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| Development partners at a CSP consultation meeting in Chittagong in 2004. |
How ADB Is Helping the Poor in Bangladesh
Country Strategy and Program
Updated December 2006
Development Partners Harmonize Assistance Strategies
Supporting the implementation of Bangladesh’s national poverty reduction strategy (NPRS), ADB’s results-based country strategy and program (CSP) for Bangladesh for 2006-2010 was developed jointly with the Department for International Development (DFID) of the United Kingdom, Government of Japan, and the World Bank, which together provide about 80% of all development assistance to the country. For the first time in South Asia, a CSP has been prepared jointly with other development partners. This initiative follows commitments made at the High-Level Forum on Aid Effectiveness held in Paris in March 2005 by a number of developing countries and their development partners.
The four partners’ joint strategy is firmly aligned with the NPRS vision, strategies, and priorities. It is built on
- improving the investment climate for private sector-led growth and employment
- advancing the social development agenda to empower the poor so that all benefit from growth
- addressing key governance issues to enable growth and social development
The joint strategy approach has allowed ADB to be more selective and focused, building on its prior experience and sector expertise. ADB will play a lead role in supporting policy and institutional reforms in the energy, transport, education, urban health, and urban water supply and sanitation sectors. In other areas such as agriculture, water resources management, and the financial sector, ADB will play a supportive role to initiatives led by other development partners. Building country capacity and ensuring community participation (especially by women and disadvantaged groups) in designing and implementing projects remain a key feature of ADB operations. Disaster mitigation, regional cooperation, and environment will be addressed as other key crosscutting issues. Under the CSP, ADB’s private sector operations will be aligned and oriented to complement public sector operations, addressing critical infrastructure and policy constraints to mobilizing both domestic and foreign private investment.
The indicative allocation of ADB’s concessional ADF resources for Bangladesh in the period 2006-2008 amounts to an average of $300 million per annum, including 20% over-programming to prepare for slippages during project processing. Considering the findings of ADB’s study on Bangladesh’s borrowing capacity, a three-year Ordinary Capital Resources (OCR) allocation of $900 million has been made, taking into account:
- the positive impact of ADB OCR operations on economic growth in general and on Bangladesh’s external position in particular
- likely availability of counterpart funds
- the country’s overall debt service capability to absorb OCR resources
OCR lending will be used to finance major infrastructure projects that will directly contribute to growth and competitiveness. It will help meet a portion of the large savings-investment gap and reduce the nation’s reliance on costly supplier’s credits in various sectors.
The enhanced leverage in policy dialogue, brought about by a joint donor support to common sector policy frameworks, also enables ADB to strengthen engagement in sectors where reforms are difficult but are fundamentally important to growth of the national economy (e.g., power, port and railway subsectors).
The joint approach facilitated increased sharing of economic, thematic and sector studies amongst the partners. While several studies were previously undertaken jointly, the joint strategy approach led to intensifying the partners’ commitment to collaborate on specific future analytical work, in order to rationalize efforts in areas of common interest and avail of synergies and each institution’s competencies.
Following preparation of the joint country strategy, the four partners are also collaborating on joint annual programming reviews to assess adjustments needed in the operational programs of subsequent years, and undertaking joint annual portfolio reviews to identify and address common project implementation constraints and bottlenecks. The joint strategy partners have also selected eight priority sectors (civil service reform, legal/judicial/police reform, rural infrastructure and local governance, public financial management, urban infrastructure, social protection and livelihoods for the poorest, governance issues in transport sector, private sector/SME development for more intensive collaboration, with one of the partners taking a lead role in policy dialogue and coordination with Government authorities and other development partners.
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