Bangladesh: Rural Connectivity Improvement Project

Agriculture, natural resources and rural development / Rural market infrastructure

Bangladesh, with a population of about 163 million in 2016, and a land area of 147,570 square kilometers, is among the most densely-populated countries in the world, and also one of the most vulnerable countries to climate risks. Two-thirds of the country is less than 5 meters above mean sea level and located in the world''s largest tropical river deltas of the Ganges, Brahmaputra, and Meghna. Bangladesh has made steady economic progress over the past six years, with annual gross domestic product (GDP) growth exceeding 6% on average. In a major leap forward, United Nations declared that Bangladesh has become eligible to graduate to a developing country from a least developed country by 2024. The government''s Seventh Five Year Plan, FY2016 -FY2020 is shaped towards this end. The plan aims to achieve a growth rate of at least 7% on average over the plan period. It is on track to meet this target, having achieved an annual GDP growth rate of 7.1% in 2016, and 7.3% in 2017. Moving forward, the Asian Development Outlook report on global economic prospects forecasts that Bangladesh will grow at an average of 7.1% over fiscal years 2018 and 2019 with strong domestic demand and strengthening exports. The report projects that investments will benefit from low interest rates and improved infrastructure.

About 80% of the country's population live in rural areas and depend on agriculture for their livelihood. The rural economy, through farm and non-farm sector, substantially contributes to the national economy. Agriculture constituted about 15.5% of the GDP in 2015, which is in the same range as that of South Asia as a whole. Although share of agriculture in GDP has been declining gradually over the years, about 50% of the work force are still directly or indirectly employed in the agriculture sector and remain a major contributor to poverty reduction due to rising wages. Growth in agriculture was between 3% to 3.5% over the period 2000 to 2015. The country has achieved near self-sufficiency in cereal production with strong emphasis on rice production, which is growing above the population growth rate. Agriculture development is necessary to further reduce the reliance on imported food and other agricultural products, which absorb 29% of export earnings. The plan focuses on increasing rural incomes and agriculture's contribution to economic development by (i) maintaining self-sufficiency in cereal production, (ii) diversifying and improving the quality of crops, (iii) increasing productivity, and (iv) promoting agribusiness. Bangladesh's major agricultural challenges include (i) lack of modern production technologies, (ii) inadequate food quality, (iii) weak value chains, and (iv) food insecurity. Insufficient rural transport, inadequate market infrastructure, and the impacts of intensifying floods and cyclones related to climate change are major constraints to agriculture development. Accordingly, the plan has put forward specific strategies to overcome these challenges and constraints.

Rural connectivity underpins rural development in Bangladesh, and road transportation is the dominant mode of transportation, utilized by over 70% of passengers and 60% of freight traffic. Rural roads contribute significantly to generating increased agricultural incomes and employment opportunities while benefiting the entire rural population through access to economic and social services. Many of these rural roads were constructed during 1990 2010 on earthen embankments and are owned by Union Parishads (rural councils) or Zila Parishads (district councils). Since 1995, the government, with the support from the international development community, has continued to expand and improve the rural road network. However, rural connectivity in Bangladesh remains unfinished, impeding the physical and economic access. Only about 40% of the rural population has access to all-weather roads, and these roads make up only 28% of the total length of rural roads in the country.

Under the plan, the government has now embarked on a sustained effort to improve the country's rural road network, using its own resources and with the assistance from its international development partners. The government has proposed to increase the percentage of rural roads classified as _good_ from 43% in 2016 to 80% in 2020. The project is well-aligned with the government's development plan and will improve about 1,700 km of rural roads to all-weather standards, serving the agriculture sector and 51.5 million rural people living in 34 districts in five divisions. These roads are critical in supporting the country's agriculture value-chain development zones.

The project is consistent with the strategic objective set out in the government's Seventh Five Year Plan, 2016 -2020 to expand the rural road capacity to increase connectivity, provide greater access to social services and markets, and promote the agriculture sector. The project will also support the government's agricultural strategy of increasing agricultural productivity, encouraging commercial agriculture and agribusiness development, increasing employment opportunities for rural poor people, and reducing the poverty level.

Rural road conditions between selected rural communities, productive agricultural areas, and socio-economic centers improved.

Capacity of rural infrastructure agency and road users in project areas enhanced.

Rural road master planning enhanced