Bangladesh and ADB Sign Landmark Partnership Agreement to Fight Poverty

The Government of Bangladesh and the Asian Development Bank (ADB) today signed a landmark Poverty Partnership Agreement in Dhaka, Bangladesh. The Agreement is a commitment to achieve specified targets in various areas of poverty reduction – including nutrition, health and education – within clearly-defined time frames.

This is the first such agreement in South Asia, home to a large proportion of the world’s 1.3 billion absolute poor. The ADB launched last November a poverty reduction strategy which elevated poverty reduction to an overarching goal of its operations.

ADB President Tadao Chino traveled to Bangladesh to personally sign the agreement. Noting that this is the first such agreement that he has signed, President Chino said: "This agreement is very significant and it raises our deep and long-standing relationship with Bangladesh to a new level. Bangladesh is a frontline state in the war against poverty. The Government is taking specific measures to achieve challenging targets and the ADB will support them with a substantial assistance package."

The Poverty Partnership Agreement was signed by Bangladesh Finance Minister Shah A. M. S. Kibria and ADB President Tadao Chino. President Chino also met Bangladesh Prime Minister Sheikh Hasina and is visiting poor areas during a two-day visit to the country.

The Agreement outlines goals to be achieved in the medium term (by 2005) and the longer term (2010). These include targets in the following fields:

• Poverty: Bangladesh is one of the world's poorest countries with a per capita income of $333 per annum. Nevertheless, the Government has already made significant progress in this area. Since 1973-74 the incidence of poverty has declined from 70 percent to 46 percent. Under the new Partnership Agreement the Government is committed to reducing this to 35 percent by 2005, and below 25 percent by 2010.
• Education: reducing by 50 percent by 2005 the number of children not attending primary school and achieving universal primary education (on a completion rate basis) by 2010.
• Maternal and infant mortality: cutting these rates, respectively, by 35 percent and 30 percent by 2005 and by 75 percent and 65 percent by 2010.
• Malnutrition: lowering the proportion of malnourished children by 20 percent by 2005 and by 40 percent by 2010.
• Family planning: Making reproductive health services available to half the women who currently lack access to such services by 2005 and to all women of appropriate age by 2010.

To support these goals, the ADB plans to lend up to US$500 million annually to Bangladesh. Most of the loans will be on a concessional basis subject to resource availability and country performance. The ADB is currently negotiating with donors for the replenishment of its soft loan resources.

The ADB assistance will support poverty reduction through interventions in agriculture and rural development, primary health and nutrition, basic education, water resource management, road and rail transportation, power and energy, urban development and the financial sector.

The assistance will promote the three pillars of the ADB's poverty reduction strategy: pro-poor economic growth, social development and good governance.

• Pro-poor Economic Growth:

  To promote higher growth, the ADB will help develop key infrastructure such as electricity, gas and transportation, along with policy reforms to establish an enabling environment for the private sector. It will also support reforms in the financial sector, which is critical for fostering such an environment. Since most of the poor live in rural areas, the ADB will help liberalize markets for agriculture inputs and will target the poorest areas such as the North West. It will emphasize small and medium scale irrigation and flood control projects, combined with reforms in the irrigation sector; research, extension, storage and marketing for diversifying to higher value-added crops and non-crop agriculture; community development, rural infrastructure and micro-finance. The ADB's road, rail, energy and power projects will focus on the poorest areas and in partnership with private sector firms wherever feasible. The ADB will also assist in developing small and medium scale enterprises.

• Social Development:

  ADB assistance will be targeted at the poor, particularly women and children. The program will include projects in primary, secondary and nonformal education; nutrition and urban primary health care; urban water supply and sewerage, especially in the secondary towns, if there is significant progress in the management of urban service delivery.

• Good Governance:

  This is an essential precondition for sustained poverty reduction. Corruption remains a major drain on public resources and especially affects the poor. Consequently, the ADB will support the Government's policy and institutional reforms, linked with ADB investments, to improve efficiencies in the various sectors in which it is providing assistance.

  The ADB will also support governance reforms that are aimed at giving more voice to the poor, empowering women and building capacity for improved local government and financial management. The ADB is also providing technical assistance to establish a poverty reduction monitoring system.