Country Case Study: Bangladesh Bangladesh Private Sector Forum B A C K G R O U N D A N D S T R A T E G I E S

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Country Case Study BangladeshBangladesh
Private Sector ForumB A C K G R O U N D A N D
S T R A T E G I E S
Mamdood Hossain Alamgir Director, Board of
Investment Prime Ministers Office,
Bangladesh Mamun Rashid CEO, Citibank N.A.,
Bangladesh
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• Presentation Plan
• 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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Emergence of Private Sector
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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, countrys GDP growth is
  expected to reach 6.5 this year, highest growth
  since 1972.
• For the 2nd time in the countrys 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 ()
Source Bangladesh Economic Review 2004 and
Bangladesh Bank
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Bangladesh Socio-Economic Indicators
Investment as of GDP
Source Bangladesh Economic Review 2005
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Bangladesh Socio-Economic Indicators
Upward Industrial Trend ()
Source Bangladesh Economic Review 2005 and ADB
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Bangladesh Socio-Economic Indicators
Manufacturing Growth ()
Source Bangladesh Economic Review 2005
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Bangladesh Socio-Economic Indicators
Export Growth (Million US)
Source Bangladesh Economic Review 2005 and EPB
2006
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Bangladesh Socio-Economic Indicators
Actual FDI Inflow (Million US)
In Million US
Source World Investment Report 2005, Bangladesh
Bank and BOI P Projected, ttarget
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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 mid-2006.
• 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 Ministers 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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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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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/QA
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Thank You