Bilateral Aid Agencies in Poverty Reduction

Dr. muhammad G. SarwarSarwar_mg@ yahoo.com

Civil Service College, Dhaka 10 July 2011

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Presentation Contents• Foreign Aid Flow in to Bangladesh: trend

analysis• Dominant Players in Development Assistance

in Bangladesh: the gang of four• Bilateral Donors– JICA– DFID / UK Aid– US AID– Pros and Cons of Bilateral Assistance

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Periodic Flow of Foreign Aid 1972-2010 (in billion US$)

FY Food Aid Commodity Aid

Project Aid

Total Aid Average Yearly

Aid

1971-

1980

2.090 2.768 1.749 6.607 660

1981-

1990

2.346 4.435 7.340 14.121 1.412

1991-

2000

1.537 3.169 10.911 15.617 1.562

2001-

2010

613 536 15.104 16.253 1.625

Total 6.586 10.908 35.104 52.598 1.315

% share 12 21 67 100

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Periodic Flow of Foreign Aid 1972-2010 (in billion US$)

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Types of Foreign Aid 1972 -2010 (in %)

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Ten largest Donors in Bangladesh FY 1972-2010 (in million US$)

SL Donors Grant Loan Total Share (%)

1 World Bank 269 11664 11933 22.69

2 Asian Development

Bank

70 8114 8184 15.56

3 Japan 3308 3753 7061 13.42

4 USA 2,787 763 3,550 6.75

5 UN System (except

UNICEF)

2744 20 2764 5.25

6 Canada 2087 16 2103 4.00

7 UK 1973 89 2062 3.92

8 Germany 1436 268 1704 3.24

9 European Union 1534 48 1582 3.01

10 Netherlands 1,078 71 1,149 2.186

Ten Largest Donors in Bangladesh

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Ten Largest Bilateral Donors

• JICA (Japan International Cooperation Agency)• DFID / UK AID• US AID• CIDA (Canadian International Development Agency)• GTZ / Germany• Netherlands• Saudi Arabia• SIDA (Swedish International Development Agency) • NORAD (Norwegian Agency for Development) • DANIDA (Denmark International Development Agency)

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JICA: vision

Inclusive and Dynamic Development• ‘Inclusive development’ refers to development that

encourages all people to recognize the development issues they themselves face, participate in addressing them, and enjoy the fruits of such endeavors.

• ‘Dynamic development’ refers to the creation of self-reinforcing virtuous cycles of mid to long-term economic growth and poverty reduction in a constantly changing environment where a variety of issues arise simultaneously and get entangled each other.

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JICA: mission

• Mission 1: Addressing the global agenda• Mission 2: Reducing poverty through

equitable growth• Mission 3: Improving governance• Mission 4: Achieving human security

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JICA: strategy• Strategy 1: Integrated assistance (three modalities of assistance

—technical cooperation, ODA loans, and grant aid to offer comprehensive support)

• Strategy 2: Seamless assistance (provide assistance in ways that best match the level of development in each recipient nation, taking a long-term perspective and offering seamless assistance to ensure sustainable development into the future)

• Strategy 3: Promoting development partnerships (promote public-private partnerships, pooling the experience, technologies, and resources of local governments, universities, nongovernmental organizations, and other actors)

• Strategy 4: Enhancing research and knowledge-sharing (building broad networks of academics from Japan and elsewhere around the world to create new knowledge value in the field of international development assistance) 11

JICA: Activity Guiding Principles

1. Achieving synergies of the merger2. Tackling complex, difficult issues flexibly

with the field-based approach3. Fostering expertise for providing

professional solutions4. Efficient and transparent operations

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Jica in Bangladesh: history• 1973: Beginning of Japanese Technical Assistance to Bangladesh

by dispatching Japan Overseas Cooperation Volunteers (JOCVs)• 1974: The first ODA Loan to Bangladesh; Establishment of JICA

Bangladesh Office• 1988: Establishment of OECF (antecedent of JBIC) Representative

Office in Dhaka• 1995: Exceeding 500 billion yen as total commitment of ODA

Loans to Bangladesh• 2003: Exceeding 1,000 Experts dispatched from Japan; Debt

Cancellation (1,58.90 million yen)• 2006: Exceeding 5,000 Participants joining trainings in Japan• 2008: Merger of JICA and JBIC • 2009: Exceeding 1,000 JOCVs dispatched from Japan; 1,190

billion Japanese Yen as a total amount of Japanese ODA13

JICA Activities in Bangladesh• Social Development with Human Security

– Disaster Management– Water and Sanitation – Health – Education

• Economic Growth – Transportation– Power and Energy– Agriculture/Rural Development– Private Sector Development

• Governance

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JICA Commitment and Disbursement (billion US $)

Commitment Disbursement Pipeline on 1st July 2010

Project Aid 4.61 3.03 1.56

Commodity Aid 3.59 3.64 0.0

Food Aid 0.41 0.41 0.0

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JICA Commitment and Disbursement (billion US $)

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Trend of JICA Commitment and Disbursement (million US $)

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Selected JICA Projects • Number of Total On-going Projects: 52 • JICA on-going Projects on Transportation:

– Dhaka Chittagong Railway Development Project (2008 - 2015)– Eastern Bangladesh Bridge Improvement Project (2009 - 2012)– Chittagong Ring Road Development Project (2010 - 2013)– Bangladesh Digital Mapping Assistance Project (BDMAP) (2009 - 2011)– The Project for the Provision of Portable Steel Bridges on Upazila and

Union Roads (2005 - )– The Project for Improvement of Steel Bridges for Roads in Rural Areas

(2001 - ) – Dhaka Urban Transport Network Development Study (2009 - 2011)

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DFID / UK AID

• Bangladesh is branded as a country faces challenges of:– large and increasingly urban population– of natural disasters and climate change– one of the poorest states in the world – most fragile – both physically and politically

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UK AID Top Priorities

• Encouraging private sector investment• Ensuring the government is capable of

financing and delivering social services• Getting more children into better schools• Improving family planning and reducing

maternal deaths

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UK AID Commitment and Disbursement (billion US $)

Commitment Disbursement Pipeline on 1st July 2010

Project Aid 2.01 1.56 0.57

Commodity Aid 0.45 0.44 0.0

Food Aid 0.05 0.05 0.0

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UK AID Commitment and Disbursement (billion US $)

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Trend of UK AID Commitment and Disbursement (million US $)

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UK AID in 2009-10 Total UK bilateral aid received (09/10): £148.8 million Current Project Portfolio: 54• Aid by sector:• Economic Growth: 28%• Education: 25%• Governance: 17%• Health: 15%• Other social services: 11%• Other: 3%

UK AID will spend an average of £250 million per year in Bangladesh until 2015.

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Selected DFID Projects • Health, Nutrition and Population Sector Programme (HNPSP)• Primary Education Development Programme 2 (PEDP2)• BRAC Challenging the Frontiers of Poverty Reduction - Phase 2 • Climate Change Program - Jolobayoo-O-Jibon• Chars Livelihoods Program ii • Economic Empowerment of the Poorest • Urban Partnership for Poverty Reduction • English in Action• Regulatory and Investment Systems for Enterprise• Promoting Financial Services for Poverty Reduction in Bangladesh• Strengthening Public Expenditure Management • Sanitation, Hygiene, Education & Water Supply in Bangladesh

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US AID Bangladesh

• Branded Bangladesh as a country of:– most densely populated– poorest countries in the world– a moderate Muslim majority population of 156

million

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US AID Programs

• Investing In People: Health and Education• Humanitarian Assistance: Improving Disaster

Response • Increasing Economic Growth• Governing Justly and Democratically • Peace and Security: Combating Human

Trafficking

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Examples of US AID Impact in Bangladesh• USAID has supported the construction of 507

cyclone shelters that accommodate 507,000 people.

• USAID reaches out to 20,000 religious and community leaders every year to introduce them to development initiatives.

• Approximately 20 million Bangladeshis receive basic health care services every year through USAID's health programs.

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Where does USAID's Money Go?Top 10 Benefiting Countries for FY 2010• Afghanistan • Pakistan • Haiti • Israel • West Bank/Gaza • Kenya • Sudan • Jordan • Ethiopia • Georgia

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US AID Program Areas in Bangladesh for FY 2010

• Health • Education • Infrastructure • Agriculture • Good Governance • Soc-Econ Services & Protection for Vulnerable Populations • Financial Sector • Administration and Oversight • Conflict Mitigation and Reconciliation • Private Sector Competitiveness • Counter-Narcotics

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US AID Program Areas in Bangladesh for FY 2010 (contd.)

• Environment • Civil Society • Rule of Law and Human Rights • Political Competition and Consensus-Building • Economic Opportunity • Macroeconomic Foundation for Growth • Program Design and Learning • Trade and Investment • Disaster Readiness • Financial Sector Capacity • Stabilization Operations and Security Sector Reform • Counter-Terrorism 31

US AID Commitment and Disbursement (billion US $)

Commitment Disbursement Pipeline on 1st July 2010

Project Aid 1.73 1.13 0.33

Commodity Aid 0.60 0.61 0.0

Food Aid 1.80 1.80 0.0

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US AID Commitment and Disbursement(billion US $)

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Trend of US AID Commitment and Disbursement (million US $)

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Bilateral Donors: a critique • Bilateral donor agencies were created by the western imperial

countries after the Second World War to keep their former colonies engaged with their economies

• Bilateral donors are dominated by the few western post-colonial powers to exert their global strategic interest in post colonial world order.

• Bilateral donors use their assistance to their former colonies to expand their business and political interest.

• Bilateral donors helps to reduce poverty in the recipient countries to enhance global and regional peace and security which is essential for maintaining existing global order.

• Aid disbursement by the bilateral donors could be faster then multilateral donors due to simpler decision making procedure.

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Thanks !

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