Cablegate: Bangladesh Donors Conference

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 DHAKA 005698

SIPDIS

FOR SA AND ANE-MARK WARD/MICHAEL METZLER

E.O. 12958: N/A
TAGS: EAID PREL PGOV ECON BG
SUBJECT: BANGLADESH DONORS CONFERENCE

1. Summary. The BDG and donor community, aka Local
Consultative Group (LCG), met under the chair of the BDG
Minister of Finance on November 15-17. This was the annual
development forum meeting with three key changes. First, the
BDG chaired whereas in the pass they co-chaired with the
World Bank. Second, the focus was the country's recently
approved poverty reduction strategy report (PRSP). And
third, for the first time, the USG was elected the LCG chair
and coordinated the donor community inputs. The BDG renamed
the forum to PRS Implementation Forum (PIFM) and set five
agenda topics: a) Implementation of the PRSP Agenda for the
next three years; b) Social Development, Empowering the Poor
and the Vulnerable; c) Enhancing Competitiveness for
Promoting Trade, Investment and Private Sector Development;
d) Promoting Good Governance; and e) Aid Harmonization and
Aid Effectiveness. Keynote papers were prepared for each
session by BDG officials with response from LCG-selected
members. In the end, there were 11 commitments and
timeframes agreed to for the next 12 month period, and an
agreement these meetings will occur annually. The full
account of the events, including speeches, session papers,
and agreements, is located on the LCG website at
www.lcgbangladesh.org in an area in the lower center of the
site under PRS Implementation Forum 15-17 November. End
Summary.

2. For the first time in Bangladesh, the BDG chaired the
annual donor development forum dialogue. This was decided
earlier this year when the BDG felt they were now capable of
managing the annual dialogue. The External Resources
Division (ERD) of the Ministry of Finance was the lead
agency, interacting with the LCG. Also, in mid-October, the
National Economic Council, chaired by the Prime Minister,
approved their PRSP, setting the way forward for their
mid-term vision on poverty reduction. The agenda focused on
the PRSP, with an emphasis on implementation and addressing
constraints. The BDG keynote speakers were selected for
their familiarity with the subject matter and in
consultation. LCG members were selected to be the lead
respondent.

3. PIFM began with the Prime Minister, Minister of Finance,
Vice President World Bank (WB), Director, South Asia Asian
Development Bank (ADB), and Vice President, International
Monetary Fund (IMF). Most speakers focused on the leadership
role the BDG has taken in arranging and conducting the forum,
with the donor group highlighting the need to focus on
implementation, addressing poor performance in governance,
and extremism. At the inaugural dinner, the LCG Chair, USAID
Mission Director, tabled the LCG statement following the
themes of the earlier donor speeches.

4. November 16 and 17 were devoted to discussions on the five
agenda items. The LCG prepared presentations, identified
five points to be tabled, and indicated appropriate actions
to be taken to deal with these points. From this list of
five, three were selected for in-depth presentations by LCG
members.

5. The topics selected ranged from the need to have a more
rigorous monitoring and evaluation plan in place, and since
the donors are being asked to align programs with the PRSP,
then this should be a joint effort. The need to link budgets
with the implementation plans in the PRSP to ensure
sufficient resources allocated to priority areas. Extend the
medium term budget format (MTBF) for the resource request and
allocation that was piloted in four ministries to six more
next budget cycle and then to all ministries. Work towards
stronger local governments with increased resource allocating
and training to improve local government capacity to
accountably manage resources. Staff regulatory commissions,
energy, telecom, and security and exchange, and move to being
fully operational in the near term. Implement the Public
Procurement Regulations after being passed into law.
Identify areas to initiate anti-corruption interventions,
collect information on existing conditions and lay out
approaches to address.

6. The BDG and LCG members agreed to 11 action items.
Following is a summary of the agreements: a) implementation
plan and joint committee established by December 2005; b) PRS
will guide budget allocation process; c) MTBF extended six
more ministries; d) local government block grants increased;
e) fill vacant commissioner positions for energy,
telecommunications and security commissions; f) implement
procurement law; g) link annual development plan to PRSP; h)
build capacity of bureau of statistics; i) initiate civil
service reform; j) review SME policies; and k) review policy
on empowerment and development of women.

7. Feedback on the forum was positive and the outcome of 11
agreements exceeded expectations. Considering the upcoming
elections, LCG members felt prospects for many agreements
were limited and expected four or five at the most. The BDG
did not react negatively with LCG tabled concerns such as
rise of extremism, detrimental impact of corruption, setbacks
from political gridlock and increased confrontational nature
of politics. LCG remains cautious on the extent to which the
BDG will fulfill its commitments and are prepared to push on
a number of key issue areas. While the BDG agreed to and did
open up participation in the meeting to civil society and the
private sector, invitations were limited to only a few, from
those invited attendance was dismal, and participation was
close to non-existent. LCG members will continue to press
for broad participation.
CHAMMAS

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