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Country profile
As a low lying, densely populated country of 143 million people, Bangladesh faces a unique set of development challenges. The population is growing rapidly, and the capital Dhaka is one of the fastest growing cities in the world. A quarter of the country is flooded during the monsoon season, and this could increase to 40% with climate change. More than 40% of the population lives below the international poverty line, with 14 million people in extreme poverty and vulnerable to food insecurity and natural disaster.
However, the economy of Bangladesh has been growing vigorously, at an average of 6% in recent years. There has been a steady expansion in government services, with a major role for civil society organisations as service providers. Bangladesh has implemented some highly innovative adaptation programmes to diversify its economy and increase the resilience of communities to extreme weather events. The country is on track to achieve the first MDG on eradicating extreme poverty and hunger, with poverty rates falling by 1.8% each year. Primary school enrolment has reached 91%, although completion rates remain an issue. Bangladesh is on track on child mortality, but maternal health and access to safe water remain serious challenges.
Bangladesh received net ODA of US$1.2 billion in 2006, with World Bank, ADB, DFID and IMF the largest donors. However, the country is by no means aid dependent, with ODA accounting for only 1.5% of GDP. By comparison, annual remittances and foreign direct investment are both well in excess of ODA.
The government’s development agenda is set out in its poverty reduction strategy – Unlocking the Potential: National Strategy for Accelerated Poverty Reduction 2008-2011. The PRS needs to be more clearly articulated in sector strategies and linked to the budget through the Medium-Term Budget Framework. A National Poverty Reduction Council has been created to support and monitor PRS implementation and facilitate broader participation.
Bangladesh is a signatory to the Paris Declaration and an active participant in aid effectiveness processes. It has had a Harmonisation Action Plan since 2005, led by the Economic Relations Division of the Ministry of Finance. Four donors (WB, ADB, DFID and Japan) sought to increase harmonisation through a Joint Assistance Strategy 2005-2009. This is now being expanded through the development of a more ambitious Joint Cooperation Strategy (JCS), which will establish a common framework for improving aid effectiveness. The JCS aims to strengthen demand-driven capacity development, increase medium-term predictability of aid, strengthen national ownership and improve results-orientation.
For more information on aid effectiveness in Bangladesh click here.
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