Danish Embassy in Dhaka. Concept Note Bangladesh Country Programme

Transcription

1 Danish Embassy in Dhaka Concept Note Bangladesh Country Programme October 2014

2 Three questions are proposed to guide the Programme Committee discussion: 1) Decentralisation runs like a thread through all thematic programmes bringing services and governance closer to the people. Does the Programme Committee see any obstacles to this approach? And does it agree with the lesser emphasis on central level governance, e.g. the decision to focus a future and downsized PFM engagement on decentralisation? 2) Sustainable Energy engagements aim at advancing a muchneeded sector in the Bangladesh context - using mainly the private sector as entry points and potential future role models. Does the Programme Committee agree with this approach which entails new risks - to introducing renewable and more efficient energy solutions? And does the balance struck between known and new engagement partners seem right? 3) Synergy between thematic programmes can be strengthened through the country programming approach. This is a new opportunity and guidance is sought from the Programme Committee on how to further strengthen synergies between and within the three thematic programmes.

3 1. Introduction The Country Programme is based on the Denmark-Bangladesh Country Policy Paper , outlining Danish policy priorities vis-à-vis Bangladesh. Of the overall objectives stated in the Country Policy Paper, two are directly related to development cooperation and addressed in this paper: Contribute to poverty reduction, growth and sustainable development Contribute to promotion of democracy, respect for human rights, rule and law and good governance. The country programme is aligned with the priorities set out in Bangladesh s national development plans and with The Right to a Better Life, Denmark s own strategy for development cooperation. Development cooperation as outlined increasingly works in synergy with other instruments applied by the Danish government in Bangladesh. Danida Business Partnership is an important instrument when it comes to creating jobs and bringing Danish expertise and know-how to Bangladesh, and so is Danida Business Finance. Other instruments e.g. aimed explicitly at promoting commercial cooperation are also in play and contribute to the third objective of the Country Policy Paper, i.e. promoting commercial cooperation between Denmark and Bangladesh. Bangladesh is so far the only LDC where Denmark operates with an annual Trade Council target. Creating synergies between trade and development is a priority. 2. Conclusions from preparatory analysis Goldman Sachs included Bangladesh on the list when they coined the concept of the Next 11 countries back in 2005, all singled out because of their economic potential. It is still too early to say if Bangladesh will eventually emerge as a future, major global economy. Over the past 20 years, Bangladesh has made some of the biggest gains in the basic condition of people s lives ever seen anywhere and is on track towards meeting many of the MDG targets, incl. good progress on poverty reduction. It has made the fastest improvement in infant and under-5 mortality in the whole of South Asia, and managed to reduce maternal mortality by more than three-quarters. Life expectancy rose by 10 years between 1990 and 2010, from 59 to 69. Bangladesh has come a far way, but there are still challenges. Poverty reduction remains a challenge despite remarkable progress. In the past decade, the economy has grown around 6% per year and poverty reduction has gone hand in hand with economic growth. Poverty dropped by nearly a third, from 49% in 2000 to 31.5% by However, in absolute numbers this still leaves more than 47 million people below the poverty line. Large numbers are at the margin and highly vulnerable - more so in rural areas where poverty is still significantly higher and more extreme than in urban centres. 1

4 Income growth has been the single most important driver of poverty reduction - from substantial increases in farm income to the large number of salaried jobs that have been created in particular in the booming textile industry. Studies point to income generation by increasing productivity and employment as key to further poverty reduction a priority accentuated by the rapidly growing labour force. More than 2 million new workers enter the labour market every year an opportunity but also a major challenge. Agriculture despite some progress in diversifying the labour market - remains a key sector, employing nearly half of the workforce and providing over 45% of total household income, many of them among the poorest in rural areas. Inclusive green growth is key to sustainable economic growth. Bangladesh s extreme susceptibility to climate change and the ever-increasing pressure on the natural resources and environment are major challenges. Bangladesh is already one of the most polluted countries in the world and climate change remains the dark horse than can potentially turn efforts and aspirations upside down. The overstretched energy sector is maybe the biggest constraint to growth. The overall shortage of energy is an outright deterrent to fresh investments and expansion of ongoing businesses. Bangladesh has been ranked the most difficult place for businesses to acquire electricity by the World Bank (185 out of 185), and there are studies showing that the lack of energy may cost as much as 2% in GDP growth each year. Prospects are bleak - today about 80% of the electricity comes from natural gas, a resource which studies indicate may dry up as early as in 10 years time. Bangladesh urgently needs to diversify its energy sources. Renewable energy is on the agenda, albeit not yet on a scale that makes it efficient enough to assume commercial dimensions. Even though the Government has an ambition of using more renewable energy sources, coal still seems to be the new chosen energy source. Development and growth is held back by weak governance. Governance in Bangladesh is shaped as much or maybe even more - by informal systems as by the formal structures set out in the constitution, laws and policies, many of which are progressive and inclusive. Patronage, nepotism and corruption are pervasive. The state machinery is often partisan, with low levels of accountability and weak capacity the same goes for the justice system. Limited state capability is a major challenge, affecting policy implementation, service delivery and the state s ability to protect and advance rights and interests of citizens and business investors alike. Many studies incl. Bangladesh s own development plans point to decentralisation as key to better governance and service delivery. Bangladesh is one of the world s most centralised countries, despite a multitude of policies underscoring the benefits of bringing government closer to citizens. However, studies point to the lowest tier of rural government the Union Parishads (UPs) as potentially more accountable and effective in their dealings with citizens. 2

5 Human rights violations are a long-standing and systemic challenge. In particular women and minorities are vulnerable, incl. the app. 2.5 million indigenous people living in the country. Violence against women and girls remains high. Bangladesh s deeply entrenched history of political polarisation leaves little democratic space for dissenting voices or those outside the political party patronage. The General Elections in January boycotted by the main opposition party have further exacerbated this situation. Bangladesh needs to create more and better jobs to sustain growth and absorb the many new entrants to the labour market. Poor working conditions and lack of labour rights in particular in the textile production has been accentuated by a number of large-scale industrial disasters, most notably the collapse of the garment factory building "Rana Plaza" in 2013, killing more than 1,100 workers. The garment industry employs more than 4 million workers mostly women and constitutes 80% of Bangladesh s exports The country programme aims at building on the above progress as well as addressing the challenges through the following three thematic programmes: 1) Agriculture-based poverty reduction through a thematic focus on pro-poor income generation and employment in rural areas, putting emphasis on increasing marginal and small farm households productivity and the competitiveness of agro-business. 2) Inclusive green growth through a thematic focus on improving climate resilience and income generation among the poor and vulnerable to climate change as well as promoting private sector investments in sustainable and efficient energy solutions. 3) Better governance and human rights - through a thematic focus on local governance structures, rule of law and human rights, putting emphasis on accountability, access to justice and advocacy for the vulnerable and marginalized. Special attention will be given to gender equality, the rights of workers and indigenous people. Poverty alleviation and inclusiveness are at the heart of the thematic programmes and a Human Rights Based Approach (HRBA) is applied. The thematic programmes are interlinked and mutually supportive, e.g. decentralisation working at local level and strengthening local governments runs like a thread through all the thematic programmes, as does gender equality and support to indigenous people. Creating synergies between engagements will be an important aspect of the up-coming formulation of the thematic programmes. The country programme builds on more than 40 years of development cooperation between Denmark and Bangladesh, continuously adjusted over the years to maintain its relevance and responsiveness to the challenges facing the country. Lessons learned incl. from existing sector programmes have guided decisions on which engagements to pursue under the country programme. 3

6 3. Strategic consideration and justification of the country programme Bangladesh is going to celebrate its 50 years of independence in 2021, and the aspiration is to mark the anniversary with a transition to middle-income status. However, estimates suggest that this will require sustained economic growth in the range of 7-8% a year a leap that Bangladesh is not at this point likely to be able to make, while at the same time ensuring that growth is sufficiently inclusive. The country programme is, as mentioned earlier, well aligned with key national development plans i.e. the government s Vision 2021, the current Sixth Five-Year Plan and the preliminary outline of the Seventh Five-Year Plan ( ). The upcoming Seventh Five-Year Plan - under the banner Accelerating growth: empowering every citizen - identifies increased employment opportunities and improvements in GDP growth as core instruments to reduce poverty and ensure equity. It defines development of local government as well as adaptation to climate change as central, unfinished reform agendas which will need to be given extra attention in the new Five-Year Plan. It acknowledges the need to improve governance at all levels - also through decentralization - to lower corruption and improve efficiency of public services. The Plan also accentuates the importance of empowering women, protecting the rights of the under-privileged, improving the country s energy situation and productivity in the agricultural sector as well as the need to improve workers safety. All issues that are addressed in the country programme. There are naturally other challenges and not least, ways of contributing to a povertyfree Bangladesh - than those outlined in this paper. Tackling e.g. the massive infrastructure deficit, rapid urbanization, the need for a more enabling business environment, better revenue collection and continued support to the social sectors all are crucial to inclusive growth and need to be addressed if Bangladesh is to make the transition to middle-income country. Division of labour between donors and with government is vital, based on experience, expertise and financing ability. For instance, urban poverty is a major priority for ADB, big infrastructure investments are better left to soft-loan facilities and social sectors are catered for by others, incl. EU, World Bank, DFID and SIDA. The engagements selected in the country programme are in accordance with the OECD-DAC criteria highly relevant and have been chosen for their ability to create a genuine impact, just like partners and implementation modalities have been selected with effectiveness and efficiency in mind. The country programme makes use of joint funding mechanisms where feasible. Sustainability depends on Bangladesh s own development efforts and commitments and all engagements are high on the government s priority list and anchored with robust partners. 4

7 4. Thematic programme objectives and summaries The country programme through three thematic programmes covers a total of 20 engagements, out of which 16 engagements will be ready for appraisal. Two engagements are currently being piloted and the formulation must await lessons learned. The other two engagements are contributions to basket-funding where formulation must wait for clarity on the continuation of the baskets and, if that is the case, joint formulations. 4.1 Agricultural Growth and Employment The ongoing Agricultural Growth and Employment Programme contributes to propoor and inclusive growth and sustainable employment creation for male and female members of small and marginal farms. The current programme started in 2013 and runs up to A next phase will be planned for based on lessons learned in the ongoing programme and introducing Farmer Business Schools as an innovative new concept which is being developed and piloted in the current phase. In line with the government s priorities, it is based on the documented assumption that better productivity at farm level and value addition through processing and marketing support increased and inclusive economic growth. Other major donors to the sector include the World Bank, the Asian Development Bank and USAID. The programme has three engagements: 1) Integrated Farm Management, focuses in two engagements on increasing and diversifying the agricultural production in marginal and small farm households and 2) Agro-Business Development, focuses in one engagement on strengthening the competitiveness of the agricultural and agro-business sectors. Integrated Farm Management supports the core business of the implementing agency, the Extension Department of Ministry of Agriculture. Part of the engagement is implemented in the Chittagong Hill Tracts (CHT) as part of Danish support to the indigenous people living in the area with UNDP and the CHT Ministry as partners. The engagement is based on a decade long collaboration in agricultural extension. A Farmer Field School is a group-based learning process focused on using the farmers own experiences. The farmers 50% or more being women - learn together and from each other. The farm is the school and provides the learning materials the farmers own experiments with crops and livestock husbandry are an essential part of this discovery learning. The facilitators are graduates from previous Farmer Field Schools and as such are anchored in the communities. The curriculum is adapted to the farmers needs and includes biological control of pests as an alternative to insecticides, use of compost as organic fertilizer, balanced use of chemical fertilizers and most recently integration of livestock husbandry. 5

8 The Farmers Field School methodology was evaluated by EVAL as part of the formulation of the ongoing programme. It found the method a very efficient development investment with a pay-back time of less than a year. The impact on both household income and food security was found to be highly significant. At the end of the ongoing phase female and male members from 600,000 households will have participated in 24,000 Farmer Fields Schools. Agro-business Development is implemented through a basket-fund led by SDC with DFID and Denmark as partners. The joint engagement popularly branded Katalyst is anchored in the Ministry of Commerce. Katalyst is based on a Making Markets Work for the Poor (M4P) approach. A project in Katalyst s Bangladesh portfolio has just received the "DAC Prize for Taking Development Innovation to Scale", awarded for the first time ever this year to honour projects that are able to implement simple measures highly effectively and with the broadest possible outreach. The project made affordable mini-packets of high-quality vegetable seeds available to small-scale farmers. With the mini-packets, the farmers were able to increase their production substantially and improve their own supply of vegetables and earnings. Katalyst has been testing such market-oriented innovations for over 10 years. According to their own calculations it has increased the income of 2.4 million poor farmers with a total of 295 million USD between 2008 and The ongoing, third phase of Katalyst will expire in Based on the lessons learnt from Katalyst, a new engagement will be formulated. The modality and the engagement partner are yet to be decided. 4.2 Climate Resilience and Sustainable Energy The programme with its focus on green growth and sustainable development will contribute to inclusive green growth by improving climate resilience and creating employment among the poor and vulnerable to climate change and by promoting private sector investments in sustainable and efficient energy solutions. The programme will be conducted through 6 different engagements, grouped under the headlines 1) Climate Resilience and 2) Sustainable Energy. Climate Resilience is a key priority for government as well as international donors. Support to the tune of several hundred millions of USD is being provided by donors such as World Bank, DFID, EU, USAID and SIDA for i.a. construction of cyclone shelters, re-forestation, and emergency food storage. Due to the extreme climate vulnerability of Bangladesh, the needs are many and urgent. The Danish engagement will focus on building climate resilient rural infrastructure in the vulnerable southern part of Bangladesh, working together with the Ministry of Local Government. A decentralised block grant modality will be used to climate-prof rural roads, contracting poor and marginalised women to do the job and hence also providing them with a source of income. Studies show that economic growth in this part of the 6

9 country often hit by floods and cyclones is highly dependent on access to commercial markets. Maintaining the roads makes a real difference to people s income opportunities and ultimately to their access to cyclone shelters. The engagement builds on a long history of Danish support to the rural road sector in Bangladesh. The climate angle is new and is currently being tested through Climate Frame financing. The ongoing project will e.g. re-section more than 400 km of roads and embankments, contracting 600 labour societies of poor women and giving them a total of least 1.5 million labour-days of employment. In Chittagong Hill Tracts (CHT) again as part of Danish support to indigenous people in the area a brand new engagement will use the existing implementation infrastructure in the agricultural programme, i.e. the Farmer Field Schools, to create sustainable and climate resilient livelihoods for rural communities. Sustainable energy is focused on strengthening private sector s approach to energy efficiency and renewable energy by increasing knowledge of potential solutions and benefits. This is a priority in line with Bangladesh s upcoming Five-Year Plan and the government s Renewable Energy Policy where there is an explicit target of reaching a total generation of energy from renewable sources of 10 % by The concept of energy efficiency and renewable energy is still not very developed in Bangladesh. Sustainable energy is still largely equated with solar home systems, both by government and by a number of donors, incl. World Bank, ADB and USAID. Two engagements financed via the Climate Frame are currently being piloted and new engagements will not be ready for appraisal, awaiting lessons learned from the pilots: The ongoing Energy Efficient Industry pilot is implemented by the Nordic Chamber of Commerce (NCCI) in Dhaka. It supports companies in their endeavours to be more energy efficient by helping them e.g. with energy audits. The ongoing Waste-to-Energy pilot is coordinated by IFC and implemented in close collaboration with the local lead in this area of renewable energy, IDCOL. It promotes the use of bio-waste fuelled energy, and facilitates the private sector s investment in renewable energy. The new engagement Energy Efficient Water Supply will build on the existing Danida Business Finance (DFB) partnership with Dhaka Water and Sanitation Authority (DWASA) on delivery of safe and sustainable drinking water. DWASA is the agency in charge of water management and distribution in Dhaka, a city of close to 20 million people. The DBF partnership has been successful, and DWASA is now in the process of extending their distribution network to also cover the many slums in Dhaka, reaching some of the poorest segments of the city. 7

10 The planned engagement will assist DWASA in transforming itself into an energy efficient entity and a potential role model. Focus will be e.g. on showcasing energy efficient pumping solutions and giving DWASA the tools to turn energy efficiency into a key principle in their water supply management, among others, through procurement of new equipment. This will be done by helping DWASA establish an Energy Efficiency Cell to develop a comprehensive 'Energy Efficiency Strategy', create commitment and build the required capacity of employees to tackle energy efficiency. 4.3 Governance and Rights The Governance and Rights programme will contribute to increased accountability and pro-poor service delivery through strengthening in particular local level governance and improving rights of vulnerable groups. Supporting governance and human rights has always been a priority sector for Denmark in Bangladesh. The approach has changed over the years with past programmes having as many as civil society partners. The current programme ( ) operates with only 10 partners. This focused approach will continue under the new Governance and Rights Programme, building upon the tough focusing exercise that took place in the run up to the current programme. The programme will be conducted through 11 different engagements, grouped under two mutually supportive headings: 1) Public sector management, focusing on improving especially the capacity of local government to provide accountable, effective and efficient services and 2) Human rights, working with civil society and other actors to enhance in particular the rights of groups such as women, indigenous people and industry workers. Supporting the decentralisation process and in line with the government s own priorities, bringing governance closer to the people will be a key feature of the Governance and Rights Programme. It will not only be a priority under the public sector management component. Also many of the civil society actors operating under the human rights component have a strong local level presence. The programme will, as part of the formulation, look for synergies that can further support decentralisation. Public sector management will support capacity building of the lowest tier of rural government, namely the app. 4,500 Union Parishads (UPs), using the basket-funding modality under the Union Parishad Governance Programme (UPGP) - managed by UNDP/UNCDF as the primary vehicle. UPGP supports 564 UPs - working e.g. through a performance-based block grant scheme and in collaboration with the World Bank s country-wide Local Government Support Programme. UPGP is meant to provide lessons learned for an up-scaling to the wider reform process. Results so far show that UPs are steadily progressing towards better democratic oversight, community inclusion and more transparency in local governance. 8

11 The programme plans to support national level public financial management (PFM), putting emphasis on the PFM aspect of decentralisation. The funds put aside for this engagement are at this point still unallocated, awaiting formulation of a new national PFM programme. Preliminary talks with key PFM donors, such as the World Bank and DFID, indicate that they would be favourable towards giving priority to decentralisation in a future programme. The Government and PFM donors recently agreed not to extend SPEMP, a PFM multidonor trust fund managed by the World Bank. Funding came from DFID, EU, Canada, the Netherlands and Denmark. There are many reasons why SPEMP did not work out as planned, maybe first and foremost a lack of joint under-standing among key stakeholders on the importance of the different aspects of the PFM reform process. However, PFM reforms remain crucial to e.g. public sector accountability and efficient service delivery which is why it is included in the country programme, albeit with a much smaller contribution than in the current Human Rights and Good Governance Programme. Human rights will mostly be centered on a number of civil society and guardian organisations, most of them well-known partners from the current programme. The embassy has already invested in these partners and more importantly they are as relevant today as when selected in 2011, a fact confirmed by the mid-term review of the current programme in April Engagements range from anti-corruption, via Transparency International s local Chapter, to advocating for land reforms in CHT. Many of the engagements have access to justice either through different kinds of legal aid services or awareness raising as their core activity. Women s rights and gender equality is a key aspect of several engagements the flagship engagement being the Government s programme on combatting violence again women. It is implemented by the Women and Children Affairs Ministry which is in the process of rolling out One-Stop Crisis Centres across the country. Workers rights constitute a new engagement, working through ILO s office in Bangladesh to promote better compliance with international labour standards. Focus will be on building the capacity of workers and employers organisations to make them better equipped to enter into a meaningful dialogue, both at workplace level and in the broader context. The engagement adds an important aspect to national and international endeavours to shape up factory safety in the wake of the Rana Plaza disaster efforts which Denmark, Danish textile companies and labour unions are very much involved in. 5. Preliminary results framework and monitoring mechanisms The preliminary results frameworks for the Programme on Agricultural Growth and Employment as well as for the Climate Resilient Rural Infrastructure engagement are extrapolations of the results frameworks in the ongoing Agricultural Growth and Employment Programme and in the ongoing Climate Change Adaptation Project The results frameworks will be adjusted based upon lessons learned. 9

12 The results frameworks for the new engagements under the Programme on Climate Resilience and Sustainable Energy will be defined under the formulation of the engagements. On the Programme on Governance and Rights the results frameworks on the new engagements on Employers rights and Strengthened village courts will be defined under the formulation. For the ongoing partnerships the results frameworks will be based upon lessons learned from the partnerships. For all engagements the finalisation of the results frameworks will be aligned to the planning calendars of the respective engagement partners. For all engagements monitoring mechanisms will be established or continued at the engagement level. 6. Preliminary assessment of risk Contextual risks In light of in particular the 2014 General Elections, the main contextual risks stem from political instability and the lack of dialogue between the government and the opposition. The risk of a deteriorating human rights situation and a narrowing space for the civil society is linked hereto. Corruption is endemic and a risk that needs to be factored in. Budget support is not seen as an option in Bangladesh. A key risk response will be regular policy dialogue with the Government in close coordination with likeminded donors and support to watchdog organisations. Programmatic risks Key programmatic risks are linked in particular to the potential lack of political commitment and action to move forward on core reforms and to strengthen key governance institutions. The widespread corruption constitute another potential risk, even if audits of previous Danish support have not so far identified mismanagement of funds as a major issue. Risk management measures include close monitoring and prudent follow-up. New engagements in particular those related to sustainable energy - carry with them political, institutional and economic risks, as it is often the case when entering new territory or working with a new group of partners. These risks are sought minimized but accepted as inherent at this stage of the programme based on an analysis of the potential benefits from entering into these new fields. Institutional risks Major risks for Denmark s development engagement in Bangladesh stem from the potential lack of political commitment to combat corruption, ensure rule of law and respect for human rights, and address inequality. A corruption scandal and/or a significant worsening of the human rights situation could jeopardize the country programme. Clear communication of risks and risk mitigation measures will be crucial to manage institutional risks. Key tools are also regular policy dialogue with Government and close donor coordination. Another will be readiness to stop engagements if they cannot be meaningfully implemented. 10

13 7. Indicative Budget DKK million/financial year Thematic Programmes and their Development Engagement Engagements Partner 16/17 17/18 18/19 19/20 20/21 Total Agricultural Growth and Employment Programme 01 - Inclusive agricultural growth Department of Agricultural through integrated agric. extension Extension * Inclusive agricultural growth Ministry of Chittagong Hill through integrated agric. extension Tracts Affairs through UNDP in CHT Agro-business development Unallocated Climate Resilience and Sustainable Energy Programme 03 - Climate resilient rural Local Government Engineering infrastructure Department Climate change resilience in CHT Ministry of Chittagong Hill Tracts Affairs through UNDP Climate resilience through Ministry of Local Development strengthened LGIs through UNCDF Energy efficient water supply Dhaka Water and Sanitation Authority 20 Energy efficient industry Unallocated 20 Waste-to-Energy Unallocated Improved local government capacity 08 - Employers rights 09 - Anticorruption and improved transparency 10 - Strengthened capacity of the National Human Rights Commission 11 - Violence against women combatted 12 - Strengthened Village Courts 13 - Improved access to legal services and justice 14 - Land reform and rule of law 15 - Strengthened political Participation of women at local level 16 - Human Rights and access to justice for vulnerable groups Decentralised public financial management Governance and Rights Programme Ministry of Local Government through UNDP/UNCDF Ministry of Labour through ILO Transparency International Bangladesh National Human Rights Commission through UNDP Ministry of Woman and Children's Affairs Ministry of Local Government through UNDP Bangladesh Legal Aid and Services Trust Association for Land Reform and Development Other costs (Joint monitoring unit, reviews, studies, programme preparation etc.) Bangladesh Mahillla Parishad 5 Ain O Salish Kendra 10 Unallocated Total Country Programme Budget 520 Local Grant Authority * A Part of the Agricultural Growth and Employment Programme will be financed from the ongoing Agricultural Growth and Employment Programme In the budget this part is highlighted with blue background. 11

14 Annex I Process Action Plan Process Action Plan for Country Programme Updated/checked: 28/10/2014 Identification Phase Country Programme Activity/Output Timing Responsibility Status Elaboration of a Process Action Plan 26 January 2014 EOD Done Contracting of an external consultant March 2014 EOD Done on the Concept Note Preparation of Concept Note Annexes: 1. Assessment according to the five budget support principle March-June HRBA/Gender Screening Note 3. Climate Change and Green Growth Screening Note March-August 2014 March-August 2014 Consultant/ EOD Local Consultant/ Mahal Local Consultant/ Arif Consultant/ Done Done Done 4. Prelimary Results Framework February-October 2014 EOD Done 5. Risk assessment March-October Consultant/ 2014 EOD Done Contracting of an external consultant on Concept Note Annex 4 HRD, 5 April 2014 EOD Done HRD and 1. Contracting of an external consultant on Sectorial Synergies May 2014 EOD Done Concept Note Mission June 2014 Concept Note Mission August 2014 Consultant/ EOD Consultant/ EOD Done Done Confirmation of the booking on the 24 September EOD Done agenda of the Programme Committee 2014 Final Concept Note to KVA 27 October 2014 EOD Done 1

15 Annex I Process Action Plan Public consultation on the Concept Note Programme Committee debate on the Concept Note November November 2014 KVA EOD/KVA Booked Formulation Phase Country Programme Activity/Output Timing Responsibility Status Tendering of the Process Consultancy for Facilitation of the preparation of the Country Programme and June 2014 EOD Done Formulation of the Country Programme Document Drafting of TOR for Consultancy for the Formulation of the Development 5 August 2014 Consultant Done Engagement Documentation (DED) Issuance of RFP for the Consultancy 25 August 2014 EOD Done for the Formulation of the DEDs Receipt of Proposals on the Consultancy for the Formulation of the DEDs Evaluation of Proposals on the Consultancy for the Formulation of the DEDs Process Consultant s Inception Mission Process Consultant s Second Mission and Formulation Consultant s Inception Mission Formulation Consultant s Second Mission Process Consultant s Third Mission Formulation Consultant s Last Mission Process Consultants Last Mission 17 September September September November December January January February 2015 EOD EOD Consultant/ EOD Consultant/ EOD Consultant/ EOD Consultant/ EOD Consultant/ EOD Consultant/ EOD Done Done Done 2

16 Annex I Process Action Plan Appraisal Phase Country Programme Activity/Output Timing Responsibility Status Booking of appraisal in the TAS 27 September EOD Done planning calendar 2014 TOR for appraisal to TAS 3 February 2015 EOD Documentation for appraisal to TAS 8 March 2015 EOD Appraisal 3-17 May 2015 TAS/EOD Finalisation and Appropriation Phase Country Programme Activity/Output Timing Responsibility Status Indicative booking in the External Grant Committee calendar May 2014 EOD Done Confirmed booking in the External Grant Committee calendar June 2015 EOD Finalisation of Documentation July 2015 EOD Submit Grant Proposal to KVA September 2015 EOD External Grant Committee meeting October 2015 EOD/KVA Approval by the Minister for Development Cooperation November 2015 EOD/UGS Signing of the Agreement with ERD on the Country Programmes Governance and Rights Programme January 2016 EOD and Climate Resilience and Sustainable Energy Programme Signing of 17 Development Engagement Agreements with February-March Implementing Partners and booking 2016 EOD of Commitments Signing of the Agreement with ERD on the Country Programmes Agricultural Growth and Employment January 2017 EOD 3

17 Annex I Process Action Plan Programme, Phase II Signing of 3 Development Engagement Agreements with Implementing Partners and booking of Commitments February-March 2017 EOD 4

18 Annex II - Budget Support Assessment Assessment according to the five budget support criteria. Criterion 1. Fundamental values Indicators: Fundamental values, encompassing a minimum respect for human rights, pluralistic democracy and rule of law, including independence of the judiciary. Human Rights (HRs) The assessment of the fundamental values for budget support shows a mixed picture, but the general situation has worsened. On the one hand the Government of Bangladesh (GoB) has initiated a number of initiatives to improve the institutional and the regulatory frameworks. The laws, policy and plans are generally supportive within the field of human rights and good governance from the GoB s vision 2021, the text in the Constitution, the 6 th Five Year Plan (FYP), the concept note for the 7 th FYP and various declared polices, including the engagement in the UN supported UPRs. However, rule of law remains weak across the country with widespread human rights abuses. Implementation of plans and strategies to strengthen governance and actually address HRs issues and problems, including implementation of the legal framework, has been weak and the country is faced with tremendous challenges in terms of HRs for vulnerable groups, increasing levels of political violence, abductions, unrest and conflicts, which have increased over the past year. The situation has been influenced and worsened by the political situation, the tensions with major conflicts between the Government, led by Awami League (AL), and the main opposition party - the Bangladesh Nationalist Party (BNP). The crisis centres on the one-sided general elections held on January 5, 2014, which the major opposition party boycotted, and hence leaving the AL coalition with a clear majority in the Parliament. Since the election in January 2014, problems with unrest, violence, extra-judiciary killings, abduction of people, have continued and tend to worsen, especially in connection with the recent Upazila Parishads elections (which included the opposition in the election process). NGOs have felt an increasing pressure on their existence and operations, and some of the critical NGOs have been threatened by the government or put under undue pressure to reduce voice/ activities. Comments The overall conclusion is that although there have been some improvements in the policies, in legal framework, in the establishment and operations of institutions to improve HR and the judiciary as well as targeting of the high level of corruption, the general HR situation in the country remains problematic, and the political situation is volatile. The HR situation needs to be closely monitored, and test cases will be the GoB s commitment to effective address the problems with political violence, abductions, extra-judiciary cases of violence and killings, and corruption observed at all levels of government. The press and the NGOs, will have an important advocacy, awareness raising and supporting roles, but their means of operations and autonomy to function should be carefully monitored and supported. The existing situation with absence of a fully pluralistic parliament, combined with the severe situation in HR and democracy and lack of GoB commitment so far to improve it significantly, does not argue in favour of changing the aid procedures towards more budget support oriented modalities. The review shows the need to focus on both the supply and demand side to strengthen HRs, 1

19 Annex II - Budget Support Assessment Criterion The Constitution guarantees all fundamental rights and freedoms as justiciable rights, and equal rights and contains affirmative actions to support women, children, and underprivileged groups of citizens. The legal framework also bans torture, but allow death penalty in rare bases Comments accountability and anticorruption initiatives, and opportunities especially at the local governance level to impact on strengthening the progress. Furthermore, a number of laws support human rights improvements, including the Act on National Human Rights Commission (NHRC), the Rights to Information (RTI), Act 2009, Domestic Violence Act, 2010, which refers to the CEDAW, Prevention of Money Laundering, 2012, etc. Also a number of policies, e.g. National Child Labour Elimination Policy, 2010, National Women Development Policy 2011, National Children Policy 2011, etc. have been issued in the recent years to support the vulnerable and disadvantages groups of the society. However, implementtation of these acts has been very weak, and the weak capacity and functioning of especially the judiciary system and HR agencies has led to a significant backlog of cases at all levels of the court system. The GoB is a party to the UN Universal Period Review and the most recent reports from the GoB and independent observers (2013) show that the general legal framework on HR has improved and that a number of institutions and agencies have been established to support improved HR, anticorruption and transparency, but that implementation is weak. The judiciary functions have formally been separated from the executive, but the judiciary system is struggling with lack of capacity and efficiency and tremendous delays, inefficiencies and political interference and control. One of the key constraints facing the judiciary is the large number of backlog in cases, which is in the tune of around 1.8 million cases (of which 300,000 are at the high court level). Those cases involving violence against women, which make it to court, require an average of two to five years for completion. It is generally recognized that delays can prompt a variety of responses to injustices, including extra-judicial, or extra-constitutional, means of dispute resolution, which may involve discriminatory or arbitrary practices, or result in outcomes, which further increase the vulnerability of the poor. The backlog is placing considerable pressure on the court system and is hampering access to justice, especially for the vulnerable groups. 2

20 Annex II - Budget Support Assessment Criterion Despite significant challenges in improving access to justice through the formal court system, a combination of factors has created an opportunity to strengthen the Judiciary 1. The appointment of a Chief Justice committed to improve the effectiveness and efficiency of the Judiciary is noteworthy. The establishment of the Supreme Court Special Committee for reform also demonstrates some willingness to invest time and resources in questions related with procedural reform and improvement. Important structural changes have also taken place in recent years, including the formal separation of the Judiciary from the Executive. Strengthening of the judiciary is mentioned as a key component of the government s outline prospective plan and five-year plan, and is supported by various DPs, including especially UNDP. Comments Some progress has also been noted in meeting some of the HR related MDG targets. Poverty has been brought down from 40 % in 2005 to 31.5 % in 2010, and there are good prospects of meeting the poverty MDG targets by Bangladesh is also on track on the child mortality rates, on the maternal mortality rates, and has improved the service delivery in other areas (e.g. education and agriculture), also due to a favourable economic development with stable progress in growth. GoB has taken important initiatives to support vulnerable groups, specially the women. MoWCA, with support from DPs, especially Danida, has launched a comprehensive program and action plan to address violence against women, through establishment of helpline, crises centres, hotlines, support to the legal framework and access to justice, etc. 2 and initiatives are taken to improve workers rights, especially child workers, and other vulnerable groups. However, and especially due to the weak judiciary system, there are major gaps in tackling the problems. Although the HR demand side is rather vibrant with many NGOs actively working, there have been some recent signs to restrict the rights of NGOs, through e.g. slow registration procedures, warnings, threats, etc According to the UNDP, Justice program, Reference is made to the independent UPR Report, 2013 page Reference is made to the independent UPR Report, 2013, page 3. 3

21 Annex II - Budget Support Assessment Criterion Corruption Corruption level is still rampant and amongst the highest in the region. According to Transparency International s (TI s), Bangladesh ranked 136/177 in 2013, with a score of 27/100. In 2012 the ranking was 138/177 and in /177. Progress made in fighting corruption is stagnant and poor. Comments Democracy and rule of law Whereas the election to the parliament in 2014, was not reflecting the full range of parties, in the period of : 5,509 elections across tiers of governance (4,421 UPs, 481 UZP and 282 municipalities were conducted and there has recently been election to the UZs). The Upazila election has just been completed from February to May 2014 in six phases, after the last Upazila election was held in Elections have been held in 458 or the 487 Upazilas. However, the election has been characterized by violence and irregularities. Although there has been a number of achievements with the Chittagong Hill Track peace process and the follow-up on the Peace Accord, the progress has been mixed and the implementation of the CHT is seen as somehow disappointing by the independent UPR, and initiatives to protect and support the minority groups are weak (note that minority groups are not recognized in the official policy). 2. Solid national policies and plans for poverty reduction, good governance and sustainable development. Indicators: Solid public policies to achieve poverty reduction, good governance and sustainable development, including assessment of relevance, progress and political will as well as public sector capacity to implement policy and reforms. Policy framework for monitoring progress of public policies should also be assessed. The partnership between the development partners and the receiving country and experiences from cooperation up to date. Government policies to achieve poverty reduction and political commitment. The overall vision for development and poverty reduction is guided by the Bangladesh Vision 2021, which is a comprehensive document developed to provide the strategy for Bangladesh to become a middle-income country by 2021, to promote development and to reduce poverty, has the Although GoB s 6FYPs (and the draft input to the 7 th Plan) provide a comprehensive overview of the challenges and means to address these, there are major gaps within this criterion for GBS, especially in the linkages between the plans and budgets (which are delinked), within the result monitoring frame-work and level of action planning and follow-up, which are largely missing. Furthermore the harmonisation and alignment by DPs with government procedures and 4 UPR, 2013, page 6. 4

22 Annex II - Budget Support Assessment Criterion GoB s ownership and commitment. It was developed by a diverse group of government officials, academic, private sector with consultation with civil society during the caretaker government, and has since then been accepted by the GoB as the main guiding tool for development, and has been referred to in the more specific sixth Five-Year-Plan (6FYP), and in the coming concept note for the 7 th FYP ( ), which is the main strategic instrument after the end of previous poverty reduction strategies (PRS). It is also recognized and referred to in the recent proposal for the annual budget FY 2014/15. The current 6FYP provides a comprehensive analytical work on the current challenges and the way forward in reduction of poverty. The 7 th FYP will be developed in close collaboration and consultations with DPs, with academics, with GoB agencies and with NGOs/CBOs, and about 21 analytical inputs/ studies will be provided over the coming months, with the aim to have a draft ready by beginning of Poverty targeting and achievements Bangladesh has been successful in achieving a significant reduction in poverty since The 6FYP shows that there has been a significant decline in poverty occurred from to 2010 (latest official figure) and an expected continuation of this. National poverty headcount declined from 58.8 percent in to 31.5 percent in 2010, while the extreme poverty rate declined from 41.0 to 17.6 percent over the same period. Furthermore, improvements have been made in some of the core MDG areas such as especially reduction in child and maternal mortality and increase in enrolment in primary education. However, there is still a sharp variation in the rate of poverty reduction across regions and very high inequality rates. The growing income inequality is of major concern to the Government, and the 6FYP seeks to address the income inequality problem through a range of measures including creating better access to high productivity, high income jobs; improving farm productivity and incomes; sharpening the focus on equity aspects of public spending on education, health, family planning; nutrition and water supply; reducing the regional disparity of growth; and improving the access of the poor to means of production (fertilizer, seeds, water, electricity and rural roads); and by improving the access of the poor to institutional finance. Comments systems is still weak and project mode-based and use of joint basket funding arrangements (not budget support) are the main instruments due to weaknesses in the core government systems and procedures throughout all phases from planning to auditing. There is no drive amongst the bilateral DPs to pursue neither GBS nor request within the GoB, and no overarching framework to apply. There have been some progress and good initiatives to promote greater level of harmonisation across DPs through basket funding arrangements, common programs/engagements until the GoB procedures for full alignment are in place, which is likely not to be the case in the short to medium term, i.e. within the 7 th FYP. The partnership framework is still incipient, but is gradually emerging, although with major gaps in the overall coordination, action planning and in the results monitoring, and in the GoB s commitment to stronger alignment and coordination between initiatives (various line ministries and agencies have different stakes in this). The system generally lacks an overall measurement system for tracking of the performance and agreements made. Through the support to both supply and demand side within governance and especially related with the local gover- 5