Bangladesh

BANGLADESH

OWNERSHIP

1. Partners have operational national development strategies

a. Coherent long-term vision with medium-term strategy derived from vision

1. Considerable work has been done to develop a long-term vision, which has been truly led and owned by the people of Bangladesh. Continuity in policies has been the tradition for the past two decades of democratic governance, facilitating strong ownership of vision and strategy. In 2000 the Government identified the reduction of poverty as the main thrust of its development strategy through 2010, embedded in a Partnership Agreement on Poverty Reduction with ADB. This long-term vision was further amplified in Bangladesh's medium-term strategy, described in "Unlocking the Potential: National Strategy for Accelerated Poverty Reduction (PRSP)" for 2005-07, Bangladesh's PRS. Sector strategies were completed in education and transport and are integrated with the PRSP, and the Government has finalized a health sector strategy also reflected in the PRSP.

b. Country specific development targets with holistic, balanced, and well sequenced strategy

2. The PRSP includes preliminary long-term targets with a strong link to the MDGs. The Government is setting higher goals in areas like poverty reduction, and adhering to MDG targets in most other areas. The PRSP seeks to address these through a strategically prioritized policy framework that has pro-poor growth, human development, and governance as its main pillars. Overall, the PRSP is an important step towards the achievement of MDG targets by the year 2015. The country has already met the MDGs on gender parity in school enrollment at secondary and primary levels. The child mortality rate has halved, and life expectancy has increased by more than 15 years. Data from the Household Income and Expenditure Survey was issued in August 2006 showing a substantial decrease in poverty by 9 percent between 2000 and 2005.

3. The PRSP is comprehensive in scope, and identifies four strategic blocks: enhancing pro-poor growth, boosting critical sectors for pro-poor economic growth, devising effective safety nets and targeted programs, and ensuring social development. The blocks are supported by four strategies: ensuring participation, social inclusion and empowerment of all sections, groups and classes of people; promoting good governance by ensuring transparency, accountability and rule of law; providing services efficiently and effectively, especially to the poor; and caring for the environment and long-term sustainable development.

c. Capacity and resources for implementation

4. The Government is at the beginning of a process aimed at more strategic budgeting that would align public expenditures with national priorities through a medium term budgetary framework (MTBF), included in the PRSP. Under the new budget process, implemented in four pilot ministries in FY06 and extended to 10 ministries in FY07, the envelopes for recurrent and capital spending have been integrated over a three year period. Previously, the revenue (recurrent spending) budget and the development (capital) budget, known as the Annual Development Program (ADP), were prepared separately each year, with little integration and largely in the absence of a strategic medium-term framework or policy orientation. The new system encourages allocation of resources for programs integrating recurrent and capital spending and medium-term expenditure plans in line with PRSP priorities, which assures greater funding certainty to priority projects. The Government is also making efforts to decrease the number of under-completed or under-funded projects.

5. The FY06 budget corresponds to the first year of PRSP implementation. The budget seeks to operationalize strategic elements of the PRSP including broad-based participation, good governance, and improved service delivery. Key indicators for revenues and expenditures are broadly in line with the targets set out in the MTBF. Although the Government is making progress in implementing the MTBF, projections for revenues and expenditures in priority sectors are based on a high-growth scenario. The Government has produced alternate projections reflecting lower growth scenarios. In the budget presented to Parliament on June 8, 2006 two scenarios were presented for a high and base case. A Working Group has been constituted to update the macroeconomic framework in the first and third quarters of each fiscal year. Alongside the MTBF, the Government is implementing a complementary Three-year Rolling Investment Program FY05-07 (TYRIP).

6. The Government is also making a modest beginning to give a greater performance orientation to the budget, requiring