BACKGROUND OF THE REVIEW

1
BACKGROUND OF THE REVIEW

• Danish assistance to the private sector in
  Bangladesh commenced during the later part of
  1999.
• The purpose of the PSD Programme is to contribute
  to economic growth and social development by
  facilitating transfer of technology and promoting
  sustainable partnerships between private
  companies in Bangladesh and Denmark.
• The Components of the PSD Programme are
• PSD Loans
• Training Technical Assistance
• Feasibility Studies
• Study Visits participation in Industrial Fairs
• Promoting Environment
• Start-Up Facilities

2

• Initially, relatively poor interest was shown by
  Danish companies but now both Danish and
  Bangladeshi companies are showing increasing
  interest in Joint Ventures and other forms of
  collaboration.
• Hence, Danida has felt it necessary to draw upon
  the lessons learnt from the past and move forward
  with a strategy for (2006-2010).
• Accordingly, Danida has commissioned a Review of
  the PSD Programme (2000-2005) in Bangladesh,
  which would include recommendations for a
  strategy for (2006-2010).
• Bangladesh Enterprise Institute (BEI) has been
  entrusted with the responsibility of conducting
  the Review.

3
OBJECTIVE OF THE REVIEW

• Assess the experiences in screening project
  proposals, monitoring the implementation of
  projects and evaluation of results under the
  Danida PSD Programme in Bangladesh during the
  period 2000-2005 in order to suggest measures for
  improvements.
• Study the effectiveness of the Danida PSD
  Programme in meeting the development needs of the
  private sector in Bangladesh.
• Provide recommendations to develop a strategy for
  2006-2010.

4
METHODOLOGY

• Sources of Information
• Questionnaire was circulated to 44 companies
  under the PSD programme. Responses were received
  from 25 Bangladeshi companies and 20 of their
  Danish partners.
• Roundtable and individual meetings were held with
  Bangladeshi and Danish companies.
• Several meetings with Danida PSD Staff (Programme
  Officer and Programme Coordinator) at the Embassy
• Meetings with Board of Investment, Registrar of
  Joint Stock Companies, International Leasing and
  Financial Services Limited-ILFSL, Industrial
  Development Leasing Company of Bangladesh-IDSL
  and Industrial Promotion and Development Company
  of Bangladesh-IPDC, Bangladesh Garment
  Manufacturers and Exporters Association-BGMEA,
  Dhaka Chamber of Commerce and Industry-DCCI,
  Metropolitan Chamber of Commerce and
  Industry-MCCI.
• Meetings with CIDA and GTZ

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• Issues Reviewed
• Screening of potential project ideas
• Screening of potential partners (both Danish and
  Bangladeshi)
• Choice and effectiveness of expatriate
  trainers/advisers
• Corporate social responsibility and environmental
  issues
• Monitoring of the projects/partnerships
• Cross-cutting issues
• Synergies with Sector Programmes of the Embassy
• Promotion of private sector based solutions for
  some of the challenges encountered in the sector
  programmes
• Encouragement for specific industrial/service
  sectors with growth potential

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OVEERVIEW OF DANIDA PSD PROGRAMME IN BANGLADESH
Table-1 Distribution of Companies according to
Type of Entity
Table-2 Distribution of Companies according to
Location
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Table-3 Distribution of Companies according to
Area of Business
8
STRENGTHS OF DANIDA PSD PROGRAMME

• Acceleration of Economic Growth and Social
  Development
• Increase of Foreign Exchange Earnings Profit
• Increase of Foreign Investment
• Creation of New Markets for Bangladesh
• Modernisation of Business and Management
  Practices
• Technical, Legal and Managerial Capacity
  Development
• Improvement of Internal and External Environment
• Improvement of Working Conditions
• Awareness about Gender and Corporate Social
  Responsibility
• Awareness about HIV-AIDS

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WEAKNESSES OF DANIDA PSD PROGRAMME

• Inadequate Circulation of Information/Publicity
• Inadequate Project Appraisal
• Complexity of Guidelines
• Some Deficiencies in Selection of Partners
• Restriction on Joint Ventures with More Than One
  Company
• Concentration of Projects in IT Garment Sectors
• Predominance of Training Consultancy Services
  rather than Equipment and Transfer of Technology
• Lack of Adequate Loan facilities
• Insufficient High-Level Training
• Weak and Inadequate Monitoring of Projects
• Lack of Sense of Ownership by Bangladeshi
  Companies
• Decisions Making and Majority Share Holding in
  the Hands of Danish Partners
• Concentration in Dhaka
• Location of Danida PSD Office
• Lack of Adequate Manpower in PSD Office
• Differences in Culture and Language
• Lack of Cooperation and Corrupt Practices of
  Bangladesh Govt. Agencies

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RECOMMENDATIONS

• Wide Circulation of Information/Publicity
• Detailed Feasibility Studies
• Simplify Guidelines
• Panel of Consultants
• Judicious Selection of Partners
• Strengthening of Monitoring Systems
• Withdrawal of Restriction on Joint Ventures with
  more than one Company
• Greater Cooperation of Danish Companies
• Need for Flexibility by Danish Companies
• Introduction of Venture Capital/Equity Support
• Orientation Programme
• English Language Training
• Additional Staff for Danida PSD office
• Shifting of Danida Office