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Sixth Five Year Plan of Bangladesh (2011-15)

Presentation byDr. Muhammad G. Sarwar

at

Civil Service College, Dhaka14 June 2011

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Presentation Contents

PRSP: a critique PRSP versus Mid-Term (5 Year) Plan Growth Performance of the

Bangladesh Economy in different Plan periods

Sixth Five Year Plan of Bangladesh 2011 -2015

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PRSP: a critique

PRSP is an externally (WB & IMF) induced document

Theoretical underpinning of PRSP is ‘Washington Consensus’ based liberal market economics where role of state in development is minimal

Expected support for implementation of PRSP is not being fulfilled

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PRSP versus Mid-Term (5 Year) Plan

PRSP is a development strategy document, not a development plan document

In PRSP market mechanism is the driving force of development, where as in 5 Year Plan Governments play crucial role in development

PRSP is stakeholders participation based development framework, where as 5 Year Plan is a technical document based on CGEM, IOM, SAM. etc

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Growth Performance of the Bangladesh Economy in different Plan periods

Plan Periods GDP Growth Targets (%)

Realized Growth (%)

First Five Year Plan (1973-78) 5.5 4.0Two Year Plan (1978-1980) 5.6 3.52nd Five Year Plan (1980-1985) 5.4 3.83rd Five Tear Plan (1985-1990) 5.4 3.8

4th Five Year Plan (1990-1995) 5.0 4.2

5th Five Year Plan (1997-2002) 7.0 5.22003 - 2005 - 5.52006 - 2009 - 5.3

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Sixth FYP as First Phase of Perspective Plan 2010 - 2021

Perspective Plan 2010 -2021 would be implemented in two phased by preparing and implementing two Five Year Plans:

Sixth Five Year Plan 2011 – 2015; and Seventh Five Year Plan 2016 - 2020

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Preparation of Sixth Five Year Plan 2011-15

Technical Framework an input–output table (with base set

at FY 06 or FY 07); a macroeconomic consistency model

of SFYP based on the input-output framework; and

an employment matrix 18 background studies

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Sixth Five Year Plan 2011-15:the concept note

Major sources for setting SFYP development goals and targets:

Constitution of the People’s Republic of Bangladesh (Articles 9–20);

Election Manifesto of the Bangladesh Awami League 2008; and

Agreed global and regional development goals like MDGs and SDGs.

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Sixth Five Year Plan 2011-15: targets

Important targets set for the economy are: Secure and sustain an annual level of GDP growth of 8

percent by 2013 and raise it to 10 percent from 2017; Bring down the percentage of disadvantaged people living

below the poverty line to 15 percent by 2021; Ensure a minimum of 2,122 k. cal/person/day of food to all

poor people and standard nutritional food to at least 85 percent of the population by 2021;

Ensure 100 percent net enrolment at primary level by 2010, provide free tuition up to the degree level by 2013, attain full literacy by 2014, and ensure that Bangladesh is known as a country of educated people with skills in information technology;

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Sixth Five Year Plan 2011-15: targets (contd.)

Achieve self sufficiency in food by 2012; Ensure living accommodation for the entire population

by 2015, supply of pure drinking water for the entire population by 2011, and bring each house under hygienic sanitation by 2013;

Eliminate all kinds of contagious diseases and increase life expectancy of citizens to 70 years by 2021;

Reduce maternal mortality to 1.5 percent, raise the use of birth control methods to 80 percent, and bring down infant mortality to 15 per thousand live births by 2021;

Change the sectoral composition of output with the shares of agriculture, industry, and services standing at 15 percent, 40 percent, and 45 percent respectively in 2021;

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Sixth Five Year Plan 2011-15: targets (contd.)

Reduce underemployment rate to 15 percent along with changing employment shares of agriculture, industry, and services to 30 percent, 25 percent, and 45 percent respectively in 2021;

Generate 7,000 megawatt of electricity by 2013, raise it to 8,000 megawatt in 2015, and make provision to meet the expected demand for power of 20,000 megawatt in 2021.

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Sixth Five Year Plan 2011-15: approach

Inclusive Economic Growth Enhancing Economic Growth Employment Creation Universal Social Protection for the Hardcore Poor Role of Market, State and Community in Economic

Growth Public–Private Partnership (PPP) Regional and Sub-Regional Planning Gender Responsive Plan Technology Base for ‘Digital Bangladesh’

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Sixth Five Year Plan 2011-15: approach (contd.)

Human Resource Development Environment and Climate Change Good Governance, Human Rights and

Democratic Polity Operational Linkage between Planning and

Budgeting Regional / Sub-Regional Economic Integration Least-Cost National Security Implementation and Monitoring

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Sixth Five Year Plan 2011-15: background studies

A Study on Macroeconomic Framework and Financial Sector Development for the Sixth Five Year Plan;

A Review of Fiscal and Other Macro Incentives in the Manufacturing Sector: Implications for Future Policies;

A Study on SMEs Development in Bangladesh with emphasis on Policy Constraints and Financing;

Public-Private Partnership (PPP) Development in Bangladesh and Issues in Privatization of SOEs;

A Study on Power and Energy Development and Management: Benchmark Analysis and Future Policies;

A Study on Crop Agriculture and Agrarian Reforms in Bangladesh: Present Status and Future Options

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Sixth Five Year Plan 2011-15: background studies (contd.)

A Study on Developing Non-Crop Agriculture in Bangladesh: Present Status and Future Development;

A Study on Strategies for Coping with Climate Change, Environment sustainability, and Natural Disasters in Bangladesh;

Alternative Modes of Financing for the Sixth Five Year Plan;

A Study on the National Security in Bangladesh: Strategies and Cost Effectiveness

A Study on Employment and the Labor Marker: A Guide to Employment Policies for the Sixth Five Year Plan;

A Study on Education and HRD: Quality and Management Issues in Bangladesh;

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Sixth Five Year Plan 2011-15: background studies (contd.)

A Study on Universal Social Protection Strategy: Hard Core Poverty and Safety Nets Programs in Bangladesh;

A Study on Health, Nutrition, and Population Planning in Bangladesh;

Emerging Issues in Income Growth of Rural Households, Development of Non-Farm Activities and Safety Net Provisions;

A Study on Export Promotion and External Issues: Present Status and Future Developments;

Towards Digital Bangladesh: Prospects and Constraints in Developing ICT Sector; and

Urbanization Management and Emerging Regional Disparity in Bangladesh: Policies and Strategies for Decentralized Economic Growth.

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Alternative GDP Growth Scenarios in the 6th FYP

Growth Scenarios FY11 FY12 FY13 FY14 FY15 FY11-15 average

Baseline Scenario

6.3 6.4 6.7 6.9 7.1 6.7

Medium Policy Shift Scenario

6.5 6.7 7.0 7.5 8.0 7.2

High Policy Shift Scenario

6.5 7.2 8.0 8.5 9.0 7.8

Alternative GDP Growth Scenarios in the 6th FYP

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Macroeconomic Parameters under alternative Growth Scenarios in 6th FYP

Parameter (in %)

2005-09 Baseline policy

Mid Policy shift

High Policy shift

Investment – GDP ratio

24.5 23.4 - 26.1 25.0 -30.2 25.4 -32.0

Revenue – GDP ratio

10.4 11.4 - 13.2 11.7 -13.3 11.8 – 14.0

Public Exp. – GDP ratio

14.2 16.4 – 18.1 16.6 – 17.6 17.0 – 18.7

Export – GDP ratio 16.2 18.0 – 18.8 18.0 – 19.1 18.3 – 20.3

Import - GDP ratio 21.4 22.7 – 24.3 22.8 – 25.1 23.2 – 27.2

National savings – GDP ratio

29.0 31.7 – 32.0 32.5 – 34.5 33.6 – 35.7

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Sectoral Growth Prospects for the Sixth Plan

Sector 2008-09 FY11-15Baseline

FY11-15 Mid Policy shift

FY11-15 High Policy shift

Agriculture 3.4 3.5 4.1 4.4

Industry 7.2 8.2 8.5 9.1

Services 6.1 7.0 7.4 7.9

GDP 5.9 6.7 7.2 7.8

Sectoral Growth Prospects for the Sixth Plan

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Macroeconomic Balances under Baseline Growth Scenario for SFYP

FY10 FY11 FY12 FY13 FY14 FY15 FY11-15

Real GDP growth (%)

5.8 6.3 6.4 6.7 6.9 7.1 6.7

Inflation (%) 6.5 6.4 6.4 6.4 6.3 6.3 6.4

G. Investment (B. Tk)

1608.3 1816.3 2055.4 2333.7 2681.5 3110.8 2399.5

National Savings (B. Tk)

2268.1 2453.1 2689.2 3013.5 3371.3 3810.9 3067.6

Govt. Revenue (B. Tk)

769.7 886.5 1023.2 1181.1 1363.6 1572.1 1205.3

Govt. Exp. (B. Tk)

1120.2 1272.6 1444.4 1649.9 1885.0 2154.3 1681.2

Export (B. US $) 17.6 19.6 21.9 24.5 27.4 30.9 24.9

Import (B. US $) 22.0 24.7 27.7 31.3 35.5 40.3 31.9

Remittance (B. US $)

10.7 11.8 13.4 15.0 16.5 18.1 15.0

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Macroeconomic Balances under Mid Policy shift Growth Scenario for SFYP

FY10 FY11 FY12 FY13 FY14 FY15 FY11-15

Real GDP growth (%)

5.8 6.5 6.7 7.0 7.5 8.0 7.1

Inflation (%) 6.5 6.4 6.5 6.6 6.9 6.9 6.7

G. Investment (b.tk)

1608.3 1932.6 2303.8 2745.1 3272.5 3895.5 2830.0

National Savings (b. tk)

2268.1 2511.4 2970.6 3355.0 3874.8 4457.6 3433.9

Govt. Revenue (b.tk)

769.7 903.8 1061.7 1247.9 1466.3 1722.6 1280.5

Govt. Exp.(b. tk)

1120.2 1283.9 1474.6 1696.9 1961.1 2270.9 1737.5

Export (b. us$) 17.6 19.8 22.5 25.6 29.5 34.4 26.4

Import (b. us$)

22.0 25.0 28.9 33.3 38.6 45.2 34.2

Remittance (b. us$)

10.7 11.9 13.2 14.9 17.0 18.2 15.1

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Macroeconomic Balances under High Policy shift Growth Scenario for SFYP

FY10 FY11 FY12 FY13 FY14 FY15 FY11-15

Real GDP growth (%)

5.8 6.5 7.2 8.0 8.5 9.0 7.8

Inflation (%) 6.5 6.4 6.5 6.6 6.6 6.6 6.5

G. Investment (b. tk)

1608.3 1959.8 2475.0 2991.2 3542.2 4188.1 3031.3

National Savings (b. tk)

2268.1 2592.6 3106.8 3568.0 4110.0 4679.9 3611.5

Govt. Revenue (b. tk)

769.7 913.1 1095.2 1312.4 1558.1 1839.8 1343.7

Govt. Exp. (b. tk)

1120.2 1313.6 1537.5 1798.2 2098.8 2448.2 1839.3

Export (b. us$) 17.6 20.1 23.0 26.7 31.3 36.9 27.6

Import (b. us$) 22.0 25.5 29.9 35.3 41.7 49.6 36.4

Remittance (b. us$)

10.7 12.1 14.2 16.5 18.8 22.7 16.9

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Areas of Improvement for higher Growth during SFYP

Private sector will play the prime role; Public investment and policies shall create

necessary investment climate in areas like: Energy supply including electricity and gas; Infrastructure including roads, railways,

embankment and dykes; Telecommunication; Ports; Legal and administrative system including property

rights; Project implementation capacity; Governance including law and order; Market incentives; and Sound monetary policy and public finance

management

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Thanks