We have covered a lot of territory in our time here. We began by commending Bangladesh’s extraordinary progress in health, population and primary education over the last two decades. We commended Bangladesh’s macro-economic performance. The sustained growth, complemented by prioritized and pro-poor spending, is likely to have impacted favorably on poverty and social indicators.

To survive in a post-MFA world, many of us stressed that Bangladesh needs to improve its competitiveness, not just in terms of price but, more importantly, in reducing the “time to market” and “cost of doing business”. The European Commission representative illustrated this with an anecdote about two grocery chains who had considered sourcing some of their supplies in Bangladesh but had been discouraged by the costs and uncertainties involved.

Better infrastructure and maintenance are critical to sustained economic and social progress. Poorly managed and poor quality services, including electricity, urban water, and transportation bottlenecks, particularly in ports, have already cost Bangladeshi enterprises dearly in their efforts to gain and hold markets. Improved services are key to reducing the cost of doing business, increasing competitiveness and reducing poverty. The financial and management requirements in infrastructure are enormous, and suggest a need to draw the private sector into these sectors in a major way. Our ADB colleagues estimated that $1 to $2 billion per year in additional private investment will be needed.

We also discussed governance and heard that Bangladesh’s growth could have been several percentage points higher and its poverty reduction faster, if performance on key policies had been better. A huge “growth dividend” could come from better policies and institutions, especially better law and order, reducing the cost of doing business, a more competitive financial sector, and improving infrastructure. Many of us also expressed concerns about both Bangladesh’s dysfunctional politics and the low level of public confidence in the police and the courts. We agreed that law and order are fundamental not only to improving the climate for investment---foreign and domestic---but also for improving people’s safety and security in their daily lives.

The Japanese Ambassador made a telling point about the importance of addressing governance issues. He said, “We would like to stress that the competition for foreign investment is becoming ever harder among developing countries. We do hope that the Government will tackle and resolve these obstacles with a sense of urgency and strong political will. We wish to see substantial progress achieved in investment climate by next year’s BDF.”

We urged Government to reach out to the Opposition to build a national consensus on the reforms most critical to poverty reduction, “protecting” them to avoid their becoming hostage to confrontational politics. But without solving the root cause of confrontational politics, Bangladesh’s growth and service delivery successes cannot be sustained.

We welcomed a number of steps that Government has taken and/or announced, such as passing the Anti Corruption Commission Act, getting the Energy Regulatory Commission up and running, making important procurement and financial management reforms, and banking reforms. We all hope that the Anti-Corruption Commission will be operational soon.

Government asked for assistance in strengthening the National Board of Revenue; revamping the Customs Administration; strengthening Bangladesh Bank’s capacity of bank supervision and pursuing large bank defaulters, strengthening the lower courts and judicial system, and accelerating police reform.

NGOs were another topic of discussion. They are recognized by both Government and Development Partners as important contributors to the progress in poverty reduction in Bangladesh. Government agreed that the proposed legislation on NGOs will be reviewed in a consultative way with both the NGO leadership and with the Development Partners before it is resubmitted to Parliament. Government also confirmed that it had no intention to interfere with or fix ceilings on interest rates for micro-credit.

We reviewed progress in aid governance, focusing on project auditing, financial reporting, procurement, project documentation, approval processes, and harmonization of donor procedures. Donors committed to further harmonization and emphasized speeding up implementation of aid-funded programs, “Simple is beautiful” as our ADB colleague put it. The experience with sector-wide approaches in health and education could be the basis for similar sector-wide approaches in power and other sectors.

Many of us came with questions about progress on the Poverty Reduction Strategy Paper. We are strongly supportive of the PRSP, and its thematic approach, and are committed to using it as the framework within which we will develop our future assistance strategies in Bangladesh. Government described the consultations that are ongoing and told us to expect a draft to be ready to be shared with us in September and the final document completed in December. We urged Government to focus on practical strategies and implementation in addition to goals and strategies. Our colleague from Switzerland reminded us that the success of the PRSP will depend in the implementation on decentralization. Bringing government closer to people through strong local governments is essential to increasing accountability and service delivery at local levels.

This Forum has focused on policies and priorities more than on numbers, but I don’t think you would let me leave without saying something about aid requirements. Total disbursements are likely to average about $1.6 billion per year between FY2003 and 2005. For Bangladesh to raise growth to around seven percent per year, which we estimate is needed to meet the MDG goal of halving poverty by 2015, investment will need to be increased substantially. There are three possible sources of financing: domestic revenues clearly need to be significantly increased; the investment climate needs to be improved so that the private sector will increase its share. We should aim to increase disbursements to $2 billion per annum, from both increased commitments and faster aid utilization, based on an agreed PRSP and progress on the issues discussed.

Finally, I want to thank my co-chair and the rest of the Government delegates for their participation and the constructive dialogue we have all enjoyed. I also want to thank all of the Development Partners who have participated, and I think it is fair to say that we all appreciated the candor and openness in the discussions.