This document discusses neoliberalism in the health care system in Bangladesh. It explores how neoliberal principles of individualism, free market policies like privatization and deregulation, and decentralization have shaped public health in Bangladesh. It describes how the public health system has become commercialized under neoliberalism, with decreasing access to public facilities for the urban poor. Theories of neoliberal urban governance from scholars like David Harvey and Arjun Appadurai are discussed in the context of their application to the health care system in Bangladesh.

1. Neoliberalism in
Health Care System
In Perspective of Urban Governance in Bangladesh

2. 1
Abstract
Many nations have undergone changes in health care financing and services. Within the context of
globalization, public health improvement is occurring around the world. This assignment explores the
neoliberal mindset shaping public health care in Bangladesh. Neo-liberalism comprised of three
principles: individualism, free market via privatization and deregulation and decentralization. The
basic premise of this paper is to describe the enlargement of public health under neoliberalism
mindset. This assignment also depicts urban health care scenario and its aftermath on urban poor
people. It includes commercialization of health care in Bangladesh.
1. Introduction:
Since 1970-1980, the issue of neoliberalism has become a particular part of state’s policy,
laws, ways, public health and so forth. From then, neoliberalism has been occurring through
privatization, financialization, individualism, decreasing social opportunities, prioritizing
bourgeoisies’ interest injecting globalization process. Neo-liberalism in public health has
been a rigorous concept in Bangladesh. It encompasses commercialization of health sector,
decreasing Left hand facilities of state, cutting up urban poor incentives, increasing so-called
NGOs and INGOs in urban poor center, increasing deprivation of basic health care in public
hospitals, health care plights of socially excluded class, high-priced health care in Dhaka city
and so on. Emerging public health as neoliberalised way has been a tremendous challenge for
the urban working class and poorer section to live on earth with healthy dignity. It is to be
considered integrated outcome of globalization over the world.
2. Aims and Objectives of the Study:
i. To analyze the neo-liberalization process of Public Health,
ii. To find out neo-liberal effects Public Health,
iii. To know the flow of privatization in Public Health,

3. 2
iv. To know the neo-liberal dimensions of health care policy under urban
governance,
v. To know the nature of public health in neo-liberal era.
3. Literature Review on Neoliberal Urban Governance and
Health Care Systems:
In the book of “Punishing the Poor” by Loic Wacquqnt (2009), Wacquant explained
Bourdieu’s view. Bourdieu calls the “Left hand” the “Right hand” of the state. Bourdieu said,
“The Left hand, the feminine side of Leviathan, is materialized by the spendthrift ministers in
charge of social functions-public education, health, housing, welfare, and labor law-which
offer protection and succor to the social categories shorn of economic and cultural capital.
The Right hand, the masculine side, is charged with enforcing the new economic discipline
via budget cuts, fiscal incentives, and economic deregulation.”
Here, Wacquant tried to show the neoliberal systems in urban public health alongside other
social things. He explained that Left hand is the costing part of a country. As we depict
neoliberalization of urban public health, urban health is prime matter to discuss here. In this
book, it depicted that urban health care would be in privatization. Consequently, it would be
on the further side of urban poor. In terms of Dhaka city, it is the same like other urban city
around the world. Since State has to bear cost of health, Sate has cut it down and handed
over the private sector. At present, in Dhaka city, there are enormous private hospitals
available. In these private hospitals, there are no accesses of poor people, but only ruling
class people, bourgeoisie have access. It is because they have abundant resource flow. So,
health care opportunities for urban poor have been decreasing day by day, on the other hand,
neoliberalism has been injecting in public health process.
In the article of “MIGRATION, URBANIZATION AND POVERTY IN DHAKA,
BANGLADESH” by Professor Shahadat Hossain, published in Journal of the Asiatic
Society of Bangladesh (Hum.), Vol. 58(2), 2013, pp. 369-382, under the new wave of
privatization a significant number of private schools, universities and hospitals have been
established where the rich and affluent only have the access. The fact is, Dhaka has emerged
as the city of the new shopping malls, restaurants, cafes, beauty parlors and gymnasiums.

4. 3
This privatization of urban space discriminate the urban poor who are forced to move to the
urban peripheries. Beautification projects in the city have also marginalized poor
communities from the city. This article depicted the neo-liberalism of public health in Dhaka
city and health care plights of urban poor peoples.
Arjun Appadurai (2002) in his article “Deep Democracy: urban Governmentality and the
Horizon of politics”, Public Culture, 14(1): pp. 21-47, explained how neoliberalization
injected in public health in India. Appadurai showed that due to neoliberalization of urban
health care, the Society for the Protection of Area Resource Centers, or SPARC (a NGO),
Community Based Organization or CBO, and Mahila Milan launched initiatives in 1987 to
render health care facilities and other basic needs. Public health detached from urban poor.
By turn, the urban poor people ousted from public health with the soft touch of
neoliberalization and privatization in health sector.
In the article of “Urban process under capitalism: a framework for analysis”, David
Harvey explained three laws of accumulation- a. primary circuit of capital, b. secondary
circuit of capital, c. tertiary circuit of capital. Bangladesh has been experiencing secondary
circuit of capital where privatization is very much prevalent. With the process of
neoliberalization, market economy has become dominant in every spheres of Dhaka city
including public health, market etc. These ideals have been emphasizing commercialization
over the country.
In article “Public Health, Urban Governance and the Poor in Bangladesh: Policy and
Practice” by Ferdous Arfina Osman, Asia-Pacific Development Journal Vol. 16, No. 1,
June 2009, writer sought to identify the weakness of urban governance that cause the urban
poor to have inadequate access to primary and public health in the context of
neoliberalization process. It also showed linkage of urban governance, public health and
neoliberalism.
Professor Anu Muhammad (2015) wrote an article on “Bangladesh—a Model of
Neoliberalism: The Case of Microfinance and NGOs”. He analyzed globalization,
privatization, financialization and the trajectory of neoliberal reforms in Bangladesh. To open
the space for different forms of privatization and financialization, an ideological campaign
has demonized the state’s responsibility towards its citizens. NGOs’ proliferation occurred
but pledges that those NGOs committed, did not come true.

5. 4
Sue L.T. McGregor. (2001), placed “Neoliberalism and health care” and depicted
neoliberal scenario in terms of public health. She illustrated neoliberalism nature of health
care system.
4. Neoliberalism in Urban Governance: Theoretical Discussion
Neoliberalism is an approach to economic and social studies which control of economic
factors is shifted from the public sector to the privet sector. Drawing upon principles of
neoclassical economics, neoliberalism suggest that government reduce deficit spending, limit
subsidies, reform tax law to broaden the tax base, remove the fixed exchange rate, open up
markets to trade by limiting protectionism, privatize state-run businesses, allow private
property and back deregulation.
Urban Governance refers to ‘a system of governing with is concerned with the nature of the
relationship between the rulers and the ruled, the state and the society, and the government
and the governed.
4.1 Harvey’s Theory of Neoliberalism:
In “A Brief History of Neoliberalism“(2005), David Harvey explains the nature and
principles of neoliberal state where the individual right to freedom of action, expression, and
choice must be protected. He argues the state must use its monopoly of means of violence to
protect these freedoms at all costs. One of the greatest of all institutional barriers to economic
development and the improvement of human welfare is depicted as the absence of transparent
private property rights. He observes, Privatization and deregulation combined with
competition eliminate bureaucratic red tape, increase efficiency and productivity, improve
quality and reduce costs both directly to the consumer through cheaper commodities and
services and indirectly through reduction of the tax burden. To Harvey, neoliberals tend to
prefer governance by experts and elites.
David Harvey, in his article “The Urban process under Capitalism: a framework for
analysis” which published in 2002, stated that “The ‘urban’ has a specific meaning under the

6. 5
capitalist mode of production which cannot be carried over without a radical transformation
of meaning (and of reality) into other social context.” Within the framework of capitalism he
observes, the “urban process” on the twin themes of Accumulation and Class Struggle.
“The Right to the City”, published in 2008 by David Harvey, contends with Marxist
perspective the right of mass urban peoples to the urban area- the city. Harvey argues that in
the era of neoliberal political economy rich or owner class facilitate as much that visibly
shows the spatial difference and fragmentations within the same system where billionaires
have emerged and richest man is boasted by country here also the incomes of the poor urban
has diminished or stagnated. Accumulation by dispossession lies in the core urbanization
under capitalism while the poor, underprivileged and marginalized people suffer socially,
economically and politically where creative destruction has dispossessed them of any right to
the city.
4.2 Appadurai’s Theory of Deep Democracy:
In “Deep Democracy: Urban Governmentality and Horizon of Politics” (2002), Arjun
Appadurai claims that “The world seems marked by the global victory of some version of
neoliberalism…” He concisely argues the politics and behavior of state governance and
various activist movements and associations related private organizations. He explains that
how the new models of global governance and local democracy various groups are found to
emancipate and equity maintenance that recognize nongovernmental actors need to be made
part of this model of global governance and local democracy.
Appadurai critically describes the contradictions between the ideal types and combine high
concentration of wealth and even higher concentration of poverty and disenfranchisement in
urban process of the developing countries. He sees this current crisis as a crisis of redundancy
rather than as one of legitimation. Thus in many places of the world undoubted growth in a
‘privatization’ of the state in various forms, sometimes produced by the appropriation of the
means of violence by non-state groups. He also presides about the new geography of
governmentality and its population which he named – “Citizens without a city”.

7. 6
4.3 Wacquant’s Theory of Neoliberal Governance:
Loïc Wacquant in his writing “Punishing the Poor: the Neoliberal Governance of Social
Insecurity” (2009), describes the core thing of neoliberal system in terms of penalization of
state regulation over the poor and designed lower class people.
Wacquant argues the bureaucratic is transferring its nature into two meaningful struggles.
Firstly, he intend to show, the higher state nobility of policy- makers imply on promoting
market oriented reforms and the lower state nobility of executants attached to the traditional
missions of government. Secondly, he explains as left hand and right hand. The left hand is
the feminine side which is materialized by public education, health, housing, welfare and
labor law. The right hand, the masculine side, is possessed with enforcing the new economic
discipline via budget cuts, fiscal incentives, and economic deregulation.
Wacquant very precisely presents the transition process into neoliberalism and claims that
“The new priority given to duties over rights, sanction over support, the stern rhetoric of the
obligations of citizenships, and the material reaffirmations of the capacity of the state to look
the trouble making poor (welfare recipient and criminals) in a subordinate relation of
dependence and obedience towards state managers portrayed as virile protectors of the
society against its wayward members: all these policy planks pronounce and promote the
transition from the kindly ‘nanny state’ of the Fordist- Keynesian era to the strict ‘daddy
state’ of neoliberalism” (Wacquant, 2009: 290).
Argues with the explanation of David Harvey’s feature of neoliberalism, he elaborates that
“For Harvey, neoliberalism aims at maximizing the reach of market transactions via
‘deregulation, privatization, and withdrawal of the state from many areas of social provision.’
As in previous eras of capitalism, the task of Leviathan is to facilitate conditions for
profitable capital accumulation on the part of both domestic and foreign capital” (Wacquant,
2009: 309).
“Neoliberalism is a transnational political project aiming to remark the nexus of market,
state, and citizenship”; according to Wacquant this entails the articulation of four institutional
logics. They are: Economic Deregulation, Welfare State Devolution, Cultural Trope of
Individual Responsibility and lastly An Expensive, Intrusive and Proactive Penal Apparatus.

8. 7
5. Beginning and Development of Neoliberal Policy in Bangladesh
Neoliberalization through privatization of State Owned Enterprises (SOEs) began during mid
seventies in Bangladesh. The policy has been pursued by the successive governments. It is an
ongoing policy of the government.
Political- economic factors contributed to the initiation and promotion of the privatization
policy of State Owned enterprises (SOEs) in Bangladesh. It is argued that the privatization
policy has been the outcome of both ‘crisis ridden’ and ‘politics as usual’ policy conditions
similar to the theoretical concepts developed by Grindle and Thomas (1990).
The non-effectiveness of the nationalization policy of industries, poor performance of SOEs
in addition, heavy financial burden on the state, influence of structural adjustment
programmes and pressures of international donors have been the major factors those have
made the policy character as ‘crisis ridden’.
Moreover, the policy and its promotion have been the outcome of the usual political course of
the successive governments. Successive governments have been pursuing the policy as one of
their political strategy, which has shaped the policy character as ‘politics as usual’. As far as
the major actors of the policy are concerned, the heads of the governments, cabinet members
and the bureaucracy have been the dominant policy actors behind initiation and promotion of
the policy. The private sector in general and the media in particular have indirectly
contributed to the initiation of the policy and its subsequent implementation. The
involvement and reaction of public however, have not been clearly visible in the entire
process.
Grindle and Thomas (1990) while developing a broader framework for analyzing policy
reform in developing countries have pointed out two distinct contexts for policy changes:
1. Crisis-ridden Policy Changes and
2. Politics-As-Usual Policy Changes
According to them, a problem gets on the policy agenda and is felt necessary for policy
action whenever there exists any crisis. Certain kinds of policy issues, for example,
devaluation tend to get on policymakers’ agenda only when economic crisis exist. Other
kinds of policies, for example, decentralization emerge almost uniquely under politics-as-

9. 8
usual circumstances. Crisis-ridden policy reforms tend to bring major modifications from pre-
existing policies. Crisis ridden situation prompt policy makers to make innovative or radical
changes rather than incremental to meet the crisis (Grindle and Thomas, 1990: 73-79).
Moreover, circumstances of politics as usual result in the processes of agenda setting and
decision-making that are distinct from those that prevail under circumstances of perceived
crisis (Grindle and Thomas, 1990: 84). Under no crisis conditions, change is often
incremental, with considerable scope for trial and error or scaling up if initial efforts provide
positive results (Grindle and Thomas, 1990: 84-90). The above viewpoints and arguments
have relevance to the policy context of privatization policy of SOEs in Bangladesh, which
would be evident from the following discussion and analysis.
5.1 Political-Economic Factors that contributed to the policy formation and its
subsequent promotion:
The major political-economic factors that contributed to the initiation and promotion of the
privatization policy of SOEs has been discussed and analyzed below:
1. Non-Effectiveness of the Nationalization Policy:
After the independence of Bangladesh in 1971, the then ruling party Awami League adhered
to a socialistic ideology of governing the state, which prompted the government towards
nationalization of private enterprises (Umar, 1974: 135-140; Sobhan, 2005; Uddin 2005). The
government nationalized the industrial units left by Pakistani and other foreign owners as
well as firms owned by indigenous Bengalis in jute, textile and other manufacturing
industries. The government also nationalized the entire financial system, import trade, raw
jute export trade, and most of inland water transport. Because of that, approximately 90% of
industrial fixed assets were transferred to state ownership (Akram, 2003: 3-4).However; the
nationalization policy could not make positive contribution to the economy in general and to
the SOEs in particular due to several reasons. Although the new government followed the
strategy and philosophy of nationalization, subsequent experience with gross
mismanagement, inefficiencies and persistent losses of SOEs, drove home the point that the
country could ill afford the social costs of non- profitable SOEs (Akram, 2000: 439 –440;

10. 9
Khan & Hossain, 1989: 79: 92; Sattar, 1989: 1163). It proved more difficult than expected to
dispose of a large number of enterprises under the administration of government, saddled
with large debts, no inventory, and little managerial back-up. After the liberation of
Bangladesh, these units had been put under the patronage of the then political government,
many under officially designated administrators. Some of these administrators were
government officials, some were private citizens close to the government of that time; some
were put under the management of junior managers already employed by the erstwhile
owners of enterprises; some were even put in control of the workers of these enterprises
(Sobhan, 2005: 8-9). It is argued that nationalization was executed in great haste without
preparing proper inventories of assets. This left room for wide spread pilferage (Rashid,
1988: 41). Critics argue that “they were used for patronage for party workers which resulted
in excess employment, waste and inefficiency” (Rashid, 1988: 41).
Moreover, the lack of autonomy for the nationalized sectors, managerial deficiencies arising
from the vacuum created by the departure of the Pakistani entrepreneurs (at the time of
liberation war), and the politicization of the management structure of the nationalized units
without much energy given to their proper management on a commercial footing, contributed
to the policy’s non- effectiveness (Bayes et al. 1998: 92).
The performance of the nationalized sector in terms of services, production, sales and profits
were disappointing due to many factors. Exogenous factors included the disruption and
destruction caused by the liberation war, the problems of re-establishing the economy in the
aftermath of the war, inadequate investment in plant, increases in import costs, taxes and
tariffs, depreciation of the Taka, adverse movements in terms of trade and un certain foreign
aid flows, particularly during the recession of the 1970s and the early 1980s (Rashid, 1988:
63).
Endogenous factors included the lack of clear objectives, non-availability of raw materials,
labor problems, power failures, inexperience, poor management, and lack of managerial
autonomy and a result based system of accountability (making officials/managers responsible
for non achievement of tangible benefits/profits). Consequently, control was sought to be
exercised through day-to-day interference in operational matters by the public agencies
curtailing the autonomy to achieve objectives for which the SOEs were created (Farid, 1992:
207; Rashid, 1988: 63).

11. 10
A sense of crisis and urgency thus prevailed among the policymakers at the end of 1974. The
task was to make the SOEs viable enterprises as well as to provide greater scope for private
sector involvement. In fact, crisis conditions prompted the government to make a ‘u’ turn and
brought the denationalization issue on to the agenda.
2. Policies after the fall of the government in 1975:
In December1975, the new government announced that “it was ready to extend all possible
support to the private sector to utilize its full potential for economic development of the
country” (DCCI, 2000: 7). Ultimately this resulted in introduction of different policy
measures (discussed in part B). When a perception of crisis surrounds the consideration of
policy changes, considerable pressure develops to ‘do something’ about a problem if dire
consequences are to be avoided. It can be said that the situation of Bangladesh in 1975
involved conditions where a “perceived crisis sets in motion a policy making characterized
by pressure to act, high stakes, high level decision makers, major changes from existing
policy and urgency” (Grindle and Thomas, 1990: 76).
The Government of General Ziaur Rahman and his cabinet along with the higher level policy
makers, perceived a further deterioration of macro politico-economic condition. The
government of Ziaur Rahman perceived that since the losses of SOEs were piling up to the
detriments of the economy, denationalization would help capital formation on the one hand
and would restore the confidence of the business entrepreneurs on the other hand (Humphrey
1992).
At the same time the government could gain support of the business class through
abandoning nationalization which would strengthen the political base and would enhance
stability of the military government. Theoretically, “a situation of perceived crisis raises the
concerns for policymakers about macro political conditions such as political stability,
legitimacy and regime vulnerability and leads them to carefully assess the political and
economic consequences of the options available to them” (Grindle and Thomas,1990: 77).

12. 11
3. Loss making SOEs and subsequent financial burden on the state:
SOEs incurred chronic losses and continued to rely on state subsidy. Besides losses and low
rate of return, most SOEs in Bangladesh obtained equity injections from the state and
substantial amount of loans from nationalized commercial banks (NCBs). Up to March 2007,
total loan of nationalized commercial banks to 44 corporations (under which SOEs are
placed) was Taka199993.2 million of them, the amount of default loan was Taka9513.1
million which was however 4.76% of total distributed loan.
The poor economic performances of SOEs and the heavy financial burden on the state were
major concerns for the policymakers of the successive governments in Bangladesh. This has
contributed to the pursuance of the policy of privatization regarding SOEs after 1974.
During 2000, SOEs had total assets of Taka439 billion (US $ 9.8 billion) with a total short-
term debt of Taka386 billion (US $ 8.6 billion). This has led to the conclusion being drawn
that SOEs are grossly inefficient, producing a negative return on investment and delivering
annual losses of Taka 16 billion (US $0.35 billion) (Kashem et al. 2000: 51).
Most SOEs in Bangladesh are running with huge losses and have failed with few exceptions
to generate substantial profit. It is reported that almost all SOEs have turned into losing
concerns.
The SOEs have been drawing substantial resources from within as well as outside
government finances. Nearly one third of country’s Annual Development Programme (ADP)
resources go to SOEs to finance their investment-savings gap. Nevertheless, due to different
socio-political imperatives and stakes, successive governments have had to provide subsidies
to loss making SOEs in order to keep them functional.
Hence, it can be argued that the existence of poor perform in gloss making SOEs have been a
continuous burden on the government exchequer as the government has been consistently
providing grants and subsidies to the SOEs. The heavy financial burden on the government
due to continuous subsidies has created a sense of crises among policy makers. Successive
governments have been under pressure to find alternative policy options to protect the
economic image of the country and rescue the credibility of the government. This has
ultimately kept the privatization issue on the policy agenda.

13. 12
4. Influence of Structural adjustment program and International Donors
In developing countries, market-oriented policies such as deregulation, privatization, and
liberalization, were adopted or imposed under stabilization and structural adjustment
programmes sponsored by international donor agencies like the World Bank, International
Monetary Fund (IMF) (Cook &Kirkpatrick 1988; Suleiman and Waterbury 1990; Simrit
2004; Sobhan 2005; and Uddin 2005).
Structural Adjustment Programmes which emphasized, among others, shrinking size of the
state, an open market economy, deregulation, and promoting the private sector, were all
conducive to a policy of privatization. The new loans offered since the early 1980s by
international institutions to developing countries have been associated with loan
conditionality, particularly the stabilization and structural adjustment programmes with
privatization and deregulation as the central policy components. Most developing countries
requiring foreign assistance from the World Bank and IMF were very much pressured to
introduce these programmes and policies (Haque, 2000: 223-224; Huque, 2003:1).
This has been the case for Bangladesh also. One of the major areas where pressure from the
donors comes to exercise relates to the formulation and conduct of economic policies. The
donors’ attitude stems from the understanding that the size and importance of their
contribution to Bangladesh’s development effort gives them a right to dictate how it should
conduct development affairs (Sobhan, 1982: 146).
The privatization effort in Bangladesh gained momentum at the beginning of 1980s largely
due to the wave of structural adjustment programmes that has swept all over the developing
world (Sobhan2005; Haque 2000; Huque 2003; Uddin and Hooper 2003; Rahman1994;
Matin 1990).
Structural adjustment programmes which emphasized incorporation of market principles and
managerialism in the operation of public organizations in the belief that they would generate
more efficiency and benefits to the state and society. Hood(1994: 135) preferred to call the
system as New Public Management(NPM)9 and labelled the adoption of NPM with the
notion of ‘cargo cult’.
The aid dependency of developing countries to donor agencies, meant governments had to
take measures in favour of structural adjustment as prescribed and advocated by the World

14. 13
Bank and the IMF. Aylen (1987) argues that, “it is pragmatism and expediency, rather than
politics, that are the main motives of privatization in developing countries, and that outside
pressures and force of circumstance are more important than domestic pressures and
ideologies” (Aylen 1987 cited in Hulme et.al. 1998: 66).
The multilateral donor agencies are the most significant contributors to the total aid injected
to the economy of Bangladesh. The extreme dependence of Bangladesh on foreign aid has
given the donor agencies effective leverage over the economic policy making of the country
(Hassan, 2000: 401- 405).
Total aid disbursement in Bangladesh in 2004/05 rose by 32% year on year to US$ 1.3
billion.At the same time, net foreign aid during the period was also significantly higher,
rising by 45.5% to US$ 810million. Foreign aid remains an indispensable source of finance,
providing Bangladesh with around 40% of government revenue and about 50% of foreign
exchange.
5. The New Industrial Policy of 1982 and the Industrial Policy of 1986:
The international lending agencies became a major influence on government policies after the
fall of the government in 1975, in large part because of the economic dependence of
Bangladesh (Sobhan1982). “The World Bank, as early as September 1974, urged the
Bangladeshi government to restore private-sector confidence by denationalizing units of a
certain size” (Chowdhury, 1987: 91).The New Industrial Policy of 1982 and the Industrial
Policy of 1986 were formulated during the military regime of Ershad which gave importance
to the development of private sector. These two policies were based on Western ideologies of
privatization which were pursued by Margaret Thatcher and Ronald Reagan (Uddin, 2005:
159; Uddin& Hooper, 2003: 741).
In the face of political demonstration against its regime, Ershad government solicited western
support by adopting its policy recommendations on restructuring of SOEs under the concept
of ‘structural adjustment’ propounded by the World Bank and the IMF. As donor agencies
tended to make loan facilities conditional upon privatization, the government was left with no
alternative option but to comply with policy prescription of donors (Uddin 2005).

15. 14
The World Bank in 1990 imposed conditionality to privatize jute mills under the BJMC. This
was part of a wider set of conditions imposed by on the government of Bangladesh. These
involved closure of some publicly owned mills and privatization of the remainder (Sobhan,
2005: 17-18). After Ershad regime, the BNP government formulated the Industrial Policy
1991, encouraging private sector development. The government, advised and financed by the
World Bank, paved the way for wholesale privatization by promoting an enabling
environment, which included liberalizing foreign trade, relaxing exchange controls, and
restructuring import tariffs. As part of the preparations for privatization, in 1991 the Asian
Development Bank financed the Bangladesh Government’s public sector redundancy
programme, which was titled as ‘Improvement of Labour Productivity in the Public Sector
Enterprises’ – or widely known as the ‘Golden Handshake’.
The World Bank (1995) categorically asserted that the government and bureaucracy of
developing countries should withdraw from ‘businesses through disinvestments of all SOEs.
Same theme was reflected in another World Bank Study Report, which mentions that, “Given
the colossal losses of SOEs borne by the taxpayer, and the failure of several attempts to
improve their efficiency, the Government should withdraw from these businesses, soonest
possible. Failure to do, so will undermine growth” (World Bank, 1996: 96)
During the tenure of the Awami League government in 1996, the World Bank argued that the
Privatization Board (PB) chaired by are tired bureaucrat, was too weak to push ahead with
privatization. It was then perceived that a private sector chief executive of the PB might
privatize the SOEs more expeditiously. As a result, the Awami League led government
appointed a businessman, to become chairman of the PB and was accorded with the rank of a
State Minister (Sobhan, 2005: 23)14.
The intense pressure from the donors and aid conditionality had resulted on an escalation of
government efforts towards privatization in Bangladesh (Khan, 2004: 358-359)15. “The
World Bank and the IMF have particularly pressurized the government to privatize or to close
jute sector SOEs in Bangladesh”. On 1 July2002, the government, on IMF policy
prescription, closed the largest Jute Mills of the Bangladesh, Adamjee Jute Mills citing that
the mill had incurred a total loss of Taka 12000 million.“Privatization of SOEs would not
have been carried out in thousand years in Bangladesh had there been no pressure from donor
agencies. The Finance Ministry wants to appease donor agencies by privatizing SOEs in

16. 15
order to obtain donor’s financial assistance and foreign aid which is essential to undertake
development projects and even to meet up other governmental expenditures in Bangladesh”.
6. The impetus for trade liberalization:
This was associated with the structural adjustment programme and because of the impact of
the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO).
Though may be distantly related, privatization of enterprises has been considered as a driving
force towards liberalization of trade. It is perceived that enterprises under private initiative
would be more responsive towards liberalization of trade. The Bangladesh industrial policy
of 1991 has been formulated in that direction.
“The whole industrial policy was premised on the philosophy of a market-based competitive
economy. ---The most perceptible changes were, apparently, consistent with a free market,
neo-classical paradigm and with itsfold, with an outward looking, export-led strategy. ---The
early 1990s experienced the most pro-active phase of trade liberalization” (Bayes et al. 1998:
95-96).
Trade liberalization and open market economy is likely to give a competitive edge to the
privatized enterprises and they would be compelled to improve their performance for survival
and expansion. Privatization of enterprises is likely to give relief and leverages to the policy
makers for diverting the resources (allocated for SOEs) towards alternative measures for
establishing good governance in socio-economic affairs of the state. Imperatives for trade
liberalization have also created compelling circumstances that have propelled the
privatization issue.
7. Politics as Usual:
Privatization measures are not justified on economic grounds alone, the reasons that drive the
process are political as well (Suleiman and Waterbury, 1990: 3-4). Hence, apart from the
factors analyzed above, privatization issue regarding SOEs has also been appeared on the
government’s agenda under the context of ‘politics as usual’ conditions:

17. 16
“Reform initiatives appear to be more or less continuously on government agendas because
of a series of ideas about changing existing practice is debated, studied, discussed and
considered within bureaucratic agencies, legislatures and groups of interested publics”
(Grindle and Thomas,1990: 84).
‘Politics-as-usual’ is the normal political activities in order to address any problem which
might require long term planning and efforts. These actions generally do not originate from a
sense of perceived crisis rather from a need of improving or sustain any reform initiated by
any policy. Bangladesh has been no exception to this. The necessity for structural adjustment
in order to improve the economic condition of the loss making SOEs, the impetus for
privatization of SOEs and donor’s continuous advocacy and influences have made the issue
of privatization a general area of politics in Bangladesh. We will see from the following
discussion and analysis that there have been continuous modifications of industrial policies,
privatization policy as well as changes in government institutions at different times. As a
political desire and choice, these modifications and efforts have been made in order to
improve and speed up the privatization process.
8. Role of major Policy Actors and Development of the Policy:
As mentioned, the privatization policy was initiated during 1975and since then several policy
measures and efforts have been pursued. Different actors have been involved at different
times. But in most cases, the heads of state, cabinet ministers and the bureaucracy were the
dominant policy actors which are obvious because that has often been the case for developing
countries (Holwlett and Ramesh, 1995: 53-56).
When the New Investment Policy 1974 was revised during December 1975 and passed as
Revised Investment Policy 1975,General Ziaur Rahman (the then President of Bangladesh),
his industries minister and some influential members of the bureaucracy played the dominant
role behind the agenda setting and policy making arena (Humphrey, 1992: 46-58). The
Revised Investment Policy 1975 provided greater scope for private sector investment. An
Investment Corporation of Bangladesh (ICB) was established in 1976 and the Dhaka Stock
Exchange which was shut down during nationalization order during 1972 was reactivated.
AD is investment Board was established to facilitate the privatization process in line with the
Revised Investment Policy 1975. At that time a decision was made to return several

18. 17
specialized textile units and jute twine mills to their former owners22. It was important
because jute and textiles belonged to the core of major industry that was taken over by the
nationalization policy.
The former Awami League government adopted ‘socialism’ as one of the state principle in
the 1972 Constitution of Bangladesh, which was a discouraging factor for private sector
growth. Later in1977 (during the tenure of General Ziaur Rahman) the constitution was
amended and the word ‘socialism’ was altered as “economic and social justice”. This change
made transition to a mixed economy much easier and paved the way for the major
privatization moves of 1982.
The New Industrial Policy (NIP) 1982 and The Revised Industrial Policy, July 1986 (RIP)
were framed during the tenure of General Ershad. The Industrial Policy of 1986 is basically a
refinement of the NIP of 1982. Generally Industrial Policy of 1986 broadend the scope of
NIP-82 with regard to private sector development. General Ershad was more familiar than
General Zia with private sector successes in Korea, Taiwan, Japan, and Hong Kong but he
used no models as such. Ershad’s approach was pragmatism. The Government of Ershad held
a series of discussions with representatives of various chambers of commerce, trade
associations, and industrial enterprises. Not only was it rare for the government to discuss and
consult with the private sector before a major policy decision was taken, it was also

19. 18
surprising that those discussions had considerable influences in the formulation of the policy
that followed which was New Industrial Policy of 1982 (NIP).
General Ershad, Shafiul Azam (the then minister for Industry and Commerce), bureaucrats
Mr. Shamsul Haque Chishty and Mr. Shafiqur Rahman (influential Secretaries of the
Government of that time) were the dominant and crucial policy actors (Humphrey, 1992:63-
92).One common feature of the two regimes of General Ziaur Rahman and General Ershad
was that both of them were military officials of the highest echelon of the Bangladesh Army
who came to power with the help of Martial Law. In 1975, General Zia banned all political
activities (Osman, 2004: 273). After the fall of Zia regime in30 May 1981, a BNP led civilian
government under the leadership of Justice Abdus Sattar took over power, but General
Ershad seized power from the Sattar government in February 1982. Like General Zia,
General Ershad banned political parties, suspended the constitution and divided the country
into five martial law zones (Andaleeb and Irwin, 2004: 73).
As a result of that the legislature could not effectively take part in the agenda setting and
decision making concerning privatization during that time. Political instability eroded the
power of the legislature. In the absence of true democratic environment, the military regimes
in Bangladesh functioned in close association with the civil bureaucrats. Military
governments relied on the bureaucracy for regime- maintenance (Zafarullah, 2006: 357).
9. The Industrial Policy of 1991:
However, at the beginning of 1990s, a democratically elected government was formed under
the leadership of Prime Minister Khaleda Zia. To expedite the privatization effort of SOEs,
the Industrial Policy of 1991 was formulated during the rule of democratically elected
government of BNP in which only air travel, railways, production and distribution of power,
and defense industries were reserved for the public sector (Islam, 1999: 67).
Moreover, in 1991, the government created an Inter-ministerial Committee on Privatization
(ICOP) with the responsibility of developing privatization policy as well as considering,
approving and monitoring specific privatization proposals for the various administrative
ministries (Dowlah, 1996: 6). The above agency could not effectively attain its objectives
largely because of the lengthy and complicated process involved in implementing policy,

20. 19
insufficient staff of its own with the technical knowledge of the privatization procedures and
because it was not given the man date and sufficient autonomy to engage in privatization
transactions. Its role was limited to monitoring and approval functions (World Bank,1994:
109; Dowlah, 1998: 240).
In order to facilitate and accelerate the task of privatizing SOEs and to carry out the function
under the direct control and supervision of a separate government institution, on 20 March
1993the government established the Privatization Board (PB) by dissolving all agencies
constituted before (Dowlah, 1996: 6).
However, two items in the mandate of the board were dropped, one of which was to facilitate
private investment in the reserved sectors of electricity and telephones, and the other to
facilitate the disinvestment of textiles industries (PIAG, 1994:2). Later the board was
accorded the status of an autonomous body. Different Ministries had also set up Privatization
Cells for assisting the PB for privatizing the SOEs under their control. Without having a clear
policy regarding privatization of SOEs there remained a danger that there would be confusion
and complexities in the discharge of functions. Hence, in September1996 the government
introduced the Privatization Policy 1996 and dissolved the earlier formed Disinvestment
Board. In the above cases, the head of the government, and the higher echelon of the
bureaucracy played the crucial role. Privatization issue was discussed in the parliament and
the business groups though not directly took part in policy making, provided moral and
encouraging support to the government initiatives. The Privatization Policy1996 was the
specific one compared to previous industrial policies relating to privatization of SOEs in
Bangladesh. Previously the thrust and avenues for privatization were mentioned in different
industrial policies and those were not spelled out in an integrated way. Procedures of
privatization of SOEs were not outlined in previous industrial policies. The Privatization
Policy 1996 very briefly spelled out the institutional frame work, methods of privatization,
guidelines for valuation, tender procedure for sale, the procedure for analysing the tenders,
payments procedure regarding privatization of SOEs (Privatization Board, 1996: 1-8).
It did not specify the goals, general principles to be followed, or the clear guidelines for
monitoring and steps for implementation. Moreover, the policy was framed through an
administrative order and had not been framed under any specific act passed by the
parliament, which was later the case with the Privatization Act 2000.

21. 20
10. The Industrial Policy 1999 and the Privatization Act 2000:
The Industrial Policy 1999 (which renewed government’s pledge for vigorously pursuing the
existing policy of privatization regarding SOEs), the formation of The Privatization
Commission (PC), the enactment of The Privatization Act 2000 and The Privatization
Policy2001 were the most prominent policy measures and efforts during the tenure of Sheikh
Hasina regime (1996-2001). These came into force with the joint action of the head of the
government, the legislature, and the bureaucracy. The legislature played a deciding role
behind the enactment of The Privatization Act 2000. The Privatization Bill 2000 was passed
in the Parliament. The draft of the Privatization Act 2000 and the Privatization Policy 2001
was prepared by the PC in collaboration with the Ministry of Law, Ministry of Industries, and
Ministry of Finance. Government officials of the above organizations played a key role in
framing the drafts of the policy and the act.
While framing the act and the policy the experiences learnt from the workings of the former
PB, augmented by some technical advice from World Bank Technical Assistance Projects
were considered. No feasibility study was conducted before framing of the act and the policy.
However, some workshops and seminars were held under the auspices of the PC where
feedback of different participants, scholars, lawmakers, politicians, labour leaders was
gathered. Experiences of some developed and developing countries like NewZealand,
Malaysia, Sri Lanka, and Pakistan were also considered. In order to get acquainted with the
privatization programme, and to effectively carry out the privatization programme, five teams
comprising of parliament members, workers and political leaders, journalists and government
officials were sent to Malaysia, New Zealand, Pakistan, Srilanka, Uzbekistan, and United
Kingdom. In order to inform the progress on privatization and its associated difficulties, a
meeting with the representatives of press and media was organized on 25 June 2001.
After the passage of the Privatization Act 2000 and the formation of the Privatization Policy
2001 the BNP led four party alliances government later introduced The Industrial Policy
2005.The Industrial Policy 2005 renewed the pledges of the previous industrial policies
particularly the policy of 1999 with more clarity in the areas for private sector development
(Bhuyan, 2005: 16). It is stated in the policy that state investments in the industrial sector will
be treated as residual investment in the future. SOEs would be complimenting to private

22. 21
sector industries and would been courage to compete. The policy states that if the
privatization commission cannot privatize state-owned enterprises as expected, then the
concerned ministry will sell/transfer/lease those enterprises or take any other action in this
regard. While framing the policy, the Ministry of Industries took the lead role with the
assistance of other relevant ministries like the Ministry of Finance, Ministry of Planning.
The business community provided inputs and their view points in different policy papers
which were forwarded to the different ministries of the government regarding framing of the
privatization policy 2001. Workers and employees have generally opposed the privatization
move time to time35. Nevertheless, they significantly influenced the agenda setting and
decision making process of the government initiative and effort. Members of different
Chambers of Commerce and Industries and Labor Unions have raised their voice and concern
over the initiation and persuasion of privatization policy regarding SOEs in Bangladesh
(Humphrey, 1992: 46-92; Kochanek, 1993: 93-99). The media (generally newspapers and
other periodicals) has also influenced the agenda setting and policymaking context by
criticizing or supporting government initiative and efforts in their different newspaper
reports. As for instance, the editorial of a newspaper emphasized on rethinking of the existing
privatization policy. It suggested the government to reduce the losses of SOEs and paying off
the outstanding loan of SOEs by employing honest, efficient, sincere and motivated staff for
SOEs, and to start monitoring mechanisms for ensuring effective running of privatized units.
Another editorial of an important daily newspaper opined that while going for privatization
reform, the government should emphasize not only on downsizing the labour employees of
SOEs but also on the improvement of the quality of management, financing, pricing,
procurement and marketing issues of SOEs which would help reduce the continuous losses of
existing SOEs. The editorial suggested for constituting a high-powered body of experts to
look into all aspects of management of SOEs and privatization.
11. International actors influence in the privatization process:
As we noted earlier, international actors (i.e. donor agencies like the World Bank and the
IMF) have always been influential in the privatization process. Though they did not directly
take part in the agenda setting and policy making but their advocacy and suggestion very
much influenced the policy makers in this regard. One notable feature here is that the role and

23. 22
reactions of the general public, which are the ultimate beneficiary of the privatization policy,
has not been clearly visible regarding privatization of SOEs. Probably public feeling and
expectation have not been organized or the general public has so far been substantially
unaffected by the privatization effort. It is claimed that there have not so much publicity
activities on behalf of the government regarding privatization policy and its implementation
and hence the general public is not aware of the privatization issue. It is opined that public
opinion in reform measures is often neglected in Bangladesh and government has a very low
regard to public opinion (Younis and Mostafa, 2000: 204).
Contrary to the countries of Western Europe and North America, there is absence of holding
opinion polls from the part of the government to gather public opinion on policy issues in
Bangladesh. One dominant reason behind lack of public participation could be that the policy
process is very much affected in developing countries by the political elites and bureaucracy
where the general public has a lesser degree of participation in the policy making process.
This is mainly because of characteristics of the political systems themselves, such as the
remoteness and inaccessibility of the policymaking process to most individuals in developing
countries. However, in western countries like the United States or the Western Europe,
pluralistic approach of policy making and implementation largely prevail and in those
countries public policies are the ultimate outcome of a free competition and interaction of all
groups and segments of the society, whether politicians, bureaucrats, pressure groups or the
general public. In pluralistic societies, power is widely distributed and the political system is
so organized that the policy process is essentially driven by public demands and opinion
(Parsons, 1995: 134).
However, regarding privatization of SOEs, the media have expressed the feeling and
expectation of the general public indifferent times and have acted on behalf of the general
public because media is generally regarded as the agent of general public. Regarding the
media, the former chairman of the Privatization Commission said that, “While formulating
the drafts of the Privatization Act 2000and the Privatization Policy 2001, we considered the
criticism and suggestions that came out from journalists and reporters of important news
papers”.
Another chairman of the PC said that, “We always give importance to the constructive
criticisms and suggestions of news papers on the role of the PC and other broader areas of
privatization as the media generally reflects the view points of the public”.

24. 23
Moreover, the other societal group that is the business group (which can be considered as a
part of the general public) have been indirectly taking part in policy making by influencing
the policymakers through raising their concerns and stakes.
6. Neoliberalism in Health Care System
Health care reform is occurring around the world within the context of globalization,
neoliberalism.The neoliberal philosophy resonates with policy makers and members of the
private sector where national health care policy is currently being reshaped depending on the
neoliberal world’s view. While explaining the basic assumptions of this paradigm, the paper
will illustrate how this world’s view provides justification for the current trend towards
privatizing, weakening and reforming health care systems.
6.1 Positioning Health Care policy within Socialpolicy:
Social policy is a means by which a society protects and enhances human life and dignity
while “Health Care” is often considered one of the three pillars of social policy, along with
education and social welfare/income security. Generally, health care policy is comprised of
government’s decisions affecting cost, delivery, quality, accessibility and evaluation of
programs, traditionally funded through taxation, designed to enhance the physical well-being
of all members of the population, with special focus on children, elders and, in some nations,
aboriginals and women. The health status of a nation can be a reflection of the health care
policy in place. The welfare of the consumer in a health care system relates to issues such as
safety, choice (encompassing cost, availability, accessibility and quality), information,
redress, having a voice, and health education. In a publically funded health care system, the
key delivery mechanisms are hospitals, health care professionals and public expenditures.
Recent restructuring, so called health care reform, implies different delivery mechanisms,
predominately the free-market, for-profit system.

25. 24
6.2 Neoliberalismand Health care policy:
Neoliberalism orthodoxy supports unregulated markets and a minimal welfare state,
government is seen to be limited in its efforts to intervene to temper the effects of market
forces on health and social welfare. This lack of government presence does not bode well for
consumer welfare. The neoliberal agenda of health care reform includes cost cutting for
efficiency, decentralizing to the local or regional levels rather than the national levels and
setting health care up as a private good for sale rather than a public good paid for with tax
money.
Neoliberal Rhetoric has a contribution to the transformation of health care policy for mutual,
public interest not just private interest. Neoliberalism is comprised of three principles:
I. Individualism
II. Free market via privatization and deregulation
III. Decentralization
I. Individualism:
“Individualism regards man—every man—as an independent, sovereign entity who possesses
an inalienable right to his own life, a right derived from his nature as a rational being” (Ayn
Rand, 1961:129).
Neoliberalists eliminate the concept of the public good and the community and replace it with
individual and familial responsibility. Advocates of neoliberalism believe in pressuring the
poorest people in a society to find their own solutions to their lack of health care, education
and social security. The values of neoliberalism are ownership of private property,
competition and an emphasis on individual success measured through endless work and
ostentatious consumption. These values reflect three basic tenets of neoliberalism:
(a) The necessity of free market (where we work and consume),
(b) Individualism, and
(c) The pursuit of narrow self-interest rather than mutual interest, with the assumption
that these three tenets will lead to social good.

26. 25
In neoliberalism, people do not care about the social conditions of production and work (e.g.,
nurses, care givers, doctors) but they do respect private property and they do get their
personal identity through private consumption. Many corporations delivering health care live
to sell, be damned the social or equity consequences, and feel quite justified in doing so.
Neoliberalists see no need for government to implement policy to ensure fair redistribution of
the nation's wealth, thereby narrowing the gap between the haves and have not’s. Any
transfer of monies by the state from one social group to the other (e.g., welfare recipients,
unemployment or health care benefits) are seen to hurt the rules of the market, which say that
only those who are part of the transaction should benefit from the transaction. Consequently,
social policies (including health care policies) are totally meaningless for neoliberalists since
they are seen as a type of discrimination for those who do not get to benefit from them.
Neoliberalists assume that all members of society should be treated equally with no
preferential treatment, their interpretation of social justice. Social policy that targets certain
groups or needs in society (e.g., health care needs) is seen as preferential because only certain
people benefit which is, not all are seen to benefit from the government intervention.
II. Free Marketvia Privatization and Deregulation:
The major aim of neoliberalism is the deregulation and privatization of all public and state-
owned enterprises (often comprising schools, universities, health care, public infrastructures
such as roads, public transportation etc.), in order to ensure sustained economic growth,
innovation, competition, free trade, respect for contracts and ownership of property. It is
believed that the public sector (government) has to be reduced as far as possible to create a
free market. In a free market, all decisions about what to produce, how and using what
resources are made by business not by government. So that the consumers would be spending
their discretionary money on health care in the market place rather than receivinghealth care
from money collected in taxes and siphoned from the free market. This positionprovides
justification for a call for tax cuts to increase discretionary consumer spending on health care
in the private markets - let consumers make their own choices.
Deregulation involves -

27. 26
i. Removing pieces of law that previously enabled government to deliver a service to
the public or
ii. Reworking laws so that more power is given to the private sector.
In the eyes of neoliberalists, markets are far superior to government in the allocation of
scarce resources (the underlying principle of economics).They believe that it is time to stop
government growth at all costs and switch energies to economic growth.
Privatization involves –
i. Arranging for a service to be provided for in the competitive marketplace rather than
government providing the service using tax dollars.
ii. The “private” in privatization refers to the business sector versus “public” which
refers to services paid for with money collected from the public in the form of taxes.
Anything that reduces government regulation that could diminish profits is justified under
neoliberalism including eliminating policies that protect the environment, human rights or
labour rights.
Health care policies do not escape this logic. The neoliberal assumption that private
ownership of formerly public assets (hospitals, clinics, etc.) generates economic growth is a
driving force behind market-oriented health care reform. Neoliberalists fervently believe that
private market mechanisms (supply, demand and price) are more efficient than public ones
because they generate profit and allow the benefits (choice, quality, accessibility) to trickle
down to ordinary citizens.
III.Decentralization:
The principle of decentralization defined as transfer of power arrangements and
accountability systems from one level of government to another.
The principle of Decentralization is supposed to –
i. Bring about more rational and unified health service that caters to local
preferences,
ii. Improve implementation of health programs,
iii. decrease duplication of services,

28. 27
iv. Reduce inequalities between different target audiences,
v. contain costs due to streamlining,
vi. Increase community involvement in health care,
vii. Improve integration of health care activities between public and private
agencies and
viii. Improve coordination of health care services.
Although the neoliberal system advocates transferring central state power, responsibilities
and accountability to provincial, state, municipal or regional governments, the World Bank
concedes that there is little evidence that decentralization in health care actually works. For
instance, devolving central government responsibilities for health care to local levels leads to
more and smaller less accountable, less visible and less accessible health care centers. These
services are often off loaded onto smaller governments which do not have the ability or the
money to offer the same level of health care service.
Because of decentralization, the health care system may be so inaccessible, undependable and
inefficient that, people feel they are making a good consumer choice to buy health services in
the marketplace. This market choice leads to fewer people seeing themselves as citizens who
have right to health care paid for from tax money. Then, the survival of the fittest principle
sets in and people no longer feel it as their responsibility for health care for everyone.
7. Neoliberal Policies in Health care System:
“Neoliberalism seeks to disentangle capital from these constraints” (Harvey, 2005).
Neoliberalism was emerged as a remedy to a massive economic crisis that was started 35
years ago roughly, as the older formula was not working anymore against the capital
accumulation, high rates of unemployment and inflation worldwide. The main points of
neoliberalism include liberating private enterprise from any bonds imposed by the
government, shrinking the role of the state, cutting public expenditure for social services such
as education and healthcare, encouraging foreign direct investment by lowering trade
barriers, eliminating borders and barriers to allow for the full mobility of labour, capital,
goods, and services, rising capital flows, deregulation, decentralization, and privatization
(Martinez & Garcia, 2001; World Bank, 2002).

29. 28
The worldwide implementation process of Health care policies, which are promoted by
international financial institutions such as the World Bank, International Monetary Fund
(IMF), and World Trade Organization (WTO), are generally called as ‘global integration’ or
‘globalization’. The World Bank provides loans and credits for financing infrastructure
projects, reforming of particular sectors of the economy, and structural reforms in health,
education, private sector development, agriculture, and environmental resource management
(World Bank, 2009).
7.1 Neoliberal Transformation of Health Care Policies:
Diagnosis
World Bank prepared a milestone report in 1993, titled ‘Investment in Health’, which
summaries the neoliberal policies in healthcare and guides the neoliberal transformation of
healthcare systems worldwide, including the developed and developing countries (World
Bank, 1993). A new approach was proposed for finance and organization of healthcare
services worldwide, based on the argument that the then-existing various health systems had
failed. According to the report, four major problems of health systems globally were –
i. Misallocation of resources,
ii. Inequity of accessing care,
iii. Inefficiency and
iv. Exploding costs.
It was claimed that government hospitals and clinics are often inefficient, suffering from
highly centralized decision-making, wide fluctuations in allocations, and poor motivation of
workers. Private providers were more technically efficient and offer a service that is
perceived to be of higher quality. Quality of care was also low, patient waiting times were
long and medical consultations were short, misdiagnosis and inappropriate treatment were
common. Also, public sector had suffered from serious shortages of drug and equipment, and
purchasing brand-name pharmaceuticals instead of generic drugs was one of the main reasons
for wasting the money spent on health.

30. 29
Treatment:
As a comprehensive treatment plan to the structural problems diagnosed, defining the costs as
a first priority, and letting the stage to another actor, private sector, were proposed (World
Bank, 1993). According to the report, government policies for improving health had to
change in ways summarized below:
 Cost-effectiveness was presented as the main tool for choosing among possible health
interventions and addressing specific health problems, and disability-adjusted life
years (DALY) as the measure of burden of diseases.
 Governments were recommended to decide their countries’ health priorities and
resource allocation policies according to cost-effectiveness and DALY. Less cost-
effective services such as tertiary care, heart surgery, treatment of highly fatal
cancers, expensive drug therapies for HIV, and intensive care for severely premature
babies should not be paid by government; because “it is hard to justify using
government funds for these medical treatments at the same time that much more cost-
effective services which benefit mainly the poor are not adequately financed” (World
Bank, 1993).
 Only a minimum package of essential services, which only covers five groups
(services to ensure pregnancy-related care, family planning services, tuberculosis
control, control of STDs, and care for the common serious illnesses of young
children), should be paid by the government, while the rest of the health system
becomes self-financed.
 Charging user fees, strengthening the legal and administrative systems for billing
patients and collecting revenues are the proposed ways for ensuring cost-effective
clinical care.
 When well informed, households should buy healthcare with their own money and,
may do this better than governments can do it for them.
 Greater reliance on the private sector to deliver clinical services would raise
efficiency.
 Governments should privatize the healthcare services, by selling the public goods and
services, buying the services from the private sector, and supporting the private sector
with subsidies. Unnecessary legal and administrative barriers private doctors and
pharmacies face need to be removed.

31. 30
 Government financing of public health and essential clinical services would leave the
coverage of remaining clinical services to private finance, usually mediated through
insurance.
 Governments need to promote competition in the financing and delivery of health
services, because it improves quality and drive down costs in the supply of health
services and inputs, particularly drugs, supplies, and equipment. Exposing the public
sector to competition with private suppliers can help to spur such improvements.
 There is also considerable scope for improving the quality and efficiency of
government health services through a combination of decentralization, and
performance-based incentives for managers and clinicians. In the long run,
decentralization can help to increase efficiency.
 On the other hand, government regulation is also crucial, because:
 Private markets alone provide too little of the public goods crucial for
health, such as control of contagious diseases.
 Private markets will not give the poor adequate access to essential clinical
services or the insurance often needed to pay for such services.
 Government action may be needed to compensate for problems generated
by uncertainty and insurance market failure.
 Safety and quality of privately delivered health services should be ensured.
Regarding pharmaceuticals, it was maintained that governments pay too much for drugs of
low efficacy, and drugs and supplies are stolen or go to waste in government warehouses and
hospitals. Competition should have been introduced in the procurement of drugs. National
essential drug lists, consisting of a limited number of inexpensive drugs that address the
important health problems of the population, should also be developed, and used to guide the
selection and procurement of drugs for the public sector. In other words, the other drugs
should not be reimbursed.
Besides, intellectual property rights (IPR) in pharmaceutical sector should be protected by
specific international agreements (e.g. TRIPS), and bilateral, regional and international free
trade agreements (e.g. NAFTA) in order to ensuring the continuing and widespread
availability of pharmaceuticals. Patents, data protection and data exclusivity were defined as

32. 31
the main tools implemented for protecting IPR (World Intellectual Property Organization,
2004; WTO, 1994).
The whole process mentioned above, that can be named as commercialization of healthcare
services, was implemented worldwide in the last 20 years. It is possible to see that changes
are being made by the book: A general health insurance system, which has set up a new tax,
was introduced first, and a minimal service package was defined. Then the health centers for
primary health services were transformed into family physicians’ private practice,
performance–based payment, which is calculated by quantity only, was introduced. Service
organization and planning were deregulated and left to market rules, private sector was
subsidized by public funds intensely, and public institutions were forced to compete with it
by cutting the government support. In the last phase, public hospitals are to be transformed
into autonomous institutions which are administrated by executive boards that include
representatives of trade chamber, and healthcare professionals who are employed by the
government will be contracted workers without job-guarantee.
8. Neoliberalization in Policy Planning of Urban Health Sector in
Bangladesh:
As is the case elsewhere in Asia, urbanization is growing at a rapid pace in Bangladesh. With
the increased urbanization, the basic amenities of life are not expanding for the urbanites.
Rather, the increased populations have been exerting continuous pressure on the existing
limited facilities. The poor, who constitute a large portion (45 per cent) of the urban
population, are the principal victims of this predicament and are significantly disadvantaged
in access to basic services, particularly public health services. Urban governance has yet to be
efficient enough to deal with this urgent issue. The country still lacks adequate policy
direction for urban public health and the management of existing services is also quite
inefficient.
In recent times, the world has been witnessing rapid urbanization; it is even more rapid in
developing countries. According to projections by the United Nations, rapid urbanization of
the Asia-Pacific region will continue and, by 2025,the majority of the region’s population
will live in urban areas (ESCAP 2007,para. 5).

33. 32
In South Asia, the percentage of the population living in urban areas is increasing and, as a
part of this trend, Bangladesh is urbanizing at a rapid pace. Though the country is rural, a
national daily notes that 27 per cent of its population lives in urban areas (“The costs of
urbanization”, The Financial Express (Dhaka),1 July 2007) and the urban population has
been growing at over 3.5 percent annually (CUS, NIPORT and MEASURE Evaluation 2006,
p. 13).
The national census conducted in 2001 showed that, over the previous 10 years, the
population in urban areas of the country had grown by 38 per cent, compared with only 10
percent in rural areas (Bangladesh 2003). Hossain (2003, p. 2) notes that, in 1974,only 7.86
per cent of the total population lived in urban areas. This figure had reached 20.15 per cent by
1991, and it is anticipated that the urban population will reach 36.78 per cent by 2015. A
projection in the National Water Management Plan also shows that, in the next 30 years, the
urban population of Bangladesh will outnumber the rural population and the density of the
already overly dense population will increase tremendously (Bangladesh 2005b, p. 10).In
Bangladesh, rural poverty, river erosion and better employment opportunities in urban areas
are the reasons that an increased number of rural people move to the cities.

34. 33
The additional rural migrants exert tremendous pressure on the already scarce urban utility
services and other amenities of urban life, resulting in a lack of access to basic services
relating to primary health and public health services, such as water, sanitation, waste disposal
and food safety. In Bangladesh, only 72 per cent of the urban population has access to the
water supply (Bangladesh2005b). No urban area except Dhaka (the capital city) has a
conventional sewerage system and only 20 per cent of the population of Dhaka is served by
the sewerage network; only 50 per cent of the solid waste generated in urban areas in
Bangladeshis collected daily, leaving the remaining waste scattered on the streets and causing
environmental pollution (Asian Development Bank 2008).The urban residents least able to
compete for such limited supplies are the poor, who constitute nearly 45 per cent of the urban
population (CARE 2005).
As they do not have the resources to make alternative arrangements to meet their basic needs,
they are almost excluded from access to public health services, including pure water,
sanitation, food safety and waste disposal. In urban areas, the poor mostly live in a damp,
crowded and unhygienic environment. They are highly vulnerable to environmental hazards
and to various infectious and non infectious diseases, while access to primary health services
remains excessively poor.

35. 34
Impoverishment continues due to a lack of serious concern for the urban poor at the national
level. Policy lacks a clear-cut direction regarding urban public health and the urban poor. The
legal basis for public health services in urban areas is provided through various local
ordinances, the execution of which is very poor. Urban local bodies, called city corporations1
and municipalities or pourashavas, are mainly responsible for managing public health
services in urban areas but they are ill-equipped to provide the required services. In addition
to the local bodies, various central Government organizations, private entities and non-
governmental organizations (NGOs) are also engaged in the provision of primary and public
health services. Despite the existence of multifarious service provisions, access to these
services for the urban poor is grossly inadequate due mainly to poor governance.
The discussion is organized into six sections. The first two sections illustrate the nature of the
urban governance of primary and public health services, including water, sanitation, waste
disposal and food safety, through a review of existing policy and relevant legislation and the
institutional arrangements for their implementation. The next two sections focus on the nature
of policy implementation in practice by illustrating the nature of urban poverty in Bangladesh
and the extent of access the urban poor have to primary and public health services. Based on
these illustrations, the penultimate section pinpoints the policy and institutional weaknesses
contributing to the limited access of the urban poor to the existing services. The final section
of the paper concludes the study and puts forward certain recommendations for improving the
situation which have implications for the Asian region at large.
8.1 The PolicyFramework:
This section illustrates the legal provisions of urban health services as articulated in the health
policy document and the relevant legislation. According to the Universal Declaration of
Human Rights, everyone has the right to a standard of living adequate for health and well-
being (United Nations1948, art. 25), and it is always the responsibility of government to
ensure it no matter how daunting the problems of delivery may be (World Bank 2003).
Likewise, the provision of basic health services is a constitutional obligation of the
Government of Bangladesh. Article 15 of the Constitution (Bangladesh 2004) stipulates that
it shall be a fundamental responsibility of the State to ensure the provision of the basic
necessities of life, including food, clothing, shelter, education and medical care. Again, article

36. 35
18 of the Constitution asserts that the State shall raise the level of nutrition of its population
and improve public health as its primary duties.
The National Health Policy of Bangladesh was first adopted in 2000 and has recently (2008)
been revised. It reaffirms the constitutional obligation of providing basic medical services to
people of all strata (article 15) and improving the level of nutrition and public health (article
18). The policy also aims to develop a system to ensure the easy and sustained availability of
health services to the people, especially communities in both rural and urban areas. It aims to
reduce the degree of malnutrition among people, especially children and mothers, and to
implement an effective and integrated programme to improve the nutritional status of all
segments of the population. It aims to undertake programmes to control and prevent
communicable diseases and reduce child and maternal mortality rates to an acceptable level
and to improve overall reproductive health resources and services.
The principle of the policy is to ensure health services for every citizen and the equal
distribution of available resources to solve urgent health-related problems, with a specific
focus on the disadvantaged, the poor and the unemployed. To ensure the effective provision
of health services to all, the policy adopts a primary health care strategy and adheres to the
principle of facilitating and encouraging collaborative efforts between governmental and non-
governmental agencies. NGOs and the private sector will be encouraged to perform a role
complementary to that of the public sector in the light of governmental rules and policies.
The policy also adopts the strategy of integrating the community and local government with
the health service system at all levels.
Thus the priorities of the policy include the following:
• Providing health services for all, particularly the poor and disadvantaged,
• Improving maternal and child health services,
• Ensuring adequate nutrition for mothers and children through targeted programmes,
• Preventing and controlling communicable diseases,
• Engaging in public-private partnerships;

37. 36
To support the execution of these policy statements, legislation has been promulgated from
time to time, but there is no specific legal provision relating to urban health care. Various city
corporation and pourashava ordinances deal with urban health issues. The Pourashava
(Municipality) Ordinance of 1977, the city corporation ordinances of 1982 and 1983 and the
recently revised local government(city corporation and pourashava) ordinances of 2008 have
all clearly assigned urban local government institutions with responsibilities regarding the
provision ofhealth services for their residents (Bangladesh 2008). As per the 2008
ordinances(schedules II and III), the city corporations and the pourashavas will be
responsible for the provision of a wide range of primary and public health services, including
the removal, collection and management of garbage; the prevention of infectious diseases; the
establishment of health centers, maternity hospitals and dispensaries; and water supply,
drainage and sanitation.
The Penal Code of 1860 ensures food safety, stipulating that anyone involved in the
adulteration of food or drink and sales of such products shall be punished by imprisonment
for a term of up to six months, or by a fine of up to1,000 taka,4 or both. The legislation also
prohibits the sale of adulterated drugs.
Later, the Pure Food Ordinance of 1959 was promulgated with provisions for food safety for
the citizens of all urban areas. The Bangladesh Standards and Testing Institution Ordinance
were promulgated in 1985 to ensure food safety. The food policy of Bangladesh also aims to
ensure the food safety of its population. There is no specific regulation for waste management
in Bangladesh.
City corporation and pourashava ordinances provide the legal provisions for waste
management in urban areas. The Bangladesh Environmental Conservation Act of 1995
provides for conservation of the environment, the improvement of environmental standards
and the control and mitigation of environmental pollution.
Under the Act, the Department of Environment was formed under the Ministry of
Environment, with the specific authority and responsibility to conserve the environment
(waste management) and even to accept assistance from law enforcement agencies and other
authorities as and when necessary. The following section describes how public health
services are being managed in urban areas in practice under the guidance of this policy and
legislation:

38. 37
(A) AccessofPoorin Health Services:
Accessibility is determined by the availability and affordability of services. Although the
urban poor can manage most of the basic human services informally ,by themselves, to
survive, health services is the one area that is beyond their control (Riley and others 2007).
Despite the fact that services are provided by various types of providers—public, private and
NGO—access of the poor to these services is quite limited. On the other hand, their earnings
are so low that expenditures for health care consume a negligible amount. The general
tendency of the urban poor is to spend a higher proportion of their income on food and
housing, while lower priority is given to health and education costs. The present section
depicts the extent of the slum poor’s access to primary and public health services in the
capital city of Bangladesh.
Although slums reflect urban poverty in a concentrated manner, all of those living in slums
are not poor. Usually, the per capita income; socio-economic status, particularly the housing
condition; and the possession of durable items inside the homes are popular methods of
identifying the poor. The present study has considered these factors and the upper and lower
poverty lines set by the Household Income and Expenditure Survey (Bangladesh 2005c)
based on the cost of basic needs method as the basic criterion for identifying the poor.
According to the Survey, in 2005, for the Dhaka metropolitan area, the per capita income of
the poor at the lower poverty line was 820.26 taka ($11.83) and that of the poor at the upper
poverty line was952.67 taka ($13.74).
(B) Accessto Public Health Services:
As a concept, public health refers to the broader and comprehensive view of health, as it
means the promotion and protection of the health of the general public. Public health services
are those that are provided to the general public by the government or NGOs to help them
live a healthy life. A pure water supply, hygienic sanitation, waste disposal and food safety
are significant among these services. The urban slums are the worst victims of the inadequate
provision of these services, mainly due to the refusal of the authorities to install
infrastructures in their informal settlements and also because of a high population density in a
limited space.

39. 38
(C) Accessto primary health care:
Bangladesh has achieved impressive progress in some health indicators of the Millennium
Development Goals, but there are gaps in the health conditions between the rich and the poor,
and also between the urban poor and the rural poor. In fact, the deprivation of the urban poor
is worse than that of the rural poor. The Ministry of Health itself admits that the health
indicators for the urban poor are worse than those for the rural poor due to the unavailability
of urban primary. Health care and poor living conditions (Asian Development Bank 2008, p.
181).
Infant and child mortality rates in urban slums are higher than the national average figures. In
urban slums, the infant mortality rate is 63 per 1,000 live births, while itis 29.8 in non-slum
urban areas and the national rate is 52. Similarly, thecontraceptive prevalence rate and the
total fertility rate are higher in slums than inthe non-slum urban areas.
The study finds a high prevalence of many communicable and non-communicable diseases
among the slum dwellers during a period of six month speeding the study. The respondents
reported fever (95 per cent), cough and cold (57 per cent), diarrhoea (53 per cent), skin

40. 39
diseases (28 per cent), intestinal worms (17 per cent), and rheumatic fever (17 per cent) and
jaundice (10 per cent), although they were better protected from six preventable diseases
through the Expanded Programme of Immunization. In the selected slums, nearly universal
immunization coverage was found, as 91 per cent of the respondents reported that their
children had been fully immunized, mainly by the city corporation. Although various types of
curative services existed in the study areas, access of the poor to these services was quite
limited.
The treatment-seeking pattern of the urban poor depends on the severity of the illness. In the
case of minor illnesses, they do not see any doctor. Only in the case of major illnesses do they
opt for medically trained providers. Multiple sources of treatment were found in the study
areas, including: dispensaries/chemist shops, private for-profit and not-for-profit clinics,
public hospitals, NGOs and traditional/religious healers. Among these sources, public
hospitals provided low-cost and low-quality services, while private not-for profit hospitals
provide low-cost but quality treatment to the poor. A World Bank (2007a) study notes that
only 12 per cent of all urban poor report getting medical services from the government
service centers. NGO services are also popular among the poor because they are cheap. In the
selected slums, NGOs under the Urban Primary Health Care Project of the Ministry of Local
Government and Rural Development provided free health cards to the poor, which entitled
them to free medical care for simple ailments and delivery services during childbirth.
When asked about their first point of contact during an illness, 60 percent of the respondents
cited chemist shops as their preferred facility, making them the most popular choice for the
treatment of diseases. The second most popular facilities, preferred by 43 per cent of the
respondents, were private not-for-profit hospitals providing quality services at low cost. The
NGO clinics were slightly preferred (38 per cent) over public hospitals (37 per cent). Some
respondents also sought care from private doctor’s offices (13 per cent) and traditional
healers (10 per cent). In the case of minor illnesses (e.g. fever, cough and cold, stomach pain
and diarrhea), people usually opted for self-treatment by procuring medicine directly from a
dispensary or went to traditional healers. NGO facilities or private low-cost hospitals were
also visited for minor illnesses, but these facilities were usually visited when diseases were
not successfully treated by the previously cited sources.

41. 40
(D) Maternaland child health: care-seeking pattern:
The majority of the households (82.76 per cent) in the selected slums had their last children
delivered at home, assisted by the elderly women in the family or in the neighborhood,
mostly mothers/sisters/mothers-in-law or untrained traditional birth attendants, because it was
cheap. Cost is a key barrier to access of the poor to delivery in an institution. The study found
a good number of women (55.17 per cent) having antenatal visits (1-3) during pregnancy,
while the number of them opting for post-natal care was negligible (13.79 per cent). Family
planning services were usually obtained from four sources: chemist shops, NGO facilities,
domiciliary health workers and the city corporation. Of these sources, the utilization of city
corporation services was the least common (10 per cent), while NGOs were the most popular
source (24 percent) and chemist shops were the second most popular. In urban slums, minor
diseases of children are usually treated by nearby dispensaries/chemist shops or traditional
healers. If they cannot be cured from these sources, then they have to be taken to hospitals or
clinics. Children are usually taken to the hospital with end-stage complications, as the
illiterate poor parents know little about the magnitude, distribution and risk factors of these
illnesses. The consequences of these end-stage treatments are cost escalation and even, in
some cases, the death of the child. Thus, the urban poor are highly impoverished in terms of
having access to public and primary health services. The following section describes how the
various factors of urban governance contribute to this impoverishment.

42. 41
9. POLICY AND INSTITUTIONAL STATUS: CONSTRAINTS ON ACCESS TO
HEALTH SERVICES:
The preceding discussions demonstrate that the Government has a national health policy and,
from time to time, various pieces of legislation relating to health have been promulgated.
Furthermore, various types of public, private or NGO services (both targeted and non-
targeted) exist, but their implications for the poor are quite limited, as various studies show
that the health status indicators of the slum poor are significantly lower than those of the non-
slum urban residents . The present study also depicts a disquieting picture about the access of
the urban poor to primary and public health services. All of these facts signal poor
governance in the provision of public health services for the urban poor. Governance
weaknesses causing inadequate access of the urban poor to primary and public health services
are manifold, but they fit broadly into two categories: policy weaknesses and institutional
weaknesses (in implementing the policy).This section attempts to identify the policy and
institutional weaknesses causing inadequate access of the poor to the services provided.

43. 42
(A) Policyweaknesses:
The policy weaknesses that cause the urban poor to have limited access to health services
include inadequacies in policy content resulting in an inability to address urban health issues
properly. In the health policy arena, public health has not been considered a priority issue. In
the National Health Policy, the term “public health” has been referred to in a vague manner
without any clarification. The policy has a narrow focus on health issues, as it has stressed the
importance of primary health and maternal and child health services to achieve its objective
of improving public health, without adequately emphasizing the improvement of water
supply, sanitation, food safety and solid waste management.
Another weakness of the existing policy is that it lacks a specific policy objective or principle
regarding the health of the urban poor. The policy has a clear bias towards rural areas, as
national statistics indicate that that is where the majority of the poor and disadvantaged
inhabitants of the country live. At the same time, a significant portion of the urban population
is poor, their number is increasing, and they live in more unhygienic conditions than their
rural counterparts. These realities have yet to receive due attention in the national policy. On
the whole, the policy objectives are too broad to have a specific impact on urban health.
In 2008, the health policy was revised by the non-party caretaker Government, paying
attention to the health of the urban poor for the first time. It proposed to adopt an urban health
sector strategy with the help of the Local Government Division of the Ministry of Local
Government in order to ensure primary health, family planning and reproductive health
services for the urban poor. In addition, it also proposed to undertake steps to revise and
update the laws related to food safety and emphasized proper hospital waste management.
The revised policy was left unapproved by the previous Government. Currently, the newly
elected Government has also expressed its intention to revise the health policy soon, the
outcome of which has yet to be seen.
In addition to the health policy document, there are many acts and regulations that provide
the legal basis for public and primary health services in urban areas. However, the majority of
these regulations are outdated and, for some public health issues, there is no regulation at all.
The absence of any act, regulation or guideline regarding waste management creates a serious
vacuum in the case of waste disposal. In the absence of a policy or any specific legislation,

44. 43
the local bodies cannot set the requirements, standards or guidance for developing their waste
management services and infrastructure. The city corporation and pourashava ordinances of
2008 that regulate waste management in urban areas have no specific article regarding the
involvement of NGOs or other community-based organizations in waste management and
their rights to collect revenue to cover the cost of the services provided. Although the
ordinances have provided for the delivery of services by public-private partnerships, in
practice, they have failed to encourage adequate private sector participation, as the rights,
responsibilities and incentives for participation have not been specified (Asian Development
Bank 2008).
(B) Institutional weaknesses:
Besides the policy inadequacies, the lack of implementation of the policy and legislation due
to institutional weaknesses is another aspect of poor governance. As the local bodies are the
key implementing agencies, the effectiveness of public health services is closely influenced
by their leadership quality and managerial capacity. Most of the local government institutions
lack the capacity required to implement the policy, legislation and associated programmes.
The following institutional weaknesses cause the poor to have limited access to public health
services:
1. Local bodies lack of vision:
In Bangladesh, urban local government bodies have yet to have visionary leadership, mainly
because they lack autonomy. Local bodies are not financially independent and they have no
autonomy in decision-making. They are financially dependent on grants from the central
Government, as locally mobilized resources (mainly from property taxes) are often
insufficient even for their basic operation, let alone for public services. Thus, local bodies
depend on the centre for policies, plans, financial resources, human resources and even for
budgetary decisions, which severely restricts the creativity and innovativeness of local
leaders. Moreover, local leaders lack adequate knowledge and proper training to become
visionary with regard to the socio-economic development of their locality. In most cases, the

45. 44
local government functionaries act as agents of the Government to execute its decisions. This
state of local government has been continuing since the country’s independence in 1971, and
the situation remains unchanged. Although the present Government in its election manifesto
pledged to create a strong and autonomous local government by decentralizing power to the
upazila (sub district) level through the formation of elected bodies, since assuming power, it
has been retreating from its promises. Such locally elected bodies have been formed, but they
have been kept non-functional as controversy has arisen over the Government’s decision to
retain central control over local affairs by granting power to the members of the parliament to
interfere in local level development activities, which the elected local leaders are not ready to
accept. To empower the lawmakers to intervene in the functioning of the newly elected
upazila parishads (councils), the parliament also recently passed the Upazila Parishad Act of
2009. According to this law, the parishads are not allowed to send development plans to the
Government without recommendations from the lawmakers (S. Liton, “UpazilaParishad law
goes against SC [Supreme Court] verdict”, Dhaka Daily Star, 19 April 2009). Thus, visionary
local leadership is still far from a reality in Bangladesh.
2. Lack of adequate authority of local bodies:
Although the pourashava sand city corporations are formally autonomous, in reality, their
autonomy is quite limited. The city corporation and pourashava ordinances of 2008 empower
the elected local bodies to plan, implement, operate and maintain public health infrastructure
and services without providing adequate financial and human resources and the required
authority. The World Bank (2007b, p. 109, para. 5.25) explains the lack of authority of local
bodies in this way: “Local autonomy is further stifled by the fact that local governments have
little or no choice on the staffing, nor do they have control over the wages for their
employees. Further, key personnel at the local levels are central Government employees with
limited accountability to residents”. The administrative operations of local bodies, including
the daily implementation and management of their budgets, are also subject to the rule-
making authority of the central Government (2008 Pourashava Ordinance, section 146; 2008
City Corporation Ordinance, section 157). Due to these weaknesses, local bodies fail to
perform their assigned functions properly.

46. 45
3. Inadequate budgetary allocations for local bodies:
According to the city corporation and pourashava ordinances, local bodies are supposed to
spend 8 per cent of their budget on public health and 1 per cent on primary health care.
However, in practice, they spend only 4 per cent of the total budget on public health and less
than 0.5 per cent on primary health care. The reduced expenditure on public health and
primary health care is perhaps due to the lower priority placed on public health in the national
health policy document and partly because local bodies have scarce resources. As mentioned
earlier, local bodies are heavily dependent on central Government grants and the internal
revenues raised are not sufficient to perform their functions. Funds are often disbursed at a
reduced level and the disbursement usually specifies the areas on which funds are to be spent.
At this point, infrastructure development and road maintenance usually take priority over
public and primary health services. The processing of tax returns and the collection of taxes
by local bodies is at least ten times less than is required for the efficient management of
public services (Asian Development Bank 2008). Although holding taxes account for two
thirds of the total tax revenue, they are collected inconsistently, as people have a tendency to
evade taxes and the tax administration is not efficient enough to raise a fixed amount of tax
regularly. Externally funded projects for primary health care in urban areas are also scant.
There is no dedicated project targeted towards public health care, in general, and towards
urban primary health care, in particular, except the Second Urban Primary Health Care
Project. Finally, as a wide variety of functions compete for limited resources, public health
receives a lesser allocation (as a lower priority issue). Usually, a major portion of the revenue
earned is spent for staff salaries and benefits. In fiscal year 2006/07, for instance, 63 per cent
of the revenue earnings of Dhaka City Corporation was spent for employee salaries and
allowances (Asian Development Bank 2008).
4. Inadequate human resources:
The manpower of the local bodies is quite inadequate to perform the functions assigned to
them. A large number of vacancies in both city corporations and pourashavasis common. For
instance, although the Pourashava Ordinance of 1977 has a provision for a slum
improvement officer in pourashavas, the position has yet to be introduced. Although the Pure
Food Ordinance of 1959 provides for the appointment of a public food analyst by the local