WB's assistance strategy for Bangladesh

The CAS covering the period 2006-2009, is a support package of nearly $ 3 billion over four years and was endorsed by the WB Board of Directors on March 29. The WB will provide assistance to Bangladesh under the CAS from July for funding development in priority areas. The three cornerstones of the CAS are improving the investment climate, empowering the poor and strengthening core governance. In addition, it will support governance reforms and investment in the power sector, water, health and education.

The WB will also support the strengthening accountability of the key public institutions like the office of the Comptroller and Auditor General, Public Accounts Committee, Bangladesh Bank, the Public Service Commission, Securities Exchange Commission, as well as the core governance process of public financial and budgetary management, public procurement, the National Board of Revenue, and legal and judicial reform, in collaboration with other development partners.

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The WB, the Asian Development Bank (ADB), Japan and UK Department for International Development (DFID) jointly prepared the CAS. Under the CAS programme the four major development partners of the country will provide $ 3 billion, provided the government continued its policy and implementation performance.

Serious weaknesses in different sectors of governance in Bangladesh will be challenges for more growth and prosperity in the coming decade, said vice-president of the WB for South Asia region Praful C Patel at a press conference in Dhaka on May-15, while launching the new CAS. He also said that the WB has cancelled a number of projects for procurement related corruption. .

The WB, which has taken a tough stance on governance and corruption, has already warned the government, saying that future access to their development credits will be conditioned on governance related benchmarks. It will be more aggressive in its tough stance against corruption during the CAS period and the bank has already informed the government about it, said Patel.

Bangladesh scored the lowest marks among 209 low income countries in 2004 in the WB's governance situation survey. The survey titled 'Bangladesh PRSP forum economic update: recent developments and future perspectives' was conducted on the basis of six indicators of the governance issue which were voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption.

Corruption is perceived to be most acute in Bangladesh and it has again been crowned as the top corrupt state in the world for the fifth consecutive year. The problem of corruption and poor governance lied largely in the fact that certain strategic public institutions, particularly the police, judiciary, taxation and transport remain largely unreformed. The whole mechanism of governance in the country has been vitiated owing to lack of accountability and transparency in the key public institutions.

The government was compelled to form the independent Anti-Corruption Commission (ACC) under pressure from the donors. But it did not make the ACC effectively functional, why? Any motive of advancing with some partisan agenda? The foreign donors unanimously deplored the ineffectiveness of the ACC in nabbing the corrupt, as they viewed that corruption impeded prospective economic growth and investment in Bangladesh. The visiting WB vice president also expressed his deep concern over the ineffectiveness of the ACC terming it as joke.

The WB country director Christine I Wallich asked the government to prepare performance indicators of the Public Finance Management (PFM) and to separate office of the Comptroller and Auditor General of Bangladesh (CAG) from the executive to ensure financial accountability of the public institutions. But the government has so far not taken any steps to separate CAG office from the executive.

The performance of the key public institutions which mainly moulds up the quality of governance, wretchedly is worst in Bangladesh. Lack of accountability in the public institutions has been nakedly exposed in all aspects of governance. The Asian Development Bank in its Quarterly Economic Update released on February 20, cautioned that poor governance and the knock-on effects of high global oil prices may create a negative impact on economy.

The WB has come up with a comparative study of governance between the year 1998 and 2004 in its new CAS. Regretfully, the four-party alliance government has severely suffered in all the key areas of governance. The police have been made a partisan force and the Pubic Service Commission has been turned into a rubber stamp. The separation of the judiciary has been dragged to the fag-end of its tenure to do it never. Not only the ACC but the Election Commission has also been turned out to be a big joke. Clearly, these testify to serious weakness in governance and the government now needs to do some soul-searching and be determined in emancipating itself from the indignity of being the worst performer.

Strengthening accountability and ensuring transparency in the key public institutions, are two major components for improving governance. Appointment of a sector-wise ombudsman, cancellation of the Official Secrecy Act for ensuring free flow of information, and creation of massive awareness among the people against corruption are very crucial for improving governance. The public institutions must be made accountable to the public as well as their institutional stakeholder to ensure good governance.

Over the last two decades the people of this country have witnessed a large and increasing divergence in governance, which has doubled corruption and collapsed rule of law in most of the public institutions. Not only the foreign forums, but also the common people of the country have a similar view on ensuring the accountability of the key public institutions for improving governance and reducing corruption.

The WB is apparently committed to working with the government and people of Bangladesh to unlock the country's potential through the new CAS. While lending full support to the CAS, we cannot but emphasise the concern expressed by the WB vice president for improvement of governance and reduction of rampant corruption, whose development costs are huge. It is really disgraceful for the government as well as the nation when a foreign dignitary publicly criticises the government for its poor performance and utters words of warning for the consequence. The government will continue to be treated with such insolence unless it develops the scene of self-respect through improving governance.

ANM Nurul Haque is a banker.