Bangladesh obtained independence in 1971 and has a population of over 160 million people. It has a developing economy that has grown at an average of 6% annually between 2004 and 2014. Bangladesh receives foreign development aid but faces challenges of corruption and a low tax-GDP ratio of 9%. To increase financing, Bangladesh should strengthen tax administration, address corruption through monitoring, and promote private sector investment in technology and agriculture through loans and equity. This would help Bangladesh achieve further development goals as it progresses towards middle-income status by 2025.

1. Financing in Bangladesh
FOCUSING ON PUBLIC AND PRIVATE PUSH FACTORS

2. At a glance…
 Got independence in 1971; located with her 147,570 square km land on the Bay of Bengal;
bordered by India on all sides except for a small border with Myanmar
 The country has flat plains, and most of the country is situated on deltas of large rivers flowing from
the Himalayas
 The climate in Bangladesh is sub-tropical and the population stands at around 160 million, making it
the 8th most populous nation in the world and one of the most densely populated, with more than
800 people per square kilometer.
 The government system is the parliamentary democracy. The chief of state is the president and the
head of government is the prime minister
 The country has traditional economic system in which the allocation of available resources is made
on the basis of inheritance and primitive methods; agricultural sector is still the main employment
provider; the export sector has been the engine of industrial growth with ready-made garments
leading the way
 Between 2004 and 2014, Bangladesh averaged a GDP growth rate of 6%; The economy is
increasingly led by export-oriented industrialization

3. Getting Foreign Development Aid- 1
Source: OECD/DAC Database by Calendar Year (as of 02/20/2013) unless noted;
www.aidflows.org

4. Getting Foreign Development Aid- 2
Source: OECD/DAC Database by Calendar Year (as of 02/20/2013) unless noted;
www.aidflows.org

5. Getting Foreign Development Aid- 3
Source: OECD/DAC Database by Calendar Year (as of 02/20/2013) unless noted;
www.aidflows.org

6. Realities of Bangladesh in Managing Aid
Bangladesh has been listed as 14th most corrupted country in the world (2014); according to
the TIB report, Bangladesh dropped off in the graft index as it failed to fulfill its promises
towards curbing corruptions;
=> So a big challenge is in administrative level to make a worthy use of finance
Tax-GDP ratio is only 9.0 %; and along with the corruption realities Bangladesh get very few
amount than the level they should have;
=> So here is a chance/possibility to raise the financing level in public sector with correct
intervention
Bangladesh has the news of progress to gain MDGs in poverty reduction, health, education and
gender equity sector in an impressive way; but, Bangladesh faces major challenges of creating
jobs, preserving ecology and ensuring nutrition in terms of achieving MDGs
=> So Bangladesh has gained a mixed impression where they can achieve the result if there
is strong commitment and/or pressure

7. Fitness of Bangladesh for Financing
What is the status of Bangladesh in going forward to get SDGs under the concept of FFD?
Answer: As, Bangladesh is covering to be the middle income country by 2025, the country fits to
get 4 types of financial instruments:
 Guarantees => On the issues of important needs, like “creating jobs” or “ensuring nutrition”
where third party can agree to pay lenders if borrower does not
Loans (regular) => Getting loans with regular and competitive market- rate interest, like in
“garment sector investments” or “agricultural sector investments”
Equity Investments => In exchange of partial ownership, like in “agricultural technology” or
“electricity/gas sector investments”

8. Things to Do: “Pushing from Three Sides”
Bangladesh
(Increasing
Finance)
Public Sector:
Proper Tax
Administration
Social Sector:
Managing Corruption
Private Sector:
Taking National
Development Plan
along with access of
Private Investments

9. Focuses on…
 Public Sector: Strong 1st party (government) and 2nd party (local/national civil society)
monitoring strategy to tax administration to collect the actual amount of taxes
 Private Sector: Making National Development plan to focus on more technological
development; Regular loans to agricultural production (in example, shrimp firming) Equity
investment in agro-technology; Regular investment in fisheries of sea level (Bay of Bengal);
 Social Sector: Strong political commitment to anti-corruption strategies; Making
advisory/monitoring access from international sector for checking anti-corruption strategic
success

10. References:
 URL: < http://www.aidflows.org/ >
 URL: < http://www.ibfb.org/index.php?option=com_content&view=article&id=5&Itemid=55 >
 URL: <http://www.en.prothom-alo.com/economy/news/70987/Bangladesh-now-middle-
income-country >
 URL: < http://www.thedailystar.net/bangladesh-14th-most-corrupt-country-53165 >
 URL: < http://www.heritage.org/index/explore?view=by-variables >
 URL: < http://www.thedailystar.net/frontpage/3-key-challenges-mdg-ahead-144379 >
 URL: < http://www.theindependentbd.com/post/16169 >