© 2012 International Monetary Fund October 2012 IMF Country Report No. 12/293 July 2010 January 29, 2001 January 29, 2001 January 29, 2001 January 29, 2001 Bangladesh: Poverty Reduction Strategy Paper Poverty Reduction Strategy Papers are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated with annual progress reports, they describe the countries macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document for Bangladesh is being available on the IMF website by agreement of the member country as a service to users of the IMF website. Copies of this report are available to the public from International Monetary Fund Publication Services 700 19th Street, N.W. Washington, D.C. 20431 Telephone: (202) 623-7430 Telefax: (202) 623-7201 E-mail: [email protected] Internet: http://www.imf.org International Monetary Fund Washington, D.C. ©International Monetary Fund. Not for Redistribution ©International Monetary Fund. Not for Redistribution Steps Towards Change National Strategy for Accelerated Poverty Reduction II FY 2009 – 11 (Prepared in the light of Election Manifesto of the Bangladesh Awami League 2008) General Economics Division Planning Commission Government of the People’s Republic of Bangladesh December 2009 ©International Monetary Fund. Not for Redistribution Cover Design: GED, Planning Commission Copies Printed: 3,500 (English) ©International Monetary Fund. Not for Redistribution Message Our government’s aim is to achieve Vision 2021 by implementing economic policies delineated in our Awami League Party’s Election Manifesto. Vision 2021 envisages Bangladesh as a middle income country, free from poverty and with healthy growth, stable commodity prices, reduced income and social disparity, secured health and education, entrenched democracy, and capacity to meet the challenges of climate change. The endeavors would be aided by modern information and technology, which also would realize our goal of a “Digital Bangladesh” by 2021. Since independence, our effort to free Bangladesh from poverty was hindered by disruption of democracy a number of times. The short periods of democracy we experienced, saw some progress in our struggle against poverty, and appreciable success in respect of some of our Millennium Development Goals (MDGs). Now with democracy restored in Bangladesh, our government is confident of freeing our people from poverty and meeting the targeted MDGs, by implementing our economic policies as promised to the people in our Election Manifesto. In our government’s bid to overcome poverty, the General Economics Division (GED) of the Planning Commission has revised the second Poverty Reduction Strategy Paper (PRSP) in the light of our Election Manifesto. The document entitled “Steps Towards Change: National Strategy for Accelerated Poverty Reduction II (FY 2009-11),” or “NSAPR II” is in consonance with Vision 2021 of a middle income Bangladesh with qualitative change in the lives of the people. However, the success of NSAPR II depends on implementation of action plans by all government Ministries and agencies. I am confident all Ministries and agencies of the government would succeed in achieving the targets of the revised NSAPR II. They would, however, need resource support of our development partners, whom I urge to come forward and join hands with the government in achieving our common goals. Let us together all move forward on the road to a poverty free Bangladesh, to “Sonar Bangladesh” as was envisioned by the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman. (Sheikh Hasina) ©International Monetary Fund. Not for Redistribution Message The second Poverty Reduction Strategy Paper (PRSP-2) of Bangladesh titled ‘Steps Towards Change: National Strategy for Accelerated Poverty Reduction (FY 2009-11)’ has been revised in the light of the government’s development vision and Election Manifesto of the Awami League. It embodies policies as well as strategies for achieving accelerated poverty reduction during FY 2009-11. The revised NSAPR II outlines a comprehensive medium–term strategy for poverty reduction through faster pro-poor economic growth through pro-poor macroeconomic management, creating decent employment opportunities, enhancing productivity and efficiency through science and technology and also in development of small as well as medium scale enterprises. The document also emphasizes on protection of the vulnerable people, regional balance, fundamental human rights, good governance and effective public service delivery. The firm commitment of the government to the Millennium Development Goals (MDGs), the South Asian Development Goals (SDGs) and other international agreements relevant to economic and social development was taken into due consideration during formulating the strategies. It is evident that the incidence of poverty has been declining in Bangladesh over time. The national head count index of poverty measured by the upper poverty line declined from 56.6 percent in 1991-92 to 40.0 percent in 2005. During the period, urban poverty reduced at a faster rate than rural poverty. At the same time, all indicators of human poverty like life expectancy at birth, infant mortality rate, population having access to drinking water, and adult literacy rate have shown improvements. However, the absolute values of many of the indicators are still high. Household income for all groups has improved, though the distribution has become more unequal. In achieving faster poverty reduction, the revised NSAPR II puts emphasis on the activities that are targeted to benefit the extreme poor, women in poverty, landless poor and other vulnerable groups. To protect the poor from falling into deeper poverty, five priority areas have been identified in the strategy paper, which include social safety net programmes, food security, disaster management, micro-credit and rural non-farm activities. In this regard, significant budgetary allocation has been made in the revised NSAPR II to expand the Social Safety Net Programmes (SSNPs). ©International Monetary Fund. Not for Redistribution During recent years, climate change has been posing a critical threat to the fight against poverty in Bangladesh. The prevailing high incidence of poverty and population density makes Bangladesh more vulnerable to climate change. Climate change and variability have already been creating adverse impact on the life and livelihoods of a vast population, particularly those who are living in the coastal areas and in the arid and semi-arid regions of the country. A significant proportion of population of the country is likely to be displaced because of climate-induced flooding, tropical cyclones and storm surges. Revised NSAPR II thus emphasizes mainstreaming and strengthening climate change adaptation across various sectors- improved crop production practices, watershed and coastal zone management including aforestation, building cyclone shelters, embankments, improving salinity control measures, public awareness, emphasize climate research, and data collection. Accordingly, a Climate Change Fund with domestic resources has already been created. A multi-donor Trust Fund has also been under process to supplement the government initiatives. The estimated total resource requirement for implementing the goals and targets set out in revised NSAPR II is Tk. 2,814.81 billion at FY08 prices, most of which will be met from the domestically generated resources. However, there will be a resource gap of around Tk.874.84 billion at FY08 prices or around US$ 12.50 billion for three years which has to be mobilized from external sources and increasing domestic revenues. The revised NSAPR II has been prepared after extensive consultations with the stakeholders, academia, researchers, NGOs and civil societies both at the national and regional levels. It is prepared by the General Economics Division (GED) of the Planning Commission as the National Poverty Focal Point (NPFP) with active cooperation from all the Ministries/Divisions and government agencies. Short-term local consultants were hired to assist at the GED for revision of NSAPR II. Since the NSAPR II (FY2009-11) is a policy and strategy document, its implementation will be continuously monitored and it will be updated and adjusted drawing lessons from the practical field. I congratulate the General Economics Division (GED) of the Planning Commission for successfully revising the document, ‘Steps Towards Change: National Strategy for Accelerated Poverty Reduction (FY2009-11)’. I thank BIDS and the members of the ‘Independent Committee for monitoring and evaluation of PRS and attainment of MDGs’ for their valuable suggestions and cooperation. I am most grateful to the Finance Minister and the Economic Affairs Adviser to the Honorable Prime Minister for their valuable guidance and concerns. I am also grateful to all the participants in the NSAPR II consultation meetings at the national and regional level. I gratefully acknowledge the encouragement of the Honorable Prime Minister towards completing the revised NSAPR II. Air Vice Marshal (Retd.) A.K. Khandkar ©International Monetary Fund. Not for Redistribution Foreword Following completion of the Fifth Five Year Plan in 2002, the Government of Bangladesh changed its development strategy and adopted PRSP in an attempt to reduce