As-salaam wa-lai-kum

Bangladesh was my first destination as the new World Bank South Asia Vice-President last August. And I was back again in February, this time getting beyond Dhaka, into the vast countryside which is home to most Bangladeshis.

There, very far from formal meeting rooms like this, I learned two important lessons about Bangladesh. One was the strikingly successful history of partnership between non-governmental organizations and government. The other was the extraordinary spirit of Bangladeshis – sometimes Bangladeshis with barely a taka to their name – who have been able to seize an opportunity and change their lives.

These lessons came alive for me in the context of your justifiably renowned micro-finance institutions. And again in the context of girls’ education. Now these lessons will be shared with the world at the Shanghai Conference on Scaling Up Poverty Reduction next month hosted by the Government of China and the World Bank. As you know Madame Prime Minister, the goal in Shanghai is to take the world’s best lessons in poverty reduction programs and to really understand what has made them work; how we can do them even better elsewhere.

Madame Prime Minister, you are one of just four national leaders invited to address the opening plenary in Shanghai. On behalf of Jim Wolfensohn I thank you for honoring us. I know you will tell us about the importance of partnership and how critical NGOs have been to the lives of millions of poor Bangladeshis. I wonder though if you will be able to tell us how to replicate that extraordinary spirit; the spirit of your people which has made these success stories possible. That is harder indeed to do. There is magic there; and what a resource Bangladesh has in the richness of its people.

I remember well the quiet strength of these individuals from my last visit in February. I hope we can infuse our deliberations at this important meeting with their spirit, that same determination.

A Development Forum is always a great opportunity for us to celebrate progress. And as your committed development partners, to be candid about the challenges and obstacles.

It is clear that many of us have underestimated the performance of Bangladesh since Independence. We want to work as your partner in ensuring that this progress is sustained, indeed accelerated.

Over the last decade or so, Bangladesh first achieved food self-sufficiency and went further to build a strong export profile. A significant reform agenda has come together in the last two years. We know that reform is inevitably a complex and demanding task, one in which much will be achieved incrementally, brick-by-brick. We recognize and respect the strong economic team that is driving your performance. Let me congratulate you specifically on macro-economic stabilization! Your recent growth at 5.5 percent is enviable.

But there’s more than just macroeconomics. As measured against the Millennium Development Goals to which we have all committed our best efforts, Bangladesh shows indicators among the best in South Asia after Sri Lanka. Declines in infant and child mortality were among the fastest in the developing world. Population growth has fallen to 1.5 percent annually, which is below Pakistan and India. Poverty reduction, which is the umbrella goal among the MDGs, shows steady progress.

I know the Government is preparing what we hope will be a bold and ambitious first full Poverty Reduction Strategy. The basic challenge for it is clear. At nearly 50 percent of the population, the poverty rate is still the highest in South Asia. Bangladesh is also home to the third largest number of poor people in a single nation after China and India. If poverty is to be reduced further to meet both the MDGs and Government’s own goals an even higher growth rate and better distribution will be needed.

To reach that goal – and to touch the 60 million lives of poor Bangladeshis – will require tapping the nation’s richest resource, its people. Reaching them with opportunity and commitment. A national commitment to a sustained reform effort. A bold poverty reduction strategy, one with a strong, well-articulated vision, well-rooted in consultations with civil society and deliberations within political circles and government – and most important, an aggressive plan of action.

Key to defining that vision is surely what kind of nation does Bangladesh want to be? An outward-looking and open economy? Another Malaysia or Thailand? A niche actor in world trade? How can Bangladesh move beyond wariness and hesitation and became more energized in embracing new opportunities? What early opportunities are out there for Bangladesh? Perhaps to exploit the obvious proximity of an enormous regional market, using the new opening in SAARC for a regional trade pact.

And then you ask yourselves, what are the constraints? Infrastructure, clearly. New factories need reliable, reasonably-priced power. Rural households need electricity for new off-farm enterprises and lighting to assist with their children’s homework. New roads can take children in remote villages to school or the local clinic – roads which also allow their parents to tap into markets. And exporters need to be able to get their goods to markets quickly and cheaply – often through currently far from effective ports.

I could go on – and as a development banker, this is what I am comfortable with. Fixing broken cogs in physical and economic systems; building opportunities.

But let us also be candid as we promised. There are dysfunctional elements elsewhere in the system. Dysfunctional politics is a key vulnerability that many have recognized. However this is something that only Bangladeshis can fix. As a development banker I can best stand ready to help, when you have mapped out your path forward.

These obstacles are not new but have been endemic to the country for too long now. Hard-won economic gains and critical human development successes are now imperiled. You may be losing your competitive edge to other countries – and this will be hard to regain. In a globalised world this has a high opportunity cost. You are also risking the integrity and strength of your very institutions – successes such as the REBs, the NGOs, the new private universities; such institutional degradation is very hard to reverse. For all these reasons, your development partners are legitimately concerned and must speak plainly today.

Bangladeshis know the facts much better than any outsider. But let me name a few concerns: politically-linked violence, criminality, growing corruption. Ordinary citizens do not trust the legal system – the police and the courts – to deliver fair and speedy justice. Democratic processes are seen to have been undermined; for example, by the recent mass arrests and the harsh treatment of some MPs making a peaceful attempt to set up a new party. Several recent murders of businessmen and the seeming protection of the perpetrators, have only served to heighten concerns over law and order.

The very businessmen and businesswomen Bangladesh needs to attract to accelerate and diversify the economy are driven away by such events. And right here at home, ordinary citizens, your richest resource, need to be reassured as they walk in the street or sit at home with their children. Are they safe? All these perceptions and realities can only come to undermine the present economic successes. Reversing these alarming events is a challenge as such behavior has become well-rooted in society.

We recognize some substantial steps taken by this government. The new Anti-Corruption Commission is an important beginning. As important will be guaranteeing its independence. Steps underway on judicial and police reform are another beginning. The new approach to public procurement offers the promise of transforming opportunities for corruption in contracting.

Beyond these there can be other steps to help create public confidence: greater transparency in the legal-judicial system, business-friendly institutions and courts, people-friendly law and order, empowered citizens. Both investors and the average citizen need an environment in which they feel a day-to-day sense of personal security; a predictable security that is reassuring and even-handed. This is a long agenda. Some of the best examples I know involved starting modestly but with great conviction, creating a few early visible successes. Nothing sends a stronger signal than a few prominent examples.

Let me speak plainly, too, about another concern. Bangladesh is recognized widely for the unique strength and diversity of its NGOs. As the education minister from a foreign country who joined me on my visit to two small villages, Bairagirtek and Hathatpara, put it: “Bangladesh is blessed with some visionary NGO leaders. They are doing unimaginable things to change the lives of rural women.”. Indeed they are a strength to be cherished.

So it is with deep concern that we and the development community are now responding to the new tensions between Government and the NGO community.

The recent draft update to the laws governing NGOs had serious flaws in both process and substance. We appreciate that Government is revisiting the proposed legislation. Surely, the ambition of any revision would be to foster a strong, effective and autonomous NGO movement in Bangladesh? The question is how can they be supported to be even more effective in delivering services to the poor, supporting development education and playing their critical advocacy role? Of course there should be reasonable standards, partly framed in legislation, for the internal governance and business practices of NGOs. Responsibility and public accountability needs to be a two-way street. The NGO community itself might wish to craft its own code of conduct, one that embraces peer-monitoring and self-regulation. Government and NGOs alike have to be accountable to citizens and transparent in their actions. We would be very pleased to work with other donors in providing suitable technical help to both on international best practices.

Furthermore, Madam Prime Minister, if the citizens of this country are its strength, the hidden spirit behind Bangladesh’s perseverance, then bringing government closer to the people can greatly enhance public accountability and the effectiveness of public actions. I would suggest that strengthening local government, making government more open and accountable to citizens at the local level, is an agenda for public reform that is overdue despite having support across party lines.

I have indeed spoken plainly. But I do so confident that Bangladesh has a history in which its resilient people have often chosen to redefine their destinies. And those who know you quietly marvel at the small openings that Bangladeshis characteristically turn into big successes. Big successes like gender parity in education, like the empowerment of women, your garment industry, the NGO movement itself. It seems that all Bangladeshis need is a space for their initiative and they will grow and fill it. If politicians can take care of some of the norms on which a healthy society relies – personal security, transparency, fair legal protection, a level regulatory playing field. Bangladeshis will do the rest.

For its part the support that the World Bank could offer over the next few years will be built around the implementation of your Poverty Strategy. Your PRSP will certainly help frame our own new Country Strategy. It will be a key benchmark in assuring ourselves and our Board that our support is likely to lead to further gains in poverty reduction and a strong developmental performance.

I have tried to cover a lot of ground. Thank you for listening. I know we will have time later for discussion. The World Bank wants to remain engaged, working with your government, with all Bangladeshis, to help you move Bangladesh ahead even faster; to offer creative and hard-working Bangladeshis a new development space.

With every Baishakh comes hope. Let this Baishakh be the one where hopes are fulfilled.

I thank you.