|Project Rationale and Linkage to Country/Regional Strategy
In Bangladesh, rural infrastructure has considerably improve, enhancing the quality of life of rural people. Better rural infrastructure has fostered balanced development of rural economies through mutually reinformcing growth in the farm and non-farm sectors. The mobility of the rural poor has increase, and many are now availing themeselves of health, education, and nongovernment services, as well as a wide range of economic opportunities.
Empirical studies confirm that rural infrastructure development in Bangladesh has helped spur economic growth and reduce poverty. Recent experience has shown that better rural
infrastructure leads to higher mobility of the rural poor and their farm products. It allows the poor greater access to providers of services, such as health and education, and to off-farm jobs. Rural infrastructure development also helps reduce rural poverty in the following ways: (i) effective road connectivity allows easier movement of labor; (ii) cost-effective transport of produce helps farmers realize higher farm gate prices; (iii) additional traffic volume gives rise to transport-related small businesses, such as service stations, repair shops, food stalls, and guesthouses; (iv) construction of project facilities and after-construction maintenance directly generate jobs for the poor; and (v) poor women have greater access to economic opportunities and new jobs.
A study found that rural road investments in Bangladesh cut poverty significantly through increased agricultural production, higher wages, lower input and transportation costs, better
educational attainment, and higher output prices.3 Savings in household transport expenses averaged 36% 38%. It also increased output indexes by 30% 38%, road improvements
increased men's agricultural wages by 27%, reduced fertilizer prices by about 5%, and raised aggregate crop price indexes by about 4%. Overall poverty incidence fell by about 1 percentage point, solely because of rural road improvements. A 1994 study showed that, in the catchment area of improved facilities, transport charges dropped by 19% for cargo and 23% for passengers, while the volume traded in those markets doubled.4 Motorized traffic grew by 135% and other traffic increased by 85% after the roads were widened and paved. Another study on the impact of rural infrastructure development in Bangladesh found that accessible transportation facilities had raised incomes of the poor profoundly.
Rural infrastructure development continues to be a high priority for the Government of Bangladesh as it aims to improve the quality of life of rural people. The framework for
investment in rural infrastructure includes (i) developing all-weather upazila (administrative unitsubdivision of a district) roads to provide access to and from growth center markets (GCMs), (ii) improving union and village roads to provide rural people better access to markets and social services, and (iii) improving the infrastructure of GCMs to make trading more efficient. In the National Strategy for Accelerated Poverty Reduction II, the government emphasizes rural infrastructure development with a focus on road connectivity.6 The goal is to link growth centers, union parishad (local government institution) headquarters, upazila headquarters, and social service institutions such as schools and hospitals with the road networks.
The Asian Development Bank (ADB) supports inclusive economic growth and poverty reduction in Bangladesh through the strategic priorities identified in the country strategy and
program, 2006 2010.7 ADB's Strategy 20208 also advocates rural infrastructure development. Recognizing the importance of rural infrastructure for economic growth and poverty reduction in Bangladesh, ADB and other development partners including KfW have supported the government's efforts to develop rural infrastructure through several projects. Initially focusing on building rural roads, bridges, culverts, and the capacity of local government institutions, ADB broadened its support to include the construction of GCMs, flood shelters, and union parishad offices. Subsequently gender considerations and community participation in rural infrastructure planning, implementation, and operations and maintenance were included.
Despite improvements, rural infrastructure in the country remains underdeveloped. Only 37% of the rural population has access to all-weather roads, compared with 60% in India and
61% in Pakistan. In South Asia, 57% of road networks are paved, while only 25% are paved in Bangladesh. This indicates poor road connectivity, higher vehicle operating costs, and the need for significant upgrading of rural infrastructure. The main problems in fostering road connectivity are (i) rapidly growing demand for road transport (6% a year), (ii) lack of funds to develop infrastructure, (iii) lack of enforcement of government's policies and regulations in road safety, (iv) inadequate maintenance funding (covering only 40% of the requirement), and (v) lack of technical skills and capacity building of local government institutions. Women's access to economic opportunities and participation in decision-making processes of local governments remains limited. Bangladesh is considered one of the countries to be most affected by climate change. Increased risk of severe flooding, more frequent extreme weather events, and a potential rise in the sea level pose new challenges to rural infrastructure development.
Realizing the full growth potential of rural areas, where 75% of the total population and about 85% of the poor live, will require substantial improvement in rural infrastructure. Bangladesh has a large unmet demand for rural infrastructure improvement, and needs continuing or even increasing investment. The rural road network is 284,781 kilometers (km), of which 75% remains unpaved. The Local Government Engineering Department (LGED) is planning todevelop about 36,000 km of rural roads by 2025. Rural roads require 1.77 million meters of bridges and culverts, of which 1.10 million meters have been developed. By 2025, 240,000 meters of bridges and culverts are planned to be developed. Of the 17,363 GCMs, only 2,895 have been developed with infrastructure facilities. By 2025, 4,500 GCMs are to be developed. LGED's 20-year road master plan for 2005 2025 envisages an investment of $26 billion to improve rural infrastructure.
The Sustainable Rural Infrastructure Improvement Project will reduce poverty and raise incomes in 21 districts of northwest and southwest Bangladesh by fostering economic growth,
capacity development, and gender equity.9 The project will enhance rural people's access to social services, such as health and education, and to economic opportunities. Widening the access to markets and livelihood activities will increase earnings for the rural poor, including women. Based on the lessons learned from previous projects, project areas have been selected on the basis of high connectivity and poverty concentration. Fostering gender equity in economic opportunities, ensuring sustainable operation and maintenance, developing climate-resilient infrastructure, and considering green elements in the design and implementation of the project will be emphasized more.