Role of World Bank in the economic development of Bangladesh

Bangladesh remarkably steady growth was possible due to a number of factors including population control, financial deepening, macroeconomic stability, and openness in the economy. Below describe the role of the World Bank in the economic development of Bangladesh –

(1) The World Bank is listening to the voices of the poor in Bangladesh more than ever before.

The World Bank is increasing support for projects that directly impact people at the grassroots level. It now follows a consultative process. This means it is going to stakeholders and talking to the people for whom the projects are meant to benefit. Their voices are then considered as policies are proposed.

(2) The World Bank has helped make Dhaka’s air more breathable.

Dhaka has today become a much livable place with most of the toxic fumes from two-stroke vehicles removed from the air. This is the outcome of the Government of Bangladesh’s Dhaka Urban Transport Project (DUTP), funded by the World Bank. It has been estimated that exposure to air pollution in Dhaka causes several million cases of sickness each year. There was no initiative undertaken in the county to improve the air quality prior to the DUTP. There has been much improvement in Dhaka’s air quality since implementation – and the effect can be felt by all. Over time, an improvement in environmental conditions can have a favorable impact on foreign investment, which will reduce poverty.

(3) The World Bank is the largest external funder of microcredit in Bangladesh.

The total number of female microcredit borrowers in Bangladesh has now reached 12 million. An important tool for empowering women, World Bank first entered into microcredit financing in December 2000 with $180 million which was channeled to the borrowers through a local NGO, Palli Karma Shahayak Foundation (PKSF). After the success of the program, the Bank committed another $151 million, making the World Bank the largest external funder of microcredit programs in Bangladesh. And to reach the poorest of the poor, it’s Financial Services to the Poor (FSP) project is one of its’ most successful initiatives. It includes hard-core poor people from all walks of life including beggars, sex workers, and women.

(4) The World Bank is Bangladesh’s largest external funder of education has assisted Bangladesh in achieving gender parity in education.

The World Bank provides around $200 million annually to the Government to support education, making it the largest external funder of education in Bangladesh. It is playing an important role in textbook improvement, as well as enhancing the quality of instruction and increasing enrollment in schools through various incentives such as stipends. Our $150 million Primary Education Development Project II (PEDP II) is the main driver in this sector.

(5) The World Bank leads the donor consortium for health programs in Bangladesh that have contributed significantly to improving the health of Bangladeshis.

The World Bank is the largest development partner in the Government’s health program. Through its’ projects, it is working towards reducing malnutrition, mortality, and fertility and promoting healthy lifestyles in Bangladesh. For example, consider the Health and Population Sector Program (HPSP), a five-year nationwide effort that began in 1998. An innovative approach was adopted under which the poorly received vouchers to buy health service from the health center of their choice. This project was followed by another $600 million.

(6) The World Bank relies on local expertise.

Around 95 percent of the staff in their Dhaka office – plus additional staff in their Washington office are Bangladeshi. While a large part of the World Bank’s value is in its global experience and expertise, local knowledge is indispensable to effective development. They also work closely with the government, civil society, and communities in designing their support for the country. Most importantly, their overall assistance to the country was developed after broad consultations and is specifically designed to support the goals outlined by the government and the people of Bangladesh. Banking sector in any country plays a pivotal role in setting the economy in motion and in its development process, while the banking structure the number and size distribution of bank in a particular locality and the relative market power of specific banking institution- determines the degree of competition, efficiency and performance level of the banking system.