should be pointed out that resourceassessment at any time of the year (unless it is close to the end of thefiscal year when it is of little use for operational needs) is subject touncertainties;21 but given the scale of the disaster this year, there wasenough evidence in late October/early November of a substantial resourceshortfall, indicating the need to mobilize additional domestic resourcesand/or to curtail current expenditures selectively, and to adjust the ADP veryearly. While a review of the ADP was initiated in early fall, this processreceived less attention than a similar exercise conducted last year, in partdue to the absence of parallel estimates of resource availabilities andexpectations that additional emergency external assistance for financingrehabilitation work would be forthcoming, thereby averting the need for majorrevisions in the ADP.2 1 As noted, the reordering of priorities in the ADPand reallocation of resources for individual project have now been finalizedin early March; and maximum efforts should be made to ensure speedyimplementation in the next four months.

Z1/ Moreover, such resource assessments would need to be done frequently; andas noted below, resulting adjustments in the ADP could be accommodated througha revival of the core programming process.

2/ These expectations were somewhat unrealistic since it would take severalmonths before official agreements on new commitments are finalized and fundsactually become available for financing expenditures.

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99. As discussed in the Public Expenditure Review, in addition to well-knownprocedural bottlenecks, the major factors impeding project implementationinclude general inadequacy of local resources (taka shortage)U1 c.nd anallocation system under which lower priority projects still receive asubstantial share of the limited taka resources. As a result, taka resourcesare spread too thinly among too many projects; and even though the Governmentestablished a core program of priority projects and improved fund releaseprocedures to ensure automatic releases of approved allocations in the firstthree-quarters of the fiscal year, these mechanisms have remained largelyineffective. Accordingly, efforts should be made in future to ensure thatresources are not spread too thinly over all projects and that priority isgiven to more important projects to facilitate their speedy implementationrelative to others. For this purpose, it would be necessary to strengthen thecore programming approach by limiting it to a smaller number of high priorityprojects and allocating a greater proportion of local currency to theseprojects. This should facilitate adjustments to be made to the ADP in theevent of unforeseen contingencies without holding back all projects. GivenBangladesh's exposure to frequent natural disasters, it is essential that thecountry develop an effective mechanism to insulate priority projects fromunexpected tightening of the resource availabilities due to such calamities,and to assess quickly where adjustments in the development program will haveto be made, in order to accommodate rehabilitation needs and to permit moreimportant projects to proceed as rapidly as possible.

100. The rehabilipation programs included so far in the ADP are estimated atabout Tk 4.4 billion (of which the project aid component is Tk 2.2 billion andthe taka component is also 2.2 billion). Of this amount, Tk 2.6 billion hasbeen carried over from the FY88 program, while Tk 1.8 billion of new projectshave been so far cleared by the Planning Commission. Some Tk 730 million ofthe new rehabilitation projects are in the agricultural sector, while Tk 800million has been allocated for the Dhaka flood prevention project. Therevised ADP, finalized in early March, would include rehabilitation work to beundertaken in other areas this year; but these details are not currentlyavailable.

101. Recent experience also suggests the need for better coordination of theimplementation of the development program and the management of the budget.It is essential that, in a situation where the economy is already depressed byadverse events and local currency constraints have curtailed the development

z3/ As discussed elsewhere, the taka shortage reflects the slow growth ofrevenues, rapid growth of current expenditures, and consequently a shrinkingcurrent surplus available to finance the development budget. Indirectsubsidies to public enterprises (for example by not enforcing debt servicepayments, postponing price adjustments which would help increase revenues, andfinancing PEs' losses through bank borrowing which could otherwise be utilizedto support the development budget), as well as overcautious budgetarymanagement by not utilizing bank financing earmarked for the budget exacerbatethe taka shortage. The latter, in turn, provides an important justificationfor bureaucratic interventions and procedures which inhibit projectimplementation.

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program, budgetary management does not impose further curbs on developmentspending by not utilizing available resources, including bank financingearmarked for the budget (as happened last year and again earlier this year).In such exceptional circumstances, the role of budget management in the shortterm should be to help offset the depressing effects of the economy byfacilitating speedier implementation of the development program, if necessaryby additional bank borrowing. This would, however, not be possible for anextended period. As discussed in the Public Expenditure Review, in the mediumterm, the Government will need to make strong efforts to mobilize domesticrevenues and restrain the growth of current expenditures selectively in orderto sustain the development program--see below. As noted earlier, theoverriding constraint on project implementation last year has been theshortage of local currency resources; and this year again the shortfall inlocal currency resources is expected to be substantial. Accordingly, in theshort term, maximum use should be made of the available ceilings for bankborrowing (i.e., Tk 2 billion by June 1989) to finance necessary developmentspending. Some overprogramming of local resources, however, may be needed toachieve this target. Given the importance of supporting domestic foodgrainprocurement to help increase rural incomes, and the seasonal nature of creditneeds for domestic procurement, additional borrowing should be considered, ifneeded, for this purpose.

102. The reasons for continued overcautious budgetary management have beennumerous. Firstly, the lack of effective mechanisms to monitor expenditureson a regular basis in the Finance Ministry has led to reluctance to releasefunds to ensure that no overspending takes place. The solution to thisproblem, however, as discussed in the Public Expenditure Review, lies inimproving reporting procedures and accountability of the spending agencies andthe monitoring capability of Finance Ministry, possibly throughcomputerization, rather than to delay fund releases. Secondly, after a numberof years of success with stabilization, achieved to a large extent throughcautious fiscal management, the changes in perceptions needed to effect atransition to support a more expansive public expenditure policy have beenunderstandably slow, particularly in an environment of crises. However, therewould be little justification for maintaining such a fiscal stance in thepresent circumstances, exacerbating project implementation problems andstagnation of the economy, while leading to an involuntary accumulation offoreign exchange reserves. Thirdly, there have been apprehensions thatadditional borrowing would be frittered away on marginal projects. For thisreason, it is essential to ensure that additional resources provided throughborrowing should be allocated to priority projects with high economic returns.Fourth is the concern with the inflationary consequences of an increase ingovernment borrowing. However, in a situation where the economy is stagnatingthis should be less of a concern; and Government actions to stabilize foodprices has helped to bring down inflation to an annual rate of about 9% thisyear. Moreover, the balance of payments situation at present is quite strong;and increased demand pressures emanating from bank borroving could beaccommodated in the short term by increasing imports, wi tout necessarily

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adding to domestic inflation. An increase in imports in turn will help toincrease government revenues and provide additional resources for the ADP.? _

103. Greater attention also will need to be paid to food management to ensureremunerative prices to farmers and support foodgrain production and incomegrowth. This could be achieved without jeopardizing the food securityobjective, by more realistic assessment of PFDS offtake and providing greaterflexibility in import planning, particularly commercial purchases. Time andagain, however, import needs have been overestimated, and scarce financialresources (which could be utilized for supporting domestic procurement and/orthe ADP) have been committed to imports early in the fiscal year, even whenthere have been serious doubts about the realism of the offtake estimates.As noted, there is a risk that it could happen again this year, depressingdomestic foodgrain prices for the (record) winter crops. The Government,therefore, should postpone some of the planned commercial purchases (forexample scheduled to arrive in May and June); but if this is not possible, atleast delay some of the import (including aid-financed) arrivals. This shouldmake room for domestic procurement physically, given the limitations oneffective storage capacity, but, since purchases have been already madeabroad, it will not eliminate the need for additional financing to supportdomestic prices to farmers.

Economic Management in the Medium Term

104. The primary objective of the Government's development strategy is toalleviate poverty through increased access to food and other basic needs andto raise the general standards of living. To achieve this objective, asoutlined in the recent PFP, Bangladesh will need to signific;-.ntly accelerateeconomic growth, while maintaining macroeconomic stability and takingmeaningful steps to alleviate poverty among the rure.l and urban. poor,particularly the landless. Of utmost importance in this regard is the need toincrease the growth of production in agriculture (including foodgrains) andindustry and stimulate (non-traditional) export growth. This in turn willrequire substantial improvements in economic policies and investments inphysical and human resource development, reversing a declining trend in publicand private investment in the eighties from 16% of GDP in FY81 to below 12% inFY88. Bangladesh will also need to improve its efforts to mobilize domesticresources to help finance such investment (through tax and financial sectorreforms) and take steps to increase the efficiency of public investment.However, given its low income level, Bangladesh will continue to needincreased disbursements of external assistance on the order of 5-6% per annumin real terms over the medium to long term to support this process.

2A/ The need for a more active borrowing policy to help increase developmentspending, stimulate the economy and import demand, and generate additionalrevenues was implicit in the credit targets set for the first half of FY89.This opportunity has been missed. However, the steps that the Government isnow taking to implement the development program should help minimize theenforced cutback in spending.

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105. Some recovery in the economy next year could be expected, given normalweather, with a resumption of growth in crop production and continued exportgrowth. However this alone will not be sufficient to provide a sustainablebasis for longer-term growth. Significant improvements in economic policiesand management will be needed to stimulate and support such an incipientrecovery over time and to facilitate its extension into other sectors of theeconomy, particularly a depressed manufacturing sector. The issues facing theBangladesh economy and policy prescriptions which are needed to address themare not new. However, their adoption and implementation will requireconsiderable resolve and commitment on the part of the Government andsubstantial assistance from external donors to support Bangladesh's endeavors.In particular, there is a need for greater sense of urgency on the part of theGovernment in evolving appropriate action programs and getting on with theirimplementation if the potential recovery next year is to be fully realized.

106. The continued stagnation of agriculture even before the 1987 and 1988floods is a matter of serious concern both to the Government and theinternational community closely involved in Bangladesh's development.Accordingly, the Government, together with the UNDP initiated a joint reviewof the agricultural sector last year to identify the causes of this stagnationand remedial policy actions. After completion of the final report in April1989, the Government will need to carefully consider its recommendations andformulate an appropriate action program for the sector as early as possible.

107. The Government also appointed a task force in May 1988 to prepare anaction plan to increase foodgrain production to 20 million tons by the end ofFY92 (compared to a peak of 16.5 million tons in FY87). The task force'sreport, completed in September 1988, identifies the main areas with potentialfor increasing foodgrain production and provides a program to reach theproduction target in a little over 3 years. It aims to increase acreage underhigh yielding crop varieties by about 50% partly by replacing local varieties,substantially expand command area and the application of chemical fertilizers,and enhance supplementary i.rigation for transplanted aman. The report alsorecommended a special seed productior. and procurement program by BADC tosupply at least 30% of the total seed requirement; provision of crop credit(totaling about Tk 26 billion); ensuring remunerative output prices; aneffective domestic procurement policy to assure minimum floor prices; andsubstantial improvements in extension services and in the efficiency ofagricultural organizations. The report is a first step towards formulating anaction program to accelerate foodgrain production. However, the envisagedtarget, averaging a 7% annual production increase, far exceeds past trends inproduction; and will need to be modified, given the weaknesses of institutionsin the sector, the physical and financial resource needs, and the relativelylong lead times needed to bring about significant improvements in thediffusion of modern technology and the efficiency of public sectorinstitutions providing inputs and agricultural services. The report also doesnot spell out policy requirements for motivating farmers, or substantiallyexpanding minor irrigation programs, or increasing fertilizer use andimproving the efficiency of institutions. Further work will be needed toes+ablish more realistic growth targets and specify policy and institutionalreforms that are needed, drawing on the recommendations of the UNDP review andother studies in the foodgrain sector.

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108. A number of considerations will need to be borne in mind in formulatinga program for the development of the agriculture sector. Given its importancein the consumption pattern and Bangladesh's continued dependence on foodimports, continued priority to foodgrain prodiction in the medium term isstill appropriate, although over the longer term efforts will need to be madeto diversify agricultural production. However, seieral questions will need tobe addressed in this regard: for example, in view of frequent flooding, theappropriateness of flood control and irrigation strategies and designstandards and the relative priority which needs to be accorded to suchinvestments; feasibility of changing cropping patterns with greater emphasison boro production, the role of minor irrigation in promoting dry seasoncrops; and policies needed to promote this objective as well as greaterprivate sector participation in such activities; research and extension needsfor promoting crops, and their costs, etc. While a development strategy forthe agricultural sector will need to address tlhese questions, it will benecessary to recognize that what%ver crops chosen will need to be providedappropriate incentives, together with arrangements to facilitate inputdelivery (involving private as well as limited public initiatives) and accessto credit, and complementary investments in irrigation, research and extensionservices.

109. The Government has had considerable success with crash programs tosupport winter crops in the last two years. However, in designing policiesfor the medium to longer term it is important to consider the sustainabilityof chosen policies. For example, the recent crash programs have incorporateda number of elements which the Government had been gradually withdrawing:large input subsidies, postponement of credit recoveries, sales of irrigationequipment at heavily discounted prices, renewal of rental programs for suchequipment, etc. Many of these elements, however, cannot be sustained over themedium term without incurring heavy subsidies, pre-empting budgetaryresources, or undermining credit discipline and eventually reducing farmer0'access to credit, and undermining hard-won macroeconomic stability. Nor is itdesirable to introduce heavy subsidies to agriculture to compensate for highprotection afforded to the industrial sector through high tariffs and quotas.The appropriate solution to this problem would be to strengthen the tradepolicy reform process by reducing existing distortions in industry rather thanby creating new distortions in other sectors. If certain subsidies toselected target groups or activities are needed, it should be substantiatedthrough proper analysis and investigation.

110. The available evidence suggests that market-oriented input pricingpolicies do not deter input use if access to and ready availabilitv of inputs(such as water, fertilizer and credit) could be assured and if appropriateoutput pricing policies are maintained. In this context, the private sectorcould play a greater role in providing inputs (such as fertilizer) andsupplying and servicing minor irrigation equipment. For example, permittingthe private sector to import fertilizer (TSP and MP) and to purchase ureadomestically at the factory level would help to further improve retaildistributior of fertilizer. Similarly, the removal of restrictions on importsof certain types of engines, the reduction of direct and indirectsubsidization of BADC's equipment sales, and permitting the entry ol private

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mechanics into the repair and maintenance of DTWs would facilitate competitionbetween the private sector and public sector institutions on equal terms. Inaccordance with such initiatives, the role of public sector institutionsresponsible for delivery of inputs and services should be streamlined, alongthe lines of recent reports on the role of Bangladesh Agricultural DevelopmentCorporation in agricultural development and the Bangladeqh Water DevelopmentBoard, and their efficiency improved. Continued access of farmers to creditis essential; but to ensure a continued flow of credit from lendinginstitutions, credit recovery programs will need to be sustained. Finally, toprovide remunerative support prices to farmers, greater attention will need tobe given to careful management of the food situation, so that the PFDS willhave both physical capacity and financial resources to undertake substantialprocurement.

111. Rapid growth of industry is needed to help absorb an expanding laborforce, diversify the economic structure and further expand exports. For thispurpose, steps will need to be taken to improve efficiency, competitiveness,and export-orientation of the industrial sector. Continued commitment totrade liberalization by rationalizing the tariff structure and eliminatingquota restrictions to improve economic signals to investors and the allocationof resources, and flexible exchange rate management to ensure incentives forexport production are essential in this regard. These steps should facilitatethe Covernment's plans to promote further diversification of non-traditionalexports by encouraging production of leather goods, chemical products,assembly operations for basic electronic goods, etc. However, additionalinvestment (to expand production capacity), foreign technical and marketingassistance to ensure quality standards and access to markets, increasingskills through special vocational training programs, and improving incentivesto attract foreign and domestic capital for export production will also beneeded. Efforts should also be made to increase backward linkages, forexample by producing higher quality fabrics and other inputs for use in ready-made garments production and stimulating indirect exporting activities.

112. Reviving economic growth in the traditional manufacturing sector islikely to be a more painful proces.s. A recovery in agriculture and ruralincomes and an expansion of public expenditure programs (see below) shouldhelp to stimulate demand for domestic manufacturers. In addition, however,specific problems of major subsectors, such as jute and textiles (which sufferfrom a variety of problems such as overcapacity, poor investment decisions,accumulated debt problems and lack of competitiveness), will need to beaddressed. In the textiles sector, while the Government is trying to improvethe availability of inputs for producers, care should be taken not to resortto import bans and other restrictions to provide relief for sick industries.While liberalization of tariff policy will inevitably affect uncompetitivedomestic producers, assistance programs will need to be developed torationalize and restructure the operations of those producers who can becomecompetitive. This problem is likely to be serious in the jute manufacturingsector where, according to a government review, a major restructuring andrationalization will be needed.

113. Further improvements in the regulatory environment to facilitate privateinvolvement in manufacturing and steps to increase investment would help to

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promote industrial growth. While significant progress in deregulation hasbeen made in recent years, much more needs to be done to reduce time-consuminginteractions with the bureaucracy and inconsistencies in policies. Forexample, in 1988 the discouraged list has been expanded by adding 10 moreindustries to this list; similarly, there are a number of restrictions withregard to the access of industrialists to imported raw materials (projectswith imported raw material content of 50% or more require officialsanctioning, and there are restrictions on the amounts of raw materials whichcan be imported by industrial users) which make little economic sense underprevailing circumstances. The relaxation of these restrictions would help tominimize bureaucratic interventions. More importantly, new investments arealso hampered by lack of infrastructure--power connections, telephones, etc.The Government has recognized these problems and has established a Board ofInvestment (BOI) to provide a one-stop office for both domestic and foreigninvestors. The BOI is expected to further streamline investment approvalprocedures by centralizing and coordinating existing functions of severalgovernment agencies, including regulatory functions and providing supportservices. The BOI can play a very useful role to private investors bysimplifying processing er. helping to obtain access to necessaryinfrastructure, provide,d that its principal focus is on facilitatingimplementation, it operates in an efficient and speedy manner and that it isstaffed with experienced and qualified professionals who are adequatelycompensated. However, if these organiza_ional aspects are not given dueimportance, the BOI could further aggravate matters and assume a regulatoryrather than a facilitating role.

114. Given the need for increasing investment in the manufacturing sector,the recent decline in private investment is a matter for concern. Thisdecline has been due to both demand and supply factors. On the demand side,the stagnation of the economy and weak demand for domestic manufacturers andthe exiscence of some excess capacity in the ready-made garments industry dueto its rapid expansion in the mid-eighties have had a dampening effect on thedemand for new investment. On the supply side, weak financial institutions,lack of incentives for such institutions to provide term financing at lowinterest rates which do not adequately cover risks and costs of lending, theconsequences of credit recovery programs (which are needed to ensure creditdiscipline and viability of financial institutions), for example, denial ofcredit to borrowers with poor repayment records, have reduced the availabilityof financing for investment. To enable a recovery in industrial investment,these problems will need to be eddressed by improving the capacity andviability of lending institutions and giving them operational freedom to settheir lending rates according to lending risks and costs of funds. In thiscontext, increasing the availability of, and access of borrowers to, creditwill be as much or even more important than providing low interest rates toborrowers.

115. To improve the performance of public enterprises, clearer definition oftheir objectives and roles, separating commercial from socially orientedfunctions; increased autonomy of management, for example over pricing,employment and wage bargaining decisions; establishing clearly understoodcriteria for performance, together with cost-control mechanisms; andaccountability for management decisions and performance will be needed.

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Although a number of initiatives in these areas have been started recently,progress as noted earlier has been quite slow. For example, recent changeshave given enterprises considerable flexibility, in theory, to adjust prices,but this does not happen to any significant extent in practice. Sim4.larlydeveloping monitoring mechanisms and performance indicators has been quiteslow; this process needs to be expedited and extended to all major publicenterprises. The nexus of indirect bureaucratic controls and relationshipswhich inhibit management autonomy will. need to be relaxed, by specifyinggoals, giving management necessary autonomy and holding management accountablefor performance. For the latter to be possible, however, there should beexplicit recognition of the commercial functions of enterprises, and that theenterprises will be comper.sated for the costs of any extra functions andresponsibilities they are required to perform. (Eor example, the chemicalscorporation should not be burdened with the task of indirectly subsidizingfertill er sales to farmers by having to charge ex-jactory prices which aresignificantly below costs to the main wholesaler--Bangladesh AgriculturalDevelopment Corporat'on.) This should make the financial performance ofenterprises and the need for pricing adjustments more transparent. At thesame time, steps should be taken to clean up the debt structure of enter-prises, reduce intra-enterprise liabilities and hold them accountable forpayment of their debt service obligations. Though some of the issues relatingto labor management and compensation are sensitive and difficult, there is aneed to give public enterprises and their management greater freedom overemployment and wage decisions, to evolve arrangements to stied surplus laborover a period of time and to delink enterprises' wages frcm the civil servicewage structure. Finally, a clear policy framework is required for the partialdivestment program, indicating the PEs to remain in the public domain; what todo with the inherently uneconomic PEs; and the scope for further divesting the51% shares retained by the Government.

116. The PFP points out the need for Bangladesh to increase overallinvestment from the currently depressed level of less than 12% of GDP to over14% over the next three years (Table 1.13). There is need and scope for bothprivate and public investment to rise. The latter, however, is expected togrow more rapidly over the next three years, both because of the particularlylow level of economic and social infrastructure in Bangladesh, the imperativesof poverty alleviation, and rehabilitation and reconstruction requirements asa consequence of the floods; and because of the uncertainties surrounding thepace of recovery of private investment in the near term discussed earlier. Asnoted earlier, an increase in public exNenditures can play a catalytic roleover the next year by helping to stimulate demand and the level of economicactivity. Nevertheless, over the longer term, the public sector is expectedto play a supporting role by providing the infrastructure and servicesnecessary to improve the productivity of private sector activities andundertaking direct interventions to address the needs of the disadvantagedgroups, while the Government continues to place primary reliance on theprivate sector for directly productive activities.

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117. However, as pointed out in the Public Expenditure Review,ul the scopefor increasing public expenditures is constrained by the severe shortages oflocal currency and procedural and implementation problems which inhibiteffective absorption of aid. At the same time, increased demands on thepublic sector (for example rehabilitation and reconstructior needs and aprolleeration of projects) in the face of financing and implementationconstraints have created a major need to reassess priorities in the publicexpenditure program. This problem can be effectively handled only by makingvigorous efforts to alleviate the domestic resource and implementationconstraints, and by limiting the number of projects and establishing clearpriorities in the public expenditure program. Without such efforts, given thelocal currency constraint, expenditures in the near term for new projects,including those for flood rehabilitation, will largely displace publicinvestments that would otherwise have taken place, unless donors are willingto cover an exceptionally high share of project costs. (This is amplydemonstrated by the experience of both last year and this year when theimplementation of the normal public investment program was severelydisrupted.) Therefore, the priority and timing of such new investments willneed to be closely examined.

118. The Public Expenditure Review identifies a number of areas where theGovernment can take steps to increase the effectiveness of public expendituresboth by restructuring current expenditures and by refocusing priorities in theADP. For example, while current expendituree will need to be restrained inmany areas, increased allocations could be justified for social sectorprograms, such as health and education, and for operation and maintenance ofexisting and new assets. Similarly, within the ADP substantial re-ordering ofexpenditures will be needed. For example, higher priority needs to be givento water resource development and research and extension servi.:es inagriculture; to transmission facilities in the power sector (while reducingexpenditures on power generation); and rural roads, urban development andwater supply and port development in infrastructure; while cutting back oninvestment in industry other than for fertilizer production for export. Giventhe high economic returns to rehabilitation work, (for example, flood-damagedirriAation and water control structures and the road network), high priorityalso needs to be given to such work. At the same time, the initialrp:iabilitation estimates need to be re-examined, as there are important partsof the program that reflect longer-term investment proposals rather than theimmediate damage due to floods, before they are allowed to displace otheractivities in the ADP. The report also identifies substantial possibilitiesfor cost savings in a number of areas for example by transferring activitiesto the private sector (e.g., in fertilizer distribution and road transport),withdrawal of support from programs which have been proved inefficient orineffective (e.g., agricultural cooperatives and commercial fishingactivities), and shifting programs from local to donor financing to releasetaka resources for the other priority projects.

IV Bangladesh: Public Expenditure Review, Report No. 7545-BD, 1989.

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119. The report also recommends a review of the bridge construction programand other large projects (such as the proposed Jamuna Bridge project), whichare candidates for inclusion in the ADP. Although such projects might befully externally financed, they are large enough to have a significantmacroeconomic impact on the economy by absorbing scarce local currencyresources which would otherwise be available for other development projects,increasing the external debt service ratio, and pre-empting the limitedskilled managerial and administrative capacity in the country. Therefore, thesocial and economic benefits and costs of such projects will need to becarefully examined in the broader macroeconomic context; and their timing andphasing should be considered carefully.

120. While above measures can help to improve the efficiency andeffectiveness of public expenditures, steps will need to be taken to addressthe perennial problems which have slowed down project implementation and aidutilization in Bangladesh. The PER makes a number of practicalrecommendations aimed at improving project preparation and planning, reducingdelays with regard to procurement, technical assistance, land acquisition andrecruitment and staffing of project activities, accelerating commodity aidutilization and improving the budgeting, monitoring and expenditure controlprocedures. These recommendations will need to be discussed and implementedas appropriate as quickly as possible. The relatively slow progress of astudy in a related area, aimed at identifying the constraints which affect theefficiency of public administration, is symptomatic of the implementationproblems. The preliminary preparations for the study were initiated nearlytwo years ago, but because of delays in approval of technical assistance andsubsequent recruitment of consultants, the study has yet to get off theground. Much greater commitment and a sense of urgency to find solutions tothesa problems are needed if progress is to be made in these difficult areas.

121. As noted earlier, the difficulties of sustaining public expenditureshave been due to a considerable extent to local currency shortage, in part areflection of Bangladesh's inadequate revenue effort. In order to increaseoverall investment levels in the economy, a significant improvement inresource mobilization by the public sector and in private savings will berequired, with additional external assistance supplementing these efforts. Inthe public sector, implementing a phased program of structural reforms toimprove the revenue elasticity and equity of the tax system (proposals forreform of the tax system have been under discussion for some time), increasingnon-tax revenues by improving public sector debt management, reducing largesubsidies to public enterprises in the transport and communications sectors(railways, post office and the airlines), improving public enterprises'pricing policies and greater emphasis on self-financing of investments by suchenterprises can help improve public savings.

122. The reform of the financial sector is an integral part of efforts toincrease mobilization of domestic resources and improve their allocation. Thekey elements of a reform program under consideration by the Government seek tostrengthen institutions in the financial sector by restructuring their capitalbase, improving their capability for assessing and managing their loan risksand increasing their autonomy to take lending decisions; liberalize interestrates within margins to provide adequate incentives to banks, to encourage

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them to mobilize resources and to lend to creditworthy customers; reduce thescope of mandated lending programs at low interest rates, and compensate banksfor losses incurred in such lending; improve banking supervision; and developflexible irnstruments for monetary management by the Central Bank.Reclassification of the loan portfolios of banks as a prerequisite to theirrecapitalization; and more importantly, a strong commitment to enforce loanrecovaries to ensure continued viability of lending institutions are alsoessential elements of the reform. In the absence of such a commitment, theviability of the financial system could be further endangered, even if otherreform measures are fully implemented. Reaching accord on the program andinitiating implementation of the program, however, have been slow.Perceptions that low interest rates would be needed to promote investment hascaused less enthusiasm for interest rate reforms; while credit needs for floodrehabilitation and recovery programs, as noted earlier, have led to thepostponement of loan recoveries. Given the critical importance of thesereforms for establishing a viable financial system, high priority needs to begiven to this task.

123. A greater sense of urgency is needed for improving and expandingprograms aimed at the alleviation of widesRread poverty, which is one of thehighest priorities in the Government's agenda. As discussed, significantimprovements in the food distribution system and targeted programs have beenmade recently. A resumption of a reasonably high rate of economic growthwould facilitate progress towards this objective; buc, some of the urban andrural poor, particularly the landless, assetless, pcor women and unskilled,may receive only modest benefit from such growth. Accordingly, the Governmentaims to expand the scope of targeted programs to assist such groups.

124. The quick and efficient manner in which the Government responded tomitigate the short-term effects cf the floods of 1987 and 1988 indicates thatthe basic framework for addressing, at least, short-term poverty issues is inplace. This includes short-term emergency relief programs (e.g., GratuitousRelief), targeted relief and employment programs for the very poor (such asVGD, FFW) and programs such as the Rural Poor Program (RPP) of the BRDB toenhance the earnings capacity of the poor and to generate employment in therural areas. These programs need to be supplemented by a greater commitmenton the part of the Government aimed at (a) improving the effectiveness ofpoverty-oriented programs such as FFW, VGD and RPP, (b) support for greaterNGO participation in poverty alleviation, (c) strengthening of conventionalsocial sector and human resource development programs and (d) exploration andexpansion of innovative employment generation activities.

125. Improvements in poverty-oriented Uroarams. Existing targeted poverty-oriented programs, such as the FFW and VGD, although largely reaching theirintended beneficiaries, have raised concerns about their predominantly rel.eforientation and the lack of integration with the mainstream developmentactivities of the Government. It is suggested that the development aims of aprogram such as the VGD could embrace many different activities such asliteracy, family planr.,ng and health, credit and skills training. Similarly,the FFW program could be integrated into the mainstream development programsat the upazila level and implemented outside the ambit of the Ministry ofRelief and Rehabilitation. Recognizing these concerns, the Government (with

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donor assistance) has established a task force to review the food aid programsand the institutional arrangements for delivery. The Government, with donorassistance, is also reviewing the cooperative setup and RPP. Efforts shouldbe made to complete these studies quickly and prepare plans to strengthenthese programs; although, given the weaknesses and the undeveloped nature ofinstitutions at the upazila level, the Government's own limited counterpartresources, and the shortage of technical personnel in the area of planning andproject execition, these will pose major challenges. The Government shouldalso explore the scope for enhancing the development oriented activities ofboth VGD and FFW.

126. Encouraging NGO garticipation. The coverage of the Government'spoverty-oriented programs is in general constrained by the lack of financialresources and qualified staff. Greater participation of non-governmentorganizations (NGOs) can help in the expansion of coverage. There are anumber of NGOs such as the Bangladesh Rural Advancement Committee (BRAC),Swarnivar, Proshika and the Grameen Bank (which is partly owned by theGovernment) which have played an important role in providing income generatingopportunities and services such as training, health care and education toselected groups of poor people. They have, in particular, been extremelyuseful in reaching destitute women and providing disaster relief. In a fewcases, NGOs have provided direct services to the Government on a contractualbasis, such as BRAC's training and employment generating activities with VGDparticipants. The Government should promote such cooperation between itsinstitutions and NGOs performing similar services. Furthermore, if NGOs areto play a more significant role in poverty alleviation and to complementGovernment's efforts, much more attention needs to be focused on reforming thegovernment policies towards NGOs, especially by further simplifying theinstitu-ional arrangement-s for approval of NGO projects so as to speed upproject implementation. The Government could also explore the scope forchanneling resources to the poor through increased use of NGOs, therebyreducing the demands on its limited technical personnel. In addition,management training facilities could be made available to some NGOs in orderto enhance their capabilities.

127. Strengthenina human resource develoRment. The conventional humanresource development programs (family planning, health and education) if theyare to support the Government's poverty alleviation objectives would needstrengthening. In family Rlanning and health, the displacement of people anddisruption of services due to the floods may have seriously affected theeffectiveness of family planning programs. The relatively lower levels ofachievement in contraceptive performance in 1987 and the anticipated shortageof contraceptive supplies in 1988 resulting from the floods, reinforce theexpectation that no further fertility decline will occur in the short-term.The critical issue is to improve the utilization of existing facilities. Thisraises concerns about the balance between capital and recurrent expenditures,since, given the existing infrastru-ture, in order to improve family planningand health care delivery to the poor, there should be an increased resourceallocation for supplies and equipment. Steps should also be taken to addressthe setback to fertility improvement by improving delivery services and byrehabilitating family planning and health facilities. If the Government's

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population reduction objectives are to be met, a greater effort would alsoneed to be devoted to family planning education.

128. In educatign, the existing system is characterized by low enrollmeuitrates particularly for girls and poor performance at the primary level (three-quarters of those who enter primary school fail to complete it). Poorperformance may be attributed to the pressures on a weak delivery system (interms of inadequate planning, management and administrative capacity) toaccommodate a rapidly growing school age population. This has been compoundedby inadequate physical resources (that have been badly affected by recentdevastating floods); and in the rural areas, a private opportunity cost ofeducation which is much higher than the expected medium-term returnsUl andthus has served as a disincentive in retaining students, especially girls.In addition, it is estimated that about 19,000 educational institutions werepartly or fully damaged by the flood of 1988, of which 2,417 are primaryschools needing complete reconstruction. In view of the inability of thesystem, even under normal circumstances, to meet the primary school enrollmentrate targeted in the Third Five Year Plan (TFYP), and the high wastageexperienced in the past, the setbacks due to the floods require acomprehensive review.

129. If the educational system is to play a greater role in poverty alle-viation through enhancing the human capital of the poor, the Government shouldspeed up its efforts at structural reform, which includes the identificationand resolution of factors that account for the large wastage in the system.The Ministry of Education has recently (June 1988) completed a draft "PolicyPaper on Education" which focuses on the three key issues of the sector: thelow and inequitable access to education, the unacceptably poor quality andrelevance of existing education, and the need for unit cost containment. Thisinitiative needs to be supplemented by efforts to:

(a) better understand the dynamics of demand for education (especiallyprimary education at the rural areas) and the formulation ofremedies to cater for the needs of the underserved: such as schoolfeeding program, food for education, flexible school year, etc.thereby promoting equitable access; and

(b) expand the coverage of education by exploring further privatizationoptions, greater use of NGOs, and further cost sharing programs.

130. Exploring innovative emplovment generation. In the medium to long term,the only self-sustainir.g means to reduce poverty is employment generation.The Government is cognizant of this and has created an Employment MonitoringUnit within the Planning Commission in order to incorporate employmentconcerns in its policies and programs. In the search for innovativeemployment opportunities, special attention needs to be paid to ruralemployment generation, targeted at the assetless/landless who form the core of

2.~ For evidence on this see, Mahabub Hossain, "Education and EconomicPerformance in Rural Bangladesh," Paper presented at the 8th BiennialConference of the Bangladesh Economic Association, Dhaka, July 15-17, 1988.

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the poor. Experience with Government and NGO programs which organize the poorand provide them with credit and non-farm productive activities, suggests thatthe scope for mass coverage is limited by existing management andinstitutional capacity. Hence, these programs have reached only a smallfraction of the poor. There is, nevertheless, some scope for expanding thoseprograms such as the Grameen Bank that have been successful, especially inreaching poor women, and for exploring new schemes such as the proposed BRACBank. Similarly, alternative approaches based on successful ongoing programswould need to be developed.

131. In view of the extent of the poverty problem, a recognition of the roleinnovative approaches can play in generating employment, incomes and skills,and the need for experimentation and improvisation during implementation torectify the weaknesses of such initiatives is important. However, this shouldnot be a reason for delays in initiation of such programs. In this context,reaching early agreement on the scope and elements of the poverty projectwhich has been under consideration for some time and begin implementing it asearly as possible is an important step in harnessing external resources foraddressing the issues in this critical area.

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E. Foreign Aid Trends and Aid Requirements for FY90

Foreign Aid Trends

132. Since its independence, Bangladesh has depended heavily on external aid,in view of major structural imbalances in the economy. Initially, theseimbalances were quite severe; and although fiscal and external deficits havebeen reduced to more manageable levels, external aid inflows of the order of7-8% of GDP have been necessary to ensure macro-economic viability and sustaindevelopment programs. The need for external aid is expected to continue inthe foreseeable future, in view of the necessity for increasing investment,and other public expenditures in key areas to accelerate economic growth anddevelopment.

133. External donors for the most part, recognizing the country'svulnerability to frequent natural disasters, have responded sympatheticallyand swiftly to assist Bangladesh. Nevertheless the recent years havewitnessed increasing concerns on the part of both donors and the Government,with the utilization of available external aid, particularly in view of asomewhat sluggish disbursement performance and the continuing build-up of alarge project aid pipeline (Table 1.14). While the reasons for implementationdifficulties are discussed extensively in the Public Expenditure Review, theconcluding section of this report examines the recent trends in aidcommitments and disbursements, and implications for the level and compositionof external aid commitments for the next fiscal year--FY90--in the light ofboth the country's short-term needs and the recommendations for improving theeffectiveness of public expenditures made in that review.

134. Table 1.14 shows that total aid commitments, in nominal terms, haveaveraged about $1.6 billion a year, with project aid around $900 million ayear, and commodity aid commitments showing a greater degree of variability.Aid actually committed (i.e., agreements have been signed), especially projectand commodity aid, has been considerably less than the indications provided bydonors at Aid Group meetings in recent years, in large part reflecting delaysin project preparation and finalization of economic reforms associated withplanned commodity aid programs on schedule. In effect, the real value of aidcommitments has fallen substantially over the past few years. However, inFY89 both project aid and commodity aid commitments are expected to besomewhat higher (with project aid around $1,150 million and commodity aidaround $600 million), partly reflecting additional aid indications by donorsin response to Bangladesh's recent flood disaster.

135. Total disbursements rose sharply through FY87 to about $1.6 billion, innominal terms, with project aid rising to $967 million. The ratio ofdisbursements of project aid to the opening pipeline--the conventional measureof disbursement performance--also improved steadily from a low point of 15% inFY83 to 21% in FY87. The Government's efforts in the mid-eighties to improveproject implementation, for example, by introducing a core program forpriority projects and improving fund release procedures, helped to raise thedisbursement ratio in the mid-eighties; while the completion of a number ofstand-alone projects in power and fertilizer subsectors contributed to theexceptional improvement in FY87. However, over the past two years, the

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implementation of the development program has been less satisfactory; asgrowing local resource constraints, exacerbated by the disruptions of the lasttwo years, appear to have slowed down the implementation of many aid programs.(In FY88, total disbursements still exceeded $1.6 billion, mainly due toincreased food and commodity aid disbursements.) Consequently, project aiddisbursements declined sharply in FY88 and will decline further in FY89;correspondingly, the project aid disbursement ratio fell to 19% in FY88, andis expected to slip to 16% this year. This has been particularly serious inthe case of IDA programs, where the disbursement ratio has fallen from 16% inFY86 to only 12% in FY88, and is expected to remain at that level in FY89.

Table 1.14: EXTERNAL AID - TRENDS IN COMMITMENTS AND DISBURSEMENTS, FY81-FY89

FY81 FY82 PY83 FY84 FY85 FY86 FY87 FY88 nYg

Opening Aid Pigeline (2 mln)Project Aid 2,003 2,444 3,044 3,374 3,644 4,061 4,633 4,390 4,699Non-Project Aid 449 420 503 519 652 570 784 816 689

(Food Aid) (50) (59) (49) (42) (60) (195) (324) (207) (299)(Commodity Aid) (399) (361) (454) (477) (592) (375) (460) (609) (390)

Total 2.452 2.864 3.547 3.893 4.296 4.631 5.417 5.206 5.388

Aid Commitments (S mln)Pzoject Aid 1,001 1,189 800 882 1,340 923 932 915 1,150Non-Project Aid 558 734 722 813 632 738 671 615 814

(Food Aid) (203) (221) (248) (285) (380) (329) (109) (364) (214)(Commodity Aid) (355) (513) (474) (528) (252) (409) (562) (251) (600)

Total Commitments 1.559 1.923 1.522 1.695 1.972 1.661 1.603 1.530 1.964Share of Non-Project Aid

in To.,al (X) 36 38 47 48 32 44 42 40 43

Aid Disbursements ($ aln)Project Aid 560 589 470 553 590 710 967 831 750Non-Project Aid 586 651 707 615 676 596 628 809 720

(Food Aid) (194) (231) (255) (276) (244) (203) (255) (300) (289)(Commodity Aid) (392) (420) (452) (439) (432) (393) (403) 509 (431)

Total Disbursements 1.146 1.240 1,177 1.268 1.267 1.306 1.595 1,640 1.470Share of Non-Project Aid

in Total (Z) 51 53 60 49 53 46 39 49 49

Disbursement Ratios (in XProject Aid la 28 24 15 16 16 18 21 19 16(DLsbursement Ratio for IDA) (12) (13) (15) (16)/b (14) (12) (12)Non-Project Aid / 125 155 141 119 104 105 80 99 104

(Commodity Aid) la 98 116 100 92 73 105 88 84 111(Commodlty Aid) lI 101 96 99 90 85 98 83 98 97

(Food Aid) J4 96 103 109 108 71 46 56 63 65

La Disbursements as a ratio of openLng pipeline.Lk Excludes $50 mllion for initial deposits in SAFE accounts.LS Disbursements as a ratio of 75 of openin8 plpelLne and 25X of nev commitments.id DLsbursements as a ratio of 1001 of opening pipeline and 75X of new commitments.la Estimate.

Sources External Resources Dlvision.

136. Apart from delays in the preparation and implementation of associatedreform programs, the high variability of commodity aid commitments has beencaused by a number of other factors. For example, on several occasions(including particularly FY88) natural disasters have necessitated diversion ofdonor commitments from commodity aid to provide emergency food aid. Theflexibility for many bilateral donors to increase commodity aid commitments

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has also been limited. In some cases, perceptions of increasing disbursementdelays have caused some unwillingness to increase commodity aid commitments bysome donors. While there are clearly program-specific problems which havecreated delays in disbursements from particular bilateral programs, donorrestrictions on commodities, sources of procurement and pricing, as well asgovernment procedures have contributed to these delays. (In the case ofprograms where procurement is essentially untied and available for competitivebuying, as in the case of Japanese and IDA credits, there has been little orno disbursement delays. At the same time, the flexibility available withinsome programs has not been fully utilized by the Government.) On the whole,however, disbursement problems on commodity aid (as well as food aid) havebeen relatively minor. Although the unutilized commodity aid pipeline rosesomewhat during FY87, this trend has now been clearly reversed; and asdiscussed earlier, the immediate short-term problem in FY89 has, in fact, beenan unusually low commodity aid pipel'ne.

Aid Recommendations for FY90

137. Despite concerns with the pace of project implementation and aidutilization, the need for continued external assistance to Bangladesh shouldnot be a matter of debate. Given the structure of the economy and widespreadpoverty, Bangladesh will need to continue to depend on such assistance. Thereal challenge facing the Government and external donors is to work togethertowards finding ways of relaxing the implementation constraints so thatexternal aid potentially available to Bangladesh could be fully utilized inthe short-term, and to assure that the development impact of such assistanceis maximized to help bring about necessary structural changes in the economy,including social development and alleviation of poverty, in the medium tolonger term.

138. Bangladesh's aid needs for FY90 should be viewed in the context of itsdevelopment needs both for the short and the longer term. To accelerateeconomic growth and development, Bangladesh will need to substantiallyincrease the rate of (public and private) investment in the economy over thenext few years. To make this possible and to simultaneously increaseessential public expenditures in other areas (including O&M and increasedrecurrent expenditures in education, health and family planning), substantialadditional resources will be needed. This will require sustained efforts onthe part of the Government to mobilize more domestic resources to ensure thatBangladesh's own contribution towards financing development activities wouldrise over time, and a greater commitment to ass-re that such resources will bedevoted to increasing development activity and higher priority currentexpenditures in such areas as O&N and the social sectors, rather thansupporting the present pattern of current expenditures. In the short term,however, the low level of per capita incomes and the need for strengtheningstructural reforms in such areas as trade liberalization, will limit the rateat which tax revenues could be mobilized; although efforts should still besustained to increase both tax and non-tax revenues. Increases in externalassistance could therefore be justified to support the development effort,provided that the Government takes complementary actions to ensure that suchassistance will be utilized to support an expansion of development activity.

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139. The need for external assistance also has strong balance of paymentsjustification. Although the balance of payments situation strengthenedconsiderably and external reserves increased in the past two to three years,this trend is likely to be ephemeral. Stagnation of the economy in the lasttwo years on the heels of a prolonged period of demand management has keptimport demand in check up to now. But, the economy will need to beresuscitated, with broad-based distribution of the benefits of such growth,which vill increase consumption and investment demand. With further progressin trade liberalization, imports are expected to pick up significantly nextyear and thereafter. On the other hand, although non-traditional exports andremittances have grown rapidly in recent years, this pace is unlikely to besustained in the near future. The narrow concentration of exports on readymade garments will mean that, as available quotas are utilized, the momentumof export growth is likely to decelerate until new export products and marketsare developed in the medium to longer term; at the same time, increasedcompetitiveness and pressure on wages in the middle east market for immigrantlabor, create considerable uncertainty regarding the future growth ofremittances. Accordingly, che balance of payments current account deficit isexpected to widen to about 7% of GDP over the next three years. To financethis deficit and to maintain gross reserves at the modest level of theequivalent of three months' imports, the Government's Policy Framework Paperestimates that disbursements of external assistance will need to increase byabout 5% per annum over the next three years from the level of totaldisburseLents achieved in FY88. This estimate is consistent with the analysiscontained in recent World Bank reports which projected the need for aiddisbursements, in real terms, to grow at 5-6% p.a. to sustain a GDP growthrate of slightly over 5% per annum over the medium term.

140. The level of aid commitments needed to provide for aid disbursements ofthis order will depend on a number of factors which also have importantimplications for the composition of aid. As noted earlier, Bangladesh alreadyhas a large pipeline of project aid of nearly $4.7 billion. In addition,rehabilitation and reconstruction demands (excluding rural housing and theDhaka flood prevention project), as a result of recent flood damage is.4stimated by the Joint Task Force of the Government of Bangladesh and theUnited Nations at roughly $1.1 billion. (Many donors have already indicatedtheir willingness to finance rehabilitation programs, although how much ofthis support will be additional to ongoing aid programs is not yet known.)While the "need' for more project assistance could be justified on thesegrounds, given the various constraints impeding project implementation,particularly the severe local currency shortage, additional project aid forrehabilitation or for new projects will exacerbate the local currencyconstraint, unless effective action is taken by both the Government and donorsto address this problem. Without such action, limited local currencyresources will be spread too thinly, and all projects, includingrehabilitation projects, will be subjected to implementation delays.Therefore, the Government will need to streamline and establish clearpriorities for the public expenditure program for rehabilitation and otherex?enditures as quickly as possible; and initiate strong efforts to mobilizedomestic resources in order to meaningfully improve project implementation andutilization of available project aid. If such action is taken, external

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donors will need to take complementary actions as discussed below to supportthe Government's initiatives.

141. The Public Expenditure Review suggests a number of ways in whichexternal donors can contribute more effectively to improve the implementationand development impact of the public expenditure program: First, the donorswill need to work closely with the Governmint in establishing priorities forthe public expenditure program and adapting their aid programs according tothe Government's revised priorities. This is because, given that donorsalready finance the large part of the development program, efforts tostreamline and reprioritize the ADP will inevitably affect a number of donor-financed projects. Accordingly, new project aid commitments (including thosefor rehabilitation) should be considered carefully, to ensure that they haverelatively high economic returns, and given the limited availability of localresources, such new commitments will not adversely affect the implemelntationof priority projects in tte ongoing program. This should mean that newproject aid commitments shzuld be limited to high priority areas. Second,where commitments for new projects are made, donors should finance a largerproportion of total costs (including local costs) to minimize the demands onlocal currency resources in the short term. In many instances, donors arealready financing some local costs through reimbursable project aid (RPA); buta higher proportion of donor financing should be considered. This would beparticularly true of rehabilitation projects (which would on average entailmore local costs). Third, donors would need to consider financing ofincremental recurrent expenditures in the social sectors for programs inhealth, education and family planning, where substantial real increases inrecurrent expenditures would be needed over the next ten years to achieveprogram objectives. While this would represent a new approach to most donors,it would directly support the poverty alleviation and social developmentgoals. Fourth donors should also consider picking up, after careful review,some of the projects which are now fully locally funded, where there is soundeconomic and social justification, in order to assist the Government toallocate more local currency resources to other donor-financed projects.

142. These recommendations suggest that the priority with regard to projectaid over the next year should be on finding ways and means of improvingdisbursements from the large existing pipeline and accommodating essentialrehabilitation needs. Given the rehabilitation needs, the scope for other newprojects would be limited. Therefore, as discussed, new project aidcommitments should be directed, on the basis of discussions with theGovernment, towards meeting clearly identified priority expenditure needs. Tomeet these needs, given the constraints on implementation capacity discussedearlier, a level of new project aid commitments of around $1.1 billion a yearis recommended. (This excludes possible financing for the Jamuna Bridge, theeconomic justification of which is still under review.) What is moreimportant, however, is to provide, within this level of new commitments,sufficient flexibility to increase the share of donor funding of local costs,including financing recurrent expenditures on social sector programs.

143. As discussed earlier, the primary justification for commodity aid is tosupport the balance of payments by providing quick disbursing funds needed topay for essential imports. If the economy were to continue to stagnate, this

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justification would bo' considerably weakened. However, present expectationsare that the economy would rebound next year, and imports will increasesubstantially. A secondary justification for commodi.ty aid is that it wouldhelp generate counterpart funds which are primarily used for supportingdevelopment projects. In the short term, given the tight local currencyconstraint, this justification is still valia, provided that the Governmenttakes the necessary measures to increase development activity. As notedearlier, the Government has already taken some actions to help improve theimplementation of this year's ADP; but much more needs to be done over thenext year to revive the momentum of development and increase the effectivenessof the public expenditure program. In the expectation that the Governmentwill continue to take such actions, new commitments of about $600 million willbe needed next year, to provide for disbursements of about $550 million nextyear and to ensure a satisfactory opening pipeline (of about $600 million inFY91). To achieve this level of commodity aid commitments, exceptionalefforts on the part of the Government will be needed to prepare and implementon schedule adjustment programs in key areas to ensure that prospectivecommitments from multilateral institutions could be finalized as speedily aspossible. Complementary efforts will also need to be made by bilateral donorsto increase thte proportion of quick disbursing commodity assistance in theiraid programs, to relax the procurement, pricing and commodity conditionalityattached to such programs, and to finalize the aid agreements as early aspossible, so that disbursements from new commitments could be made relativelyquickly. The Government on its part could assist this process by implementingrecommendations made in recent studies on commodity (and project) aidutilization to improve commodity aid utilization by eliminating the existingallocation procedures and transferring as many commodity aid programs aspossible to the secondary market. Most importantly, the Government shoulddemonstrate that such assistance is devoted to supporting the developmentprogram and supplementing the Government's own resources allocated to prioritypublic expenditure activities. Without such a commitment on the part of theGovernment, the case for continued commodity aid would be seriously weakened.

144. Bangladesh has usually received food aid of the order of $250 millionannually in new commitments, except in FY88 when they reached $364 million.External donors have responded generously to Bangladesh's appeals to providespecial emergency assistance whenever required. It is to be hoped that nextyear a resumption of growth in agriculture, in the absence of unexpectedcalamities, will reduce foodgrain import needs. However, given the frequencyof natural calamities, it will be prudent to plan to provide flexibility tothe Government to meet any emergency. At the same time, the recent sharpincrease in international foodgrain prices will reduce the real value of foodaid commitments. Moreover, due to floods, disbursements of food aid in thelast year and this year will be high; and the closing pipeline at the end ofFY89 will be about $225 million. Accordingly, new commitments of about $300million (equivalent of about 1.6 million tons of wheat at present prices), arerecommended for FY89. However, the Government will need to exerciseconsiderable judgement in utilizing such aid, particularly in schedulingimports, to minimize disruptive effects on incentives for domestic producers.This in turn will require considerable flexibility on the part of externaldonors to adopt a two-to-three year programming approach to enable the

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Government to reschedule foodgrain imports as needed by domestic food stockmanagement requirements.

145. To bring about a significant improvement in aid utilization over themedium-term to support the objectives of accelerating economic growth andsocial development in Bangladesh, both the Government and external donors willneed to adopt a positive approach towards resolving present implementationdifficulties. This should entail better coordinat:on of their aid programs onthe part of external donors to respond to the country's needs and prioritiesand a willingness to provide an appropriate mix of aid to match these needs.The primary responsibility for taking a more vigorous and imaginative approachto improving project implementation and effectively utilizing externalassistance which is potentially available to Bangladesh, however, will restwith the Government. This report and the Public Expenditure Review clearlyidentify actions the Government will need to take in this regard. TheGovernment, on its part has, time and again, demonstrated its capability foreffectively mobilizing and harnessing the country's resources and themanagement talents of its leadership to deal with various exigencies, forexample, handling the recent crises and mounting a major effort to find alonger-term approach to dealing with the flood problem. Given the importanceof resuscitating the economy and the critical role the public sector has toplay in this regard, the objectives of establishing a sound basis f^rsustained development by mobilizing more domestic resources, refocusingexpenditure priorities and giving greater priority to the development program,improving project implementation and ensuring effective utilization ofexternal assistance potentially available to Bangladesh, should receivesimilar attention.

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STATISTICAL APPENDIX

Tableo., Section/Title Page No.

HUMAN RESOURCES ..................... .. . 77

1.1 Population Projections, 1985-20301.2 Population Benchmarks by District, 1961-19851.3 Vital Population Statistics, 1980-19871.4 Comparison of Child Nutritional Status Results from

Three National Surveys1.5 Health Statistics, 1980-19871.6 Family Planning Statistics, 1980/81-1987/881.7 Education Statistics, 1974 and 1981 Census1.8 Distribution of Population by Economic ActivitLes,

1981, 1983/84 and 1984/851.9 Employment by Occupation and by Sex, 1983/84 and 1984/851.10 Income Distribution and Poverty Indica,-ors, 1973/74-1985,861.11 Number of Pe-sons Going Abroad for Employment, 1976/79-1988

NATIONAL ACCOUNTS .... . . . . . . . . . . . . . . . . . . 88

2.1 GDP at Current Prices by Sector of Origin, 1980/81-1987/882.2 GDP at Constant Prices, 1980/81-1987/882.3 GDP Deflator,-, 1977/78-1987/88

BLLANCE OF PAYMENTS .... . . . . . . . . . . . . . . . . . 91

3.1 Balance of Payments, 1980/81-1987/883.2 Balance of Payments - Requirements and Sources Format,

1980/81-1987/L.3.3 Value of Total Exports by Commodity, 1980/81-1987/883.4 Quantity and Value of Traditional Goods Exports, 1980/81-1987/883.5 Quantity and Value of Non-Traditional Exports, 1980/81-1987/883.6 Quantity and Value of Mr.jor Import Commodities, 1980/81-1987/883.7 Imports and Exports Vriume and Price Indices and

Terms of Trade, 1951/82-1.987/883.8 Total Import Finan.ing, 1972/73-1987/883.9 Aid Pipeline, 1980/81-1987/883.10 Commitments and Disbursements of Aid by Type of Aid,

1976/77-1987/883.11 Average Exchange Rates, 1976/77-1987/88

EXTERNAL DEBT . . . . . . . . . . . . . . . . . . . . . . . . 103

4.1 External Public Debt Outstanding Including Undisbursed(December 31, 1987)

4.2 Service Payments. Commitments, Disbursements and OutstandingAmounts of Exti.rnal Public Debt (December 31, 1987)

-75-

TableNo. Section/Title Page N_o_.

BUDGET .... 105

5.1 Conventional Budget Summary, 1980/81-1988/895.2 Current Budget, 1980/81-1988/895.3 Annual Development Program, 1972/73-1988/895.4 Financial Performance of Public Sector Industrial

Corporations, 1980/81-1988/89

MONEY AND BANKING . . . . . . . . . . . . . . . . . . . . . . 109

6.1 Money Supply and Domestic Liquidity, 1983-19886.2 Agricultural Credit Issued by Major Credit Institutions,

1977/78-1987/886.3 Loans Sanctioned by Development Finance Institutions,

1977/78-1987/886.4 Nominal Interest Rates on Selected Savings Instruments,

August 1977 - August 19886.5 Nominal Interest Rates on Advances,

August 1977 - August 1988

AGRICULITRE . . . . . . . . . . . . . . . . . . . . . . . . . 114

7.1 Land Use By Area, 1986/877.2 Farm Size Pattern and Landlessness, 1960-1983/847.3 Area Under Main Crops, 1980/81-1987/887.4 Irrigation Summary, 1980/81-1986/877.5 Public Sector Irrigation Programs, 1980/81-1987/887.6 Commercial Fertilizer Distribution By Type and Region,

1980/81-1987/887.7 Production of Main Crops, 1970/75-1987/887.8 Public Foodgrain Distribution System Operations7.9 Seasonality of Public Foodgrain Distribution System Offtake,

1972/75-1987/887.10 Aus and Aman Production by District, 1970/75-1987/887.11 Production of Boro and Wheat by District, 1970/75-1987/887.12 Jute Production by District, 1970/75-1987/887.13 Supply and Disposition of Raw Jute, FY79-FY887.14 Public Foodgrain Procurement by District, 1975/FO-1987/887.15 Puolic Procurement of Aus and Aman Rice and Paddy by

District, 1975/80-1987/887.16 Public Procurement of Boro and Irri Rice and Paddy and

Wheat, 1975/80-1987/88

-76-

TableNo. Section/Title. Page No,

INDUSTRY AND INFRASTRUCTURE . . . . . . . . . . . . . . . . . 130

8.1 Bangladesh Bureau of Statistics Tndustrial Production Indices,1980/81-1987/88

8.2 Jute and Cotton Milling Sta'istics, 1980/81-1987/888.3 Sugar and Pulp and Paper Mill Statistics, 1980/81-1987/888.4 Production of Selected Industrial Products by Public Sector

Corporations, 1972/75-1987/888.5 Natural Gas Statistics, 1979/80-1987/888.6 Electrizity Production and Consumption, 1975/80-1987/888.7 Railwa.y Statistics, 1972/75-1987/888.8 Transport Statistics, 1974/75-1986/87

PRICES AND WAGES .138

9.1 Consumer Price Indices, 1980/81-1987/889.2 Natural Gas and Petroleum Product Prices, 1980-19889.3 Electricity Tariff Structure of the Bangladesh Power

Development Board, Effective August 1, :9879.4 Wholesale Prices of Consumer Goods in Urban Areas,

1980/81-1987/889.5 Wholesale Price Indices of Agricultural and Industrial

Products, 1976/77-1987/889.6 Public Foodgrain Ration Quotas and Issue and Sales Prices,

1965-19889.7 Daily Wages for Unskilled Labor, 1979/80-1987/889.8 Wage Differentials, 1978/79-1987/889.9 Agricultural Wage Rates, 1980/81-1987/88

-77-

Table 1.1: POPULATION PROJECTIONS, 1985-2030(Thousands)

AG;E aROU 1945 1990 1999 200 2005 2010 Z015 2020 2025 2030...... ........ *-*....... ---.............. -*.................................. *... ........... .................... ........................... ........................... .. ..

TOTAL MFF 100592 114040 128923 144020 161178 177563 193738 209465 224356 237887

HALES0-4 8581 9534 10353 10964 11275 11399 11425 11363 11144 10716

5-9 7218 8197 9153 9966 10626 10975 11142 11210 11191 11012

10-14 7143 7119 8095 9050 9886 10530 10869 11066 11 14 1113.6

15-19 6056 032 7018 799l 8964 9781 10431 10798 10985 11075

20-24 4289 5918 6886 6884 7853 8804 9644 10300 10678 10880

25-29 3298 4167 5767 6725 6739 7703 8654 9497 10163 10556

30-34 3011 3194 4048 5617 6569 6598 7559 8511 9361 10038

35-39 2564 2901 3087 3925 5463 6406 6452 7411 8365 9222

40-44 2194 2450 2782 2971 3791 5293 6225 6289 7245 8201

45-49 1852 2071 2321 2646 2837 3633 5091 6009 6091 7040

50-54 1505 1 16 1928 2170 2484 2674 3438 4837 5732 5833

55-59 1189 1356 1554 1754 1984 2282 2468 3188 4506 5365

60-64 888 1027 1178 1337 1540 1752 2026 2204 2863 4069

65-69 812 71n 836 966 1121 1281 1467 1708 1871 2448

70-74 549 596 s31 623 726 0so 979 1131 1329 1469

75. 489 539 595 584 646 747 881 1036 1220 1452

TOTAL 51639 58536 66132 74214 82483 90708 98771 106s58 113889 120510

FEMALES0-4 8223 9004 9830 10450 10786 10941 l0994 10955 10752 10335

5-9 7069 7764 8577 9434 10101 10493 10704 10809 10817 10653

10-14 6938 6944 7646 8464 9328 10006 104'2 10638 10757 Iom15-19 5418 6BO2 6824 7532 8356 9228 9917 10336 10577 10708

20-24 4094 5278 6644 6686 7400 8232 9113 9815 10250 10505

25-29 3448 3966 5129 6480 6543 726s 8105 8996 9711 10161

30-34 3004 3327 3840 4985 6322 6406 7135 7983 8684 9611

35-39 2428 288S 3208 3718 4846 6169 6272 7009 7864 8773

40-44 1990 2321 2770 3092 3598 4709 6016 6138 6879 773945-49 1627 1891 2214 2653 2973 3474 4563 5851 5988 6731

50-54 1304 1526 1781 2095 2522 2838 3330 4392 5651 5803

S5-59 1041 1196 1408 1652 1954 2363 2674 3153 4177 5397

60-64 800 921 1066 1263 1492 1776 2164 2464 2923 3893

65-69 727 6a 775 905 1082 1290 l550 1904 2186 2611

70-74 436 554 s5s 604 73 862 1040 1263 1567 1815

75+ 408 458 565 594 677 802 977 1201 1486 1866

TOTAL 48953 5S504 62791 70606 78695 868s5 94967 102907 110467 117377

BIRTH RATE 40.2 38.0 35.3 32.1 29.0 26.2 23.7 21.4 19.1DEATH RATE 15.0 13.5 12.0 10.7 9.6 8.8 8.1 7.7 7.4

RATE OF HAT. INC. 2.52 2.46 2.33 2.14 1.94 1.74 1.56 1.37 1.17

NET IGRATIO RATE -. 1 -.0 -.0 .0 .0 .0 .0 .0 .0

GIOWNTH RATE 2.51 2.45 2.33 2.14 1.94 1.74 1.56 1.37 1.17

TOTAL FERTILITY 5.500 4.926 4.413 3.952 3.540 3.171 2.e40 2.544 2.279

NRR 1.960 1.824 1.693 1.569 1.450 1.337 1.229 1.126 1.028

e(O) - BOTH SEXES 50.51 52.50 54.49 56.52 58.55 60.S9 62.57 64.50 66.32

e(10) - BOTH SEXES l1.95 52.95 54.00 55.09 56.19 57.30 58.39 59.46 60.48

INR - BOTH SEXES 117.8 107.1 96.9 86.9 77.2 67.9 S9.2 51.0 43.3

qCS) BOTH SEXES .1735 .1557 .1393 .1233 .1080 .0933 .0796 .0667 .0551

DEP. RATIO 93.4 84.1 80.4 76.2 71.1 65.4 59.7 55.0 50.7 47.2

Projection based on NRR-1 by the year 2030.

Source: World Bank.

Table 1.2POPULATION BBNCDMARKS BY DISTRICT, 1961-1985(thousnds)

---------------------------------------------------------- ___-----------------__----_.-------------------------------------

IxtrapolationDivision 1961 1974 -----------1981 Cnsas ----------- Average 1974-to-1981 to 1985 la

District Census Census Total Wale Fale m Households Size Crovth Rate Total Per ha

Rajahbhi 11850 17332 21087 10789 10298 3716 5.7 2.8 24339 625Dianjpur 1710 2571 3198 1647 1551 580 5.5 3.2 3738 473Raropur 3796 5447 6490 3325 3165 1196 5.4 2.5 7401 677Boara 1574 2231 2718 1384 1334 489 5.6 2.9 3139 699Rajahabl 2811 4268 5263 2677 2586 894 5.9 3.0 6121 556Pa2ns 1959 2815 3418 p756 1662 557 6.1 2.8 3940 693

Dina 10067 14195 17150 8831 8319 2884 6.0 2.7 19715 508Mushtia 1166 1884 2273 1167 1106 359 6.3 2.7 2611 654Jessore 2190 3327 4016 2069 1947 633 6.3 2.7 4614 600

ihela 2449 3557 4353 2264 2089 741 5.9 2.9 5041 361Barisal 3068 3928 4668 2398 2270 830 5.6 2.5 531S 646Patuakhali 1194 1499 1840 933 907 321 5.7 3.0 2134 424

Dnkaa 15294 21316 26249 13632 12616 4643 5.7 3.0 30542 850Jimalpur 1449 2059 2445 1241 1204 452 5.4 2.5 2783 718Mymensingh 4083 5508 6543 3355 3188 1208 5.4 2.5 7449 674TanSail 1487 2078 2444 1243 1200 420 5.8 2.3 2767 721Dhaka 5096 7612 10049 5376 4673 1705 5.9 4.0 12151 1347Faridpur 3179 4060 4768 2417 2351 858 5.6 2.3 5393 690

ChLttagong 13630 18636 22565 11597 10968 3892 5.8 2.8 25996 504Sylhet 3490 4759 5650 2897 2753 966 5.9 2.5 6430 456Comilla 4389 5819 6880 3481 3399 1203 5.7 2.4 7811 1025Noakhall 2383 3234 3813 1899 1914 680 5.6 2.4 4322 570Qiittagmag 2983 4315 5476 2913 2563 906 6.0 3.5 6474 759Chittagong H. T. 385 508 746 407 339 137 5.5 5.6 959 57

TOTAL 50840 71479 87052 44850 42202 15135 5.8 2.9 100592 605

------------------------------------------------------------------- __--------__-----------------------___-----------------

Note: Data shoan represent actual census results, not adjusted for probable undercounting.The adjusted 1981 Census estimate of total population is 89,940,000 for the Census date of March 8, 1981.

la Extrapolated to 1985 at 1974 to 1981 growth rate and adjusted proportionately to estimated 1985 total.

Source: Brangadesh B1uren of Statistics and staff eastimates.

-79-

Table 1.3VITAL POPULATION STATISTICS, 1980-1987

-------------------------------------------------------

__--------------------__--

1980 1981 1982 1983 1984 1985 1986 1987*

----------- _------------------------------------------------------__---------__--

CRUDE DEATH RATE (per thousand]National 10.18 11.50 12.20 12.30 12.30 12.00 11.38 11.23

'nra1 10.77 12.23 12.78 13.20 12.90 12.90 12.28 11.77

Urban 6.81 7.21 6.92 7.50 8.50 8.30 8.36 7.59

INFANT MDRTALITY RATES [per thousand]

national 101.40 111.50 121.90 117.50 121.80 111.90 116.56 112.66

Rural 103.50 112.50 123.20 120.80 122.00 113.20 118.00 114.93

Urban 80.70 99.40 103.00 98.80 119.50 98.60 100.57 97.32

male 102.30 113.40 124.10 118.80 113.50 114.20 121.95 120.26

Female 97.40 109.40 119.40 116.00 109.30 109.50 110.85 104.53

LIPE EXPECTANCY AT BIRTH (years]

Rational 56.90 54.80 54.50 53.90 54.80 55.10 55.15 55.30

uSral 56.60 54.30 53.90 53.10 54.40 54.70 54.84 54.90

urban 61.90 60.10 60.60 60.30 60.40 60.10 58.81 58.90

Nl. 57.00 55.30 54.40 54 20 54.90 55.60 55.40 55.60

Female 57.10 54.40 54.80 53.60 54.70 54.90 54.95 54.90

CRUDE BIRTH RATE [per thouasad]National 33.40 34.60 34.80 35.00 34.S0 34.60 34.36 33.33

RUral 33.90 35.70 36.90 36.40 36.10 36.30 35.38 34.61

lUrban 29.20 24.80 22.90 27.10 25.00 28.00 25.93 24.75

PER2r.ITY RATE [per woman]National 4.99 5.04 5.21 5.07 4.83 4.71 4.70 4.42

Rural 5.13 5.28 5.50 5.36 5.08 4.91 4.89 4.65

Urban 3.87 3.20 3.01 3.45 3.10 3.52 3.26 3.05

-------------------------------------------------------------------

__--------__--

* Provistonal.

Source: Bansladesh Bureau of Statistics.

-80-

Table .4COPARISON OF CHILD NUTPXTIX0AL STATUS RSULTS FRO TWO NATIONAL SUR

Indicator INFS, 1975-76 IOFS, 1981-82 BBS, 1985-86---------------------------------------------------.--------------- __--------__----------------------

(Weighted)Chronic malnutrition la 73.7X 57.3X 56.1X (Natiojal)

57.62 (Rural)44.22 (Urban)

(Weighted)Acute malnutrition /a 21.61 20.02 8.1X (National)

8.22 (Pural)6.92 (Urban)

Definitions oftChronlc maln trition < 90X median < 902 median < 902 mdian

lielght for age height for age neLght for age

Aute malnutrition < 802 median < 802 median < 802 medLanweight for height weight for helght welght for height

Actual sample slse 430 cross-sectional 510 cross-sectional 3283 urban and ruralcross-sectional; fourdata collectlonperiods

Age range 0-59 months 0-59 months 6-71 months

Reference standard used Harvard Harvard ICES

Population covered Rural Rural Urban and rural

IBS - Institute of Nutrition and Food Sciences, Dhaka Universlty.BBS - Bangladesh Bureau of Statistics, Natioael NutritLon Survey and Household

Expenditure Survey.

a Showvs percent rate among total population.

Notez The IFS surveys used the Harvard Standard as the international referencestandard for comparlson of child growth data while BBS used NC08 reference.Sam variation In nutritional status would be accounted for by the differentstandards used. Random -ariation due to small sample slaes used by INFS are orelikely to account for the differences in nutritional status found by thethreo surveys. The BBS survey sample vs. divided ilnto four data collectionperiods over a yea's time while 1F8 surveys collected data once duringthe year.

Sources Bangladesh Bureau of Statistics.

-81-

Table 1.5DEALTR STASTSTICS. 1980-1987

1980 1981 1982 1983 1984 1985 1986 1987

Rospitals (numb.r)Uoverment 510 512 544 560 568 596 600 532Private 39 164 164 1.64 164 164 164 267

Hospital Bed (number)Government Dispensaries & Hospitals 18957 19021 19136 20286 21870 22874 23306 26575

Registored Doctors (numb.) 9188 10065 10333 11496 13500 14591 16090 16793Registered Nurses & Midwives (number) 4372 5975 7434 8588 9650 10817 12111 12799

Public Expenditure (Tk million) I-Revenue 856 932 1052 1382 1820 1920 2483 3048ADP 658 742 808 1134 1293 908 2153 2673 (p)

Total Expenditures as X of GDP la 0.65 0.63 0.64 0.72 0.75 0.61 0.94 1.07 (p)

Per Caplta Expenditure (7k) /a 16.84 18.28 20.31 26.29 31.38 27.81 47.07 53.45

p - prelimsnry.

la Fiscal year data. Figures are revised estimates.

Source: Bangladesh Bureau of Statistics.

-82-

Table 1.6FAMILY PLAMIING STATISTICS, 1980181-1987188IthousandsJ

1980101 1981182 1982183 1983184 1984/85 1985186 1986187 1987188-------------------------------------------------------------- __-------------__------------------------_----------

Voluntary St*rLILsatLonsTubectomies 232.50 235.08 274.84 336.50 232.39 116.42 140.63 96.17Vasectomies 26.30 67.82 88.32 215.67 259.21 151.13 209.93 99.89Total 258.79 302.91 363.16 552.17 491.60 267.55 350.56 196.06

Delivery of Contraceptive Dsvi-esIUDs 41.60 83.67 117.74 303.34 432.45 367.67 420.34 379.13Pillf, (cycles) 8238 7751 8258 9726 11553 12137 15023 19100Cond,ow s (don.) 87112 93230 116821 131096 151940 135907 149236 166265MO philes) 60.79 63.55 69.63 64.25 71.98 46.42 39.31 14.78Injet:ions 112.01 81.07 72.70 122.46 165.93 216.49 31 4.7r 389.40Foam Nablets 5011 4126 5404 4385 3222 3125 3463 3890

COUPLE-YEARS OF PRODTECTION IthousandzJ

By SterilIsatlon laTubectomles 522 705 909 1155 1272 1261 1276 1245Vasectomies 319 355 408 583 784 857 981 983

Total 841 1060 1317 1738 2055 2118 2257 2228

With Contraceptive Deviees lbIDgs Ic 122 169 236 469 761 900 1050 11?4Pill. 543 517 551 648 770 809 1002 1273Condoms 581 622 779 874 1013 906 995 1108NMEO 15 16 17 16 18 12 10 4Injections 28 20 18 31 41 54 79 97Foam tablets 33 28 36 29 21 21 23 26

Total 1322 1371 1637 2067 2625 2702 3159 3622

Total 2130 2404 2918 3775 4680 4820 5416 5850

Married Females Aged 15-49 Id 16097 16629 17179 17746 18332 18937 19562 20208

Apparent Contraceptive Rate Is 13.2 14.5 17.0 21.3 25.5 25.5 27.7 28.9

la Cumulative, assuming year-to-year cary-over of 90S.lb Assuming one couple-year of protection per 15 cycles of pills, 15t: condoms

or ioam tablets, or 4 doses of injectables or vials of EMXO.la Cumulative, ass Ling year-to-year corry-over of 70S.Id Staff estimates based on a*ge-specific marriage rates from 1981 census.le Couple-years of protection per married female aged 15-49.

Sources: MIS, Department of Population Control, Bangladesh Bureau of Statisties, and staff estLmates.

-83-

Table 1.7EDUCATION STATISTICS, 1974 .a" 1981 Census

--------------------------------------------------------------

19.4 1981

ADULT LIIERACY RATE (age 15 and up)

National 25.8 29.2

Rural 23.4 25.4Urban 48.1 48.1

Wale 37.2 39.7Female 13.2 18.0

ATTMANCe RAES

NatioaliAges 5-9 18.7 22.5Ages 10-14 33.8 33.5Ages 15-19 18.8 17.0Ages 20-24 7.5 7.7

RuralAges 5-9 17.7 21.1Ages 10-14 32.1 31.3Ages 15-19 16.9 14.9Ages 20-24 6.4 5.5

UrbanAges 5-9 31.5 31.6Ages 10-14 50.7 44.8Ages 15-19 34.6 27.1Ages 20-24 15.9 13.2

KaleAges 5-9 22.0 24.7Ages 10-14 40.5 37.9Ages 15-19 29.0 25.4Ages 20-24 14.2 12.2

Fes-alAges 5-9 15.4 20.2Aet 10-14 25.8 28.1Ages 15-19 7.1 8.3Ages 20-24 1.1 2.3

So-------------------e------- .____________________St_t__t__s

Saeure: Bang1adesh Bureau of Statistics.

-84-

Table 1.8DISTRIBUTION OP PCPULTIQP8 ST CO9WIC ACSVISTM 1981. 19031/4 AN 1984165(ln Percent)

------------------------------------------------------------ ___-----_----__--__-_.------------_-_--_----------------_-----------

1981 1983184 1984185

Male Female Total hale rnal. Total Malo Female Total

1. NationalPopulation *&ad 10 years end above 67.60 66.06 66.89 66.51 68.02 68.17 68.87 68.79 68.83Economic partilipation:Civilian labor force la 73.48 4.17 40.27 78.31 7.89 43.91 78.15 8.20 43.90

- Employed 72.20 3.82 39.43 77.11 7.57 43.14 77.03 7.75 43.14- Unemployed 1.28 0.35 0.83 1.20 0.31 0.77 1.13 0.45 0.89

Other 26.52 99.83 59.73 21.69 92.11 56.08 21.84 91.79 56.06- Household work 3.63 74.31 37.60 0.30 74.76 36.67 0.30 74.94 36.84- Inactive 22.6 21.53 22.13 21.39 17.35 19.41 21.54 16.85 19.25

2. RuralPopulation *ged 10 yars snd *ahve 6tl.15 65.51 65.3 67.78 68.12 67.94 68.29 68.65 68.57Econnoic partclipationtCivilLan labor fore. la ...80 4.08 40.08 78.67 7.45 43.31 78.80 7.67 43.44

- Employed 73.62 3.67 39.28 77.62 7.09 42.61 77.87 7.22 42.75- U_neloyed 1.18 0.41 0.Ro 1.05 0.35 0.70 0.93 0.45 0.69

Other 25.20 95.92 39.92 21.33 92.55 56.69 21.19 92.32 56.53- Housebold vork 3.94 76.73 39.68 0.33 76.24 38.03 0.31 76.29 38.08- itlactive . 21.26 19.18 20.24 20.98 16.51 18.68 20.88 16.02 18.46

3. UrbanPopulation *god 10 years nd abave 74.68 69.35 72.34 73.43 67.92 70.69 72.40 68.26 70.52Economic partclipatLon:CIvilLan labor fore /a 67.80 6.98 42.16 7:.34 13.89 47.56 74.25 12.12 46.93

- Employed 66.10 6.98 41.18 70.21 13.89 46.34 72.05 11.68 45.49- Uneployed 1.70 - 0.98 2.13 - 1.22 2.20 0.43 1.44

Other 32.20 93.02 57.84 27.66 86.11 52.44 23.19 87.88 53.06- Housebold work 3.39 60.46 27.45 - 63.89 28.05 0.24 64.80 28.63- Inactive 28.81 32.54 30.39 27.66 22.22 24.39 25.50 23.07 24.43

----------------------------------------------------------------- __----------__--------------------------------------------------

/a The refined rate of civllLan Jabor force Ls the percentae of person 10 years old and above found engaged in productivectivity durng the eurvey period.

Source: Population Census 1981, Ls 1983/84, and LYS 1984/85. 3BS.

-85_

Table 1.9EULODEUT BY OCCUPATION AM BY SEX 1983184 and 1984185 la(thousands)

____________________________________________________________.._________.___________________________

1983184 1984185

Occupation Male Female To1-1 Male Female Total---------------.------------------------------------------------- __----------__-------------------

Professional & TSchnlcal 622 78 700 553 85 638

Admlnistratnve 182 S 185 219 5 224

Clarlcal 639 t0 679 810 139 94_.

Sales 2876 134 3010 3246 112 3356

Services 916 1117 2034 781 1151 1932

Agriuelture 16213 216 16429 16474 238 16712

Production & Transport 3795 771 4567 4116 763 4879

NEr 303 69 372 229 57 286

Total 25547 2429 27976 26428 2550 28978

--------------------------------------------------------------------- __------__-------------------

la Person &bove 10 year age l cluded above.

Sources LFS 1983184 and 1984/85 BBS.

-86-

Table 1. 10IDCQH DISTRXRUTION AND POVERYT INDICATOR, 1973/74-1985186

------------------------------------------------------------------------- __--__--

1973174 1981182 1983184 1985186------------------------------------------------------------- __--------------__--

I InEctoe DiatzlbutiownPercent of neans accruing to:

Bottom 40X - Rural 19.10 16.82 19.24 19.95Urban 17.80 16.07 18.87 19.20

Lower middle 40S - Rural 38.40 38.77 38.06 36.21Urban 38.00 36.02 37.91 37.87

Upper middle 15 - Rural 26.50 25.64 24.56 23.71Urban 26.60 27.01 27.79 26.10

Top 5X - Rural 16.00 16.78 18.14 21.36Urban 18.60 20.89 16.93 18.04

Gini Coeffielent - Rural 0.35 0.36 0.35 0.36Urban 0.38 0.41 0.37 0.37

II. Poverty Incidencet

Percent of population vith dailycaorie Intake per person belows2122 calorles - Rural 83 74 57 51

Urban 81 66 66 56

1805 calories - Rural 44 52 38 22Urban 29 31 35 19

lumbers of people vith daily calorieintke per person below (millions):2122 calories - Rural 57.4 60.9 47.0 44.2

Urban 5.6 6.4 7.1 7.0

1805 calories - Rural 30.7 43.1 31.3 19.1Urban 2.0 3.0 3.8 2.4

Sources BB8, Household Expenditure Surveys.

Table 1.11NMBEMR OF PESOUS GOING ABROAD FOR EMPLO'NENT, 1976179-1988

----------------------------------------------------- __---------------------____-_-__---__-----------------------------------------__--------

MULTITEAR AVRUAOES CAMENDAR YEAR DATA

First Eblf76-79 80-84 1980 1981 1982 1983 1984 1985 1986 1987 1988

By Occupation

Construction workers 2119 2446 2590 3393 2641 3814 3779 5393 4437 2278 977Vehicle-drivers 1162 2111 1070 2575 3587 1881 1448 3026 4109 4229 2094Workers (skilled, seal-skilled u nmskilled) 4879 35434 17706 31478 34870 40410 37886 50956 42857 48727 19339Technicians 3057 5965 4247 10357 7597 6113 4992 9271 8317 5705 2676Engineers 370 147 194 236 175 67 60 143 83 79 27Doctors and nurses 284 420 274 273 224 492 2003 1126 556 294 188Professlonals 398 1620 385 1905 2805 3371 3836 3620 3185 3586 1579Catering vorkers 791 2187 1836 2653 2604 2225 1299 2052 2835 2992 1716Kiscellaneous 3946 165. 2271 2917 3072 827 1450 2107 2284 6127 2493 1

Total 17277 51982 30573 55787 57575 59220 56753 77694 68663 74017 31089

By Destination

United Arab Emirates 5094 5937 4847 6418 6501 6616 5302 8329 8681 9963 6234Qatar 1542 3910 1455 2268 5504 7561 2763 4751 4847 5831 4107Kuwait 1623 6395 3687 5464 6846 10302 5677 7283 10286 9559 3136Iraq 1410 7373 1927 13153 12152 4932 4701 5051 4908 3848 1498Saudi Arabia 2799 14076 8695 13384 14770 12942 20587 37222 27335 39337 12441Libya 1314 2934 2976 4162 1929 2215 3386 1546 3111 2271 1478Bahrain 699 1880 1351 1392 1860 2470 2325 2969 2417 2055 1459bmn 2052 8130 4745 7351 7309 11126 10119 9200 6255 440 454Slngapore 28 592 669 1083 304 178 728 20 25 136 -Others 717 757 221 1112 400 878 1174 1323 798 577 282

Source:---------------ureau----------o---------a--------o-------r----__Emp---__--oym------n-------an-------Tr-----------ing---------_--------

Source: Bureau of Mkupower, Efloyment and TrainLg, 885.

-88-

Table 2.1GDP AT CURRENT PRICES BY SECTOR OF ORIGIN, 1980181-1987188(Tk million)

---------------------------------------------------------------- __-----------__-----------------------------------------------

1980181 1981182 1982183 1983/84 1984185 1985186 1986187 198718 8

(p

Agriculture 108953 121839 135871 169328 207976 216783 255062 277556

- Crops 83632 94922 104470 129841 154671 147896 177643 188657- Forestry 5848 6550 8501 11876 11932 20294 23587 28069- Livestock 12451 12713 14769 16709 26732 31594 32915 37194- FlsherLes 7022 7654 8131 10902 14641 16999 20917 23636

Industry 36696 42530 44713 50983 59502 66114 72598 82230

Mining quarrying 3 6 3 4 4 8 6 5Manufacturing '2861 25702 28070 30945 34632 37335 40208 42620

- Large & medlumi-scale 3214 14728 15546 17250 19352 20687 22867 24239- Small-Scale & cottage -47 10974 12524 13695 15280 16648 17341 18381

Construction 13b88 15863 15028 18095 22518 26058 28839 34607Electricity, gas & water 744 959 1612 1939 2348 2713 3545 4998

Services 87614 100775 107839 129611 149484 179116 211514 243981

Transport & eomuunications 18331 22858 25048 26013 27265 33328 36640 39571Trade & catering 20808 22083 23154 28513 35280 39174 46877 50674Banking & insurance 4131 4191 4341 5152 6889 8935 10116 11431Owner-occupied housing 17325 19575 19512 24867 27999 31771 34817 42477Otber services * 18481 22626 25459 31082 34357 46098 59329 73957Public dministration & defense 8138 9442 10325 13984 17694 19810 23735 25871

Gross Domestic Product at market prices 233263 265144 288423 349922 416962 462013 539174 603767

Net indirect taxes 13464 13824 15470 18854 21794 25516 30083 31809

Gross Damestic Product at factor cost 219799 251320 272953 331068 395168 436497 509091 571958

(p) - preliminary.

Sources Bangladesh Bureau of Statistics.

-89-

Table 2.2GDP AT C0NSTANT PRCES, 1980/81-1987188(Tk million at 1972173 market prices)

-------------------------------------------------------------- __-------------__--------------------------------------

1980181 1981/82 1982/83 1983/84 1984/85 1985/86 1986187 1987/88(p)---------------------------------------------------------- __-----------------__--------------------------------------

Agriculture 34908 35225 36851 37442 37795 39320 39367 38954

- Crops 27627 27441 28794 29120 29463 30756 30700 30157- Forestry 1703 1882 1917 2095 2 59 2076 2048 2076- Livestock 3477 3680 3767 3837 3927 4022 4122 4161- FLsheries 2101 2222 2373 2390 2446 2466 2497 2560

Industry 10698 11023 11090 12010 12754 13045 13982 14704

ining & quarrying 1 1 1 1 1 2 1 1Manufacturing 7602 7722 7598 7875 8132 8282 8811 8796

- Large & medium-scale 4394 4425 4208 4390 4544 4589 5011 4975- Small-scale & cottage 3208 3297 3390 3485 3588 3693 3800 3821ConstructLon 2845 3004 3038 3649 4095 4169 4449 4995Electricity, gas & water 250 296 453 485 526 592 721 912

ServLces 26038 25978 26894 28551 30354 32343 34728 36023

Transport & cmeuications 4845 4852 5227 5341 5480 5787 6163 6364Trade & rtering 6866 6272 6432 6798 7210 7600 8438 8569Banking & insurance 1387 1293 1220 1291 1545 1951 2059 2089Owner-occuVied housing 5297 5422 5548 5678 5812 5949 6089 6285Other services 4910 5225 5565 5941 6339 6734 7149 7944Public administration & defense 2733 2914 2902 3502 3968 4322 4830 4772

Gross DometeC Product, at market prlces 71644 72226 74835 78003 80903 84708 88077 89681

Net indirect t aes 4130 3767 4018 4199 4224 4682 4916 4812

Gross Dnomestic Product, at factor cost 67514 68459 70817 73804 76679 80026 83161 84869

(Real Annual Grovth, in S) /a 6.8 0.8 3.6 4.2 3.7 4.7 4.0 1.8

__________________ ----------------------------------------------------------------------------------------------

p - provisional estimate.

/a Growth in GDP at market prices.

Source: Bangladesh Bureau of Statistics.

Table 2.3GDP DEFLATORS, 1977178-198718811972173 = 1.0000]

------------------------------------------------------------------- __--------__------------------------------------------------------------------

1977/78 1978179 1979180 1980181 1931182 1982183 1983184 1984185 1985186 1986/87 1987188 (p)…----------------------------------------------------------------__----------__----------------------------------------------------------------__

Agriculture 2.3860 2.7610 3.0030 3.1211 3.4589 3.6870 4.5224 5.5027 5.5133 6.4791 7.1252

- Crops 2.3590 2.6470 2.8640 3.0272 3.4591 3.6282 4.4588 5.2497 4.8087 5.7864 6.2559

- Forestry 2.7280 3.1280 3.0780 3.4339 3.4803 4.4340 5.6687 6.0909 9.7755 11.5171 13.5214

- Livestock 2.4550 3.1740 3.8320 3.5810 3.4546 3.9206 4.3547 6.8072 7.8553 7.9852 8.9384

- Fisheries 2.3740 3.2740 3.3370 3.3422 3.4446 3.4265 4.5615 5.9857 6.8933 8.3768 9.2305

Industry 2.3350 2.4860 2.9640 3.4302 3.8579 4.0312 4.2450 4.6653 5.0681 5.1922 5.5924

Mining & quarrying 2.0000 2.5000 2.2500 3.0000 3.0000 3.0000 4.0000 4.0000 4.0000 6.0000 4.5000

Manufacturing 2.1320 2.2410 2.7130' 3.0072 3.3284 3.6944 3.9295 4.2587 4.5080 4.5634 4.8457

- Large & meci mi-scale 2.1520 2.2410 2.7130 3.0073 3.3284 3.6944 3.9294 4.2588 4.5080 4.5634 4.8718

- Small-scale & cottage 2.1520 2.2410 2.7130 3.0072 3.3285 3.6944 3.9297 4.2586 4.5080 4.5634 4.8117

Construction 2.8880 3.0290 3.7100 4.6004 5.2806 4.9465 4.9589 5.4989 6.2604 6.4821 6.9278

Electricity, gas & water 2.2150 2.4720 2.7200 2.9760 3.2399 3.5578 3.9979 4.4639 4.5828 4.9168 5.4804

Services 2.1830 2.4450 2.8730 3.3649 3.8792 4.0098 4.5396 4.9247 5.5380 6.0906 6.7730

Transport & communications 2.0710 2.0700 2.4430 3.7835 4.i110 4.7920 4.8704 4.9754 5.7591 5.9452 6.2181

Trade & catering 2.2840 2.5000 2.8090 3.0306 3.5209 3.5998 4.1943 4.8932 5.1545 5.5555 5.9138

Banking & insurance 2.2150 2.4650 2.7230 2.9784 3.2413 3.5582 3.9907 4.4589 4.5797 4.9131 5.4214

Owner-occupied housing 2.1850 2.5320 3.0360 3.2707 3.6837 3.5180 4.3795 4.8174 5.3406 5.'180 6.7584

Other services 2.1400 2.6480 3.3110 3.7640 4.3303 4.5748 5.2318 5.4199 6.8456 8.2989 9.3098

Public administration & defense 2.2150 2.4670 2.7210 2.9777 3.2402 3.5579 3.9931 4.4592 4.5835 4.9141 5.4730

Gross Domestlc Product at market prices 2.3110 2.6090 2.9510 3.2559 3.6710 3.8541 4.4860 5.1538 5.4542 6.1216 6.7324

Average changes in GDP deflator (Z) 30.4 12.9 13.1 10.3 12.7 5.0 16.4 14.9 5.8 12.2 10.0

p = preliLminary.

Source: Bangladesh Bureau of Statistics.

-91-

Table 3.1BALANCE OF PAYETS, 1980181-1987188(US$ millions)

-------------------------------------------------------------- __-------------__-----------------------------------------

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987/88------------------------------------------------------------- __--------------__-----------------------------------------

Merchandise exports, fob 710.7 626.0 686.0 811.0 934.0 819.0 1074.0 1231.0Merchandise Lmports, fobl/Uf to -2533.0 -2572.0 -2309.0 -2353.0 -1647.0 -2364.0 -2620.0 -2987.0

Trade Balance -1822.3 -1946.0 -1623.0 -1542.0 -1713.0 -1545.0 -1546.0 -1756.0

Non-factor services. net 37.5 27.0 57.0 32.4 11.4 1.0 -29.7 -10.5Non-factor servLces, receipts 222.3 214.0 213.0 222.4 228.0 223.9 226.6 255.2(- Other transport) 40.3 36.0 -- 26.0 31.0 23.3 22.0 27.1(- Travel) 16.6 16.0 -- 30.0 29.2 18.0 14.1 9.7t- Government services, n.e.l.) 30.3 33.0 -- 53.0 35.0 32.3 28.5 39.2(- Other) 135.1 129.0 -- 113.4 132.8 150.3 162.0 179.2

Non-factor services, payments -184.8 -187.0 -156.0 -190.0 -216.6 -222.9 -256.3 -265.7(- Other transport) -39.2 -47.0 -- -63.0 -58.5 -39.0 -43.1 -41.1(- Travel) -18.4 -20.0 -- -24.0 -39.9 -53.0 -47.8 -77.1(- Government servlcea, n.e.i.) -37.0 -39.0 -- -78.0 -76.8 -83.6 -110.4 -106.1C- Other) -90.2 -81.0 -- -26.0 -41.4 -47.3 -55.0 -41.4

Investment income, net -22.6 -97.0 -169.0 -64.4 -89.6 -126.1 -121.6 -133.0Investment income, receipts 51.9 34.0 17.0 56.6 58.0 36.1 35.2 54.9t- Interest on reserves lb) 18.4 13.0 -- 47.8 53.0 31.0 30.0 41.1C- Other interest & investment inceme) 33.5 20.5 -- 8.8 5.0 5.1 5.2 13.8

Investment incom, payments -74.6 -131.0 -186.0 -121.0 -147.6 -162.2 -156.8 -187.9t- Interest on external public M&LT debt) -42.0 -47.2 -46.3 -63.0 -65.0 -72.5 -81.5 -123.0

M- DHF service charges) -8.0 -37.1 -33.7 -37.0 -37.0 -37.5 -38.9 -38.9C- Other interest & investment income) -24.6 -46.2 -105.0 -21.0 -45.6 -34.6 -36.4 -26.0

Private unrequlted transfers, net 379.1 424.0 628.0 627.0 476.8 586.0 731.0 788.0Private unrequlted transfers, receipts 379.4 424.1 628.0 627.0 477.0 555.0 696.0 737.0Prlvate unrequited transfers, payments -0.4 -0.1 -0.2 -0.2 - - -

Current Account Balance -1428.3 -1592.0 -1107.0 -948.0 -1314.4 -1084.1 -966.3 -1111.5

Amortiration of public MeLT debt -50.1 -39.0 -74.0 -72.0 -110.0 -117.0 -154.0 -166.0

Total IM transactions, net 193.1 49.5 46.9 19.0 -7.0 -28.0 134.0 -18.0

Aid disbursements, total 1147.2 1236.1 134!.5 1268.0 1267.0 1306.0 1595.0 1640.0

Other long-term capital, net 40.1 0.0 0.0 -8.0 -1.0 -5.0 -7.0 -6.5C- Direct & portfolio Investment, net) 0.0 ".0 0.0 -- 1.2 -5.1 2.4 2.6C- Subscriptions to int'l non-monetary orgs) -1.9 0.0 0.0 -- -3.6 -0.2 -2.5 -1.6(- Other, net) 42.0 0.0 0.0 -8.0 -0.7 0.3 -6.9 -7.5

Short-term capital, net 28.1 65.0 -36.0 64.8 -34.9 10.0 -140.0 -159.5|- Resident official sector, net) 87.6 0.0 0.0 40.7 11.8 2.5 -10.2 -5.2t- Deposit money banks, net) -94.3 0.0 0.0 33.6 -21.2 1.6 -69.8 -97.4C- Other, not) 34.9 65.0 -36.0 -9.5 -25.5 5.9 -60.0 -56.9

Liabil!ties constltutLag foreign authoritLes'reserres, net 90.7 165.0 -6.0 -96.0 -30.0 0.0 -40.0 -40.0

Food borrowing, net 0.0 0.0 0.0 -9.0 91.0 -69.0 -96.0 8.0C- Food Borrowin, gross) 0.0 0.0 0.0 51.0 190.0 13.0 0.0 41.0t- Food Loan Amortization) 0.0 0.0 0.0 -60.0 -99.0 -82.0 -96.0 -33.0

Errors & omeissions, net lc -45.2 -12.6 65.8 -36.8 -4.7 87.1 -68.7 -2.5

Chansge in reserves Id t- - increase) 24.4 128.0 -2S5.2 -182.0 144.0 -100.0 -257.0 -144.0--------------------------------------------------------------- __------------__-----------------------------------------

MENDRASDUM ITEKS Reserve level, end of June (USS m) 250.8 122.8 358.0 539.9 394.8 495.0 752.0 896.0

- Reserves, excluding gold (US$ m) 231.5 87.9 322.5 522.8 380.5 478.5 729.4 872.3- Gold, national valuation (US$ m) 18.5 17.0 17.8 16.1 14.3 16.5 22.6 23.7

Average annual exchange rate tTkIUSS) 16.3447 20.0400 23.7600 24.9000 26.0600 29.8861 30.6294 31.2422------------------------------------------------------------- __--------------__----------------------------------..------

-- - not available separately.

/a MerchandLse imports are reported on a mixed valuation basis, partly fob and partly cif./b 71 on average level of reserves./c Including valuation changes other than those of reserves.Id Including chAnges in the valuation of reserves.

Source: Bangladesh Bank.

-92-

Table 3.2BALANCE OF PAYMENTS - REQUIREMENTS AND SOURCES FORMAT, 1980/81-1987/88(US$ millions)

-------------------------------------------------------------- __-------------__--------------------------------------

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188

FOREIGN EXCHANGE REQUIRNENTS

CURRENT ACCOUNTMerchandise lmports 2533.0 2572.0 2309.0 2353.0 2647.0 2364.0 2620.0 2987.0Payments on Investments 74.6 131.0 186.0 121.0 147.6 162.2 156.8 187.9Non-factor services 184.8 187.0 156.0 191.0 216.6 222.9 256.3 265.7

Subtotal 2792.4 2890.0 2651.0 2665.0 3011.2 2749.1 3033.1 3440.6

CAPITAL ACCOUNTPublic M&LT debt amortLzatLon 50.1 39.0 74.0 71.0 110.0 117.0 154.0 166.0Food loan amortization 0.0 0.0 0.0 60.0 99.0 82.0 96.0 33.0Long-term capltal. net -40.1 0.0 0.0 2.5 1.0 5.0 7.0 6.5Short-term capital, net -28.1 -65.0 36.0 -64.8 34.9 -10.0 140.0 159.5

Subtotal -18.1 -26.0 110.C 68.7 244.9 194.0 397.0 365.0

TOTAL REQUIREMENTS 2774.3 2864.0 2761.0 2733.7 3256.1 2943.0 3430.1 3805.6

FOREIGN EXCHANGE SOURCES

CURRENT ACCOUNTMerchandlse exports 710.7 626.0 686.0 822.0 934.0 819.0 1074.0 1231.0Remittances 379.1 424.0 628.0 S52.0 477.0 586.0 731.0 788.0Investment income 51.9 34.0 17.0 56.6 58.0 36.1 35.2 54.9Non-factor services 222.3 214.0 213.0 222.4 228.0 223.9 226.6 255.2

Subtotal 1364.0 1298.0 1544.0 1653.0 1697.0 1665.0 2066.8 2329.1

CAPITAL ACCOUNTAid dlsbursements 1147.2 1236.1 1345.5 1268.0 1267.0 1306.0 1595.0 1640.0IMF transactlons, nat 193.1 49.5 0.0 19.0 -7.0 -28.0 134.0 -18.0

Food borroving, gross 0.0 0.0 0.0 51.0 190.0 13.0 0.0 41.0Other 90.7 165.0 -6.0 -40.1 -30.0 0.0 -40.0 -40.0

Subtotal 1431.0 1450.6 1339.5 1293.9 1420.0 1291.0 1689.0 1623.0

TOTAL SOURCES 2795.0 2748.6 2883.5 2946.9 3117.0 2956.0 3755.8 3952.1

Increase In gross reserves -18.1 -26.0 110.0 68.7 -144.0 100.0 257.0 144.0

Errors and misLsLons 38.8 -89.4 12.5 144.5 4.9 -87.0 68.7 2.5

Source: Bangladesh Bank.

-93-

Table S.3VALUE OF TOTAL EXPORTS BY COMMODITY, 1980181-1987188(USS million)

-------------------------------------- __------------__---___---__---------_--__-------------------------_-_____----

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188------------------------------------------------------------- __--------------__------------------------------------

Raw jute 118.86 101.69 109.81 117.19 150.81 123.89 104.00 80.53Jute manufactures 357.03 283.50 305.32 336.12 357.72 294.32 274.73 265.01Jute specialty products 9.42 8.04 12.50 20.87 32.08 0.86 26.81 36.30

Leather & leathb.r products 56.68 63.08 58.46 85.27 69.80 60.73 134.82 147.17Frozen shrLmps, fish & froglegs 39.95 52.81 72.06 95.00 86.85 114.70 136.20 139.65Other fish products 1.98 0.00 1.64 2.19 2.45 5.42 4.02 5.21Tea 40.67 37.94 46.58 68.90 61.02 32.78 29.65 38.95

Spices, lal. tamarind & sesame 0.22 0.00 0.28 0.61 0.48 0.15 0.16 0.14Frults & vegetables 1.02 1.47 0.00 3.43 4.25 14.75 17.79 15.67Tobacco 0.02 0.00 2.28 3.25 2.57 0.66 1.29 0.82Betel leaves 0.96 0.00 1.20 1.25 1.38 4.33 3.43 2.17

Rav cotton 0.17 0.00 0.00 0.14 0.46 0.43 0.09 0.24Cotton yarn & thread waste 0.12 0.00 0.36 0.31 0.16 0.00 0.00 0.03

Sugar 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00Molasses 1.03 2.00 0.63 0.00 0.00 0.00 0.00 0.75

Oll cake 0.56 0.00 0.13 0.09 0.00 0.00 0.00 0.00Wheat & rlce bran 1.16 2.42 2.26 3.49 3.09 0.00 0.00 0.00Rtce 0.00 5.88 0.00 0.00 0.00 0.00 0.00 0.00

Crude fertlIlzers 0.49 0.00 0.40 0.32 0.24 0.39 0.60 1.67Animal casings 0.14 0.00 0.19 0.08 0.05 0.00 0.08 0.12Lizard skins 0.06 0.00 0.40 0.95 0.91 1.11 0.04 0.00Tortolse & turtle meat & shells 1.00 0.00 0.98 0.99 0.90 1.38 1.13 1.64Bees vax 0.06 0.00 0.10 0.06 0.02 0.00 0.06 0.05

Textiles, inacl. silk & silk vaste 0.83 0.55 0.65 0.42 0.32 0.00 1.04 0.70Readymade garments 3.24 7.00 10.84 31.57 116.20 131.48 298.67 433.92

HandLcrafts 3.45 0.00 2.48 2.38 1.91 1.93 3.99 3.76Pottery & colr products 0.07 0.00 0.00 0.01 0.02 0.00 0.46 0.01Wood & furniture components 0.28 0.00 0.36 0.20 0.08 0.00 0.06 0.02Bamboo & bamboo products 1.24 0.00 0.83 0.24 4.59 0.00 0.12 0.06

Pulp 0.01 0.00 0.05 0.02 0.00 0.00 0.02 0.02Newsprint 7.55 0.00 4.16 6.54 8.50 7.34 7.65 7.06Paper 0.98 0.00 0.11 J.56 1.59 0.00 1.66 4.50EBrdboard & partiele board 0.05 0.00 0.04 U.03 0.01 0.00 0.00 0.00Cellophane 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Rayon 0.61 0.00 0.22 0.02 0.00 0.00 0.00 0.29Pharmaceuticals & crude drugs 0.02 0.00 0.55 0.18 0.00 0.00 0.28 0.09Glycerine 0.38 0.00 0.62 0.53 1.15 1.09 0.87 0.73Urea 9.58 0.00 10.35 9.74 4.79 2.57 4.18 24.93Ammonium sulfate 0.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Naphtha 29.85 30.16 18.91 22.72 20.68 13.91 10.24 8.08Furnace oil 19.28 11.25 8.31 0.00 0.00 0.00 1.96 3.68Bitumen 0.00 1.00 4.00 3.12 0.11 0.05 0.44 0.22

Wire & cables 0.02 0.00 0.14 0.72 0.55 0.00 0.01 0.00

All others la 0.77 18.18 8.42 2.88 2.72 4.73 7.20 8.01

Total 710.69 626.97 686.60 822.00 934.43 819.00 1073.77 1231.20------------------------------------------------------------- __--------------__------------------------------------

MgM0RANDU1 ITEKS:Traditional exports 582.67 494.25 532.00 627.52 671.43 512.57 570.62 567.81Readymade sarments 3.24 7.00 10.84 31.57 116.20 131.48 298.67 433.92Other nontraditional exports 124.78 125.72 143.76 162.91 146.80 165.95 204.48 229.47--------------------------------------------------------------- __------------__------------------------------------

la Includes ltems for whlch details are not shown separately.

Souree: Export Promotion Bureau.

Table 3.4QUIm AND VALUE OF TRADITOUNAL GOODS EORTS, 1980/81-1987/88

1980181 1981182 1982183 1983184 1984185 1983/86 1986187 1987/88------------------------------------------------------------- __--------------__---------------------------------------_----------------

Raw JuteValue ('000 USO) 118864 101692 110000 117192 150809 123890 104000 80530Quantity (bales) 1943946 1911370 2246000 1902000 1408000 2301000 2241000 1345000Unit price (US$/bale) 61.14 53.20 48.91 61.61 107.15 53.84 46.41 59.87

Hessian Quantity (metric tons) 182782 188562 224599 214097 184641 151371 204501Sackin8 Quantity (metric tons) 238676 292912 195961 162234 176945 242486 19h 30Carpet-backing Quantity (metric tons) 76244 54306 90750 94199 72600 69737 72183

Carpets Quantity (metric tons) 57 221 697 236 213 315 231

Others/diserepancy Quantity (metrie tons) 3677 1354 -3007 37234 -8550 .. 2225

Total Jute ManufacturesValue ('000 USS) 357033 283502 306000 336115 357722 294318 274730 265010Quantity (metrLe tons) 501436 537355 509000 508000 425849 463909 n.-. 465000Unit price (USS/metric ton) 712.02 527.39 556.60 661.64 840.02 634.43 n.a. 569.91

Jute Speciality ProductsValue ('000 US$) 9422 8035 12000 20047 32079 856 26810 36300Quantlty (metric tons) 14500 13200 22000 30000 35151 1011 n.a. 60000unit price (US$/Metric ton) 650.00 608.71 545.46 668.23 912.61 846.69 n.a. 605.00

TeaValue ('000 USS) 40672 37938 46000 68900 61018 32780 29660 38800Quantity ('000 lbs) 65675 69041 67647 67650 56533 65763 47102 60480Unit price (US$1000 lb.) 619.29 549.50 680.00 1018.50 1079.30 498.50 629.70 640.00

Leather and Leather Products laValue ('000 US$) 56682 63081 58000 85261 69799 60730 134820 147170Quantity ('000 square feet) 80607 87278 93890 102910 81750 71520 137460 118210Unit price (US$1000 square feet) 703.19 722.76 617.74 828.50 853.80 849.10 980.79 1245.00

Total Value, Traditional Exports 582670 494250 532000 627520 671430 512570 570020 567810

In Conatant FY81 Prices 582670 612190 621960 611760 504640 562630 618870 57290

la Excli.des bides and skin, but includes leather goods.

Souree: Bangladesh Export Promotion Bureau and Bangladesh Tea Board.

-95-

Table 3.5QUANTITY AND VALUE OF UON-TRADITIONAL EXPO5S, 1980181-198188

1980181 1981182 1982183 1983184 1984185 1985186 1986187 198788

Frosen Shrimps, Froglegs nd FishValue ('000 US8) 39950 52811 72000 95000 86845 114700 134160 139650

Quantity ('000 lbs) 16552 20575 27490 38462 38240 47160 45580 48330

Unit price (USS$lb) 2.41 2.57 2.62 2.47 2.27 2.40 2.99 2.89

Other Fish Products and Preparations Ia

Va ue ('000 US$) 1984 1473 .. 2186 2450 5420 4020 5210

NewsprintValue ('000 US$)

7552 5998 4000 6540 8498 7340 7650 7060

Quantity (tons) 16498 10542 9000 14000 18000 16000 19000 13950

Unit price (US$lton) 457.75 487.48 462.22 467.14 472.11 458.75 402.63 506.09

PaperValue ('000 US$) 983 12 .. 2560 1586 .. .. 4500

Quantity (tons) 1689 25 .. 2371 2453 .. .. 5948

Unit price (US$Iton) 582.00 480.00 .. 657.95 646-56 .. .. 756.56

NaphthaValue ('000 US*) 29845 30160 19000 26000 20677 13910 10240 8080

Quantity (metric tone) 116367 106910 59000 100700 89000 80000 777"68 65000

Unit price (US$Imetric ton) 256.47 282.11 320.50 258.18 232.33 173.88 131.78 124.31

Furnace Oilvalue ('000 US8) 19281 11250 8000 .. .. .. .. 3680

qiantity (metric tons) 106344 69169 50000 .. .. .. .. 39000

Unit price (US$lmetric ton) 181.31 162.65 166.20 .. .. .. .. 94.36

BitumenValue ('000 US$)

0 1000 4000 3120 106 S0 440 220

Quantity (metric tons) 4323 16000 13000 459 209 2008 1000

unlt prlce (US11metric ton) 0.00 231.30 225.63 240.00 230.94 239.23 219.12 220.00

Ricevalue ('000 Us$) 0 5880 0 0 0 0 .. 0

Quantity ( r,oo to"s) 0 20000 0 0 0 0 .. 0

Unit price (US$lton) 0.00 294.00 0.00 0.00 0.00 0.00 .. 0.00

Ureavalue ('000 Us$) 9584 0 10000 9734 4790 2570 4180 24930

Quantity (tons) 39764 0 66000 61000 26300 20499 35000 223464

Unlt prlce (US$Iton) 241.02 0.00 156.82 159.57 182.13 125.37 119.43 111.56

Suarvalue (000 US$) 26 0 0 0 0 0 .. 0

GaueentsValue ('000 U8S) 3240 7000 10840 31570 116200 131480 298670 433.92

Total Non-traditional Exports ('000 US$)Ib 128019 132719 154000 194490 263000 306430 503750 663390

in constant prloe.I of 1181 ('000 US$) 128019 127111 152578 199420 278960 307450 438130 555950

Total Exports ('000 US$) 710689 626969 686000 822000 934426 819200 1073770 1231200

ln constant prlces of 1Y81 ('000 US$) 710689 739300 774540 811180 783600 870080 1057000 1108420

.. - not available s*perately.

I/ includes drled and salted flsh and flsh products, sharkf and flsbmaws.

lb ncludes other items not shown above.

notes Non-traditional exports exclude raw jute. jute manufactures, tea, and leather.

Sources Export Prootlan Bureau.

-96-

Table 3.6QUAINTITY AND VALUE OF MAJOR IM1W0RT COMODITIES. 1980181-1987188

------------------------------------------------------------- __--------------__-------------------------------

1980181 1981182 1982183 1983184 1984/85 1985186 1986/87 1987/88------------------------------------------------------------- __--------------,_-------------------------------

Rice /aValue (mill. USS) 40.4 46.0 97.0 56.0 176.0 8.0 49.5 150.0Quantlty (long tons) 82.8 144.0 345.0 179.0 690.0 39.0 261.0 671.0Unlt Price /a (US$) 487.7 319.4 281.2 313.0 2S5.1 205.1 187.7 223.0

Wheat /aValue (mill. USS) 210.0 239.0 289.0 342.0 322.0 212.0 223.0 339.0Quantlty (long tons) 976.6 1111.0 1527.0 1877.0 1899.0 1164.0 1508.0 2342.0Unit Prlce /a (US$1long ton) 21S.0 215.1 189.3 182.0 169.6 182.1 147.9 145.0

Edlble Oil /aValue (mill. US$) 92.0 71.0 83.0 87.0 103.0 135.5 115.0 137.0Quantity ('000 tons) 141.0 109.0 12S.0 100.0 136.0 272.0 283.0 300.0Unit Price (USS/ton) 652.5 651.4 643.4 870.0 757.4 498.0 406.4 455.0

OllseedsValue (mill. USS) 11.0 5.0 5.0 2.0 6.0 0.1 25.0 38.0Quantity (metrlc tons) 29.7 13.0 17.0 5.4 20.0 0.4 116.0 150.0Unit Prlce (USS/metrLc ton) 370.0 384.6 294.1 370.0 300.0 368.0 215.5 254.0

Crude Petroleum /bValue (mill. US$) 343.6 334.0 373.0 233.0 226.0 177.0 126.0 136.0Quantlty ('000 tons) 1304.7 1177.9 1443.0 1004.0 985.0 1008.0 1000.0 988.0Unit Prle- (US$/ton) 263.3 285.2 258.5 232.0 229.4 t75.6 126.0 138.0

Petroleum Products /cValue (mill. US$) 159.8 213.0 83.0 122.0 133.0 165.0 104.0 136.0Quantlty ('000 tons) 523.9 583.0 219.0 464.0 570.0 805.0 732.0 790.0Unit Prlee (USI/ton) 305.1 365.4 379.0 263.0 233.3 205.0 142.1 170.0

FertlIlser IdValue (mill. US$) 10'..0 104.4 66.0 75.0 137.0 108.0 25.0 46.0Quantity (long tons) 350.3 457.2 330.0 356.0 666.0 640.0 145.0 277.0Unit Prlce (US$Ilong ton) 296.9 228.3 200.0 211.0 205.7 168.8 172.4 166.0

CementValue (mill. US$) 32.8 31.0 44.0 37.0 26.0 57.0 64.0 60.0Quantlty (metric tons) 446.0 435.0 759.0 748.0 588.0 1333.0 1601.0 1500.0Unit Prlee (US$/ton) 73.5 71.3 58.0 49.0 44.2 42.8 40.0 40.0

Raw CottonValue (mill. U8$) 108.0 79.0 56.0 125.0 106.0 51.6 45.0 83.0Quantlty ('000 bales) 256.0 187.0 194.0 388.0 305.0 181.0 205.0 250.0Unlt Prlee (US$/bale) 421.9 422.5 288.7 322.0 S47.5 285.0 219.5 330.0

Staple FLbresValue (mill. US8) 13.0 5.0 4.0 9.0 3.0 1.0 7.0 8.0Quantlty ('000 bales) 42.0 16.0 13.0 27.0 10.0 3.0 29.0 28.0Unit Price (US$/bale) 309.5 312.5 307.7 333.3 300.0 :42.0 241.4 275.0

YarnValue (mill. US$) 20.1 22.0 30.0 39.0 31.0 50.0 42.0 45.0Quantity (million .lbs) 14.0 i8.0 20.0 37.0 26.0 56.0 39.0 40.0Unit Prlce (US cents/.lb) 142.9 122.2 150.0 105.4 119.2 89.3 107.7 112.0

----------------.------------------------------------------------ __----------__-------------------------------

/a A. a large portlon of food import. is financed an a grant ba.si, unlt prices are oftenavailable for accounting purposes only.

/b Does not include crude oil shipped to and refined in Singapore for the account of BPC during FY80-FY83./c Includes petroleum products imported by BPC from lts refining operations in Singapoze as well afi

imports of non-fuel petroleum products./d As aome fertilizer imports are financed an a grant basis, unlt prices are often available

for accounting purposes only.

Note: 1 bale of raw cotton - 500 lbse 1 bale of polycster - 618 lbst1 bale of Viecoae - 441 lb., 1 bale of yarn - 400 lbs.

Sources Planning Comission.

-97-

Table 3.7IMPORTS AND EXPTRSS VOLUME AD PRICE INDICES AND TERKS OF TRADE, 1981/82-1987188(1980181-100)

------------------------------- _--_--__.------------_---------___------------__-----------

1981182 1982103 1983/84 1984185 1985/86 1986/87 1987188-------------------------------------------------------------. ,_ --------------------------

IMPOrTs

RiceValue Index 113.86 240.10 138.61 435.64 19.80 122.52 371.29Volume index 173.91 410.67 216.18 845.41 47.10 315.22 810.39Unit Price Index 65.47 57.62 64.12 51.53 42.04 38.87 45.82

WheatValue Index 113.81 137.62 162.86 153.33 100.95 106.19 161.43Volume index 113.76 156.36 192.20 194.45 118.88 154.21 239.81Unit Price Index 100.04 8e.01 84.73 78.85 84.92 68.86 67.31

Edlble OllsValue Index 77.17 90.22 94.57 111.96 147.28 125.00 148.91Volume index 77.30 91.49 70.92 96.45 192.91 200.71 212.77Unit Prlce Index 99.83 98.61 1:3.34 116.07 76.35 62.28 69.99

OilseedsValue Index 45.45 45.45 18.18 54.55 0.91 227.27 345.45Volume index 43.77 57.24 18.18 67.34 1.35 390.57 505.05Unii Price Index 103.85 79.41 100.00 81.00 67.50 58.19 68.40

Crude PetroleumValue Index 97.21 108.56 67.81 65.77 51.51 36.67 39.58Volume index 90.28 110.60 76.95 75.49 77.25 76.64 75.72Unlt Price Index 107.67 98.15 88.12 87.12 66.68 47.85 52.27

Petrolaum ProductsValue Index 133.28 51.94 76.34 83.22 103.25 65.01 85.10Volume index 111.29 41.81 88.57 108.81 153.67 139.73 150.80Unit Prlce Index 119.76 124.23 86.19 76.48 67.19 46.53 56.43

FertliserValue Index 100.38 63.46 72.12 131.73 103.85 24.23 44.23Volume index 130.54 94.22 101.64 190.15 182.44 41.40 79.09Unit Prlce Index 76.90 67.36 70.95 69.28 56.92 58.53 55.93

CementValue Index 94.51 134.15 112.80 79.27 173.78 195.12 182.93Volume index 97.53 170.18 167.71 131.84 298.88 358.97 336.32Unit Prlce Index 96.90 78.83 67.26 60.13 58.14 54.36 54.39

Rev CottonValue Index 73.15 51.85 115.74 98.15 47.78 41.67 76.85Volume index 73.05 75.78 151.56 119.14 70.70 80.08 97.66Unlt Price Index 100.14 68.42 76.37 82.38 67.58 52.03 78.70

Total /aCurrent Price Index 98.86 88.67 92.89 104.50 93.33 103.43 117.92Constant Price Index 99.17 96.55 102.72 123.01 106.38 116.69 130.71Unit Price Index 99.68 91.84 90.44 84.95 87.73 88.64 90.22

-98-

Table 3.7 ContinuedIMPORTS AND EXPOSTS VOLUME AND PRICE INDICES AND TERMS OP TRADE, 1981182-1987/88(1980181-100)

-------------------------------------------------------------- _____--_--_----__----_--____

1981182 1982/83 1983184 1984185 lS85186 1186IC7 1987188

EXPORTS

Raw juteValue Index 85.53 92.54 98.59 126.88 104.23 87.49 67.75Volume index 98.32 115.54 97.84 72.43 118.37 115.28 69.19Unit Prlce Index 87.01 80.10 100.77 175.17 88.05 75.90 97.92

Jute OoodsValue Index 79.40 85.71 94.14 100.19 82.43 84.46 74.22Volume index 107.16 101.51 101.31 84.93 92.52 99.71 92.73Unit Prlce Index 74.10 84.43 92.92 117.98 89.10 84.70 80.04

TeaValue Index 93.28 113.10 169.40 150.02 80.60 72.92 95.40Volume Index 105.13 103.00 103.01 86.08 100.00 71.72 92.09Unit Price Index 88.73 109.80 164.46 174.29 80.60 101.68 103.59

LeatherValue Index 111.29 102.33 150.42 123.14 107.14 237.85 259.64Volume index 108.28 116.48 127.67 101.42 88.73 170.53 146.65Unlt Price Index 102.78 87.85 117.82 121.42 120.75 139.48 177.05

Shrimps eteValue Index 132.19 180.23 237.80 217.38 287.11 340.93 362 60Volume index 124.29 166.08 232.37 231.03 284.92 275.37 291.99Unlt Price Index 106.35 108.52 102.34 94.09 100.77 123.80 124.18

NapthaValue Index 101.06 63.66 87.12 69.28 46.61 34.31 27.07Volume index 91.87 50.70 86.54 76.48 68.75 66.78 55.86Unit Prlce Index 109.99 125.56 100.67 90.58 67.79 51.38 48.47

Total /aValue Index 88.22 96.53 115.66 131.48 115.24 151.09 173.24Volume Index 104.03 108.98 114.14 110.26 122.43 148.73 160.46Unit Prlce Index 84.81 88.57 101.33 119.25 94.13 101.59

TERMS OP TRADE INDEXExport Prlce Index 84.81 88.57 101.33 119.25 94.13 101.59 107.97Imports Price Index 99.68 91.84 90.44 84.95 87.73 88.64 90.22TOT lb 85.08 96.44 112.05 140.37 107.29 114.61 119.67Annual Cbange S -14.92 13.36 16.18 25.28 -23.57 6.82 4.42

------------------------------------------------------------------- __--------__-----------

/a Includes items not shown above./b Export Price Index dlvlded by Imports Prlce Index

Note: Calculated from exports and imports details made available byExport Promotion Bureau, Bangladesh Bank and Planning Commission.

-99-

Table 3.8TOTAL DMPORST FIRACING 1972173-1987/88(US$ million)

--------------------------------------------------------------- __--------

Speel-l Loans &Year Cash Batter Trade "ES /a Grants Total

1972173 396.3 49.4 - - 541.0 986.71973174 397.3 64.0 - - 392.9 854.21974175 273.7 62.0 3.0 41.2 810.7 1190.61975176 430.1 23.7 5.2 40.4 786.5 1285.91976177 307.2 28.8 2.1 56.2 449.9 844.8

1977178 497.3 48.6 2.6 88.1 794.7 1431.21978179 442.6 73.7 2.9 116.1 1005.6 1641.01979180 901.7 75.4 3.5 177.4 1181.2 2339.21980181 1056.3 96.6 2.7 334.3 1178.9 2668.81981182 976.9 100.6 4.1 342.2 1262.9 2686.7

1982/83 489.9 49.9 10.6 479.2 1287.1 :316.71983184 637.4 75.3 7.2 494.8 1138.1 2353.01984185 735.2 63.9 6.8 695.8 1145.8 2647.51985186 649.3 85.1 33.1 676.2 920.3 2364.01986187 366.4 79.0 27.4 879.1 1268.5 i620.4

1987188 443.9 84.7 43.0 1090.2 1325.4 29a7.2

--------------------------------------------------------------- __---------

/a Wage Earners Scheme.

Note: Data reflect payments rather than commodlty arrivals.Valuatlon for commodities financed under loans and grants is on amixed fob/clf basis, depending on the terms of the respective aidaereementos all other categorles reflect cf valuation.

Source: Bangladesh Bank, Statisties Department.

-100-

Table 3.9AID PIPBL1NE, 1980/81-1987;88(Us$ mtllion)

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188---------------- ,..------------------------------------------__--------------__-----------------------------------

FOOD AIDOpening pipellne 50.00 58.80 48.86 41.76 60.41 194.40 329.83 207.4Comitments 202.87 220.56 248.35 285.16 380.16 329.57 1'8.96 364.0Dlsbursements 194.07 230.50 255.45 276.38 244.50 202.75 .25.41 300.5Closing pipeline 58.80 48.86 41.76 50.54 196.07 323.83 207.38 299.3 la

COMGODITY AIDOpening pipelie 398.77 S61.18 454.32 476.70 591.69 374.73 460.44 609.1Coemitmnts 354.87 513.00 474.38 528.17 251.77 408.93 562.06 251.2Disbursements 392.46 419.86 452.01 439.19 431.57 393.39 402.52 509.4Closing pipellne 361.18 454.32 476.70 565.67 362.81 460.44 619.98 451.5

PROJECT AIDOpening pipeline 2002.65 2444.23 3044.25 3374.13 3644.48 4061.80 4633.19 4390.1Comitments 1001.49 1189.29 799.80 881.66 1339.56 922.94 932.23 914.5Disbursements 559.91 589.27 469.93 552.82 590.91 709.79 967.23 830.5Cloning pipeline 2444.23 3044.25 3374.13 3702.96 4063.12 4633.19 4598.19 4699.0

TOTALOpening pipellne 2451.43 2864.22 3547.44 3892.58 4296.58 4630.93 5417.46 5206.6Comi'tsents 1559.24 1922.85 1522.53 1694.99 1971.48 1661.44 1603.25 1529.7Disbursements 1146.45 1239.63 1177.38 1268.40 1266.98 1305.93 1595.16 1640.4Closing pLpeline 2864.22 3547.44 3892.58 4319.17 4622.00 5417.46 5425.55 5449.8

DISBURSEMENTS RELATIVE TO RULES OF THUMB[PERCENT]

Food ald 1OOX OPL + 751 NC] 96.0 102.8 108.6 108.1 70.8 45.9 55.6 62.oCoffnodity 175X OPL + 25X NC] 98.8 111.7 99.6 94.0 78.2 102.6 83.5 98.0Project aid (202 OP] 139.8 120.5 77.2 81.9 81.1 87.4 104.4 94.6Total 115.7 111.5 90.3 89.3 80.1 79.8 87.7 87.4

------------------------------------------------------------------- __--------__----------------------------------

la Revalued pipeline.

Notes OPL-Opentag plpeline, NC=ew comasttentseCommodity aid Includes cash aid, and ptoject aid includes tscbnlcal ssist neDLscetpepiLes between closing pipeline In one year and opening pipeline in the nextyear result from adjustments for currency revaluations, aid cancellations, andreclasifiLcations.

Source: External Resources Divislon.

-101-

Table 3.10CUOHITMENS AND DIS8UR8EHZMN OF AM0 BY SYE OF AID. 1976177-1987/88(Us$ million)

--------------------------------------------------------------- __------------__----------------------------------------------.--

19t6/77 1977178 1978179 1979160 1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188------------------------------------------------------------- __----------__--__-----------___-____---------_---_-____-------_--_

CO"MITlENTSFood Aid 14S.1 138.8 300.7 270.0 202.8 220.6 248.4 285.2 380.2 329.6 109.0 364.1Grants 90.5 106.9 259.8 253.0 171.4 183.7 248.4 271.8 380.2 329.6 109.0 364.1Loans 52.6 31.9 40.9 15.0 31.4 36.9 - 13.4 - - - 0.0

Co-uodlty Aid 304.1 426.1 604.4 285.3 354.9 513.0 474.4 528.2 253.1 408.9 562.1 251.2Grants 157.5 146.2 355.6 108.3 185.7 263.9 268.1 240.4 152.6 225.9 206.1 138.5Loans 146.6 279.9 248.8 177.0 169.2 249.1 206.3 287.8 100.5 183.0 356.0 112.7

Project Aid 279.7 582.9 855.1 597.9 1001.5 1189.2 799.8 881.7 1344.6 922.9 932.2 914.5Grants 152.5 180.1 320.6 121.6 192.9 357.9 320.2 346.3 347.5 609.9 578.6 378.3Loans 127.2 402.8 534.5 476.3 808.6 831.3 479.6 535.4 997.1 313.0 353.6 536.2

TOTAL 726.9 1147.8 1760.2 1153.2 1559.2 1922.8 1522.6 1695.1 1977.9 1661.4 1603.3 1529.8

DISBURSEKENTSFood Ald 121.6 177.9 179.0 374.7 194.1 230.5 255.4 276.4 244.5 202.8 225.4 300.5

Grants 77.1 116.9 162.1 318.8 162.6 230.5 221.0 26S.0 242.0 202.8 225.4 300.5Loans 44.5 61.0 16.9 55.9 31.5 - 34.4 13.4 2.5 - - 0.0

Comcodlty Aid 254.2 .380.4 482.6 378.5 392.5 419.9 452.0 439.2 431.6 393.0 402.5 509.4Grants 125.1 154.5 204.5 161.6 179.6 213.0 244.5 244.4 243.9 256.0 176.0 170.7Loans 129.1 225.9 278.1 216.9 212.9 206.9 207.5 194.8 187.7 137.0 226.5 338.7

Project Aid 158.6 275.6 368.4 469.9 559.9 589.2 469.9 552.8 590.9 709.8 967.2 830.5Grants 52.9 121.5 135.3 170.2 251.5 210.3 121.9 226.4 214.9 503.8 255.5 3M2.6Loans 105.7 154.1 233.1 299.7 308.4 378.9 348.0 326.4 376.0 206.0 711.7 477.9

TOTAL 534.4 833.9 1030.0 1223.1 1146.5 1239.6 1177.3 1268.4 1267.0 1305.6 1595.1 1640.4

Memo Items:GrantsComlitments 400.5 433.2 936.0 484.9 550.0 805.5 836.7 858.5 880.3 1165.4 893.7 880.9Dlsbursemmnts 255.1 392.9 501.9 650.6 593.7 653.8 587.4 733.8 700.8 962.6 656.9 823.8

LoansComaltments 326.4 714.6 824.2 668.3 1009.2 1117.3 685.9 836.6 1097.6 496.0 709.6 648.9Dlsbursements 279.3 441.0 328.1 572.5 552.8 585.8 589.9 534.6 566.2 341.0 938.2 816.6

---o---rc--------------n---st------------------------------e-----__---tern---__-------------------------------------------o---.-

Source. N1nlstry of Finm nc External Resources DlvLisn.

Table 3.11AVERAGE EXCBANOE RATES, 1976177-1986187(Period averagess Taka per US dollar)

1976177 1977178 1978179 1979180 1980181 1981/82 1982183 1983184 1984185 1985186 198618? 1987188

QUARTERLY AVERAGES

PRINCIPAL RATE laJuly-September 15.0954 15.3871 14.6988 15.2134 1S.0403 18.5764 22.4187 24.5393 25.2823 26.6890 30.3000 31.0000October-December 15.6714 15.0133 15.2798 16.u815 16.1601 19.1922 23.6330 24.9723 25.8510 30.1740 30.5250 31.0857January-March 15.5683 14.7225 15.3991 15.4128 16.5981 20.7945 24.5000 25.0827 26.2380 30.5030 30.8000 31.3976April-June 15.5317 15.3633 15.5137 15.2030 17.5801 21.5967 24.5000 25.2000 26.8780 30.3000 30.9140 31.5000

SECONDARY RATE lbJuly-September - - 20.6500 20.1000 19.4800 22.0500 22.8800 26.3200 27.9000 32.5900 33.1500 33.0000October-December - - 19.5000 19.1000 19.3000 22.6500 24.4000 27.4000 25.8000 33.4500 33.1500 32.9000January-March - 20.3000 20.0700 18.7500 20.8000 22.4000 24.7900 27.4600 30.4500 33.2000 33.0000 32.9000April-June - 18.9800 19.9200 19.2500 22.7300 22.4000 26.2200 27.9400 31.3000 33.2000 33.0000 32.9000

FISCAL YEAR AVERAGES /c

Principal Rate 15.4667 15.1215 15.2228 15.4777 16.3447 20.0400 23.7629 24.9486 26.0620 29.8861 30.6347 31.2458Secondary Rate - - 20.0350 19.3000 20.5775 22.3750 24.5725 27.2800 28.8625 33.1100 33.0750 32.9250

/a Unvweihted averages of monthly exchange rates shown. The rates are period averages of the market rate (IFS, llne rf).which are cross rates based on a fixed relationship to the Pound SterlLng since January 1972.

lb UnweiLhted averages of end period monthly data.tc Unvelghted averages of quarterly exchange rates shown.

Source: International Monetary Pund.

-103-

Table 4.1

EXTERNAL PUILIC DEBT OUTSTANSINi INCLUDING UNiDISBURSED AS OF DEC 31. II7

INCLUDES ONLY DEBT COSITTED 000000 - DEC 31t t987DEBT REPAYVALE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

DE 8 T UTST A N I N G I N A R R E A R S

DISBURSED: UNDISBURSED: TOTAL PRINCIPAL : INTEREST

CREDITOR TYPE SUPPLIERS CREDITSCREDITOR COUNTRV

AUSTRIA 255 - 255 - -CHINA 9.t79 9,179 - -

CZECHOSLOVAKIA 2.830 - 2.830 -FRANCE 2.078 1.830 3,908 - -HUNGARY 10,277 - 10,277 - -NETHERLANDS 7.539 - 7.539 -PAKISTAN 5.609 - 5.609 - -ROMANIA 9.769 - 9.769 - -

SINGAPOREUSSR 114.223 1.897 116.120 52 -VUGOSLAVIA 4.377 - 4.377 - -

TOTAL SUPPLIERS CREDITS ;66; 136 3.727 169.863 52

CREDITOR TYPE : FINANCIAL INSTITUTIONSCREDITOR COUNTRY

AUSTRIA 8.168 - 8,168 - -FRANCE 23.283 - 23.283 1 -INDIA 872 335 t.207 - -NETHERLANDS 4.248 5.166 9.414 -UNITED KINGOON 14.267 133 14.400 - -USSR 2.025 2.526 4.55t1 -

TOTAL FINANCIAL INSTITUTIONS 52.863 8.160 61.023 I -

CREDITOR TYPE : JULTILATERAL LOANSCREDITOR COUNTRY

ASIAN OEV. BANK 836.709 1.251.208 2.087.917 - -EEC 46.904 - 46.904 - -1BRo 70.245 70.245 - -IDA 2.985.513 1.534.054 4,519.567 - -IMF TRUST FUND 55.449 55.449 -INTL FUND ARG(IFAD) 92.920 83.545 176.465 - -ISLAMIC 0EV. BANK 47.520 32.439 79,959 1.826 55OPEC SPECIAL FWI40 99.262 30.655 129.917 - -

TOTAL MULTILATERAL LOANS 4.234.522 2.931.901 7.166.423 ;.826 55

CREDITOR TYPE : BILATERAL LOANSCREDITOR COUNTRY

BELGIUM 42.924 8.884 5t.808 - -

BULGARIA 30t _ 30tCHINt 44,488 32,871 77.357--CZECHOSLOVAKIA t t.403 - t t,403--DENMARK _ _F INLAND - -FRANCE 1tO.040 37.504 147.544 -GERlAN OEM. REP. 2.109 - 2.109 - _GERMANY. FED.REP. OF - -HUNGARY 4.234 4,234 -INDIA 53.635 tt.459 65.094 - -

IRAN 11.044 - 11.044IRAQ 17.499 68.745 86.244 -JAPAN 2.606.78 421.566 3,028.444 - -KOREA. REPUBLIC OF 4.800 - 4.800 - -

KUW4IT 125.633 24.824 150,457 -NETHERLANDS 22,460 - 22,460 -POLAND 2.115 - 2,115 - -RUMANIA . 8.780 22.060 30.840 926 12SAUDI ARABIA 99.271 111.788 211.059 - -SWITZERLAND 6.971 - 6.971 -TURKEY 1.550 - 1.5g0UNITED ARAB EMIRATES 80.839 2.010 82.849 _UNITED KINGDOM - - -UNITED STATES 1.080.560 45.858 1,126.418 --USSR 33.851 - 33,851 2.906 29YUGOSLAVIA 26.222 26.222 -

TOTAL BILATERAL LOANS 4.397.605 767.569 5,185,174 3,832 41

TOTAL EXTERNAL DEBT 8.851,126 3.731.357 12.582.483 5.711 96

NOTES: (I) Oniy debts with an original or extended maturity of over one year are included in tnis table.(2) Debt outstanding Includes principal In arrears but excludes lntOreSt In arrears.

Table 4.2

SERVICE PAVMENTS. COMMITMENTS. DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBTPROqJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31. 1987

INCLUDES ONLY DEBT COMMITTED 000000 - DEC 31. 1987DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)* * * TABLE TOTAL * *

DATE DEBT OUTSTANOING AT T R A N S A C T I O N S DUR N G P E R I OD OTHER CHANGESEND OF PERIOD

DISBURSED INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y N E N T S CANCEL- ADJUST-ONLY UNDISBURSED MENTS MENTS ----------- -----------:----------- LATIONS * MENT *s

: : : PRINCIPAL INTEREST TOTAL: (I) (2) (3) (4) (5) (6) (7) (8) (9)

198112 3.911.529 6,234.402 451,079 287.264 13,925 34.069 47.994 14.030 -198206 4.120,089 6.784.660 814,098 394.703 25.828 23.830 49,658 1.685 -236.327198212 4.434.205 7.162.500 '334,678 287,170 37,151 36.885 74.036 8.617 88.930198306 4.661,258 7.478.664 451.442 316,146 36.673 24,418 61.091 9.192 -89.413198312 4.865.626 7.869.121 441.402 229.586 30.716 43.301 74.017 5.504 -14.725198406 5.358.259 8.407.618 433.122 332.933 34,449 30,747 65,196 30.090 169.914198412 5.123,535 8.281.491 397,582 209.700 63.146 44,592 107,738 4.038 -456.525198506 5.443.546 8.694.005 546,784 344.195 57.429 31.879 89,308 128.358 51.517198512 5.978,008 9.430.599 303.642 234.914 72.279 56.974 129.253 49.629 554.860198606 6.853,584 10.496.757 576.380 501,733 79.776 41,847 121.623 45.047 614.601198612 7.272.412 10.677.759 201,606 451,156 80.302 63,631 143.933 65,093 124.791198706 7,867,585 11,320.335 474.464 474.656 89,745 54,202 143,947 89,662 347.519198712 8.851,126 12.582.483 522.206 438,459 99.820 77.083 176.903 94.061 933.823

* * * THE FOLLOWING FIGURES ARE PROJECTED * * *

198806 9,709,783 12,448,290 - 992.839 128.471 66,200 194.671 - -5,722198812 9.563,796 12.302.303 - - 145.986 83.203 229,189 - -1 a-198906 10.331,448 12.176.195 - 893,765 126.108 68.207 194.315 - -198912 10,205.248 12.049.995 - - 126.196 85,524 211.720 - -4199006 10.791,190 11,934,333 - 701.598 115.654 70.772 186,426 - -8199012 10.661,567 11,804,710 - - 129.613 87,099 216.712 - -10199106 11,010,428 11.686.322 - 467.248 118,387 70.412 188.799 - -1199112 10.874,199 11.550.093 - - 136.226 86.186 222.412 - -3199206 11.058.084 11.431,239 - 302.745 118.848 68.911 187.759 - -6199212 10.913.390 11,286.545 - - 144,684 84,855 229,539 - -10199306 10.965.165 11.154.960 - 183.359 131,582 67,370 198.952 - -3199312 10,810.576 11,000,371 - - 154.586 82.355 236,941 - -3199406 10,783,001 '0.863,858 - 108,937 136,510 64,717 201.227 - -3199412 10,616.796 10.697.653 - - 166,202 79,121 245.323 - -3199506 10,526.014 10.549.047 - 57,839 148,606 61,976 210.582 - -199512 10.346,968 10.370,001 - - 179,045 75,667 254,712 - -1199606 10,202.880 10,207.145 - 18,772 162,856 58,894 221.750 - -199612 10.008,804 10.013.069 - - 194.070 72.132 266.202 - -6199706 9,841,388 9,843,721 - 1,933 169.340 56,055 225.395 - -8199712 9.641,300 9.643.633 - - 200,087 68.601 268.688 - -1199806 9.466.696 9.469,028 - - 174,605 53.288 227,893 - -199812 9,266,705 9.269.037 - - 199.977 65.267 265,244 - -14199906 9.091,742 9.094.074 - - 174,962 50,541 225.503 - -1199912 8.885,767 8.888,099 - - 205.973 61,978 267,951 - -2200006 8.710.362 8,712.694 - - 175.401 47,855 223.256 - -4200012 8.506,841 8.509.173 - - 203,519 58.678 262.197 - -2

Projected amounts In thIs column are amounts excluded from projections because of unknown terms.

* This column shows the amount of arithmetIc imbalance in the amount outstanding including undisbursed from one period tothe next. The most common causes of imbalances are changes in exchange rates and transfers of debts from one categoryto another in the table.

-105-

Table 5.1CONVENTIONAL BUDGET SU"HARY 1980181-1988189(Tk dcore)

------------------------------------------------------------------ __---------__------------------------------------------------

1980181 1981182 1982183 1983184 1984185 1985186 1986/87 1987188 1987/88 1988189Revised Revised Revised Revised Revised Revised Revised RevisedBudget Budget Budget Budget Budget Budget Budget Budget Budget Budget

--------------------------------------------------------------- __------------__------------------------------------------------

A-REVENUE BUDGETReceLpts 2343 2554 2711 3033 3477 4073 4717 5303 /a 5146 6172E pendLtures -1482 -1850 -2147 -2503 -2930 -3421 -3956 -4481 -4730 -5250Revenue Surplus 861 704 564 530 547 652 761 822 416 922

B * C-Foreign Greats & Loans 1841 2264 3040 3483 3307 4018 4372 5003 5086 5088

-DODMESTIC CAPITAL NETDomestLc Loans A Advances -26 -42 -214 -109 -248 -252 -173 -363 -626 -752Non-Development Capital Expr. 226 148Net Public Accounts 0 0 79 167 148 160 160 178 183 202

Total Net Doestie Capital -26 -42 -135 58 -100 -92 -13 -185 -217 -402

Tot-l Budgetery Resources 2676 2926 3469 4071 3754 4579 5120 5640 5285 5608

Extra-Budgetary Resources &Deficit Financing 57 68 86 106 203 254 200 175 355 254

Net Food Borrowing 209 0 0 1 276 -249 -366 -11 24 -56

TOTAL RESOURCES AVAILABLE 2942 2994 3555 4178 4233 4584 4954 5804 5664 5806

B-USE Of RESOURCESADP 2369 2715 2977 3433 3508 4096 4513 5018 4651 5315Non-ADP Projects 0 0 34 210 207 144 92 128 70 115Food Budget 572 168 544 535 518 344 349 658 943 376

Food-for-Work 105 160 148 198 216 348 326 345 400 339Net Food Outlay 467 8 396 337 302 -4 23 313 543 37

---------------------------------------------------------------------- __-----__------------------------------------------------

la Including effect of new measures (Tk 416 crore) but reduced on account of subsequentwithdrawal of some of these measures (estim-ted at Tk 28 craoe).

Sourcet Ministry of Finsnce.

-106-

Table 5.2CURRMNT 8005T, 1980181-1988I89(Tk erore)

1980181 1981162 1982186 1983184 1984165 1985186 1986187 1987188 1987188 1988189Actual Actual Actual Actual Actual Actual ReYvisd fludget Actual Budget

Estimate Bstimt< Estimate

Tax Revenue 1820 1966 2115 2S45 2891 3267 3804 4419 4315 5215Production. conwsution

and distribution taxes 1564 1654 1761 1966 2446 2728 3154 3582 3533 4159(Custom duties) 748 783 870 934 1183 1539 1542 1701 1654 1854(Sales taxes) 352 325 29 350 446 460 539 565 543 651(Excise duties) 586 454 498 598 692 772 914 1134 1172 1447(Stamp taxes) 73 87 87 77 114 146 147 162 150 175(Notor vehicle taxes) 5 5 8 7 11 11 12 20 14 32

Taxes on incame 227 280 326 559 386 462 557 700 664 881Land revenue tax la 20 20 20 SO 42 55 66 87 82 95Other taxssand duties lb 9 12 8 10 17 22 27 50 36 sO

Non-Tax Revenue 435 380 356 445 645 862 910 884 937 957

Nationalised sector 160 151 113 122 280 345 545 275 250 238(Industries) 86 23 27 28 67 77 88 90 80 75(Financial Imntitutions) 74 108 86 94 213 268 257 185 170 163

Interest receipts 152 48 19 117 124 231 192 210 227 230Ragistration fees 21 28 27 32 40 43 68 67 57 67Forest 28 32 so 34 46 61 52 50 58 51Railways -19 -8 -3 -23 -39 -116 -109 -83 -103 -142Post Office nd T&T (net) -2 7 5 5 10 70 38 11 64 95Other Ic 95 142 165 158 184 228 324 354 384 418

Total Current Revenue 2255 2346 2471 2790 3536 4129 4714 5303 5252 6172

EXPENDITURESAdministrative Services 705.6 670.6 785.8 942.6 1057.4 1325.5 1539.0 1754.3

- Mn. & com services 306.7 163.2 124.8 216.0 238.1 339.0 358.6 397.0- Justice and law enforcaemnt 120.7 157.5 147.1 177.4 210.5 262.9 304.7 351.3- Defene 256.1 S22.4 478.6 511.0 570.8 668.8 814.9 933.7- Foreign affairs 22.1 27.5 35.3 38.2 38.0 54.8 60.8 72.3

Economic Services 58.2 78.8 96.0 120.3 158.9 194.6 202.0 216.7- Agriculture & water 47.9 55.2 72.6 89.0 118.0 138.9 128.6 131.1- Industry 3.1 4.1 4.7 4.4 6.5 9.8 18.4 18.7- Miscellaneous services 7.2 19.5 18.7 26.9 34.4 45.9 55.0 66.9

Infrastructure 17.3 126.3 91.4 90.1 123.7 92.5 132.8 165.9- Tramsport 4.4 95.1 59.4 46.3 62.3 42.6 76.5 85.3- Energy - 0.5 0.5 0.5 0.7 1.0 1.1 1.1- Camunicatlons 12.9 22.8 21.5 27.8 23.5 31.5 56.0 49.3- Physical planning - 9.9 10.0 15.5 35.2 17.4 19.2 30.2

Social Services 321.4 551.8 414.1 535.8 888.7 941.2 1082.5 1326.5- education 211.5 235.8 284.6 371.9 498.2 607.6 741.8 818.9- Health & population 85.6 93.2 105.2 127.9 159.3 192.0 149.2 149.0- Relief 11.0 7.8 9.1 15.2 204.2 116.7 160.0 322.7- Niscellansous services 15.3 15.0 15.2 20.8 27.0 24.9 31.5 35.9

Other 223.7 425.7 512.5 562.1 715.8 1180.8 979.2 1178.9- Local govern et - 43.0 44.7 71.6 90.4 351.6 376.7 412.8- Subsidies 111.1 182.9 199.2 211.9 239.2 159.0 69.2 53.9- Pension 13.5 19.5 40.2 41.2 60.7 75.5 90.0 157.0- Debt service 99.1 180.5 228.4 237.4 325.5 594.7 443.3 575.2

Total Current Expenditures 1326.2 1653.2 1899.8 2250.9 2944.5 3734.6 3935.5 4642.3

la Tax levied on land holdings.lb Includes electricity duties, estate duty on agricultural land, txes on immovable property.

gift taxes capital gainst tax, toll taxs, betterment tax on comercial *stablishments, endother levies.

la Receipts of various Governmet departaens, especially under eivil works, education a"d health.

Sources Ministry of Finance.

Table 5 .3ANNIUM DEVEI.OP I PROGRMME. 1972173-1988189

(Tk crore)1976177 1977178 1978/79 1979180 1980181 1980181 1981182 1981*82 1982183 1982183

Revised Revtsed Revised Revised Revised Revtsed Revtsed

Budget Budget Budget Budget Budgst Actualslc Budget Actualslc Budget Actuals$c

Agriculture, Rural Development 314.8 348.0 468.8 665.8 754.8 789.3 882.0 783.4 9S6.5 838.2

and Water Resources(AgrIculture) 152.9 154.0 234.4 293.8 322.7 282.3 369.8 314.5 472.1 415.4

(Rural Development) 42.0 51.0 61.9 74.8 74.9 98.1 112.7 100.0 116.0 103.9

(Water and Flood Control) 119.9 143.0 172.5 297.2 357.2 408.9 399.5 368.9 368.4 318.9

Industry 143.0 190.0 304.0 362.7 336.7 277.6 367.7 270.0 314.5 247.0

Poieer Scientific Researchand Natural Resources 131.3 168.0 252.5 398.9 377.8 375.9 434.7 511.4 629.5 578.8

Trensport 196.2 176.0 213.5 404.0 375.1 465.9 380.2 370.3 489.3 394.7

Coamnicationg 30.7. 51.0 43.1 80.2 71.3 66.9 60.3 78.9 76.0 99.0

Physical Planning and Bousing 63.0 81.0 96.6 144.8 146.7 155.9 177.4 146.5 149.6 130.0

Education and Training 47.3 58.0 64.1 64.9 97.0 97.0 107.1 86.1 108.6 105.2

B*..th 32.0 43.0 47.6 70.0 65.8 61.2 74.2 69.2 80.8 73.9

Family Plannin 21.6 31.0 46.7 59.3 69.6 46.6 86.3 40.0 85.7 71.2

Social Welfare 2.9 5.0 6.5 21.6 24.2 19.1 29.6 20.5 13.8 12.1

Hanpover end Employment 2.0 4.0 6.9 9.7 10.5 9.1 19.8 6.9 20.5 24.6

Cyclone ReecotructLon 8.0 14.0 16.2 5.0 0.0 0.0 7.3

Other 96.0 7.9 201.4 105.7

Total ASP 1005.7 1203.0 1602.6 2330.0 2369.0 2364.5 2715.3 2391.1 3126.2 2687.7

1983184 1983184 1984185 1984185 1985186 1985166 1986187 1986187 1987/88 1987/88 1988189

Revised Revised Revised Revised Revaied

Budget Actualslc Budget Actuals/c Budset Actualslc Budget Actualstc Budget Actualslc Budgett

_- -- -- - - - -- - - -- - - - -- - - -- - - - -- - - --- --- -- - - -- - - - ----------

-

Agriculture, Rural Development 1051.1 939.3 939.0 771.4 783.9 717.2 838.0 759.8 1030.5 798.4 1239.6

end Water Resources(Agriculture) 475.8 476.4 314.1 287.5 193.0 204.4 252.0 190.9 333.2 258.7 366.8

(Rur"I Development) 105.7 73.6 110.2 91.5 113.7 99.4 143.9 108.3 137.6 91.0 195.4

(Water nd Flood Cotrol) 469.6 389.3 514.7 392.6 477.2 413.4 442.1 460.6 559.7 448.7 677.4

Industry 332.5 233.6 239.8 249.1 590.5 536.9 661.1 696.9 419.9 430.7 380.0

Paver. Scientific Researchand Natural Resources 821.0 697.1 845.8 865.6 945.3 948.7 1048.3 1153.0 1023.7 977.1 1069 0

Transport 285.9 244.8 227.1 269.0 266.0 256.1 435.1 441.1 468.6 A66.3 676.1

Cotanications 54.8 50.3 60.6 70.7 49.3 44.1 43.6 37.0 95.8 96.7 89.0

Physical Planning and Housing 147.2 163.6 108.2 114.0 102.9 114.0 158.5 139.0 198.0 167.5 214.2

Education and Training 133.4 128.4 128.8 125.2 181.7 128.1 214.6 197.6 251.5 213.3 302.1

Bealth 80.0 70.8 99.2 93.0 72.5 66.3 80.4 73.3 87.0 83.3 125.3

Family Planing 106.9 85.7 111.0 101.8 127.7 87.9 142.4 104.8 170.4 1.0.9 230.0

Social Welfare 15.5 14.2 18.3 15.5 14.7 13.5 21.9 20.1 19.9 15.9 43.9

Manpower nd Enploymnt 25.0 24.2 20.1 13.5 11.4 5.9 9.0 7.4 5.5 2.6 6.7

upauilas 343.2 319.6 423.0 395.9 425.0 126.0 lb 335.0 322.1 370.0 379.6 340.0

Other 1S8.2 34.4 287.5 83.4 524.6 384.7 519.5 487.0 509.6 374.1 599.1

Total ADP 3384.7 3006.0 3508.4 3168.1 4095.5 3129.4 4513.4 4439.1 4650.6 4146.4 5315.0

29.6 la

la Self-financing by autonomous agencLis.

*b Excludlag upeaile deel_pment asistane of Tk 200 crore which is included tn ectoral espenditures.

Ic IHUD estlates.

Note: Reported actual expenditures aret nk 267.4 crore for 1972173. Tk 305.0 crore for 1973/74 and Tk 393.2 crore

for 1974175. It is believed that these totals may understate the level of expenditure due to the provstoinal nature

of some entries and the possibtitty of incomplete recording.

Source: Linistry of Finace and Planning ComLasion.

Table 5.4FINANCIAL PERFORMANCE OF PUBLIC SECTOR INDUSTRIAL CORPORATIONS, 1980181-1988189(Tk crore)

------------------------------------------------------------------__---------__-----------------------------------------------------------------__--.------

------------------------Audited Actual ----------------------- Revised Budget1980181 1981182 1982183 1983/S. 1984/85 1985186 1986187 1987188 1988189-------------------------------------------------------------

__--------------__------------------------------------------------------------__--------------

A. MET PROFITS la

Bangladesh Jute Hills Corporation (BJMC) All Mills lb 31.8 -65.5 -- -- -- -- -- -- --Bangladesh Jute Mills Corporation (BJMC) /c 25.5 -42.6 23.9 -29.8 -146.2 -158.3 -41.9 -103.8 -98.2Bangladesh TextLle Mills Corporation (BTMC) All Mills /b -33.2 -43.8 -- -- -- -- -- -- --Bangladesh Textile Mills Corporatlon (BTMC) lc -18.4 -41.8 5.3 13.4 4.2 -51.9 -22.7 -8.5 6.8Bangladesh Sugar and Food Industries Corporation (BSFIC) 38.6 46.4 45.7 43.8 -21.5 -30.7 -27.8 2.8 23.6Bangladesh Steel and Engineerlng Corporation (BSEC) 12.4 -12.0 -22.8 -15.4 -3.9 0.5 1.5 -2.6 1.7Bangladesh Chemical Industries Corporation (BCIC) 5.6 7.1 39.6 26.3 15.8 15.5 -5.5 -14.1 -32.9Bangladesh Forest Industries Development Corporation (BFIDC) 1.0 0.8 3.3 3.4 4.8 5.8 1.4 6.5 6.7Bangladesh Petroleum Corporation -9.2 -278.9 59.7 200.0 206.4 261.0 339.5 182.5 75.4Total 47.0 -345.9 154.7 241.7 59.6 41.9 244.5 270.4 -16.9

0B. GROSS SALES 00

Bangladesh Jute MKlls Corporation (BJiXC All Mills /b 640.3 620.9 -- -- -- -- -- -- --Bangladesh Jute Mills Corporation (BJMC) lc 455.2 447.0 549.8 514.9 633.7 594.7 651.6 634.7 745.2Bangladesh Textile Mills Corporation (BTMC) All Mills lb 317.5 204.0 -- -- -- -- -- -- --Bangladesh Textile Mills Corporation (BTMC) /c 188.2 201.1 256.0 299.2 298.5 294.1 289.3 372.1 479.3Bangladesh Sugar and Food Industries Corporation (BSFIC) 260.1 300.5 318.6 368.2 143.6 252.3 409.4 409.8 477.8Bangladesh Steel and Engineering Corporation (BSEC) 331.7 278.9 215.5 370.1 407.6 400.8 425.7 472.6 573.3Bangladesh Chemical Industries Corporation (BCIC) 351.3 400.6 495.8 671.0 691.2 771.2 861.7 986.3 1218.8Bangladesh Forest Industries Development Corporation (BFIDC) 17.6 21.6 30.4 35.7 40.2 48.2 52.0 63.5 71.4Bangladesh Petroleum Corporatlon 1136.2 1268.5 1391.6 1161.5 1266.7 1515.3 1217.7 1259.3 1273.9Total 3054.7 3095.0 3257.7 3420.6 3481.5 3876.6 3907.4 4198.3 4839.7

C. PROFIT/SALES RATIO (X)

Total 1.5 -11.2 4.7 7.1 1.7 1.1 6.3 6.4 -0.3---------------------- _-------------------------------------------_-__-------__---------------_---------------------------------------------------__-------

-- - not available.

la Pre-taz profits or losses. Negative sign (-) denotes net losses.lb These are the accounts of all the mills, including the ones that were transferred to the private sector in 1982183./c These ace the accounts of the mills that are still in the public sector as of 1982/83.

Source: Mraitoring Cell, Ministry of Finance.

-109-

Table 6.1MONEY SUPPLY AND DOMESTIC LIQUIDITY, 1983-1988(Tk billion)

---------------------------------------------- _-------------------__---------__-----------------------------------------------

June 30, June 30, June 30, Dee 31, June 30, Dec 31, June 30, Dec 31, June 30,1983 1984 1985 1985 1986 1986 1987 1987 1988

(P)-------------------------------------------------------------------- __-_-----._--------------------------_-_-__---------------

1. Credit (net) to Government 19.8 24.1 23.4 22.3 25.3 23.8 22.4 23.1 21.8(of which SpecLal Treasury Bonds) (-) (1.9) (1.9) (1.9) (0.6) (0.6) (0.6) (0.6) (-)

2. Credlt to Other Public Sector 24.6 25.5 32.3 35.7 39.7 41.8 41.6 42.2 43.33. Credit to Private Sector 31.0 49.1 68.9 75.5 83.6 83.3 89.6 99.6 108.94. Total Domestic Credit (1+2+3) 75.4 98.7 124.6 133.5 148.6 148.9 153.6 164.9 174.05. Net Foreign Assets -3.9 1.5 -0.1 -0.7 0.7 0.2 3.9 5.6 8.76. Other Liabilities (net) -12.5 -16.3 -19.2 -18.5 -26.0 -16.3 -18.9 -13.0 -18.7

7. Total Liquidity (M2) 59.0 83.9 105.3 114.3 123.4 132.8 138.6 157.6 164.1

8. Currency Outside Banks 11.4 15.6 17.2 17.7 19.5 19.0 20.7 22.5 24.19. Demand Deposits 14.9 19.9 25.1 28.3 29.8 31.0 22.8 28.5 24.710. Currency and Demand Deposits (MI) 26.3 35.5 42.3 46.0 49.3 50.0 43.5 51.0 48.811. Time Deposits 32.7 48.4 63.0 68.3 74.1 82.8 95.1 106.6 115.3

Changes for Major Components (X) la

1. Credit (net) to Governmentand Public Sector 1.2 11.7 12.3 4.1 12.1 0.9 -2.4 2.0 -0.3Government 1.4 21.7 -2.9 -4.7 13.5 -5.9 -5.9 3.1 -5.6Other Public Sector 1.1 3.7 26.7 10.5 11.2 5.3 -0.5 1.4 2.6

2. Credit to Private Sector 31.0 58.4 40.3 9.6 10.7 -0.4 7.6 11.2 9.33. Total Domestic Credit (1+2) 11.6 30.9 26.2 7.1 11.3 0.2 3.2 7.4 5.54. Total Liquidity (N2) 29.7 42.2 25.5 8.5 8.0 7.6 4.4 13.7 4.1

-------------------------------------------------------------------- __-----_-___-_--------------------------------------------

P - provisional.

Ia Percent changes over preceding period.

Sources Bangladesh Bank, Statistics Department.

Table 6.2GRICULTURAL CREDIT ISSUED BY HUJM3 CREDIT ZISTITUTIONS, 1977178-1987188(Tk crore)

1977178 1978t79 1979180 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986187 1987188

Comaercial lBanks aShort-tet agricultural loan. 76.7 64.8 87.4 103.8 95.0 148.0 288.1 349.0 164.2 156.3 227.20Other agricultural financing lb 0.5 0.5 1.0 5.7 11.4 45.0 77.1 103.6 50.9 20.0 13.34Ylaberei financing 1.1 3.8 2.7 1.1 1.1 1.2 3.4 4.4 18.2 5.2 3.78Tea production and developmmnt financing 3.5 6.3 6.7 2.8 3.6 2.4 2.7 6.7 6.3 6.0 5.23Cold storage facLiltLes for agricultural 2.6 2.3 3.6 3.6 6.2 4.4 10.3 25.0 13.2 20.8 13.57products

Total 84.5 77.7 101.3 117.0 117.3 200.9 381.3 488.7 252.7 208.3 263.12

Bangladesh triaki ankShort-tow a,wicultural loanm 18.7 17.3 25.5 73.0 110.0 216.1 329.8 192.8 101.8 143.3 144.43Other agricultural financLng lb 16.0 25.8 68.9 66.7 92.7 120.3 198.3 312.2 137.6 105.6 214.46FLaheries financng 1.4 4.0 4.8 7.4 7.0 12.1 24.2 15.3 10.4 5.2 6.23Te production And dev lopeent finm"ing 17.9 24.8 41.2 58.0 56.3 45.9 33.3 81.4 100.8 92.7 99.38Cold storage facilltLe. for agricultural 0.2 1.3 1.7 4.7 5.1 6.5 6.9 13.0 14.5 18.1 14.72

product.Total 54.2 73.2 142.0 209.7 271.0 400.8 592.4 614.7 365.1 441.9 lc 379.22

Bangladeah Samabaya lRnkShort-term agricultural loanm 13.1 16.6 22.5 20.7 13.7 19.0 18.0 23.0 9.6 12.9 11.46 0Other agricultural financIng lb 2.7 3.5 3.1 5.0 3.7 3.5 3.3 5.3 4.4 4.2 2.51

Total 15.8 20.1 25.6 25.7 17.4 22.5 21.3 28.3 14.0 17.1 13.97

Totals by loan typeShort-tern agricultural loanm 108.5 98.7 135.4 197.6 218.7 383.1 635.9 564.8 275.6 312.4 383.09Other agricultural financing lb 19.3 29.9 72.9 77.4 107.7 168.7 278.7 421.1 192.8 129.8 130.31Fisheries fIneacing 2.5 7.7 a.5 8.5 8.0 13.4 27.6 19.8 28.6 10.4 10.0.Tea production and devlopmet financing 21.4 31.1 47.8 60.7 59.9 48.3 36.0 88.1 107.1 98.7 104.61Cold atorage fac111ties for agricultural 2.9 3.6 5.2 8.3 11.4 10.8 17.2 38.0 27.7 38.9 28.29products

Total 154.6 171.0 268.9 352.5 405.7 624.2 995.3 1131.7 631.8 667.3 /e 656.31

Of which: Channelled through Cooperatives UnderBangladash Rural Development BoardPaddy 10.2 11.3 19.1 23.8 24.6 393.2 289.5 120.2 57.1 46.6 64.71T. _Am 3.3 3.4 5.1 7.1 7.3 55.4 9f.5 120.2 18.5 10.0 20.60sore 4.8 4.5 8.5 11.5 13.2 168.9 96.5 0.0 33.1 31.2 38.31AualB. Amn 2.1 3.3 5.5 5.1 4.0 168.9 96.5 0.0 5.5 5.4 5.80

Wheat 0.2 0.4 0.8 1.1 0.9 9.6 33.2 0.0 0.7 0.4 0.27Potato 0.4 0.6 0.6 0.8 0.4 3.7 0.0 0.0 1.8 1.1 0.63

Total 10.9 12.2 20.5 25.6 25.8 406.5 322.8 120.2 59.6 48.1 63.51

_____________--__________________________________________________________________________________________________________________________________________________

I& Inludes refInancig provided by Somali Bank to TCCAa/KSSa through the IRDPIRDB.lb Includes agricultural term credit as wall "s finaning for marketing, transport and egro-induatries.Ic lnlud"e tk 54.28 ¢rore under B2B and Sk 22.67 crore w"der RaJhsahl 2riahl Ulnayen Blnk for which bre kdown by type of loan is not available.

Source.: langladesa eak, Agricultural Credit Department, Bangladesh Krlshi Banks Blagladesh Samabaya Bank, Ltd.:and commercial bank.

-lll-Table 6.3LOAS S wCuIot2 nv DUZOWu numaBoS uusr noys. 977/7I-1987il(7k crore)

---------- __-_------------------------------------------_----------__---------__------_---_ _-------------__---------_--------------_-

1977:78 1970179 19791/0 1980181 1961182 1982186 1983184 198416 1985186 1986187 1987188------------------------ - -------------------- -------------------------------------------------------------------------------------

A. BANGLADBSH SBIPA BANK (853)

Loans sanctionedFood and allied products 9.2 6.1 28.9 *9.5 20.S 0.5 0.4 1.0 0.9 0.1 0.2SpecialiLed teatile. nd bandlom seator I- 1S.1 10.9 25.4 43.1 41.5 2.5 13.6 48.8 69.9 56.9 35.6Paper, board, printing and publishing lb *.5 4.0 10.8 10.5 4.0 0.0 1.0 0.4 0.4 O.S 2.8Tannery. lather end rubber Induatrias 0.0 2.5 6.8 10.6 1.2 1.2 1.2 4.3 15.2 1.4 2.1Chamicals. pharm. and allied Industries 9.3 1.4 10.4 10.4 9.0 0.1 2.2 0.2 6.5 9.9 0.8Engineering ivdustries 1.1 7.5 13.8 15.6 20.6 2.6 2.9 8.S 2.4 3.3 3.5Hon-Metallic minral. la 0.2 0.0 1.1 2.5 0.0 1.3 0.1 2.5 1.1 0.2 3.7Miscellaneous industries 0.0 0.0 0.0 0.0 0.6 0.1 0.5 0.0 0.6 0.2 0.4Sub-total 31.3 32.6 97.1 142.0 97.1 8.2 21.9 65.9 97.0 72.5 48.9

Service LuduitrLes Id 8.4 17.6 12.1 16.9 12.1 0.7 0.5 0.3 2.1 2.8 3.1

Total Sanctions 39.0 50.2 109.2 158.9 109.5 9.0 22.4 66.3 99.1 75.3 52.0Prlvate seater 34.5 49.4 102.6 158.9 109.5 9.0 22.4 66.3 99.1 75.3 52.0Public sector 5.3 0.8 6.6 0.0 0.0 0.0 0.0 0 0 0.0 0.0 0.0

Total DLs ursements 11.6 28.1 35.2 52.4 64.6 62.2 36.9 28.8 12.2 27.9 30.9

End-fiscal year Resource Position

Foreign Currency Resources (US8 million)

Resources available from aid agretcnts 50.6 58.6 60.4 104.8 94.4 96.8 65.3 49.7 73.6 65 3 66.7(-) Dlsburs mntr 4.1 11.1 12.0 15.0 17.8 23.9 11.8 7.7 2.3 7.0 7.0Resources available for disbursemnt 26.5 47.5 48.4 89.8 76.7 72.9 53.5 42.0 71.3 58.3 59.7(-) Funds eoitted but not yet disbursed 11.0 15.1 17.1 32.5 40.9 57.1 22.9 16.9 32.7 18.3 27.3Resources available for cditn nt 15.5 32.5 31.3 57.5 35.7 35.8 30.6 25.1 38.6 40.0 32.4(M) Cancellation a withdrawals 0.0 0.6 1.9 5.5 2.6 2.1 2.5 0.9 5.5 - -(-) Approvals not yet ceomitted 6.1 9.3 S2.3 47.9 64.1 31.0 12.1 24.8 32.5 20.1 9.8

Foreign currency resources av il. for approval 9.4 23.8 0.9 14.9 -25.7 6.9 21.0 1.2 11.6 19.9 22.6

Local Currency Rasources (5k million)

Cash on handlin banks 15.1 15.7 27.3 19.2 11.1 39.7 57.8 74.2 90.9 104.3 130.6C-) Money at call * 57.0 27.2 14.5 7.9 11.0 0.0 16.3 Is 8.0 le 6.8 le 4.51/ 106.0-) Reservs on deposit 10.1 10.9 13.8 14.2 3.8 4.5 5.7 6.5 6.7 5.3 5.5C-) C iitmenta & aprovals not yet diab. 8.6 16.9 25.4 36.5 36.5 50.1 35.1 32.0 27.1 33.8 27.0

Local currency resources avail. for dub. 53.4 15.1 2.4 -23.7 -18.2 5.2 33.3 43.7 63.9 69.7 104.1

B. BAGLADESH SGILPA RIB SANGSSH (BSRS) If

Loans sanctionedFood end a*lled products 9.7 9.9 25.1 18.8 5.4 0.2 2.7 0.3 1.0 0.2Speclalized tatilos and hndloon sector la 18.5 11.2 12.5 16.9 0.3 1.1 50.8 0.6 10.3 0.0Paper, board, printing t publishing lb 0.5 0.4 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0Tarnery, leather and rubber Industries 0.0 0.1 1.8 0.0 0.4 0.0 0.9 0.0 0.0 0.0Chemicalsa pbaa. and allied tinustries 2.0 1.1 17.5 7.6 1.8 3.2 1.9 0.8 0.2 0.0Engineering tndustries 1.0 6.1 2.2 10.4 0.8 3.5 0.8 0.1 0.0 0.5son-metallic ninrals tc 0.0 0.0 2.2 10.5 0.0 0.0 4.3 0.0 0.8 0.0Miscellaneous indu tries 4.3 0.5 0.9 1.5 0.0 1.5 1.0 1.0 0.0 0.2Sub-total 55.9 29.2 62.7 65.2 8.7 9.5 62.5 2.8 12.3 0.7

Service industrLes Id 0.8 10.4 20.0 4.5 0.0 4.4 0.2 1.6 0.4 0.0 0.2

Total Sanctions 36.8 39.6 82.7 69.8 8.7 15.9 61.7 4.4 12.7 0.7 0.2Private sector 35.8 38.7 82.7 67.5 8.7 9.8 60.1 2.8 12.7 0.7 0.2PubliLc sector 1.0 0.8 0.0 2.3 0.0 4.1 1.6 1.6 0.0 0.0 -

Total DLsbursements 11.0 21.8 48.8 58.2 33.7 46.9 42.4 19.7 8.9 5.2 3.0

______________________________________________________________________________________________________________________________--______

/a Includes jute and allied fiberx.lb Includes forestry and vood products.Ic Includes gl"s snd oeramIcs.Id lncludes ind wate r and road transport, cinemas, hotels, and clinios./. Includes aromt Isveted In the Govar snt securities.If Net of subsequent caellatina ad adjustments.

Sources: BSB BSR28.

Table 6.4RIMIEL IRTEREST RAME6 0 S6ELECTED SAVIIGS INSTUMTS, August 1977 - August 1988(percent per asnm)

------------------------------------------------.------------------ __.-------__---------------_---------_----------------_-------_-____----------__-

Aug. 1977 Oct. 16, 1980 Jan. 1985 Sept. 1985 July 1986 Sept. 1987 tugust 1988---------- _. -----------------------------------------------------------------------------------------------------------------------------------------

Scheduled Banks' Deposit Rates:Speclal Notice Accounts 4.00 4.50 4.50 4.50 4.50 4.50 4.50Savings AccOunts vith Checking 4.50 8.50 8.50 8.50 8.50 9.00 Ia 9.00Fixed Deposits:

Three months to under siL months 7.00 12.00 12.00 12.00 12.00 12.00 12.00Six months to under one year 7.50 13.00 33.00 13.00 13.00 12.50 lb 12.50One year to under two years 8.25 14.00 14.00 14.00 14.00 13.25 lb 13.25Tvo vears to under three years 9.25 14.50 14.50 14.50 14.50 13.75 lb 13.75Three years and over 10.25 15.00 15.00 15.00 15.00 14.25 lb 14.25

Post Office Savings Bank Deposlt Rate:Ordinary Deposits 8.50 11.50 11.50 11.50 11.50 11.50 11.50Plied DepositstOne year to under two years 9.20 15.00 15.00 15.00 15.00 15.00 15.00Two years to under three years 10.20 15.50 15.50 15.50 15.50 15.50 15.50Three years and over 11.20 16.00 16.00 16.00 16.00 16.00 16.00

Goverment BorrowingtTreasury Bills 6.00 8.50 8.50 9.00 9.00 8.00 8.00 _Tap Treasury Bllls lc 7.00 9.50 9.50 - - - -Ways and Means Advances 7.00 9.50 10.50 10.75 10.75 ,0.25 10.25Two-year Special Treasury Bonds: Id

Issued at discount - 15.70 15.70 15.70 15.70 15.70 -Issued at par - 14.20 14.20 14.20 14.20 14.20 -

Savlngs CertifLcates:BLght-year Defense SavLags Certlficates 15.00 21.00 21.00 21.00 21.00 21.00 21.00Six-year Bonus Savings Certificates 16.60 22.00 22.00 22.00 22.00 22.00 22.00Flve-year 8age Earners Development Bonds te - 23.00 23.00 23.00 23.00 23.00 23.00Flve-year Savlngs Deposits 12.20 12.20 12.20 18.00 18.00 18.00 18.00

----------------------------------------------------------------- __---_------__----------------------------------------------------------------__---

/a 10.02 for rural areas./b Effectlve from January 17, 1987./c SLnce repaid by August 1985.Id With effect from February 5, 1984 and repaid by June 1988.le Wlth effect fram February 24, 1981.

Source: Bangladesh Bank, Research Department.

Table 6.5NOMINAL INTS RAM ON ADVANCES, August 1977 - August 1988

(percent per anmun)

Aug. 1977 Oct. 16, 1980 Jan. 1985 Sept. 1985 July, 1986 Sept. 1987 Aug. 1988

--------------------------------------------------------------------__-------__-------------------------------------------------------------------__-------__--

Bank Rate (Bangladesh Bank's lending and discount rate) 8.00 10.50 11.00 11.25 10.75 10.75 10.75

Schedule Banks Interest Rates on Loans and Advances:- Export credit for tradltlonal Ltems /a 10.50 12.00 12.00 12.00 12.00 12.00 12.00

- Export credit on non-traditLinal items lb 10.50 9.00 9.00 9.00 9.00 9.00 9.00

- Ezport credit on three non-traditional items tc 10.50 9.00 7.00 7.00 7.00 7.00 7.00

- Agrtculture (production) tnrludlng forestry and flshery Id - 16.00 16.00 16.00 16.00 16.00 16.00

- Industry 11.00-12.00 14.00 14.50 12.00-14.50 9.00-14.00 9.00-14.00 9.00-14.00

- Industry in less developed areas 11.50 13.00 13.0C 13.00 10.00-13.50 10.00-13.50 10.00-13.50

- Loans for construction of houses:- Ln ruTal areas 5.00 5.00 5.00 5.00 5.00 5.00 5.00

- In urban areas 16.00 16.00 16.00 16.00 16.00 16.00 16.00

- Special credlts:- loans given in the Speclal Economic Zone of

Chittagong Hill Tracts region 11.00 5.00 5.00 5.00 5.00 5.00 5.00

- small loan schmes , speiLal credit forsalt growers, self-employment, etc. /a s 13.00 13.00 13.00 13.00 13.00 13.00

- Advances for internal trading purposes 15.50 16.00 16.00 16.00 16.00 16.00

/a Includes jute, jute goods and loose tea./b Ineludes packet tea and jute carpets.lc Namely light engineering and electric goods, handicrafts and hoadloom products.

Id Includes service charge. The rate was 122 up to September 30, 1983. Thereafter service charge at 4S over the rate of 121 on short term

loans and servlce cbrage at 32 over the rate of 132 on other term loans are applied vith effect from October 1, 1983.

/a Service charge at 22 over the rate of 132 are app!lied with effect from Aptll 1, 1984.

Source: Bangladesh Bank.

-114-Table 7.1LAID USE BY ARA, 1986187(thousand hectaer)

-------- Land area and classificationL------------ ----------------------- aL Utilisztion-----------------------Total Not Culti- Forests Cultivable Cultiva- Current Net Cropped s811181 Double Triple Gross Cropped

Ditrict Area vable la Are- lb ble Vast* FPllows Area Ic Cropped Croppod Cropped Area Id____________ ----------------------------------------------------------------------------------------------------------------------

Dlnajpur 645 114 11 540 13 20 507 346 140 21 689Rs-gSpur 961 226 2 733 10 12 711 206 428 77 1293Bogr, 389 91 0 298 0 4 294 87 161 *6 547Rajohaht 948 216 2 730 9 13 708 535 149 23 902Pabna 491 120 0 371 1 13 357 133 173 S1 632

Ruahtia 349 S8 0 291 0 26 265 109 139 17 438Jessore 656 143 0 513 4 5 504 325 159 20 703Ehulna 1199 181 575 443 1 4 438 321 97 20 575sarical 794 280 17 497 13 3 481 286 154 41 717PAtuakhsli 475 131 17 327 6 5 316 189 113 14 457

aMsalpur 337 59 7 271 6 4 261 50 170 41 513Ymenslngh 410 64 15 331 1 1 329 47 242 40 651

Taftail 342 41 43 258 2 2 254 98 116 40 450DbhAk 728 165 28 535 4 25 506 180 265 62 896Faridpur 691 179 0 512 0 8 504 240 199 65 833KLshoregenj 585 153 1 431 11 32 388 160 200 28 644

Sylhet 1507 512 91 904 68 69 747 435 280 32 1091Comilla 669 120 1 548 2 21 525 211 268 46 885Roakhali 543 65 58 420 30 32 3S8 179 136 43 580Cbhttagong 748 173 215 360 17 48 295 152 105 58 476Bandarban 0.T. 448 80 273 95 51 6 38 26 9 3 53Xhgracharl b.T. 270 63 149 58 9 15 34 24 8 2 46RlaHgmati 8.T. 591 60 482 49 9 6 34 24 8 2 46

Total 14796 3294 1987 9515 267 394 8854 4363 3719 772 14117

_______________________________________________--__________________________________________________________________________________

----- Area Irrigated---------- Cropping Intensity---- Pumps and Other Total IrrigattonA/e B/f Cis Tubovells NIthod-/h PerAentag/i1

Dinajpur 1.36 1.31 1.28 70.0 12.0 82.0 15.2RUngpur 1.82 1.79 1.76 141.0 69.0 210.0 28.6Bogr& 1.86 1.84 1.84 122.0 12.0 134.0 45.0Rajshahi 1.27 1.25 1.24 149.0 47.0 196.0 26.8P.bva 1.77 1:71 1.70 66.0 9.0 75.0 20.2

KushtiA 1.66 1.51 1.51 71.0 48.0 119.0 40.9Jesore 1.39 1.38 1.37 89.0 29.0 118.0 23.01Dlna 1.31 1.30 1.30 16.0 15.0 31.0 7.0Barial 1.49 1.48 1.44 15.0 32.0 47.0 9.5Patukhali 45 1.42 1.40 7.0 3.0 10.0 3.1

J-Ialpuz 1.97 1.94 1.89 78.0 5.0 83.0 30.6Nymeuingh 1.98 1.97 1.97 83.0 7.0 90.0 27.2TenSgai 1.77 1.76 1.74 85.0 3.0 88.0 34.1Dhaka 1.77 1.69 1.67 122.0 16.0 138.0 25.8Faridpur 1.65 1.63 1.63 45.0 5.0 50.0 9.8Zishoreganj 1.66 1.53 1.49 127 45 172.0 39.9

SyIhet 1.46 1.31 1.21 91.0 102.0 193.0 21.3Comilla 1.69 1.62 1.61 138.0 32.0 170.0 31.0Noskbali 1.62 1.49 1.38 30.0 6.0 36.0 8.6Chittaong 1.61 1.39 1.32 93.0 51.0 144.0 40.0Bandarban B.S. 1.39 1.20 0.56 1.0 3.0 4.0 4.2

hsgracharl F.T. 1.35 0.94 0.79 - 4.0 4.0 6.9R_gmati B.". 1.35 1.15 0.94 2.0 3.0 5.0 10.2

Total 1.59 1.53 1.48 1641.0 558.0 2199.0 23.1

I& Rivers, tidal creeks laks, ponds tros, buildings, homesteds *tc.lb Total area not of not cultivable *rea and forests.tc Area cropped at leat once during the year.

Id Sum of single-cropped area plus 2 x double-cropped area plus 3 x triple-cropped area.Ic Ratio of gross cropped area to net cropped area.If Ratio of gross cropped area to nt cropped arc plus currt fallows./g Ratio of gross cropped area to cultivable ares.lh Area irrigated by gravity systems, cals and traditional mt-xds (such a* swing baskets doons, etc.).IL Percentage of cultivabl, are. irrigated.

Sources: Bangladesh Bureau of Statistics and staff estimates.

Table 7.2FARM S1ZE PATTUER AND LANDLESSSUESS, 1960-1983184

1960 1977 1983184P

Percentage of form by fean as.. (ha)

up to 0.40 24.3 15.9 40.50.41-1.01 27.3 33.8 29.91.02-3.04 37.7 40.9 24.7babve 3.04 10.7 9.4 4.9

Percentage of land operated by faw eLse (ha)

up to 0.40 3.2 2.7 7.80.41-1.01 12.9 16.3 21.21.01-3.04 45.7 49.4 45.1

above 3.04 38.1 32.7 25.9

Rural Houxeholds ('000)

Total 8239 10871 13818

Form 6139 6257 10048Non-Yam 2100 4614 3770

Loandess 2100 4614 3770Near Landless la 803 342 2417

subtotal 2903 4956 6187

la Owning less than 0.2 ha.

Sources: Agricultural Census Reports, 1960 and1977, and preliminary estimates of1983184.

-116-

Table 7. 3AREA UNDER MUR CROPS, 1980181-1987188(o000 hectarea)

------------------------------------------------------------- __--------------__------------------------------

1980181 1981182 1982/83 1983/84 1984185 1985/86 1986I87 1987/88------------------------------------------------------------- __--------------__------------------------------

Foodgrains 11144 11240 11354 11507 11306 11095 11325 11035- Rlce 10540 10693 10823 10784 10452 10399 10609 10323

(Aw ) 3181 3216 3229 3209 3004 2845 2904 2789(Aman) 6172 6146 6128 6142 5839 6020 6053 5591(Boro) 1186 1331 1465 1433 1610 1534 1652 1943

- Wheat 604 546 531 538 691 540 585 597- Other Cereals /a 185 163 156 131 115

Pulses /a 803 784 744 716 737- Gram 113 109 104 104 103- Rhesari 242 244 232 222 231- Mashkalal 84 75 69 65 70- Masur 240 233 222 213 216- Matar 24 23 21 21 20-M Mhn 60 60 59 57 58

Oilseeds /a 607 597 590 563 547- Rape and mustard 364 385 370 343 318- Tit 102 86 92 84 82-Groundaut 32 28 29 30 38- Linseed 77 68 68 74 75-Coconut 31 31 31 32 34

Fibres 657 601 610 612 705 1075 785 531- Jute 649 584 590 594 691 1058 772 517- Cotton 8 17 20 18 13 17 13 14

Drugs & Narcotics 147 151 149 148 147 145 138 141- Tea 45 46 46 46 46 45 46 46- Tobacco 53 56 53 53 53 54 46 47- Detelnuts 37 36 36 36 36 34 34 35- Betel leave& 12 13 13 13 13 12 12 13

Spices 127 133 133 132 131 124 122 123- Rabi chillies 69 71 71 71 68 63 60 61- Onion 31 34 34 34 35 34 34 34- Garlic 13 13 13 13 13 12 12 12- Turmeric 14 15 14 14 15 15 16 16

Tubers 174 176 180 179 177 164 157 174- Potato 104 108 113 113 114 108 106 123- Sweet potato 70 68 67 67 63 56 51 51

Sugar Plants 163 176 181 182 178 170 163 182- Sugarcane 152 165 170 170 167 160 165 173- Date palm 11 11 11 11 11 10 0 9

FruLts 121 126 127 125 124 123 124 128- Banana 41 43 44 43 41 41 41 41- Monso 45 46 47 46 46 46 46 48- Pineapple 15 15 15 14 14 13 13 14- Jackfrult 21 21 22 22 23 23 24 25

Vegetables- Brinjal 28 29 29 29 27 26 26 27

Total, all crops lb 14755 14417 14502 14364 13983

of which: crops shown /b 14323 14175 14256 14121 13625all others 0 0 0 432 242 246 243 358

--------------------------------------------------------------------- __------__------------------------------

/a FY84-88 data for other cereals, pulses and oilseeds have been revised. Comparable data forearlier years are not currently available.

lb Due to revisions noted above data for PY81-83 are not shown.

Note: Crops wlth less than 10,000 ha average not shown separately.

Source: Bangladesh Bureau of Statistics.

-117-

Table 7.4InwGATION SUMWARY, 1980/81-1986187t'000 hectares)

------------------------------------------------------------- __--------------__----------------------

1980181 1981182 1982/83 1983/84 1984/85 1985/86 1986187------------------------------------------------------------- __--------------__----------------------

BY METHOD

Modern methods 1033 1130 1340 1536 1739 1721 1841Tubevells 227 277 421 682 898 963 982Low-lift pumps 681 720 763 682 696 609 660BWDB gravity schemes 125 133 156 172 145 149 199

Traditional methods 643 634 549 463 376 377 360Sving-baskets 85 88 87 86 81 84 94Doons 377 364 300 244 188 170 179Canals 28 34 8 0 2 14 0Other 153 148 154 133 105 109 87

Total, nut 1676 1764 1889 1999 2115 2098 2201of vhich:

modern (2) 61.6 64.1 71.0 76.8 82.2 82.0 83.6traditional (t) 38.4 35.9 29.0 23.2 17.8 18.0 16.4

BY CROP

Aus 122 116 128 148 144 165 164Aman 144 188 ±99 162 160 190 190Boro 1021 1065 1165 1225 1314 1259 1364Wheat 199 194 198 219 290 267 264Other cereals 4 5 4 7 3 3 3

Pulses 5 3 2 2 3 4 3Oilseedd 5 4 5 7 12 12 11Potato 73 79 75 75 71 68 68Vegetables 44 48 51 45 50 53 57Sugarcane 10 10 7 8 8 11 11Cotton 2 2 3 7 4 3 4Others 47 50 53 57 61 63 62

Total, gross 1676 1764 1889 1963 2120 2098 2201

Errors and omisslons 0 0 0 -39 1 0 0

IRRIGATED AREA AS PERCENT OF TOTAL AREA UNDER PARTICULAR CROP

Aus 3.8 3.6 4.0 4.6 4.5 5.8 5.6Aman 2.b 3.1 3.2 2.6 2.6 3.2 3.1Boro 86.1 80.0 79.5 85.5 91.7 82.1 82.5Wheat 32.9 35.5 37.3 40.8 53.9 49.4 45.1Other cereals 5.9 7.2 27.3 58.7 6.1 16.9 21.6

Pulses 1.4 0.8 0.6 0.6 1.1 1.7 1.2Oilseeds 1.5 1.4 1.6 2.4 4.0 4.2 3.9Potato 70.0 72.5 66.4 67.0 63.1 63.0 64.3Vegetables 36.9 36.1 52.0 45.0 49.9 26.8 28.9Sugarcane 6.3 6.1 3.9 4.8 4.7 6.9 6.6Cotton 22.7 14.0 16.8 37.5 22.5 23.9 33.5

Source: Bangladesh Bureau of Statistics.

-1 18-

Table 7.5PUBLIC SECTOR IntROATION PROGRANS, 1980181-1987188

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188------------------------------------------------------------------- __--------__---------------------------------------------

AREA InEIGATED UNDER BWDB SCHEMES 1 000 HECTARES)Gravity Schems 122.7 130.2 152.8 172.5 149.7 172.4 198.6 395.9 laDeep TSb Wells (DTWIs 4.7 3.4 10.7 10.4 6.3 4.3 3.3 3.4Low Lift Pumps ILLPaJ 3.9 4.8 6.7 8.2 5.9 2.3 1.9 2.1

Total 131.3 138.4 170.2 191.1 161.9 179.2 203.8 401.4

BADC IRRICATION PROGRAMS

LOW LIFT PUMPS WLLPsINumber fielded 36049 41354 43039 43615 50661 51242 53397 58332Avg. Cusecs per pump 1.80 1.71 1.82 1.65 1.65 1.65 1.65 1.65Avg. area irrLiated per cusce [ha] 8.7 8.2 7.1 9.6 9.1 9.7 9.7 9.7Total area irrigated 1I000 ha) 565.7 576.9 552.8 417.4 459.6 497.8 538.2 565.8

SHALLOW TUBE WELLS (STWa Wells sunk 10900 20566 17338 6929 7678 964 1180 6281Wells comissioned 10691 20517 19092 6919 7500 964 1776 6281Wells in operation 20931 42843 64508 71427 78927 79891 81667 87203Total area irrigated 1(000 ha)' 101.4 206.7 305.4 321.4 323.6 311.6 318.5 340.1Avg. area irrtigated per well (ha] 4.8 4.8 4.7 4.5 4.1 3.9 3.9 3.9

DEEP TUBE WELLS (DTWVsWell. sunk 1239 2085 2581 2406 1527 1295 1467 1253Wells comissioned 688 1310 2522 2168 1987 1410 1471 1105Wells in operation 10131 11486 13794 15519 16901 17883 18744 21698Total are irrigated 1[000 ha] 265.2 311.5 413.7 415.5 441.2 466.7 388.0 421.4Avg. area irrigated per well (hal 26.2 27.1 30.0 26.8 26.1 26.1 20.7 19.4

BANGLADESH tRISH BANKSTWs fielded 5714 4510 6116 11762 8633 4062 825 n.c.

RRDBHAND TUBE WELL [NOSTII

Cooperatives (TCCAI involved 30 21 131 261 78 159 ) 23696 n.NOSTI distributed 4187 2145 50000 69550 43480 30315 )

--------------------------------------------------------------------- __------__---------------------------------------------

la Including a total of 225,000 hectare trrigation of F.C.D.I. small scheme and water control structures.

Note: Comparlson with BBS data suggest that data for tube well and LLP acreage irrigated may be overreportedby implementing agencies.

Source: Bangladeah Bureau of Statistics, Bangladesh Water Development Board, Bangladesh AgriculturalDevelopment Corporation, Bangladesh Irishi Bank, and Integrated Rural Development Programse.

-1 19-

Table 7.6COMMECIAL FERTILIZER DISTRIBUTION BY TYPE AND REGION, 1980/81-1987/88('000 matric tons)

----------------------------------------------------------------------- __----__-----------------------------

1980/81 1981/82 1982/83 1983184 1984185 1985186 1986187 1987188

BY TYPE

Urea 569.5 518.8 629.1 708.1 831.8 794.9 915.1 1028.57riple super-phosphate lTSPl 218.4 208.5 206.0 260.7 345.7 297.4 335.7 389.8Di-noanium phosphate [DAP] 41.3 48.5 73.2 93.8 0.4 0.1 65.9Nuriate of potash IMP) 45.8 44.8 50.4 63.2 69.3 59.9 0.0 86.0nyper-phosphate [BPI 2.8 0.4 0.1 1.0 0.3 0.2 0.0 )Super phosphate [SP] 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1Amanium sulfate (AS] 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ) 6.4Potasslun sulfate [PS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 )NltroPhosKa [NPK] 10.5 7.5 8.8 0.2 10.2 0.0 0.0 1Triple phosphate CTPJ 0.1 0.0 0.0 0.0 0.0 0.0 0.0 1Zinc sulfate and oxy-sulfate 0.2 0.8 0.5 6.7 1.2 0.7 1.4 1.8Gypsum 0.0 0.0 0.4 1.3 1.4 3.3 2.8 1.4

Total 888.7 829.3 968.4 1129.0 1260.2 1156.4 1320.9 1513.9

BY REGION

Raishahi 268.7 252.1 304.3 390.8 404.1 390.0 454.4 510.6Dinajpur 45., 40.8 52.1 68.7 79.2 57.4 65.3 89.3Ranspur 57.0 50.6 63.4 85.5 84.1 83.3 98.8 92.6Bogra 70.8 71.1 74.2 91.4 84.3 93.1 113.3 100.3RashahiL 59.6 56.2 65.9 87.2 94.9 80.4 96.2 93.6Pabna 35.3 33.4 48.7 58.0 61.6 75.8 80.8 134.8

Rhulna 132.3 116.6 127.2 156.3 188.9 166.6 200.3 258.7Rushtia 43.3 37.1 36.3 51.7 60.5 55.4 60.3 78.6J ssore 41.3 39.6 41.2 55.2 66.6 52.9 68.8 79.8Khulna 16.9 15.0 17.5 19.8 27.8 28.1 29.4 51.0Barisal 24.6 20.0 25.2 24.6 27.7 25.3 33.5 38.9PatuakhalL 6.3 4.9 7.0 5.1 6.2 4.9 8.3 10.4

Dhaka 241.2 236.5 274.5 313.5 355.3 352.8 360.6 407.1Jemalpur Ia 24.8 29.9 38.3 42.1 43.0 47.5 53.2Hym.nsingh la 108.8 70.7 87.2 93.7 118.3 100.4 122.2 131.4Tangall 35.8 37.7 46.2 48.5 50.5 41.2 51.9 44.2Dhaka 82.0 87.6 91.3 108.1 113.9 139.0 107.9 141.6Parldpur 14.7 15.7 20.0 24.9 30.5 29.2 31.1 36.7

Chittagong 247.0 224.1 262.4 268.5 311.9 247.0 305.6 337.4Sylhet 26.9 25.8 29.7 37.9 46.6 35.3 43.3 54.5ComLlla 121.7 111.2 125.0 121.5 127.7 105.4 134.6 147.4NoakhalL 33.2 29.0 28.5 26.7 39.4 34.7 44.9 57.1Chittagong 60.7 53.1 75.5 74.7 85.2 58.0 71.8 65.4Chittagong BT 4.5 5.0 3.8 7.7 13.1 13.6 11.0 13.0

Total 889.2 829.3 968.4 1129.1 1260.2 1156.4 1320 9 1513.8

la Jamalpur Lucluied Ln Nyuensingh through 1980/81.

Sourese Baaglad.4h AgrLcultural Developowat Corporation.

-120-

Table 7.7PRODUCTION OF MAIN CROPS, 1970175-1987188(thousand metric tons except as noted)

------------------------------------------------------------------- __--------__-----------------------------------------

FIV-YEAR AVERAES|D -------------------------------ANNUAL DTAT------------------------------70175 75180 1980181 1981182 1982183 1983184 1984185 1985186 1986187 19871881b

FoodgrLAns 11055 13101 15026 14648 15321 15866 16211 16194 16590 16547- Rice 10872 12615 13882 13630 14216 14508 14622 15037 15406 15413

(Au.) 2670 3138 3289 3270 3066 3222 2783 2827 3129 2993(Aman) 6075 7337 7963 7209 7603 7936 7930 8539 8267 7689(Boro) 2128 2140 2631 3152 3546 3350 3909 3671 4010 4731

- Wheat 109 429 1092 967 1095 1211 1464 1042 1091 1048- Oth-r cereals lb 147 125 115 93 86

Pulses lb 527 512 495 487 515- Gram 87 81 76 82 75- hsai rl 170 163 167 164 182- Masbkalai 60 54 45 43 52- Masur 161 164 160 149 159- Matar 15 15 14 14 14-Mhun 7 8 9 34 35 33 35 33

Oil seeds lb 468 484 415 438 448- Rape and mustard 253 285 201 229 222- Til 57 46 54 49 49- Groundnut 33 32 34 34 48- Llnseed 41 37 43 43 43- Coconut 84 84 83 83 86

Fibres- Jute ('000 bales) 5371 5302 4943 4646 4881 5216 5111 8660 6753 4700- Cotton ('000 bales) 7 5 10 54 58 46 29 29 22 37

Drugs & narcotics- Tea 25 35 40 39 41 42 38 43 38 41- Tobacco 39 48 48 51 51 49 50 46 40 42- Bet'lnuts 22 25 25 24 24 24 23 23 22 22- Betel leaves 54 55 60 61 72 62 63 61 62 65

Spices 336 303 241 293 251 251 256 246 240 256- Rabi chillies 50 46 37 43 43 43 43 40 39 41- Onlon 158 142 96 132 140 138 143 137 130 141- Garlic 46 40 38 42 43 44 41 38 36 39- Turmeric 22 23 25 25 25 26 29 31 35 35

Tubers 1522 1648 1703 1776 1893 1909 1872 1715 1617 1834- Potato 797 866 999 1084 1167 1185 1178 1103 1069 1276- Sweet Potato 725 782 704 692 725 724 694 612 548 558

Sugar plants- Sugarcane la 6417 6575 6599 7136 7477 7285 6990 6640 6895 7207- Date palm (juice) 472 376 378 379 343 350 317 312 n.a. n.a.

Fruits 1426 1376 1405 1431 1280 1201 1226 1207 1318 1243- Banana 588 594 652 684 710 686 701 691 795 684- Mango 343 243 203 184 199 162 166 159 155 160- Pineapple 104 141 153 155 159 139 134 128 133 145- Jackfruit 196 200 204 207 212 214 225 229 235 254

Vegetables- Brinjal 205 179 178 185 187 185 174 166 162 164

--------------------------------------------------------------------- __------__-----------------------------------------

la Based on total area and mill farm yield estLmates, probably substantially overestimated.lb Revised data for 1984-88 period. Comparable figures for earlier years not available.

Source: Bangladesh Bureau of StatistLes.

Table 7.8PUBLIC FOODGRAIN DISTRIBUTION SYSTEM OPERATIONS('000 metric tons)

---------------------------------------------------------------- __-----------__--------------------------------------------------

--- PFVE-YEUR AVER3S-- -- ANNUAL DA AT----------------------

70175 75180 80185 1980181 1981182 1982/83 1983/84 1984185 1985/86 1986187 1987188

Opening Stocks 256 550 809 791 1240 616 611 800 1017 976 751

Domestic Procurement 100 396 425 1033 102 192 270 344 349 190 375

Imports 1981 1564 1757 1076 256 1843 2028 2590 1202 1767 2922

.otal AvailbilLty 2336 2510 2991 2900 2807 2651 2909 3734 2568 2933 4048

Statutory rationing 386 419 303 349 312 308 293 282 160 210 189

Priority categories la 312 710 651 611 665 648 641 712 467 668 681

Modified rationing 919 367 379 182 491 368 399 465 103 257 316

Relief 215 55 133 55 75 156 120 452 205 248 247

Food-for-Work & Canal Digging 0 239 427 349 370 338 441 458 468 480 554

Marketing Operations lb 1 19 47 0 110 0 51 8 8 40 -

Open Market Sales lc 0 31 81 0 46 118 107 201 129 217 205

Total Distribution 1832 1839 2021 1546 2069 1936 2052 2578 1540 2120 2503

Losses 122 117 107 105 102 104 57 139 52 62 45

Exports & repayments nkind 0 0 5 0 20 0 0 0 0 - -

Closing Stocks 472 556 855 1249 616 611 800 1017 976 751 1498

--------------------------------------------------------------------__-------__--------------------------------------------------

/a Includess essential priorities, other prioritiess large employerss and direct sales to flour mills.

lb Marketing operatlons involve direct sale of grains to dealers at subsidized prices.

lc OMS in paddy and rice were initlated during 1981I82, vheat OMS began in 1978/79.

Source: Food Planning and Monitoring Unlt, Minlstry of Food.

-122-

Table 7.9SUESONALTY OF PUBLIC FOODGRAIN DISTRIBUTION SYSTEN OFFTAKE, 197217S-1987188('000 metrlc tons)

--------------------------------------------.------------------- __-----------__---------------------------------------

---MULTI-YEAR AVERAGES--- -ANNUAL DATA-----------------------------Month 72175 75180 80185 1980/81 1981182 1982/83 1983t84 1984/85 1985/86 1986/87 1987/88

July 188 153 124 107 90 116 87 218 84 92 166Aug"ut 213 157 136 107 89 131 99 254 93 109 219September 221 177 190 134 163 196 171 286 125 151 295October 210 200 235 145 249 281 214 286 164 240 292November 168 154 185 125 190 171 175 262 132 196 217December 134 118 148 90 163 123 129 236 115 121 217January 140 145 171 110 156 178 162 251 148 197 204February 137 160 197 142 214 191 218 222 155 220 234March 152 163 198 161 214 187 232 196 159 246 249April 160 156 182 160 232 140 227 152 161 243 187May 171 140 156 144 182 128 202 122 139 171 121June 171 141 110 121 126 93 13S 77 65 135 78

Total 2066 1866 2034 1554 2068 1935 2051 2562 1540 2121 2503

(Monthly Average) 172 156 170 130 172 161 171 214 128 177 209

So-----rce:-----------------t---y---of-----F---od--------d------o---l__---Food_--------------r--------------D-----------

Source: M1nLstry of Food and World Food Programme, Dhaka.

-123-

Table 7.10AUS AND AMAN PRODUCTION BY DISTRICT, 1970175-1987188('000 metric ton" tic equivalent)

------------------------------------------------------------ __---------------__-----------------------------.------

FVE-YEAR AVERAGES| ------------------------------ANNUAL DATA-----------------------------70/75 75180 1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188

AUS

Rajshahl 768.8 904.7 868.2 939.6 822.7 895.9 827.9 803.2 748.1 611.6Dlmjpur 143.3 184.8 190.7 163.8 163.4 196.0 196.5 169.9 145.7 145.9Ranpur 301.1 327.9 295.9 330.3 320.9 279.5 261.1 290.3 245.3 247.7Boars 84.1 108.4 136.1 120.8 118.1 112.7 85.7 84.3 90.9 39.4Rajahohi 152.6 167.8 115.8 184.8 119.6 200.0 178.9 154.8 168.8 103.4Pabma 87.9 115.8 129.8 140.0 100.8 107.7 105.8 103.9 97.4 75.2

Rhwllna 562.4 662.8 758.0 591.8 573.2 636.8 516.5 601.8 859.4 869.6Kushtia 113.6 128.6 143.8 127.7 96.9 136.5 159.3 170.3 297.8 209.6Jessor. 219.9 258.4 227.9 208.7 175.7 168.0 141.7 156.7 240.4 227.0i hulna 37.9 48.0 81.7 46.9 58.4 58.0 30.2 32.2 37.4 50.8Barisal la 157.3 182.6 229.5 148.4 173.0 192.1 139.3 172.0 195.6 263.9Patuakhal1 lb 33.4 45.2 75.0 60.0 69.2 82.2 46.0 70.6 88.2 118.3

Dhaka 701.8 850.1 897.6 930.6 945.9 958.0 878.7 812.9 873.9 852.4Jamalpur lc 137.1 120.2 140.1 130.0 114.5 119.8 107.5 87.0Kymensigh Id 337.2 435.0 356.2 378.4 361.6 378.0 430.8 343.5 331.7 366.6Tangail le 76.0 113.1 115.3 107.0 111.3 93.8 71.8 76.0 79.1 64.9Dhsak 140.8 158.2 165.3 182.0 184.4 195.8 154.6 123.7 143.9 109.0Faridpur . 147.9 143.7 123.7 143.0 148.5 160.3 107.0 149.8 211.7 224.9

Chittraong 637.0 720.4 730.7 771.4 698.9 730.9 628.2 609.2 748.0 659.5Sylhet 145.7 167.8 209.4 254.5 203.0 178.4 147.5 163.1 230.2 177.4Comilla 179.1 213.1 220.7 232.9 237.2 239.8 197.4 160.5 202.3 208.8No&khali 147.0 176.1 180.4 145.5 142.1 164.2 146.5 149.8 204.5 157.9Chittagong 125.5 127.4 120.2 138.4 116.6 118.1 116.3 103.6 80.5 87.9Chittagong 8. Tracts 30.4 11.5 21.6 17.2 14.2Bandarban If 8.9 1C.5 13.3 13.3

Total 2670.0 3138.0 3254.6 3233.4 3040.7 3221.5 2851.3 2827.1 32 9.4 2993.1

AKAN

Rajshahil 2046.1 2221.1 2491.8 2394.3 2437.7 2594.9 2566.1 2691.2 2536.7 2245.2Dlnaipur 405.3 437.7 505.6 450.0 461.0 506.2 529.1 545.8 525.1 504.8Rangpur 727.9 737.9 865.6 834.7 866.4 885.9 928.1 930.0 887.8 868.4Bogra 319.0 329.6 395.4 356.8 362.0 395.6 425.7 445.6 410.1 351.5Raijshahi 445.8 482.9 524.1 521.9 516.4 560.5 525.4 557.3 510.1 421.2Pabna 148.2 233.0 201.2 230.9 231.9 246.7 157.7 212.5 203.6 99.3

Yuina 1087.5 1611.0 1696.3 1544.4 1629.5 1778.0 1897.1 2068.5 1917.5 1942.6uAbhtia 56.7 76.6 76.6 69.7 68.2 81.6 107.1 120.6 114.1 129.1

Jessore 227.7 303.1 297.8 271.9 295.8 333.0 322.4 412.2 380.7 360.3hulna 305.2 489.6 516.8 472.8 501.1 528.8 622.7 607.9 497.0 524.6

Barisal I/ 302.1 428.0 462.7 411.8 430.8 463.2 481.0 531.5 546.5 518.6Potuakhali lb 195.8 313.7 342.3 318.1 333.5 371.3 363.9 396.3 379.2 410.0

Dhaka 1380.4 1686.8 1754.6 1785.7 1692.2 1639.0 1587.0 1763.5 1760.4 1550.3J amlpur 249.0 271.4 231.8 249.9 240.5 242.5 263.5 263.1 227.1Mymensingb Id 646.7 742.4 629.2 687.6 634.8 698.5 756.7 709.5 692.9Tangl Io 142.5 195.9 201.0 187.6 204.2 205.1 158.9 177.9 193.5 160.5Dhaka 285.0 347.3 343.0 523.4 319.9 317.1 301.3 309.7 335.5 258.1FarLdpur 188.6 241.9 196.8 213.7 230.7 241.5 185.9 255.7 258.8 211.7

Chittagong 1560.6 1818.0 2020.0 1687.2 1844.1 1914.1 1880.6 2016.2 2052.2 1951.2Sylbet 523.4 490.2 577.6 517.2 534.2 573.5 505.6 582.7 552.6 578.8Comilla 416.1 484.0 513.6 449.0 502.8 501.7 482.5 531.4 524.3 496.5NoRkhal, 269.0 398.5 422.8 320.1 350.6 385.1- 423.1 418.6 418.9 316.7Cbittagong 319.5 398.6 446.5 358.0 410.2 415.1 422.8 429.3 509.5 514.4Chittagong B. Tracts 30.6 46.7 59.4 42.9 46.3 38.6 46.6 54.2 46.9 44.8

Total 6074.6 7336.9 7962.7 7411.6 7603.5 7925.9 7930.8 8539.4 8266.8 7689.3

I& From 1967168 to 1969170. Including Patukhcali.lb Yrom 1967168 to 1969170, included In Barisal.Ic From 1967168 to 1978179 Included In Mlyinn4ngh.Id From 1967168 to 1969/70. including Jamalpur and Tangail, from 1970171 to 1975176, including Jzmalpur./a From 1967168 to 1969170. included in MPymnuLngh.If Bandarban was a subdlvision of Chittagong Hill Tracts untll 1982.

Source: Bangladesh Bureau of Statistics.

-124-

Table 7.11PRODUCTION OF BORO AND WHEAT BY DISTIUCT. 1970/75-1987188('000 metric tons, rice equivalent)

------------------------------------------------------------ __---------------__---------------------------------------

FIVE-YE M AVERAGES| -- N---------------------------NUAL DATA-----------------------------70175 75180 I 1980181 1981/82 1982/83 1983/84 1984185 1985186 1986/87 1987/88

BORO

Rajshahi 193.1 235.5 307.8 461.2 5!0.7 666.4 738.4 1022.4 1113.9 1394.0Dinajpur 9.6 13.6 21.0 26.0 31.7 35.2 38.4 52.6 71.3 87.2Rangpur 34.4 42.4 76.6 107.5 126.9 128.2 154.5 280.7 340.9 391.8Bogra 30.7 43.5 71.1 110.1 129.6 193.0 225.1 270.5 249.7 376.0RajshahL 83.3 94.8 97.6 115.2 132.2 169.8 159.1 237.9 289.2 319.8Pabaa 35.0 41.2 41.6 102.4 130.3 140.3 161.3 180.7 162.8 219.2

Rhulna 237.8 180.1 169.0 225.7 264.0 215.9 355.4 233.1 246.6 365.0Kushtia 4.0 3.9 4.1 7.3 9.0 6.9 10.2 19.4 21.1 26.9Jessore 23.6 24.5 26.4 63.3 79.5 78.1 151.2 81.0 115.3 210.3Khulna 36.4 29.7 39.8 41.2 44.9 42.4 80.0 74.9 59.6 78.4B4risal 120.4 95.2 88.1 97.9 112.5 75.1 94.5 49.0 45.3 45.1Patuakhali 53.3 27.0 10.6 16.0 18.2 13.4 19.5 8.8 5.3 4.3

Dhaka 739.9 777.5 1001.0 1321.3 1456.3 1262.6 1525.3 1279.9 1472.2 1717.3Jamalpur 0.0 9.1 62.8 115.1 131.5 111.9 172.4 140.6 169.5 222.4Mymensingh 269.4 65.5 450.9 569.4 565.2 528.7 647.4 503.0 603.0 731.1Tangail 49.9 87.1 132.8 209.7 266.4 223.9 235.1 229.5 229.8 217.3Dhaka 189.6 214.0 298.1 320.9 360.4 301.2 298.5 264.0 309.9 330.8Faridpur 53.2 55.9 56.4 106.1 132.8 90.8 171.8 142.8 160.0 215.7

Chittagong 886.4 910.7 1152.5 1143.9 1275.1 1204.6 1290.0 1135.4 1177.5 1254.5Sylhet 415.5 341.0 500.2 396.0 418.2 430.0 464.0 378.2 386.9 351.0Comilla 175.2 203.5 245.3 303.7 336.2 287.5 317.7 302.1 304.0 436.7Noakhali 87.5 143.3 115.2 132.4 193.4 151.4 186.5 135.7 170.8 179.7chittagong 187.1 203.2 271.1 283.4 299.1 308.4 292.2 292.5 284.4 264.8Chittagong H. Tracts 21.2 19.7 20.6 23.4 28.3 27.2 29.5 26.9 31.4 22.3

Total: 2057.2 2103.9 2630.2 3152.0 3546.2 3349.5 3909.1 3670.8 4010.2 4730.8

WHEAT

Rajshahl 49.0 117.6 609.5 453.8 543.5 598.1 684.3 453.0 535.2 435.3Dinajpur 2.9 19.2 148.6 130.9 113.0 143.1 119.2 88.6 114.8 95.5Rangpur 5.8 21.2 198.9 127.4 169.9 173.6 196.2 108.4 165.3 131.1Bpgra 3.3 19.4 59.5 48.3 52.2 61.7 79.8 61.1 49.3 44.4Rajshahi 14.4 28.5 118.9 72.3 109.3 112.3 154.4 108.4 109.8 93.2Pabna 22.6 30.3 83.6 75.0 99.1 107.4 134.7 86.5 96.0 71.1

Khulna 19.2 74.9 196.7 199.7 198.2 197.8 246.7 170.2 157.8 222.8Kuehtla 14.4 51.1 117.7 108.4 132.1 131.9 136.1 94.3 73.2 97.4Jessore 4.5 19.3 67.8 75.2 56.3 59.3 100.5 58.6 70.8 104.5Rhulna 0.2 4.2 8.3 13.3 5.1 4.7 5.6 10.4 9.7 6.8Barisal 0.1 0.3 2.8 2.9 4.5 1.8 4.4 6.7 4.0 13.9Patuakhali 0.0 0.0 0.1 0.0 0.2 0.0 0.1 0.2 0.1 0.2

Dhaka 27.3 47.4 153.4 183.8 228.9 261.6 359.1 265.8 242.5 225.0Jamalpur 1.0 2.9 8.5 10.5 17.3 30.6 46.5 31.9 39.7 37.4Mlyenslngh 1.1 6.0 20.8 22.0 32.1 40.2 47.8 43.2 41.2 39.3Tangail 2.4 11.6 41.5 36.7 38.2 39.8 46.6 49.5 47.1 39.7Dh-sk 5.1 9.3 31.8 38.2 47.2 50.5 78.0 75.5 51.6 64.1Paridpur 17.7 17.7 50.7 76.4 94.1 100.5 140.3 65.7 62.9 74.5

ChLttagong 11.3 47.2 133.0 130.0 124.8 154.0 173.8 152.9 155.6 134.9Sylbet 0.2 1.7 7.9 8.3 13.8 8.8 15.8 9.3 11.5 10.5Comilla 10.9 44.4 122.9 120.6 109.3 143.7 154.7 140.9 141.7 122.3Noakhali 0.2 1.0 1.5 0.8 1.4 1.3 3.0 2.4 2.1 2.0Chittagong 0.0 0.1 0.4 0.3 0.2 0.2 0.2 0.2 0.3 0.1Chittagong H. Tracts 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.1 0.0 0.0Bandarban /a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total: 106.7 287.2 1092.5 967.4 1095.4 1211.4 1463.9 1041.9 1091.1 1048.0

____,_________________________________________________________________________________________________________________-

/a From 1967/68 to 1982/83, included in Chittagong Hill Tracts.

Source: Bangladesh Bureau of Statistics.

-125-

Table 7.12JUTE PRODUCTION BY DISTRICT, 1970/75-1987/88

----.----------------------------------------------- __-----------------------__----------------------------------------

FIVE-YEAR AVERAGESI ------------------------------ANNUAL DATA-----------------------------70175 75180 1980/81 1981182 1982183 1983184 1984185 1985186 1986187 1987188

('000 bales of 400 lb.)

Rajahaji 1600.2 1705.6 1784.0 1501.5 1614.5 1625.8 1773.4 3067.2 2384.8 1616.7Dinajpur 179.2 179.7 182.4 165.8 150.8 142.2 177.0 215.6 242.9 250.5Ranspur 926.2 1008.4 1012.3 937.0 975.4 1014.7 1097.7 1634.3 1447.5 917.6Bogra 118.2 136.0 168.3 177.1 266.9 121.1 119.6 356.3 176.8 96.3Rajahahi 173.9 162.0 165.1 99.5 142.0 161.4 188.7 481.4 343.2 182.6Pabaa 202.7 219.5 255.9 122.2 179.4 186.4 190.5 379.6 174.4 169.7

Rhulaa 798.4 838.4 854.6 783.0 927.5 922.5 1061.7 1571.0 1052.5 933.4Rushtia 172.5 180.1 202.8 191.6 253.5 289.4 378.6 474.9 299.9 237.9Jessore 454.6 517.9 511.1 504.3 560.6 567.0 501.4 888.1 584.3 605.4Rhulna 98.6 110.1 102.8 70.8 100.1 121.8 169.8 198.1 150.0 74.6Barisal 69.9 28.3 36.7 14.5 11.6 12.5 10.4 8.2 16.3 13.4Patuahhali 2.8 2.0 1.2 1.8 1.7 1.8 1.5 1.7 2.0 2.1

Dhaka 2455.7 2392.8 1929.2 2025.9 2033.8 2281.5 1968.7 3427.4 2674.0 1911.2Jamalpur 0.0 192.2 226.2 256.9 253.3 263.7 211.5 292.6 222.4 209.7Mymensingh 1013.8 779.8 566.6 708.0 672.9 738.1 614.9 1207.0 893.1 535.3Tansail 327.4 367.1 272.9 188.5 206.8 277.7 194.7 340.5 289.7 259.6Dhaka 546.5 525.9 438.1 447.1 419.4 419.7 431.3 811.2 583.5 379.6FarLdpur i68.0 527.9 425.4 425.4 481.4 582.4 516.3 776.1 685.3 527.0

Chittagong 516.2 364.8 374.7 335.2 305.6 315.8 307.1 594.4 642.2 239.7Sylhet 55.5 18.2 18.8 28.9 16.7 11.5 10.1 46.7 23.8 8.7Comilla 399.7 301.8 289.5 285.4 275.4 292.7 286.3 530.5 610.7 223.9Noakhali 58.4 42.9 65.1 19.4 12.7 10.7 10.0 16.1 7.4 6.8Chittagong 1.0 0.7 0.6 0.6 0.4 0.3 0.2 0.0 0.0 -Chittagong H. Tracts 1.5 1.2 0.7 0.9 0.5 0.5 0 5 1.1 0.3 0.3

Total: 5370.6 5301.6 4942.5 4645.7 4881.4 5215.1 5110 8660.0 6753.5 4701.0

('000 metric tons)

Rajahaji 290.3 309.5 323.7 272.4 292.9 295.0 321.8 572.3 445.0 293.3Dinajpur 32.5 32.6 33.1 30.1 27.4 25.8 32.1 40.2 45.3 45.4Ranspur 168.1 183.0 183.7 170.0 177.0 184.1 199.2 305.0 270.1 166.5Bogra 21.4 24.7 30.5 32.1 48.4 22.0 21.7 66.5 33.0 17.5Rajshahi 31.5 29.4 30.0 18.0 25.8 29.3 34.2 89.8 64.0 33.1Pabna 36.8 39.8 46.4 22.2 32.6 33.8 34.6 70.8 32.5 30.8

Rhulna 144.9 152.1 155.1 142.1 168.3 167.4 192.6 293.1 196.4 169.5Rushtia 31.3 32.7 36.8 34.8 46.0 52.5 68.7 88.6 5b.0 43.2Jessore 82.5 94.0 92.7 91.5 101.7 102.9 91.0 165.7 109.0 110.0Rhulaa 17.9 20.0 18.6 12.8 18.2 22.1 30.8 37.0 28.0 13.5Barisal 12.7 5.1 6.7 2.6 2.1 2.3 1.9 1.5 3.0 2.4Patuakhali 0.5 0.4 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4

Dhaka 445.6 434.1 350.0 367.6 369.0 414.0 357.2 639.6 499.0 346.5Jlpur 0.0 34.9 41.0 46.6 46.0 47.8 38.4 54.6 41.5 38.0Iymonsingh 183.9 141.5 102.8 128.5 122.1 133.9 111.6 225.2 166.7 97.1Tangail 59.4 66.6 49.5 34.2 37.5 50.4 35.3 63.5 54.1 47.1Dhaka 99.2 95.4 79.5 81.1 76.1 76.1 78.3 151.4 108.9 68.7Faripur 103.1 95.8 77.2 77.2 87.3 105.7 93.7 144.8 127.9 95.6

Chittagong 93.7 66.2 68.0 60.8 55.4 57.3 55.7 110.9 119.8 43.4Sylhet 10.1 3.3 3.4 5.2 3.0 2.1 1.8 8.7 4.4 1.6Comilla 72.5 54.8 52.5 51.8 50.0 53.1 51.9 99.0 114.0 40.6Noakhall 10.6 7.8 11.8 3.5 2.3 1.9 1.8 3.0 1.4 1.2Chitt&Zong 0.2 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 -Chittagong H. Tracts 0.3 0.2 0.1 0.2 0.1 0.1 0.1 0.2 0.0

Total: 974.4 9f1.9 896.8 842.9 885.7 946.3 927.3 1615.9 1260.2 852.7

Sou---------------:-----------------la----------sh-------B-------ea----------of-------St-------t--------t-----------.-

Source: Bangladesh Bureau of Statiaticsa

-126-

Table 7. 1SUPPLY A14D DISPOSITION OF RAW JUTE, mY79-mY88('000 bales)

1179 FYr80 Y81 FY82 1Y83 FY84 PY85 FY86 FY87 Y188

Opening stocks 692 2331 4219 3252 a850 1339 944 325 4265 5231Production, total 6530 6035 4985 4686 4920 5256 5150 7649 6792 4728

- Jute 6442 5963 4943 4646 4881 5216 5111 7601 6753 4700- Mesta 88 72 42 40 39 40 39 48 39 28

Adjustment Ia 191 1203 -202 -369 594 .. -612

Market arrivals t-721 7238 4783 4317 5514 5256 4538 7649

Total supply 7413 9569 9002 7569 7364 6595 5482 7974 11057 9959Mill consumption 2809 2982 3356 3346 3329 3369 3370 3400 3356 3220- BJMC mills 2809 2864 3251 3191 3150 1880 1885 1900 1866- Prlvate mills 119 105 155 179 1489 1485 1500 1490Other consumption 300 300 400 400 400 350 311 400 200 400Losses 5 100 50 62 50 30 16 30 29 60

Total domestic uses 3114 3382 3806 3808 3779 3749 3697 3830 3585 3680

Registered exports 1968 1968 1944 1911 2246 1902 1460 2000 2241 1345

Total disposition 50L2 5350 5750 5719 6025 5651 5157 5830 5826 5025

Closing stocks 2331 4219 3252 1850 1339 944 325 2144 5231 4934

Total supply - market arrivals + opening stocks.Total domestlc uses - mill consumption + other consumption + losses.Total disposition - total domestic uses + registered exports.

/a Dlfference between estimated crop size and estimated market arrivals.

Sources MLinstry of Jute, DJMC.

-127-

Table 7.14PUBLIC FOODGRAIN PROCMU4RENT BY DISTRICT, 1975180-1987188( 000 metric tons, rctee equivalent)

5-YyEARVESE ------------------------------A ANVAL DATAT----------------------------Division/District '5/80 80/85 I 1980/81 1981182 1982183 1983/84 1984185 1985186 1986187 1987188

Raisbabi 196.6 253.1 482.0 174.1 121.3 227.3 260.7 280.4 159.9 303.1Dinajpur 74.2 102.7 190.5 87.1 54.8 99.5 81.8 96.7 42.2 85.9Ranpur 36.8 53.1 82.3 24.6 26.3 67.0 65.3 61.1 34.0 62.6Bsogra 24.5 34.4 50.5 13.6 20.5 35.8 51.8 57.3 51.9 83.9Raj5hahi 53.0 46.0 122.8 41.8 14.4 14.2 36.8 44.9 22.7 53.2P-bna 8.1 16.8 36.0 7.0 5.4 10.8 25.0 20.4 9.1 17.5

hulina 65.7 34.9 108.0 7.6 12.0 13.9 32.9 25.5 4.3 27.5Rushtl 5.3 4.2 10.3 1.1 0.3 1.4 8.0 6.4 1.2 4.2Jessore 8.0 7.5 8.1 0.1 2.7 5.1 21.5 6.9 2.5 20.8Rihuna 11.3 6.5 25.9 2.0 1.0 1.0 2.6 1.7 0.1 2.1Barisal 15.4 6.6 27.0 0.6 2.0 2.4 0.8 4.1 0.5 0.4Patuakhali 25.7 10.1 36.7 3.9 6.0 3.9 0.1 6.4 0.0 0.0

Dbaka 62.8 68.6 201.1 64.3 31.4 16.4 29.6 20.4 8.9 20.1Jamalpur /a 2.5 11.5 35.1 7.7 5.5 5.1 4.3 0.8 0.1 1.8Mymensingh 50.4 32.9 99.6 29.1 17.9 8.4 9.7 3.7 7.8 15.3Tangall 2.2 8.3 22.9 5.6 2.2 1.4 9.4 7.7 0.1 1.8Dhaka 6.0 13.7 38.2 21.6 5.3 1.3 1.8 2.2 0.4 0.6Farldpur 1.7 3.2 5.4 5.4 0.5 0.2 4.4 6.0 0.5 0.6

Chittagong 71.4 68.0 225.6 52.4 27.3 9.1 25.8 15.2 15.4 23.8Sylhet 30.0 28.3 92.3 27.2 12.2 3.1 6.5 2.2 9.3 17.0Camilla 16.1 16.5 41.7 13.4 8.2 3.0 15.9 8.9 4.5 2.9NoakhlIl 11.1 10.6 45.8 1.1 3.4 1.6 0.9 1.1 0.1 0.1ChittaSons 11.7 7.0 29.6 3.3 1.6 0.3 0.1 1.4 0.7 0.9Chittagong Hill Tracts 2.6 5.8 16.1 7.3 1.9 1.2 2.4 1.6 0.8 2.9

Total 396.5 424.6 1016.7 298.2 192.1 266.7 349.0 350.0 188.5 374.5

-- - not avilable.

/a Jamalpur was a subdivLsion of ymsmnsingh until December 26, 1978.

Note: 1.0 ton rice equivalent - 1.0 ton wheat - 1.5 ton paddy.

Sources: ILnL1try of Food.

-128-

Table 7.15PUBLIC PROCUREMENT OF AUS AND AMAN RICE AND PADDY BY DISTRICT, 1975180-1987188(0-etric tons, rice equivalent)

------------------------------------------------------------ __---------------__---------------------------_______-----

5-YEAR AVERAOES -- N----------------------------ANNUAL DATA-----------------------------75180 80185 1980181 1981/82 1982183 183184 1984185 1985186 1986/87 1987/88

AUS

Rajshahi 5769 8365 19708 12137 912 8926 144 0 0 0Dinajpur 3350 7023 16613 11147 886 6375 94 0 0 0Ran8pur 429 535 1304 312 1 1056 0 0 0 0Bogra 931 136 41 90 8 541 0 0 0 0Rajshahi 861 499 1741 581 17 105 50 0 0 0Pabna 198 173 9 7 0 849 0 0 0 0

Rhulna 2025 3497 16799 422 6 260 0 0 0 0Rushtia 574 915 4316 257 0 0 C 0 0 0Jessore 1225 548 2381 100 0 260 0 0 0 0Xhulna 110 604 2957 65 0 0 0 0 0 0Barisal 56 998 4983 0 6 0 0 0 0 0PatuakhalL 60 432 2162 0 0 0 0 0 0 0

Dhaka 281 4179 16666 2496 68 1665 0 0 0 0Jamalpur /a 27 524 2416 33 0 169 0 0 0 0Mymensingh 238 2258 8987 816 66 1419 0 0 0 0TangaLl 9 37 116 4 0 66 0 0 0 0Dhaka 1 1094 3852 1603 2 11 0 0 0 0Faridpur 7 267 1295 40 0 0 0 0 0 0

Chlttagong 5014 7913 33680 4348 3 105 1430 0 0 0Sylhet 3875 3192 13504 1364 0 95 998 0 0 0Comrilla 22 480 1785 616 0 1 0 0 0 0Noakhall 140 2938 14050 627 3 9 0 0 0 0ChittaSong 713 497 2146 341 0 0 0 0 0 0Chlttagoag Hill Tracts 264 805 2195 1400 0 0 432 0 0 0

Total 13089 23955 86853 19403 989 10956 1574 0 0 0

AKAN

Rajshahi 163001 114620 262658 107091 60308 71393 71651 122341 21179 45562Dinajpur 65914 61747 122766 61160 36537 43668 44602 62419 12614 23455Rangpur 32799 20354 44341 20869 15847 11275 9436 27105 7777 8611Bogra 16773 7517 16391 3129 4422 8219 5424 17105 374 7137Rajahahl 43972 23369 72266 21499 3398 7512 12170 14277 357 6333Pabna 3543 1634 6894 434 104 719 19 1435 57 26

Khulna 57178 19865 77248 5945 8361 7374 397 10896 55 472Kushtla 2089 229 1006 5 53 58 25 111 1 37Jessore 3791 761 3639 15 65 40 46 532 0 288Rhulna 10906 4675 20684 1447 258 950 35 91 1 34Barisal 14745 4580 17666 612 1966 2414 240 3811 34 107Patuakhali 25648 9620 34253 3866 6019 3912 51 6351 19 6

Dhaka 41529 16478 66785 1414 11162 1646 1385 1822 23 462Jamalpur la 1336 3425 14194 863 1502 522 44 556 0 10Mymensingh 28260 10565 41480 492 9022 773 1057 616 6 365Tangail 952 651 3102 4 61 27 63 21 1 15Dhaka 1829 1575 7309 21 249 170 124 0 4 60Faridpur 1152 263 700 34 328 154 97 629 12 12

Chittagong 43965 23197 94606 2021 13549 3367 2440 3496 1262 2148Sylhet 14993 7105 29535 346 5365 246 33 284 2 22Comilla 7278 2251 8585 18 2092 359 200 42 19 74NoakhalL 10604 6929 29069 8 3405 1562 601 1074 11 13ChLttagong 9261 3708 17065 66 1222 130 57 656 720 2Chlttagons Hlll Tracts 1829 3204 10352 1583 1465 1070 1549 1440 510 2037

Total 305673 174160 501297 116471 93380 83780 75873 138555 22519 48644

/a Jamalpur was a subdivision of Mymeushingh until December 26, 1978.

Note: 1.0 ton rlce equivalent * 1.0 ton wheat - 1.5 ton paddy.

Source: Ministry of Food.

-129-

Table 7.16PUBLIC PROCUREMSNS OF BORO AND IRR2 RICE AND PADDY AND WHEAT, 1975180-1987/88(metric tons, rice equivalent)

------------------------------------------------------------ __---------------__-------------------------------------

5-YEAR AVERAGES I ------------------------------ANNUAL DATA-----------------------------75180 80185 I 1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987/88

BORO AND IRRI

Rajshahi 5782 47997 69766 47081 44704 37185 41249 70850 94584 198243Dinajpur 411 12512 12875 12817 11070 13998 11800 19813 17089 47572Rangpur 278 5841 8800 899 5185 10084 4235 11372 11828 29119Bogra 603 11733 8760 9882 13664 7603 18755 22785 44178 71093Rajshahi 3982 12912 30147 17372 10729 2203 4110 13446 17828 39778Pabna 508 4985 9184 6048 4047 3297 2349 3434 3661 10681

Rhulna 789 2160 8428 809 636 7 921 20 929 3275Kushtia 83 429 1670 335 53 0 85 0 247 147Jessore g9 23 88 0 0 0 26 6 311 2130Xhulna 40 770 2090 474 375 7 705 0 110 627BarLa * 564 887 4322 0 6 0 105 20 248 331Pa uakhali 4 52 258 0 0 0 .. 0 13 40

Dhaka 16505 37244 91700 57681 17950 9744 9144 4850 8407 16848Jamalpur la 520 4775 10535 6197 5228 1831 82 45 69 527HMymens ngh 13722 18829 47533 26379 7832 6170 6233 2755 7810 14787Tangail 570 4318 12255 5479 111(0 725 2020 1426 84 879Dhaka 1660 8965 19778 19578 3779 1018 672 449 287 412Faridpur 33 357 1599 48 1 0 137 173 157 243

Chittagong 15845 29066 82883 43809 9829 3740 5069 3691 10588 20690Sylhet 10997 17151 47566 25419 6486 2434 3848 1886 8035 16972Comilla 2387 6810 18884 11161 2499 1066 440 930 2180 2854Noakhali 299 588 2616 0 18 3 302 0 113 104Chittagong 1680 2743 10258 2889 418 125 25 711 0 88chittagong Hill Tracts 482 1774 3556 4340 408 112 454 164 260 672

Total 38922 116634 252777 149317 74119 50676 56383 79411 114503 239056

WHEAT

Rajshahi 22037 82113 129877 7871 15418 109756 147642 87182 44133 59296Dinajpur 4508 21445 38201 2002 6269 35468 25287 14464 12506 14847R-anpur 3248 26373 27870 2529 5232 44547 51668 22629 14369 24883Bogra 6234 14604 25287 475 240 19440 27579 17363 7331 5644Rajshahi 4161 9211 18639 2328 272 4387 20427 17176 4565 7118Pabna 3887 10047 19880 537 1221 5914 22681 13550 5364 6804

Khulna 5710 9378 5560 465 3015 6270 31582 14463 3339 23885KushtLa 2540 2656 3287 465 232 1370 7928 6313 968 4033Jessore 2904 6179 2022 0 2598 4848 21427 6313 2169 18415hulina 257 445 183 0 181 52 1811 1578 0 1436Barisal 9 98 68 0 4 0 416 257 202 0Patuakhali 0 0 0 0 0 0 .. 2 0 1

Dhaka 4494 10456 23984 2666 1203 3323 19105 13597 427 2579Jamalpur /a 576 3199 7931 557 730 2582 4193 160 55 1242MyMensingh 180 1075 1590 1380 14 15 2374 299 1 70Tangail 708 3101 7396 157 29 567 7357 6263 50 805Dhaka 2480 1802 7296 409 248 18 1040 1708 45 79Parldpur 551 1280 1771 163 182 141 4141 5167 276 383

Chittagons 6604 7871 14385 2227 3956 1931 16858 8017 3537 1003Sylhet 158 810 1715 105 313 324 1595 71 1198 0Comilla 6419 6918 12468 1615 3643 1603 13263 7937 2339 0Noakhali 21 123 109 507 0 0 0 9 0 0Chittagong 0 19 92 0 0 4 0 0 0 847Chittagong Hill Tracts 4 0 1 0 0 0 0 0 0 156

Total 38845 109819 175806 13229 23592 121280 21587 123259 51438 86763

----------------------------------------------------------------- ___---------__---__-----_----------------_---------

la Jamalpur was a subdivision of Mymensingh until December 26, 1978.

Note: 1.0 ton rice equivalent - 1.0 ton wheat - 1.5 ton paddy.

Source: Ministry of Food.

-130-Table 8.1BAADESH BUREAU OF STATISTICS INDUSTRIAL PRODUCTION INDICES, 1980181-1987188(1973174 - 1001

---------------------------------------------------------------------- __-----__----------------------------------------------------

------ W eihts (2)------[fs Indexl (Ind Index) 1980181 1981182 1982183 1983/84 1984/85 198S/86 1986187 19U7188

Food Products 10.45 10.17 141 174 168 142 106 11S 160 166Fish processing 0.40 0.39 82 93 80 36 147 233 209 175Flour milling 0.43 0.42 37 37 54 40 87 86 116 188Bakeries 0.59 0.57 191 211 199 .. 47 170 50 44Sugar & molasses 4.95 4.82 160 222 195 168 97 91 201 196Edible oils L fats 0.49 0.48 149 177 190 131 49 96 167 216Vegetable gh.e 1.04 1.01 93 129 160 117 105 107 96 114Tea 2.55 2.48 137 130 128 136 143 133 129 136

BeveVages 0.89 0.87 160 187 143 241 202 199 213 171Distilling & sp.rits 0.47 0.46 197 230 182 340 181 169 126 115Non-alcoholic beversges 0.42 0.41 135 140 98 131 172 233 269 250

Tobacco Products 13.65 13.28 125 133 11S 124 121 121 123 114

Textiles 47.39 46.11 114 109 115 111 111 100 116 104Cotton textiles 22.57 21.96 115 105 114 114 117 110 120 108Jute manufacturing 24.27 23.61 114 114 114 109 105 91 109 102Rayon & other synthetic textiles 0.55 0.54 71 41 165 87 161 117 210 59

Paper and Paper Products 0.95 0.92 124 136 100 114 160 170 172 171Paper 0.52 0.51 142 137 112 118 265 180 18S 181Newsprint 0.29 0.28 115 146 100 113 174 180 177 185Particle board S hardboard 0.14 0.14 78 108 53 99 111 115 97 109

Chemicals and Chemical Products 10.46 10.18 166 182 175 237 264 282 287 359Cc heal fertilizer. 4.87 4.74 146 143 157 234 280 S29 339 487

Basic Industrial chemicals 0.17 0.17 93 71 81 95 103 118 149 124PaInts. varnishes. lacquers 0.22 0.21 116 118 107 140 157 142 161 160Medcines & pharmaceticals 2.84 2.76 191 244 203 270 284 265 247 266Disinfectants & insecticides 0.28 0.27 375 266 136 389 474 306 352 316matches 2.08 2.02 162 191 198 209 211 219 237 226

Petroleum Products 1.42 1.38 333 313 247 256 265 252 284 285

Bon-tetallic Minerals 0.74 0.72 534 S18 492 452 410 462 502 505Class . 0.16 0.16 114 165 180 220 226 139 218 214Cement 0.58 0.56 650 615 579 514 460 551 585 S85

Iron and Steel 12.09 11.76 195 167 65 128 154 164 147 124

Non-Electric Machinery 0.46 0.45 361 304 1990 720 1062 409 265 53

Electric Machinery 0.89 0.87 298 322 295 349 507 6S5 729 597Electric motors 0.12 0.12 74 62 110 213 181 107 46 66Electric fan 0.37 0.36 247 291 290 320 388 409 449 436Lamps & bulbs 0.02 0.02 311 379 390 457 537 565 614 617Comunications equipment 0.27 0.26 528 523 405 499 869 1348 1561 1176Cables 1 ires 0.11 0.11 142 205 223 271 365 394 397 292

Transport Equipnt 0.28 0.27 125 115 48 86 74 82 73 85Shipbuilding 0.04 0.04 177 178 132 110 126 81 46 106

aotor vehicles 0.15 0.13 98 71 12 62 58 88 74 66Bicycles 1 rickshaws 0.09 0.09 147 160 74 117 81 73 8S 109

Other 0.33 0.32 68 58 81 80 63 123 98 52Juts baling & presslng 0.30 0.29 67 58 84 85 66 131 105 52Rubber products 0.01 0.01 62 55 49 167 109 107 91 152Ice Making 0.02 0.02 81 72 27 2 13 11 19 -

Indez of Manufacturing Production /a 100.00 97.29 143 143 136 142 147 144 156 151Public sector 77.50 75.40 MA NA KA NA NA RA NA NPrivate sector 22.50 21.89 nA NA NA NA NA NA NA NA

Index of MIning Production /b 0.29 144 177 186 220 245 265 301 363Index of Electricity Production lb 2.42 210 240 271 296 360 377 407 512Index of Industrial Production 100.00 145 146 139 146 152 150 162 160--------------------------------------------------------------------- ___------__----------------------------------------------------

la Weights shown in second colum apply to the overall index of industrial production/b Entirely In the public sector.

Notes The 1dex of manufacturtng production covers approxImately 93X of value added in large and medium-scalemanufcturing. Ercluded are. among others, the manufacturIng of footwear, leather, furniture endano-ferrous metal products, printing ed publishing, as well as all small ad cottage Industries(which include spInnig, dyeing and handlom waving).

Sources Bangladesh Bureau of Statistics.

-131-

Table 8.2JUTS AND COTTON MILLING STATISTICS, 1980181-1987188

------------.---------------------------------------..------- __--------------__-----------------------------------------

1980181 1981182 1982183 1983184 1984185 1985186 1986187 1987188(p)-----------------------------------------------------..--- __-----------------__-----------------------------------------

BJMC JUTS MILL STATISTlCS

Number of mills 77 77 40 36 34 33 33 33Labor force, permanent and badlis' 194106 20070e 135148 125916 124395 144093 142703 102048

Number of looms (annu4al mrage)Installed 25791 25791 18289 16303 16295 15808 15808 15808Operating 23759 23441 16648 15343 15507 13337 14917 15058

Hessian production('000 meters) 711061 681543 598527 569418 497584 356827 479020 543336(metric tons) 205413 197466 166198 160362 140363 102009 137876 156388

Sacking production('000 meters) 669848 744768 368916 257929 307276 278712 306342 287056(metric tons) 309681 329277 157833 103042 127503 128085 137270 128628

Carpet backing (CBC) produ¢tLn 71278 56274 69054 66342 53S14 43697 54289 35327

Other production 3751 S788 6330 8184 6123 1291 2123 5517

Total production (metric tons) 590123 586805 399415 337930 327303 275082 331558 325860

Raw jute consumptionMillions of bales 3.35 3.29 3.27 3.10 3.00 2.41 2.90 2.93Bales per ton of productien 5.67 5.60 8.19 9.17 9.17 8.76 8.75 8.99

COTTON MAIUIACTURING CAPACITY AND PRODUCTION /a

Number of mills 56 56 31 32 35 35 36 36Installed capacity

Spindles 1057460 1032238 606331 623060 661108 712552 724568 721956Looms 7592 6848 3187 3108 3111 3118 3106 3104

Capacity in operationSpindles 863112 786119 521474 512640 520760 474183 535123 527449Looms 5203 4531 2272 2319 2400 2209 2234 2286

Yarn Productionmetric toms 46245 43223 29002 29424 29028 25206 27453 2707932-count equivalent 55228 49849 35994 36120 35513 31435 35692 34536

Cloth Productlon'000 meters 78613 66291 35593 34520 37274 33887 34575 37684'54-pLik equivalent 81239 71705 39839 37887 39809 35591 37720 41306

Raw Cott*n Consumption (metric tons) 46409 44521 30811 29288 28752 25500 28500 28162

--------------------------------------------------------------------- __------__----------------------------------------

la Data shown for 1982183 and beyond are not directly cemparable vith those for earlier* years, as BTKC dislnvested itself of a number of its mllls durlig 1982183 and 1983184.

Notes: - Capacity data are annual averages.

- At the end of June 1982, ITmC had 66 enterprises under lts control:31 spinntng mills, 22 composite spinning & veaving mills, 4 specialixedmills, 1 engineering unlit, and 8 enterprises vithout any physical assets.

- At the end of June 1987, BTMC had 44 enterprlses under lts controls24 spinnig mills, 12 composite spinning & veaving mills, 4 specializedmills, 1 enginesesring unit. and 3 enterprises vitho-_t any physical assets.

Source: Bangledesh Textile Mills Corporation, Bangladesh Jute Mills Corporation.

-132-

Table 8.3SUGR AND PULP AND PAPER NIU ST*ZISTICS, 1980/81-1987/88(metric tons, unless spactftd othardie)

---------------------------------------------------------- __-----------------__--------------------------------------------------

DmSIO5 Start-up Capacity laDtstrict MIll Date Iustalled Achi.yeblelb 1980181 1981182 1982103 1983184 1984185 1985186 1986187 1987188------------------------------------------------------------- ___-------------___--------------------------------------------------

SWARDHAKA S2313 33483 24913 35095 31888 24913 14999 16164 26859 31369Dhaka

Deshbandhu Sugar Mills Io 1934 2032 3000 * 363 573 369 194 39 0 678 1155Faridpur

Fsridpur Sugar Mllls 1977 10161 10161 9197 13382 12980 11851 6294 5780 10100 12880Jasalpur

Zeal Bangl& Suar Hills 1959 10161 10161 10080 13156 11262 8203 6420 7917 11248 12521MYmeMIUsh

Kaliachapra Sugar Hills 1971 10161 10161 5272 7984 7277 4665 2246 2467 4833 4813National Sugar Hills Id 1933 3048 1016 0 0 0 0 0 0 0 0

KNULNA 35561 35561 34236 54022 43560 41839 22433 17731 39747 45682Js5a5re

Mobarakeonj Sugar Kills 1969 10161 10161 11216 16236 14787 13582 7673 3610 11062 13647KushtiaXushtia Sugar Mills 1966 15240 15240 11700 19921 16345 15063 8394 7871 16037 17482Carew & Co. Ltd. Ic 1938 10160 10160 11320 17865 12428 13195 6366 6250 12648 14553

RAJSHABI 128087 124024 86064 113051 105907 84601 50417 48703 115319 101209BograJaipurhat Sugar Mills 1963 20320 20320 18040 22011 21224 15880 9096 5938 14786 13222

DinaJpurPanuchagrh Suar Mills 1969 10161 10161 6819 8926 10379 9257 6896 6160 9942 10867ThSakurgaon Sugar Mille 1959 15240 15240 11114 16692 10310 8826 5018 4173 7506 9750SetabganJ Sugr Mills to 193311982 12500 12500 0 0 5115 5185 2320 2710 5028 6031

NatoreMator. Sugar Mills 1984 15000 15000 0 0 0 0 818 5437 17981 12938

RJsshahiRajishhi Sugar Mill. 1966 15240 15240 16188 22212 20020 15717 9099 6510 20761 13023North BSngal S. Hlls Ic 1933 14225 12192 12995 16843 20113 16564 9719 10175 19174 17258

RaogpurShampur Sugar Mills 1968 10161 10161 9830 12826 8836 6432 4020 3802 10030 10237Ranapur Sugar Mills 1958 15240 13210 11078 13541 9910 6740 3431 3798 10111 7883

Total 196163 193068 145213 202168 181355 151353 67849 82598 181925 178260

Hoe Itemst

Can crushed, total ('000 metric tows) 1827 2473 2217 1900 1177 0l18 2287 2199Sugar recovery in I of con cruhsd 8.1 8.3 8.3 8.1 7.5 8.1 8.0 8.1Molasses produced (.000 metrie tos) 68 92 81 70 44 38 86 83Bsasse produced ('000 metric tos) 679 915 821 701 424 367 833 791

PULP PAPER

gernaphuli Pealr Mills (paper) 24302 24744 21340 18451 28876 31131 32208 32552lhulna Newsprint Mills

(Nwsprint) 30412 38652 26550 28670 45972 48414 46518 47811(Mechanical printing paper) 3748 5351 4652 9094 4880 6686 3878 2047

North Bensal Paper Mills (paper) 7517 7628 4795 9506 9974 10906 11020 9838Sylhet Pulp & Paper Mills (pulp) 14023 9131 12128 10822 12190 14054 15084 17818

Total 80002 85506 69465 76543 101892 111191 108708 110066

______--__________________________________________________________________________________________________________________________

* Fron 1986187 omnrds, following replacement, the capacity has bean incr esed to 3000 MT.

ls Based on 120 dys of erushitg.lb In 1982183: based on technical fesibllity.Ic Nationalised in 1965.Id The mill is closed from 1975176 and its capacity hb not been lncluded in the total.le Shut down In 1975, rehabilitated end reopened in 1982183.

Notes ALL mills established after 1947 were in the ublic sector.

Sources: Banladesh Sugar and Pood Industries Corporation, Bangladesh ChemicalIndustrie Corporation and Bangladesh Bureau of Statistics.

-133-

Table 8 .4PRODUCTION OF SELECTED D TRIAL MownS bY PUIILIC SECSlRM CP(RDAUBOS to(units as shown)

--- AAVR __ | ------------------------------ AINI. DATAT--------__------------------72175 73180 j 1980181 1981182 1982183 1983184 1984185 1985/86 1986187 1987188

(p)Jute TextiLes 000 mtric tons 510.4 499.6 590.0 386.8 569.9 600.9 521.4 458.7 539.7 527.2

Hessian 188.0 167.8 205.4 197.4 228.2 238.9 208.4 162.5 203.5 219.9Sacking 242.8 238.4 309.6 329.S 241.6 256.8 223.5 224.4 248.0 228.6Carpet Backing 31.7 67.7 71.3 36.3 94.0 96.4 81.3 67.0 80.3 66.4Others 27.9 25.7 3.7 3.8 6.1 8.8 8.2 4.8 7.9 12.3

Cotton TextilesCloth mill. Yd 65.6 79.0 86.0 72.5 63.5 66.2 68.4 64.6 64.S 67.5Yarn mill. lbs 92.5 89.6 102.0 95.3 99.7 102.0 106.1 94.7 99.5 102.9

Paper 4and BoardNevsprint '000 metric tons 30.0 24.9 30.9 39.3 26.7 28.7 46.0 48.4 46.6 49.7Paper 25.7 27.8 33.2 32.1 26.1 27.7 38.1 42.1 43.2 42.4Rayon Yarn 2.2 1.5 1.3 0.9 1.6 1.2 1.5 0.8 1.1 1.3Hardboard mill. sq.ft. 12.3 17.0 19.9 11.1 16.4 14.4 17.2 17.: 15.5 15.5Particle Board .000 tons 3.0 2.0 1.2 2.5 0.5 2.4 2.3 2.4 2.5 2.3

Steel Ingots 000 metrlc tons 64.3 10S.6 139.3 108.6 47.4 72.2 101.4 95.5 82.1 70.0

Engineering Products 0.0 0.0Diesel Engines '000 1.3 1.4 8.5 1.8 4.7 4.7 7.9 4.5 2.6 -Pumps 1.1 4.0 16.1 19.2 25.7 21.2 15.2 6.8 4.4 1.9Comnerctal and Ba, Vyhicles 1.3 1.2 2.4 1.6 0.4 1.9 1.0 1.0 1.3 -Radios 13.8 102.2 198.0 185.8 112.0 102.8 213.9 162.4 168.1 115.fTeleviston sets 0.5 4.9 26.7 27.8 33.6 50.0 57.0 69.8 71.0 60.0

Petroleum Products '000 tons 650.7 947.4 1207.7 1133.0 919.0 1004.2 978.3 949.4 974.3 950.2

Fertilizers '000 metrl tonsUrea 191.9 224.7 341.7 345.4 371.0 727.9 729.8 835.0 846.0 1285.8TSP 0.0 44.5 71.2 58.9 70.9 81.2 56.7 100.8 126.0 117.0AmonLumn Sulphate 6.6 6.8 9.2 11.6 12.3 11.0 9.3 10.0 9.0 6.0

Glass Sheets mill. feet 6.7 6.6 6.7 9.4 13.1 12.8 12.9 7.9 12.0 12.0

Matehes mill. gross boxes 8.4 7.6 10.1 11.8 11.8 12.1 13.1 13.6 14.9 13.7

Food and Allitd ProductSoyabean Oil 0000 metric tons 5.2 10.7 15.3 18.4 21.3 16.9 9.0 8.2 18.5 24.0Fish Processing mill. lbs 3.0 5.8 2.5 2.5 2.4 1.1 0.9 7.1 6.4 7.6Soft Beverages '000 casea 294.0 297.2 386.0 401.0 568.0 731.0 995.0 1345.0 1486.0 1770.0Cigarettes million 13627.7 11897.4 14906.0 13778.0 15778.0 14843.0 14393.0 14363.0 14762.0 14031.0Biacuitc and Bread 000 metric tons 4.9 4.9 8.4 9.2 8.7 .. 2.0 3.0 5.0 8.8Sugar 66.8 126.2 145.2 202.2 177.6 157.2 88.5 82.5 181.9 178.2molasses 35.5 56.8 66.4 91.3 79.2 69.7 41.5 38.5 85.2 82.0Salt '000 metric tons 417.7 695.4 269.0 370.0 241.0 634.6 645.6 ... ...

Cement '000 metric tons 45.4 250.5 344.8 326.2 306.7 268.3 240.2 292.1 309.7 310.0

Limestone '000 metric tons 87.0 53.1 38.5 44.6 32.1 33.8 40.9 22.1 45.7 39.6

Sulphuric Aeid '000 metric tons 6.2 5.9 3.8 2.1 3.1 4.3 4.4 6.0 7.9 5.4Caustic Soda 3.7 4.9 6.0 6.1 5.7 6.1 6.8 6.9 8.3 8.2Hydrochloric Acid 1.0 1.7 2.5 1.1 1.4 1.5 1.4 1.6 2.0 2.3Chlorine 2.6 3.4 4.1 4.2 4.0 4.2 4.6 4.6 5.7 5.0

Natural Gas mill. cubic feet 9041.3 30250.4 49936.0 64781.0 72104.0 83090.0 94580.0 106652.0 125315.0 147454.0

Electricity mill. kWh 1139.4 1686.3 2661.8 3034.6 3432.9 3966.2 4592.0 4776.0 5288.0 6142.7

/a Includes prlvate sector production of tea, egtettes, ed matches. Jute and cotton tetlile.plastic board, radio and TV. fish processing. soft bevrage and bread and bLscuit.

Soure.s Miniatry of Industry, corporations. Plannin Comission. and Bangladesh Bureau of Statistics.

-134-

Table 8.5 UAT5UAL GAS STATISTICS, 1979180-1987188(1Slleon , mm)

------------------------------------------------------ _--___---__------------__-----______-------------------------------------

1979180 1900181 19811/2 1982183 1983184 1984185 1985/1 19861/7 1987188

PRODUCTIO0Sylh8 t 7008 7039 7101 6942 3827 3081 3793 3690 4322Chbatak 1966 2073 1653 1972 1779 1188 0 31 0Ra.bidpur 0 0 0 0 0 0 0 0 0Titas 31678 33410 42644 48473 57825 57367 45429 53098 60126Ktilatila 0 0 0 0 2955 5007 4266 5911 6089Habigani 4975 7415 13410 14718 16762 18125 32734 33741 34114Bakhrabad 0 0 0 355 6693 15290 24190 38798Samaten 0 0 0 0 0 0 0 0 0Katubdl- lb 0 a 0 0 0 0 0 0 0Begulsani 0 0 0 0 0 0 0 0 0Fonl 0 0 0 0 0 0 0 0 0BeaniLbagar 0 0 0 0 0 0 0 0 0lamt& 0 0 0 0 0 3134 5141 4656 3934

Total 45627 49937 64808 72105 83503 94595 106653 125317 147383

CONSUMPTION BY SECTORPower 15882 18515 22246 27706 30372 37894 39780 51847 61656FY tiliaers 18559 17610 26111 25192 31834 31081 35387 37744 50989Industrial 6863 7774 8735 9490 10193 13146 16327 18923 16777coa.aerLil 1055 1493 1844 2182 2341 2468 2759 3289 3563Heueholde 2611 3475 437 5363 5796 6346 6796 6835 7553

Total 44970 48867 63313 69933 80536 90935 101049 118638 140538

H#OR*EDUK IUE"SsTa r of EstLmated Recoverable Gas Reserve Condensate Nethaen Celorific

Die- (In Trillion Cubic Fret) Recavery Content Value GrssField caevry Proven Probable Possible Total (BBLIHMCF) (vol X) (BTUICPT)

Sylhat 1955 0.44 0.24 - 0.68 95.85-96.63 994.4Chhatak 1959 0.05 0.11 0.23 0.39 0.004 97.90 1000.24Rashldpur 1960 0.49 0.38 0.19 1.06 2.8-4.6 9U-99.6 1023.36Titan 1962 0.84 1.10 1.04 2.98 1.5-1.7 90.02-97.33 1039.31Kailastila 1962 0.38 0.15 0.07 0.60 10.9-13 95.57-95.99 1040.53B bi onj 1963 0.41 0.70 1.01 2.12 0.03-0.05 97.1-97.84 999.12Bskhrabad 1969 0.74 0.74 1.30 2.78 2.0 94.34-96.1 1047.57Semuteng 1969 0.08 0.15 - 0.23 VIA 96.94 VIAlutubdia la 1977 0.06 0.72 - 0.78 N/A 94.49 b/ABeguacnj 1977 0.01 0.03 0.09 0.13 0.36 93.22-94.49 1045.61Feni 1981 0.09 0.27 - 0.36 1.78-3.56 91.35-97.9 1049.84Kacta 1982 0.02 0.11 - 0.13 4.27 95.36 1043.13Beanibasar 1981 0.10 0.08 0.07 0.24 16-20 95.32 1061.13Fenchugeni 1987 0.08 0.28 - 0.36 0.6-4.45

Total 3.78 5.06 4.00 12.84 40.24-53.9"------------------------------------- _----------------------__---------------__------------------------------------------------

BBL - barrel.BTU - British Thermal Unite - 0.252 kilocalor.CFT - cubLe feet.IOCF - million (standard) cubic feet.

I/ Offshore field.

Source: Petrbangla.

-135-

Table 8.6t,RCTRICm P8ODUCTION MMD ONSHMPTFON, 1975180-1987186[GM IPS1 AS ROM50)

IrVM-YEaM AVRMES ------------------------------ARUUAL DATA-----------------------------75180 8018S 1980181 1981182 1982183 1983184 1948185 1985186 1986187 1987188

----------------------------------------------------------------------------------------------------------------------------

Inatall-t capacity (1M] 765.7 970.3 813.2 857.0 919.2 1121.0 1141.0 1171.2 1607.2 2146.2

Gross GCaer tion 1892.6 3524.9 2661.8 3036.4 3432.7 3946.2 4527.6 4800.3 5586.9 6540.0Not Generation 1793.1 3371.8 2539.8 2896.1 3294.2 3803.2 4325.9 4572.3 5301.9 6136.9

Final consumption 1194.1 2313.1 1594.5 2028.3 2398.6 2703.4 2840.7 3306.8 3485.3 3772.7SIlled cons,aption Emillion Tak*) 417.7 2916.2 1635.9 2041.1 3231.7 3619.5 4052.8 5771.6 6278.4 7661.8

CONSUHMPX BY SECTOR

Domeatic 183.2 449.4 292.1 339.1 438.6 520.2 657.2 715.8 898.4 950.0Commercial 152.2 267.4 329.2 270.8 235.9 251.4 249.9 278.1 308.7 391.1Industrala 769.7 1430.7 1021.7 1339.1 1473.7 1712.0 1606.7 1562.5 1729.1 1843.2Aertcultur 31.8 42.9 38.0 29.6 37.4 53.4 56.2 51.1 56.2 62.9Others 50.5 146.4 58.5 49.7 212.9 140.5 270.6 699.3 491.5 52S.5

Tat"l 1187.4 2336.9 1739.5 2028.3 2398.6 2677.6 2840.6 3306.8 3485.3 3772.7

Losses (Utility only)/a 705.2 1188.0 922.3 1008.1 1034.1 1288.6 1687.0 1493.5 2101.6 27f7.3as e of grosa generation 37.3 33.7 34.6 33.2 30.1 32.5 37.3 31.1 37.6 42.3

la Includes station auxiliary use.

Source: Dausladsh Powr Deelopment Board.

-136-

Table 8.7RAILWAY STATISTICS, 1972175-1987188

-MULTI-YE AVERAGES- ------------------------------ ABIIUAL DAAT-------------------A---------72175 75180 80185 19808l 1l81182 19218S3 1983184 1984185 1985186 1986187 s987/88

Louts length kml la 2874 2876 2888 2884 2884 2887 2892 2892 2918 2792 2792Broad gouge 964 966 976 974 974 974 978 978 980 970 970metor rga 1910 1910 1912 1910 1910 1914 1914 1914 1938 1822 1822Harr"o guge 0 0 a a 0 0 0 0 0 0 0

Locimntvese total 503 423 386 410 417 410 386 306 290 291 291DieslS, total 171 178 276 240 253 302 299 288 290 291 291

Broad gaug 34 34 69 52 64 76 76 75 75 75 75Mater souse 138 143 208 188 189 226 223 213 215 216 216

Steem, total lb * 331 247 109 170 164 108 87 18 - 0 0Broadgouge 115 81 32 54 50 22 1s 1s - 0 0Motor gauge 216 165 77 116 114 86 69 0 - 0 0

Broad gauge 4221 4450 4182 4149 4302 4292 4086 4080 4073 4073 4073Metar gaoge 11715 12204 12598 12568 12705 12684 12597 12434 12357 12283 12174Total unite 15936 16754 16779 16717 17007 16976 16683 16514 16430 16356 16247Total 4-Aheler units 18327 18734 19814 19366 1989 20196 19892 19720 19629 19545 19424

Freight Cartied t'Oo0 metric tonsl 2877 3299 3029 2984 3230 2998 2939 2995 2341 1984 2517Ric7 127 275 243 191 273 249 241 262 203 132 191paddy 67 196 130 161 236 94 104 75 51 47 48Uheat 599 515 658 478 573 860 704 674 427 373 681

Raw jute 353 300 222 215 216 224 228 226 171 166 164Jute goods 18 28 26 26 so 22 18 30 12 14 20Sugarce 141 385 320 360 364 299 365 215 218 254 371Sugar 63 70 54 31 50 78 55 56 37 26 54Salt 8s 117 94 102 70 65 119 113 82 62 64

FYrtLILzer 64 297 349 338 367 323 296 419 404 317 377CmUt 89 109 126 155 86 83 175 130 116 77 93Col 119 157 57 85 81 49 40 29 59 34 70Petroleum products lc 119 147 132 184 179 116 99 84 lor 75 119

Total ton-km 631105 787758 609314 786655 844488 813876 778635 822917 612223 502594 678266

PSi Consumption (metric tonalCoal 16961 19313 23668 23400 16278 16331 16886 14765 1767 -

Diesel oil 12810 40982 35356 40395 39503 44656 44998 44696 50417 45949Furnace oil 24772 22646 49418 37026 18679 5919 2191 1122 839 -

la Total track mileage In 1978179 va 4503 km.lb Including 6 narrov gauge steam locomotives.Ic Excluding fuel for the railvays and for the military.

Sources Ministry of Communications.

-137-

Sable 8.8TRANSPORt STATISTICS, 1974175-1986/87

-------------------------------------------------------------- __-------------__------------------------------------_-----------.-

1974175 1978179 1979180 1980181 1981182 1982183 1983184 1984185 1985186 1986187---------------------------------------------------------------- __-_---------__-----------------------------------_-----__-----_-

(Unit)ULAID WATER TRANSPORT

SIMTC FleetTotal . No.) 705 633 591 591 586 555 544 533 524 484

Self-propelled barges 11 9 6 6 6 6 3 8 8 8nlend 6 river barges lb 412 313 287 287 255 229 232 246 239 246nland tugs 33 28 28 29 29 29 27 25 24 23

hainland tugs 18 26 24 23 23 23 21 19 19 19coasterslc 25 24 23 2S 23 25 21 20 20 20

Country BoatsCargo t 000) 87 92 92 94 96 98 100 102 104 106Passenger (t000) 161 170 171 177 180 183 186 189 192 195

ROAD TRPASPORT STATISTICS

Road Hileage, total I& (mells) 2695 2927 3002 3536 4095 4618 4969 6446 6947 n.a.high (miles) 2343 2533 2608 2662 2686 2968 3188 3832 4039 n.c.low (miles) 352 394 394 874 1409 1650 1781 2584 2908 n.e.

Buses operating, private ( No.) 5223 5195 5747 6S62 6383 7330 7528 7731 7940 8152Tircks operating, private C No.) 9457 11089 11473 11413 13263 14236 14620 14990 15383 15720Bullock carts (eat.) (t000) 87 135 137 138 139 141 142 144 144 147

la Data cover only roads constructed and maintained by the Roads and HigSvaye Department. Ulih road areroads with camcnt, concrete, bituminous cncrete or bitviminus surfae, lovl rods are roads withston, gravel, brick, or *erth surface, but uhich are properly aligned and have drainage structures.

lb Including jute boats and flats.lc Can travl up the main river route.

Soure: Bangladaeh Bureau of Statistic.

-138-

Table 9.1CoRSu?1R PTCC lNTDCES. 19S0/16-1987/6U

--------- _-----_--------------------------,------------__-------__-.--___----_.-------------------------_-_-_---_---_-----

1980/18 191182 1982103 1983184 1984/65 1985 U 1986/87 1987/6*

DHAIA M1DDLE ZCOME (1973)74 - 1001*ood 244.69 268.15 312.77 350.47 387.89 429.46 483.42 335.42Fuel & Lighting 293.08 376.71 461.27 466.39 302.64 539.30 542.20 562.09Houstn 348.64 374.66 402.19 416.81 453.74 506.62 550.78 647.71ClothIng 176.78 194.87 200.46 224.98 255.15 274.23 292.59 319.08)isc.lienaoua 232.69 264.59 299.09 335.30 392.25 419.38 459.52 524.37Overall 254.97 296.50 325. 9 357.47 396.38 436.03 481.16 536.02Percent increase 12.5 16.3 9.9 9.7 10.9 9.9 10.4 11.4

DHAK GCtVEM lR UWLOYZS 11969170 * 1001\ Food 603.64 697.43 725.47 824.25 933.53 1024.32 1169.71 1255.52Fuel & L4hting 657.47 817.75 883.19 694.14 1057.34 121C.31 1263.71 1329.65SouaJng 879.59 933.17 1040.85 1057.00 1113.86 1268.60 1415.86 1689.98ClothIng 653.56 724.55 792.56 837.05 925.93 967.90 1034.27 1132.91miacell eou 531.46 578.27 634.93 712.58 795.78 817.96 877.15 977.32

Overa1l 628.28 708.84 757.96 832.94 931.47 1014.33 1129.69 1241.17Percent increase 12.0 12.8 6.9 9.9 11.8 8.9 11.4 9.9

CBISTAm ZUDUSTRIAL CBFERS (1969170 - 1001Feod * 563.12 646.36 679.33 801.25 907.99 980.11 1116.55 1187.93ClothIng 574.83 687.01 766.32 929.86 1037.50 1082.19 1122.97 1139.85Rousing 783.94 897.52 1023.79 947.63 1066.91 1264.60 1409.37 1487.63Mscell aeus 501.56 533.67 553.73 606.47 695.44 718.19 741.51 799.28Overall 576.53 662.25 707.36 807.03 913.98 989.60 1105.20 1165.95Percent Lncreae 7.3 14.5 6.8 14.1 13.3 8.3 11.7 5.5

KRQL93 INDUSTRIAL V0W8 t1969170 - 1001Food 524.81 617.30 640.63 712.87 789.09 878.96 1029.00 1081.26ClothIng 535.06 582.48 626.05 736.45 867.51 942.56 998.42 1012.56HousIng 720.40 781.28 734.74 781.90 862.94 1057.42 1269.65 1397.02Hlscellansous 467.51 511.76 526.05 562.34 600.82 689.23 737.89 736.33

Overall 538.16 617.88 635.88 706.01 784.37 882.33 1017.75 1067.43Perenmt ncrease 8.1 14.8 2.9 11.0 11.1 12.5 15.3 4.9

UARAYAANO*J INDUSTRIAL O31ERS t1969/70 - 1001Food 562.41 653.52 681.79 774.72 862.97 930.58 1052.18 1159.12Clothing 653.95 616.38 769.49 809.38 913.53 1035.11 1131.55 1179.78Housing 774.52 932.00 955.46 891.11 1078.96 1257.59 1371.20 1535.97miscell neous 515.27 585.85 593.29 604.44 674.08 725.19 757.69 789.78

Overall 587.29 689.37 707.13 770.96 868.73 950.45 1039.36 1157.76Percent Increase 9.0 17.4 2.6 9.0 12.7 9.4 11.5 9.3

RURAL COSUUR, PRICE TSDICES FOR SBLECTED DISTRICTS (1973/74 - 1001Dhaks 218.0 261.0 282.0 315.0 356.0 369.0 420.0 454.0Chlttasng 217.0 265.0 286.0 344.0 380.0 391.0 456.0 489.0Rajishi. 219.0 267.0 274.0 295.0 340.0 364.0 408.0 439.0*hsaa 204.0 252.0 260.0 284.0 320.0 333.0 391.0 415.0Sylhot 224.0 275.0 290.0 329.0 354.0 375.0 437.0 477.0Rangpur 203.0 250.0 276.0 305.0 368.0 381.0 430.0 465.0Banglasdh trurall 214.0 262.0 278.0 312.0 353.0 369.0 424.0 456.0

! ~ ~-------------------------------------------------------------------------------------------------------Notes- Dhaka middle incoM Land" refers to families vith 1973/74 incomes of Tk 300 to Tk 999.

Dbhak governnrt employess index refers to non-gasetted employees vith monthly salaries ofTk 100 to Ik 400 Lz 1969/70.

Sources Bmgladesh Bureu of Statistics.

Table 9.2MORAL GAS AND flELED PRUCT PRICES, 1980-1988

ffzectlv DatesNAUA GAS --- -----------------------------------------------------------------------------------------------------------------------------

Tim srsT June?, JUV 7, July 1. Juo 30. Jura 7, June 30, Jww 27. Jin 18. MY 1,WNWu 1980 1981 18 1984 18 1986 197 1988

BUL USERSCost Af OeslNCF (e-field), 5.98 7.55 9.50 10.00 11.65 11.80 16.85 21.n 26.97

Lneluing *cisL duty /a 4.50 6.00 9.00 9.50 9.50 12.80 15.72 20.30 23.28

INUSRALCost of Goal=J (em-fteld), - - - - 22.65 29.1s 37.06 37.06 AS.79incuAi9 .ise dufty la - 21.65 28.1S S3.71 55.71 41.99

Cost of G"aNC (ex-field), 6.68 15.68 18.00 22.65 - - - - -Including eoise duty to 5.00 16.00 17.50 21.65 - - - -

MD USMER WhICZSI INCLDID XCISB DOUSSBlk Cms1mrs

Poer Cmratu 7.75 9.10 10.50 11.50 15.05 15.66 19.09 26.82 28.54Ferttller Production 7.75 9.30 10.50 11.50 1.05 1. ".6 19.09 24.82 28.56

Indutrvil Conamre 18.00 27.75 31.00 36.00 36.00 U3.20 52.14 52.16 59.96Cinl Consumer 19.00 28.00 31.00 36.00 65.20 54.26 65.39 85.00 97.75

Iousebold ConsmmeNatere 18.00 20 0o 27.00 14.00 36.00 60.80 44.S8 50.10 56.10Uziteredtlth

- Stoav (Cm burver) 22.00 25.00 15.00 65.00 65.00 60.00 66.00 80.00 92.00- Stove (two burners) 40.00 45.00 a5.00 80.00 80.00 100.00 110.00 130.00 150.00- Additial buner (eah) 14.00 16.00 27.00 34.00 34.00 41.00 65.00 36.00 64.00- o0e (each) 14.00 38.00 58.00 74.00 74.00 89.00 97.00 121.00 119.00 L4- Additional oe (each) 17.00 19.00 29.00 37.00 37.00 65.00 69.00 61.00 70.00- Grill (each) 34.00 58.00 58.00 74.00 74.00 89.00 97.00 121.00 139.00- AdditIonal grill (ah) 17.00 19.00 29.00 57.00 17.00 45.00 49.00 41.00 70.00- Water bestar up to 20 S&L 68.00 76.00 117.00 147.00 147.00 177.00 194.00 2U2.00 278.00- Water heater abo 20 gal 84.00 93.00 146.00 164.00 184.00 221.00 2u2.00 303.00 348.00- Dryr (each) 101.00 112.00 175.00 220.00 220.00 265.00 291.00 364.00 619.00- Rofrigertor (acoh) 84.00 93.80 117.00 147.00 147.00 177.00 194.00 262.00 278.00- Oa Lbht, g en l usa 65.00 56.00 66.00- Gas light. interal use 23.00 28.00 32.00

Kin4-m ChbasesflonthDastla (unmeteed) 18.00 20.00 27.00 34.00 34.00 41.00 63.00 86.001. 97.001.Cerclal 95.00 140.00 155.00 180.00 180.00 272.00 327.00 S5l of S0l of

smection Iced senction Iced

PUTOLEW PODCTS lb July 1980 may 1981 September 1981 July 192 Norch 193 July 1986 Jun 1986 Jim 19S7 Jm 1988UARAl t MIAL GAILLO Ex-Ref h-depot Bh-Ref h-depot h-Reof B-deot h-Ref an-depot h-Ref Bh-epot x-depot x-Ref E-depot x-Ref B-depot Br-Rof h-depot

Prmle Ga"olin (with 3080) 42.07 66.66 65.85 52.52 68.14 54.86 62.58 69.30 66.84 75.16 76.15 54.62 61.51 54.62 61.51 54.62 61.51Regular Gasoli (H3) 40.40 46.37 42.16 48.16 44.27 50.52 57.55 63.80 60.63 66.68 67.19 52.32 50.51 32.32 58.55 52.32 58.55Jet Fue (P-1) 26.72 28.31 29.6 31.25 $0.90 !2.7S 40.17 42.02 40.17 62.02 62.64 36.14 19.14 36.16 39.14 16.14 39.14Kerosene (SWO) 16.09 17.69 20.73 22.50 21.69 25.63 30.71 32.81 30.71 32.81 32.82 27.91 10.50 27.91 30.50 27.91 30.50Diesel Oil (80) 20.23 22.50 20.02 22.50 20.98 23.63 30.00 32.81 30.00 32.81 32.82 27.91 30.50 27.91 30.50 27.91 30.50FueL Oil (FM) 11.81 13.00 15.12 16.68 15.80 17.51 22.71 24.54 22.71 24.54 24.55 19.28 21.37 19.28 21.37 19.28 21.3?LLquefied Petrolem CGa (LFC) 50.00 54.36 50.00 56.31 50.00 56.36 50.00 14.36 95.00 105.00 105.00 69.50 113.50 69.50 113.50 49.50 113.10

I& Price wse raised to Tk 75Jcylioder with effect from 12 August 1982.lb Ea-refinery n ex-depot at ClittWagn. In July, 1984 Prices were fixed in liters with minor

adjustmets in ex-depot prices as shomn ht-refinery prices were not changed,Jc Double.

ource lita Ga Cutany and Rangiedesh Petroleum Corporation.

-140-

Table 9. 3ILECIRICI T TARIFF STRUCTUROF TH BUAGLADUESH POWR DEVELOPMENT BOARD(Effeotive August 1, 1987)

Conimu r Group Mini-" Charge Unit Rates------------------------------------------------------------------ __---------__--------------_------------

Category A: Residential Not applicable - Monthly consumptionLi4ht and Power up to 70 KWh Tk 1.25/KWh

- Monthly consumptionfrom 71 KWh to 200 KWh Tk 1.401KWh

- Monthly consuptLonover 200 KVh Tk 2.85/KWh

Category 3: Agricultural Tk 123/UP per month - Wlthout time-of-dayPu¢ping durlng season but not meter Tk 1.70IKh

less than Tk 500 for single - With time-of-day moterphase or Tk 2000 for - Off-peak hours Tk 1. 351KWhthroe phases. Also not - Peak hours Sk 4. 00/KWhless than Tk 1500 for singlephase or Tk 6000 for threephases per season.

Category C: Small - Without tiLe-of-dayIndustrial Consumer meter Tk 2.301RKh(up to 30 KW) - With time-of-day

meter- Off-peak hours Tk 2. 00/KWh- Peak hours Tk 4.25/KWh

Category D: Non-residentLIl Tk 601KW of sanctioned Tk 1.65/KWhLUght and Power load(up to 50 LW)

Category EI Cocmrcial Tk 60/KW-Tk 80/KS - Without time-of-dayof sanctioned load meter Tk 2.80/KWh

- With tie-of-daymeter- Off-peak hours Tk 2.00/KWh- Peak hours Tk 5.40/KWh

Category Fs Medium Voltage Tk 80/KI of sanctioned - Wlthout time-of-dayGeneral Purpose load but not less than meter Tk 2.10/KWh(up to 2.5 MW) Tk 8000/month - With time-of-day

meter- Off-peak hours Sk 1.70/Kih- Peak hours Tk 4.00/KWh

CategoY G: Extra-high Tk 80/IK of contracted - Off-peak hours Sk 0.75/KWhVoltage General Purpose load - Peak hours Tk 2.75/KIh(132 gV and up to 150 NW)

Category H: High Tk 80/KM of contracted - WIlthout time-of-dayVoltage General Purpose load meter Tk 2. 00/KWh(33 aV nd up to 10 MW) - With time-of-day

meter- Off-peak hours Tk 1.65/KWh- Peak hours 1k 3.75/KWh

Category I: 8igh Voltage Not applicable - Wlthout tine-of-dayBulk Supply for REB/Pa11l meter Tk 1.14/KWhBlddyut Samity - Wlth tl-of-day

meter- Off-peak hours Tk 0.80/KWh- Peak hours Tk 2.90/%&h

Categoy J: Street Light Not applicable Tk 2.15/KWhand Water Pumps

Temporary Power Service Double of applicable - Double of applicable rate forrate for the tariff Category E for 230/400category - Double of appLicable rate

for Category F for 11 xV- Double of applicable rate

for Category 8 for 33 KV

Note: The tariff hAs been revised recently by about 52 but details were not availablet? be included in thLs report.

Source: Bangladesh Power Development Board.

-141-

Table 9.4IIUOALBSZ 19201 01r co96um 0000 29 mmBA 4 , 1980181-1987188(Taka per unit shown)

TzaditienalItems UnIts 1980181 1981162 1962143 1953184 1984185 1985186 1986,87 1987188

Masur auvAd $80.15 455.14 400.83 419.42 396.42 385.03 700.33 749.78ThoearL Mound 151.62 230.90 213.48 301.09 239.45 245.81 412.07 354.48Potatoes, local (beat quality) -,-Ai 112.28 103.11 79.02 122.99 124.36 142.23 225.00 136.66ROhAU fish (large cut Pleces) maund 962.00 1037.00 1097.00 1272.78 1466.00 1905.13 2371.17 2284.87Chicken eg"s, fresh 100 91.20 101.00 107.00 121.69 144.46 177.93 182.33 183.36Chillies, dry (superior 4uality) mmumd 1050.78 987.66 512.70 1152.06 1441.56 619.69 964.00 1592.01Turmeric (HaldL, beat quality) sua*d 456.30 476.17 554.08 1325.84 1574.16 1441.00 958.33 936.35Mustard oil. local (best quality) mmmnd 1092.02 995.35 1004.69 1394.27 1463.53 1320.57 1487.33 1473.45Chao (cow) maund 2497.00 5105.00 5240.00 3326.90 4218.38 5107.47 5390.80 5741.00Coconut oil. Laported (sup. quality) -.- A 1082.56 1117.48 1006.50 1485.57 1884.91 1430.11 1297.17 1662.11Vegetabl* oil (Pakysm) 35 lbs. 378.06 391.32 452.45 569.02 754.08 697.26 694.38 734.58Tobacco leaf (Motibari, sup. quality) maund 910.15 859.87 783.58 994.86 1111.54 1079.12 1038.60 1095.81Betelnut (Tanti, whole, dry, sup. quality) maund 1226.49 1200.59 975.45 1230.83 1801.39 2038.51 1691.17 1575.38Betel lea (medium siza) 6400 291.58 395.81 478.49 461.55 544.76 529.69 538.33 817.80firewood. Gftsari 100 msaWs 2361.00 2837.00 2935.00 2908.09 3698.21 5341.75 5715.98 5748.77KArosene, white 4 gIalln 83.00 103.00 140.25 135.72 136.65 136.13 130.16 131.92CLgarettes (Capstan) 230 95.52 108.18 125.72 123.30 128.86 159.99 150.56 164.63Matches (box of 40) gross 28.90 34.36 43.09 38.75 40.80 64.52 089.17 59.35Paper, 10 11... foolscap re 90.11 95.56 109.34 115.40 120.82 117.39 119.85 120.74Cycle tyro, leiorted (Naster Service) dosen 783.89 736.85 1140.61 1473.69 1722.05 2027.50 1968.79 2294.51Cycle tubes (Deshi) dozen 268.26 262.20 256.93 257.05 345.91 413.78 443.23 358.59Lonsoloth (medium quality) 40 yards 429.00 502.00 349.010 645.00 727.00 712.07 748.94 656.45

Metric Units

Hasur ug 14.19 16.99 14.96 15.66 14.80 15.67 18.76 20.09Rhesari kg 9.39 8.62 7.97 11.24 8.94 6.59 11.04 9.50Potatoes, local. (beat quality) kg 4.19 3.85 2.95 4.59 4.64 3.81 6.03 4.20lohu fish (large cut pieces) kg 25.81 27.82 29.44 34.15 39.17 51.11 63.62 61.31Chicken egus, fresh hundred 91.20 101.00 107.00 121.69 144.46 177.93 18k.33 183.36Chillies, dry (superior! quality) kg 59.22 36.87 19.14 43.00 53.80 16.60 25.85 42.66T=rmeri (HeIdi, best quality) kg 17.03 17.77 20.68 49.49 58.76 38.61 25.67 25.09Mustard oil, local (best quality) kg 40.76 37.15 57.50 52.04 34.63 35.58 39.05 39.48Ghe* (cow) kg 67.00 83.31 86.93 89.27 113.19 136.84 144.42 153.83Coconut oil, imported (sup. quality) kg 40.41 41.71 57.57 55.45 70.36 39.66 34.75 44.54Vesetable oil (Pskvan) kg 25.81 24.65 28.50 35.84 47.50 43.92 43.73 46.27Tobacco leaf (Motiheri, sup. quality) kg 35.97 31.35 29.25 57.13 41.49 28.91 27.82 29.36Betelvut (Tanti, whole, dry, mgp. quality) kg 45.75 44.81 36.33 45.94 67.24 54.62 45.31 42.21Betel lesa (medium size) thousand 45.53 61.85 74.76 72.12 85.12 82.76 84.11 127.78firewood, Gasari metric ton 881.22 1056.13 1094.72 1085.47 1380.59 1993.70 2133.60 2145.68Kerosene, white Liter 4.36 5.64 7.71 7.46 7.51 7.48 7.16 7.26Cigarettes (Capstan) thousand 382.08 432.72 502.88 493.20 515.44 639.96 602.24 658.52Matches (box of 40) thousand 200.69 258.61 299.24 269.10 283.53 448.10 473.10 412.15Paper, 10 Jlbs. foolscap thousand 180.22 191.12 219.08 230.80 241.64 234.78 259.66 215.54Cycle tyro, Imported (Master service) each 65.32 61.40 95.05 122.81 143.50 168.96 164.07 191.21Cycle tubes (Desbi) each 22.36 21.85 21.41 21.42 28.83 34.48 56.94 29.87Longcloth (medium quality) meter 11.19 13.6 1 4. 98 17.57 19.81 19.40 20.41 17.89

Mote: Al1 prices shown represent simple averages of weekly averc.je prices duriZkg the fiscal yearfor the urban centers covered.

Soure:s Bangladesh Bureau of Statistica.

Table 9.5W8CLESALE PRICE INDICES OF AGRICULTSRAL AND INDUSTRIAL PRODUCS, 1976177-1987188(1969170 - 100)

---------------------------------------------------------------------- __-----__---------------------------------------------------------------------

WeLghts, inI of total 1976177 1977178 1978179 1979180 1980181 1981182 1982183 1983184 1984185 198l5186 1986187 1987188

-------------------------------------------------------------- __-------------__----------------------_--------------------------------------__------

ASRICULTURAL PRODUCTS 67.87 375.14 403.96 463.89 499.12 535.83 605.80 616.30 751.76 929.00 933.00 1050.43 1148.25Food 41.08 333.42 385.98 442.38 548.14 561.27 635.22 631.79 742.62 839.00 912.00 1072.20 1118.05Raw materials 25.94 439.40 434.62 499.38 422.23 494.72 557.13 594.47 763.97 1069.00 952.00 1005.92 1184.38Fuel 0.85 430.59 337.65 412.94 476.76 561.18 669.41 534.12 797.74 1092.00 1298.00 4358.63 1417.35

INDUSTRIAL PRODUCTS 32.13 407.69 440.80 442.58 565.91 594.09 652.60 728.01 780.95 857.00 911.00 930.50 969.56Food 7.96 415.83 432.29 469.60 517.63 567.08 590.4S 611.15 780.28 957.00 1038.00 1025.44 1111.60Row materials 6.38 413.64 520.22 439.18 581.24 503.29 517.24 587.54 683.87 726.00 969.00 801.80 809.95Fuel and lightlag 6.16 39".68 404.87 410.88 543.67 621.92 769.80 960.47 956.42 977.00 1020.00 1021.92 1043.74Manufactures 11.63 403.10 422.10 442.73 602.32 647.64 707.31 762.02 733.85 798.00 843.00 888.08 920.59

ALL PRODUCTS 100.00 385.60 415.80 456.98 520.58 554.55 620.84 652.20 760.96 906.00 926.00 1011.93 1090.84

ChITTAGOOUAGRICULTURAL PRODUCTS 67.87 360.54 418.03 476.60 512.28 541.20 622.47 644.23 760.26 895.00 1004.00 1136.53 1146.81Food 41.08 336.83 39.66 463.78 558.34 576.63 682.59 674.76 776.09 844.00 1023.00 1167.69 1156.47Raw materials 25.94 399.42 449.11 49.27 433.17 485.43 528.10 593.68 738.97 977.00 967.00 1080.62 1126.91Puel 0.85 319.99 367.06 404.71 518.92 531.76 596.47 711.76 642.35 877.00 1210.00 1265.69 1287.45

INDUSTRIAL PDUCTS 32.13 412.48 440.40 457.73 537.96 603.67 667.01 760.91 806.56 864.00 915.00 932.12 990.44Food 7.96 503.80 496.87 504.52 595.87 596.10 633.54 676.00 841.83 954.00 1058.00 1112.24 1202.14Raw materials 6.38 400.16 522.88 418.65 475.55 526.80 523.35 59".37 704.70 760.00 784.00 785.25 805.97Fuel and lihting 6.16 400.16 400.81 465.42 577.27 642.86 809.09 1017.05 1067.33 1083.00 1112.00 1085.04 1154.87Manufactures 11.63 389.25 403.10 443.08 542.51 630.18 693.46 771.97 709.37 744.00 783.00 808.43 859.67

ALL PRODUCTS 100.00 377.23 425.22 470.54 519.00 561.27 636.78 681.73 774.87 885.00 975.00 1070.25 1096.57

____________________________________________________________________________________________________________________________________________________

BACLADESEAGRICULTURAL PRODUCTS 67.87 347.75 39f.58 444.94 481.41 508.93 580.79 596.20 726.93 88S.00 919.00 1023.29 1087.18

Food 41.08 323.36 376.90 429.67 527.78 545.40 623.95 633.35 725.02 817.00 911.00 1029.86 1073.04Raw materials 25.94 384.58 427.49 468.50 406.67 449.42 508.48 533.96 729.51 989.00 919.00 1002.69 1096.93Fuel 0.85 402.35 403.53 463.53 520.00 531.76 701.18 689.41 770.79 1013.00 1291.00 1327.65 1399.04

INDUSTRIAL PRODUCTS 32.13 391.53 431.59 449.36 54S.95 603.02 667.44 740.83 788.23 854.00 904.00 915.10 964.32Food 7.96 412.69 440.73 480.40 516.59 562.94 594.72 627.76 779.10 937.00 1014.00 1019.90 1103.27Row materials 6.38 397.18 511.13 414.42 515.67 529.78 513.79 582.44 697.18 722.00 736.00 753.15 774.72Puel *nd lishting 6.16 352.44 362.18 445.45 548.86 661.04 834.90 93.02 978.30 999.00 1039.00 1004.65 1054.95manufactures 11.63 394.84 418.40 449.36 575.75 644.63 712.21 171.37 747.00 794.00 848.00 892.02 924.78

ALL PRODUCTS 100.00 361.82 407.82 446.36 501.51 540.99 608.63 642.67 746.86 875.00 914.00 988.54 1047.75A-n-ul Increase (S) 0.7 12.7 9.5 12.4 7.9 12.5 5.6 16.2 17.20 4.50 8.16 5.99

…----_----_------------------------------------------------_---_--_-__-------__-----------------___-_-----_---------_---------_-------------_-----_

... - not .qpplicable.

lotes Th wholesale price indices (base 1969170 - 100) *er prepared for sL urbsn centers in RanlaedsDh(k Chittagong.hulnJ, Rajobshl, Sylhet nd Rangpur) and cover 44 Lndlvldual item. Weights orv assigned in proportion to the gross

value of production for each item in the base year 1969/70. The national index repr<esnts the unveishted averageof the Lidices for the six urban centers.

Source; Bangladesh Bureu of Statistics.

-143-

Table 9.6PUBLIC FOODGRAIN RATION QUOTAS AND ISSUE AND SALES PRICES, 1965-1988[Tk/maund][Maund = 37.326 kg]

----..------------------------------------------------------------ __---------__--------------------------_____

Adult Cereal QuotasRice Wheat [seerslweek]

------------------ -------------------- lseer a 2.05Z lbs.] Rice/Wholesale Retail Wholesale Retail ----------------------- Wheat

Effective Date Issue Sale Issue Sale Total Rlee Wheat Ratio----------------------------------------------------------------- __----------__-------------------------------

Nov. 1, 1965 la 25.40 26.40 17.62 18.80Jan. 1, 1970 29.62 30.80 19.62 20.80Jan. 11, 19?1 29.00 30.00Jan. 15, 1973 28.82March 19, 1973 3.00 0.75 2.25 0.33July 1, 1973 38.82 40.00 28.82 30.00Sep. 3, 1973 38.00 28.00May 27, 1974 58.00 60.00 48.00 50.00February 24, 1975 2.50 0.50 2.00 0.25September C, 1975 2.50 1.50 1.00 1.50Dec. 20, 1975 68.00 70.00 53.20 55.00Feb. 7, 1976 87.00 90.00 67.00 70.00August 31, 1976 3.00 2.00 1.00 2.00

October 16, 1976 4.00 2.50 1.50 1.67March 5, 1977 3.00 2.00 1.00 2.00December 3, 1977 3.00 1.50 1.50 1.00Dec. 31, 1977 97.00 100.00 77.00 80.00May 19, 1979 117.00 120.00 87.00 90.00May 3, 1980 137.00 140.00 107.00 110.00 3.00 1.00 2.00 0.50Nov. 13, 1980 136.00 140.00 106.00 110.00January 3, 1981 2.50 0.7- 1.75 0.43

Apr. 11, 1981 lb 151.20 155.20 112.00 116.00Dec. 12, 1981 /I 171.00 175.00 120.00 124.00 2.00 0.50 1.50 0.33July 3, 1982 Id 191.00 193.00 130.00 134.00July 18, 1983 /h 2.00 0.50 1.50 0.33Jan. 3, 1983 Ia 209.00 215.00 139.00 145.00Dec. 31, 1984 If 262.00 268.00 167.00 172.90Dec. 1, 1985 269.00 275.00 175.00 181.00June 15, 1986 283.00 289.00 186.00 192.00Dec. 29, 1986 IS 1.50 0.00 1.50

Aug. 3, 1987 288.80 294.80 191.80 197.80Jan. 4, 1988 313.00 319.00 197.80 203.70

--------------------------------------------------------------- __------------__-------------------------------

/a For wheat, since April 15, 1961./b Since April 11, 1981, ex-godovnlex-mill issue prices payable by

ration dealers have been differentlated slaihtly ln accordance wlththe distance of the dealers' shops from the nearest MOP warehouse ormill, whlIe retail prices have been maintained at a uniform levelthroughout the statutory rationing areas. As of January 3, 1983,the actual issue prices vary by up to Taka 0.50 per maund for rice,paddy and vheat.

lc For wheat, effective December 12, 1981, the issue prLce xcr wheatsold to flour mills and large employers was set at Tk 129 per maund.

Id For wheat, effectlve July 3, 1982, the issue prlce for wheat sold toflour mills and large employers was set at Tk 139 per maund.

/e For wheat, effective January 3, 1983, the lssue prlce for vheat soldto flour mills and large employers was set at Tk 150 per maund.

/f For wheat, effective Aprll 1, 1985.Ig Applicable for statutory rationing areas.Ih Effective on July 18, 1983, ration quotas are set in kilograms.

Notes: The wholesale issue price ls the ex-godownlex-mill price chargedto ration dealers (and ineludes the cost of guniLes), whlle theretail sales prlce is the price charged to ration card holdersbuying their permissLble quota at ration shops. The dlfferencebetween vholesale lssue price and retail sales price, thus,represents the official margin for the ration shop dealers.

Source: MinLstry of Food.

-144-

Table 9.7DAILY WAGES FOR UNSKILLED LABOR. 1979180-1987188 /a(Tk/day)

1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986187 1987/88

AGRICULTURE [WITHOUT FOOD)current 12.46 13.97 15.48 17.05 19.58 24.29 29.53 32.92 _ ..30

1973/74 prices lb 6.20 6.53 5.91 6.13 6.28 6.88 8.00 7.76 7.08Index, 1973/74 - 100 93 98 89 92 94 103 120 116 106

FISHERYcurrent 15.34 18.34 21.56 21.48 19.80 22.51 25.42 31.27 n.a.

1973/74 prices /b 7.63 8.57 8.23 7.73 6.35 6.38 6.89 7.38 n.a.Index, 1973/74 - 100 112 126 121 114 93 94 101 108 n.a.

SMALL SCALE RURAL INDUSTRY Idcurrent 11.94 13.90 15.59 16.38 24.25 28.86 31.45 39.50 40.16

1973/74 prices /b 5.94 6.50 5.95 5.89 7.77 8.18 8.52 9.32 8.81Index, 1973/74 - 100 118 129 118 117 154 163 169 185 175

COTTON TEXTILE WORKERScurrent 14.77 16.90 17.97 19.88 21.63 24.04 28.68 32.17 35.67

1973/74'prices Ic 7.54 7.97 7.33 7.80 7.62 7.54 8.17 8.12 8.45Index, 1973/74 - 100 136 144 132 141 138 136 147 147 152

JUTE TEXTILE WORKERScurrent 13.36 16.49 17.57 19.35 20.22 20.81 28.29 32.71 33.10

1973/74 prices /c 6.82 7.78 7.17 7.59 7.12 6.52 8.06 8.26 7.84Index, 1973/74 - 100 90 103 95 100 94 86 106 109 103

MATCH INDUSTRY WORKERScurrent 12.58 13.80 16.40 18.82 20.12 20.57 22.01 24.36 30.53

1973/74 price. /c 6.42 6.51 6.69 7.38 7.08 6.45 6.27 6.15 7.23Index, 1973/74 - 100 101 102 105 116 111 101 98 96 114

ENGINEERING INDUSTRY UORKERScurrent 13.33 15.39 18.22 20.33 22.78 26.00 36.43 34.40 30.64

1973/74 prices /c 6.80 7.26 7.44 7.97 8.02 8.15 10.38 8.69 7.26Index, 1973/74 - 100 109 116 119 128 128 130 166 139 116

VEGETABLE OIL INDUSTRY WORKERScurrent 12.39 13.72 15.40 16.05 16.47 18.14 20.93 23.43 26.30

1973/74 prices /e 6.32 6.47 6.29 6.29 5.80 5.69 5.96 5.92 6.23Index, 1973/74 - 100 115 117 114 114 105 103 108 107 113

CONSTRUCTION WORKERScurrent 17.21 19.29 21.74 23.30 24.56 26.36 33.32 38.98 45.24

1973/t4 prices lc 8.78 9.10 8.87 9.14 8.65 8.26 9.49 9.84 10.72Index, 1973/74 - 100 124 129 125 129 122 117 134 139 151

/a Based on average wage rates for Dhaka, Chittagong, Rajahahi end Rhuln Divisions./b Deflated by rural consumer price index./c Deflated by the average of the consumer prlce lndices for industrial workers ln Chittagong, Rhulna and Narayangani./d Refers to sklll workers.

Source: Bangladesh Bureau of StatistLcs.

-145-

Table 9.8WAGE DIFFERENTIALS, 1978179-1987188

---------------------------------------------------------------------------------------------------------------------- _

1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986187 1987/88---------------------------------------------------------------------------------------------------------------------- _

UNSKILLED INDUSTRIAL WORKERS : UNSKILLED AGRICULTURAL WORKERS

Agriculture 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00Fishing 0.91 1.23 1.31 1.39 1.26 1.01 0.93 0.86 0.95 n.a.S.S. Industry 0.88 0.96 0.99 1.01 0.96 1.24 1.19 1.07 1.20 1.24Cotton Textile 1.09 1.19 1.21 1.16 1.17 1.10 0.99 0.97 0.98 1.10Jute Textile 0.99 1.07 1.18 1.14 1.13 1.03 0.86 0.96 0.99 1.02Matches 0.93 1.01 0.99 1.06 1.10 1.03 0.85 0.75 0.74 0.95Engineering 0.99 1.07 1.10 1.18 1.19 1.16 1.07 1.23 1.04 0.95Vegetable Oil 0.91 0.99 0.98 0.99 0.94 0.84 0.75 0.71 0.71 0.81Construction 1.26 1.38 1.38 1.40 1.37 1.25 1.09 1.13 1._8 1.40

SKILLED WORKER UNSKILLED WORKER

INDUSTRYCotton textiles 1.28 1.27 1.31 1.35 1.33 1.37 1.31 1.40 1.55 1.42Jute textile 1.35 1.27 1.20 1.24 1.29 1.37 1.31 1.36 1.47 1.52Matches 1.26 1.22 1.23 1.34 1.44 1.36 1.35 1.39 1.43 1.39Engineering 1.81 1.87 1.80 1.83 1.80 1.66 1.56 1.37 1.68 1.79Vegetable oils 1.24 1.26 1.26 1.20 1.26 1.44 1.45 1.45 1.52 1.58

CONSTRUCTION 1.98 1.94 1.98 1.98 2.04 2.04 1.98 1.90 1.97 2.05

AGRICULTURE 1.18 1.17 1.17 1.23 1.30 1.44 1.40 1.51 1.50 n.a.

FISHERY 1.34 1.30 1.26 1.28 1.31 1.62 1.64 1.69 1.98 n.a.

Source---------------------------gl----------es------------ure---------u-----of----------t-----t-----stics.-----------

Source: Bangladesh Bureau of Statistics.

-146-

Table 9.9AGRICULTURAL WAGE RATES, 1980/81-1987188(Tklday, without food)

Division/District 1980/81 1981182 1982/83 1983/84 1984/IS 1985186 1986/87 1987/88

Rajshahi 12.23 13.88 14.82 15.70 21.97 26.22 27.00 25.87Dinajpur 10.50 11.83 14.00 14.33 22.50 25.00 27.91 27.15Rangpur 14.80 15.17 14.33 16.83 24.00 26.25 24.33 22.49Bogra 10.00 12.08 15.00 15.00 19.33 25.00 25.83 23.35Rajshahi 14.00 15.67 14.92 14.42 19.00 24.83 27.75 26.47Pabna 11.83 14.67 15.83 17.92 25.00 30.00 29.16 27.90

Khulna 13.57 13.93 14.73 18.37 22.47 '8.04 28.67 28.86Kushtia 11.17 10.92 11.58 18.67 19.17 28.33 21.25 23.84Jessore 12.50 12.92 13.58 16.58 19.50 24.16 32.50 28.74Khulna 15.00 15.17 15.58 15.58 22.00 30.00 29.58 28.48Barisal 15.42 15.83 16.00 19.00 23.75 27.72 32.50 32.51Patuakhali 13.75 14.83 16.92 22.00 27.92 30.00 27.50 30.71

Dhaka 13.80 15.11 16.58 19.27 21.68 27.45 30.67 30.60Mymensingh la 11.87 14.17 14.71 17.38 20.96 28.96 30.96 30.91

(Mymensingh) 12.50 13.50 15.00 18.75 20.67 33.33 30.25 30.52(Kishoreganj) 11.33 14.83 14.42 16.00 21.25 24.58 31.66 31.29

Tangail 14.50 15.00 15.00 21.33 25.00 27.33 29.00 29.81Dhaka 16.25 21.25 23.50 25.75 25.00 29.09 32.42 32.63Faridpur 12.58 14.08 15.00 14.50 16.50 22.91 30.00 29.03

Chittagong 16.43 18.60 22.08 24.98 31.68 36.43 41.79 40.51Sylhet 15.00 15.42 20.00 23.92 29.50 30.16 34.58 34.79Comilla 15.00 17.08 18.75 25.42 30.08 32.27 35.42 30.70Noakhali 16.42 19.42 22.75 24.75 33.33 37.50 40.42 37.24Chittagong 18.50 20.25 24.25 21.25 33.83 42.08 48.75 52.17Chittagong Hill Tracts 17.25 20.83 24.75 29.58 31.67 40.16 44.44 47.64

Country Average 14.01 15.38 17.05 19.58 24.45 29.53 32.92 32.30

REAL WAGE RATES(Tk/day, without food, 1973/74 prices)

Rajshahi 5.83 5.34 5.39 5.25 6.25 7.11 6.37 5.67Dinajpur 5.17 4.73 5.07 4.70 6.11 6.78 6.58 5.95Rangpur 6.93 6.07 5.19 5.52 6.52 7.11 5.74 4.93Bogra 4.57 4.52 5.47 5.08 5.69 6.78 6.09 5.56Rajshahi 7.08 5.87 5.44 4.89 5.59 6.73 6.54 5.80Pabna 5.40 5.49 5.77 6.07 7.35 8.13 6.88 6.12

Khulna 6.65 5.62 5.66 6.47 7.02 7.60 6.76 6.33Kushtia 5.47 4.81 4.45 6.57 5.99 7.68 5.01 5.23Jessore 6.13 5.13 5.22 5.84 6.09 6.55 7.67 6.30Khulna 7.35 6.02 5.99 5.49 6.88 8.13 6.98 6.25Barisal 7.56 6.28 6.15 6.69 7.42 7.51 7.67 7.13Patuakhali 6.74 5.88 6.51 7.75 8.73 8.13 6.49 6.73

Dhaka 6.46 6.12 6.07 6.37 6.12 7.44 7.23 6.71Mymensingh /a 5.73 5.17 5.32 5.95 5.81 7.85 7.30 6.78Tangail 6.65 5.75 5.32 6.77 7.02 7.41 6.84 6.54Dhaka 7.45 8.14 8.33 8.17 7.02 7.88 7.65 7.16Faridpur 6.00 5.40 5.32 4.60 4.63 6.21 7.08 6.37

Chittagong 7.44 6.81 7.67 7.46 8.70 9.87 9.86 8.88Sylhet 6.69 5.61 6.90 7.27 8.33 8.17 8.16 7.63Comilla 6.69 6.36 6.46 7.73 8.50 8.75 8.35 6.73hoakhali 7.33 6.60 7.84 7.52 9.42 10.16 9.53 8.17Chittagong 8.52 7.64 8.48 6.18 8.90 11.40 11.50 11.44Chittagong Hill Tracts 7.95 7.85 8.65 8.60 8.33 10.88 10.48 10.45

Country Average 6.53 5.90 6.13 6.34 6.93 8.00 7.76 7.08

------------------------------------------------------------------- __--------__-----------------------------

/a Including Jamalpur.

Note: National, division, and district figures shown are utweighted averages of wagerates in constituent administrative units.

S . , -'-.h B, r , if 3r tlrtq<-<.

p.I

40%

csCO

'oo ~ ~ .