EC Country Strategy Paper for Bangladesh 2002-2006

EXECUTIVE SUMMARY
Bangladesh – a country of about 130 Mio people squeezed at a ratio of 1000/per sq. Km of
cultivable land, with still 45% living below the poverty line – has been a longstanding partner
in the Commission’s development co-operation and is still one of the largest recipients
of Community assistance in Asia. Over the last decade, Bangladesh managed to achieve
substantial improvements in some social indicators, such as the decrease of the infant mortality
rate from 94 to 60 per 1000 births. However, malnutrition is still among the highest in
the world, with 58% of the under five being underweight. Donors generally agree that most
programmes aiming at poverty reduction, including major NGO programmes, have predominantly
benefited the moderate poor, but failed to reach the poorest of the poor.
Therefore, the greatest challenge remains to address the structural poverty of the country,
the main factors of which are an unequal distribution of productive assets, inequitable distribution
of incomes, massive under-employment and low levels of human resource development.
To these must be added an unbalanced social system, a low level of law and order,
endemic corruption and a lack of good governance. Good governance is of crucial importance
for effective poverty alleviation. Enhanced capacity to establish good governance
practices, greater accountability and transparency as well as building efficient, well managed
and responsive institutions are essential elements for effectively combating poverty.
Some important bilateral (DFID) and multilateral (UNDP, World Bank) donors are therefore
increasingly focussing their interventions in this area. The EC has therefore decided to
concentrate on improving human development indicators, with in-built good governance
and institutions building elements.
An additional challenge concerns its exports structure, dominated by readymade garments.
BGD will face the risk of an erosion of its world market share and a renewed competition
from other countries (India and China) when the ATC (Agreement in Textile and Clothing)
will end on 31 December 2004. The spill over effect in the BGD economy could be important
unless BGD takes up adequate measures. In this regard, it is important that the EC can
adequately support BGD efforts to diversify exports, improve its current marketing capacity
and fully use the opportunities offered by the EU Everything But Arms (EBA) facility.
Donor co-ordination is well established via the Local Consultative Group (LCG), in the subgroups
of which the government should participate more actively. GoB with the support of the
World Bank and in consultation with other relevant development partners, is preparing a Poverty
Reduction Strategy, due to be drafted 2002.
Against this background, the overall objective of EU co-operation with Bangladesh is to
helping the government to reduce poverty and contributing towards the country’s integration
into the world economy.
As for the general strategic approach, the EC co-operation will
• favour programmes in support of sectoral policies rather than projects
• continue its support to those NGOs which provide services deemed essential
• mainstream consistently environment, gender and good governance issues
• seek to promoting a higher level of efficiency in project implementation.
8