South Asia

The new country strategy and program (2006–2010), approved in 2005, was one of the first prepared using a results-based approach. It was developed jointly with the United Kingdom’s Department for International Development, Government of Japan, and World Bank. The joint country strategy and program allows ADB to be more selective and focused while providing coordinated support, along with the other country strategy and program partners, to reforms that are difficult but fundamentally important to poverty reduction and economic growth.

The political situation remained the main challenge to smooth program delivery, particularly in the last quarter of the year. However, close coordination with the Government helped mitigate the constraints. Policy dialogue with the Government helped foster reforms in the energy, education, and railways sectors. The dialogue focused on improvements in transparency and efficiency in public procurement, portfolio performance, and preparation of operational risk mitigation action plans to address key governance risks.

ADB operations helped remove critical constraints on the investment climate and on empowering the poor by improving governance in the energy, transport, education, and integrated urban infrastructure sectors. Energy reforms aimed to help the Government restructure the power sector to ensure adequate and reliable power supply at competitive prices through increased private sector participation and more efficient management and operations. Successful implementation of the Second Primary Education Development Program, which will improve the quality of primary education and its accessibility to poor children is under way with ADB as the lead agency, together with 10 other development partners.

ADB approved four projects totaling $255.1 million for rural infrastructure improvement, secondary education, secondary towns’ water supply and sanitation, and improvement of capital market and insurance governance. In addition, a multitranche financing facility for the railways subsector ($430.0 million) was approved. ADB also approved seven technical assistance grants totaling $5.7 million.

The rural infrastructure improvement project will upgrade about 9,920 km of tertiary roads that make up the rural road network to help reduce poverty in 23 districts in north and central Bangladesh, providing the poor with ready access to services. In secondary education, the focus is on strengthening the sector’s management and governance, the curricula and national examinations, and teacher education, as well as furnishing and equipping schools, training personnel, and upgrading the curricula. The secondary towns’ water supply and sanitation sector project will help provide sustainable access to improved and safe water supply and sanitation services to about 1.6 million people in 16 towns, helping the Government meet the water-related Millennium Development Goals and its own poverty reduction targets. Finally, a loan to improve good governance practices in the capital market and the insurance sector will reinforce investor confidence in financial markets.