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Helping Tribal People of Bangladesh's Chittagong Hill Tracts

MANILA (26 October 2000) - More than 300,000 poor people, many from tribal ethnic minorities in the Chittagong Hill Tracts of southeastern Bangladesh, are expected to have higher incomes as a result of a US$30 million loan approved today by the Asian Development Bank (ADB).

The Chittagong Hill Tracts Rural Development Project is the first major effort to help the hill people since two decades of civil strife ended in 1997. People's livelihoods were severely disrupted and roads and trails deteriorated during the unrest.

The Chittagong Hill Tracts have a rich cultural legacy with 13 tribal groupings as well as Bengalis who have settled from the adjoining plains. However, the region is much poorer than the rest of the country. Per capita income is 40 percent lower than the national average. The literacy rate is also lower due to the limited income of parents, poor access to schools, a shortage of teachers and the fact that children are kept at home for household and income-generating activities.

The project will increase the accessibility of isolated people to employment generating opportunities and social services. It will upgrade existing rural communication infrastructure, primarily feeder roads, trails, bridges and culverts. Microfinance, training and other services will be provided to improve the poor's income generating capacity.

As well as attacking poverty in this manner, the project aims to underpin the 1997 peace accord by empowering local communities to decide what they want and to take part in projects. A community investment fund will be created to fund small-scale development activities.

In addition, the project will strengthen the capacity of local government institutions, nongovernment organizations (NGOs), and beneficiaries to plan and implement local activities. This will provide a sound institutional capacity for further initiatives. The project will encourage women to become more involved in decision-making and enterprise development.

"We'll be tackling the main problems of poor communication, overdependence on subsistence agriculture, underemployment due to the underdevelopment of the nonfarm sector, low savings, and poor access to credit and savings facilities," says ADB's Donneth Walton, who is working on the project.

The ADB loan will finance half the project cost of US$60.3 million. The loan is from the ADB's Asian Development Fund and is repayable in 32 years with a grace period of 8 years. It carries an interest of 1 percent per annum during the grace period and 1.5 percent annum thereafter. Co-financing will come from the Danish International Development Agency, the Palli Karma-Sahayak Foundation, the Government and beneficiaries.

The Ministry of Chittagong Hill Tracts Affairs will be the executing agency for the project, which is due to be completed in 2008.

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