Sixth Five Year Plan of Bangladesh 2011 -15

Sixth Five Year Plan of Bangladesh (2011 -15) Presentation by Dr. Muhammad G. Sarwar at Civil Service College, Dhaka 14 June 2011 1

Presentation Contents ¡ ¡ PRSP: a critique PRSP versus Mid-Term (5 Year) Plan Growth Performance of the Bangladesh Economy in different Plan periods Sixth Five Year Plan of Bangladesh 2011 -2015 2

PRSP: a critique PRSP is an externally (WB & IMF) induced document ¡ Theoretical underpinning of PRSP is ‘Washington Consensus’ based liberal market economics where role of state in development is minimal ¡ Expected support for implementation of PRSP is not being fulfilled ¡ 3

PRSP versus Mid-Term (5 Year) Plan ¡ ¡ ¡ PRSP is a development strategy document, not a development plan document In PRSP market mechanism is the driving force of development, where as in 5 Year Plan Governments play crucial role in development PRSP is stakeholders participation based development framework, where as 5 Year Plan is a technical document based on CGEM, IOM, SAM. etc 4

Growth Performance of the Bangladesh Economy in different Plan periods Plan Periods GDP Growth Realized Targets (%) Growth (%) First Five Year Plan (1973 -78) 5. 5 4. 0 Two Year Plan (1978 -1980) 5. 6 3. 5 2 nd Five Year Plan (1980 -1985) 5. 4 3. 8 3 rd Five Tear Plan (1985 -1990) 5. 4 3. 8 4 th Five Year Plan (1990 -1995) 5. 0 4. 2 5 th Five Year Plan (1997 -2002) 7. 0 5. 2 2003 - 2005 - 5. 5 2006 - 2009 - 5. 3 5

Sixth FYP as First Phase of Perspective Plan 2010 - 2021 ¡ Perspective Plan 2010 -2021 would be implemented in two phased by preparing and implementing two Five Year Plans: l l Sixth Five Year Plan 2011 – 2015; and Seventh Five Year Plan 2016 - 2020 6

Preparation of Sixth Five Year Plan 2011 -15 Technical Framework ¡ l l an input–output table (with base set at FY 06 or FY 07); a macroeconomic consistency model of SFYP based on the input-output framework; and an employment matrix 18 background studies 7

Sixth Five Year Plan 2011 -15: the concept note Major sources for setting SFYP development goals and targets: ¡ Constitution of the People’s Republic of Bangladesh (Articles 9– 20); ¡ Election Manifesto of the Bangladesh Awami League 2008; and ¡ Agreed global and regional development goals like MDGs and SDGs. 8

Sixth Five Year Plan 2011 -15: targets Important targets set for the economy are: ¡ ¡ Secure and sustain an annual level of GDP growth of 8 percent by 2013 and raise it to 10 percent from 2017; Bring down the percentage of disadvantaged people living below the poverty line to 15 percent by 2021; Ensure a minimum of 2, 122 k. cal/person/day of food to all poor people and standard nutritional food to at least 85 percent of the population by 2021; Ensure 100 percent net enrolment at primary level by 2010, provide free tuition up to the degree level by 2013, attain full literacy by 2014, and ensure that Bangladesh is known as a country of educated people with skills in information technology; 9

Sixth Five Year Plan 2011 -15: targets (contd. ) ¡ ¡ Achieve self sufficiency in food by 2012; Ensure living accommodation for the entire population by 2015, supply of pure drinking water for the entire population by 2011, and bring each house under hygienic sanitation by 2013; Eliminate all kinds of contagious diseases and increase life expectancy of citizens to 70 years by 2021; Reduce maternal mortality to 1. 5 percent, raise the use of birth control methods to 80 percent, and bring down infant mortality to 15 per thousand live births by 2021; Change the sectoral composition of output with the shares of agriculture, industry, and services standing at 15 percent, 40 percent, and 45 percent respectively in 2021; 10

Sixth Five Year Plan 2011 -15: targets (contd. ) ¡ ¡ Reduce underemployment rate to 15 percent along with changing employment shares of agriculture, industry, and services to 30 percent, 25 percent, and 45 percent respectively in 2021; Generate 7, 000 megawatt of electricity by 2013, raise it to 8, 000 megawatt in 2015, and make provision to meet the expected demand for power of 20, 000 megawatt in 2021. 11

Sixth Five Year Plan 2011 -15: approach ¡ ¡ ¡ ¡ ¡ Inclusive Economic Growth Enhancing Economic Growth Employment Creation Universal Social Protection for the Hardcore Poor Role of Market, State and Community in Economic Growth Public–Private Partnership (PPP) Regional and Sub-Regional Planning Gender Responsive Plan Technology Base for ‘Digital Bangladesh’ 12

Sixth Five Year Plan 2011 -15: approach (contd. ) ¡ ¡ ¡ ¡ Human Resource Development Environment and Climate Change Good Governance, Human Rights and Democratic Polity Operational Linkage between Planning and Budgeting Regional / Sub-Regional Economic Integration Least-Cost National Security Implementation and Monitoring 13

Sixth Five Year Plan 2011 -15: background studies ¡ ¡ ¡ A Study on Macroeconomic Framework and Financial Sector Development for the Sixth Five Year Plan; A Review of Fiscal and Other Macro Incentives in the Manufacturing Sector: Implications for Future Policies; A Study on SMEs Development in Bangladesh with emphasis on Policy Constraints and Financing; Public-Private Partnership (PPP) Development in Bangladesh and Issues in Privatization of SOEs; A Study on Power and Energy Development and Management: Benchmark Analysis and Future Policies; A Study on Crop Agriculture and Agrarian Reforms in Bangladesh: Present Status and Future Options 14

Sixth Five Year Plan 2011 -15: background studies (contd. ) ¡ ¡ ¡ A Study on Developing Non-Crop Agriculture in Bangladesh: Present Status and Future Development; A Study on Strategies for Coping with Climate Change, Environment sustainability, and Natural Disasters in Bangladesh; Alternative Modes of Financing for the Sixth Five Year Plan; A Study on the National Security in Bangladesh: Strategies and Cost Effectiveness A Study on Employment and the Labor Marker: A Guide to Employment Policies for the Sixth Five Year Plan; A Study on Education and HRD: Quality and Management Issues in Bangladesh; 15

Sixth Five Year Plan 2011 -15: background studies (contd. ) ¡ ¡ ¡ A Study on Universal Social Protection Strategy: Hard Core Poverty and Safety Nets Programs in Bangladesh; A Study on Health, Nutrition, and Population Planning in Bangladesh; Emerging Issues in Income Growth of Rural Households, Development of Non-Farm Activities and Safety Net Provisions; A Study on Export Promotion and External Issues: Present Status and Future Developments; Towards Digital Bangladesh: Prospects and Constraints in Developing ICT Sector; and Urbanization Management and Emerging Regional Disparity in Bangladesh: Policies and Strategies for Decentralized Economic Growth. 16

Alternative GDP Growth Scenarios in the 6 th FYP Growth Scenarios FY 11 FY 12 FY 13 FY 14 FY 15 FY 11 -15 average Baseline Scenario 6. 3 6. 4 6. 7 6. 9 7. 1 6. 7 Medium Policy Shift Scenario 6. 5 6. 7 7. 0 7. 5 8. 0 7. 2 High Policy Shift Scenario 6. 5 7. 2 8. 0 8. 5 9. 0 7. 8 17

Alternative GDP Growth Scenarios in the 6 th FYP 18

Macroeconomic Parameters under alternative Growth Scenarios in 6 th FYP Parameter (in %) 2005 -09 Baseline policy Mid Policy shift High Policy shift Investment – GDP ratio 24. 5 23. 4 - 26. 1 25. 0 -30. 2 25. 4 -32. 0 Revenue – GDP ratio 10. 4 11. 4 - 13. 2 11. 7 -13. 3 11. 8 – 14. 0 Public Exp. – GDP ratio 14. 2 16. 4 – 18. 1 16. 6 – 17. 6 17. 0 – 18. 7 Export – GDP ratio 16. 2 18. 0 – 18. 8 18. 0 – 19. 1 18. 3 – 20. 3 Import - GDP ratio 21. 4 22. 7 – 24. 3 22. 8 – 25. 1 23. 2 – 27. 2 National savings – GDP ratio 29. 0 31. 7 – 32. 0 32. 5 – 34. 5 33. 6 – 35. 7 19

Sectoral Growth Prospects for the Sixth Plan Sector 2008 -09 FY 11 -15 Baseline FY 11 -15 Mid Policy shift FY 11 -15 High Policy shift Agriculture 3. 4 3. 5 4. 1 4. 4 Industry 7. 2 8. 5 9. 1 Services 6. 1 7. 0 7. 4 7. 9 GDP 5. 9 6. 7 7. 2 7. 8 20

Sectoral Growth Prospects for the Sixth Plan 21

Macroeconomic Balances under Baseline Growth Scenario for SFYP FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 11 -15 Real GDP growth (%) 5. 8 6. 3 6. 4 6. 7 6. 9 7. 1 6. 7 Inflation (%) 6. 5 6. 4 6. 3 6. 4 G. Investment (B. Tk) 1608. 3 1816. 3 2055. 4 2333. 7 2681. 5 3110. 8 2399. 5 National Savings (B. Tk) 2268. 1 2453. 1 2689. 2 3013. 5 3371. 3 3810. 9 3067. 6 1023. 2 1181. 1 1363. 6 1572. 1 1205. 3 Govt. Revenue (B. 769. 7 Tk) 886. 5 Govt. Exp. (B. Tk) 1120. 2 1272. 6 1444. 4 1649. 9 1885. 0 2154. 3 1681. 2 Export (B. US $) 17. 6 19. 6 21. 9 24. 5 27. 4 30. 9 24. 9 Import (B. US $) 22. 0 24. 7 27. 7 31. 3 35. 5 40. 3 31. 9 Remittance (B. US $) 10. 7 11. 8 13. 4 15. 0 16. 5 18. 1 15. 0 22

Macroeconomic Balances under Mid Policy shift Growth Scenario for SFYP FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 11 -15 Real GDP growth (%) 5. 8 6. 5 6. 7 7. 0 7. 5 8. 0 7. 1 Inflation (%) 6. 5 6. 4 6. 5 6. 6 6. 9 6. 7 G. Investment (b. tk) 1608. 3 1932. 6 2303. 8 2745. 1 3272. 5 3895. 5 2830. 0 National Savings (b. tk) 2268. 1 2511. 4 2970. 6 3355. 0 3874. 8 4457. 6 3433. 9 Govt. Revenue (b. tk) 769. 7 1061. 7 1247. 9 1466. 3 1722. 6 1280. 5 Govt. Exp. (b. tk) 1120. 2 1283. 9 1474. 6 1696. 9 1961. 1 2270. 9 1737. 5 903. 8 Export (b. us$) 17. 6 19. 8 22. 5 25. 6 29. 5 34. 4 26. 4 Import (b. us$) 22. 0 25. 0 28. 9 33. 3 38. 6 45. 2 34. 2 Remittance (b. us$) 10. 7 11. 9 13. 2 14. 9 17. 0 18. 2 15. 1 23

Macroeconomic Balances under High Policy shift Growth Scenario for SFYP FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 11 -15 Real GDP growth (%) 5. 8 6. 5 7. 2 8. 0 8. 5 9. 0 7. 8 Inflation (%) 6. 5 6. 4 6. 5 6. 6 6. 5 G. Investment (b. tk) 1608. 3 1959. 8 2475. 0 2991. 2 3542. 2 4188. 1 3031. 3 National Savings (b. tk) 2268. 1 2592. 6 3106. 8 3568. 0 4110. 0 4679. 9 3611. 5 Govt. Revenue (b. tk) 769. 7 1095. 2 1312. 4 1558. 1 1839. 8 1343. 7 Govt. Exp. (b. tk) 1120. 2 1313. 6 1537. 5 1798. 2 2098. 8 2448. 2 1839. 3 913. 1 Export (b. us$) 17. 6 20. 1 23. 0 26. 7 31. 3 36. 9 27. 6 Import (b. us$) 22. 0 25. 5 29. 9 35. 3 41. 7 49. 6 36. 4 Remittance (b. us$) 10. 7 12. 1 14. 2 16. 5 18. 8 22. 7 16. 9 24

Areas of Improvement for higher Growth during SFYP ¡ ¡ Private sector will play the prime role; Public investment and policies shall create necessary investment climate in areas like: l l l l l Energy supply including electricity and gas; Infrastructure including roads, railways, embankment and dykes; Telecommunication; Ports; Legal and administrative system including property rights; Project implementation capacity; Governance including law and order; Market incentives; and Sound monetary policy and public finance management 25

Thanks 26