BACKGROUND OF ECONOMY OF THE IMMEDIATE POST-INDEPENDENT BANGLADESH

    After a bloody war, Bangladesh got her independence on 26 March 1971.Historically, today’s independent Bangladesh and the Bangladeshis (the then territory and people of East Bengal and East Pakistan which was popularly known as ‘The Golden Bengal’) had to suffer chronically a long period of about 214 years from 1757 to 1947, and from August14, 1948 to 24 March, 1971 being an undivided part of British-India colonization and that of the then Pakistan respectively. This long continuous period of more than two centuries had been characterized by the policy of ‘divide and rule’, and socio-economic, cultural and political exploitation, deprivation, discrimination and undemocratic misrule. Through achieving independence, Bangladesh won her full right of self-determination and self-rule as a nation-state. Thus Bangladesh inherited a war-ravaged totally shattered economy, coupled with the adverse effects of colonization and misrule on her socio-cultural and political areas. Immediate after the independence, the diplomatic ties between Bangladesh and Japan established on 10^th February, 1972.Since then, Japan has been extending its aid assistance to Bangladesh. And Bangladesh-Japan has been maintaining a very significant, effective and close economic relation.

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OVERALL PICTURE OF JAPAN’S ODA TO BANGLADESH

    Bangladesh as a newborn state had to face multidimensional challenges with tremendous food, foreign exchange crises for which she had to depend heavily on the Foreign Food Aid from Japan and USA and other international community. The relation between Bangladesh and Japan has been characterized by mutual trust, cordial friendship especially in the areas of economic assistance and cooperation. When we look at the Aid commitment and disbursement position of Japan’s ODA to Bangladesh, it reveals a vivid picture of Japan’s leading trend of providing ODA to Bangladesh, initially more in the form of Food Aid, Commodity Aid and Project Aid. Among the 20 major international donors providing donations to Bangladesh, Japan stands just after IDA (International Development Association) but bilaterally the largest donor to and development partner of Bangladesh. Japan, the second largest economy and technologically the most advanced nation in the world, has been able to project its positive image as the leading donor globally. Over the years, the relationship and economic cooperation between these two Asian Countries have been growing stronger and stronger. Since 1985 Bangladesh has ranked first as the recipient of Japan’s Grant Aid (roughly 10% of Japan’s total grant aid) with a moderate rate of increase annually.

Fig: Flow of Japan ODA to Bangladesh over the period of 1971/72-June 2004.

A. Aid Grants:

    The Foreign Aid Flow chart reflects that over the period of 1971/72 to June 2004, Bangladesh received a total grant disbursed of US$ 3220.50 million and a total amount of loans disbursed of US$ 3439.50 million from Japan which stands the highest among the 20 major donors. Out of this amount total Project Aid disbursement stands at US$ 2605.805 million bilaterally from Japan and which is the highest among the donors. Till 1976, Japanese ODA was dominated by the Food and Commodity Aid, and there after the Project Assistance started increasing gradually. Unto 1980, the volume of Food and Commodity Aid was greater than Project Aid. The table reveals the fact that Food Aid stands the lowest in comparison to Commodity and to Project Aid, and it is only of 7.62% of the total Grant Aid amount and Food loan is of 4.75% of total loan disbursed over the said period. Again over the period, Japan has the second leading position in terms of Food Aid disbursement to Bangladesh, after the USA. In the initial years (1971-1976), Bangladesh had to have Food Aid largely in the form of grant because of its food shortage due to war and post-war situations, but gradually she attained her food sufficiency through some special internal policy programs like income growth/self-reliance movement/Green Revolution being supported heavily by the high fertility rate of her lands and adoption of Multi-crop Diversified Agricultural and Irrigation system, the declining birth rate achieved through successful Family Planning Programs over the decades. But it is also the fact that due to flood propensity and recurrence, Bangladesh requires instantly some food aid to meet up her emergency requirements which has also been reduced due to the gradual increase of efficiency in disaster management system. Project aid provided strong support to have permanent infrastructure development like construction of cyclone and flood shelter etc. On the other hand, it is also considered favorably that huge quantity of food grains are utilized through the ‘Food for Work’ and ‘Food for Education’ Programs which have contributed largely to the construction of local network of roads and to the increase of literacy rate reducing the rate of dropouts at the elementary school level. It reflects that Food Grant has been absolutely dominating over its loan over the whole period. It is also significant that from 1985-2005, no loan was provided as Food Aid.

B. Loans (Project and Non-Project):

   The Aid Flow chart shows that out of whole ODA disbursed to Bangladesh over the period of 1971-June 2004, the amount of loan was US$ 3439.50 million which is 51.64 % of the whole of ODA. It also reveals an increasing rate of commodity loan. This type of loan has been used to assist the balance of payments and fiscal revenue and to purchase/import raw materials and intermediary goods, machineries in order to provide support to the productive sectors and some priority projects. As macro economic management, commodity loans have been found contributing and supporting to the generation of foreign exchange by selling imported goods and to meet up the local cost of some projects. It is fact that Japan as donor and Bangladesh as the recipient country thrusts their importance on the effective appraisal, planning and formulation procedures and implementation and utilization of commodity loans and supply of necessary goods in the aid package with realistic commitment and feasible conditionality. The ex-post conversion of loans into grants through the process of debt relief mechanism reflects the system of non-credit worthiness and realistic policy which could accelerate long term growth and development. In order to meet fiscal deficits and to maintain balance of payment, import substitution industry building was given high priority and was supported by project aid significantly. And for the purpose of investment and promotion ex-post, infrastructure sector was provided with Project Aid on an increasing rate. It is also revealed from the Aid Flow Chart that both Project and Non-Project loans disbursed over the said period was higher than the grant. The disbursement chart shows sectors like Transport, Power, Water Resources, Physical Infrastructure, Industries, Agriculture, Oil, Gas and private sectors got priority and preference for utilization of project fund provided by bilateral, multilateral, OECD, OPEC and other countries’ donors.

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DEBT RELIEF GRANT ASSISTANCE (DRGA)

   It is also true that Bangladesh has been benefited by the Debt Relief Grant Assistance (DRGA) arrangements and through this type of mechanism, Bangladesh gets back the amount she pays to Japan in the form of debt servicing in accordance with the decision undertaken in the Board of Trade and Development of UNCTAD in its session of 12 March 1978. The last agreement of the 25th DRGA 7th installment was signed on 16 April 2003. The GOJ adopted Debt Relief Measures in the form of JDCF (Japan Debt Cancellation Fund) which replaced the earlier DRGA. A Note of Exchange was signed between Bangladesh and Japan on 21 March, 2004 in this regard. Under this JDCF, Bangladesh will be getting the benefit of Debt Cancellation of about US$ 160 million each year up to the year of 2018. Bangladesh has started utilizing this Debt Cancellation Fund, especially in the Human Resource Development Projects effectively under which senior and mid-level officials of the government have been imparting training in different fields. Under this program, many officials and students from both GO and NGOs are getting scope of training, studying mostly in Japan. No doubt that the decision for debt relief through the creation of JDCF has been considered very effective and gracious gesture of the creditors towards the recipient LDCs including Bangladesh. Surely it has reduced the Bangladesh’s burden of repayment of overdue loans. It has benefited Bangladesh in her human resource development efforts along with increasing her credit worthiness. It is also true to the fact that all of the loan projects could not have accrued equal success of implementation, but if we look at the total aid package, it reveals that the flow of grant aid in Bangladesh is gradually declining and bilateral aid has been decreasing with multilateral been increased. Bangladesh’s debt obligation is mainly of public sector, with very negligible amount in the private sector. The outstanding figure of loans was 339001.3 million Yen (US$ 3131.94 million) as of June 2004. The rate of payments of Debt Service has also been increased. The total debt service payment in 2003/2004 is 13.72% of country’s merchandise export, 8.77% of exports of good and services and 1.8% of GDP. The Development Budget of Bangladesh also reflects that the share of external components gradually have been declined with the passage of time, though the extent of bilateral obligation has been increased. Bangladesh has been proved manageable well without rescheduling its loan repayment. Bangladesh has also been termed as “less indebted country” by World Bank.

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TECHNICAL ASSISTANCE AND COOPERATION

   Technical Assistance and Cooperation of the GOJ to Bangladesh is appreciable. JICA has extended its technical cooperation through funding and implementing Technical Cooperation Projects in Bangladesh in the prime sectors of Education, Health, Environment, Disaster Management, Agriculture and Rural Development, Power, Transport and also in private sector over the last two decades. The Government of Japan sent 743 survey teams, 308 Experts Dispatch, trained 1486 Bangladeshi participants, dispatched 257 JOCVs, a total of 20794 persons over the period of 2000-2005 for which spent a total of 13,035,995 thousand Yen including some equipment of total 643,634 thousand Yen. In FY 2004, JICA received 4722 Bangladesh trainees and dispatched 1089 experts to Bangladesh. Agreement on technical cooperation between Japan and Bangladesh was signed in 2002 for promotion of bilateral technical cooperation. There is huge scope of strengthening technical cooperation between both the countries including transfer of advanced and appropriate technology to Bangladesh and utilization of Bangladeshi human resource in Small and Medium Enterprises as well as in ICT in Japan.

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JAPAN'S ODA STRATEGY AND POLICY FRAMEWORK AND PRIORITIES OF BANGLADESH AS A RECIPIENT COUNTRY

• Japan’s Foreign Assistance (both grant aid and loan assistance) is guided by specific policy framework. But Japan’s ODA commitment and disbursement policy has been experienced as moderately and carefully designed, especially for the Asia-Pacific region. The GOJ has been found very careful of evaluating, developing and maintaining the bilateral relationship and building international friendship on the basis of mutual trust, regional integration, following the policy of non-interference of the domestic affairs, social and political unrest of the recipient countries.
• Japan’s ODA has been focused less-conditional, favorable to the development and realization of the recipient country’s aim for self-reliance and poverty alleviation and development of infrastructure. Japan’s ODA commitment to Bangladesh has been based on the conception of development in terms of tangible benefits accrued and to the target people, vision of regional development preferences and acceleration of infrastructure of industrial growth.
• Japan’s ODA could serve the objectives of economic growth, sustainable development, security, democracy and human rights preservation in Bangladesh.
• The Japanese ODA Charter adopted in 1992 articulated 4 basic principles-the introduction of market economic promoting private market and free trade, the protection of environment, the constraining of military expenditures including weapons of mass destruction and the advancement of democracy and human rights around the world.
• In Bangladesh, we find a positive trend of Japan’s ODA both in terms of quantity and quality. No doubt that the governments of Bangladesh irrespective of transition and changes, her people, civil society and business community are always in line with supporting these 4 points of Japan’s Aid Charter of 1992. In addition, the value addition by maintaining her large number forces in international peace-keeping mission reflects very articulately Bangladesh’s commitment to world peace and democracy, and the formation of PRSP setting national strategy manifests her devotion towards poverty alleviation and reforms in different sectors including administrative as well as financial. Having positive considerations of achievements and commitment of Bangladesh towards world peace and respect for democracy and having full support and all operational elements for open market economy, Bangladesh has justifiably deserves more comprehensive ODA package coupled with more FDI and foreign trade from Japan as well as from other donors of the world. On the comparative perspective of global donors and donations, Japan’s ODA policy strategy can be termed more of non-political, non-orthodox cal, moderately conditional and concessional, goal-oriented, pro-poor and priority-based.
• Japan’s ODA has been found effective in supporting the economic as well as social progress in Bangladesh, especially investing in the priority sectors like basic infrastructure including Roads and Bridges, Energy, Agriculture, Rural Development, Human Resource Development (Health and Education), Technical Assistance and Transfer of Technology.
• In order to keep peace with the trends of modernization and globalization, the philosophy and strategy of ODA distribution and utilization to the developing countries has taken a major shift globally which envisages more realistic utilization accruing tangible benefits and accountability, transparency, good governance and environmental issues. Japan has set its ODA strategy recently.
• Bangladesh, being one of the LDCs, having 147 million people and a huge human resource potentials and capital, has also got its plans and strategy reformed gradually in order to have more aid facilities and opportunities with strong commitment to pragmatic utilization.
• The main task of ODA programming, selection of a priority projects impartially and the overall Japan’s aid management policy and system, a better co-coordinated joint efforts from both the donor/creditor and the recipient country have special significance and importance and can be regarded the main key to success and development in Bangladesh. The taskforce, project selection committee and the Project Appraisal and Evaluation Joint Committee system followed for regular Aid and loan agreement system have effective results in the Aid policy procedures and processes of Japan ODA to Bangladesh. Japan’s Aids and loans have much contributory effects on the socio-economic and infrastructural and human resources development projects for which Bangladesh and her people offer appreciations to GOJ and her people. And also evaluate with very high hopes for future broader effective cooperation and aid negotiation consolidating bilateral relations and bound with strong strings of friendship shared with Asian culture and regional responsibility. Bangladesh can be benefited from the experiences and higher modern technology and dedicated work culture and value system of the “East Asian Miracle”.
• Moreover the GOJ’s announcement of the MIRAI (Minimal Interest Rate Initiative for Low-Income LDCs) Initiative and other new improvements of the Yen Loan structure on March 31, 2006 making the terms and conditions of Yen Loans effective from April 1, 2006 reflects Japan’s renewed commitment to some positive reforms initiative for more efficient and effective implementation of the Japanese Yen Loan. I am optimistic to note that these new order initiatives of the GOJ will help more favorably and additionally to the attainment of its goals by Bangladesh like others. It is fact that under the introduced new terms and conditions with the minimal interest rate of 0.01% improving further the level of concessionality of Yen Loan for Low Income LDCs, Bangladesh could avail this facility in the financial year of 2006 when the 28th ODA loan package of 24,906(Twenty four thousand nine hundred six) million Yen has been agreed and signed for 3 priority projects- Power Generation and Transmission, Telecommunication Network and Water Supply. Bangladesh like other countries those which are complying with on-going IMF-supported programs, the terms and conditions will help harmonize with such programs and will help cooperate structural reform efforts and maintain some fiscal stability.
• Also the introduction of STEP (Special Terms for Economic Partnership) as well as the imposition of 0.2% charge in proportion with the length of the extension of disbursement periods of the Loan Agreements might have positive results in maintaining transparency and accountability of the Executing Agency and the contractor’s maintaining quality and timely implementation of the projects.

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PROVERTY ALLEVIATION AND ECONOMIC GROWTH

   Bangladesh has laid her emphasis and firm commitment for Poverty Alleviation and Economic Growth of Bangladesh through the formulation of the PRSP (Poverty Reduction Strategy Paper) in October 2005, which highlights the principles of country ownership and results-oriented one. It outlines a comprehensive medium-term strategy for the implementation of pro-poor growth, effective safety-net programs and human development, more social inclusion and empowerment of the poor and the women, promotion of good governance and service-delivery practices towards attainment of the MDGs. It has focused a compelling agenda for concentration of total efforts of the nation on employment, nutrition, quality education, maternal health, local governance, criminal justice, sanitation and safe water. The government of Japan has set three goals and nine priority areas of Japan’s ODA for promoting poverty reduction in Bangladesh which supports the PRSP goals of Bangladesh both in principle and operational strategy.

• Goal 1: Social Development with Human Security such as- Education, Health, Environment, Disaster Management;
• Goal 2: Economic Growth: Agriculture and Rural Development, Power, Transportation, Private Sector Development;
• Goal 3: Governance: As a member of Japanese ODA team, JICA has taken up major on-going and upcoming projects in Bangladesh that are aim to contribute to poverty reduction under the mentioned framework. JBIC also unveiled a Medium term Strategy for Bangladesh for Overseas Economic Cooperation Operations (OECOs) which envisages the 3-Years’ Rolling Plan Strategy for Bangladesh. This Strategy centers its priority on seven priority areas: Support for Poverty Reduction, Infrastructure development for economic growth, support for environmental promotion and anti-pollution measures, assistance to address global issues, supporting human resource development, supporting the dissemination of Information Technology and provincial development. Based on these strategy JBIC has been preparing and providing funds for implementation of 3-Years’ Rolling Plan in these priority sectors.

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INFRASTRUCTURE DEVELOPMENT (TRANSPORTATION AND COMMUNICATION)

   In the infrastructure building initiatives, the contribution of Japan and the success of the projects have very tangible benefits. Transport System- Road and Bridge Development of the Public Transportation Network system the Government of Japan has provided financial as well as technical and technological support. JJICA has also targeted further development of maintenance system of roads and bridges. The construction of the Jamuna Bridge has accrued benefits more than it was expected in the Appraisal in cost-benefit analysis. The construction of the Jamuna Bridge in 19978(yen 7.768 billion), the Meghna and Meghna-Gumti bridge in 1991 & 1996(yen 8.148 billion and 8.343 billion) respectively and the construction of Pakshey bridge in 2003(yen 18.066 billion) and the Rupsha Bridge in 2005(yen 8.30 billion) stand as landmark in the history of ODA Loan and co-financing project implementation with WB, IMF and ADB. Japan has already completed the Feasibility Study for the construction of the Padma Bridge in 2004-2005, and has assisted the development of partnership with ADB and World Bank for its further study. The Three Years’ Rolling Plan of JBIC (2006 to 2009) reflects hopes for the inclusion and commitment of the Government of Japan towards funding the Construction of the Padma Bridge. Prospects for getting ODA fund and technical cooperation from Japan for Establishment of a Deep Sea Port and Construction of Subway or Monorail for Dhaka city Public transportation are on discussion with great hopes.

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HUMAN DEVELOPMENT (EDUCATION, HEALTH, WOMEN AND CHILDREN)

Education:

   Education is the backbone of a nation and the effective instrument that enforces all development efforts such as one of human development, poverty alleviation, reduction of gender disparity and attaining socio-economic implement. For expansion of quality education at all levels this sector receives the highest budgetary allocation. Reforms measures in accordance with recommendation of Education Commission have also been undertaken. Measures have been taken to ensure women’s empowerment by the expansion of Female Education, increased participation of women in socio-economic development activities, providing special opportunities to women like exception of tuition fees upto class XII including awarding stipends to female students, financial support for purchasing books and payment of examination fees enabling female to appear public examination with increasing importance for technical education. New infrastructure development for educational institutions have been prioritized and strengthened along with promotion of environment and renovation of old schools and colleges. The GOB is determined to ensure Universal Primary Education by 2015 to achieve fully the MDGs. Mothers can draw the stipend for their children at the primary level which reflects the GOB’s commitment to Women Empowerment. At present the male: female ration of students at primary level is 50:50 which was only 55:45 in 1991. The distribution of books at free cost at the primary level has importantly helped the poor students continue their studies. The GOB has made special provision for the recruitment of female teachers in the primary schools against the existing vacancies. The recruitment rules have reserved 70% quota for the female teachers in the primary schools against the existing rules have raised the proportion of 21.09% in 1991. Japan’s ODA has increasing scope, space and effective role to play to add more to have socio-economic sustainability in Bangladesh and will help create opportunities for the foreigner as well as internal investors and will attract FDI.
The changing role of Japan’s ODA policy strategy on the perspective of globalization is comprehensive and open in nature. In order to ensure the quality of teaching as a consistent and effective means for transfer of knowledge to attain effective result and to build student, JICA has under taking projects in capacity development of Bangladeshi teachers to improve quality of teaching materials and method, particularly in primary education.

Healthcare and Medical Services:

   Public expenditure on Healthcare has been increased. Bangladesh has achieved some spectacular success in this sector. In order to improve the overall health status of the nation, government has successfully made effective interventions like expansion of medical facilities, establishment of medical colleges and new hospitals at the district, sub-district and union levels, construction of national health centers, construction of training centers at the district level. Government has setup Medical University at the national level. The GOJ through JICA has been providing aid assistance with extension of cooperation for the improvement of maternal and child health and controlling infectious diseases. JICA has under taken some projects like Safe Motherhood Promotion Projects, Expanded Program of Immunization Activities (1999~) Filariasis Control Program (2004~).
Government has further made its commitment towards achieving MDGs. Over the decades, the actions and measures taken by the GOB as well as NGOs have been proved very effective and result-oriented and have brought some spectacular outcomes.

Women’s participation:

   Women’s participation, socio-economic mobility and visibility both in urban and rural areas has been increased manifold. Women’s status in the family, in their workplaces as well as in the society including their increasing role in the decision making process have been enhanced. Special rules, policy-framework, strategies have been made for women and children and councils, committees institutions have been established with more resource allocations for programs and projects. Government of Japan is also providing fund in some projects for the development of the Women and Children.

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HUMAN RESOURCE DEVELOPMENT AND TECHNOLOGY TRANSFER

   Japan now-a-days is playing a key role in human resources development globally. She provides project and non-project technical assistance for human resources development and technology transfer to Bangladesh. Recently she has instituted a project for post graduate studies for students of Bangladesh on which about 30 students will be studying in Japan annually. This is in addition to MonbuKagakusho and other programmes that are in place.

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AGRICULTURAL AND RURAL DEVELOPMENT AND IMPORT SUBSTITUTION

   Bangladesh has achieved a steady growth rate over the last decade. In 2005-2006, the economic growth rate was 6.7%. The combined contribution of all sub-sectors of agriculture (crop, livestock, forestry and fisheries) to GDP is about 21.91 percent of which fisheries sub-sector accounts for 5.03 percent and the crop sub-sector alone is projected to contribute 12.10 percent to GDP. Of the total labor force in Bangladesh, 51.7 percent are engaged in agriculture (BBS Labor Force Survey, 2002-2003). In spite of the economic growth the Bangladesh has achieved, about half of her population still remains below the poverty line of which around 80 percent are resided in rural areas. Agriculture and Rural Development is perceived as an important sector in the acceleration of pro-poor growth and to achieve MDGs by 2015. JICA aims at agriculture based rural economic growth and poverty reduction of rural people. JICA has implemented Poultry Management Technique Improvement project and been taken Participatory Rural Development Project and Portable Steel Bridge Construction of Upzila and Rural Roads and income generating activities for the Landless and Marginal Farmers and promoting ‘heart to heart’ relationship in rural Bangladesh in support to Bangladesh initiatives.
Japanese assistance for self sufficiency in food through technical assistance, training and domestic production of inputs like fertilizer is very conspicuous. Its support for agriculture and forestry by way of creation of institutions like IPSA (now an Agricultural University) and CERDI (a core extension training centre now) will continue to bring fruit to the sector. Japan supported immensely for achieving self sufficiency in production of fertilizer. Starting with co-financing of the Chittagong Urea Plant, she assisted in setting up two other major fertilizer plants. Japan contributed in setting up 67% of the fertilizer production capacity of the country. Including the know how and transfer of technology, this was a great contribution in achieving self sufficiency in food. Steps have also been taken in strengthening of water management departments/organizations. The GOJ is extending support through JICA under taking Small Scale Water Resource Management project, Feasibility Study, Irrigation Project Technical Cooperation Project, and Rural Infrastructure Development Project. ADB, WB, Netherlands and others will also provide financial assistance in partnership.

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POWER AND ENERGY

   Power is the key to development. The demand for power as a source of energy is rising in many spheres starting from industries to day-to-day demand of the general public, agriculture and service sector. In an electrified village, the annual income of an electrified household is Tk. 92,963 which is 65 percent higher than the income of a non-electrified household. Government has involved private sector along with the Public sector for power generation so that it can reach electricity to the doorstep of every household by 2020.In Bangladesh at present only 25% of the total population and 31% of all households have access to electricity. Still there is a considerable gap between demand-supply of power, and issues such as routine power outages and frequent voltage fluctuations are forming a bottleneck for economic growth. JICA has been extending possible technical cooperation in collaboration with investment projects in this sector. Projects like ‘Strengthen Management and Performance Standards and Improvement of Operation and Maintenance of Power Plan including Policy Support through the Expert Dispatch’ have been assisted by JICA. JIBC has given priority for Power Generation and Transmission and Distribution of Bangladesh and has funded projects in 2005, 2006, and has also included projects in this sector from 2007 to 2009. In 2006, JICA has signed a project titled as ‘Grid Substations and Associated Transmission Lines Development of yen 4642 million which is under implementation now and has included the project named as ‘Generation Capacity Project in Haripur’ in the 29th Loan Package awaiting for signing in 2007.

 

TELECOMMUNICATION AND ICT

    Backbone network development and construction and promotion of total telephone density of fixed as well as cellular telephones are the prime need to support the public as well as the private sector’s investment and growth acceleration.
Completion of Optical Fiber Cable network and enhancement of the capacity of the international segments for transmission of Internet Protocol Data are the key requisite to be set up.
     The Bangladesh Telegraph and Telephone Board (BTTB), Bangladesh Telecommunication Regulatory Commission (BTRC) are the important government institutions dealing with this sector and to make this sector more vibrant, reforms of the BTTB as corporatization and capacity building of BTRC are still under process to face the more competitive services with the private service providers/companies which requires to bring revitalization and reinvesting and increasing efficiency, transparency and more accountable to the public. The Government of Bangladesh signed the project with JBIC, the Government of Japan titled as ‘Telecommunication Network Development Project’ in June 2006 as Yen Loan Project of Yen 8040 million to build up Basic Infrastructure-Telecommunication Network Development Project along with the policy of corporatization of the BTTB, and aid modalities such as Training, Technical Cooperation project (ICT Skill). Other development partners such as World Bank is also financing for corporatization and capacity building. Preparatory study for Rural Telecommunication project with a view to formulation of policy framework regarding the universal access has also been taken up and activated by the GOB in partnership with the GOJ and World Bank.

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ENVIRONMENT DEVELOPMENT

   Human lives and livelihood in Bangladesh are intricately intertwined with nature. Bangladesh is a signatory of the Multilateral Environmental Agreement by which government is committed to undertake certain environmental management actions which will be largely beneficial to the poor. Policies and actions of the Government must not cause marginalization of the poor and force them to intensify over utilization of the open access natural resource base, or make them more vulnerable to pollution hazards. The majority of the poor are highly dependent on natural resources; the improved management of natural resources is a prerequisite for poverty reduction. Conservation and regeneration of natural resources through appropriate intervention, investment and management have to be ensured so that the poor and vulnerable communities can depend on the use of natural resources on a sustainable basis.
Improvement of Environmental System specially in the Mega city Dhaka where construction of population density is abnormally high such as-Development of Sewerage System/Waste Water Management project/ supply of drinking water system have been given priority. Minimization of the huge gap between water demand and supply. The supply capacity is three-fourth of the demand in Dhaka city and one-third in Chittagong.
     Japan will provide support to the construction of water supply and sewerage systems by Yen Loan together with Technical Assistance, Improvement of Public Health and promotion of industrial development along with the improvement of water quality through local govt. institution (such as CWASA and other cities) having no assistance from other development partners. The improvement of the weak management system and poor financial position of local govt. institutions is the prime concern of our economic cooperation to address.
Waste Management System: Development study by JICA is going on Dhaka. Solid Waste Management Project may be taken in 2009 by JBIC, GOJ.
     Collaboration between Local Govt. Institutions of Bangladesh and GOJ through JICA/JBIC water supply project, Dhaka Water Supply & Sewerage Project, Dhaka Solid Waste Management Project/Water Treatment Technology-Japan’s support to the construction of water supply and sewerage system by yen loan & technical assistance are being provided. Karnaphuli Water Supply Project was agreed upon and signed in June 2006 with JBIC for which the Government of Japan has been funding an mount of Yen 12,224(Twelve thousand two hundred twenty four) which is now under implementation .A project titled as “Small Scale Water Resources Development Project” has been included by JBIC for loan assistance in FY 2007 and is waiting for agreement to be signed. Khulna Water Supply and Karnaphuli Water Supply (II) Projects are also under proposal in the Yen Loan Rolling Plan on priority.
     JICA also extends its financial as well as technical and technological assistance to help solve Bangladesh the environmental problems like- solid waste, inadequate sewage system, air and water pollution. JICA is helping in supporting the formulation and implementation of the overall urban policy and a Master Plan for the Solid Waste Management in Dhaka city.
     JICA also extending the assistance of the GOJ in order to mitigate Arsenic problems and thus help Bangladesh to ensure human security. JICA has undertaken Project for Sustainable Arsenic Mitigation under Integrated Local Government System in Jess ore (2005-2008) and is also planning for the Project for Strengthening Water Quality Examination System in Bangladesh. Under Japanese Grant Aid Assistance, JICA is also providing Policy Support through Japanese Experts and Trainings. 

   No doubt, Bangladesh is one of the world’s most disaster-prone countries owing to its geographic location, very extensive network of rivers and seas and changing climate. She has to face the increasing challenges of frequent occurrence and recurrence of floods, cyclones and other natural calamities. It is practical that when a disaster strikes it collapses all economic and social activities and damages the infrastructure as well as communication system creating tremendous human sufferings and miseries and consequent negative impact on the pace of poverty reduction... Disaster has been one of the major hindrances for effective poverty reduction in Bangladesh. Among the LDCs, particularly in Asia, Bangladesh has been the most adversely affected by natural calamities. Over the time, the Government and people of Bangladesh have been fighting out these challenges with indomitable courage and effective policy framework, and have developed commendable efficiency and homegrown strategies for prevention, evacuation and shelter, after-care services and rehabilitation and resettlement activities. In these initiatives, Bangladesh has been getting assistance from bilateral as well as multilateral organizations and collaborative efforts of the government of Bangladesh and the development partners have also been emphasized in the PRSP with a view to poverty reduction bringing a paradigm shift in disaster management. The Government of Japan, since 1971/72 till to-date, has always stood by the side of Bangladesh and her people with aid and assistance. JICA extends its cooperation to strengthen disaster monitoring systems, disaster forecast/warning and evacuation systems as well as the highly urgent and important area of infrastructure development. JICA also considers emergency relief during any disaster occurs. Major on-going and upcoming projects in the sector that JICA has implemented are Grant Aid Project for Improvement of the Meteorological Radar System in Cox’s Bazar and Khepupara (2005-2006).The project, funded by the Japanese Government, aims to replace Cox’s Bazaar and Khepupara meteorological radars to continue monitoring tropical cyclones in the Bay of Bengal towards providing more accurate forecasts/warnings and to contribute to the reduction of devastations and casualities by tropical cyclones. JICA funded and facilitated the smooth implementation of the project. “Grant Aid Project for Multi Purpose Cyclone Shelter (MCS) Project (Phase V) (2004-2005)”. JICA’s cooperation for constructing high-floored shelters as a priority matter as well as strengthening monitoring systems and preparing forecasting and warning systems, assisted immensely in coping with natural disasters.

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GOVERNANCE

   In recent years Bangladesh has made considerable progress in bringing about social development, economic growth and poverty reduction. However, it needs more effective and efficient administrative system, law and order conducive to implement the government policies and programs. JICA has provided training programs to develop capacity of the government officials since its operation. Furthermore, JICA has decided to strengthen its support in governance sector with focus on civil service training, police reformation, improving aid absorption capacity and local governance. Major on-going and upcoming projects in the sector are Capacity development on issues such as public administration, police reform, and local governance through training program. General training programs covers annually around 250 trainees and Japanese Grant Aid for Human Resources Development Scholarship around 15 to 20 participants.

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PRIVATE SECTOR DEVELOPMENT IN BANGLADESH

   We find the emergence and presence of a strong private sector in the national economy of Bangladesh. In the FY 2005-2006, the rate of private investment is 18.67%. 75% of our total investment in the national economy comes from the private sector. Government is persistently encouraging private sector involvement in various service sectors including power, energy, mining, transport and communication, education and healthcare. Formation of the Board of Investment and the Privatization Commission, and implementation of extensive reform measures in the capital market are conspicuous moves in this direction. Privatization in the banking and non-financial institutions along with reforms is underway. Textile and garments industry and pharmaceuticals have preferably been taken for privatization at a faster pace. The on-going process of denationalization of the industrial as well as commercial is advancing steadily but with speedy pace. Service sectors like telephone and ICT have been made open for private investment from both internal and external. The government of Bangladesh has formulated ‘Private Sector Guidelines’ to encourage more participation of private sector. Government of Japan through JICA and JBIC has recently made interventions for Private Sector Development (PSD). JICA is participating in the Private Sector Development Support Project (PSDSP) in order to enhance the competitive strength of Bangladesh in a post-MFA world. The PSDSP is a collaboration project between the Government of Bangladesh and donors such as World Bank, DFID, DIDA and EU. JICA has contributed to its design process and considered to join the implementation stage as well.

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PROSPECTS AND PROBABILITY

   Above all the purpose of Japan’s assistance to Bangladesh like others is the cultivation of goodwill between the countries. Both Bangladesh and Japan have been able to achieve their purpose with good results because of the matter of fact that Bangladesh and Bangladeshi people as well as Japan and the Japanese have been very cordial, friendly and trust worthy with a mutual sense of high gratitude to each other as a whole. Among the South-Asian as well as the Third-world countries, Bangladesh having maintained the qualities of an important and moderately democratic and peace-loving friendly state, has all strategic and favorable aid considerations and special Asian attachment from the Asian most developed state Japan as well as others in the world. Less conditionality of Japan’s ODA to Bangladesh and the principle of working heart to heart with the grass-root people of Bangladesh in the rural development and school learning areas, in comparison to some with the multilateral and bilateral donors, have made Japanese efforts popular and beneficial to the socio-economic progress in Bangladesh. But systematic and low cost-effective technology transfer, operations and technical maintenance provisions and procedures in the aid package can accrue more benefits and bring more positive impact on sustainability and building working capacity supporting the development of institutions in the long run. Japan’s contribution towards rural development, poverty alleviation and fulfilling the requirements of MDGs especially in the education (primary and secondary), health and sanitation and reduction of child mortality and enhancement of maternity and health care services are spectacular successes in Bangladesh. In the case of FDI in co-financing (GO and multilateral Partnership) projects, KAFCO is a glaring example of success where the profits so far accrued is in over-saturation and of commendable import substitution project that helps achieve agricultural development. It is also noteworthy that the GOJ has set 3 goals and of priority areas for Japan’s ODA for poverty alleviation in Bangladesh which are-social development with human security, education, health, environment, disaster management, economic growth, private sector development and governance. JICA is implementing some ongoing projects and identified some upcoming projects in these priority areas. Japan’s Grant Aid for Human Resource Development Scholarships since 2002 to 2007, JICA has provided fund as well as modern specialized and technical education for about 108 participants with higher studies in different subjects in different Universities and Institutes of Japan. The importance of Japan’s ODA to Bangladesh deserves favorable considerations for some basic reasons like geographical location of Bangladesh in the South Asia, socio-cultural and growing economic factors, comparative advantages and opportunities for trade and investment, labor-intensity and the cheapest labor availability, resilient national characteristics, people’s love for peace and respect for democracy, aspirations for prosperity, positive notions towards foreign nationals and active participation and commitment of workers, very low-cost livelihood facilities, easy access to the government officials to have effective dialogue and discussions, proficiency in Lingua-franca, and the trust and confidence of Bangladeshi people in the Japanese Government and her people as a whole. In comparison to the difficulties in working places, facilities and chances of facing odd challenges, still the scope and opportunities are far better in Bangladesh. But what is more needed now at this stage to gear up further the engine of economic development of Bangladesh, a comprehensive approach is required and which can bring expected results in the promotion of trade and business and FDI along with the ODA package for infrastructure development and growth . Because it will create an enabling situation that will attract more Foreign Direct Investment and foreign trade helping Bangladesh to support her balance of payments increasing her foreign exchange and minimizing fiscal deficits, and can help bring self-reliance. As it is seen in South East Economic Development, the creation of such a comprehensive ‘mix’ situation requires a set of basic factors such as political stability, good governance and supportive economic infrastructure- gas, electricity, transport including some other positive but committed initiatives in making an enabling healthy environment from the part of the recipient country. And as it is viewed practically, the Government and the people of Bangladesh, her business community, civil society do always welcome and appreciate, and will continue to do so to have such a comprehensive, balanced and open approach of Japan’s Aid policy and strategy.

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