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Bangladesh Private Sector Forum
Country Case Study: Bangladesh
Bangladesh Private Sector Forum
BACKGROUND AND STRATEGIES
Mamdood Hossain Alamgir
Director, Board of Investment
Prime Minister’s Office, Bangladesh
&
Mamun Rashid
CEO, Citibank N.A., Bangladesh
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Presentation Plan
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Emergence of Private Sector
The Context of BPSF
Objectives of BPSF
Structure and Participation
Outreach Strategies
Monitoring Mechanisms
Projected Results
Challenges
Participation/QA
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Bangladesh Private Sector Forum
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Emergence
of Private Sector
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Bangladesh Private Sector Forum
Emergence of Private Sector
 Bangladesh has successfully moved forward to market
economy despite its emergence as a socialistic economy
during independence in 1971.
 Private Sector is becoming a vibrant force in the economy.
 For the first time, country’s GDP growth is expected to reach
6.5% this year, highest growth since 1972.
 For the 2nd time in the country’s history, manufacturing
growth touched double digit in last quarter.
 76% of the total investment is by the Private sector and
represent 18.5% of GDP.
 FDI inflow significantly reached to US$ 0.8 billion in 2005.
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Emergence of Private Sector
Lets see some figures …
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Bangladesh: Socio-Economic Indicators
Consistent GDP Growth (%)
5.39% 5.23%
5.04%
4.92%
4.57%
6.50%
6.27%
5.94%
5.27%
5.26%
5.38%
4.87%
4.62%
4.42%
4.08%
199192
199293
199394
199495
199596
199697
199798
199899
19992000
200001
200102
200203
200304
200405
200506p
Source: Bangladesh Economic Review 2004 and Bangladesh Bank
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Bangladesh: Socio-Economic Indicators
Investment as % of GDP
Total Investment
22.2
23.0
Public
Private
23.4
17.2
17.5
18.5
6.1
5.9
15.5
15.6
15.8
6.7
7.4
7.2
6.4
6.2
2000-01
2001-02
2002-03
1999-00
24.4
23.1
16.8
1998-99
23.6
23.1
2003-04
2004-05
Source: Bangladesh Economic Review 2005
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Bangladesh : Socio-Economic Indicators
Upward Industrial Trend (%)
8.60%
7.44%
6.17%
7.26%
7.60%
2002-2003
2003-2004
9.50%
6.53%
4.92%
1998-99
1999-2000
2000-01
2001-2002
2004-2005 2006-2006p
Source: Bangladesh Economic Review 2005 and ADB
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Bangladesh : Socio-Economic Indicators
Manufacturing Growth (%)
10.48
8.62
10.50
8.58
8.15
8.43
7.38
6.75 7.10
6.68
6.41
5.48
5.05
4.76
3.19
19911992
19921993
19931994
19941995
19951996
19961997
19971998
19981999
19992000
20002001
20012002
20022003
20032004
20042005
200506p
Source: Bangladesh Economic Review 2005
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Bangladesh : Socio-Economic Indicators
Export Growth (Million US$)
10,159
8,655
5,324
5,752
1998-1999
1999-2000
6,467
5,986
6,548
2000-2001
2001-2002
2002-2003
7,603
2003-2004
2004-2005
2005-2006t
Source: Bangladesh Economic Review 2005 and EPB 2006
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Bangladesh : Socio-Economic Indicators
Actual FDI Inflow (Million US$)
In Million US$
1,000
800
460
190
1998
268
280
180
79
1999
2000
2001
52
2002
2003
2004
2005p
2006t
Source: World Investment Report 2005, Bangladesh Bank and BOI
P= Projected, t=target
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Bangladesh Private Sector Forum
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The Context
of BPSF
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The Context of BPSF
 Private sector participation in the policy formulation process
in Bangladesh began in ‘80s, but in an ad hoc basis.
 This includes consultation with the business chambers,
sectoral industry associations, temporary policy fora,
representation in various committees etc.
 However, the recent robust growth of the private sector
demands a formal strategic framework to ensure its
participation in the processes.
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The Context of BPSF
 In early 2005 the Government of Bangladesh formally
embarked on a long-term program of private sector
development through a combination of institutional and
regulatory reform, a strengthened economic zone strategy
and the creation of a special economic zone.
 At the centre of the process is the ongoing preparation of a
large ($150-$200m) World Bank-led, multi-donor-funded
PSD project which is scheduled for commencement in mid2006.
 A year-long “design phase” which includes a large number
(around 30) of preparatory projects is underway and is being
led by the IFC, FIAS and the SEDF.
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The Context of BPSF
 To assist in the preparation of the proposed Private Sector
Development Support Project (PSDSP), the Government of
Bangladesh has established several groups.
 Under the Prime Minister’s Office, the Government has
formed the Private Sector Development Task Force whose
membership is made up of permanent secretaries and
agency heads.
 In addition to the PSD Task Force, the Government has also
established the PSD Core Group, which consists of around
37 senior working-level civil servants.
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The Context of BPSF
 Complementing this is the Private Sector Consultative
Group (PSCG), which is made up of approximately 25
leading private sector representatives.
 The PSCG is continuing to supply private sector inputs to
the reform process that has been initiated.
 These various groups have collectively already started an
ongoing series of public-private dialogue and are meeting
jointly every one or two months, including in the form of
dedicated working groups covering specific topics.
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The Context of BPSF
 Three Working Groups have been formed, focusing on
Regulatory Reform, Special Economic Zones and Capacity
Building.
 The working groups are composed of members of the PSD
Task Force, the PSCG and the PSD Core Group.
 The Working Groups are chaired jointly by a member of the
PSD Task Force and a member of the PSCG, in order to
provide inputs from both groups of stakeholders.
 The Working Groups have each produced a brief note on
their thematic areas, and these papers have been
instrumental in the design of the proposed PSDSP.
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Objectives
of BPSF
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Objectives of BPSF
 The current mechanism for dialogue which has been
established to help prepare the proposed PSDSP and to
support the PSD reform agenda has proven to be an
excellent platform for public-private discussions.
 As a result of this extensive process, the Government has
asked the Development Partners Support Group to consider
establishing a more formalized and permanent mechanism
for private sector-public sector dialogue.
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Structure and
Participation
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Bangladesh Private Sector Forum
Structure and Participation
 Possibly to be known as the Bangladesh Private Sector
Forum (PSF), all of the PSD Task Force, PSD Core Group,
PSCG and DPSG will be asked to play a role.
 It is proposed that these groups come together to form the
Private Sector Forum in the second quarter of 2006 after the
bulk of the PSDSP preparation has taken place and ahead
of project effectiveness.
 These groups will need to be augmented by a permanent
secretariat which will schedule meetings, set agendas, and
follow-up on recommendations. The Prime Minister is
expected to serve as patron.
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Outreach
Strategies
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Outreach Strategies
 In order to ensure success, the PSF must incorporate the
inputs of a wide and diverse range of private sector
representatives.
 The PSF must also ensure that it takes a national approach
instead of a regional approach; therefore, private sector
representatives need to be drawn from across the nation.
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Monitoring
Mechanisms
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Bangladesh Private Sector Forum
Monitoring Mechanisms
 The PSDSP itself will have a Monitoring and Evaluation
Framework.
 The PSF will be connected to the regulatory reform program
of the proposed BICF and PSDSP.
 Interactions of the PSF will be monitored by the members of
the DPSG, through the proposed BICF.
 International experts may also be brought in to the meetings
of the PSF to facilitate discussions and design solutions, if
requested by the Government.
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Projected
Results
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Projected Results
 Through a process of continued, results-focused dialogue,
the main targeted outcome of the PSF will be a growing
Bangladeshi private sector achieved through an improved
investment climate characterized by an ongoing process of
regulatory reform.
 The PSF will seek to develop a critical path for regulatory
reform and growth based on inputs to, and
recommendations from, the membership of the PSF.
 The PSF will be closely aligned to the work of the proposed
PSDSP and any additional technical assistance operations
that may be formed to support that.
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Challenges
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Challenges
 Political will and commitment is a must for success.
 The PSF must aim to take a nonpartisan approach, in order
to ensure success amidst political change.
 The recommendations of the PSF must be implemented as
soon as possible, in order to ensure success.
 The PSF must aim to benefit from the experiences and
lessons of other countries presented at this workshop in
order to be most effective.
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P A R T I C I P A T I O N/Q&A
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Thank You
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