One-third of World Bank’s promised allocation is going to six districts
Had the World Bank's development allocation for 40 ongoing projects in Bangladesh been equally distributed in cash, all the poor people of the country would have got $261 per head.
However, the real picture is: Dinajpur, with the second-highest poverty rate, is getting only $53 per poor person whereas Narayanganj, with the lowest number of poor, is receiving $2,791 per head, which is around 53 times higher than Dinajpur's allocation.
This regional disparity in development allocation has been revealed in an analysis showing whether the sectoral distribution of project assistance reflects the real need of the poor as it intends to.
The analysis by the World Bank finds that poorer districts are getting less per-capita development allocation than the richer ones do.
Some districts with poverty as low as 17% (Kushtia) and as high as 63% (Bandarban) receive nearly the same level of portfolio allocations per poor person, reads the analytical report titled "Bangladesh portfolio footprint analysis: Poverty and equity global practice".
Reviewing allocations of $10 billion of assistance in 40 projects involving $12.62 billion under the development donor's IDA (international development assistance), it finds impoverished districts also received less sector-wise allocations for power, energy, education and agricultural development.
It says around 19% of the allocation is spent in three districts – Dhaka, Chattogram and Narayanganj.
The analysis shows in Kishoreganj, where the poverty rate is 53.3%, the per-capita development allocation is $66. But in Habiganj, its neighbouring district with a 13.40% poverty rate, the allocation is five times higher.
According to the report, poverty rate or the total number of the population have not been prioritised in the distribution of the World Bank's promised investment in Bangladesh and the actual demand has not been reflected in the sector-wise distribution.
Experts say the country's overall development activities are centred on several areas, including the capital, Dhaka, and the port city, Chattogram.
They said there is not enough opportunity to implement a development project outside the interests of influential politicians and bureaucrats. The investment of the World Bank could not go beyond this tendency.
Dr Shamsul Alam, member (senior secretary) at the General Economics Division of the Planning Commission, said it is "extremely disappointing" to see such an uneven distribution of investment of an organisation working to alleviate poverty by ensuring growth through job creation.
Stating that World Bank's strategic misrepresentation has come to the fore through the report, he said the agency is following the old strategy of "carrying coal to Newcastle". An organisation's conveying message of ethics and ideology brings no value when it adopts such a strategy, he commented.
As its largest development partner, the government wants the World Bank to provide the most effective support in poverty alleviation, inequality elimination, and job creation.
Mentioning that the World Bank's investment has failed to provide strategic guidance to the government, Shamsul Alam questioned, "How will the goal of poverty alleviation be met with such an investment? What is the purpose of such an investment? "
When asked about the role of the government in fair disbursement of foreign aid, he said as an independent lender, the World Bank is working on its own strategy.
There were some concerns within the government over regional disparities in development and poverty alleviation. To eliminate inequality, the government has expanded the social safety net coverage. The government is giving extra importance to the development of rural infrastructure and primary education, he added.
Dr Ahsan H Mansur, executive director at the Policy Research Institute, told The Business Standard, "Political leaders and bureaucrats work from the processing to the approval and implementation of all kinds of projects. Most projects are taken up under their influence and pressure. As a result, development allocations are concentrated on rich areas.
"It is difficult to ensure a balanced district-wise distribution of allocation in large projects like power plants, roads, rail infrastructure."
The economist said, "More allocations need to be made in areas such as job creation, poverty alleviation and social inclusion."
Ahsan Mansur said, "Although the government played a key role in approving all projects, the World Bank, as a donor agency, had some responsibilities, too."
Zahid Hussain, former lead economist at World Bank's Dhaka office, told The Business Standard that the project taken up for infrastructural development aims at paving the way for development. Such a project can be implemented in any area of the country.
However, the projects for social security and financial inclusion mainly focus on poverty alleviation. The people in the poverty-stricken areas deserve special priority in these projects. And it is a worry if that does not happen, he also said.
The World Bank's report has not specified who are benefitting from the development projects in the infrastructure sector. Even if a footprint report is made on development investment, it can be seen that the people of rich areas are getting more benefits, he added.
People in poor areas are lagging behind in benefiting from World Bank investments owing to a lack of good governance, transparency and accountability and free flow of information.
The economist said projects are formulated and implemented based on the government's priorities. Neither the World Bank nor other donor agencies do so. However, financing agencies can recommend the inclusion of backward areas in any project.
However, alongside increasing surveillance, there is a scope for the World Bank to strengthen and increase information flow to ensure the benefits of poor people from the project.
The Implementation Status and Results (ISR) report prepared for each project of the World Bank contains information on how many dollars have been spent in each sector. What kind of benefits a class of people get from the project is often not there, Zahid Hussain added.
Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue (CPD), said, "The main goal of the World Bank's IDA fund is to eradicate poverty. It is not fair to neglect the poor in investing in this fund.
"The government's overall allocation is centralised on certain areas, including Dhaka and Chattogram. The same situation could be seen in the investment of the World Bank."
The portfolio footprint analysis says the inverse correlation between the poverty rate in Bangladesh and per capita investment of the World Bank in the country is -0.4. This means if the poverty rate increases by 1% in a district, the allocation will reduce by 0.4%.
Among the nine districts which have got the least allocation from the World Bank investment, six are from the top nine poorest districts, including Kurigram, Dinajpur, Magura, Kishoreganj, Jamalpur and Rangpur.
On the other hand, among the rich districts, Narayanganj, Munshiganj and Madaripur are in the first, second and third place respectively on the list of getting allocation from the World Bank fund.
Eight districts which get the highest allocation from the fund are on the list of top nine rich districts.
Injustice in division-wise allocation
The World Bank claimed that in addition to the inequality in district-based allocations, there is also injustice in the distribution of allocations promised by the World Bank at the divisional level.
The report said the poverty rate in Rangpur is 47% which is the highest in the country. The per-capita allocation for the poor in this division is $84.13. With the lowest poverty rate of 16%, Dhaka is getting $521.37 which is more than six times than Rangpur's.
"Some divisions have low poverty rates but large poor populations. The poor face distinct obstacles depending on where they live," the report reads.
Dhaka division is getting more allocation than Rangpur does in terms of the population too. In Rangpur, where the population is 1.76 crore, per person gets $39.71 from the total allocation of $699 million. The Dhaka division has a per capita allocation of $79.66 for 4.02 crore people as the total allocation is $3.20 billion.
According to the report, Rajshahi division with a 29% poverty rate gets $31.99 per capita and $111 per poor person from the fund. Mymensingh with 33% poor receives $52 per capita and $158 per poor person.
In Khulna division where the poverty rate is 28%, the per poor person allocation is $204.98 and per capita allocation $56.23. The per capita and per poor person allocations in Sylhet are $48.62 and $304.91 and in Chattogram $87.55 and $470.24.
Demands not reflected in the sector-wise allocation
In Chuadanga, only 9% of the people are without electricity. In Bandarban, the rate of people without electricity is 72%. But the per capita allocation of the World Bank in this sector in the two districts is only $0.48.
The report said these backward districts are being provided with a poor amount of allocations in power, energy, education, health and agriculture sectors.
In Netrokona and Sunamganj, less than 56% of the people have access to electricity. But the World Bank's per capita allocation in the two districts is less than $5. On the other hand, in Narayanganj and Narsingdi, where almost 100% people have got electricity, the per-capita allocation of the World Bank is more than $150.
According to the report, "Investments in energy have a correlation of 0.36 with the share of households that have access to electricity, and a correlation of 0.11 with households' average number of hours with access to electricity. This indicates that investments in energy are not systematically targeting the districts which are badly in need of electricity."
As the attendance rate of students is less than 80%, there is a demand for more money in the education sector in Gazipur district. But the World Bank is giving about $10 per child. Children in Joypurhat, one of the districts with the highest school attendance, receive more than $20 per head from the World Bank.