AID FOR TRADE EXPERT DIALOGUE BANGKOK, 18 th Nov. 2013 Case study: Bangladesh Presented by: Mohammad Farhad Bangladesh Foreign Trade Institute
Outline of presentation Preparation Stage Implementation Stage Preliminary Results Identified Challenges for Project Implementation or Next Steps
1. Preparation stage Research Team Joined the project at the end of May 2013 No formal research team was formed for Bangladesh
Project Overview Background, rationale and aims/objectives of study - The project at hand is to design a methodology to measure AfT project effectiveness
Overview of Aid for Trade in Bangladesh
Trade and development strategies: The overarching goal of Bangladesh is to take the country forward through achieving the Millennium Development Goals (MDGs) and becoming a middle income country by 2021. The country s development strategies and priorities are laid down in its ten-year national development plan, named the Perspective Plan (PP), 2011-2021. Trade is explicitly highlighted in the country s development priorities. The PP endorses the present trade policy regime, outlined in sub-section 2.1, and underscores that to cross the middle income threshold by 2021, Bangladesh will need to transform its trade regime to the kind seen in high-performing emerging market economies.
Trade and development strategies (contd.) The PP also emphasises that trade should be mainstreamed in the country s national development agenda, and should particularly incorporate Aid for Trade, and recognises that Bangladesh needs to take initiatives for making best use of AfT with a view to building and improving the country s trade capacity and infrastructure so as to benefit from the opportunities created in the multilateral trading system. The PP outlines several strategic approaches meant to get the maximum leverage out of the manufacturing sector and its competitiveness in the global marketplace, including: (a) Export diversification (b) Export restructuring in a globalised economy (c) Working on market access issues.
Trade and development strategies (contd.) Like the PP, the Sixth Five Year Plan (SYFP) (GOB, 2011) also endorses the country s outward-oriented growth and trade strategy, and seeks to further reduce trade barriers as provided by the WTO rules framework and to promote more effective cooperation with the neighbours and also envisages active participation in relevant international and regional/subregional fora. Aid for Trade is considered as a means to facilitate the achievement of these policy objectives.
Flow of Aid for Trade in Bangladesh: In Bangladesh, all types of aid (both grants and loans) are received through the ERD of MoF. Aid received is categorised into 17 sectors, however, there is no separate classification for aid the country receives in the form of AfT, which means that ERD does not have accurate information on the actual aid flows in the category of AfT. However, it has become much easier to track the flows of trade-related aid since the beginning of AfT initaiative, as the OECD-DAC Aid activities database (CRS), introduced in 2007. According to OECD-WTO data, Bangladesh is the second largest recipient of AfT among the LDCs.
Flow of AfT in Bangladesh: Average annual flow during 2006-2009 (in million US$) Category Total (2006-2009)/ Annual average Commitment Disbursement AfT, total Total 137,465.2 98,842.4 Annual average 34,366.3 24,710.6 Total 39,096.2 26,887.12 AfT, LDCs Annual average 9,774.05 6,721.78 % of AfT total 28.44% 27.20% Total 3,669.08 1,756.64 AfT, Bangladesh Annual average 917.27 439.16 % of AfT total 2.67% 1.78% % of AfT LDCs 9.38% 6.53% AfT, trade policy & regulations, Total 4,907.12 3,217.52 total Annual average 1,226.78 804.38 Total 1031.12 584.4 AfT, trade policy & regulations, Annual average 257.78 146.1 LDCs % of trade policy & regulations, total 21.01% 18.16% AfT, trade policy & regulations, Bangladesh AfT, trade facilitation, total AfT, trade facilitation, LDCs AfT, trade facilitation, Bangladesh Source: OECD-WTO Total 114.64 91.4 Annual average 28.66 22.85 % of trade policy & regulations, LDCs 11.12% 15.6% Total 796.64 478.72 Annual average 199.16 119.68 Total - 55.12 Annual average - 13.78 % of trade facilitation, total - 11.51% Total.04.524 Annual average.010.131 % of trade facilitation, LDCs - 3.80%
Flow of AfT in Bangladesh: Growth of AfT disbursement: Global vis-a-vis Bangladesh (2010 constant price) AfT Categories Total AfT (% change) during 2006-11 over 2002-05 Bangladesh s AfT (% change) during 2006-11 over 2002-05 Economic infrastructure Building productive capacities Trade Policies and Regulations Total 77.92 20.00 56.03-44.81 59.54 686.03 66.79-28.68 Source: OECD-DAC CRS database
Sources of project data: Project Selection International and National data sources were explored OECD Creditors Reporting System (CRS), WTO Trade-Related Technical Assistance Database (GTAD), World Bank project data Government database- Completed Project Evaluation Reports 2003-2010; Implementation Monitoring and Evaluation Division (IMED), Ministry of Planning, Government of Bangladesh
List of Completed Projects in Bangladesh under AfT (2003-2011) Year Completed: 2003 Year Initiated Project Name Donor AfT Category Type of Aid 2000 Bangladesh Export Diversification Project (BDXDP) World Bank,/DFID Trade development 2001 Bangladesh and the WTO: Trade Policy, the Changing DFID/Netherl Trade development International Environment and Poverty Reduction ands 1999 Agricultural Services Innovation and Reform Project Building productive capacity Loan Year Completed: 2005 Year Initiated Project Name Donor AfT Category Type of Aid 2001 Bangladesh agro-based industries and technology development project (ATDP II) USAID Building productive capacity Job Opportunities and Business Support (JOBS) project USAID Building productive capacity 2003 Technical Assistance to Privatization Commission ADB Building productive capacity Grant Year Completed: 2006 Year Initiated Project Name Donor AfT Category Type of Aid 2002 Research for the development of sustainable aquaculture practices USAID Building productive capacity / Trade development Grant
List of Completed Projects in Bangladesh under AfT (2003-2011) cont. Year Completed: 2007 Year Initiated Project Name Donor AfT Category Type of Aid 2002 Katalyst (Phase I) (http://www.katalyst.com.bd/) DFID/SDC/ SIDA Building productive capacity/ Trade development 2003 Business development service for private sector GTZ Trade development Grant promotion 2003 Market Access and Trade Facilitation Support for South Asian LDC's through Strengthening Institutional and National Capacities (SMTQ) NORAD & India Trade development Grant Year Completed: 2008 Year Initiated Project Name Donor AfT Category Type of Aid 2003 Developing business services Markets programme in Trade development Bangladesh 2005 Computerization of the Office of the Registrar of Joint SEDF, AusAid Trade Facilitation Grant Stock Companies and Firms (RJSC) 2006 Capacity building of FBCCI JICA Grant 2005 Technical assistance for promoting private sector participation in the energy sector ADB Building productive capacity/ Trade development Grant
List of Completed Projects in Bangladesh under AfT (2003 2011) cont. Year Completed: 2009 Year Initiated Project Name Donor AfT Category Type of Aid 1/1/2005 Bangladesh Trade Support Programme European Union+GoB Trade policies and regulations/trade Development Grant South-Asia Enterprise Development Facility (SEDF) I DFID, ADB, CIDA, EU, Trade Development IFC, the Netherlands, and Norway. 2005 Bangladesh Leather Service Center Italy Building productive capacity 2000 Chittagong Di-Ammonium Phosphate(DAP-1) Project Building productive capacity Grant/ Loan Grant Loan Year Completed: 2010 Year Initiated Project Name Donor AfT Category Type of Aid 1/1/2006 Bangladesh Quality Support Program (BQSP) EU/ NORAD/ UNIDO/ Trade policies and Grant (http://best-bd.org/bqsp/index.php) ITC regulations / Trade development 2004 Trade Related Research and Policy Development CIDA Trade policies and Grant 10/1/2008 Promotion of Social and Environmental Standards in the Industry-PSES (http://www.pses.com) regulations GIZ Trade development Grant
List of Completed Projects in Bangladesh under AfT (2003 2011) cont. Ongoing Year Initiated Project Name Donor AfT Category Type of Aid 12/1/2008 Technical and Vocational Education and Training (TVET) Reform European Union Building productive capacity Grant 3/1/2010 Jute: An eco-friendly alternative for a sustainable future 7/2/1905 Sub-Regional Transport Project Preparatory Work (http://www.adb.org/projects/project.asp?id=44142) Apr 2008-Mar 2013 Katalyst (Phase II) (http://www.katalyst.com.bd/) European Union Building productive capacity / Trade development Grant ADB Economic infrastructure Loan DFID/SDC/CIDA/ EKN Building productive capacity / Trade development 7/1/2005 Better Work and Standards Program-BEST EU/ Building productive capacity / NORAD/UNIDO/GIZ Trade development 2006 Bangladesh Investment Climate Fund EU/ DFID/IFC Trade policies and regulations 2012 Diagnostic Trade Integration Study (DTIS) under EIF EU, JICA, USAID, DFID 2011 BD Private Sector Development World Bank 2008 Poverty Reduction through Improved Competitiveness of the Enterprises (PRICE) 2007 Promotion of Social and Environmental Standards in the Industry-PSES. This is a continuation of PROGRESS. (http://www.pses.co) Trade policies and regulations USAID Building productive capacity / Trade development GIZ Building productive capacity / Trade development Grant Grant Grant Grant Grant
Project Selection The following two projects were selected for evaluation considering the selection criteria based on eight indicators, namely category, objective(s), time-frame, information availability, number donor(s), modality of delivery, private sector s involvement, and willingness to extend cooperation Bangladesh Quality Support Programme (BQSP) South Asia Enterprises Development (SEDF)
Bangladesh Quality Support Programme (BQSP) Bangladesh Quality Support Programme (BQSP) is an EU financed programme with the Government of Bangladesh with additional support from NORAD through UNIDO and ITC. BQSP designed to support growth and poverty reduction through the growth and diversification of exports. BQSP targeted to bring quality standards and quality management in Bangladesh up to an international standard, and to increase awareness of international quality standards in the business community to support the development and diversification of exports. PARTNERS Implementing Organisations United Nations Industrial Development Organization International Trade Centre UNCTAD/WTO in co-operation with Ministry of Industries Ministry of Fisheries and Livestock Ministry of Textiles and Jute
Bangladesh Quality Support Programme (BQSP) Ministry of Commerce Export Promotion Bureau Principal participating public and private sector organisations Ministry of Agriculture Ministry of Science and Information Bangladesh Standards and Testing Institution Consumers Association of Bangladesh Department of Fisheries Bangladesh Frozen Foods Exporters Association Bangladesh Textile Mills Association Bangladesh Garment Manufacturers and Exporters Association Bangladesh Knitwear Manufacturers and Exporters Association The Federation of Bangladesh Chambers of Commerce and Industry Dhaka Chamber of Commerce and Industry Chittagong Chamber of Commerce and Industry Khulna Chamber of Commerce and Industry
Bangladesh Quality Support Programme (BQSP) BENEFICIARIES The immediate beneficiaries of the programme were the co-operating organisations in the public and the private sector. Ultimate beneficiaries were Bangladesh manufacturers and exporters; employees, job seekers and trainees in those industries; Bangladesh consumers; and importers and consumers in the importing countries. The ultimate beneficiaries also include Small and Medium enterprises that are interested in the export markets. Other direct beneficiaries are the Trade Support Institutions (TSIs) such as the chambers of commerce or other professional associations. All tools, methodologies and approaches used in the project are transferred to the Export Promotion Bureau as the counterpart institution for this project.
South Asia Enterprises Development (SEDF) It is really an impossible task based on a limited number of literature review and interviews - to be able to judge which of the two evaluations- (EU and IFCcommissioned evaluations) come nearer to the truth. According to the EU mission itself, its overall negative findings (as compared to that of the IFC-commissioned evaluation) can be partly explained in terms of the different formulations that EU uses compared to the ones that SEDF management use to describe SEDF s role. While SEDF describes its role as providing SMEs with: I. Assistance in facilitating access to finance II. Support for an improved enabling environment III. Access to business services and the development of key sub sectors the European Commission, on the other hand, sees SEDF s role as: I. Increasing access to finance for SMEs II. Improving the business environment for SMEs III. Value addition to SMEs According to the EU evaluators, the latter formulation expects SEDF to achieve something concrete and measurable, i.e. results; whereas the SEDF interpretation is limited to outputs.
3. Preliminary Results Evaluation based on five criteria Relevance : The relevance of the SEDF cannot be questioned. The SME sector is crucial in Bangladesh (as elsewhere) as an engine for employment, income and economic growth. The constraints in Bangladesh have been mentioned earlier, and the programme is clearly addressing most of these. Efficiency : The most important conclusion is that it is very difficult to determine to that extent the programme has or is on its way to achieve its objectives even at the level of enhancing the performance of the SMEs. The attribution problems are inherent in technical assistance programmes. Effectiveness : The cost effectiveness of SEDF has most likely been low if the assessment of limited results from the programme is correct. Impact : Not yet measured Sustainability : The SEDF programme is designed in a way that sustainability is difficult to assess. However, the evaluations indicate an overall change process in the banking and institutional system, which seems self-driven, hence there is sustainability.
4. Conclusion Next Step..
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