84039
                                                Bangladesh

                      Country Assistance Strategy Progress Report FY11-15
                                              and
                          Municipal Governance and Services Project

                                           Joint Chair Summary*
                                             January 14, 2014
       Executive Directors considered and endorsed the Joint IDA/IFC FY11-15 Country
Assistance Strategy Progress Report (CASPR) for the People’s Republic of Bangladesh
(IDA/R2013-0299; IFC/R2013-0388). They also approved a credit in the amount of SDR266.6
million (US$410 million equivalent) to Bangladesh for the Municipal Governance and Services
Project (IDA/R2013-0313/1) on the payment terms and conditions set out in the President’s
Memorandum.

        Directors welcomed the progress Bangladesh has achieved in sustaining economic
growth, reducing poverty and improving social indicators as well as the progress achieved under
the ongoing Bank Group’s Country Assistance Strategy (CAS) for Bangladesh. They strongly
supported the Progress Report’s approach to focus on accelerating poverty reduction and shared
prosperity by reengaging in areas that are critical for growth, while consolidating past
achievements in service delivery. They welcomed the adjustment of the Bank Group’s program
for the remainder of the extended CAS period with a greater emphasis on (i) strategic selectivity
by enhancing financing in areas such as infrastructure and energy which are necessary to support
growth and jobs, (ii) governance, and (iii) knowledge, partnerships and leveraging financing.
They highlighted the importance to further improve governance and implement anti-corruption
measures. Directors noted that the challenges ahead in governance and the political economy will
remain the key obstacles to sustain the economic and social progress achieved by the country,
and to deliver the Bank Group’s program during the remainder of the CAS.

        Directors welcomed the significant increase in IFC engagement in the country through
investments and advisory support with an aim at enhancing private sector activity in strategic
sectors as well as the provision of public-private partnership-based services. In addition, noting
the importance of the garment industry as the principal earner of foreign exchange and employer
of female workers, Directors welcomed Bank and IFC partnerships with the industry and the
Government to improve labor safety standards.

       Directors welcomed the Municipal Governance and Services Project aimed at  improving
municipal governance and basic urban services and infrastructure in participating Urban Local
Bodies. Directors noted the innovative project design, including a performance-based evaluation
and allocation system based on inter alia improvements in governance and financial
management. They stressed the need to have adequate mitigation measures in place to address
substantial implementation risks related to weak governance, local institutional capacity, delivery
monitoring and sustainability.
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*This summary is not an approved record.