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Bangladesh Case Study: Progress of MDG Implementation and Canada’s Contribution Rashed Al Mahmud Titumir and Jakir Hossain

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Page 1: Bangladesh Case Study: Progress of MDG Implementation and ... · Bangladesh Case Study: Progress of MDG Implementation and Canada’s Contribution 119 Introduction B angladesh, like

Bangladesh Case

Study: Progress of

MDG Implementation

and Canada’s

Contribution

Rashed Al Mahmud Titumir

and Jakir Hossain

Page 2: Bangladesh Case Study: Progress of MDG Implementation and ... · Bangladesh Case Study: Progress of MDG Implementation and Canada’s Contribution 119 Introduction B angladesh, like
Page 3: Bangladesh Case Study: Progress of MDG Implementation and ... · Bangladesh Case Study: Progress of MDG Implementation and Canada’s Contribution 119 Introduction B angladesh, like

Bangladesh Case Study: Progress of MDG Implementation and Canada’s Contribution

119

Introduction

Bangladesh, like most of theworld, is a signatory to theUN Millennium Declaration

(MD),1 adopted at the largest-evergathering of Heads of State, whichset eight specific goals with 18 spe-cific targets. The Declarationasserts a vision for the 21st centuryproclaiming fundamental values ofequality, freedom, solidarity, toler-ance, respect for nature, andshared responsibility. Commit-ments were made in the areas ofpeace, security and disarmament;development and poverty eradica-tion; environment; human rights,democracy and good governance;protecting the vulnerable; meetingthe special needs of Africa; andstrengthening the United Nations.

The roadmap for implementationof the commitments articulatedthrough the eight MillenniumDevelopment Goals (MDGs) to beachieved by 2015 captures meas-urable areas of development thatdemonstrate progress toward spe-cific targets under each goal.

Bangladesh has developed somenational targets in consonancewith the global MDGs. Four years

after the declaration of theMDGs, it is timely to take stock ofthe progress of their implementa-tion. This case study onBangladesh attempts to con-tribute to this stocktaking exer-cise, by focusing on progress intwo sectors, namely educationand health, and offers a prelimi-nary assessment of the contribu-tion of a bilateral donor—theCanadian InternationalDevelopment Agency (CIDA)—toward advancing the MDGs.

Implementing the MDGs in BangladeshThe government’sproclaimed MDG achievementsThe Government of Bangladesh(GoB) is quite hopeful of realizinga majority of the goals (if not all)by the stipulated deadline. Areview of MDG progress, jointlyprepared by the Government ofBangladesh and the UN countryteam in Bangladesh, suggests thatBangladesh is “on track” on amajority of the targets such asinfant mortality, child mortality,

Bangladesh Case Study:

Progress of MDG Implementation

and Canada’s ContributionRashed Al Mahmud Titumir and Jakir Hossain

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expansion of primary and secondary edu-cation, reducing gender disparity, anderadication of hunger in the form ofchild malnutrition (Table 1). TheBangladesh Poverty Reduction StrategyPaper (PRSP) holds that the rate of actualprogress achieved by the country during1990-2000 is consistent or even higherthan the pace of annual progressrequired for achieving the MDGsby 2015.

To achieve MDG 1 (eradicate extremepoverty and hunger), Bangladesh’s targetis to reduce the proportion of populationwith an income of less than US$1 (PPP) aday from 50 per cent in 2000 to 29 percent, and the proportion of people inextreme poverty from 20 per cent in2000 to 14 per cent by 2015. The officialview suggests that the poverty head-count ratio declined by only 1 instead ofthe required 2 percentage points perannum, from 58.8 per cent to 49.6 percent during the nine years between1991-92 and 2000.

The MDG 2 (achieve universal primaryeducation) targets are claimed to be ontrack, showing impressive achievementsin terms of net enrolment in primaryeducation (73.7 per cent in 1992 to82.7 per cent in 2002) and primary edu-cation completion (42.5 per cent in 1992to 80.6 per cent in 2002). It is claimedthat the gender gap in enrolment at theprimary and secondary levels (MDG 3—promote gender equality and empowerwomen) has been virtually eliminated.Official statistics suggests the ratio of girlsto boys in primary and secondary schoolsare 48:52 and 52:48 respectively, closeto the target of 50:50 by 2015.

However, a recent World Bank studyasserts that even with interventionmechanisms like the reduction of

student:teacher ratios and increasedcoverage of the primary educationstipend program, net primary enrolmentwould not be able to cross the 90 percent benchmark and completion ratewould stay below 85 per cent by 2015.2

As regards MDG 4 (reduce child mortali-ty), the official statistics shows an appre-ciable drop in under-five death ratesfrom 151 to 76 per thousand live birthsduring 1990 to 2002.

Similarly, infant mortality has fallen from94 per thousand live births in 1990 to56 per thousand in 2002. The maternalmortality ratio (MDG 5—improvematernal health) is claimed to havedeclined from 570 to 320-400 deathsper hundred thousand live births from1990 to 2002.

The official report recognizes that one ofthe major issues that may hamperprogress in reducing poverty relates tonon-achievement of growth in real percapita and a plateau in the decline inpopulation growth. Real per capitagrowth of 4 to 5 per cent per annum isrequired to achieve the income povertytarget, to be achieved by an overall realincome growth rate of 6 to 7 per centper annum on a sustained basis alongwith population growth of around1.5 per cent. The official status reporteven considers that the recent levelingoff in total fertility rates is a cause forconcern, in that they may not only affectthe reduction of income poverty, butmay also act as a stumbling block in theachievement of other MDGs.

The official report claims improvementsin health outcomes, particularly in thereduction in maternal mortality rates.The report, however, mentions theconcern that child and infant mortality

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121

Table 1

MDG Targets and Status in Bangladesh

Base Current TargetBangladesh Targets Indicators Yeara Status 2015

Goal 1 Eradicate Extreme Poverty and Hunger

Reduce proportion of people • Proportion of population below 58.8% 49.6% 29.4%below US$1 per day US$1 per day (PPP-values)

• Poverty gap ratio 17.2 12.9

Reduce proportion of people in • Proportion of people in 28% 20% 14%extreme poverty from 28% in extreme poverty1991 to 14% percent by 2015 • Share of poorest quintile in 9%

national consumption• Prevention of underweight

children (under five years) 67% 51% 33.5%

Goal 2 Achieve Universal Primary Education

Increase net enrolment from • Net enrolment rate in primary 73.7% 82.7% 100%73.7% in 1992 to 100% by 2015 education

Reduce primary school drop • Proportion of pupils starting 42.5% 80.6% 100%out rates from 38% in 1994 Grade 1 who reach Grade 5to 0% by 2015 • Adult Literacy Rate 36.9% 38.8%

Goal 3 Promote Gender Equality and Empower Women

Eliminate gender disparity in • Ratio of girls to boys in primary and secondary education —primary 55:45 48:52 49:51preferably by 2005 and in all levels —secondary 34:66 52:48 50:50of education no latter than 2015 —tertiary education 25:75 36:64 50:50

• Ratio of literate females to males 42:65 55:71 100:10of 20-24 years old

• Share of women in wage 22% 0employment in the non-agriculture sector

• Proportion of seats held by 2%women in national parliament

Goal 4 Reduce Child Mortality

Reduce under five mortality rate from • Under five mortality rate 151 82 50151 deaths per thousand live births (deaths per 1000 live births)in 1990 to 50 by 2015 • Infant mortality rate 94 56 31

(deaths per 1000 live births)• Proportion of 1-year-old children 54% 69% 100%

immunized against measles

Goal 5 Improve Maternal Health

Reduce maternal mortality • Maternal mortality ratio 570 320-400 143Increase the proportion of births • Proportion of births attended byattended by skilled health personnel skilled health personnel 5% 12% 50% by

2010Reduce TFR to 2.2 by 2010 • Total fertility rate 3.3 3.3 2.2 by

2010Reduce maternal malnutrition • Proportion of mothers who are

malnourished 45% <20%Increase by the median age of girls • Legally stipulated age at girl’s firstat first marriage marriage 18 years 20 yearsEliminate violence against women • Proportion of maternal deaths caused

by violence 14% 0%

Note: a The base year varies and data refers to 1991-92 for Goal 1, 1992 for Goals 2 and 3, 1990 for Goals 4 and 5.

Source: Government of Bangladesh and United Nations, 2005.

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rates remain high and are unlikely toreach the MDG targets in 2015 unlessprogress is accelerated. According to thereport, Bangladesh has already reachedthe targets in MDG 7 (ensure environ-mental sustainability) related to water,but access to improved sanitationremains low, though it has increasedduring the 1990s.

Despite showcasing such progress in thesocial sectors, the statistics provided inthe report suggest two emergingchallenges that may impede the steadyprogress toward realizing the goals. First,there exists a very high degree of socialinequality, which cuts across all key socialtargets. Second, the rich-poor divide isstriking and shows a secular upwardtrend; particularly worrying is the gapbetween the poorest and the rest ofsociety. For example, the differencesbetween the poorest and the richest arein the range of 68-93 per cent in thecase of infant and child mortality rates;46 per cent and 196 per cent in the caseof primary enrolment and secondaryenrolment respectively; a range of 64-104 per cent in the case of childmalnutrition; a range of 72-89 per centin the case of maternal malnutrition(measured by the “height” yardstick), arange of 32-50 per cent in the case ofmaternal malnutrition (measured by“body-mass” index) and 71 per cent inthe case of total fertility rate. The spatialvariability of the Human Poverty Index(HPI) estimated for districts hasdecreased from 13.16 to 11.98 between1995 and 2000, indicating modestimprovements in spatial inequality. Ahigh level of inequality in spatial dimen-sions and socio-economic categoriesneeds to be seen as a factor likely tocause divergence in the progress in socialMDGs (Goals 2 to 5) in the coming

decade. However, the government isoptimistic that, based on historicaltrends, it will attain most of the MDGs atthe aggregate level by 2015.3

Status of MDG implementation:A closer look at the educationand health sectors

Education

The statistics on primary educationalenrolment and literacy rates are a matterof serious debate: a number of sourcesprovide conflicting numbers. There hasbeen some progress in enrolment, butthe official claim of 82.7 per cent4 hasbeen challenged by the nation-widesurveys5 which put the figure at around80 per cent.

Enrolment has been offset by a high rateof dropouts (33 per cent in 2004)though this was below the 38 per centrecorded in 1994.6 The overall literacyrate of 41.4 per cent found in a nation-wide survey7 is considerably lower thanthe officially announced statistic(49.6 per cent). Adult literacy rates alsoexhibit gender and spatial disparity.Despite a steady increase in women’sliteracy since 1990 as a result of somespecific government and non-govern-ment interventions, rates recorded formales remain higher (47.6 per cent) thanfor females (35.6 per cent). The numberof literate people in rural areas (37.2 percent) is far below that of the urban areas(63.6 per cent). While the motivationbehind focusing on primary education inthe MDGs arguably emerges from theconsideration of improving efficiency anddistribution, Bangladesh’s educationsystem appears to have remained elitistand exclusive in nature.8

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123

Public Expenditure in Primary Education per Pupil as % of GDP per capita

Figure 2

9.129.128.938.93

7.397.397.737.73

6.966.96 7.047.04

7.747.74

8.238.237.897.89

8.428.42

7.097.09

6.506.50

7.007.00

7.507.50

8.008.00

8.508.50

9.009.00

9.509.50

1993-941993-94 1994-951994-95 1995-961995-96 1996-971996-97 1997-981997-98 1998-991998-99 1999-001999-00 2000-012000-01 2001-022001-02 2002-032002-03 2003-042003-04

YearYear

Public Expenditure on PrimaryPublic Expenditure on PrimaryEducation per pupil as % of GDPEducation per pupil as % of GDPper capita per capita

Source: Ministry of Finance, Government of Bangladesh, National Budget, various years.

I thi

nk t

here

’s t

ext

here

1.09

1.13

1.05

1.00 0.98 0.99

0.91 0.92

0.95 0.94

0.81

0.75

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04

(P)Year

Exp

endi

ture

s

Source: Ministry of Finance, Government of Bangladesh, National Budget, various years.

Total Public Expenditure in Primary Education as % of GDP

Figure 1

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The quality of education is a major issueof concern.9. On average, students take6.6 years to complete the five yearprimary school cycle. Only 1.6 per centof the primary cycle completersachieved all the cognitive competenciesprescribed by the national curriculum.Poor attendance rates (61 per centvarying between gender, rural-urbanareas, and administrative divisions),insufficient contact hours (120 minutesfor grades I-II and 240 minutes forgrades III-V) and an unfavourablestudent-teacher ratio (59:1), are alsoexamples of concerns relating to quality.

Another area of concern is the down-ward trend of public expenditure inprimary education. Total public expendi-ture in primary education as a percent-age of gross domestic product (GDP) fellsteadily from 1.09 per cent in 1993-94 toapproximately 0.81 per cent in 2003-04(see Figure 1).

Public expenditure in primary educationper pupil as a percentage of grossdomestic product (GDP) per capita fellfrom 9.12 per cent in 1993-94 to7.09 per cent in 2003-04. In 1993-94,per capita GDP was Tk (taka)11,505 andexpenditure per pupil was Tk1,050 . In2003-04, per capita GDP was Tk24,598and expenditure per pupil was Tk1,743(Figure 2).

Total spending in primary education overthe years increased in absolute terms,though as a percentage of the totaleducation allocation has fallen from53.48 per cent in 1993-94 to 39.99 percent in 2003-04. In 1993-94, totalallocation in primary education wasTk14,764.70 million and in 2003-04, itwas Tk 27,020 million (Figure 3). Withinthe Bangladesh national budget, theAnnual Development Program (ADP)allocation in primary education, though

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Primary Education Allocation as % of Total Education Budget

Figure 3

48.88

46.89

45.56

53.48

49.39

43.7842.72

42.92

44.54

43.84

39.99

38.00

40.00

42.00

44.00

46.00

48.00

50.00

52.00

54.00

56.00

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04

Year

Prim

ary

Educ

atio

n Re

venu

e A

lloca

tion

Source: Ministry of Finance, Government of Bangladesh, National Budget, various years.

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increased in absolute term, as a percent-age of the total ADP in education hasalso fallen from 65.81 per cent in 1993-94 to 46.96 per cent in 2003-04. In1993-94, total ADP allocation in primaryeducation was Tk6,285.90 million and in2003-04 it was Tk10,720 million.

Health

The health sector in Bangladesh hasundergone reforms, primarily initiated bya Health and Population Sector Program(HPSP) which ended in December 2003.The reform program is consistent withthe prescriptions enshrined in the WorldBank’s 1993 World Development Report,Investing in Health. The Bank advocates arestructuring of health systems in linewith its neo-liberal, free-market ideology.It recommends a combination of privati-zation, cost-recovery schemes, and othermeasures that tend to place health careout of reach of the poor. Arguably, withthe World Bank’s involvement in healthcare, comprehensive primary health care(PHC) has effectively been shelved.

Alternative approaches to healthfinancing, another common componentof reform programs, have also promotedprivatization, which instead of serving asan instrument for change has frequentlybecome an end in itself. Growth inprivate health care has often resulted inshifting costs to households by increasingcost sharing; in priority-setting decisionsabout the choice of services (or packagesof care) to be publicly funded; and in thecreation of competing private insuranceschemes and informal payment mecha-nisms. Because of differential ability topay, all these new financing approachesundermine equity-oriented health poli-cies. This suggests that privatization isbased on ideological commitmentsrather than sound evidence of itseffectiveness.

Donors prescribe that the new Health,Nutrition and Population SectorProgramme (HNPSP) must consider therole of the Ministry of Health and FamilyWelfare (MOHFW) beyond service provi-sion. Donors advise that the HNPSP willneed to specify how MOHFW cancommission services from the privatesector and NGO providers, and mightbetter regulate provision by the privatesector and introduce user fees. Butevidence shows that the public sectorhas always been the prime serviceprovider and that the poor also benefitfrom the sector.

The benefit incidence analysis (BIA)conducted by the MOHFW reveals thatbenefits to the poorest income quintileexceed those to the richest, suggestingthat attendance at public health facilitiesin the country are generally pro-poor.The survey results suggest that use ofservices at the upazila (sub-district) leveland below is dominated by the bottomtwo quintiles. The poorest 40 per cent ofthe population accounts for 53 per centof use at these levels.10 The exit surveyconducted as background to the 1999-2000 Public Health Expenditure Reviewby the Health Economics Unit of theMOHFW11 also found that utilization ofpublic primary care facilities, as reflectedin attendance rates, suggested that thelower income groups primarily use theseservices. The bottom quintile accountsfor more than 35 per cent of visits whilethe richest group accounts for only14 per cent. However, the process ofaccessing care was found inequitable,because the poor were found to waitlonger and pay more for services.

The definition and control of health careby medical professionals has resulted inits commodification, its configuration asa product, which can be sold orexchanged for profit. The commodity

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nature of health care has resulted in anoverwhelming emphasis on the curativeaspects and a stunting of the preventiveand especially the promotional aspects,since the former are more likely to bepurchased in the face of acute illness andthe latter are perceived as less neededdue to the less direct and less immediateimpact on current health problems. Thedominance of the curative aspects hasbeen reinforced by a number of factors.These include, most importantly, thehealth care industry, the education ofhealth professionals, and new and influ-ential approaches to developing cost-effective health interventions.

The second national health accounts sur-vey supports the above observation. Thesurvey reveals that 70 per cent of healthexpenditure in Bangladesh is out ofpocket, with 50 per cent being spent ondrugs and pharmaceuticals.

The giant Health and Population SectorProgram (HPSP) has fallen far short ofachieving its major goals, including curbson high rates of maternal and child mor-tality, in its five-year lifespan. Abatingmalnutrition also took centre stage in theTk114,190 (60Tk= US$1) program whichthe health ministry launched in July1998. More than 95 per cent of birthstake place at home aided only byuntrained attendants. Safe delivery, espe-cially in rural areas, is still far from reality.Under-five child mortality rates alsoremain very high, mostly from respiratorytract infections, diarrhoea and pneumo-nia. According to the health ministry, 50per cent of couples do not practice fami-ly planning in Bangladesh. Use of contra-ceptive pills is confined to 23 per cent,contraceptive injections to 7.2 per cent,traditional methods 10.3 per cent, intra-uterine device (IUD) 1.2 per cent,

Norplant 0.5 per cent, and sterilization6.7 per cent. Extending essential servicepackage (ESP) to the poor and the mostvulnerable through some 11,000 com-munity clinics (CCs) was another majorcomponent of the program. Over 85 percent of CCs, built at a cost of Tk 2,790million, have remained unused for thelast three years allegedly for being con-structed during the rule of the previousgovernment. The health ministrylaunched an alternative project at a costof Tk 2,800 milllion. Forty new structureshave been constructed under the newscheme, Strengthening of Existing UnionHealth and Family Welfare Centres,which plans to set up 738 clinics, makinga serious drain on public resources.

An examination of macro allocation ofresource flows to the health sectorincluding the inter-sectoral distribution ofthese resources shows that generaladministration12 dominates the budgetallocation while defence, education, andsports move together in parallel. Sectoralbudget allocation to health and popula-tion has increased from 4.47 per cent in1990-91 to a peak of 6.05 per cent in1996-97, then, declining to around 5.5per cent after 1997-98. During the latterpart of the 1990s, revenue spending inthe health sector slipped into seventhposition from sixth (Figure 4).

The second national health accounts sur-vey demonstrates that overall investmentin health remains low, at less thanUS$12 per capita, with less than US$5coming from the public purse.Government is providing a decreasingproportion of overall health expenditure;its overall expenditure falls far short ofthe levels required to provide compre-hensive health services.

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The prevalence of underweight children,despite some positive changes, still pres-ents a major threat to reducing the num-ber of hungry people. The proportion ofmoderately underweight children underthe age of five years now stands at 48per cent below the 56 per cent recordedduring the period 1997-2000 (Table 2).Moreover, the level in Bangladeshremains among the highest in the world,and more severe than that of most otherdeveloping countries, including the sub-Saharan African nations. Bangladesh has16 per cent more underweight childrenthan 16 other Asian countries with thesame per capita GDP as Bangladesh.13

Child mortality is much higher (95 percent) for the poorest quintile than therichest. The proportion of skilled atten-

dants for child delivery is below 1.5 percent for the poorest households, com-pared with 22 per cent for the richesthouseholds: the equity gap is one of thehighest in the world. Large gender dis-parities continue to exist.

Challenges for MDGs realizationPoverty remains at unacceptably highlevels in Bangladesh. The level of humandevelopment is very low and the countryranks 132 on the Human DevelopmentIndex (HDI). Poverty has remains so per-vasive that the country entered the newmillennium with the same number ofpeople in 2001 living in poverty—62 mil-lion—as in 1991-92.

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Figure 4

Sectoral Share o in Revenue Budget, 1990/91 - 1999/2000

0%

20%

40%

60%

80%

100%

1990-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-2000 2000-01 2001-02

Year

Administration Defence Education andSport

Health andPop

Source: Titumir et al., 2002

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Growth, but lacking investment14

Bangladesh’s economy has expandedover the last two decades at an averagerate of 4 per cent.15 There has been amodest poverty reduction rate of around1 percentage point a year since the early1990s.

The reformers, mainly the World Bank,have fervently attributed the modestexpansion to the reforms initiated underthe structural adjustment programs.16

While the World Bank has extolledBangladesh’s move from stability togrowth, others are more sceptical. Theverdict appears to be relatively consensu-al so far as stability is concerned, but ismixed, at best, on growth. The sceptics

point out that investment and growthhave been inadequate and below whatcould be achieved.

Based on a log linear trend model, theeconomy supported a long-term growthrate of 4.4 per cent over the 1980-2000period. Except for a spell during the late1990s when it exceeded 5 per cent,growth has hovered at this level.17

Muqtada assessed the extent to whichinvestment was affected by stability vari-ables, finding that the correlations areinsignificant but that there is a negativecorrelation between inflation and invest-ment. Again, the budget deficit is posi-tively (but weakly) related to investment.Empirical analysis suggests that the sta-bility variables had little effect on invest-ment and growth.

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Table 2

Trends in various indicators of malnutrition

Bangladesh DHSBBS child nutrition surveys (per cent children

(per cent children 6-71 months) 0-59 months)

Nutrition status indicator 1985-86 1989-90 1992 1995-96 2000 1997-96 1999-2000

Stunting(height-for-age)

% Below 2 std. Deviations 69 66 64 51 49 55 45

% Below 3 std. Deviations - - 33 24 19 28 18

Wasting(weight-for-height)

% Below 2 std. Deviations 15 15 17 17 12 18 10

% Below 3 std. Deviations - - 2 3 1 4 1

Underweight(weight-for-age)

% Below 2 std. Deviations 72 67 68 57 51 56 48

% Below 3 std. Deviations - - 25 18 13 21 13

Source: Government of Bangladesh and United Nations, 2005.

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Modest decline in poverty, but increases in inequality

By most estimates, Bangladesh has wit-nessed a modest poverty reduction rateof around 1 percentage point a yearsince the early 1990s. Two alternativeestimates based on the HouseholdIncome and Expenditure Surveys (HIES)of the Bangladesh Bureau of Statisticsshow poverty declining from 58.8 percent in 1991/92 to 49.8 per cent in2000, and alternatively, from 49.7 per-cent in 1991/92 to 40.2 per cent in 2000(Table 4).

The observed improvement in povertyrates also holds true for the distribution-ally sensitive measures of poverty. Thepoverty gap ratio declined from 17.2 percent to 12.9 per cent and the squaredpoverty gap ratio declined from 6.8 percent to 4.6 per cent, indicating that thesituation of the poorest also improvedduring this period.

Notwithstanding this improvement, theproportion of the poorest as a sub-cate-gory (defined through a lower poverty

line) remains disturbingly high.According to the GoB’s draft PRSP, therate is around 20 per cent of the popula-tion in 2000. But the World Bank sets therate at 33 per cent in accordance with its“Lower Poverty Line” estimate, whichrefers to households who spend less onfood than the food poverty line, and ismade up of the sum of the food povertyline and a lower allowance for non-foodconsumption.18

There has been a continuous increase ininequality. The Gini Coefficient for urbanareas has shot up from 0.33 in 1991/92to 0.44 in 2000. Similarly, the rural Ginihas increased from 0.27 to 0.36 duringthe same period. Overall, the Gini indexof inequality increased from 0.259 to0.306 during this period (Table 5). Whileinternational comparison of Gini indicesis subject to many problems, it is fair toconclude that Bangladesh has enteredthe stage of relatively high incomeinequality, which has been increasingover time.

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Table 3

Correlation Matrix for Some Macroeconomic Variables

Real GDPBudget per capita

Investment Inflation deficit (log)

Investment 1.000

Inflation -0.385 1.000

Budget deficit 0.176 -0.107 1.000

Real GDP per capita (log) 0.871 -0.186a 0.042 1.000

a Statistically significant at 5% level.

Source: Muqtada, 2003. See Table 1 and 2 in Muqtada 2003.

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Rising income inequality has diminishedthe poverty reducing potential ofgrowth. Had the urban growth rate dur-ing the 1991/92 and 2000 period beendistribution neutral, the incidence ofurban poverty would have fallen by 13percentage points instead of 7 percent-age points, or almost twice the actualobserved rate. Similarly, the incidence ofrural poverty would have dropped by12 percentage points instead of 9 per-centage points. Growing inequality thusemerges as a more important concernfor the urban areas.

In short, with a lower inequality elasticityit is possible to achieve the same quan-tum reduction in poverty with a loweraggregate growth rate in income. This isespecially important in view of the uncer-tainties in the growth scenario over themedium-term.

A sharp rise in inequality perhaps wouldnot be worrying in the context of rapideconomic growth and structural change.Evidently, this has not been theBangladesh experience during the early1990s, which witnessed a pronouncedincrease in inequality against the back-drop of a fairly modest rate of economicexpansion. This phenomenon has led tocalls for a review of the current pattern ofgrowth in favour of a more pro-poorgrowth process.

Increase in joblessness

The rate of unemployment has increaseddue to insufficient job creation. Availablestatistics show a rising trend of unem-ployment among educated persons.

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Table 4

Poverty and Inequality in the 1990s

Estimate 2:Estimate 1: Sen & Mujeri using

BBS/World Bank HIES longer-using 1990s HIES term groupedunit-record data distribution data

1991/92 2000 1991/92 2000

Headcount Ratio

National 58.8 49.8 49.7 40.2

Rural 61.2 53.0 52.9 43.6

Urban 44.9 36.6 33.6 26.4

Gini Index of Inequality

National 0.259 0.306

Rural 0.243 0.271 0.255 0.297

Urban 0.307 0.368 0.319 0.379

Sources: Government of Bangladesh, 2004. Based on BBS, 2001; World Bank, 2002 for estimate 1, and Cost of BasicNeeds estimation by Sen and Mujeri, 2002 for estimate 2.

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Equally significant, formal sector employ-ment has hardly shown any increase(Figure 6). Cross-tabulating the data byage shows high unemployment ratesamong the young workforce. There isalso significant difference in youth unem-ployment among males and females.Unemployment is high among womenworkers aged 15 to 24 years; the highestunemployment rate for men was the 25to 29 age group. Between 1995-96 and1999-2000 the unemployment rateamong young men declined while thatamong young women increased mani-fold. A comparison of employment struc-ture between the poor and the non-poor

shows that the poor lag behind in self-employment in both farm and non-farmsectors. Only 6.7 per cent of the poorhouseholds hold salaried jobs in the non-farm sector, as compared with 14.4 percent among the non-poor. In terms ofemployment structure, the most impor-tant difference between the poor andnon-poor is the extent of involvement incasual employment (47 and 24 per cent,respectively). Higher poverty in thisgroup is the result of two forces: a higherunderemployment rate and a low growthof wage rate.19

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Table 5

Inequality in Rural and Urban Areas

Rural Urban

1991/92 1995/96 2000 1991/92 1995/96 2000

Headcount 58.45 50.47 49.53 38.20 29.79 31.30

Proportionate Poverty Gap 16.73 14.01 13.84 11.40 7.62 9.02

Weighted Poverty Gap 6.43 5.42 5.16 4.54 2.58 3.47

Gini Index for Consumption 28.21 30.62 31.02 36.25 38.55 40.53

Gini Index for Income 27.00 31.00 36.00 33.00 39.00 44.00

Per Capita Expenditure 504.71 652.65 779.96 817.48 1234.25 1389.04

Assuming 1991/92 Lorenz Distribution for all the years

Headcount 58.45 48.37 46.53 38.20 25.84 25.27

Proportionate Poverty Gap 16.73 12.32 11.61 11.40 6.32 6.12

Weighted Poverty Gap 6.43 4.37 4.05 4.54 2.18 2.09

Notes: These estimates were made by combining the decile distribution data for income with the poverty lines used inthe I-PRSP. Computations were made by using a program developed by the World Bank which fits a parametric Lorenzdistribution to the decile distribution data and finds the values of the three measures of poverty by juxtaposing thepoverty line and average income against that distribution.

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Figure 5

Trend in Real GDP

GDP = 0.044time + 23.669 R 2 = 0.997

23.20

23.40

23.60

23.80

24.00

24.20

24.40

24.60

24.80

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

log

log GDP(real)

Linear (log GDP(real)

Note: Real GDP values are transformed in logarithm value.Source: Muqtada (2003), based on World Development Indicators (WDI) CD-ROM 2002.

Figure 6

Employment Population Ration (EPR) and Wage Employment (% EPR)

0

10

20

30

40

50

60

70

80

Perc

ent

1991 1996

EPR

WS/EPR

Sources: GoB, 2004, which is based on Khan and Sen, 2004; Muqtada, 2003 based on KILM CD-ROM 2001-02.

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Canada’s contributions to theMDGs in Bangladesh

Canadian development cooperation in Bangladesh

Bilateral relations between Bangladeshand Canada are multifaceted, rangingfrom development cooperation, to trade,to strengthening democratic processes.The relationship was further strength-ened by the Canadian government selec-tion of Bangladesh as a new “country offocus” in December 2002. The provisionof duty- and quota-free access ofBangladeshi exports to Canada has inten-sified bilateral trade prospects. In termsof disbursement by bilateral donors overthe last 30 years, Canada ranks third(total: US$1.8 billion, bilateral: $C1.95billion) after Japan (US$6 billion) and theUS (US$3.3 billion). Canada was thesixth largest bilateral donor in 2000.20

The Canadian International DevelopmentAgency ‘s (CIDA) Bangladesh CountryDevelopment Programme Framework(CDPF)21 for 2003-2008, identifyingBangladesh as a “country of focus” plansa virtual doubling of aid growing to anannual expenditure of $60-70 million bythe fifth year. The greater volume of aidunder this new arrangement should alsoenhance Canada’s image by moving itinto fourth place among the top bilateraldonors in Bangladesh after Japan, theUnited Kingdom and the United States.

CIDA confirms its commitment to attain-ing the MDGs as a means to povertyreduction. Given this commitment andCanada’s responsibilities under Goal 8(develop a global partnership for devel-opment), the CDPF can be assessed fromthe point of view of its relevance tothe MDGs.

Canadian Development CooperationFramework

Following global concerns over aid effec-tiveness, Canada made a major shift in itsdevelopment cooperation strategy. Whilethe initial strategy centred around infra-structure development, the current focuspermeates social development, institu-tional and human capacity-building forbetter policy implementation, gover-nance, gender balancing, based on sec-tor wide approaches (SWAps). The CDPF,initiated in 1999, a year before theMillennium Declaration that set out theMDGs, reflects more or less the goals.

The core objectives of the CDPF is tocontribute to poverty reduction andsustainable development in Bangladesh.They include improving the quality anddelivery of health and education servicesappropriate to the needs of the poor, inparticular women and children, and toincrease access; improving policy devel-opment and regulatory reform ofselected public and private institutionsand link governance more directly topoverty reduction; and in the mediumterm, addressing constraints in the devel-opment of small and medium enterprisesby increasing their access to finance andcapacity-building services, and improvingtheir regulatory environment.

Further to the CDPF, in 2002 CIDA alsopublished Canada Making a Difference inthe World, an overarching strategic state-ment with a particular emphasis onstrengthening aid effectiveness. Underthe new policy, CIDA commits to directits resources to development program-ming planned and owned by recipientcountry partners and to improve its focuson poverty reduction and the MDGs.Both the CDPF and the strategic state-

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ment are based on the program-basedapproach (PBA) or SWAps to focus ondeveloping country ownership andcapacities.

However, current reviews of CDPF estab-lish that the PRSP is thought to havebeen the expression of country consen-sus on development priorities forreducing poverty and has been the foun-dation for “country ownership” of CIDA’said strategies.22 While the overarchingissue in CIDA’s bilateral developmentcooperation is ownership, it doesn’t ade-quately question whether Bangladesh’sPRSP represents locally owned strategiesto reduce poverty.

Sectoral allocation for realizing MDGs

Canada has contributed to the significantprogress in different sectors, particularlyhealth, poverty alleviation throughmicro-finance, gender parity, andbuilding institutional capacity involved inservice delivery, governance, education,etc., to help realize the MDGs.

Agriculture and rural development (Goal 1) Recognizing Bangladesh’s transition fromchronic food shortages to rice self-suffi-ciency, CIDA’s contribution includes:

• Long-term support (a total $328 mil-lion over the last 32 years) to the agri-cultural sector in Bangladesh throughwater management, rural electrifica-tion, irrigation, and agriculturaldiversification projects

• The Rural Maintenance Program(RMP), supported jointly by food aidfrom CIDA’s Multilateral Branch($10 million/year) and by the bilateral

program, has helped create year-roundjobs for over 40,000 destitute womenwho maintained earthen farm-to-mar-ket roads

• Over 90,000 poor women havegraduated from income diversificationtraining programs. In elections at thelocal level, current or former RMPwomen participants ran for office and35 were elected.

A further contribution, with impacts ongender equality, has been made throughmicro-credit:

• The multi-donor supported“Challenging the Frontiers of PovertyReduction” project implemented byBRAC, is focusing on upgrading skillsof 1.3 million “ultra poor” ruralwomen. (CIDA has contributed$13 million.)

• CIDA and other donors havesupported NGO micro-financeprograms of the Grameen Bank andBRAC in the past for farm and non-farm income-generating activities.CIDA has been supporting the PalliDaridro Bimochon Foundation whichbecame a semi-autonomous credit andsavings institution in 2000. CIDA iscommitted to helping the Foundationreach complete self-sufficiency in itsmicro-finance activities.

Education (Goal 2) In the 1990s, Bangladesh marked aremarkable change in primary educationwith the provision of primary educationthrough non-formal schools, seeking toengage those left out of formalschooling, many of them poverty-strickenchildren, including many girls.

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CIDA

—Funded the BRAC schools with$28 million through a multi-donorfunding arrangement. This programtargets 1.1 million poor rural children,particularly girls, who are unable toattend public schools.

—Sought to enhance donor coordinationand harmonization including corefunding, common reporting, andsingle monitoring and evaluation.

—Supported the AdolescentDevelopment Program ($2.5 million),implemented by USC Canada andBangladesh, which is providing basiclife skills, literacy, and numeracy,training in income-generating activitiesto some 42,000 poor adolescents,mainly girls, who would not otherwisehave access to education.

—Other projects through NGOs areproviding adult literacy and incomegenerating activities, in particular topoor women in rural areas.

Social Development and Gender Equality(Goal 3) CIDA pioneered support to BangladeshiNGOs and has continued to do so overthe long term, so that a number of theseorganizations “have emerged as modelsof development and participatory gover-nance.” The reach of these organizationsis particularly effective with women andthe “ultra poor”.

CIDA states that local NGOs fill a void inproviding “an institutionalized andsustainable forum for their voice to reachthe echelons of policy-making. LocalNGOs provide that forum for the poor toarticulate their rights-based aspirations.”

An emphasis on women’s empowerment,utilizing a Gender Fund-III ($2.5 million),administered by the Canadian HighCommission, which supports civil societyorganizations concerned with genderequality, has been another means of test-ing innovative approaches and exploringmore sensitive emerging issues.

Health (Goals 4, 5, 6) CIDA’s involvement in health programsdates back to 1976. Based on a 30-yearhistory in the sector, CIDA has beenworking with other donors in jointco-financing and parallel financing ofhealth projects. CIDA has provided$28.8 million through a donor consor-tium in the HPSP, aiming to improve thehealth and family welfare status of themost vulnerable. Other contributionsinclude:

• the Arsenic Mitigation Project($14.8 million) includes internationallyrecognized criteria for examining andverifying arsenic mitigation technolo-gies in order to provide safe drinkingwater and avoid arsenic poisoning.

• the Community-Managed Health Careproject (with $5 million from CIDA)contributes to improving the effective-ness of the primary health care systemin 362 villages in Bangladesh.

CIDA notes that overall progress in thesector is demonstrated by the impact onrates of infant and under-five mortalityamong other factors.

The HPSP recently evolved into theHealth, Nutrition and Population SectorProgram (HNPSP.)

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Governance (Goal: cross-cutting) Canada focuses both on economic andpolitical governance. With regard toeconomic governance, CIDA:

• contributes to improving the financialmanagement capacity of the Ministryof Water Resources. A computerizedaccounting system is functional at 26Regional Accounting Centres. Thisproject is linked to a larger programsupported by the Asian DevelopmentBank (ADB), the UK’s Department forInternational Development (DfID), andthe UNDP, focusing on governmentbudgetary controls, accounting, andmonitoring.

• allocated $2 million to an impactmonitoring project seeking to improvethe government’s capacity to deal withWTO negotiations through a localthink tank, the Centre for PolicyDialogue (CPD).

In the area of political governance, CIDAsupports:

• the Legal Reform Project ($15 million)is assisting Bangladesh in upgradingits legislative drafting capabilitiesand improving child protectionlaws, juvenile justice, legal aid, andcompany law.

• the Policy Leadership and Advocacy forGender Equality ($12.5 million) is agovernance project for mainstreaminggender equality within the govern-ment and civil society.

• the Bangladesh EnvironmentalManagement Project ($12.6 million)is strengthening the Department ofEnvironment’s capacity to carry out itsmandate and functions.

MDGs, Development Cooperation, Policy Autonomy,and Structural Injustice MDGTargets, Bangladesh’s Strategy,and CIDA Bangladesh’s strategy to realize theMDGs is heavily intertwined with theoverarching targets set out in its nationalPRSP, the blueprint for developmentplans, priorities and policies, and thebasis for donor support.23 While PRSPgoals are set taking the MDGs intoconsideration, the government’sapproach to realizing the MDGs isdependent on successful implementationof the PRSP targets.24 Until recently,there had been no specific links betweenthe PRSPs and the MDGs25, since thegoals were adopted in 2000 after thePRSP process had already been adopted.Linking the MDGs to the PRSP signals afurther consolidation of developmentthinking and risks undermining anypotential gains of the participatory andthe country-led process envisaged bythe PRSP.

PRSPs, although far from being a perfectinstrument, have been the main frame-work for all donor lending and havebecome the dominant methodology forshaping national development strategieswith the ostensible aim of poverty reduc-tion. In linking its Country DevelopmentProgramme Framework to the PRSP,CIDA has been unable to avoid theWorld Bank-International Monetary Fund(IMF) policy prescriptions which supporta neo-liberal approach. The major con-sideration for adopting SWAps anddeparting from earlier project-basedapproaches was to ensure “ownership”of the partner country. But in accepting

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the WB-IMF approach, the opportunityfor a PRSP which would be effective andlocally developed and owned is lost. Theapproach was largely unchallenged bythe CDPF which did not propose alterna-tive program approaches or strategies tostrengthen real dialogue and thus toimprove country ownership in countrypoverty strategies.26

Making PRSP conditional on World Bank-IMF approval for getting concessionalloans reduces the receiving countries’access to a greater diversity of donorresources which do not rely on the inter-national financial institutions (IFIs) as thepolicy “gatekeepers” for resource trans-fers. While the CIDA approach to devel-opment cooperation aims to ensure aideffectiveness through partnerships withrecipient countries, it fails to counter themarket-led neo-liberal paradigms of theIFIs. CIDA, by effectively endorsing theessentially externally imposed PRSPapproach, seems to endorse a policystatus quo, which has already provedcounter-productive to development.

While growth is important for povertyreduction, tackling economic inequality isjust as important and must be taken intoaccount in the policies of major donorsseeking aid effectiveness. This can meanchallenging the dominant macro-economic models to ensure redistributionof resources for the poor. Internationalgovernance also needs to be remodeledto enhance democratic powersharing byeconomically poor states.

The quality of the policy process is criti-cally important. In assessing the MDGs,qualitative analysis, distribution effectsand the effects of the internationaleconomic context must be considered.

MDGs: whither policy autonomy

Tying the MDGs to the PRSP combinesexternally imposed poverty reductiontargets with an externally imposedmacroeconomic framework. It signals animportant convergence of ideology andpower of the international developmentagencies and financial institutions, but itis not necessarily the most effective way,and certainly not the only way, toeliminate poverty and the structuralcauses of poverty.27

If the MDGs are adopted as theoverriding targets, the already limitedscope for PRSPs to generate country-ledpoverty reduction policies is further nar-rowed. In theory, PRSPs are participatoryand have the potential to elicit the voicesand the priorities of the poor themselves.Yet, by adopting the MDG targets, thepossibility of generating country-specificand appropriate targets is curtailed. Forexample, food sovereignty may be a keydemand of the population, yet theMDGs’ second target simplifies this toreducing hunger by half. Thus the PRSPsmay simply focus on measuring nationalprogress toward the MDGs rather thantrying new and innovative policiesreflecting the priorities of the poor.

Achieving the MDGs, or even makingprogress on the goals, does notnecessarily confront the need for struc-tural change. Indeed, statistical achieve-ment of the MDGs could be a purelyconjunctural phenomenon, reflectingsomething as arbitrary as a massivedevaluation in the US dollar, or acampaign to keep children in school by apopulist government, rather than anyunderlying structural change or sustain-able poverty reduction. Therefore, to usethe MDGs as a measure of the success ofpoverty reduction is flawed by the

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implicit assumption that the 18 targetsindicate deeper structural change. What’smore, their very simplicity disguises thecomplexity of poverty and the realityof power.

The MDGs, like the PRSPs, are externallycreated and imposed formulas. Placingthem and country reports about them atthe centre of attention automaticallyshapes the agenda and scope of actionin much the same way that the PRSPspre-determine the macroeconomicframework within which povertyreduction policies are designed.

The UNDP and the World Bank envisagethat the PRSP will constitute the primarystrategic and implementation vehicle toreach the MDGs. Regardless of whetherthe MDGs have anything to do withpoverty reduction, the fact that they willbe implemented through the PRSP prismand, therefore, that all bilateral andmultilateral funding to support theMDGs will also flow through the PRSP,is problematic. They will have theeffect of narrowing economic policychoices, and other, potentially moreeffective approaches will be pushed tothe margins.

A further limitation is governmentcommitment. The government so farappears to be less than fully committedto realizing the goals by the stipulatedtimeline. No specific acceleratedprogram is visible. Government officialsare not exposed to any particularmotivation with regard to the MDGs.The parliament conspicuously failed totake the goals to the floor to give thema sense of national ownership and aspace for debate. No parliamentaryspecial standing committee has so farbeen constituted to oversee the hugetask involved.

Moreover, while the goals are explicitlyintertwined with the PRSP, the PRSPformulation process is itself in questionin areas such as understanding nationalcontext, stakeholders’ participation,involving the line ministries effectively,and more importantly, national politicalconsensus over the implementation ofthe targets to ensure policy coherenceand continuity.

The participation of people from differentsocial, cultural, and economic back-grounds is imperative for reducingpoverty and hunger. However, peoples’participation cannot be restricted toimplementing government or donor-ledprograms. Instead, the people must havesufficient voice and power in shaping thecountry’s development model and indeciding how country resources will beused. Such crucial decisions must notremain the preserve of any select orelite group. Poverty and hunger cannotbe eliminated without democratizingpolicy-making.

The current process of formulating andimplementing poverty reduction policieshas not been successful in tackling theroots of poverty. This is due to the factthat the poor themselves are excludedfrom the entire process. The governmentfailed to involve the parties with a stakein the goals and who might haveallowed national ground realities to betaken into account, rather than just thereplication of foreign minds. While theissue of poverty reduction and realizingthe MDGs is primarily intertwined withthe socio-political structure of society, thespace for people to engage in designingtheir national future is missing.

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Structural injustice: maintaining the status quo

Durable and sustainable solutions topoverty require active involvement of thepoor, a more comprehensive under-standing of the root causes of povertyand its multidimensional and diverseconsequences, and the appropriatepolicies.

The weaknesses of the approach embod-ied in the MDGs include:

• lack of emphasis on the importance ofreducing inequality and injustice

• silence on the issues of unequal marketpower, and consolidation of corporatepower

• lack of attention to migration andfactors affecting the movement ofpeoples

• lack of attention to local politicalrealities, elite power, and lack ofdemocracy.

In this light, it’s highly unlikely that theMDGs will go beyond maintaining thestatus quo. Given the current dominantdevelopment policy framework, povertyand inequality will remain, and indeed,increase.

Successive attempts to tackle poverty bydelivering resources to the poor either bythe trickle-down route or through theconventional approach of targetedassistance are founded in the compulsionto bypass the issue of power and justiceby treating poverty eradication as apositive-sum game. Poverty originates instructural inequality and injustice ratherthan only in the lack of resources.

ConclusionThe current development strategies ofBangladesh are fundamentally premisedon the neo-liberal ideology propagatedand made conditional by the powerfulfinancial institutions and its bilateralfollowers. The central message of thisneo-liberal creed is that the free marketshould regulate all economic activities;the state should intervene to maintainfiscal discipline, attain a stable rate ofexchange, liberalize, deregulate, privatizethe economy, as well as to make employ-ment flexible, as the only way to gainaccess to credit and attract foreigninvestment.

This creed is fundamentally divorcedfrom reality, from the specifics of social,economic and political circumstances ofa given country. The institutions andpower relations that recreate and sustainpoverty are ignored. Policies like blanketprivatization, deregulation, liberalization,and competition do not automaticallyguarantee prosperity. Evidence fromevaluations of structural adjustmentpolicies in a number of countrieschallenges the claims of the proponentsof these policies. Evidence suggests thatthe gap between the rich and the poor,as well as between and within thenations, has widened on an unprece-dented scale.28

Years of application of these policiesprovoked a significant counter-move-ment, a global backlash of frustrationand reaction against the arrogance ofthose of their proponents. That reactionhas contributed to the promotion of anew wave of poverty reduction and relat-ed development policies, like the MDGs.However, these initiatives don’t touch thelong-term structural inequities which willcontinue to breed poverty, enlargeinequality, and feed frustration.

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RASHED AL MAHMUD Titumir is theManaging Trustee of the UnnayanOnneshan-The Innovators, a centre forresearch and action on development, andthe founding faculty of the Department ofDevelopment Studies of the University ofDhaka. He was educated at the University ofDhaka, the University of London andCarleton University. He has provided adviso-ry services to government, inter-governmen-tal organizations and NGOs on structuraladjustment, Poverty Reduction StrategyPapers (PRSP), the world trading system andregional economic cooperation.

JAKIR HOSSAIN is Member Secretary of theUnnayan Onneshan-The Innovators, a cen-tre for research and action on development,and an Assistant Professor at the Institute ofBangladesh Studies at the University ofRajshahi. He was educated at CarletonUniversity and the London School ofEconomics. He has published extensively inthe fields of poverty and injustice, education,and the textile and clothing sector.

ReferencesBangladesh Bureau of Statistics (BBS).Report of Labour Force Survey, 1999 2000.Dhaka: BBS, 2003.

BBS. Report of Household Income andExpenditure Survey 2000. Dhaka, 2002.

BBS. National Accounts Statistics: GrossDomestic Product, 2000-2001, 2001.

BBS. Preliminary Report of HouseholdIncome and Expenditure Survey 2000,2001.

BBS. Preliminary Estimates of GrossDomestic Products, 1999-2000 and FinalEstimate of Gross Domestic Product, 1998-99, 2000.

BBS/UNICEF. Preliminary Results of theMultiple Indicator Cluster Survey (MICS)2003, cited in GoB and UN, 2005.

Begam T, Liaquat Q, Begam S, Moral H.Ensor T, and Dave P, Who Benefits fromPublic Health Expenditure? HealthEconomics Unit, Ministry of Health andFamily Welfare, Government ofBangladesh, Research Paper No. 22,2001

Campaign for Popular Education(CAMPE). Literacy in Bangladesh: Need fora New Vision. Education Watch 2002,Dhaka: CAMPE, 2003.

CAMPE. Renewed Hope, DauntingChallenges. State of Primary Education inBangladesh. Education Watch 2001.Dhaka, 2002.

CAMPE. Hope and Complacency. State ofPrimary Education in Bangladesh.Education Watch 1999. Dhaka, 2000.

Government of Bangladesh, Ministry ofPlanning. Unlocking the Potential.National Strategy for Accelerated PovertyReduction. Dhaka: General EconomicsDivision, Planning Commission,Government of Bangladesh, December2004.

Government of Bangladesh and UnitedNations Country Team. MillenniumDevelopment Goals: Bangladesh ProgressReport, Dhaka, February 2005.

Guttal, S. Women and Globalisation. SomeKey Issues. Presented at the conferenceon Strategies of the Thai Women’sMovement in the 21st Century, Bangkok,March 28-29, 2000.

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Khan A.R. and B. Sen. The Structure andDistribution of Personal Income andPoverty Reduction in Bangladesh duringthe 1990s. Essays in Honour of K. Griffin,2005. Unpublished.

Khan, A.R. and B. Sen. “Inequality and itsSources in Bangladesh: 1991/92 to1995/96. An Analysis Based onHousehold Expenditure Surveys,”Bangladesh Development Studies, March 2001.

Muqtada, M., A.M. Singh, and M.A.Rashid. (eds.). Bangladesh: Economic andSocial Challenges of Globalisation. A studyprepared for the International LabourOrganization, Geneva. Dhaka: UniversityPress Limited, 2002.

Muqtada, M. “Promotion of Employmentand Decent Work in Bangladesh:Macroeconomic and Labour PolicyConsiderations,” in Independent Reviewof Bangladesh’s Development (IRBD).Employment and Labour Market Dynamics.A Review of Bangladesh’s Development,2002. Dhaka: Centre for Policy Dialogueand University Press Limited, 2003.

Rahman, R. I. and N. Islam,“Employment-Poverty Linkages”, ILODiscussion Paper. Geneva, InternationalLabour Organization, 2003.

SAPRIN, The Policy Roots of EconomicCrisis and Poverty. A Multi-CountryParticipatory Assessment of StructuralAdjustment, 2002, www.eurodad.org.

Sen, B and M. Mujeri. Poverty inBangladesh: Trends, Profiles andDeterminants Background Paper for I-PRSP, 2002. Unpublished.

Titumir, R.A.M, Malik, M.R., and S>M>MHossain, Public Health Expenditure inBangladesh: Do We Need a ReformAgenda? Dhaka: Save the Children UK,2002.

Titumir, R.A.M. and D. Bhattacharya.Reforms and Consequences:Stakeholders’ Perceptions. Dhaka:Shrabon Prokashoni, 2001.

Titumir R.A.M. and J. Hossain. Povertyand Employment: Lost in the Queue?Dhaka, Unnayan Onneshan/TheInnovators, , 2005. Unpublished.

Titumir R.A.M. and J. Hossain.Encountering Exclusion: PrimaryEducation Policy Watch. Dhaka: PathakSamabesh and The Innovators, 2004.

Tomlinson, Brian and Pam Foster. At theTable or in the Kitchen? CIDA’s New AidStrategies, Developing CountryOwnership, and Donor Conditionalities.CCIC/Halifax Initiative Briefing Paper,September. Ottawa: CCIC, 2004.

World Bank. Attaining the MillenniumDevelopment Goals in Bangladesh,Dhaka, 2005.

World Bank. Bangladesh CountryAssistance Strategy: A Progress Report andUpdate for 2004-05, Dhaka, 2004.

World Bank. Poverty in Bangladesh:Building on Progress. Report No. 24299-BD. Washington, DC: June 2002.

Endnotes1 United Nations General Assembly,

Millennium Declaration. A/RES/55/2. (NewYork: September).

2 World Bank, Attaining the MillenniumDevelopment Goals in Bangladesh (Dhaka:World Bank, 2005).

3 Government of Bangladesn and UnitedNations (GoB and UN), 2005.

4 GoB and UN, 2005.

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5 Bangladesh Bureau of Statistics (BBS) andUNICEF, cited in GoB and UN, 2005; andthe Campaign for Popular Education(CAMPE), 2002).

6 GoB and UN, 2005.

7 CAMPE, 2003.

8 R. Titumir and J. Hossain, 2004.

9 GoB and UN, 2005 Titumir and Hossain,CAMPE 2000, 2002, 2003.

10 Begum et al, 2001.

11 Begum et al, 2001.

12 There are several items in the budgetfor each ministry while the documentscontain ministry-wide allocation. Generaladministration comprises the civil bureau-cracy, excluding line ministries, such asMOHFW, Education, Defence, etc.

13 GoB and UN, 2005.

14 This section draws on Titumir andHossain, 2005.

15 Overall GDP growth has been modest;the per capita GDP rate has risen from1.7% in the 1980s to nearly 3% duringthe 1990s. See Muqtada, 2003.,

16 World Bank, 2002.

17 Muqtada, 2003.

18 World Bank, 2002.

19 Rahman and Islam 2003.

20 According to the Organization forEconomic Co-operation andDevelopment/Development AssistanceCommittee cites on CIDA’s website.

21 CIDA, Bangladesh Country DevelopmentProgramme Framework. WorkingDocument. www.cida-acdi.gc.da AccessedApril 15, 2005.

22 Tomlinson and Foster, 2004.

23 The vision of the Bangladesh PRSP isfocused on enhancing pro-poor growth,boosting critical sector for pro-pooreconomic growth, devising effectivesafety nets and targeted programs, andensuring social development.

24 World Bank, 2004.

25 In April 2003, the World Bank and theUnited Nations Development Groupissued a memorandum outlining the rela-tionship between the MDGs and thePRSPs, stating that the PRSPs provide akey opportunity to mobilize nationalactors to achieve the goals.

26 Tomlinson and Foster, 2004.

27 See, among others, Nicola Bullard, “TheMillennium Development Goals and thePoverty Reduction Strategy Paper: TwoWrongs Don’t Make a Right,” in Anti-poverty or Anti-poor? Focus on the GlobalSouth. December 2003.

28 The Structural Adjustment ParticipatoryReview Network (SAPRIN) report (SAPRIM2002) summarizes the findings of theinvestigations undertaken on the impactsof structural adjustment in Bangladesh,Ecuador, El Salvador, Ghana, Hungary,Uganda, Zimbabwe, Mexico, and thePhilippines. The investigation reveals thefact that the SAPs have contributed toimpoverishment and marginalization ofthe local populations while increasingpoverty and economic inequality. Smallfarmers and women have been affectedmore negatively by the differential accessto resources for production that has beenreinforced by the reforms and the market.The liberalization of economic activity inrural areas and a reduction of the devel-opment role of government, along withtrade liberalization and currency devalua-tions, have favoured exports over produc-tion for the local market and haveincreased inequalities. The elimination ofuniversal subsidies for essential goods andservices has negatively affected the poorand their quality of life.

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Canadian Aid to

Bolivia and the MDGs:

Actions and

Perspectives

Gonzalo Chávez A.

and Beatriz Muriel H.

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Socio-economic development in Boliviaunder the MillenniumDevelopment Goals

Background

Bolivia is considered one of thepoorest countries in LatinAmerica. According to the

UN Development Programme’s(UNDP) 2002 Human Develop-ment Index, out of 177 countries,Bolivia ranks 114, 80 places belowArgentina, the country with thehighest index in South America.1

The millennium has not broughtabout the changes needed forfurther economic growth withequity in Bolivia. The grossnational product (GNP, measuredin millions of US dollars) hasfollowed a slight declining trendbetween 1999 and 2004, asshown in Table 1. This behaviourreflects four major shocks to thecountry: the eradication of thecoca leaf; a decline in directforeign investment; the rise ofexchange rates with regards tothe currency of its two maintrading partners, Argentina and

Brazil; and the socio-politicalconflicts during the period.2

At the time, there was also aslight increase in the incidence ofextreme poverty: in 1999 the(extremely) poor populationnumbered around 35.8 per cent,but in 2002 this rate wasestimated at 36.8 per cent.3Indicators did improve slightly inthe rural areas— which are thepoorest of the country—from59.8 per cent in 1999 to 54.8 per cent in 2002.

Poverty gaps by region are closelyrelated to the concentration ofIndigenous populations in therural areas.4 According to the2001 Census, 35.4 per cent ofBolivia’s population is Indigenous;22 per cent of the urban popula-tion and 66 per cent of the ruralpopulation. Approximately 59 percent of Indigenous People areindigent or marginalized, com-pared to 19 per cent of the non-Indigenous population.

Lastly, inequality in incomedistribution, as measured by theGini Index, is high in Bolivia,compared to Brazil or Chile.5 The

Canadian Aid to Bolivia

and the MDGs:

Actions and PerspectivesGonzalo Chávez A. and Beatriz Muriel H.

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Gini Index also shows a slight deteriora-tion in time, with a value of 0.57 in 2002and 0.53 in 1999. A contrary tendency isnevertheless observed in the ratio ofincome between the 90 and 10 per-centiles, which suggests that the prob-lems of inequity among the middle classhave deepened.

Policies surrounding theMillennium Development Goals Notwithstanding the discouraging obser-vations of the level of poverty andinequality in Bolivia, the government has

been trying to find solutions to theseproblems since the Structural Reforms of1985. Bolivia’s public policies have nowshifted toward accomplishing theMillennium Development Goals (MDGs).With the support of international cooper-ation, processes of agreement withorganized civil society members wererealized (National Dialogues I and II),which culminated in the preparation ofBolivia’s Poverty Reduction Strategy(EBRP) in 2001.

The Strategy presents the government’sand civil society’s shared perception ofthe relevance of reducing poverty and

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Table 1

Bolivia: Gross National Product and Poverty Indicators, 1999 – 2004

1999 2000 2001 2002(p) 2003(p) 2004(p)

Gross National Product

(in millions of US$) 8,298 8,405 8,036 7,812 7,666 8,107

Per capita (in US$) 1,008 997 932 885 849 879

Incidence of Extreme Poverty

Total 35.8% 39.2% 37.3% 36.8% n.a.. n.a.

Urban 23.5% 27.9% 26.2% 25.7% n.a. n.a.

Rural 59.7% 58.7% 55.6% 54.8% n.a. n.a.

Income Inequality Indicators

Gini Index 0.53 0.56 0.56 0.57 n.a. n.a.

Ratio P90/P10 13.1 15.2 12.9 11.6 n.a. n.a.

Source: Instituto Nacional de Estadísticas (INE), Unidad de Análisis de Políticas Sociales y Económicas (UDAPE).

Notes: (p): preliminary; n.a. (not available)

1. The incidence of extreme poverty is defined as the percentage of the population with income below the cost of a food basket.

2. In the Gini Index, inequality increases when it nears 1.

3. The P90/P10 ratio measures income between the 90 and 10 percentiles.

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promoting human development, particu-larly for those members of society withthe greatest needs and who are the mostvulnerable, mostly the Indigenous popu-lation, women, children, and the poor.Improving living conditions is pursuedthrough providing greater employment,skills development, and income-generat-ing opportunities, better access tomarkets, extending social safety netsand security, and promoting publicparticipation, within a context of growthwith equity and responsible naturalresource management.

The ‘Dialogues’ exercise also indicatedthe significant governance problemstroubling Bolivia, including corruption,excessive bureaucracy, lack of institution-al coordination, inefficient publicresources administration, lack of adminis-trative capacity, and high rotation ofpublic personnel, among others.

In 2004, a revision of the EBRP (Bolivia’sPoverty Reduction Strategy) was pro-posed, mainly due to a lack of clearlydefined priorities. To address this omis-sion, four areas of intervention and 42priorities were proposed. The reformulat-ed EBRP emphasized increasing produc-tivity, assuring a minimum degree ofequality, and developing micro-, small-,and medium-sized enterprises.

The general objective of the revisedstrategy is to achieve a pattern of devel-opment with a wide base that signifi-cantly reduces inequality in income distri-bution. This goal seeks to structurallytransform the economy, raising theincomes of the population living close tothe poverty line, reducing the degree ofpoverty of the population that is belowthe poverty line, and establishing aminimum safety net of universal socialservices and productive opportunities for

the poor. The strategy had been enrichedwith the Dialogue III Bolivia Productivacarried out in December 2004, thatdelineated the most productive sectorsfor all country departments in order topromote regional development.

The objectives and actions surroundingthe strategy have been reinforced byBolivia’s pledges, together with thoseof the international community, forreaching the MDGs. The next sectioncharts the progress achieved in theMDG effort.

Education (MDGs 2 and 3)

Target 3 of MDG 2 looks to guaranteethat by 2015 all children will be able tocomplete primary education.

Before the EBRP, Bolivia’s education poli-cies fell under the Educational ReformLaw of 1994. This law defined educationas the highest priority of the state, ratify-ing education as guaranteed at the pri-mary level under the country’s constitu-tion. Civil society is encouraged to partic-ipate in the sector’s planning, organizing,executing, and evaluating, in order thateducation responds to the population’sinterests, needs, challenges, and aspira-tions. The socio-cultural, heterogeneousnature of the country is recognized, giv-ing education an intercultural and bilin-gual nature.6

The educational reform process has beenquestioned in terms of its clarity andconsistency, as well as in its effective useof human, material and financialresources. These factors have probablycontributed to the slow progress ofimprovement in the education sector.7Nevertheless, there have been improve-ments at the primary level (see Table 2).

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Government efforts (and those of somenon-governmental organizations) may beobserved in the increase of the grosscoverage rate, which increased byslightly more than 10 per cent between1992 and 2002. Furthermore, there areno significant differences between urbanand rural areas.8 The proportion ofchildren aged 13 who graduated fromeighth grade also underwent significantimprovement across the decade,reaching 77.3 per cent in 2002.

These trends in education indicators andin the actions surrounding universalprimary educational coverage, resourcesfor building and equipping schools,pedagogical resources, etc. have madeit possible for the government toconclude that Bolivia will accomplishMDG 2 by 2015.9

Target 4 of MDG 3 looks to eliminatethe gender disparity in primary and

secondary education, preferably by theyear 2005 and in all other educationallevels by 2015. These targets fordecreasing the gender gap have alsobeen contemplated within theEducational Reform for illiteracy andprimary levels and are being re-evaluatedat the secondary and tertiary levels.

The greatest gender disparities existamong the illiterate. According to the2001 Census,10 6.4 per cent of men areilliterate versus 19.4 per cent of women.Of particular importance is the gap byregion: 6.4 per cent of the urbanpopulation is illiterate as compared to25.8 per cent of the rural, mainlyIndigenous, population. These differencesare particularly acute among the adultand senior populations.

The educational gender gap for youthand children is significantly lower. In the2001 Census, the gross coverage rates

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Table 2

Bolivia: Coverage in the Provision of Primary Educational Services, 1992-2002

Indicator 1992 1999 2000 2001 2002(p)

Gross Coverage Rate(a) 97.10% 106.6% 107.7% 107.7% 108.1%

Net Coverage Rate(b) n.a 87.0% 87.0% 87.9% 88.0%

Rate of Completion of Eighth Grade (c) 52.30% 66.5% 71.8% 71.5% 77.3%

Source: Sistema de Información Educativa (SIE) and UDAPE.

Notes: (p): preliminary

(a) Gross coverage rate = number of students enroled in a given educational level without distinction of age /population in the age group that corresponds to the respective educational level.

(b) Net coverage rate = number of students enroled in a given educational level for the age that corresponds to therespective level / population in the same age group.

(c) Rate of completion of eighth grade = population that graduated from eighth grade / population aged 13.

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had a gender gap of 5.71 per cent forchildren for secondary education,2.11 per cent for primary education, and-1.5 per cent (for girls) for pre-schooleducation.11 These indicators show ten-dencies that make the achievement ofMDG 3 likely.

Health (MDGS 2, 4, and 6)

Target 5 of MDG 4 is to reduce by two-thirds, between 1990 and 2015, under-five mortality. Target 6 of MDG 5 is toreduce by three-quarters, between 1990and 2015, the maternal mortality ratio.Finally, Target 7 of MDG 6 is to halt andbegin to reverse the spread of HIV/AIDSand the incidence of malaria and othermajor diseases.

The provision of health services to thematernal-infant population wasconceived as a government strategybeginning in 1996 with the creation ofthe Seguro Nacional de Maternidad yNiñez (Maternity and Infancy NationalInsurance). In the years that followed,this initiative was redefined through theSeguro Básico de Salud (Basic HealthInsurance) in 1998, and finally, throughthe Seguro Universal Materno Infantil,SUMI (Universal Maternal-InfantInsurance) in 2002. Over time, thenumber of health provisions and healthservices coverage has been increasing.

Some difficulties surrounding healthservices provision are: socio-culturalfactors inhibiting demand, primarilyamong the Indigenous population,problems in the supply of medicationand inputs to health institutions, andgeographical inaccessibility in certainrural areas.12

Child and maternal mortality are closelyrelated to the socio-economic conditions

of the environment and family. In thecase of child mortality, young mothersare at higher risk, and their educationlevels are a factor in their own health andthat of their children To the degree thatthe years of schooling increase andpoverty is reduced, improvements inhealth will follow.

Table 3 shows the evolution of somehealth indicators related to theMillennium Development Goals. Thereduction of the child mortality rate(children under five) by two-thirdsimplies that by 2015, the rate should beapproximately 40 per 1,000 children.This goal, according to the govern-ment13, will very likely be achieved, forduring the period 1989-2001, the ratedecreased by slightly more than half andwas accompanied by higher healthservices, particularly in programs againstinfectious diarrhetic and respiratorydiseases, so common in Bolivial infants.Nevertheless, it is worth noting thatthere are significant differences accordingto region. In 1998, for example, the childmortality rate was 50 in urban areas and90 in the rural areas.

Maternal health shows a more modestimprovement. Maternal mortality hadbeen reduced by merely one-fourthbetween 1989 and 2001. Notwith-standing these numbers, new govern-ment policies have made it possible toconceive accomplishing the reduction ofmaternal mortality rates by 2015.

With regard to contagious diseases,sexually transmitted diseases (STDs)attract a lower priority in Bolivia.Between 1984 and 2002, there were914 registered cases of HIV/AIDS and in2002, 56,000 cases of other STDs (suchas syphilis, gonorrhea, and chlamydia,etc.) in a population of more than 8 mil-

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lion.14 In order to avoid the spread ofthese diseases, a Sexual and Reproduc-tive Health Program has been imple-mented; it proposes prevention policiesbased on information initiatives, promo-tion of condom use, and sexual andreproductive education.15

The most important diseases withinBolivia’s epidemiological profile areChagas’ Disease (American trypanosomi-asis), malaria, and tuberculosis. Thegovernment has implemented anEpidemiological Shield Strategy forcontroling and reducing these diseases.

Preventive actions against Chagas’Disease, including fumigating infestedhouseholds and residential areas, havesignificantly reduced infestations rates—from more than 50 per cent in 1999 to10 per cent in 2003. Positive cases oftuberculosis have remained static; treat-ments increased from 82 per cent in2000 to 86 per cent in 2002. Malariaprevention and control initiativesallowed the annual parasite incidenceto decrease from 8.0 per cent in 2000to 6.1 in 2003.16

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Table 3

Bolivia: Health Indicators, 1989 – 2003

1989 1994 1998 2001 2003(p)

Mortality Rates (MR)

MR of children under 5 (per 1,000) 96 75 67 n.a 54

MR of mothers (per 100,000 live born) 416 390 n.a 310(a) n.a

Coverage Rates (CR)

CR, provision of services of acute diarrhea diseases in children under 5 (b) n.a. n.a 29% 35% 46%

CR, provision of services for pneumonia in children under 1 n.a n.a 14% 20% 24%

Sources: INE, UDAPE.

Notes:

(p): preliminary; n.a.:

(a) Corresponds to the year 2000.

(b) From the year 2000 on, the denominator of children under 5 was changed to children of low income familiesunder 5.

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Ensure environmental sustainability(MDG 7)

Target 9 of Goal 7 integrates theprinciples of sustainable developmentinto country policies and programs andreverse the loss of environmentalresources and Target 10, halve, by2015, the proportion of peoplewithout sustainable access to safedrinking water and basic sanitationare discussed.

Bolivia has progressed in the formulationof policies linked to environmental andsustainable development management,with the passing of fundamental lawssuch as the Forestry Law, the NationalAgrarian Reform Institute Law (INRA), theMining Code, the Hydrocarbons Law,and others. Nevertheless, according tothe government, it is necessary tocomplete the norms framework thatguarantees management oriented towardsustainable development.17

With regard to potable water and basicsewage, the extension of water servicesincreased in urban area from 81 per centin 1992 to 90 per cent in 2001 and inrural areas from 24 per cent in 1992 to39 per cent in 2001. Basic sewage cover-age increased in the urban area from49 per cent in 1992 to 55 per cent in2001 and in the rural regions from17 per cent in 1992 to 33 per cent in2001.18 These indicators reveal, on theone hand, some relevant changes, whichare the result of public policies that werestrongly supported by internationalorganizations and, on the other hand,there is still inadequate coverage ofservices in the rural areas of Bolivia.

One of the most important obstacles tobetter and wider distribution of waterand basic sewage services is weak public

institutions, attributable not only tolimited resources, but also to weaknessesin coordination, and technical andmanagement capacities at the differentlevels of government. Inadequate invest-ment in national and local resources andinappropriate evaluation and monitoringalso contribute to the challenge. One ofthe main problems is the incipient natureof integral planning and the lack ofcollaborative collection and dissemina-tion of information at all levels of thesector. To address these problems, theBolivian government has introduced theNational Basic Sewage Plan 2000-2010to provide equitable and universal cover-age, and build strong and sustained insti-tutions. However, the probability ofachieving Target 10 remains low.

Eradicate extreme poverty and hunger(MDG 1)

Lastly, with regard to poverty, the targetis to halve the proportion of peopleliving on less than a dollar a day andthose who suffer from hunger. Accordingto the government, and corroborated bythe indicators in Table 1, Bolivia has littlechance of reaching this goal.19

Several factors hinder economic growthin favour of the poor in Bolivia. First,improvements in agricultural productivityare almost nonexistent, yet agricultureremains the main source of income forthe majority of the poor.20 Second, theindustrial sector is incipient, subject toinvestment problems (high costs), unfaircompetition due to weak illegal importscontrol and scale problems. Finally, thesectors with promising development out-looks, such as electricity, finance, hydro-carbons, and communications, are notlabour-intensive.21

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Throughout the last decades, throughthe promotion of diverse plans andprograms, Bolivia has set objectives forattaining productive integral and sustain-able development, making possibleproductive empowerment and transfor-mation, creating institutions that enablesocio-economic development, improvingphysical infrastructure, promotingexports by increasing competitiveness ofthe production of goods, boosting theeconomy by creating stable employ-ment, and increasing the income of thepoorest sectors of the population.22

Several policies have been implementedto reach these objectives; among them issupport for micro, small and medium-sized enterprises (SMEs), the promotionof chains of production, the opening upof external markets through bilateral andmultinational agreements, technical assis-tance, and tax reductions. Nevertheless,these policies have been very disperseand not very effective in practice, andthe results have been an economy that ismore or less excluded from the rest ofthe world.23

The most important path for the Boliviangovernment to follow to attain growth infavour of the poor is to develop itshuman capital and promote micro, small,and medium-sized enterprises.Challenges lie ahead in this course ofaction. First, the productivity of thesefirms is low and, due to limitations ofeconomies of scale, it is more difficult todevelop and promote them in the exter-nal market.24 Second, the returns oneducation are low for the populationwith primary education; for the urbanareas, for example, Muriel (2004) revealsthat an additional year of educationimproves hourly wages by only two percent. (In secondary education, the returnis slightly higher at four per cent.)

Canadian Aid to Bolivia under the MillenniumDevelopment Goals

Background

Canadian aid to Bolivia began at the endof the 1960s in the areas of infrastruc-ture, rural development, education, andtechnical assistance. This focus was main-tained during the decade that followed.In the 1980s, the Canadian InternationalDevelopment Agency (CIDA) respondedto the natural disaster caused by El Niñoand the severe drought during 1982 and1983 with food aid. During this decade,Canadian aid granted financing to inter-national organizations such as the Pan-American Health Organization (PAHO),UNICEF and the Inter-AmericanDevelopment Bank (IADB). The areas ofintervention were widened to includehealth, water and basic sewage projects,social development and research,telecommunications, mining, and energy.

Following Bolivia’s return to democracyin 1982 and the inauguration of a newinstitutional framework and neweconomic policies under the governmentof Víctor Paz Estensoro in 1985, CIDAexpanded its development program toinclude balance-of-payments support forthe structural adjustment efforts of thegovernment and supported economicfunds through new national institutionssuch as the Social Investment Fund(FIS), the National Environment Fund(FONAMA), the Foundation forDevelopment Alternatives (FADES), andthe Foundation for the Promotion andDevelopment of Enterprises (PRODEM).Toward 1992, two-thirds of bilateralfunds were assigned to governmententities in support of national reformprocesses. This support was maintained

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in the successive governments, whichpledged to continue the reforms.

Canadian Aid Objectives, 2003-2007

In the second half of the 1990s,Canadian aid consolidated its focus ofaction for Bolivia. This focus is stillpresent; it consists of support to Bolivianinstitutions and capacity to enhance thereform processes. CIDA has decided todeepen coordination between coopera-tion and the national government andovercome isolated or incoherent actions.As well, a goal has been established forconcentrating program resources instrategic objectives in coordination withother development actors. CIDA’s presentprogramming in Bolivia is defined in theNuevo Marco de RelacionamientoGobierno y Cooperación (NewFramework of Government-Foreign AidRelations) subscribed to by theGovernment of Bolivia and by the inter-national community of donors at theConsulting Group meeting in 1999, aswell as in the Millennium DevelopmentGoals, and in the Bolivian PovertyReduction Strategy (EBRP).

CIDA has actively contributed to andparticipated with other donors in thepreparation of the EBRP in Bolivia. It hasalso supported many of the criticalprocesses for the success of the EBRP,including the Survey for theImprovement of Living Conditions(MECOVI), the National Census 2001,the Sole Funding Directory (DUF), theNational Dialogue Law, and the NationalCompensation Policy. As well, CIDA’sprogramming has been influenced by theEBRP. As such, bilateral and multilateralprograms respond to some of theEBRP’s objectives.

However, CIDA’s aid has not focused onthe core policies proposed by the EBRP(Bolivia’s Poverty Reduction Strategy).The EBRP emphasizes the achievement ofgreater employment opportunities andincome, and better access to marketsthorough the development of micro andsmall enterprises. In contrast, CIDA linkedthe reduction of poverty and theimprovement of the standards andquality of life of poor Bolivians mainlythrough two strategic objectives: to helpconsolidate the economic and politicalreforms in Bolivia, supporting theefforts of the Bolivian government formodernizing the state (i.e. throughimprovements in technology, efficiency,good governance, etc.) and, particularly,for increasing regulatory capacity andefficiency in the hydrocarbons sector;and to help meet the basic needs of poorBolivians through the improvement ofaccess of women, men, boys, and girls toessential health services and to potablewater services by supporting nationaland local institutional capacities in theseareas. Table 4 shows CIDA’s grants toBolivia related to these purposes.25

The strategic goal of governance andcivil society support is reflected in thehigh proportion of resources designatedto these programs; for fiscal year (FY)2004/05, for example, it is around51 per cent of total aid. Resources forhealth had been important in FY2003/04, with 35 per cent.

The modernization of the State reflectsthe assumption that the development ofthe hydrocarbons and utilities sectors willsustain Bolivian economic growth and inthe long run reduce poverty. Thesesectors have received from CIDA: the oiland gas sector, for example, received, onaverage for 2000-05 around 37 per centof the resources of the “productive and

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service sectors,” compared with 8 percent for industry and agriculture.

The relationship between the state andthe hydrocarbons and utilities sectorsrests on the fiscal income to the state(taxes and royalties from the privatizedenterprises, revenues that would later beconverted into basic services (health,education, and sewage) and infrastruc-ture benefiting small and medium enter-prises (SMES). However, some problemsarise with this perspective. First, it ishighly probable that bureaucracy and

corruption restrict the efficient use ofthese resources. Second, the connectionbetween the development of these sec-tors, long-term economic growth, andpoverty reduction has been questionedin the literature. Besides the low capacityof these sectors to absorb the 130,000new entrants in the labour market everyyear, there is the Dutch Disease Problem:a boom in the natural resources sectormay generate growth in the short-termbut, in the long run, the industrial sectoris negatively affected by the appreciating

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Table 4

Canadian Aid to Bolivia

Fiscal year 2000-01 2001-02 2002-03 2003-04 2004-05(p)

Total Aid (in 000 of C$) 14,797 16,885 13,440 18,930 9,903

By sector 100.00% 100.00% 100.00% 100.00% 100.00%

Education 2.32% 3.80% 4.61% 3.27% 7.03%

Health 9.43% 4.37% 4.31% 34.64% 6.01%

Water and basic sanitation 0.85% 0.80% 0.50% 0.54% 0.69%

Governance and civil society support 35.06% 40.51% 55.81% 42.75% 51.32%

Environment 1.84% 0.71% 1.96% 0.49% 1.37%

Productive and service sectors 44.22% 45.63% 27.43% 13.39% 25.17%

Others 6.28% 4.19% 5.38% 4.91% 8.41%

By branch 100.00% 100.00% 100.00% 100.00% 100.00%

Communications 0.00% 0.05% 0.12% 0.11% 0.28%

Americas 64.49% 72.33% 64.57% 73.38% 48.46%

Multilateral Program 7.78% 0.41% 0.00% 0.00% 0.00%

Canadian Partnership 27.73% 27.21% 35.32% 26.51% 51.26%

Source: CIDA.

Note: (p): preliminary.

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exchange rate caused by excessivedollars in the economy. Finally, there isalso the tendency that a boom in anatural resource sector, such as oil andgas, may attract most of the skilledhuman capacity, limiting the growthcapacity of other sectors of the economy.

HealthCIDA’s program in the health sector isoriented towards developing thepractice of national ownership andcontributing to coordinating and ration-alizing donor activities supporting theBolivian government’s efforts to reducepoverty. These principles are in harmonywith the processes defined in the EBRP.CIDA’s efforts are centred around itsknowledge of the progress and limita-tions of the public policies in the area inthe last few years, as well as the lessonslearned from past interventions.Experience has shown the limitations ofsuperficial expansion and supporting toomany isolated projects identified by CIDArather than local needs, which makemonitoring by CIDA and coordinationand follow-up by Bolivia difficult.

With regard to Bolivia’s efforts, CIDAunderscores the health sector’s reformand decentralization. The new Bolivianshared management model implies thatthe representatives of the prefectures,municipal governments, and localcommunities jointly manage the provi-sion of health services. Nevertheless,there are weaknesses in institutions, andtechnical and financial capacities, whichlead to management and administrationproblems. Many of the poorest munici-palities cannot adequately provide healthservices to their residents. As well,coordination between the central andmunicipal governments is not adequatelydeveloped and the latter lack the

technical and administrative infrastruc-ture required to develop the capacitiesneeded for their new responsibilities. Inaddition, problems exist in regard to theparticipation of civil society through theComités de Vigilancia (ObservationCommittees) in the monitoring of thequality of local health services and in thepresentation of health project proposalsto the government.

On the basis of these managementchallenges, as well as on the previouslymentioned limitations of the healthservices, CIDA proposes the need tostrengthen institutional, coordination,and managerial capacities at differentlevels of the public sector. CIDA ispledged to support Bolivia’s public healthreform infrastructure for health servicesand the development of innovativemodels for the management of localhealth. This new logistic health program,which CIDA is in the process ofdesigning, directs its support both inthe national and sub-national spheres.

CIDA accumulated much experience andknowledge from the Development ofSkills Project for Health Reform in thedepartmental health districts, municipali-ties, and grass-roots organizations in thecities of San Lorenzo, (Department ofTarija) and Guayaramerín (Department of Beni). Under the project, CIDAsupported the development of capacitiesfor formulating, planning, implementing,and monitoring public health administra-tive plans and systems. This projectcovers two of the 12 promising modelsof local health management identified bythe Government of Bolivia. At present,these models are being considered forreplication in other districts. CIDA hasestablished a niche and a solid reputationin the sector, as well as having madeessential contacts with Bolivian and

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Canadian health experts while imple-menting innovative models of coopera-tion and participation in communityhealth management and institutional andindividual capacity-building.

Water and basic sewage

Water management and basic sewageare relatively new project areas for CIDAin Bolivia. Among its past experience arethe Water, Irrigation and Potable Waterin Laka Laka project between 1989-97,and the Integrated Water and Healthproject in selected communities in theDepartments of Potosí and Chuquisacabetween 1990-95. As in the healthsector, the learning obtained fromthese experiences led CIDA to moreprogrammatic interventions linked tothe government’s reform processesand to better coordinate interventionswith other donors.

In coordination with national efforts,Canadian aid is supporting the creationof an information system for the man-agement of hydro resources and basicsewage that has as its goal to link theneeds of municipalities with the nationalplanning system. The objectives of theproject are to contribute to improvingthe quality of information, and strength-ening the collection, aggregating, andcoordination of data; and to strengthenplanning capacities through the intro-duction of a computerized informationsystem, providing essential feedbackand information to the municipalities on existing norms and legislation of the sector.

Modernization of the state The modernization of the state is themain area of intervention under CIDA’snew programming in Bolivia; its strategic

importance is established in the signifi-cant reforms promoted during the1990s, also known as the second genera-tion of reforms that substantially rede-fined the role of the state in the econo-my and in society. Following the stabi-lization of the Bolivian economy at theend of the 1980s, the state ceased to bean economic agent and assumed the roleof conductor of policies and creator of anenvironment favourable to developmentthrough the provision of regulation,infrastructure, and essential socialservices frameworks. It also proceededto decentralize power to municipalgovernments and districts. Among themain reforms are privatization, pensionreform, administrative decentralizationand popular articipation, health reform,educational reform, and public sectorreform, which includes the civil servicereform program.

Although the different levels of govern-ment have achieved significant progressin improving the governing structures ofthe country, there is still far to go inimplementing these very ambitious andbroad reforms. The Bolivian state is stillweak, both institutionally and politically,and there is still much to do in order forits public institutions to be consideredeffective. The municipalities are onlycapable of absorbing approximately35 per cent of the funds assigned tothem by the central government and theprefectures only absorb 50 per cent dueto their limited planning and implement-ing capacity and the lack of a clear workvision among the different sectors,departments, and levels of government.As well, it is important to note thatBolivia’s governance challenges are theresult of long-standing structural ineffi-ciencies of its democratic system, and itshistory of political exclusion and lack oflegitimacy of public institutions.

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In accordance with the pledges of theBolivian government and CIDA’s experi-ence, recent programs focus on threeelements: regulatory frameworks in thestrategic resources and minerals sectors;reforming the civil service and publicsector; and protecting and extendinghuman rights.

The first component is the effectiveformulating and application ofregulatory frameworks in the strategicresources and minerals sectors,specifically hydrocarbons and mineralresources. CIDA’s participation began in1993. CIDA’s support in the creation of alegal framework for privatization, in theincreasing of investment and in theimprovement of environmental regula-tion in this sector has been widely recog-nized. CIDA’s assistance in mining beganin 1997 and has centred aroundstrengthening the government’s capacityto formulate operational policies andframeworks that support the regulationof the sector, the implementation andpractice of environmental, health, andsafety standards, conflict resolution, andgreater economic opportunities for smallmining operations, and women andchildren miners.

In order to contribute to Bolivia’s gover-nance in a more integrated manner, bothin terms of efficiency and the reconstruc-tion of social and political equilibriums,CIDA’s support should join the effortstargeting the regulatory framework inthe productive sectors and industrialpolicies for SMEs. In accordance withthe EBRP’s policy to strengthen smallproducers as central in the fight againstpoverty, CIDA could participate in thecreation of an institutional environmentconsistent with the characteristics anddimensions of micro and smallenterprises. Some potential areas foraction are positive changes in the legal,

tax, and financial rules governingSMES, better coordination between thecentral and municipal governments toencourage local development andstrengthening the institutional capacityof the municipalities to lower transactioncosts and to increase synergies in thelocal business environment. Moreover,the EBRP proposes industrial policies toincrease productivity and competitioncapacity of production chains and, as aresult, the transformation of underem-ployment to dignified employment.

The reform of the civil service and ofthe public sector includes institutionalsupport for selected Bolivian institutionsthat are in the process of becoming moreefficient, accountable and transparent. Inmore specific terms, there is financialsupport through the Local Fund for theReform of the Public Sector (FLARSP) andtechnical assistance through the strategicdesignation of Canadian specialist volun-teers in selected institutions that areundergoing reforms.

Human rights is a new area for CIDA interms of modernizing the state of Bolivia.Jointly with other donors, CIDA issupporting the Defensor del Pueblo(Office of the Ombudsman), a recentlycreated institution that is independent ofpolitical control. Its mandate is to corrector address governance errors or mistakesin Bolivia, be they inadequate or insuffi-cient provision of services, corruption,political bias in the bureaucracy, or lackof access to justice on the part ofmarginalized Bolivians. At present CIDA isrepresented by a human rights specialistwith a seat in the office located in La Paz.

Gender equity

Gender equality is a transversal or inter-secting issue in the programs andprojects supported by Canadian aid in

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Bolivia, in accordance with the EBRP.Gender entered Bolivia’s public policyagenda in a significant and irreversiblemanner in 1993 with the creation of theVice-ministry in charge of the preparationand implementation of policies directedtoward gender equity.

The general focus of CIDA with regardto gender equity is concentrated insupporting efforts targeting theprogressive participation of women inthe development processes, mainlythrough increasing political consciencewith regard to the rights of women; thegrowing capacity of women’s organiza-tions for playing an active role in policydialogue, as well as in the planning,implementing and evaluation of develop-ment; and greater direct participation ofBolivian women in the decision-making processes, within the state, inthe private sector, in civil society, incommunities, and within the family.

Environmental sustainability

Environmental sustainability is anothercross-cutting issue underlying theCanadian aid program in Bolivia inaccordance with the EBRP. Sustainabilityis also defined as the protection, effectivemanagement and preservation of theintegrity of natural resources for futuregenerations. The Government of Boliviahas developed strategies for dealing withits environmental challenges and theEBRP grants the issue considerableimportance.

CIDA seeks to assure that all of itsprograms and projects comply with theCanadian Environmental Evaluation Law,and it has pledged the direct promotionof awareness-building and the applica-tion of environmental standards. Oneexample is the Bolivian Gas and

Petroleum project, which has among itsobjectives the adoption of ecologicallysustainable technologies that are safeand more efficient, through training andtechnology transfers to the EnvironmentUnit of the Vice-ministry of Energy andHydrocarbons.

ConclusionsCIDA’s policies in Bolivia, related tohealth, water and basic sewage, genderequity, and environmental sustainability,are coordinated with the MillenniumDevelopment Goals through harmoniza-tion with the EBRP. As well, CIDA hascontributed in a direct manner to theDialogues I and II process and to thepreparation of the EBRP. It has alsocontributed to the processes and activi-ties that allowed the reformulation of theEBRP, as well as to the construction ofmonitoring indicators and processes.Coordination of Canadian aid with theBolivian Government and with bilateraland multilateral aid constitutes significantprogress relative to interventions thatwere isolated, disperse and based onunilateral aid initiatives. In addition, thepolicies for the modernization of thestate and for the strengthening of themunicipalities make accomplishing theEBRP (Bolivia’s Poverty ReductionStrategy) process viable.

However, CIDA’s goals in Bolivia do notmirror the revised EBRP´s generalobjective to promote a more inclusivedevelopment model capable of over-coming poverty and social inequality.CIDA does not include in its objectivesthe development of SMEs throughstrengthening production chains andsupporting an adequate regulatoryframework for producers and municipali-ties. These enterprises—with fewer than

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10 workers—absorb around 85 per centof the total labour force; therefore, theexclusion of this important objectiverestricts the results of CIDA’s contributionto Bolivia in its fight against poverty.

As well, the EBRP asserts that the modelof development based on naturalresources such as hydrocarbons,electricity, and telecommunications is notsustainable in the long run due to thelack of an economic relationship withother sectors and low employmentgeneration. Although the Bolivianeconomy has grown 4 per cent between1990 and 1998, it did not generateemployment or reduce poverty.

CIDA’s decision to invest marginally inthose sectors that generate the majorityof employment may also be related to itstotal disbursements to Bolivia. It isimportant to consider that a largerallocation of resources to Bolivia— perhaps developing an additional line ofprograming—toward the support ofSMEs under the EBRP policy would allowCIDA to play a more significant role inBolivia’s poverty reduction efforts. SinceBolivia is one of the countries of focusfor CIDA, its actions could be morecomprehensive and significantly supportan inclusive model of economicdevelopment. Particularly after theOctober 2003 crisis, efforts to advancethe project implementation and effortsto monitor and evaluate their socialand environmental impacts must alsobe strengthened.

GONZALO CHÁVEZ holds a Master’sdegree in Public Policy from HarvardUniversity and a Master’s degree inEconomics and International Relations fromColumbia University. He is a PhD candidate

at the University of Manchester. His earlierstudies were at the Pontificia UniversidadeCatólica do Rio de Janeiro. He is the Directorof a Master’s program at the UniversidadCatólica Boliviana where he is a full-timeprofessor. As a consultant, he has worked forthe Bolivian government, the CorporaciónBoliviana de Fomento and The North-SouthInstitute.

BEATRIZ MURIEL, PhD, has worked asan analyst at the Unidad de Análisis dePolíticas Económicas and served as Directorof the Institute for Socio-Economic Researchin La Paz. In addition, she has worked as aconsultant to various national and interna-tional institutions, including Educated GirlsGlobally (EGG), the Inter AmericanDevelopment Bank and The North-SouthInstitute.

ReferencesAgencia Canadiense para el DesarrolloInternacional. Marco del Programa deDesarrollo de País Bolivia, June, 2003.

Andersen, L. and B. Muriel H. “Cantidadversus Calidad en Educación:Implicaciones para Pobreza.” Revista deEstudios Económicos y Sociales 1:1-43.2002.

Bolivia. INE (Instituto Nacional deEstadísticas). Estadísticas Nacionales2003. La Paz, 2003.

Bolivia. UDAPE (Unidad de Análisisde Políticas sociales y económicas).“Estrategia boliviana de reducción de la pobreza: Informe de avance y perspectivas.” www.udape.gov.bo. La Paz, 2003.

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Bolivia. UDAPE. “Evaluación económica2003.” www.udape.gov.bo. 2004a.

Bolivia. UDAPE. “Evaluación económica al primer semestre del 2004.”www.udape.gov.bo. 2004b.

Bracamonte, G. [personal interview].Interviewed by Gonzalo Chávez inNovember 2004.

Chávez, A.G. “Marco de Políticas Públicasen Bolivia: 1980 – 2003.” Maestrías parael Desarrollo – Universidad CatólicaBoliviana, mimeo. La Paz, 2004. unpublisher?

Fernández, M. and T. Reinaga. “RuralGirls’ Education.” IISEC-EGG-BID, mimeo,La Paz, 2004. Forthcoming.

Hernani, L.W. “Mercado Laboral,Pobreza y Desigualdad en Bolivia.”Revista de Estudios Económicos ySociales 1: 44-104. 2002.

Muriel, H.B. “Políticas Gubernamentalesen torno al mejoramiento de la edu-cación boliviana,” Instituto deInvestigaciones Socioeconómicas-Universidad Católica Boliviana, mimeo. 2002.

Muriel, H.B. “Urban female employmentin Bolivia.” IISEC-EGG-BID, mimeo. LaPaz, 2004.

Narváez, G.R. “Inequidades en el estadode salud, acceso y uso de los servicios de salud.” Unidad de Análisis de Políticas Sociales y Económicas. La Paz:UDAPE, 1998.

Orihuela, R.C. Contribución diferenciadadel Capital Humano al CrecimientoEconómica en América Latina, África del surdel Sahara y Bolivia. La Paz: UniversidadCatólica Boliviana, 2004.

UDAPE/INE. Progreso de los Objetivos deDesarrollo del Milenio, 2002.

UNDP. Human Development Report 2003.(New York: Oxford University Press,2003).

UNDP. Human Development Report 2004.

EndnotesThe authors are grateful for usefulcomments received from NSI, CIDA andother colleagues.

1 UNDP, Human Development Report,2004.

2 In 2003, President Gonzalo Sánchez deLozada was ousted from office by severalsocial movements. Some explain theousting by pointing to the formerPresident’s implementation of question-able economic policies, corruption, andrepression of strong public/civil societyprotests.

3 The incidence of extreme poverty isdefined as the percentage of thepopulation with income below the costof a food basket.

4 Indigenous People are determinedaccording to their mother language,which can be Quechua, Aymara or othernative language.

5 Hernani, 2002.

6 See Muriel, 2002.

7 Ibid.

8 See Fernandez and Reinaga, 2004.

9 See UDAPE et al., 2002; and UDAPE,2003. In Bolivia there are still importantproblems related to quality of education,principally for Indigenous people, butthese are not contemplated in the MDGs.See, for example, Andersen and Muriel,2002; Fernandez and Reinaga, 2004; andOrihuela, 2004.

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10 See INE, 2003.

11 Nor does the rate of completion of theeighth grade present significant genderdifferences (see UDAPE, 2003).

12 See INE et al., 2002 and UDAPE, 2003.

13 See UDAPE et al., 2002 and UDAPE, 2003.

14 Nevertheless, this data may be underestimated.

15 See INE et al., 2002.

16 See UDAPE, 2004a and 2004b.

17 INE et al, 2002.

18 These data have been extracted from theCensus 1992 and 2001.

19 The indicator of basic unsatisfied needsbetween 1992 and 2001 (census years)reveals that poverty has been reduced byless than one fifth in practically onedecade.

20 This is evident principally for the valleysand Altiplano regions of Bolivia.

21 As suggested by UNDP (2003), theseproblems reflect structural impedimentsthat have it made very difficult to achievesustained economic growth.

22 See Chávez, 2004.

23 See Vera, 2005.

24 Even large firms are often limited in theircapacity to market their products in theexternal market due to scale of produc-tion problems.

25 We thank Alex Carrasco from CIDA forthis information.

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Implementing the

MDGs in Mali:

Canada’s Contribution

Boukary Barry

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Progress of the MillenniumDevelopment Goals in Mali

The international community,under the auspices of theUnited Nations, has under-

taken since 1990 to organize sever-al conferences and summits withthe aim of establishing a generaldevelopment program based onthe protection of human rights andincluding objectives, quantifiableindicators, and a specific schedulefor their achievement. This led inSeptember 2000, to the establish-ment of eight goals, 18 targets orsub-goals, 48 indicators, and a tar-get date of 25 years, beginning in1990 and ending in 2015, towhich 191 countries around theworld, including Mali, committedto achieving.

Through the MillenniumDevelopment Goals (MDGs), theUN and the United NationsDevelopment Group, thesignatory countries hoped to seemore activities and greaterinteraction for development,especially tools and mechanismsto monitor, evaluate, and adjustaction taken, with the aim ofcreating a better world.

Following the interviewsconducted for the present study,various opinions have beenformed regarding the MDGs.These perceptions fall into fourmain categories:

• Some see in the MDGs realadvances in the notion of inter-national cooperation, in termsof an evolution from obligationof means to obligation ofresults. According to this view-point, the establishment of theMDGs represents the desire onthe part of donors to introduceinto aid management (and thusinto the field of development)the use of management toolsborrowed from the corporateworld. Stringency, and thegoals of effectiveness, efficien-cy, and the consistency ofactivities are the elements thatdetermine a management strat-egy’s success. In other words,sound management of theresources allocated to develop-ment is the prime concern.

• Others see the MDGs simply asa minimum platform of goalsto be achieved by each countryand for which the UnitedNations Development Group,

Implementing the MDGs in Mali:

Canada’s ContributionBoukary Barry