| | | | | E ~~~~17464 g i | W .~~~~~~~~~~~~~~~~~~ i g ' ' ie r- - r- -r - / DD-r",jr~. i: I ' : BANGLADESH ANNUAL ECONOMIC UPDATE 1997 ECONOMIC PERFORMANCE, POLICY ISSUES AND PRIORITY REFORMS October 1997 South Asia Region The World Bank C ontents Abbreviations i Bangladesh at a glance iii Executive Summary v SECTION A An Overview Of Recent Developments And Challenges Ahead 1 SECTION B Progress On Reform Program 2 Public Sector Reform 2 Sectoral Issues and Private Sector Investment Development 4 SECTION C Economic Developments in FY97 6 Economic Growtlh Trends 6 Investment and Saving 7 Fiscal Developments 8 Balance of Pavmenits 10 Inflation and Monetary Developments 11 SECTION D Poverty Trends, Social And Environmental Developments 12 Poverty Incidence/Trends 12 Irends in Social Indicators 12 Environmiiienit 14 SECTION E Needed Priority Reforms 14 Sustaining Stability and Strengthening Macroeconomic Framework 14 Reforming the Public Sector: Improving Governance 15 Promoting Private Sector Development 17 Human Development and Environment 18 SECTION F Medium Term Development Prospects 19 External Environment 19 Foreign Direct Investment 20 Managihg the Macroeconomic Implications of Larger FDI 20 ANNEX I Potential External Sector Developments 22 ANNEX II The Stock Market Episode 25 ANNEX III Revised National Accounts 26 ANNEX IV Medium-Term Growth Scenario 30 STATISTICAL APPENDIX 31 LIST OF TEXT TABLES, CHARTS AND BOXES TABLES Table I Fiscal Trends 9 CHARTS Char-t I GDP Growtlh and Agriculture Growtlh 7 Chart 2 Investment, National & Domestic Savings 8 Chart 3 Central Govt. Finance 8 Chart 4 Composition of Financinig 8 Chart 5 Composition of Revenue Expenditure 9 Chart 6 Sectoral Composition of ADP 9 Chart 7 Exports, lmports & Remittances 10 Chart 8 Gross Reserves (Quarterly) 11 BOXES Box I SOEs and the Banking Sector 4 Box 2 New, re-based National Accounts 6 i Abbreviations ADP Annual Development Program FFW Food for Work APT Analysis of Poverty Trends FICCI Foreign Investors Chamber of Commerce & Industry ARC Administrative Reorganization Committee FY Fiscal Year BB Bangladesh Bank GDP Gross Domestic Product BBS Bangladesh Bureau of Statistics GOB Government of Bangladesh BIDS Bangladesh Institute of Development Studies GSP Generalized System of Preferences BCIC Bangladesh Chemical Industries Corporation HACCP Hazard Analysis Critical Control Point BEPZA Bangladesh Export Processing Zone Authority HES Household Expenditure Survey BFFEA Bangladesh Frozen Food Exporters Association BGMEA Bangladesh Garments Manufacturers & Exporters HPSS Health and Population Sector Strategy Association BMRE Balancing, Modernization, Replacement and HYV High Yielding Varieties Expansion BOI Board of Investment ICOR Incremental Capital Output Ratio BOP Balance of Payment IDA International Development Association BOO Build-Own-Operate IDS Infrastructure Development Surcharge BPDB Bangladesh Power Development Board IPGMR Institute of Post Graduate Medicine and Research BRC Banking Reform Committee IPPs Independent Power Producers BTTB Bangladesh Telephone and Telecommunications IRWIDGOB Institutional Review of the WID Capability of Board GOB CBN Cost of Basic Needs Method JTI Judicial Training Institute CEDAW Committee for the Elimination of Discrimination KAFCO Karnaphuli Fertilizer Corporation Against Women KPM Karnaphuli Paper Mill CEPZ Chittagong Export Processing Zone LC Law Commission CFTC Chittagong Feeder Trade Committee LCG Local Government Commission CPA Chittagong Port Authority LGED Local Government Engineering Department CPI Consumer Price Index LGRD Local Government and Rural Department CPR Contraceptive Prevalence Rate MAP Monitoring of Adjustment and Poverty MOE Ministry of Energy CSE Chittagong Stock Exchange MT Metric Ton DCI Direct Calorie Intake MW Megawatt DEPZ Dhaka Export Processing Zone NA National Accounts DESA Dhaka Electricity Supply Authority NAP National Action Plan DSE Dhaka Stock Exchange NBR National Board of Revenue EC European Commission NCB Nationalized Commercial Bank EPB Export Promotion Bureau NCWD National Council for Women's Development EPI Expanded Program of Immunization NEMAP National Environment Management Action Plan EPZ Export Processing Zone NGO Non-Government Organization ESP Essential Service Package NHP National Health Policy EU European Union NPK Nitrogen, Phosphate & Potassium FAO Food and Agricultural Organization NRH-S National Reproductive Health Strategy FDI Foreign Direct Investment O&M Operations and Maintenance FFE Food for Education OMS Open Market Sales PARC Public Administration Reforms Commission ii PB Privatization Board SA Statistical Appendix PC Power Cell SD Supplementary Duty PFDC Public Food Distribution System SMA Statistical Metropolitan Area PGCB Power Grid Corporation in Bangladesh SOE State-Owned Enterprise PPGP Private Sector Power Generation Policy SZTD The Survey Zone of the Taxes Department PSID Private Sector Infrastructure Development TFR Total Fertility Rate PSEPZ Private Sector Export Processing Zone THC Thana Health Center PSPGP Private Sector Power Generation Policy TRB Telecommunications Regulatory Board. RER Real Exchange Rate TYRIP Three Year Rolling Investment Program RFP Request for Proposal VAT Value Added Tax RIBEC Reform in Budgeting and Expenditure Control VGD Vulnerable Group Development RMG Ready-Made Garments WID Women in Development ROM Rehabilitation, Operation and Maintenance Currency equivalents The external value of Bangladesh Taka (Tk) is fixed in Following local convention, expenditures and revenues are relation to a (weighted) basket of currencies, with the US sometimes denominated in units of crore (abbreviated CR), dollar being the intervention currency. The official average which is equal to Tk. 10 million. exchange rate on August 18, 1997 was Tk.44.55 per US dollar In this report, USS is sometimes abbreviated as $. US $1 = Tk. 44.55 Tk I = US $ 0.0224467 Fiscal Year (FY) July I - June 30 This Annual Economic Update was prepared by a team led by Tercan Baysan. The other members of the team were Syed Nizamuddin, Zahid Hussain and Zaidi Sattar. World Bank BDO interns Afsana Ahmed and Tilat Khayer provided research assistance. Mehar Akhter was responsible for processing the report. Useful comments and inputs were received from Bashirul Huq, Humayun Hye, J. Kang, and Shekhar Shah. Pierre Landell-Mills and Roberto Zagha provided overall guidance during the preparation of this report. The excellent cooperation of the Government of Bangladesh (particularly that of the Bangladesh Bureau of Statistics, Bangladesh Bank, National Board of Revenue, Export Promotion Bureau, Ministry of Finance and IMED) in preparing this report is gratefully acknowledged. iii Bangladesh at a glance POVERTY and SOCIAL South Low- Bangladesh Asia income Development diamond' Population mid-1996 (millions) 121 6 1,264 3,229 GNP per capita 1996 (US$) 260 380 500 Ltfe expectancy GNP 1996 (billions US$) 31 6 481 1,601 Average annual growth, 1990-96 Population (%) 16 1.9 1.7 Labor force (%) 2 1 2.1 1.7 GNP Gross per --primary Most recent estimate (latest year available since 1989) capita 7 enrollment Poverty: headcount index (% of population) 48 Urban population (% of total population) 18 26 29 Life expectancy at birth (years) 58 61 63 Infant mortality (per 1,000 live births) 77 75 69 Child malnutrition (% of children under 5) 67 Access to safe water Access to safe water (% of population) 96 63 53 Illiteracy (% of population age 15+) 62 50 34 Gross primary enrollment (% of school-age populaton) 92 98 105 8angladesh Male 98 110 112 Low-income group Female 86 87 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1995 1996 Economic ratios* GDP (billions US$) 14.3 15.7 29.1 32.1 Gross domestic investment/GDP 6.1 12 9 16.6 17.0 Openness of economy Exports of goods and services/GDP 2.9 74 14.2 14.3 Gross domestic savings/GDP 0.9 2.0 8.3 7.1 Gross national savings/GOP 4.9 9.6 13.1 11.9 Current account balance/GDP -4.3 -3.9 -3.5 -5.1 . Ivte Interest paymentrr GDP 0.1 0.6 0.6 0.6 Savings , ._) - Investment Total debt/GDP 13.0 43.9 56.2 53.2 V Total debt service/exports 23.4 22.5 13.3 11.6 Present value of debt/GDP .. .. 31.4 Present value of debt/exports .. .. 166 7 Indebtedness 1975-85 1986-96 1995 1996 1997-05 (average annual growth) Bangladesh GOP 5.0 4 2 4.4 5.3 6.0 Lancoaesh GNP per capita 2.4 2.4 2.8 32 7.3 Low-income group Exports of goods and services 6.0 15.0 34.6 11.4 7.7 STRUCTURE of the ECONOMY 1975 1985 1995 1996 (% of GDP) Growth rates of output and investment (%) Agriculture 62.0 41.8 30.9 30.0 3u Industry 11.6 16.0 17.6 17.7 20 Manufacturing 7.0 9.9 9.6 9.6 Services 26.4 42.3 51.5 52.4 ° .. . - _ Private consumption 95.9 90.6 77.9 79.1 go 91 92 93 94 95 96 Generalgovemmentconsumption 3.2 7.3 13.7 13.7 GDI GDP Imports of goods and services 8.1 18.3 22.5 23.9 1975-85 1986-96 1995 1996 (average annual growth) Growth rates of exports and imports I%) Agriculture 3.5 1.8 -1.0 3.7 so, Industry 4.7 6.5 8.4 5.3 Manufacturing 2.9 5.9 8.6 5.3 25 - Services 6.8 5.2 6.9 6.5 Private consumption .. 1.4 0.6 5.2 .\ ./ - - - - General govemment consumption . 3.9 5.3 7.2 9 94 959 Gross domestic investment 8.4 7.9 28.2 10.9 -25 - Imports of goods and services 7.9 7.0 37.7 16.2 Exports -m ports Gross national product 4.9 4.3 4.4 4.7 Note: 1996 data are preliminary estimates. Figures in italics are for years other than those specified. The diamonds show four key indicators in the country (in bold) compared with its income-group average, If data are missing, the diamond will be incomplete. kv Bangladesh PRICES and GOVERNMENT FINANCE 1975 1985 1995 1996 Domestic prices Inflation I%) (% change) 1C Consumer prices 21.9 10.7 5.2 4.1 Implicit GDP deflator .. 11.1 8.7 5.6 5 Government finance (% of GDP) o - Current revenue .. 8.5 12.1 11.5 90 91 92 93 94 95 96 Current budget balance . 1.3 3.3 2.8 Overall surplus/deficit .. -6.8 -5.7 GDP def CPI TRADE 1975 1985 11995 1996 (millions US$) Export and import levels (mill. USS Total exports (fob) .. 940 3,473 3,882 7.500 Leather .. 70 202 213 Frozen food . 87 299 315 Jute goods .. 358 319 330 s,ooo Garments .. 116 1,980 2,548 Total imports (cif) .. 2,647 5,834 61881 Food .. 607 476 586 2,500 1l Fuel and energy .. 359 383 456 Capital goods 6. 691 1,688 1,918 0 Export price index (1987=100) . 74 186 194 90 91 92 93 94 95 96 Import price index (1987=100) .. 104 127 130 Exports it Imports Terms of trade (1987=100) 71 146 150 BALANCE of PAYMENTS 1975 1985 1995 1996 - (millions US$) Current account balance to GDP ratio (%) Exports of goods and services 427 1,162 4,130 4,508 0 _ | Imports of goods and services 1,459 2,864 6,545 7,614 9o 91 92 93 94 95 99 Resource balance -1,033 -1,702 -2,415 -3,106 -2 - Net income -6 -90 -41 -6 Net current transfers 417 1,178 1,426 1,475 Current account balance, before official capital transfers -621 -613 -1,030 -1,637 6. Financing items (net) 666 536 1,304 575 Changes in net reserves -45 77 -274 1,062 -a Memo: __I Reserves including gold (mill. US$) 148 356 3,070 2,018 Conversion rate (localIUS$) 8.9 26.0 40.2 40.8 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1995 1996 (millions US$) Composition of total debt, 1995 (mill. US$) Total debt outstanding and disbursed 1,861 6,874 16,370 17,070 IBRD 55 55 55 46 F G A IDA 295 2,021 5,638 5,713 244 206 55 Total debt service 105 356 729 687 , - B IBRD 0 3 8 8 5638 IDA 2 22 83 92 E Composition of net resource flows 5533 Official grants 315 472 890 878 Official creditors 576 563 849 766 Private creditors -3 -3 -72 -25 \ . C Foreign direct investment 0 0 2 .. D 622 Portfolio equity 0 0 67 -14 4072 World Bank program Commitments 205 398 356 168 A - IBRD E - Bilateral Disbursements 91 288 197 278 B-IDA D-Otnermultilateral F-Private Principal repayments 0 6 46 55 C - IMF G - Short-term Net flows 91 282 151 223 Interest payments 1 20 46 45 Net transfers 90 262 105 178 Development Economics. 1996 extemal debt and resource flows data are staff estimates (preliminary). I EXECUTIVE SUMMARY I. Fiscal year 96/97 started with the establishment of a new government in power following the June 1996 general elections. This improved the political environment, ending a prolonged period of turmoil and civil unrest that had crippled the economy, stalled economic reforms, undermined hard- earned economic stability, and weakened business confidence. At the outset, the new Government announced the key elements of its development agenda and economic policy orientation by stating its commitment to: poverty reduction, social justice, and continuing economic policy and institutional reforms aimed at faster economic growth and human development. And it stressed that ensuring macroeconomic stability remains a key objective of the Government's economic program. Recent Developments 2. Some progress notwitlhstanding, key policy and institutional reforms remain to be implemented. During FY97, there were some positive initiatives in the banking sector, with improvements in the legal and regulatory environment and efforts to improve loan recovery. In the energy sector, significant progress was made in developing a Private Sector Power Generation Policy and in attracting foreign direct investment. Upward adjustments in power tariffs and more recent increases in petroleum product prices will help improve the financial situation of the energy sector. And the June 1997 decision to increase the price of urea will reduce fertilizer subsidies. However, in the banking system, the high level of non-performing assets and undercapitalization continue to be serious problems and a threat to macroeconomic stability. In addition, there has been little progress in privatizing public enterprises, opening the trade regime, and introducing urgently needed legal and administrative reforms. And the economy continues to be affected by deep-seated structural weaknesses, including infrastructure bottlenecks and deficiencies in the public sector institutions responsible for implementing policies and regulations governing private sector activity. More importantly perhaps, uncertainty regarding the future scope and pace of changes in trade and industrial policies, and banking reform have created an environment which is not conducive to the high levels of private investment the country needs to sustain rapid economic growth. 3. Economic growtht was above average in FY97, but industrial recovery is needed to sustain it. For the second year in a row, a bumper rice harvest maintained growth at above 5 percent. In fact, at 5.7 percent, GDP growth in FY97 was the highest since the beginning of the 1990s. At about 3.6 percent in FY97 (down from about 5 percent in FY96), the rate of industrial growth, however, was one of the lowest. Several adverse developments contributed to this outcome: disruptions in the supply of natural gas--which in tum affected power supply and urea production--and labor disputes which disrupted Chittagong Port operations. Furthermore, the July-November 1996 boom and bust in the stock market caused more difficulties in the real sector by diverting funds from production. These short-term adverse shocks were compounded by the banks' more stringent lending standards (result of their sizable non-performing assets) and the lack of a clearly articulated reform program which discouraged private investment. It is clear that Bangladesh needs to improve its policy framework to boost industrial activity and sustain high economic growth. 4. Foreign exchange reserves declined by afurther $0.3 billion and, at $1. 7 billion, reaclhed a critically low level (less than 3 montlhs of imports). The external current account deficit declined from over 5 percent of GDP ($1.6 billion) in FY96 to less than 3 percent ($0.9 billion) in FY97. This was the result of a healthy export growth (14 percent) and a significant rebound in remittances. Import growth declined sharply from 18 percent in FY96 to 3.5 percent in FY97 due to subdued industrial activity and very low food imports. The contraction in the external current account deficit vi contributed to the slowdown in reserve losses, which had exceeded $1 billion in FY96. However, continued low aid disbursements (which declined gradually but persistently from $1.8 billion at the beginning of the 1990s to $1.5 billion in the last two years) and a $120 million portfolio capital outflow--a spillover effect of the boom/bust episode in the stock market--offset the improvement in the current account. Pressures on foreign exchange reserves are likely to continue and could even mount with a recovery in industrial activity and ensuing pick-up in import demand. This pressure would be exacerbated if the net aid disbursements were to continue their recent decline. 5. Tlhe response to thte persistent reserve decline has been inadequate. Additional steps are needed to rebuild reserves. The official exchange rate was devalued by 4.6 percent vis-a-vis the US dollar in seven steps in FY97. This was not adequate to avoid a 4 percent appreciation of the real effective exchange rate. however, and has likely contributed adversely to the competitiveness of Bangladesh's exports. The recent sharp devaluations in Southeast Asian competitor countries must have further seriously eroded Bangladesh's competitiveness. A competitive exchange rate policy will be important for strengthening the economy's export base. At the same time, steps will be needed to improve the capital account balances. These include, in particular, sustained efforts by the Government to increase aid utilization--by removing project implementation bottlenecks, meeting policy commitments--and attract increasing private capital inflows. 6. Improvements in fiscal balances have not been accompanied by improvements in thte quality of public spending. There are also questions as to whethler positive developments in fiscal balances will be sustained during FY98. A marginal increase in revenue (from 1 1.5 percent of GDP in FY96 to 1 1.7 percent in FY97) and a marginal decline in expenditure (from 17.1 percent of GDP in FY96 to 17 percent in FY97) led to a decline in the fiscal deficit from 5.7 percent of GDP in FY96 to 5.3 percent in FY97. In addition, net domestic financing declined from 2.2 percent of GDP to 1.9 percent. These positive developments were not accompanied, however, by improvements in the quality of public spending. In particular, while there has been a welcome increase in the share of social sectors and infrastructure in the Annual Development Program (ADP), the ADP also contains many low priority projects and several that would be best carried out by the private sector. For example, a recent review of the FY98 ADP and of the latest Three Year Rolling Investment Program has identified 91 projects warranting careful re-examination. In addition, while there has been some positive measures taken in the FY98 budget (simplification of income tax payments procedures, efforts to improve compliance, another change in the corporate tax rate structure towards uniformity, and improvements in VAT and increase in the turnover tax rate), there are questions as to whether the FY98 revenue and fiscal deficit targets will be met. Already in the first two months of FY98 revenue collections have been 10 percent below the target. Compounding this, pay increases resulting from the implementation of the Pay Commission's recommendations and the non-resolution of absorbing completed ADP projects staff could put pressure on expenditure. 7. The decline in the domestic financing of the deficit was accompanied by a significant increase in its monetization. In particular, bank credit--mainly from the central bank--to the Government increased by 27 percent, which followed the 37 percent expansion observed in FY96. Furthermore, the decline in foreign exchange reserves mopped up liquidity with the result that broad money growth remained at 11 percent. This, togcther with good harvests, contributed to keep inflation in the low single digits during FY97. Challenges Ahead 8. Sustaining macroeconomic stability. There is a need to strengthen the macroeconomic framework by increasing foreign exchange reserves and by reducing Government 's borrowing from vii the banking system in order to avoid crowding out the private sector. In the fiscal area, this requires reducing price distortions and subsidies, broadening the tax base and improving tax compliance, and reducing losses incurred by public enterprises and the quasi-fiscal losses stemming from the banking system. 9. Accelerating reforms. The enormnous challenge of poverty reduciion facing Bancglacdesh requires faster econ7omic growvth and h20m7an developnmenit. To this end, completing the unfinished reform program is the key. This requires stronger effort to accelerate pending reforms in public resource management and administration, privatization, banking, trade policy, and the legal system. At the same time, coherent sector strategies in education, health, population, and rural development need to be formulated and implemented. Rapidly establishing an appropriate legal and regulatory framework in energy and telecommunications will be important for ensuring competition and efficiency in these expanding sectors. Addressing the law and order situation is also vital for security of life and property, for improving the business environment, and for better access to public services by all. These steps would energize the private sector and stimulate private investment by improving the investment climate. 10. Exploiting opportunities. Currently, Bangladesh is attracting a strong foreign direct investment (FDI) interest, particularly in the energy and telecommunication sectors. On the basis of the ongoing contacts and already advanced negotiations, the level of FDI in the current fiscal year could reach $0.5 billion, with most of it going to the power and gas sectors. Such levels of FDI could be sustained and possibly increased in the medium-term. Bangladesh's prospects for economic growth, export diversification, and overall development would be significantly improved by capitalizing on this growing FDI interest, which could also expand into other industrial activities. Accelerating the pace of reforms would help realize this potential FDI and associated benefits. II. Significant gas discoveries would increase exports, and improve tlhe balance of payments. But it would require corresponding adjustments in macroecononmic policies. In the event of large gas exports, the rcal exchange rate could appreciate, advcrscly affccting the international competitiveness of other exports and discouraging export diversification. Appropriate strategies would need to be developed in conjunction with fiscal, exchange rate and monetary policies to avoid sustained real exchange rate appreciation. BANGLADESH: ANNUAL ECONOMIC UPDATE 1997 ECONOMIC PERFORMANCE, POLICY ISSUES AND PRIORITY REFORMS 1. Objectives and scope. This report reviews progress made in the implementation of the economic policy and institutional reform program, assesses economic performance, and highlights crucial policy issues. The report also focuses on priority reforms needed for faster economic growth and poverty reduction and to better prepare Bangladesh for the challenges of the twenty first century. A. AN OVERVIEW OF RECENT DEVELOPMENTS AND CHALLENGES AHEAD 2. Following the June 1996 general elections, the new Government assumed office in an improved political environment, leaving behind a prolonged period of turmoil and civil unrest that had crippled the economy and stalled economic reforms. At the outset, the Government declared its determination to pursue 'economic growth with social justice' and achieve faster poverty reduction. To these ends, the Government stressed its commitment to continue economic policy and institutional reforms within the framework of a market-driven and private sector-led business environment. As part of this strategy, the Government also expressed its determination to promote faster rural development and stronger elected local governments, and to provide support for education and basic health care. Maintaining macroeconomic stability was also highlighted as a key objective of Government's economic program. 3. With respect to the reform program, some positive initiatives were taken in the bankilng legal/regulatory environment, in attracting foreign direct investment (FDI) into the energy sector, and in adjusting administered prices. The progress in the implementation of the pending reforms has remained very limited in other areas, such as privatization, trade policy, legal/judicial and administrative reforms. And much remains to be done to effectively address the serious weaknesses in the banking sector and bottlenecks in infrastructure. In short, Bangladesh started FY98 with a still sizable reform agenda, and a private sector still waiting for a clear direction in economic policy. 4. Overall macroeconomic performance in FY97 was satisfactory in terms of economic growth and inflation, though sluggish growth in industry and uncomfortably low foreign exchange reserves have remained as problem areas. Growth picked up noticeably in FY97, largely reflecting strong crop production, which also contributed to a low, single digit inflation. But economic activities remained weak in almost all industrial subsectors. Industrial growth was one of the lowest in recent years. Slow progress in the reform program and uncertainty regarding the future scope and pace of changes in trade and industrial policies appear to have contributed to this outcome. In addition, several adverse factors in FY97 affected industrial performance, including disruptions in the supply of gas, labor disputes affecting Chittagong port operations, and the boom/bust in the stock market during the first half of FY97. To sustain even the 5 plus percent GDP growth achieved in the last two years, it would be necessary to boost industrial activity. 5. Looking ahead, the enormous challenge of poverty reduction facing Bangladesh requires faster economic growth and human development than experienced in the recent years. To this end, the Government is facing several challenges in FY98 and beyond. In the near-term, there is a need to strengthen the macroeconomic framework. Specifically, it would be important to rebuild foreign exchange reserves to a comfortable level by pursuing a competitive real exchange rate policy, continuing trade C CQncern about the policy uncertainty has been also voiced by various Chambers of Commerce and Industries. 2 liberalization, improving aid utilization, and attracting private capital inflows. Within such a stable macroeconomic environment, completing the unfinished reform agenda will be critical for achieving the poverty alleviation and growth objectives. This would require a stronger effort by the Government to accelerate the implementation of pending reforms in banking, privatization, trade policy, public resource management and administration, and the legal/judicial system. Also, appropriately designed sector strategies in education, health, population, and rural development need to be implemented. Addressing the law and order situation will be important for improving the business environment. These reforms and measures would energize the private sector and boost private investment. Finally, in view of the growing FDI interest in Bangladesh, it would be prudent to make appropriate adjustments in macroeconomic policies to deal with the BOP implications of expected pick up in FDI, particularly in the energy sector. 6. Section B below gives a brief account of recent progress in the implementation of the reform program. This provides the necessary background on the economic policy and institutional environment under which the economy operated in FY97. Sections C and D review economic, social, and environmental developments in FY97. Key requirements of sustaining macroeconomic stability and crucial policy and institutional reforms are discussed in Section E. Medium-term economic prospects are assessed in Section F within the context of an accelerated reform scenario, taking into account the expected increase in FDI inflows. B. PROGRESS ON REFORM PROGRAM Public Sector Reform 7. Fiscal policy. On the revenue side, Bangladesh's fiscal structure continLes to suffer from a very narrow tax base. While the introduction of VAT in 1991 has contributed to the revenue mobilization effort by broadening the tax coverage and raised the tax/GDP ratio by about 2 percent of GDP, the revenue effort is still based heavily on imports. Close to 60 percent of tax revenues come from imports (Statistical Appendix table SA 6.4). This also inhibits the progress in rationalizing customs duties further. Efforts aimed at extending the coverage of VAT and income taxes have been limited, while strengthening tax administration remains to be tackled. 8. The policy measures announced with the FY98 budget include some positive steps: a further simplification of income tax payment procedures with increased provision of self-assessment, another change in the corporate tax rate structure towards uniformity, and some new measures--such as the use of mandatory filing of tax returns by owners of cars and certain categories of houses; extension of VAT's coverage, removal of some VAT exemptions and increase of turnover tax rate; and the rationalization of the supplementary duty system. These might help raise more revenues but are insufficient to address the structural weaknesses of Bangladesh 's revenue base. 2 9. Budgetary revenues/expenditures are affected indirectly by the administered prices of power, urea and petroleum products. Prices of power and urea were raised in FY97 after a long gap. Also, petroleum prices were increased in August 1997, though the positive effect on nontax revenues is expected to be small. This is due to the fact that changes in the prices of diesel and kerosene--which account for over 80 percent of the domestic consumption of petroleum products--were negligible and the Government itself is the major consumer of gasoline. 2 In the case of urea, it is the size of urea subsidy that is affected by changes in its price, given that even after the 29 percent increase of June 1997, the ex-factory price of urea is still less than half the international price. 3 10. The importance of well-targeted and prioritized public expenditure programs in achieving rapid economic growth and poverty reduction is clear. The Governmenit has made good progress in increasing the share of social sectors and infrastructure in the Annual Development Program (ADP) allocations.3 Yet, there is still ample room for improving inter-sectoral and intra-sectoral distribution of public expenditures. At present, there are many projects that appear to be of low priority and some that should clearly be left to the private sector. For example, in a recent (non-exhaustive) review of the FY98 ADP and the latest Three Year Rolling Investment Program (TYRIP) for FY96-FY98, some 91 projects, warranting careful re-examination of their rationale and priority, have been identified. 11. Public sector management/governance. The Government has repeatedly stressed its intention to establish an efficient and transparent governnient as a top priority. This correctly reflects the crucial importance of improving governance in: using public resources; policy making for sound macroeconomic management and efficient resource allocation; creating effective and stronger institutions to implement policy, facilitating better functioning of markets, and establishing law and order. So far progress has been very slow in most aspects of this very fundamental reform area. According to business organizations, law and order situation continues to be a problem. "Toll collection" is reported to be still rampant. Armed groups of students continue to battle on the campuses. The promise to appoint an ombudsman remains to be fulfilled. "System losses" continue at extraordinarily high levels in PDB, DESA, and WASA. 12. With respect to administrative reforms--which are aimed at restructuring public administration, enhancing accountability and transparency in government, making the civil service more effective, reducing opportunities for corruption, and strengthening parliamentary oversight as well as other public institutions (e.g., CAAG and Bureau of Anti-Corruption etc.)--so far the only progress has been the formation of additional committees/commissions, without much concrete action. 13. The report of the Administrative Reorganization Committee (ARC) was submitted to the Government in 1996. Subsequently, a Public Administration Reforms Commission (PARC) was constituted. A Chairman of PARC with the rank of a Minister was appointed in July 1997 and the work of the Commission is just being initiated. A National Workshop on "Government That Works" was organized in December 1996 jointly with the World Bank. More initiatives have been taken on local government reforms: the report of the Local Government Commission (LGC), which is proposing a four- tier local government structure, has been completed and submitted to the Government. However, as of mid-September, the Government has not announced any decision in this regard. 14. Recently, there has been a revival in the activities of the Privatization Board (PB), following the appointment of a private sector representative as Chairman of the PB in May 1997. However, actual progress inprivatization during FY97 was disappointing. Sizable SOE losses continue to burden the budget, and their inefficiency remains a major drag on the economy. Gross losses of nonfinancial SOEs alone amounted to $364 million in FY97 (SA 6.3). A third of this amount was incurred by PDB and DESA; (losses of the Railways and the Post Office, which are directly accounted for in the Government budget, exceeded $25 million in FY97). Government's pronouncements on privatization have so far not been matched by actual progress on the ground. Not one of the 64 manufacturing SOEs slated for privatization last year was actually transferred in that year. There have been some progress recently with the issuance of letters of intent (LOI) by the PB for outright sale of 9 public enterprises. Decision has also been made for off-loading shares of another 9 units through the Investment Corporation of Bangladesh (ICB). However, what is worrisome is that on more than one occasion bids were called for and received, For a detailed review and assessment of Bangladesh's public expenditure programs, see the World Bank's recent report: Bangladesh: Public EyPenditure Review: 1997 Uodate-Mlaking the Best Use of Public Resources, July 1997, South Asia Region. 4 but the Government failed to take a decision. Recent initiatives to have consultations with the concerned workers could facilitate faster decisions. What is lacking is a clear policy on the modalities of privatization which the Government is willing steadfastly to back. Sectoral Issues and Private Sector Investment Development 15. Financial sector reforms. The Government has taken the initiative to: strengthen the banking legal framework in the areas of loan recovery and management; pursue large defaulters; and create a general awareness about the poor state of the banking sector and on the dangers and costs of indiscipline in banking. BOX 1: SOEs and the Banking Sector--Costs of Inaction Quasi-fiscal losses associated with the operations of Bangladesh's non-financial SOEs and of the banking sector (and DFIs) are sizable, burdening the budget directly or indirectly. Obviously, there are additional costs as well, imposed on the economy due to high costs/poor quality of SOE products/services and forgone opportunities or lost returns because of the mismanagement of the resources tied up in SOEs. Non-financial SOEs, including the Railways and the Post Office, have been showing large losses--which amounted to 1.2 percent of GDP in FY97. Their budget deficits have recentlv approached 2 percent of GDP, with financing being met from ADP allocations, transfers/loans from the Government budget, borrowings from NCBs, and further accumulation of arrears to the banks and the Government. The banking sector is financially weak, with both NCBs and domestic private banks highly undercapitalized, underprovisioned, and burdened with significant amounts of nonperforming loans. DFIs' overdue loans amounted to 61 percent of tlheir outstanding loan portfolio at end- 1996; (potential interest earnings on the classified loans of NCBs and on the overdue loans of DFIs--at nominal interest rates of 15 and 10 percent, respectively, would have amounted to 1. 3 percent of GDP at end-FY97). Since December 1992, the Government has issued bonds worth Tk 60.7 billion and given Fk Io billion in cash to recapitalize NCBs, write off agricultural loans, and compensate NCBs for some of the loans extended to SOEs. Government's assumption of SOE liabilities and other budgetary support to SOEs and meeting the recapitalization and provisioning needs of the banks will continue burdening the budget until the urgently needed reforms in the nonfinancial SOEs and the banking sectors are effectively implemented. Even if the needed reforms were to be implemented now, recapitalization and provisioning needs of the-banks could reach the range of 2.0-5.0 percent of GDP, depending on whether the less stringent current prudential regulations or the international norms are applied. Inaction would increase these budgetary costs (as well as--the probably more damaging-- spillover effects on the economy) significantly. By acting now, the Government could avoid potentially sizable additional costs and utilize these (saved) resources for financing high impact social sector and infrastructure programs. 16. In addition to establishing a Bank Reforms Committee (BRC) and changing the memberships of the Boards and managements of the banks, several actions were also taken to strengthen the legal framework related to the commercial banking during FY97. These included: approval by the Parliament of amendments to the Financial Loan Courts Act of 1990; passing of a bill amending the Banking Companies Act, thus bringing this law up-to-date to deal with the insider lending problem; and the enactment of a Bankruptcy Act to facilitate effective debt recovery. Other actions toward loan recovery included setting up of a special legal cell at the Bangladesh Bank to pursue large defaulters and the formation of task forces in the banks for strengthening the loan recovery drive. 17. So far loan recovery efforts have not yet reversed the increasing trend in classified loans. The size of classified loans increased by 10 percent during Decemb-r 1995 - December 1996, reaching Tk 111 billion (31.5 percent of total loans), and further expanded to Tk 122 billion by end-FY97, or about 33 percent of the total loan portfolio. It should be noted that these magnitudes are calculated under the Bangladesh's current prudential standards which are less stringent than the international norms. 5 Obviously, this is a situation requiring urgent actions in order to ensure the safety of deposits, establish a healthy and well functioning banking sector, and stop the budgetary drain at the expense of tax payers as well as indirect costs in terms of lost business opportunities (Box 1). 18. In the aftermath of the stock market turmoil of July-November 1996, the Government has initiated steps to protect investors' interest and develop stronger and well-regulated capital market institutions (Annex II). To this end, in early 1997 Parliament passed the Securities and Exchange Commission (Amendment) Bill 1997 and the Securities and Exchange (Amendment) Bill 1997. 19. In infrastructure, the Government has taken initiatives to unbundle activities with a view to promoting competition and efficiency for better service delivery. Steps have also been initiated to establish appropriate regulatory and policy framework to set the rules of market engagement in energy and telecommunications. 20. In power, encouraging steps to restructure the sector have been taken. Progress has been made by the Power Cell (PC) in the preparation of a power sector reform program and private power development. A private sector power generation policy (PPGP) was approved in October 1996. The latter states that new power generation capacity will be created through "independent power producer" (IPP) projects, which will be implemented on a BOO basis. Standard "security packages" and "request for proposals" have been prepared for soliciting offers from IPPs. Bids for four barge-mounted and six other power plants are in various stages of processing. Power purchase agreements with IPPs have recently been signed by the Government for two barge-mounted power plants. Completion of these ten power plants would lead to the creation of an additional capacity of 1520-1720 MW, raising the present operational capacity by over 70 percent. However, the Government is planning to undertake four power plants under BPDB's direct investment. A review of GOB's position on these four projects appears desirable, particularly in view of the strong interest shown by IPPs in the power sector. There seems to be little justification for public sector investment if the country's power needs can be efficiently met by the private sector. By not undertaking these four projects, the Govemment could give a stronger signal to the private sector. Such a decision would bc prudent especially since the overall commercial performance of the public sector entities has dropped--with the collection to generation ratio falling from about 62 percent in FY95 to 61 percent in FY97. Finally, it needs to be highlighted that the establishment of an appropriate legal/regulatory and pricing policy framework for the sector is a priority (see Section E for details).4 21. In the oil/gas sector, which is expected to attract increasing amounts of FDI (Annex I), efforts are underway, with support from the ADB, to develop an appropriate regulatory framework for this sector. In telecomimunications, the Government's commendable effort to promote private investment and enhance competition by bringing private providers in value-added services would need to be followed up urgently by having an effectively functioning Telecommunications Regulatory Board (TRB). At present, the TRB lacks competent technical staff. What is still missing is the necessary regulations to determine the pricing policy, protect service users, and ensure healthy competition. Also, keeping the TRB in the Ministry of Telecommunications should be seen as a transitional arrangement. Establishing an autonomous regulatory body is desirable for transparency, commercially-based independent decisions, and for ensuring neutrality in regulating the sector. The monopoly of Bangladesh Telephone and Telecommunications Board (BTTB) in basic (fixed wire) services in urban areas also needs to be phased out to promote competition in the entire telecommunications sector. 4 Note also that a (World Bank) supported Private Sector Infrastructure Development (PSID) project aimed at facilitating private sector involvement in power, telecommunications, water, and transport sectors has reached the implementation stage. In April 1997, the Cabinet approved the proposal to create a new infrastructure Development Company" to handle the retailing of (limited recourse debt) financing to private investors. 6 22. In trade policy, some of the new measures announced with the FY98 Budget give mixed signals to investors about the policy stance of the Government in this area. While some customs duty rates have been lowered to "rationalize" tariffs, other rates have been raised to provide higher "protection" to some activities. And the reduction of the maximum tariff rate from 45 percent to 42.5 percent has been offset by the 2.5 percent Infrastructure Development Surcharge (IDS).5 With respect to the quantitative restrictions, which cover mainly textiles, there has been no change in the import regime. Despite their long history in Bangladesh, QRs and high tariffs have not only failed in promoting the development of a competitive and diversified textiles sector with linkages to the RMG sub-sector, they have also encouraged informal trade from across the border, thus depriving the Government of tariff revenues. C. ECONOMIC DEVELOPMENTS IN FY97 23. Macroeconomic developments in FY97 were marked by a healthy GDP growth and moderate inflation. The budget deficit as well as the external current account deficit declined, but there was also a further reserve drawdown; (see SA 2.1 for a summary presentation of macroeconomic indicators and Box 2 for information on NA statistics). These performance highlights are discussed in more detail below. BOX 2: The new, re-based National Accounts series Bangladesh Bureau of Statistics (BBS) has been trying to improve the quality of the national accounts (NA) and address some of the deficiencies in official statistics. Recently, BBS has announced in a draft report some of the results of its ongoing effort aimed at improving the coverage and re-basing of NA statistics, using the SNA '93 guidelines. Preliminary results, covering at present only FY90-FY95 period, show much higher levels of nominal investment and GDP, as widely expected. The extent of upward changes range betwveen 30-32 percent for GDP and 53-104 percentfor investment. Consequently, investment-GDP ratios are also higher, thus implying larger incremental capital-output ratios (ICORs). The new NA series are affected by the inclusion of hitherto neglected or only partially covered economic activities, methodological improvements, updated input-output coefficients/weights used in calculations, and the altered sectoral classifications. Some of these results are briefly summarized in Annex- III. Note that the review and assessment of economic perfornance presented in Sections A and C are based on the available (1984/85 based) BBS national accounts series and Bangladesh Bank data for FY96 and FY97. This is not expected to reflect a substantially different picture with respect to the economy's performance and growth rates of the key macroeconomic indicators. Some of the ratios--such as fiscal deficit, budgetary revenues and expenditures, external current account deficit, etc., expressed as ratios of GDP--would be different on the basis of the new (yet to be finalized) NA figures for FY96 and FY97. Therefore, when intertemporal comparisons are made, some caution is in order. Economic Growth Trends 24. Strong crop production for a consecutive second year helped raise GDP growth from 5.3 percent in FY96 to an estimated 5.7 percent in FY97 (Chart- 1; SA 3. 1). Increase in crop production alone accounted for about 24 percent of total GDP growth in FY97. Timely rainfall early in the year and relatively lower incidence of crop destructive flooding contributed to bumper aman and aus harvests. Adequate availability of inputs, particularly fertilizer and irrigation, helped maintain boro production at about the same level as last year. Urea sales increased by nearly 4 percent (SA 7.2) and irrigation acreage increased by 10 percent in FY97 over their levels in FY96. Total foodgrain production in FY97 reached 5 The (unweighted) average tariff rate appears to have increased from almost 21.5 percent in FY97 to around 23 percent in FY98 (with the inclusion of the 2.5 percent IDS). It is worth highlighting that while the Govemment indicated the extension of IDS to include some domestically produced goods, no such announcement has been made yet. 7 20.3 million MT, thus exceeding the FY93 peak by about 4.2 percent (SA 8.1). Growth in production of jute, livestock, poultry and fisheries was also impressive. Note, however, that it may be difficult to sustain the above-average growth in agricultural GDP achieved in FY97 (SA 3.3) even under normal weatlher conditionls. Furthermore, the lower domestic rice prices resulting from bumper harvests may have some adverse impact, particularly on boro planting decisions, in FY98. Prices of raw jute, whiclh were unusually high in FY96, declined significantly in FY97 and this may have some negative effect on jute acreage in FY98. 25. Growtlh performance in inldustry was sluggish, with/ manufactulring growth-- at 3.3 percent in FY97--registering one of the lowest rates in recent years (SA 3 3) 6 Several adverse developments contributed to this outcome, including disruptions in the supply of natural gas--which in turn affected power supply and urea production--and labor disputes which disrupted Chittagong port Chart-1: GDP Growth and Agricultural Growth operations.7 Also, the July-November 1996 10 boom/bust in the stock market caused difficulties 8 / in the real sector by diverting funds from production. These short-term adverse shocks were compounded by the banks' more stringent 4 4 GO Growt lending standards (result of their sizable non- 2/ performing assets), wlichl might have affected / Agricultural Grovth access to credit of some firms. Continuing 0 / - mixed signals on the Government's position with 29 FY90 FY91 FY9 FY93 FY FY96 FY97 respect to privatization, industrial and trade Year policies are likely to have led to a perception of Source: Based on BBS' old series. policy uncertainty in the business community, thus adversely affecting industrial activities. In services, growth in the transportation, storage and communication sector contributed about 13 percent to the total FY97 GDP growth (SA 3.3), thanks to a pick-up in inter-district distribution activities. However, growth in trade services sector was slower due to lower import growth and weak linkage between growth in crop production and trade services.8 Investment and Saving 26. Investment rate in FY97 showed some increase, according to BBS's old series. Total investment rate is reported to have increased from 17 percent of GDP in FY96 to 17.4 percent in FY97 (Chart-2; SA 3.4). This is difficult to reconcile with the data on capital and intermediate goods. For instance, according to NBR's shipment-based trade data, imports of iron and steel (in current dollar terms) declined nearly 23 6 Production of some important industrial items through May 1997 had negative growth over their levels in the corresponding period of the previous year. These included cotton cloth (-8.8 percent), fertilizer (-20.8 percent), jute textiles (-3.2 percent) and cotton yarn (-2.8 percent). 7 The Chittagong port was closed for 13 days during March-July, 1997 due to disputes between port users, workers, and the Chittagong Port Authority (CPA). The resulting congestion problems became so serious that the Singapore based Chittagong Feeder Trade Committee (CFTC) decided to re-introduce the congestion surcharge of $150 for 20 feet size containers and $300 for 40 feet size containers for one month with effect from August 16, 1997. In power, the shortage resulted from inadequate gas supply, which led to closure of Raozan power plant and Chittagong urea factory (CUFL). The Government had to build the Ashuganj-Bakhrabad gas pipeline on an emergency basis to cope with the gas shortage problem. The seriousness of the pervasive power shortage problem became painfully visible once again on September 3 when angry people from fotur markets ransacked the DESA office at English Road, Dhaka. They were protesting against continued suspension of power supply for 22 days to four markets. Several such incidents also took place earlier in many district towns outside Dhaka. 8 A sizable part (about 30 percent) of rice production is not marketed and, therefore, these do not contribute to further value addition in the trade sector. 8 percent, and that of cement declined by 10 percent, while imports of capital goods Chart-2: lnvreslt, Natioial & DTesticSavtngs increased by less than I percent, and value- 18 added in construction grew by only 3.6 percent 14 (SA 3.3) in FY97. Even after taking into 12X account the 4.6 percent nominal exchange rate 0 .Irnestt / bfional saArngs devaluation and the less than 6 percent 0 8 growth (through May) in domestic production 6 -D-[.es-c SaVlgs of cement in FY97, the magnitude of the 4 increase in the size of nominal investment 2 appears inconsistent with these data. In short, Yea*Fys FY92 FY91 FY92 FY93 FY94 FY5 FY95 FY97 the FY97 investment rate is likely to have been overstated; (such an over-estimation would have also led to an over-estimation of the national Source: Based on BBS' 1984-85 based series. savings rate). 27. The recent decliniing trend in private saving was reversed in FY97. According to BBS' data, the national saving rate increased from 1 1.9 percent of GDP in FY96 to 14.6 percent in FY97; (however, the latter figure appears to have been overestimated). This was partly due to a very strong growth in remittances, which must have contributed to higher private savings (Chart-2; SA 3.4). In addition, the strong growth in agricultural GDP, increases in nominal interest rates and lower rate of inflation in FY97 must have contributed to the significant rise in the domestic savings rate. Fiscal Developments 28. Tlhe FY97 budget deficit declined to 5.3 percent of GDP from 5.7 percent in FY96, largely as a result of scaling down of the ADP size (Chart-3; Table- I; SA 6. 1). There was a consequent decline in domestic financing as a share of GDP. However, the composition of domestic financing of the central Government budget deficit did not improve. Government's borrowing from the banking system continued to remain on the high side, as it became difficult to mobilize funds from the non-bank public due to the diversion of financial savings to the stock market.9 Consequently, the Government's borrowing from the banking system--mostly from the Bangladesh Bank--increased by 27 percent in FY97, following the 37 Chart-3: Central Govt. Finance Chart-4: Composition of Financing 7 20 is 6- ° 8 0 3 Net Domesic Financing 6 2a 10 O~~~~~~~0 O . Year >n an >n >n on FearY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 Yer >- Y-ear 3 - - >. L. L. U i LL. Lt L L L. Source: Based on data from Ministry of Finance. 9 As savers tried to divert their funds to the stock market, they encashed their holdings of savings certificates. This led to an overrun in Government's interest payments on the domestic debt above the budgeted level. In order to boost the sales of savings certificates to the non-bank public, the Government raised interest rates on these long-term debt instruments and introduced two new savings certificates in the second half of FY97. These measures started showing effects towards the end of FY97. 9 percent increase of FY96. TIhis might have adversely affected access to credit by some private firms, though it is difficult to establish the extent of crowding out, given the very low growth in industrial activities and imports. At the same time, net foreign financing of the budget deficit declined further in FY97 as a share of GDP (Table-i; Chart 4; SA 6.1). This reflected continuing levelling off in gross aid disbursements, which remained--at about $1.5 billion--far below the level anticipated by the Government at the beginning of FY97. 29. There were adverse developments affecting the recurrent budget in FY97. Current expenditures exceeded the original budgetary target by 3.6 percent, resulting largely from higher than budgeted interest payments on the domestic public debt, foodgrain procurement, defense spending and urea subsidies. As a result, the current expenditure-GDP ratio increased from 8.7 percent in FY96 to 8.9 percent in FY97. Note also that the shares of wages and transfer payments in recurrent expenditures have tended to rise somewhat Chart-5: Composition of Revenue Expenditure 30 00 Chart-6: Sectoral Composition of ADP 40 * 35 . Pay & Allowances * * 25 00 30 -lfsmtr 0 2000 25 20. I s A 100 _ 15 e 10 00 10 Interest Payrnent Rural Development . 5 _ n S 00 - ~ S-.-a'tlOl5ure 5 |_111 0 8, M G °S~~-ubsidies il ~ @ Industrv y Yea FY91 FY92 FY93 FY94 FY95 FY96 FY97 Year FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 Source: Based on data from Ministry of Finance. Source: Based on data from IMED. in recent years (Chart-5). On the revenue side, there was a 5 percent shortfall in revenue collection relative to the budgetary' target, reflecting mainly a shortfall in tax revenue collections. The latter was due to the low import growth and the continued weaknesses in the collection of VAT and income taxes. There was also some shortfall in non-tax revenues, resulting primarily from delayed/inadequate adjustments of administered prices and growing SOE losses (SA 6.3). 30. Tlhe high levels of ADP allocationsfor key sectors have been maintained, though quality problems remain (SA 6.2; Chart-6). Quality may in fact be getting worse. This is because of the increase in the number (and cost) of unapproved projects and the inclusion of several approved projects with questionable priority and rationale in the FY98 ADP. Table-1: Fiscal Trends (percent of GDP) Actuals FY97 Selected budget items FY95 FY96 Estimated outcome Total Revenue 12.1 11.5 1 1.7 Tal 9.6 9.2 9.5 Total Expenditures 18.9 17.1 17.0 o/w Current 8.8 8.7 8.9 ADP 8.6 7.4 7.5 Overall Deficit -6.8 -5.7 -5.3 Net Foreign Financing 4.9 3.5 3.4 Net Domestic Financing 1.9 2.2 1.9 Source: Based on SA 6.1. 10 31. Fiscalfinances are likely to come under pressure in FY98. The pressure points are likely to be: pay increases resulting from the implementation of the Pay Commission's recommendations and the non- resolution of the problem of absorbing completed ADP pro jects staff in the revenue budget; and a possible revenue shortfall. Note that NBR revenue collection during the first quarter of FY98 showed a 7 percent shortfall relative to the target. Balance of Payments 32. Performance in the external sector in FY97 was mixed. The current account deficit declined from 5.1 percent of GDP in FY96 to 2.8 percent in FY97, reflecting a low (3.5 percent) growth in merchandise imports, a higlher-tlhani-targeted (14 percent) growth in merchandise exports, and a strong (21 percent) growth in remittances (Chart-7; SA 4. 1). 33. Export growth in FY97 was led bv rawjute, knitwear, and woven garments. 10 Export base continues to remain narrow and, thus, vulnerable to shocks and threats such as the ones Bangladesh is currently facing in the European, US and Japanese markets (Annex-I, Part-B). Note also that leather exports declined nearly 8 percent due to a weakening in global demand for leather products and a continuing decline in the supply of high grade hides in Bangladesh. Export of jute goods fell by 3.5 percent, reflecting to some extent increasing production bottlenecks arising from worn out plant and equipment in Bangladesh's jute mills. 34. Import of primary goods, particularly foodgrains, showed a significant contraction in FY97 due to consecutive bumper crops in the last two years. This, together with a very low Chart-7: Exports, Imports, Remittances & Gross Aid growth in imports of capital goods, ,50 Disbursement accounts for the particularly subdued overall growth in merchandise import 200. payments. Growsth of non-food imports may pick-up in FY98, if there is recovery 5.0 Q ~~~~Merchandise Imports in industrial growth. It is also worth highlighting that the external current Merchandise Exports account deficit could have beeni lower--by 5.0 Gross Aid Disbur over $200 million--had it not been for the Remittances Government's decision to import about $90 million worth of urea and the surge in the > import price of crude oil and petroleum Source: Based on data from Bangladesh Bank products. The latter added more than $100 million to the import bill. 35. The impressive renmittance growth could be explained partially by the arrival of remittance inflows postponed in FY96 due to political disruptions and the higher exchange rate devaluation in FY97. The banking system, despite severe weaknesses in their asset portfolio, functioned without any major disruption throughout FY97, making transfer of remittances easier than before. Also, some banks established outlets for collecting remittances from Bangladeshis residing in the United States. 36. Tlhe reserve drawdown continued in FY97, albeit at a muchi slower pace (Chart-8; SA 4.1). Total 10 These grew by 29 percent, 28 percent and 15 percent, respectively. Export of garments accounted for 53 percent and knitwear 31 percent of the total FY97 increase in merchandise exports. I I reserve depletion amounited to $320 millioni in FY97 as coompared with $1.06 billion in FY96, with the reserve level falling further to $1.7 billion at end- FY97. Notwithstanlding the decline in the current account deficit, pressure on foreign exchange reserves persisted due to low aid disbursements and sizable private capital outflows. Bangladesh's inability to utilize two adjustment credits kept net n aid disbursements at a level ($1.2 billion) lower than : what could have been achieved in FY97. This was i also a factor in the continuing downward trend in aid disbursements observed in recent years (Chart M 3 ' 7). Private portfolio capital outflows, amounting to 5 $120 million, were driven by developments in the stock markets.12 The foreign exchange reserve level c'2-lI1, 9 ,1 ,I,i 941 9441 9&1 9111 9 1 f-111 97-1 97111 at end-September 1997 stood at $1.6 billion, Source: Based on data from Bangladesh Bank equivalent to only about 2.4 months of the projected FY98 merchandise imports. This unconmfortably lowv reserve level is a caluse for conicernl. 37. Rebuilding Joreign exclhange reserves to a conlfortable level will be an intportant policy clh allenge in FY98. The policy response to the persistent reserve decline has been inadequate. The official exchange rate was devalued by 4.6 percent vis-a-vis the US dollar in seven steps in FY97.13 This was not adequate to avoid a 4 percent appreciation of the real effective exchange rate in FY97 (SA 4.5), which is likely to have contributed adversely to the competitiveness of Bangladesh's exports. The recent sharp devaluations in Southeast Asian competitor countries must have further seriously eroded Bangladesh's competitiveness. Pursuing a competitive exchange rate policy, togethier witlh continued trade liberalization, will be important for strengthening the economy's export base. At the same time, steps will be needed to imnprove the capital account balances. These include, in particular, sustained efforts by the Government to increase aid utilization--by removing project implementation bottlenecks, meeting policy commitments--and attracting increasing private capital inflows. Inflation and Monetary Developments 38. Wlhile bumperfood crops helped to keep inflation at modlest single digit levels in FY97, more recent information indicates some pick-up in tie rate of inflation. The twelve-monthly moving-average inflation rate declined from 4.1 percent in FY96 to 3.9 percent in FY97 (Table-l; SA 10.1). The decline In Bangladesh's balance of payments (BOP). imports are recorded on a payment basis. Merchandise exports are, however, entered on a shipment basis and the difference between payment and shipment values is shown as part of 'Errors and Omissions' (SA 4. 1). This leads to an understatement of the financing burden arising from the current account deficit since the shipment value typically exceeds the payment value of exports. This is attributable to several factors: usual lag between export shipment and receipts; short shipments and price revisions, the incidence of which is larger in case of garments; and, since FY96. inclusion of KAFCO's urea exports in the shipment-based figures while the corresponding receipts are kept outside the country. The nmagnittude of the tunderstatement is not trivial. For instance, the current account deficit in FY97 would have been $1.42 billion. as compared with $902 million, if exports were included on a payment basis in the balance of payments. It is therefore important to interprete Bangladesh's BOP statistics carefully in view of this discrepancy. 2 Note that foreign investors were among the big winners in the stock market episode as they timed their exit from the market with near perfection. Almost all the portfolio capital that came into Bangladesh markets in FY93 to FY95 have now left. See Annex-ll for more details on the stock market episode in FY97. Taka was subsequently devalued in two steps during July-August 1997. thus raising the cumulative rate of devaluation under the present Government to 6.7 percent. Currently, the official buying rate is Tk 44.45 per $. the selling rate Tk 44.65 per $ and the average is Tk 44.55. 14 Based on the old Dhaka Middle Class CPI (1973/74 = 100) at end-June. 12 reflected primarily a lower food price inflation rate (down from 5.9 percent in FY96 to 4.8 percent in FY97). The rate of inflation for non-food items increased (from 1.5 percent to 2.5 percent). However, the end-period (year-on-year) rates of inflation increased from 2.2 percent in FY96 to 6.1 percent in FY97 (SA 10.2). 39. Monetary policy in FY97 contin ued to accommodate the Government's borrowing needs, althouglh efforts were made to mitigate its impact on monetary aggregates. Broad money growtl increased from 8.3 percent in FY96 to 11 percent in FY97, reflecting largely a sizable increase in Government borrowing from the banking system, but mainly from the Bangladesh Bank (SA 7. 1). Had it not been for the foreign exchange reserve drawdown and moderate (12.6 percent) growth of credit to the private sector, the monetary growth would have been larger. Increased open market sales of Bangladesh Bank (BB) bills (until March) and treasury bills and the increase in the Bank Rate in two steps--from 6.5 percent to 7.5 percent--also helped contain monetary growth. Upward adjustment in thic threshold (maximum) rates on auctioned treasury bills was instrumental in inducing some shift in T-bill sales away from the BB to the banks, thus containing the growth of reserve money. D. POVERTY TRENDS, SOCIAL AND ENVIRONMENTAL DEVELOPMENTS Poverty Incidence and Trends 40. The incidence of rural poverty has remained high. The recently released results of the 1995/96 Household Expenditure Survey (HES) suggest that there has been a modest decline in the incidence of rural poverty since the early nineties (SA 1.4).15 Notwithstanding this modest improvement, estimates-- based on the cost of basic needs (CBN) method--indicate that the incidence of rural poverty is still high. Preliminary HES results suggest that in 1995/96 about 40 percent of the rural population were below the lower poverty line and as high as 57 percent were below the upper poverty line.0 Not unexpectedly, rural poverty has been particularly high among the landless and illiterate households. The incidence of urban poverty has been noticeably less than rural poverty but is still significant and will become increasingly so as the urban sector continues its rapid growth.'7 Trends in Social Indicators 41. Bangladesh's social indicators improved noticeably over tle past decade. Wlile the coverage of basic social services has steadily expanded, tlhere are questions about their quality and effectiveness of delivery. The progress in improving the key health and family planning indicators seems to have slowed in recent years. The pace of reduction of infanit mortality, achieved largely througlh increased EPI coverage, better diarrheal disease control and widespread access to safe drinking water, has not been maintained. Infant mortality (currently about 77 per thousand live births) is still high, even compared to 5 Other recent surveys also had similar findings. These include the ones carried out under the Analysis of Poverty Trends (APT) project executed by the BIDS and the Monitoring of Adjustment and Poverty (MAP) project carried out by the BBS. 16 See Ravallion, Martin, Povertyv Comnoarisons, Harwood Acadeniic Press. (Switzerland, 1994). The BBS has decided to adopt the CBN method for reporting the findings of the 1995-96 HES and also for future rounds of the survey. For an explanation of the upper and lower poverty lines, see Quentin T. Wodon. "A Profile of Poverty in Bangladesh: 1983-1992 '. Report No. IDP-169, South Asia Region. The World Bank. October 1996. The lower poverty line under the CBN method has a food component based on the cost of2122 k. calories per person per day and a non-food component based on the actual non-food expenditures of households whose total expenditures are equal to the food poverty line. The upper poverty line has the same food component but a different non-food component based on actual non-food expenditures of households whose food expenditures are equal to the food poverty line. 17 The incidence of urban poverty, using the CBN method and 1995/96 HES data, is 14 percent based on the lower poverty line and 35 percent based on the upper poverty line (see BBS: Summary Report of Household Expenditure Survey, 1995-96, August 1997, Tables 4.2 and 4.3). 13 the average for low-income countries (69 per thousand births). Maternal mortality (4.5-5.0 per 1000 live births) also continues to be high, and very little progress is being made in this area, especially in the absence of a coherent strategy to deal with the problem. Improvements in these indicators will require the implementation of a well designed strategy. The contraceptive prevalence rate (CPR) has been improving- -from 45 percent in FY94 to 49 percent in FY97. However, the pace of fertility reduction appears to have slowed down somewhat, with the TFR declining slowly--from 3.44 in FY94 to 3.27 in FY97--reflecting the need to improve coverage of younger couples and the effectiveness of the contraceptive mix. 42. There are sonie indications of progress in tlte nutritional status of children since the early nineties, but the incidentce of under-5 child nialnutrition still places Bangladesh in the list of high risk countries. BBS' Child Nutrition Survey of 1995/96 reports a noticeable decline in the incidence of stunting--from 64 percent in 1992 to 51 percent in 1995/96--and in the incidence of underweight children-- from 68 percent to 57 percent--during this period. However, the incidence of malnutrition is still exceptionally high, even by standards of low-income countries.19 Most recent surveys, including the 1995-96 HES, indicate that more than 95 percent of the population have access to safe drinking water. This widespread availability of safe water has unfortunately been threatened by the finding that arsenic is increasingly contdminating the water. 43. There has been a remarkable expansion in school enrollments at all levels, particularly for female students, bitt tlte quality of education remains unsatisfactory, with the high dropout rates declining slowly, tlhus leading to continuing wastage of resources devoted to education. Primary school enrollment has expanded rapidly since the early nineties, with about 90 percent of the relevant age group in school and virtual parity of girls in enrollment. The primary dropout rate has been declining slowly and still remains higlh (39 percent). In secondary education, gross enrollment reportedly rose by 9 percent in 1996. Female students accounted for 47 percent of secondary enrollment. The dropout rate at the secondary level improved noticeably from 48 percent in 1995 to 44 percent in 1996, and fell sharply for girl students. The literacy rate continues to be low, even compared to South Asia or low-income countries as a whole.20 44. Progress has been made in preparing a plan for mainstreaming women in dlevelopment and tlle plan needs to be adopted and implemented soon. Much groundwork has been done over the past year to prepare the framework for WID policy reform, but the momentum appears to have slowed down. A National Action Plan (NAP) for implementation of the Beijing Platform for Action (PFA) was finalized in June 1997. An Institutional Review of the WID (IRWID) capability of GOB was also completed in April 1997. However, the approval and formal adoption of the NAP and IRWID has been pending and, consequently, the WID actions envisaged in these two documents have not yet been initiated. The reconstituted National Council for Women's Development (NCWD) met for the first time in February 1997. A draft National Policy for Women's Advancement was endorsed at this meeting and subsequently declared by the Prime Minister in March. A multi-sectoral program on violence against women is under preparation. Two of the specific reservations on the Committee for the Elimination of Discrimination Against Women (CEDAW) Convention were withdrawn in July 1997. Progress on adoption of a more pro-active stance with regard to recruitment of women in the public sector so far has been limited. One Is See Sector- Strategy Paper on Health. Nutrition and Population, Human Development Network. World Bank, June 30, 1997, Table A. I Global Ranking of Risk Countries by HNP Indicators. 9 According to UNICEF's report, "The Progress of.Vations-1996', the incidence of malnutrition, taking into account Bangladesh's socio-economic condition, should be no more than 33 percent. 20 Comparative figures for 1995 are in "Bangladesh at a glance" table, p.iii. 14 proposal in this regard is the Local Govermllent Commilission's recommiienidatioin for a specified nuimiber of women members in all the proposed four tiers of local Government. Environment 45. Environmental problems are deteriorating noticeably, posinig potentially seriouts hea(lth hazar(ds and thlreatening growtil prospects. One of the major areas of environmental concern is the deterioration in the quality of ground and surface water. This is particularly due to the recent outbreak of arsenic contaminationi, the widespread discharge of toxic and harmful effluents by industries, and increasing salinity in coastal areas. The arsenic pollution is linked to the naturally occurring arsenic released into ground water. It is apparently occurring as a consequence of the lowering of the water table, caused by the use of shallow tube-wells for irrigation. It has so far been detected in the western part of Bangladesh. It is potentially a serious health hazard, wlhich could affect a large section of the population. Air pollution in the cities, particularly Dhaka, caused by inefficient combustion of fuel and use of leaded petrol, is assuming alarming proportions. There are also problems of quality water supply, sanitation, and solid waste disposal in the urban areas. Another major concern is the declining land productivity due to soil degradation, which is threatening prospects for crop sector growth. This is attributable to intensive land use. The latter has led to imbalances in soil nutrients due to suboptimal application of NPK fertilizers, the increased appearances of micro-nutrient deficiencies, and increased monoculture cropping of rice. E. NEEDED PRIORITY REFORMS 46. As higlhliglhted in the introductory section, for paving the way to higlher sustailable economic growth and faster poverty reduction, the Government needs to firmly establish macroeconomic stability and push forward with the key economic and institutional reforms. Actions are needed now to: (i) build up foreign exchange reserves, strengthen the tax base, and reduce the Government's heavy borrowing from the banking system; (ii) improve governance in the public sector; (iii) dispel policy uncertainty, build up business confidence, and foster private investment by completing policy/institutional and regulatory reforms, particularly in the financial and SOE sectors, trade, and infrastructure; and (iv) continue strengthening polices and programs for human development.21 Sustaining Stability and Strengthening Macroeconomic Framework 47. In view of the sustained large Government borrowing from the banking system and the fairly weak foreign exchange reserve situation, actions are needed to strengthen the macroeconomic framework. Some of the key measures to build up foreign exchange reserves include: * In the short-term, quickly resolving the outstanding issues pertaining to the EU's GSPfacility for Bangladesh's kniitwear exports and those related tofrozenfood exports. It is vitally important not to lose these markets, which have been one of the fast growing sources of export earnings and do have the potential for further growth (Annex I, Part B); (of course, in the near- and medium-term, a key policy measure will be to continue with the trade policy reforms in order to reduce the existing anti- export bias. This is discussed in paragraph 61 below); 21 Note that the World Bank's 1996 publication Agenda for Action provides a detailed account of the needed sectoral policy and institutional reforms. 15 * eliminating the existing restrictions on the retention of export proceeds; and deregulating export financing by removing back-to-back L/C requirement for RMG exporters; and * maintaining a competitive real exchange rate (RER) policy, taking account of permanent changes in the domestic and external RER fundamentals affecting the underlying equilibrium RER. This is crucial for promoting exports, avoiding import surges, and establishing viability in external balances. 48. In thefiscal area, tax revenue mobilization drive needs to continue in order to strengthen the budgetary revenue base and effect a shift away from heavy reliance on import taxes. Opting for an easy way out by relying on import taxes for additional revenues will not address the basic structural weakness of Bangladesh's fiscal balances. The new tax measures announced with the FY98 Budget will most likely bring some improvement in revenue performance, though the revenue projections for FY98--showing 22 percent nominal growth--appear optimistic. It is clear that both during FY98 and beyond, the revenue mobilization effort has to contitue, with the primary emphasis being on: * further broadening of the coverage of VAT and income tax, by eliminating/reducing exemptions, continuing the effort of identifying new tax payers; not introducing new tax holidays; and further restructuring of the corporate income tax rates toward a lower uniform rate; * revamping and strengthening the tax administration, including measures to reduce tax fraud; * adjusting the non-tax revenue sources such as user fees/charges (to avoid erosion due to inflation and recover a growing portion of costs), and, where practical, considering the active involvement of beneficiaries in maintenance activities as a way of collecting user charges--e.g., in irrigation; and * gradually liberalizing price controls over urea and petroleum products, and letting these follow the international trend prices, but subject to an indirect tax structure that takes into account revenue needs, equity, and the "user/polluter pays" principle for pollution and the costs of infrastructure services (road use). As discussed earlier, keeping these prices at below market levels, apart from causing inefficient use of resources, will affect the budget adversely through effects on the size of non-tax revenues and/or subsidies. 49. On the expenditure side, it will be important to contain the growth of current expenditures such as pay/allowances and defense spending, while also trying to gradually reduce food and fertilizer subsidies. In view of the significant manpower surplus in lower grades, a freeze on new hiring in these grades and personnel rationalization through natural attrition and/or voluntary retirement would help contain growth in the recurrent spending (SA 6. 1). These measures would also allow real increases in crucial recurrent expenditure categories, such as social sectors and non-wage O&M. 50. Regarding the ADP, lack of a clear position on the role of the state in industry and indecisiveness with respect to the future of SOEs, political considerations and weaknesses in institutional capacity continue to produce less than satisfactory ADP programs. There is a need for a careful re-examination of the ADP project portfolio in terms of their merit, rationale and priority. In any event, with respect to the FY98 ADP, some trimming would be warranted given that there are many questionable projects. 51. Also, to improve budgetary management, it would be prudent to implement the recommendations of the ongoing RIBEC project, particularly those pertaining to improving budgetary information and moniitoring systems, controls, accounting, and expenditure classification. Reforming the Public Sector: Improving Governance 52. Given the lack of any visible progress in reforming the public administration, the agenda is sizable. The PARC, building on the recommendations of the ARC and of other completed studies, could 16 move fast, if this is facilitated by a strong political backing and the necessary resources to carry out its mandate. The PARC will need to prioritize and sequence the large number of tasks listed in its very challenging mandate, which cover: restructuring of Government Departments, manpower rationalization and development/training, enhancing accountability and transparency, improving public service delivery, curbing corruption, strengthening Parliamentary oversight, and facilitating private sector development. The time has come to move from studies to actions. 53. Selecting a core set of key reform areas to focus on initially and developing workable reform measures for successful implementation would be the practical way to follow. Experience of other countries has shown that reform efforts aimed at improving service delivery by agencies that are in constant contact with the public and private firms tend to find strong support and show success. Accordingly, consideration could be given to concentrate initial efforts on well-known public agencies, including customs and taxc administration. To ensure success, it would be important to develop and introduce efficiency-promoting incentive regimes (e.g., in the form of performance/merit-based bonus and promotion schemes, and effective training). As for the task of reorganizing/restructuring within the central Government, this would need to be coordinated closely with the pending actions in the local government front. The extent and modalities of administrative and fiscal decentralization would have a bearing on how the central Government should be reorganized. 54. As regard strengthening of local governments, an early decision on the Local Government Commission (LGC) recommendations by the Government would help initiate the local government reforms, including the preparation of the necessary legislation soon. As emphasized by the Government, progress in devolving responsibilities and fiscal authority to local elected bodies could, if well done. contribute to achieving improvements in transparency, accountability, and efficiency in public administration and public service delivery. Otherwise, there is also a risk that these local bodies could become a new source of corruption and inefficiency, unless sufficient safeguards are instituted. 55. In the area of privatization, the Government could make its policy clearer by removing the confusion created by the planned public sector investments in activities that should be clearly left to the private sector - e.g., in fertilizer, sugar, cement, paper mills, textiles, high voltage cable production. These raise questions about the Government's intentions regarding the SOE sector and its declared policy of private sector-led growth. The justification that 'there is no private sector interest/response in these activities' should be questioned since this is due to either continuing administrative controls over the relevant markets (as in the case of fertilizer) or dominance of the market by SOEs which continue to be supported (directly/indirectly) from the budget or simply that the private sector does not see a viable activity under the current market conditions, in which case the public sector is likely to fail even more. 56. The Government needs to demonstrate its commitment to privatization by some tangible achievements. Some of the critical measures needed include: * a clear official policy statement on privatization, spelling out the objectives, scope, phasing, strategies, various options and modalities of the privatization program; * enactment of a privatization law, to give strong support for the policy statement and facilitating the Privatization Board's (PB) work; * a stronger mandate and political backing to the newly reconstituted PB--which now has broader political and business representation--to perform its functions effectively; * preparation and implementation of an effective public awareness campaign aimed at explaining to the public the underlying reasons for and objectives of privatization; * a program of consultation with the SOE workers to address their concerns and strengthen transitional adjustment programs to help workers who would be taking retirement packages; 17 * enhancing the PB's decision powers and its professional and financial resources, thus enabling the PB to engage individual consultants and investment banks to prepare the identified public enterprises for privatization, including the valuations, prospectuses, road shows, and tender conditions; and expediting the privatization of identified units and the handing over of SOEs for which LOIs have been issued. Promoting Private Sector Development 57. Improvinig the blusiness environment and butilding up confidence are key to promiioting private activity and investment. In this regard, addressing serious bottlenecks in infrastructure and bureaucracy, improving legal environment and law and order situation, and--as highlighted earlier--removing uncertainties in economic policy would be crucial. These weaknesses raise the cost of doing business, thus constraining growth in private investment and hampering competitiveness and diversification in the economy. 58. Bangladesh is at a turning point in addressing infrastructure constraints. The dynamism that has been created successfully by the Government in the energy and telecommunications sectors could be exploited to benefit the economy significantly. To this end, it is important to move fast in establishing the legal/regulatory and policy framework in power/gas and telecommunications sectors. Setting these "rules of the game" up-front will help in attracting domestic and foreign private investment, as well as be instrumental in efficient market development in these activities. Also, there is an urgent need to unbundle and commercialize the infrastructure SOEs, particularly in the power sector. 59. Initiatives have started for developing a legalframework for facilitating efficient transactions in banking and in relation to market exit. However, even in the latter areas as well as with respect to entry, contract enforcement, competition policy, and protection of private property, much remains to be done. In this regard, the establishment of the permanent Law Commission (LC) is timely, and the planned judicial and legal reform project would support efforts aimed at institutional strengthening in the judicial area. Starting with the most pressing areas of legal and judicial gaps (particularly in banking), the LC could expedite urgently needed progress in the market-related legal framework. 60. Faster progress in implementing reforms in the financial sector is needed. This is one of the most critical areas requiring attention and results. The risks and costs of a very weak banking sector burdened with substantial amounts of non-performing loans are indeed high (Box 1). Bangladesh will need a healthy and efficient banking sector to facilitate faster economic growth. To create such a banking sector from the current worrisome state, much stronger political commitment, actions, and enforcement are necessary. Short- and medium-term actions are needed in several fronts, including: * investigating and initiating cases against the large defaulters and negligent bank management; * staffing Loan Courts with specially trained judges and enhancing their capacity; * preparation of a comprehensive legal reform package aimed at effective loan recovery, taking into account the recommendations of the Banking Reforms Committee and the Law Commission; * amendment of laws to improve governance in bank management and depoliticize appointments to the boards of NCBs and BB; * policy measures to strengthen independence of Bangladesh Bank and its supervisory and regulatory capacity; and * insulating the NCBs from credit demands of chronic loss making SOEs, and compensating these banks for overdues from the budget. 18 61. Notwithstanding the liberalization meaures of the late 1980s and early 1990s, the existing anti- export bias of the trade regime needs to be reduced further by continuing the unfinislhed trade policy reforms. To promote exports and export diversification in potentially competitive areas, some of the key medium-term trade liberalization measures, which should be announced in advance, include: * further reduction of the average level and dispersion of import tariffs towards a single uniform tariff of 15 or 20 percent --through a phased program of tariff rationalization aimed at reducing the higher rates and increasing the lower rates in steps, while also cutting down the number of tariff slabs; and * eliminating protection-related quantitative restrictions in the short-term.22 62. Bangladesh's rural economy accounts for over 80 percent of the population and majority of the poor. Therefore, sustained strong performance in agriculture, and development of a diversified noni-farm rural sector are critical for Bangladesh's overall development and poverty reduction effort. Rural infrastructure, market-based credit programs, research and extension services, liberalization of output and input markets, and well-designed social sector services, have all proved to be effective in raising agricultural productivity. Strengthening these key factors, and eliminating the remaining policy distortions--such as controls in the urea market--would contribute to enhancing agricultural productivity. And there are indications that there is a significant growth potential in the rural non-farm sector both in the service as well as manufacturing areas.23 Developing a rural development strategy, which would integrate the most effective productivity-enhancing Government and NGO programs and provide mechanisms of coordination among local and central Government entities, NGOs, and the donors, will be instrumental in promoting robust diversification and growth in the rural sector. Human Development and Environment: There are Significant Challenges 63. The key clhallenge in healthr andfamily planning is to expand access to basic services by tlhe poor, particularly vulnerable women and children, withtout compromising on their quality. This will require actions on several fronts: prioritizing public expenditures to ensure wider and more equitable access to basic services and improving their quality; better utilization of existing rural health facilities; efficiency enhancement in public sector programs through organizational and management improvements; adopting new decentralized approaches for managing public health facilities and involving the stakeholders; and exploiting all options for cost recovery through user charges, particularly in the context of the large funding gap for the high priority essential service package (ESP) components of health care. 64. Full commitment and support at the political levels to the Health and Population Sector Strategy (HPSS) will be crucialfor ensuring tlhat the national healtht policy and expenditure programs in health andfamily planning are in line with tlte priority to be given to the essential service package. A welcome development in this regard is GOB's recent approval of the HPSS, whose key message is that use of public resources should be focused on the ESP. Child survival and development and enhanced reproductive health are vital components of the ESP, which should be given top priority in the sectoral allocation so as to achieve a more acceptable reduction of infant and maternal mortality. In addition, the preparation and implementation of the National Reproductive Health Strategy (NRHS) and reorganization and integration of the health and family planning programs will be essential for better delivery of maternal and child health care services. 22 For further details, see: The World Bank, Bangladesh: Trade Policy Reform for Improving the Incentive Regime, report No. 15900-BD, October, 1996. 23 See the Bank report, Bangladesh: The Non-Farm Sector in a Diversifying Rural Economy, Report No. 1 6740-BD, June 1997. 19 65. In education, increasing emphasis should be placed on improving tlhe quality of learning and skill acquisition. The resource allocation priority given to formal education, particularly to primary and secondary education, will need to be sustained. In planning the expansion of non-formal mass education, the capacity of the implementing institutions and the experience gained under the ongoing projects should be taken into account. This needs to be complemented by efforts to encourage more active participation by the local community and private sector and NGOs in secondary/higher education and in technical and vocational training. Also much better linkages between these programs and the skill requirements of the labor market will be needed. With the high enrollment rates achieved in primary and secondary education, the emplhasis should now be on quality and efficiency. This will require comprehensive interventions, including: improved curriculum and training materials, increased instructional time and its effective use; improved teacher training, incentives and accountability, effective management and supervision; credible examination system; and accountability of educational institutions to the community and funding sources for performance. 66. Giveni thle importance of mainstreaniing women in developnment, a more pro-active stance is warranted forfollowing up on the various WID reform initiatives. While considerable groundwork has been done for formulating the framework of WID policy reforms, the early adoption, operationalization and initiation of inplementation of the NAP and IRWID is crucial for timely results. Provision of a clear mandate to the NCWD to take the lead in the implementation of international commitments made by GOB and a proactive role by the NCWD, including more frequent deliberations, would greatly facilitate this task. The withdrawal of reservations on the CEDAW Convention has been a welcome move. However, the existing reservation on Article 2 which calls for the state's obligations to implement the provisions of the Convention is an unnecesary constraint. This reservation should be withdrawn so that the provisions whlichl have been ratified could also be implemented. Also relevant domestic legislation need to be brought in Iine with the provisions of the CEDAW Convention ratified by Bangladesh. 67. Preventing environmental deterioration will be a crucial challenge because it will othierwise qjffect th1e poor most, directly as well as tltroughi its adverse impact on growti. The future growth of Bangladesh is likely to be associated with faster industrialization and urbanization, which could have devastating environmental effects and in turn could impede future progress. In addition, crop sector growth, which will be vital for future economic growth, is already being threatened by land degradation and declining productivity. It is thus clear that it will not be possible to sustain high growth without effective management of the environment and natural resources. Strong public policies will be needed for the sound management of the ecosystem and the maintenance of the natural resource base. This will require a much more pro-active stance by the Government and the prioritized implementation of a well- conceived environmental strategy. Progress in the implementation of the NEMAP, which was adopted by the Government in 1995, has been rather slow and will need to be reactivated on an urgent basis. F. MEDIUM TERM DEVELOPMENT PROSPECTS External Environment 68. Bangladesh has a good opportunity to improve prospects for economic growth and development by capitalizing on the intensified FDI interest shown in various sectors, particularly the energy sector. Benefits from potentially sizable FDI could be enhanced if the pace of reforms is accelerated, thus improving the investment climate. Furthermore, with the early resolution of the pending problems associated with exports of knitwear and frozen food, strong export performance could be maintained and improved by pursuing a competitive real exchange rate policy and continuing trade JiberaJization. 20 Foreign Direct Investment 69. The interest in Bangladesh's energy sector is strong, as demonstrated by various agreements reached with international oil companies. As explained in Annex Il-Part A, this interest is likely to continue and spread to other areas, particularly if the business environment is improved and policy certainty established with measures described in Section E. On the basis of the ongoing contacts and already advanced negotiations, the level of FDI in the current fiscal year could reach $0.5 billion, with most of it going to the power and gas sectors. Under continuing reforms, Bangladesh could easily attract an annual FDI level ranging between $400 to $600 million over the medium-term, initially concentrating in power, gas, and telecommunications and then spreading to other manufacturing sectors. Such an environment could create opportunities to achieve faster GDP growth and employment, diversify the economy and the export base. 70. As FDI inflows pick up and the investment rate rises, bottlenecks in energy, telecommunications and other areas of infrastructure would be reduced. These developments would also help stimulate private investment in other areas of the economy through multiplier effects and crowding-in effects of increasing infrastructure services. Consequently, the economy could experience rising productivity, savings rate, and expanding levels of external trade; (such a scenario is described in Annex IV). Managing the Macroeconomic Implications of Larger FDI 71. As the economy's external transactions grow due to rapid expansion of FDI, strong coordination between fiscal, monetary, and foreign exchange rate policies will be essential to respond appropriately to the potential BOP pressures. In the near-term, with increasing amounts of FDI taking place in the energy sector, imports will expand by nearly similar amounts in view of the very high capital/technology intensity of these investments, implying no significant positive effects on reserves. More importantly, as production starts and foreign investors begin to repatriate their returns (to equity and externally borrowed capital), demand for foreign exchange will increase. There will be some offsetting effects as import demand for oil/POL products and fertilizer falls due to the expanding domestic production of gas and power. However, Bangladesh would still face an increasing pressure on foreign exchange reserves in the near-term, which is already being felt with the recent decline in the level of aid inflows. It would therefore be crucial to achieve higher export growth. In this regard, fostering export diversification into new items and markets and exploiting fully any emerging opportunity for exporting gas (and urea), especially in the region, will be important. Aside from the reforms cited earlier, a concerted effort by the Government and the private sector to develop new export marketing networks would be important as well. 72. If significant gas discoveries are made and Bangladesh starts exporting sizable volumes of natural gas, the above described pressure on the foreign exchange reserves could be relieved in the medium-term. However, in the event of a significant increase in gas exports, there will be a pressure on the real exchange rate to appreciate, thus adversely affecting international competitiveness of other exports and discouraging export diversification. Therefore, appropriate strategies would need to be developed in conjunction with fiscal, exchange rate and monetary policies to avoid a sustained appreciation of the RER. ANNEXES 22 ANNEX-I POTENTIAL EXTERNAL SECTOR DEVELOPMENTS A. Private Foreign Capital Inflows -- From Trickle to a Surge Two factors have been driving private foreign capital toward emerging markets: * investors' desire for portfolio diversification and higher profits, and * improved policy environment and macroeconomic stability. While ODA to developing countries declined between 1990 and 1996, private capital flows more than quadrupled, from $44 billion to $244 billion. These capital flows mainly comprised of (a) portfolio investment, (b) commercial borrowing, and (c) foreign direct investment (FDI). Except for a brief period, between FY94 and FY95, when there was a surge in portfolio capital investment, Bangladesh has attracted a steady though moderately rising flow of FDI, mostly in Export Processing Zones (EPZ), primarily in garments and textile ventures with some investments in electronic and miscellaneous manufactures (see Table). E FDI estimates/projections, FY98-FY2002 (in million US $) YEAR EPZ OIL/GAS POWER KAFCO TELECOM OTHER TOTAL FY85-97 210.2 201.4 0 531.5 100 134 1177 Annual avg. 16.2 15.5 0 40.9 7.7 10.3 90.6 FY85-FY97 FY98-FY02 350 550 1000 0 475 25 2400 Annual avg. 70 110 200 0 95 5 480 FY98-FY02 Note: EPZ includes proiections for expected private EPZ beginning in FY98/99 OIL/GAS includes projections of expected FDI from 12 new blocks whose bids are being evaluated. OTHER covcrs FDI in activities outsidc EPZ. Source: Projections/estimates based on information provided by BOI, BEPZA. MOE and FICCI. Yet, private capital flows into Bangladesh have been little more than a trickle, when compared to her South Asian neighbours. First, measured by the ratio of capital flows to GDP, the degree of financial integration attained by the Bangladesh economy is characterized as 'low' in comparison to that of India, Pakistan, and Sri Lanka, which are ranked as 'medium' to 'high'. Second, private capital flows to Bangladesh are mostly in the form of FDI and only a trickle of portfolio capital. Third, the rising trend of capital flows suggests increasing investor interest in the Bangladesh economy, though continuing problems with poor infrastructure and still inhibiting policy environment have not helped to speed up the process. Finally, new initiatives in the oil and gas sectors, prospects in private power generation, and moderately rising FDI flows into EPZ, have already created the scope for substantial FDI flows of around $2.4 billion during the next five years. Thus, the Bangladesh economy could experience a surge of FDI flows over the medium term. Three key aspects of FDI flows have a direct bearing on macroeconomic management and policy formulation: * the potential for macroeconomic overheating from the expansion of aggregate demand and incidence of spending on non-tradables; * the potential vulnerability from large, abrupt reversal of capital flows; 23 long-term implications of increasing financial integration for the conduct of macroeconomic policy, since (a) the economy is more exposed to external shocks, and (b) domestic polices are no longer immune to external developments resulting in reduced policy autonomy. In the Bangladesh context, overheating from a surge in private capital flows, though possible, is likely to be modest enough not to cause serious policy concerns in the medium term. Since FDI will most likely be the predominant component, it all but eliminates the prospects of abrupt outflows, wlichl would have been the case if portfolio capital were to dominate. FDI is usually associated with long-term commitments of funds witlh more predictable repatriation of profits. The adverse impact of abrupt withdrawals of foreign capital could range from speculative attacks on currencies, exchange rate volatility, balance of payments crisis and overall macroeconomic instability. Bangladesh's capital account is not fully convertible and the exchange rate regime might be characterized as 'managed' though 'flexible'. In these circumstances, if capital flows become significant, managing monetary policy, particularly in the absence of secondary market for government debt instruments and Central Bank bills, will be tricky. B: Two speciflc tlhreats to exports in FY98 Knitwear: Bangladesh's garment exports to Furopean Union (EU) has been enjoying a 12.5 percent duty exemption tinder GSP since 1986. subject to application of rules of origin requirements.24 A EU Inquiry Commission that had visited Bangladesh in late 1996 apparently detected widespread violation of the three-stage transformation requirement for knitwear (yarnl to fabric to knitwear). This led to a EU threat to withdraw GSP facility if the Bangladesh authorities fail to cancel by October 31, 1997. some 6.910 GSP certificates under Schedule B and 8,531 GSP certificates under Schedule C, affecting mostly knitwear exports. Government's initial response was to renew the three-year-old Bangladesh plea for derogation of the rules of origin requirements for three years for knitwear items and through the year 2005 for sweaters and pullovers. The EC has indicated its willingness to allow some derogation if, according to EC Vice- President, Bangladesh decides to "respond favorably to our request for withdrawal of certificates." On September 7. the Cabinet Committee headed by the Finance Minister decided to cancel the 6,910 GSP certificates.? This is well advised even though cancellation would mean making a sizable amount of compensation, estimated to be $60 million, to European importers for paying retrospective duties against knitwear items imported under the false certificates. Not surprisingly, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) have taken a strong stand against cancellations in order to prepare grounds for the Government to eventually pick-up the tab. The Government has already indicated its willingness to provide bank loans on concessional terms to the affected exporters and to request the EU to stagger the realization of the compensation. Be that as it may, a mutually acceptable resolution of the problem with EU would require cancellation of the identified certificates. Otherwise, the credibility of the authority issuing export certificates will not be restored and the GSP would be withdrawn, thus hurting the short- and medium-term export prospects in markets where Bangladesh has established a strong presence. Frozen Food: The EU also slapped a ban on entry of Bangladesh's frozen food exports from September 15, 1997 based on a report by a EU inspection team that the shrimp processing plants in Chittagonig and Khulna were not complying with EU's quality control rules and regulations. Following the EU, the United States Food and Drug Administration also issued a similar threat if the quality control standards are not 24 European markets account for nearly 80 pcrcent of Bangladcsh's knitwear exports that reached $750 million in FY97 from about $600 million in FY96. 25 It should also be mentioned that the Government canceled 383 certificates under Schedule A in November 1996. 24 raised by December 18 to satisfy FAO's Hazard Analysis Critical Control Point (HACCP) manual.26 The Governmenit has requested extensioni of the grace period to allow sufficient timie for plant upgradation. The Department of Fisheries and Bangladesh Frozen Food Exporters Association (BFFEA) have agreed on a 265 points check-list under 22 heads to follow the EC directives during the plant renovation work. BFFEA, however, have demanded an interest free loan of about $90,000 for each plant from the Government. Meanwhile, EU has reportedly delivered a new manual with stricter standards. It has also indicated the willingness to review the ban by November 30, 1997 based on a revisit of the plants in October/early November. Japan is also threatening to slap a ban if a set of regulations, which require putting labels on the frozen food products signifying suitability for special uses, are not fulfilled by September 17, 1997. 26 Frozen food exports amounted to $278 million in FY97. of which EU accounted for about 50 percent and US accounted for 30 percent. 25 ANNEX II Thze Stock Market Episode -- Few rich became richer while many middle and lower income savers lost substantially The boom and bust in Bangladesh's shallow and nascent stock exchanges in FY97 revealed glaring weaknesses in the way securities markets have been managed and regulated. The lack of transparency and accountability combined with a frail regulatory framework and indigent infrastructure paved the way for market manipulations during July-November 1996. During this period, share prices multiplied nearly four times; market capitalization jumped from a tiny fraction to around 20 percent of GDP, increasing almost three-fold; the price-earning ratio soared to 80; and a law and order situation was created whein 20 to 30 thousand unemuployed students, n7astans (hoodlums) and others gathered every day outside the Dhaka and Chittagong stock exchanges (DSE and CSE) to trade shares, hoping that they would get rich overnight. For some the fantasy indeed became a reality, but for most of the half a million retail investors, who assumed a position in the market with cash taken out of their savings and fixed deposits, real asset sales and borrowings, it turned into a nightmare. Since mid-November 1996, share prices moved mostly in one direction - down - and the price index has now dipped below the bourses' starting point in mid-1996. Nonetheless, the market still had P/E ratio above its neighbors. The Government did well by not reacting to the stock market situation hastily. Based on the Inquiry Committee report, the Government argued that the episode was influenced, somewhat disproportionately, by a few member-dealers, including several top notches, of DSE and CSE and some listed companies. The Government filed cases against them, but without success. The legal framework for regulation was strengthened recently with the approval of the SEC (Amendment) Act 1997 by the Cabinet on September 1, 1997. Based on this, the SEC issued a notification on September 16, 1997 subjecting the subscription of Sponsors/Promoters Directors to a lock-in period of 3 years. Also, the SEC approvcd the Settlement of Stock Exchange Transaction Regulation 1997 in the third week of September 1997. This regulation, wlhich came into effect from September 23, brought uniformity in the trading systems of DSE and CSE; increased the frequency of settlements to twice a week; and is expected to reduce price disparities between the two bourses. However, due to lack of automation and a Central Depository System (CDS), full benefits of the new trading system may remain unrealized. Also, settlement on a Delivery versus Payment (DVP) basis -- which, according to the Inquiry Committee report, was misused by some brokers to manipulate prices -- has been abolished. The short-run economic effects of the stock market episode was largely redistributive, with a few rich becoming richer while a large number of middle-income savers lost their lifetime savings. However, the prospects for developing a healthy capital market in Bangladesh have been badly set back for the near- and medium-term. There could be a long run benefit from the whole experience since the retail investors learnt first hand the nature and extent of the risks involved, and have presumably understood the importance of taking calculated risks, in playing the capital market. To restore confidence and create the basis for a healthy capital market, urgent steps are needed for the SEC to acquirc the necessary expertise and for firm actions to be taken to introduce a computerized CDS. 26 ANNEX III Bangladesh National Accounts (revised estimates, 1989-90 to 1994-95)27 Bangladesh Bureau of Statistics (BBS) has been trying to improve the reliability of national accounts (NA) and address some of the deficiencies in official statistics. Recently, BBS has announced in a draft report some of the results of the ongoing effort aimed at improving the coverage and removing other deficiencies of NA statistics. The major deficiencies identified in various reports28 on national income accounts of Bangladesh could be summarized as follows: * undercoverage, due to paucity of information on production of numerous marketed/marketable goods and services in the absence of regular periodic surveys or studies; * use of outdated coefficients or ratios that failed to reflect recent changes in the structure and pattern of economic activities in various sectors; and * methodological weaknesses/gaps in addition to some computational lapses. A National Accounts Task Force set up by the Government in May 1996 examined the critical issues pertaining to the current status of national income accounting and made a number of recommendations in its report to the Government. Acting upon these recommendations, BBS, with the help of an ADB-funded project, has worked on and made public a revised set of national accounts estimates for the years 1989-90 through 1994-95. These revisions are purported to have addressed the fundamental problems of undercoverage, outdated coefficients or ratios, and methodological flaws. The revised data are presently being reviewed by a panel of experts. The improvements that appear to have been made in the revised estimates might be summarized as follows: * the new series is re-based to 1989-90, in place of 1984-85, using deflators whose coverage and weights have been updated to more recent levels; * GDP by industrial origin has been re-classified into 15 main ISIC sectors (in comparison to the previous 11 ) to move closer to the SNA 93 accounting framework; * wider coverage and methodological improvements have been made in the estimation procedures of agriculture sector (particularly crops subsector), electricity, gas and water supply, small-scale industries, transport and trade services, on the basis of surveys and studies conducted during 1988 through 1995; and * HES has been used to compute directly private final consumption expenditures which are then applied to the estimation of GDP by the expenditure approach. The new accounts thus computed vary significantly from past estimates suggesting that both undercoverage and methodological flaws led to serious under-estimation of GDP and investment levels 27 Draft circulated by BBS in July 1997. 2S For example. 1996 Report of the Task Force on The Review of National Accounts. World Bank's 1996 report, '"Bangladesh: Strengthening the Statistical System", IMF's 1996 Report on the National Accounts Statistics Mission, and Z. Sattar (1997), "What is the GDP growth rate of Bangladesh? A Review and Revised estimates for FY91-95". 27 and savings-investment ratios in the past. The salient features of the revised estimates are noted below (all for the period 1989/90 through 1994/95): 1 . Table 1: Per capita income for the last year of the revised series stands at $336, compared to $254 for the old estimate for FY95. 2. Table 2 and 3: GDP at current market prices are 30-32% higher, compared to the old series. 3. Table 4: With the exception of FY91, GDP growth rate is somewhat higher for FY92-FY94; but it is significantly higher for FY95 (5.7% versus 4.4%). 4. Table 5: The structure of GDP is also altered. The share of agriculture in GDP falls to 25% in FY95, as opposed to 30.9%, for the old series. The share of industry rises to 25%, compared to 17.6% in the old series. The progressive increase in the size of industry compenisates for the decline in agriculture, the two sectors contributing equally to GDP by FY95. The size of services sector remain fairly stable through the entire period at 49-50%. 5. Table 6: Savings-investment ratios in the old series have raised many questions that the new series seems to answer. The new investment-GDP ratios range between 17-19%, compared to 11.5-16.6% for the old series, which were generally inconsistent with past estimates of GDP growth and implied somewhat lower ICORs than expected for an economy like Bangladesh. Gross domestic savings at I I-13% are also more plausible than previous estimates that were widely recognized as gross under- estimates. 6. Table 7: The new resource balance table show a slight reduction in the share of consumption in aggregate expenditures (86-89%), compared to the old series (90-95%). The current account deficit is also a much smaller share of GDP than before. 28 TABLE 1: PER CAPITA INCOME, 1989/90- 1994/95 OLD NEW YEAR (TK) ($) (TK) ($) FY 90 6990 212 9372 285 FY 91 7756 217 10379 291 FY 92 8300 218 11050 290 FY 93 8544 218 11472 293 FY 94 9167 229 12195 305 FY 95 10225 254 13497 336 NOTE The period average exchange rate for the relevant fiscal year is used for conversion into US $ TABLE 2: GDP AT CURRENT MARKET PRICES (in billion Taka) 1989190- 1994/95 YEAR OLD NEW % CHANGE FY 90 737.6 975.1 32.20 FY 91 834.4 1101.9 32.06 FY 92 906.5 1190.7 31.35 FY 93 948.1 1257.5 32.63 FY 94 1030.4 1356.9 31.69 FY 95 1170.3 1525.9 30.39 Source . BBS, National Accounts Statistics ofBangladesh !'RevisedEstimates 1989-90tQ 1994-95, draft, July 1997. TABLE 3: Broad Sectoral GDP and Changes (at current market prices, in billion taka) SECTOR 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 AGRICULTURE OLD 271.8 300.6 312.4 288.8 305.9 361.4 NEW 281.1 310.1 324.1 307.8 327.3 378.9 %CHANGE 3.42 3.16 3.75 6.55 6.99 4.85 INDUSTRY OLD 116.5 131.4 150.3 165.9 182.6 205.8 NEW 220.1 246.8 274.5 304.0 330.7 369.3 % CHANGE 88.87 87.89 82.61 83.26 81.14 79.47 SERVICES OLD 349.3 402.4 443.8 493.3 541.9 603.1 NEW 473.9 545.0 592.1 645 7 698.9 777.6 % CHANGE 35.69 35.42 33.42 30.88 28.97 28.94 GDP-at m.p. OLD 737.6 834.4 906.5 948.1 1030.4 1170.3 NEW 975.1 1101.9 1190.7 1257.5 1356.9 1525.9 %CHANGE 32.20 32.06 31 35 32.63 31.69 30 39 Source BBS, NationaL Accounts Statistics of Eangladesh (Revised Estmates_98_90 to 1994-95), draft, July 1997 29 TABLE 4: GDP growth at constant (1989190) prices (percent). SECTOR FY 91 FY 92 FY 93 FY 94 FY 95 AGRICULTURE Old 1.6 2.2 1.8 0.3 -1.0 New 1.6 2.9 2.2 1.7 -0.2 INDUSTRY Old 4.3 7.1 8.0 7.8 8.4 New 3.5 6.8 7.4 8.1 8.7 SERVICES Old 4.6 4.8 5.3 5.8 6.9 New 4.0 4.4 5.6 4.0 7.5 GDP at m.p. Old 3.4 4.2 4.5 4.2 4.4 New 3.1 4.5 5.1 4.3 4.4 Source: BBS, National Accounts Statistics of Bangladesh (Revised Est, 1989 90 to 1994-95), draft, July 1997. TABLE 5: Broad Sectoral Shares Of GDP At Constant Prices (percent) SECTOR FY 90 FY 91 FY 92 FY 93 FY 94 FY95 AGRICULTURE Old 36.80 36.00 34.50 30.50 29.70 30.90 New 28.83 28.38 27.94 27.18 26.48 25.00 INDUSTRY Old 15.80 15.70 16.60 17.50 17.70 17.60 New 22.57 22.64 23.13 23.64 24.50 25.18 SERVICES Old 47.40 48.20 49.00 52.00 52.60 51.50 New 48.56 48.98 48.93 49.18 48.02 49.82 Source: BBS, NationalAccounts Statistics of Bangladesh (Revised Est 1989-90 to 1994-95). draft, July 1997. Table 6: Gross Domestic Savings and Investment (percentof GDP) SAVINGS INVESTMENT YEAR OLD NEW OLD NEW FY 90 2.7 10.6 12.8 18.0 FY 91 4.1 12.0 11.5 17.4 FY 92 5.8 12.8 12.1 17.2 FY 93 7.0 12.5 14.3 17.5 FY 94 7.4 13.3 15.4 18.1 FY 95 8.2 12.8 16.6 19.1 Source: BBS, NationalAccounts Statstics of Banaladesh (Revised Estimates, 1989-90 to 1994-95, draR, July 1997. 30 ANNEX-IV Medium-Term Growth Scenario Under Accelerated Reforms - Key Macroeconomic Indicators 1997 1998 1999 2000 2001 2002 2003 GDP Growth Rate (Percent) 5.7 5.5 5.8 6.1 6.4 6.7 7.0 ( Percent of GDP) Gross Fixed investment li 17.0 18.8 20.5 21.7 22.1 22.4 22.8 Private 10.5 12.1 13.7 14.9 15.2 15.4 15.8 Public 6.5 6.7 6.8 6.8 6.9 7.0 7.0 National Savings 14.4 15.2 16.3 17.3 17.6 18.1 18.7 Private 11.3 12.1 12.8 13.8 13.8 13.8 14.1 Public 3.1 3.1 3.5 3.5 3.8 4.3 4.6 Government Budget Revenue 11.7 12.1 12.5 12.8 13.2 13.6 13.9 Expenditure 17.0 17.6 17.7 17.8 17.8 17.9 17.9 Overall Budget Deficit -5.3 -5.5 -5.2 -5.0 -4.6 -4.3 -4.0 External Sector 2/ Current Account Deficit -2.6 -3.6 -4.2 -4.4 -4.5 -4.3 -4.1 Exports/GDP 15.5 16.5 17.5 18.7 19.5 20.2 21.0 Imports/GDP 23.2 25.3 27.0 28.5 29.3 29.9 30.3 Reserves in months of March. imports 2.9 3.0 3.1 3.1 3.1 3.1 3.2 Key Underlying Assumptions: 1. FDI inflows will rise from $450 million in FY98 to $600 million in FY99 and then stabilize in the range of $425-S475 million per annum. 2. ICOR Xvill rise initially, as FDI flow into the capital intensive investment in energy and infrastructure, and then decline somewhat to a level of around 3. 3. Exchange rate policy will be used to support external competitiveness and sustainability. 4. Tariffs will be rationalized gradually to move towards a low uniform rate by reducing rates on consumer goods and increasing rates on capital goods. 5. Real merchandize export growth will pick-up slowly, because of the lagged effect of higher FDI on production and trade, to around a sustained 10 percent per annum by FY2000. 6. Real merchandise import growth will pick-up immediately due to the high import content of FDI and start declining somewhat from FY2000 onwards as oil and gas extractions begin, thus reducing demand for POL imports, and some efficient import substitution in energy intensive activities begin to take place. 7. Remittance growth around 10 percent per annum in real terms: aid disbursement will decline in real terms: and profit repatriation will amount to 15 percent of the total stock of FDI every year. 8. Revenue mobilization will be strengthened through expansion of domestic VAT net and streamlining income tax administration. 9. Government consumption will be contained via rightsizing and Government investment expenditures will grow in tandem with GDP growth. t/ The investment ratio in this table allows for possible over-statement in BBS investment estimates. 2! Exports and imports include goods and non-factor services. STATISTICAL APPENDIX STATISTICAL APPENDIX Table No. Section/Title Page No. SOCIAL INDICATORS 1.1 Population Projections 34 1.2 Vital Population Statistics 35 1.3 Family Planning Statistics 36 1.4 Income Distribution and Poverty Indicators 37 MACROECONOMIC SUMMARY 2.1 Macroeconomic Indicators, FY90-FY97 38 NATIONAL ACCOUNTS 3.1 Gross Domestic Product at Current Prices 39 3.2 Gross Domestic Product at Constant (1984/85) Prices 40 3.3 GDP Growth at Constant (1984/85) Prices 41 3.4 Gross Domestic Product by Expenditure in Current Prices 42 BALANCE OF PAYMENTS 4.1 Balance of Payments. 1987/88-1996/97 43 4.2 Composition of Exports 44 4.3 Quantity and Value of Major Import Commodities 45 4.4 Aid Pipeline 46 4.5 Real Effective Exchange Rate (REER) Index 47 EXTERNAL DEBT 5.1 Service Payments, Commitments, Disbursements and 48 Outstanding Amounts of External Public Debt BUDGET 6.1 Actual Income and Expenditure of the Central Government 49 6.2 Annual Development Programme 50 6.3 Profit Performance of State-Owned Enterprises 51 6.4 Composition of NBR Tax Revenues 52 MONEY AND BANKING 7.1 Money Supply and Domestic Liquidity 53 AGRICULTURE 8.1 Production of Main Crops 54 8.2 Commercial Fertilizer Distribution by Type 55 8.3 Public Foodgrain Distribution System Operation 56 INDUSTRY 9.1 Quantum Index of Medium and Large Scale Manufacturing 57 Industries 9.2 Production of Selected Industrial Goods 58 PRICES AND WAGES 10.1 Consumer Price Indices (Annual Average) 59 10.2 Consumer Price Indices (by month) 60 34 Table 1.1 BANGLADESH POPULATION PROJECTIONS ('000) Projection with NRR = 1 by 2010 AGE GROUP 1990 1995 2000 2005 2010 2015 2020 2025 2030 TOTAL M+F 110371 119769 129066 139293 149796 160534 170384 179655 188312 MALES 0-4 9816 7833 7743 7877 7998 8141 7874 7945 7901 5-9 9387 9471 7586 7558 7736 7877 7556 7778 7862 10-14 6472 9271 9366 7518 7504 7689 7497 7517 7744 15-19 5564 6339 9118 9255 7443 7442 7801 7445 7472 20-24 4273 5277 6054 8911 9094 7335 7742 7713 7372 25-29 3789 3920 4921 5843 8712 8932 7473 7634 7620 30-34 3621 3478 3621 4736 5693 8547 7420 7361 7534 35-39 3176 3354 3227 3470 4601 5566 7363 7291 7247 40-44 2461 2957 3140 3088 3352 4476 6515 7199 7144 45-49 1991 2294 2777 2993 2961 3233 5369 6315 6996 50-54 1606 1846 2138 2615 2831 2816 4298 5131 6055 55-59 1284 1460 1686 1966 2415 2633 3347 4019 4818 60-64 1041 1127 1287 1493 1748 2169 2581 3027 3655 65-69 791 860 935 1074 1253 1488 1595 2216 2619 70-74 684 595 651 713 823 981 1046 1263 1773 75- 718 743 703 729 786 915 1007 1184 1438 TOTAL 56674 60825 64953 69839 74950 80240 86484 91038 95250 FEMALES 0-4 9336 7522 7447 7589 7719 7845 7580 7638 5-9 9055 8936 7252 7263 7473 7620 7298 7500 10-14 6223 8925 8826 7185 7216 7433 7257 7265 15-19 5734 6128 8810 8734 7123 7163 7569 7212 20-24 4783 5605 6002 8669 8616 7039 7532 7493 25-29 3981 4647 5459 5875 8517 8485 7284 7435 30-34 3297 3858 4515 5332 5756 8369 7217 7177 35-39 2614 3187 3740 4397 5209 5640 6994 7094 40-44 2116 2520 3081 3629 4279 5086 6073 6852 45-49 1700 2031 2424 2973 3511 4155 5162 5918 50-54 1386 1614 1933 2314 2845 3375 4117 4984 55-59 1033 1292 1508 1812 2175 2692 3265 3917 60-64 850 933 1171 1372 1654 2005 2563 3033 65-69 570 729 803 1013 1193 1460 1662 2287 70-74 485 449 578 641 813 980 1145 1385 75+ 534 568 564 656 747 947 1182 1427 TOTAL 53697 58944 64113 69454 74846 80294 83900 88617 Birth Rate 29.80 26.90 25.00 23.20 21.80 19.70 18.70 Death Rate 10.90 9.60 8.80 8.20 7.80 7.90 8.00 Rate of Nat'l. Inc. 1/ 1.90 1.73 1.62 1.50 1.41 1.17 1.07 Net Migration Rate -2.60 -2.30 -0.90 -0.40 -0.20 -0.10 -0.10 Growth Rate 1.63 1.50 1.52 1.45 1.38 1.16 1.06 Total Fertility 3.80 3.27 2.81 2.41 2.27 2.26 2.24 NRR 1.51 1.34 1.18 1.05 1.00 1.00 1.00 e(O) - Both Sexes 56.59 58.41 60.27 62.19 63.98 64.58 65.83 e(15) - Both Sexes 50.83 51.43 52.03 52.65 53.91 54.24 55.07 IMR - Both Sexes 85.10 74.60 64.20 53.80 47.60 44.70 40.10 IMR - MALE 93.00 82.00 70.90 59.90 53.00 IMR - FEMALE 76.70 66.90 57.10 47.40 41.90 q(5) - Both Sexes 0.12 0.11 0.09 0.07 0.06 0.06 0.05 q(5) - MALE 0.13 0.11 0.09 0.08 0.07 q(5) - FEMALE 0.12 0.10 0.08 0.06 0.06 Dep. Ratio 2/ 96.00 87.50 68.50 55.70 52.00 49.80 44.80 44.60 Source: World Bank. 1/ Rate of Natural Increase 2/ Dependency Ratio Table 1.2 VITAL l'OPULATION STATISTICS 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 CRUDE DEATH RATE [per thousand] National 10.18 11.5 12.2 12.3 12.3 12.0 11.9 11.5 11.3 11.4 11.3 11.0 11.0 10.0 9.0 8.6 Rural 10.77 12.2 12.8 132 12.9 129 12.3 11.8 118 12.0 11.8 11~5 11.3 10.5 9.3 9.0 Urban 6.81 7.2 6.9 7.5 8.5 8.3 8.4 7.6 7.4 7.3 7.9 7.3 7.5 7.2 7.1 6.9 INFANT MORTALITY RATES [per thousand] National 101.40 111.5 121.9 117.5 121.8 112.0 116.0 113.0 110.0 98.0 94.0 90.6 88.0 84.0 77.0 75.0 Rural 103.50 112.5 123.2 120.8 122.0 113.0 118.0 115.0 112.0 105.0 97.0 94.4 91.0 88.0 79.0 78.0 Urban 80.70 99.4 103.0 98.8 119.5 99.0 101.0 95.0 91.0 84.0 71.0 69.3 65.0 61.0 57.0 53.0 Male 102.30 113.4 124.1 118.8 113.5 114.2 122.0 120.0 116.0 102.0 98.0 94.4 90.0 86.0 77.0 77.0 Female 97.40 109.4 119.4 116.0 109.3 109.0 111.0 105.0 105.0 95.0 91.6 86.8 86.0 82.0 76.0 74.0 LIFE EXPECTANCY AT BIRTH [years] National 56.90 54.8 54.5 53.9 54.8 55.1 55.2 56.4 56.0 56.0 56.0 56.1 56.3 57.9 58 1 58.7 Rural 56.60 54.3 53.9 53.1 54.4 54.7 54.8 56.1 55.4 55.0 55 4 55 8 56.0 57.5 57.7 60.9 Urban 61.90 60.1 60.6 60.3 58.7 60.1 58.8 60.0 60.9 61.0 60.5 60.0 60.5 60.6 60.0 57.9 Male 57.00 55.3 54.4 54.2 54.9 55.7 55.2 55.6 57.0 56.0 56 3 56.5 56.8 58.2 58.2 58.4 Female 57.10 54.4 54.8 53.6 54.7 54.6 55.9 54.9 56.0 55.6 55.6 55 6 55.9 57.7 57.9 58.1 CRUDE BIRTH RATE [per thousand] National 33.40 34.6 34.8 35.0 34.8 34.6 34.4 33.3 33.2 33.0 32.8 31 6 30.8 28.8 27.8 27 0 Rural 33.90 35.7 36.9 36.4 36.1 35.3 35.4 34.6 34.5 34.2 34.3 32 9 32.2 30.0 29 1 28 9 Urban 2920 24.8 22.9 27.1 25.0 28.0 25.9 24.8 24.9 24.3 24.6 23 9 234 21 0 20.2 20 0 FERTILITY RATE [per woman] National 4.99 5.04 5.21 5.07 4.83 4.71 4.70 4.41 4.43 4.24 4 33 4.24 4 18 3 84 3 58 3.45 Rural 5.13 5.28 5.50 5.36 5.08 4.91 4.89 4.64 4.59 4.58 4 57 4 51 4 33 4.00 3.79 N/A Urban 3.87 3.20 3.01 3.45 3.10 3.52 3.26 3.05 2.84 2.92 2 90 2,89 2.88 2 62 2.38 N/A N/A = Not available. Source: Annual Report of Sample Vital Registration System 1993 and 1994, October 1995, Bangladesh Bureau of Statistics. Table 1 3 FAMILY PLANNING STATISTICS [thousands] 1982/83 1983184 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 Voluntary Sterilization Tubectomies 275 337 232 116 141 97 130 94 142 97 92 63 49 54 Vasectomies 88 216 259 151 210 100 100.03 83 68 69 50 71 17 Total 363 552 492 268 351 197 23097 225 165 161 114 120 71 Delivery of Contraceptive Devices IUDs 118 303 432 368 420 379 362 366 274 270 262 336 245 Pills (cycles) 8258 9726 11553 12137 15023 19100 24620 34346 42704 46629 63920 67548 74403 Condoms (doz.) 116821 131096 151940 135907 149236 166436 181976 198023 133798 159514 224134 208303 213142 EMKO 70 64 72 46 39 15 10 12 4 5 2 1 4 5 Injections 73 122 166 216 315 392 605 1258 1689 2255 2561 3534 4333 Foam tablets 5404 4385 3222 3125 3463 3890 4100 1547 25174 9258 1778 14 17 COUPLE-YEARS OF PROTECTION [thousands] By Sterilization al Tubectomies 909 1155 1272 1261 1276 1245 1252 1269 1240 1208 1150 1098 1042 Vasectomies 408 583 784 857 981 983 984 969 940 915 874 837 770 Tota 1317 1738 2055 2118 2257 2228 2236 2238 2179 2123 2024 1935 1812 U With Contraceptive Devices bl lUDsdc 236 469 760 900 1050 1114 1142 1165 1090 1032 984 1025 963 Pills 551 648 770 809 1002 1273 1641 2290 2847 3109 4261 4503 4960 Condoms 779 874 1013 906 995 1108 1213 1320 892 1063 1494 1389 1421 EMKO 17 16 18 12 10 4 3 1 1 1 0 1 1 Injections 18 31 41 54 79 97 150 314 422 564 640 883 1083 Foam tablets 36 29 21 21 23 26 27 10 168 62 12 1 Total 1637 2067 2625 2702 3159 3622 4175 5101 5420 5830 7392 7802 8428 Total 2954 3804 4680 4820 5416 5850 6411 7339 7599 7953 9416 9737 10240 Married FemalesAged 15-49d/ 17179 17746 18332 18937 19562 20208 20875 21565 19946 20590 N/A N/A 22200 Apparent Contraceptive Rate e/ 17.0 21.3 25 5 25.5 27.7 28.9 30.7 34 0 38.1 38 6 N/A 44.6 46 1 a/ Cumulative, assuming year-to-year carry-over of 90%. b/ Assuming one couple-year of protection per 15 cycles of pills, 150 condoms or foam tablets, or 4 doses of injectables or vials of EMKO. d/ Cumulative, assuming year-to-year carry-over of 70%. d/ Staff estimates based on age-specific marriage rates from 1981 census. e/ Couple-years of protection per married female aged 15-49. N/A Not available Sources. MIS, Directorate of Family Planning, Bangladesh Bureau of Statistics, and staff estimates 3 7 Table 1.4 INCOME DISTRIBUTION AND POVERTY INDICATORS 1973174 1981182 1983184 1985/86 1988/89 1991/92 1995/96 (P) I. Income Distribution: Percent of income accruing to: Bottom 40% Rural 19.10 18.82 19.24 19.95 18.02 17.89 24.18 Urban 17.80 16.07 17 84 19.20 17.52 17.59 18,57 National 18.30 17.36 18.95 19.35 17.53 17.41 21.33 Lower middle 40% Rural 38.40 38.77 38.06 36.21 36.80 38 36 39.49 Urban 38.00 36 02 37.91 37 87 35.74 36 34 37 36 National - 37.32 37.67 35.80 36.28 37.72 36.76 Upper middle 15% Rural 26.50 25.64 24.56 22.48 25.37 25.95 36.32 Urban 25.60 27.02 27.32 24.89 26.72 26.65 44.06 National 65.30 26.37 25.08 23.50 25.68 26.02 41 90 Top 5% Rural 16.00 16.78 18.14 21.36 19.81 17.80 18.45 Urban 18.60 20.89 16.93 18.04 20.02 19.42 18.83 National 16.40 18.95 18.30 21.35 20.51 18.85 18.09 Gini Coefficient Rural 0.35 0.36 0.35 0.36 0.37 0.36 0.43 Urban 0.38 0.41 0.37 0.37 0.38 0.40 0.38 National 0.36 0.39 0.36 0.37 0.38 0.39 0.45 II. Povertv Incidence: a/ Percent of population with daily calorie intake per person below: 2122 calories Rural 93.03 74.00 56.97 51.04 47.80 47.61 45.82 Urban 81.16 65.98 66.36 56.00 47.73 46.58 45.30 National 91.84 73.15 58.05 51.66 47.79 47.47 48.45 1805 calories Rural 49.76 52.37 37.94 22.06 29.52 28.27 23.81 Urban 28.99 30.93 35.51 19.20 20.45 26.03 23.31 National 47.67 50.11 37.66 21.70 28.37 27.97 26.37 Numbers of people with daily calorie intake per person below (millions): 2122 calories Rural 57.40 60.90 47.00 44.20 43.40 44.80 44.82 Urban 5.60 6.40 7.10 7.00 6.30 6.80 9.38 National 63.00 67.30 54.10 51.20 49.70 51.60 54.2 1805 calories Rural 30.70 43.10 31.30 19.10 26.80 26.60 23.06 Urban 2.00 3.00 3.80 2.40 2.70 3.80 5.11 National 32.70 46.10 35.10 21.50 29.50 30.40 28.17 Total population (In million) Rural 61.70 82.30 82.50 86.60 90.80 bl 94.10 98.95 Urban 6.90 9.70 10.70 12.50 13.20 b/ 14.60 19.38 National 68.60 92.00 93.20 99.10 104.00 bI 108.70 118.33 a/ Intertemporal comparisons of poverty incidence is complicated by changes in methodology between the various rounds of survey. b/ The derived total population is inconsistent with those in the HES (FY89, p.47) which indicate a totai population ot 104 milion of which 90.8 million were rural and 13.2 million were ueban. The latter will, however, result in poverty incidence indicators substantially different from the HES estimates. P = Preltminery Estimates. Source BBS. Household Expenditure Surveys. Table 2.1 38 MACROECONOMIC INDICATORS, FY90-FY97 (Based on the 1984-85 National Accounts Series)* FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 (PE) (In Percentage) GDP growth rate: 6.6 3.4 4.2 4.5 4.2 4.4 5.3 5.7 GNP Per Capita (in$) 208 213 213 214 230 253 270 276 (Percent of GDP) Savinas: Domestic Saving 2.7 4.2 6.0 7.6 9.1 8.3 7.2 9 5 National Saving 5.8 7.4 9.7 11 7 13.8 13.1 1 1.9 14 6 Investment: Gross Investment 12.8 11 5 12.1 14.3 15.4 16.6 17.0 17.4 Public 6.4 5.7 5.5 6.4 7.6 7.2 6.3 6.5 Private 6.4 5.8 6.6 7.9 7.8 9.4 10.7 10.9 Budcget: Total Revenue 9.3 9.6 10.9 12.0 12.2 12.1 11.5 11.7 Tax Revenue 7.8 7 8 8.8 9 6 9.3 9.6 9 2 9.5 Total Expenditure 17.2 16.8 16.8 17 8 18.1 18.9 17.1 17.0 Current Expenditure 8.8 8.7 8.3 8.9 8.9 8.8 8.7 8.9 Overall Budget Deficit -7 9 -7.2 -5.9 -5.9 -6.0 -6.8 -5.7 -5.3 Balance of Payments: Exports 6.8 7 3 84 9.8 9.8 11.9 12.2 13.5 Imports 16.9 15.0 14.8 16.8 16.3 20.0 21.6 21.7 Current Account Balance -7.0 -4.2 -2.4 -2.6 -1.6 -3.5 -5.1 -2.8 (In Percentage) DebtService Ratio 13.7 12.5 11.5 102 11.5 10.0 9.8 8.5 External Debt (million US $) 12,757 13,470 13,898 14,619 16,223 16,370 17,070 na Rate of Inflation (based on old CPI) Twelve-monthly moving average 9.3 8.9 5.1 1.3 1.8 5.2 4.1 3.9 Year-on-Year (June-over-June) na na 6.2 -2.4 4.0 6.2 2.2 6.1 Memorandum Items: BB Gross Reserves: (million US $) 520 880 1,608 2,121 2,765 3,070 2,039 1,719 (in months of imports) 1.6 3.0 5.5 6.3 7.9 6.3 3.6 2.9 Exchange Rate (TK/US $) 32.9 35.7 38.2 39.2 40.0 40.2 40.9 42.7 Real Effective Exchange Rate (1990=1 00) Period Average 98.2 92.3 91.5 90.8 85.9 85.7 89.3 * See Box I in the text PE = Preliminary estimates: na = Not available Sources: Bangladesh Bureau of Statistics (BBS) Twenty Years of National Accounting of Bangladesh 1971-1992, Export Promotion Bureau (EPB); Bangladesh Bank (BB); Ministry of Finance, IMF. Table 3.1 GROSS DOMESTIC PRODUCT AT CURRENT PRICES (Taka in Million) 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 (P) Agricuttu.re 354083 169970 188382 219761 231623 245392 271790 300596 312438 288842 305888 361367 389986 418306 Crops 325689 135031 139489 164975 167646 176467 194211 217823 222451 184660 187653 225139 235200 249693 Forestry 10947 10948 18981 20544 25374 24187 26529 28639 31005 32442 33739 38943 43059 45531 Livestock 8053 11785 15401 16222 17875 21266 25300 26564 28115 31613 36091 40373 46857 51351 Fisheries 9394 12206 14511 18020 20728 23472 25750 27570 30867 40127 48405 56912 64870 71731 Industry 57771 64982 72337 80019 89639 101593 116529 131375 150306 165888 182582 205803 229922 243291 Mining and Quarrying a/ 4 4 3 4 3 4 89 112 134 160 190 209 282 346 Manufacturing 37733 40112 43563 47631 50437 55608 64506 72801 82571 92009 101463 112739 124411 129765 LargeScale 20543 21282 23380 26911 28517 31414 37565 42259 49347 57087 64327 73161 81311 84555 Small Scale 17190 18830 20183 20720 21920 24194 26941 30542 33224 34922 37136 39578 43100 45210 Construction 18095 22518 26058 28839 34602 39262 43110 47261 53590 56717 60395 69209 76599 82346 Power, Gas, Water& Sanitary 1939 2348 2713 3545 4597 6719 8824 11201 14011 17002 20534 23646 28630 30834 Services 146342 171981 205508 239421 275874 312613 349252 402421 443758 493335 541895 603091 681692 740983 Transport, Storage 41797 45655 54605 61901 65945 71774 75061 97697 108672 122466 129221 139049 148238 158040 TradeServices 30813 38816 41505 45883 50396 55015 61583 68279 73766 78306 86156 100548 117461 125799 Housing Services 28558 32444 37066 40988 49982 59866 66358 73867 79055 87378 97314 106869 124567 134117 Public Admnn & Defense 8934 13235 17366 20867 24735 29203 32764 38191 43406 49210 55040 62308 70742 79048 BankingandInsurance 5152 6889 8935 10116 11435 13126 15110 16299 17793 19607 21500 23127 26373 28084 Prof. & Misc. Services 31088 34942 46031 59666 73381 83629 98376 108088 121066 136368 152664 171190 194311 215895 GDP at Market Prices 558196 406933 466227 539201 597136 659598 737571 834392 906502 948065 1030365 1170261 1301600 1402580 Growth Rate (%) 20.14 -27.10 14.57 15.65 10.74 10.46 11.82 13.13 8.64 4.58 8.68 13.58 11.22 7.76 Indirect Taxes-Subsidies 20969 21794 25516 30082 32695 37601 41807 50070 57492 65589 73150 88073 97990 112950 GDP at Factor Cost 537227 385139 440711 509119 564441 621997 695764 784322 849010 882476 957215 1082188 1203610 1289630 a/ Due to variation in coverage, the figures may not be comparable for the years preceding 1989/90. P = Provisional Source: Bangladesh Bureau of Statistics. Table 3.2 GROSS DOMESTIC PRODUCT AT CONSTANT (1984/85) PRICES (Taka in Million) 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 198990 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996V97FP) Agriculture 168264 169970 175549 176250 174901 173037 190354 193421 197662 201230 201915 199822 207126 219652 Crops 133921 135031 139599 139596 137119 134509 150828 152575 155101 156392 153852 148068 152168 180698 Forestry 11801 10948 11413 11168 12038 12309 12586 12845 13147 13536 14077 14712 15338 15980 Livestock 10507 11785 12131 12801 12922 13348 13805 14102 14615 15522 16841 18239 19706 21278 Fisheries 12035 12206 12406 12685 12822 12871 13135 13899 14799 15780 17145 18803 19914 21696 Infdustry 63049 64982 66709 72093 75902 79568 84632 88294 94558 102105 110044 119234 125603 130132 Mining and Quarrying a/ 4 4 3 4 2 3 66 80 94 107 121 137 174 208 Manufacturing 40765 40112 41156 44403 44682 45927 49256 50423 54117 59033 63665 69165 72823 75235 Large Scale 22134 21282 22088 25087 25263 25945 28095 29269 32342 36627 40363 44884 47595 49023 Small Scale 18631 18830 19068 19316 19419 19982 20561 21154 21775 22406 23302 24281 25228 26212 Construction 20072 22518 22908 24469 27475 28816 29749 31087 32471 34032 36074 38593 40146 41606 Power, Gas. Water& Sanita 2208 2348 2642 3217 3743 4822 5561 6704 7876 8933 10184 11339 12460 13083 Services 160225 171981 182335 194004 204332 213998 222541 232727 243969 256894 271881 290737 309712 328969 Transport, Storage&Comm 43508 45655 47115 52341 54293 56611 59024 60840 63349 66416 70089 74203 77889 82626 - Trade Services 36093 38816 39389 40394 41675 43663 44965 46707 48561 50631 53284 58669 64544 68739 Housing Services 31413 32444 33435 34534 35645 36811 38030 39316 40656 42197 43792 45457 47204 49039 PublicAdmn.&Defense 9984 13235 15944 17191 18553 19839 20363 22334 24184 26240 28484 30962 33533 36344 Banking and Insurance .8867 6889 8700 9180 9312 9417 9523 9755 10002 10302 10663 11090 11478 11903 Prof &Misc. Services 33360 34942 37752 40364 44854 47657 50636 53775 57217 61108 65569 70356 75064 80318 GDP at Market Prices 391538 406933 424593 442347 455135 466603 497527 514442 536189 560229 583840 609793 642441 678753 Growth Rate (%) 490 3.93 4.34 4.18 289 2.52 663 340 4.23 448 4.21 445 835 565 Indirect Taxes - Subsidies 34019 21794 23496 24657 24958 26667 28200 30907 34019 38764 41400 45893 48366 54671 GDP at FactorCost 357519 385139 401097 417690 430177 439936 469327 483535 502170 521465 542440 563900 594075 624082 a/ Due to variation in coverage, the figures may not be cornparable for the years preceding 1989/90 P = Provisional Source. Bangladesh Bureau of Statistics. Table 3 3 GDP GROWTH AT CONSTANT (1984/85) PRICES (In Percentage) 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97(P) Agriculture 44 5.0 1.0 3.3 0.4 -0.8 -1.1 10.0 1.6 2.2 18 03 -1 0 3.7 60 Ciops 42 4.8 0.8 3.4 0.0 -1 8 -1.9 12.1 1.2 1 7 08 -1 6 -3,8 2.8 5.6 Forestry 6.1 9.4 -7.2 4 2 -2 1 7.8 2.3 2.3 2.1 2.4 3.0 4.0 4 5 4.3 42 Livestock 27 5.0 12.2 29 55 0.9 3.3 34 22 3.6 6.2 85 83 8.0 80 Fisheries 7.2 2.9 14 1.6 22 1.1 04 2.1 58 6.5 6.6 87 97 5.9 89 Industly 1.5 11.2 3.1 2.7 81 53 4.8 6.4 4.3 7.1 80 7.8 8.4 5.3 3.8 Miningand Quarrying . 21 2 17.5 138 131 13.5 267 195 Manufacturing 1.9 75 -16 26 79 0.6 28 72 2.4 7.3 9.1 78 86 53 3.3 LargeScale 2.6 13.3 -38 38 136 0.7 27 8.3 42 105 13.2 102 112 6.0 30 SmallScale 1 1 1.3 1.1 1 3 1 3 0.5 2.9 2.9 2.9 2.9 29 4 0 4.2 39 39 Construction -3.4 20.1 12 2 1 7 6 8 12 3 4.9 3 2 4.5 4.5 4 8 6 0 70 4 0 3.6 Power, Gas, Water& Sanitary 53.0 7.1 6.3 125 218 16.4 28.8 15.3 20.6 17.5 13.4 14.0 113 99 5.0 Se_vjis 62 2.4 73 60 64 5.3 47 4.0 4.6 4.8 5.3 5.8 69 65 62 Transport, Storage&Comm 7.2 42 4.9 32 11 1 3 7 4 3 4.3 3 1 4 1 48 5 5 59 5.0 61 TradeServices 5.2 -1.6 75 1 5 26 3.2 48 3.0 39 4.0 4.3 52 101 100 65 HDusingServices 31 3.0 33 31 33 32 33 33 34 3.4 3.8 3.8 38 38 30 Pjblic Admn. & Defense 22 5 -6 9 32 6 20 5 7 8 7 9 6 9 2 6 9.7 8 3 8 5 8.6 8 7 8.3 8.4 Banking and Insurance -5.7 5.7 17.4 26 3 5 5 14 1 1 1 1 2.4 2 5 3 0 3 5 40 3 5 3.7 Prof &Misc.Services 6.5 6.8 47 80 69 11 1 62 6.3 62 64 68 73 73 6.7 70 GDPatConstantMarketPrice 47 4.9 39 43 42 29 25 66 34 42 45 42 44 54 57 Memo item: ICOR 1/ 3.3 2.8 31 3.0 30 45 49 1 9 38 27 27 34 35 31 30 Because of extremely low base the growth rates were misleadingly large with wild fluctuations. 1/ Incremental Capital-Output Ratio (ICOR) The calculation assumes a one year lag in investment-growth relation P Provisional Source: Derived from Table 2 2 42 Table-3.4: GROSS DOMESTIC PRODUCT BY EXPENDITURE IN CURRENT PRICES (Taka in Million) FY87/88 FY88/89 FY89/90 FY90/91 FY91/92 FY92/93 FY93/94 FY94/95 FY95/96 FY96/97 (P) Net Resource 1/ 652301 727523 811764 895597 962395 1011165 1095813 1267360 1428631 1512806 Consumption 2/ 577995 642332 717337 799642 852544 875951 936886 1072709 1207431 1269120 Private 2/ 508026 551877 614119 684910 727607 741647 789606 911911 1029776 1073509 Public 3/ 69969 90455 103218 114732 124937 134304 147280 160798 177655 195611 Investment 3/ 74306 85191 94427 95955 109851 135214 158927 194651 221200 243686 Private 2/ 38290 42891 47275 48562 60063 74406 80676 110172 139343 152263 Public 3/ 36016 42300 47152 47393 49788 60808 78251 84479 81857 91423 Resource Balance 4/ -55165 -67925 -74193 -61205 -55893 -63100 -65448 -97099 -127031 -110226 Fxports 46438 51522 62683 75364 94121 113783 122272 166010 184373 217650 Imports 101603 119447 136875 136569 150014 176883 187720 263109 311404 327876 Gross Domestic Product at m.p. 597136 659598 737571 834392 906502 948065 1030365 1170261 1301600 1402580 Nei Factor Income from Abroad 4/51 18873 21266 21044 23612 28996 34095 42344 46511 49550 59102 Gross National Product at m.p. 616009 680864 758615 858004 935498 982160 1072709 1216772 1351150 1461682 Net IndirectTaxes 32695 37601 41807 50070 57492 65589 73150 88073 97990 112950 GNP at Factor Cost 583314 643263 716808 807934 878006 916571 999559 1128699 1253160 1348732 Net Private Transfers from Abroad 6/ 1594 2089 1350 2925 4845 4815 6320 9166 10552 12599 Gross Disposable Income 7/ 617602 682953 759965 860928 940343 986975 1079029 1225938 1361703 1474282 Gross Domestic Saving 8/ 19141 17266 20234 34750 53958 72114 93479 97552 94169 133460 Gross NationalSaving 9/ 39607 40622 42628 61287 87799 111024 142143 153229 154271 205162 Current Account Deficit 10/ 34699 44569 51799 34668 22052 24190 16784 41422 66929 38524 Memo items (% of GDP): Consumption 96.79 97.38 97.26 95.84 94.05 92.39 90.93 91.66 92.77 90.48 Private 85.08 83.67 83.26 82.08 80.27 78.23 76.63 77.92 79.12 76.54 Public 11.72 13.71 13.99 13.75 13.78 14.17 14.29 13.74 13.65 13.95 Investment 12.44 12.92 12.80 11.50 12.12 14.26 15.42 16.63 16.99 17.37 Private 6.41 6.50 6.41 5.82 6.63 7.85 7.83 9.41 10.71 1 0.86 Public 6.03 6.41 6.39 5.68 5.49 6.41 7.59 7.22 6.29 6.52 Resource Balance -9.24 -10.30 -10.06 -7.34 -6.17 -6.66 -6.35 -8.30 -9.76 -7.86 Exports 7.78 7.81 8.50 9.03 10.38 12.00 11.87 14.19 14.17 15.52 Imports 17.01 18.11 18.56 16.37 16.55 18.66 18.22 22.48 23.92 23.38 Gross Domestic Saving 3.21 2.62 2.74 4.16 5.95 7.61 9.07 8.34 7.23 9.52 Gross National Saving 6.63 6.16 5.78 7.35 9.69 11.71 13.80 13.09 11.85 14.63 Current Account Deficit 5.81 6.76 7.02 4.15 2.43 2.55 1.63 3.54 5.14 2.75 1/ Consumption plus Invesment. 21 Derived as residual. 3/ BBS data. 41 From Balance of Payments Table 3.1 converted into Taka by using average exchange rate. 51 Includes Net Investment Income and Workers' Remittances. Excludes "other" private unrequited transfers - e.g. unilateral transfers to NGOs. 6/ Excludes official grants to the Government. 7! Equals Gross National Product at Current m.p. plus Net Private Transfers from Abroad 8/ Equals Gross National Savings minus Net Factor Income from Abroad minus Net Private Transfers from Abroad. 9/ Equals Investment minus Foreign Saving (External Current Account Balance). 10! Current Account Deficit from Table 3 1 converted into Taka, excluding official grants to the Government. Note: P = Provisional 43 Table 4.1 BALANCE OF PAYMENTS, 1987/88-1996/97 (US$ in Millions) 1987188 1988/89 1989/90 1990191 1991/92 1992/93 1993194 1994195 1995/96 1996/97(P) Merchandise exports, fob al 1231 1291 1524 1718 1993 2383 2534 3473 3882 4418 Merchandise imports. fob,c&f al b/ -2986 -3390 -3791 -3510 -3526 -4071 -4191 -5834 -6881 -7120 Trade Balance -1755 -2099 -2267 -1792 -1533 -1688 -1657 -2361 -2999 -2702 Non-factor services, net -t1 -14 14 76 68 76 21 -54 -107 121 Non-factor services, receipts 255 312 379 395 474 523 523 657 626 678 (- Other transport) 27 32 36 34 37 38 41 57 56 84 (-Travel) 10 17 20 17 25 32 20 23 28 39 Government services. n.e i.) 39 51 92 96 78 99 114 229 123 na (-Other) 179 212 232 248 334 354 348 348 409 555 Non-factor services, payments -266 -326 -365 -319 -406 -447 -502 -711 -733 -557 (-Other transport) -41 -52 -63 -73 -102 -107 -129 -142 -149 -180 (-Travel) -77 -114 -112 -61 -109 -126 -153 -265 -162 -140 (- Government services, n.e. .) -106 -115 -138 -141 -142 -149 - 60 -223 -270 na (- Other) -41 -43 -52 -44 -53 -65 -60 -81 -152 -237 Investment income, net -133 -109 -122 -102 -88 -73 -30 -41 -6 -91 Investment income, receipts 55 78 67 65 91 94 147 162 182 92 Interest on reserves) 41 67 41 52 61 49 83 83 81 81 (-Other interest & investment income) 14 11 26 13 30 45 64 79 101 11 investment income, payments -188 -187 -189 -167 -179 -167 -178 -203 -188 -183 (-Interest on external public M< debt) -123 -139 -131 -129 -137 -144 -137 -154 -153 -165 (- iMF service charges) -39 -43 -48 -33 -35 -11 -7 -7 -7 -7 (- Other interest & investment income) -26 -5 -10 -5 -7 -12 -34 -42 -28 -11 Private unrequited transfers, net 788 836 802 846 975 1067 1247 1426 1475 1770 Receipts 788 836 602 846 975 1067 1247 1426 1475 1770 Workers Remittences 737 771 761 764 848 944 1089 1198 1217 1475 Others 51 65 41 82 127 123 158 228 258 295 Payments 0 0 0 0 0 0 0 0 0 0 Current Account Balance -1111 -1387 -1573 -972 -578 -618 -420 -1030 -1636 -902 Amortization of public M< debt -166 -170 -186 -197 -210 -239 -264 -314 -316 -329 Total IMF transactions, net -18 68 -164 4 85 2 -70 -60 -66 -108 GrossAidDisburse-nents 1640 1669 1810 1733 1611 1675 1559 1739 1444 1530 Other long-term capital, net -7 44 0 1 0 6 58 55 10 -74 (-Direct & portfolio investment, net) 3 2 3 2 10 16 69 67 -14 -120 (- Subscriptions to int'l non-monetary orgs) -2 0 0 -1 0 -1 0 0 0 0 (- Other, net) -8 42 -3 0 -10 -9 -11 -12 24 46 Short-term capital, net -160 -139 -131 -143 -85 -9 32 11 -92 -41 (- Resident officia sector, net) -5 4 0 0 -1 1 0 117 -21 -53 (- Deposit money banks, net) -97 -144 -38 -40 -18 -3 4 -72 -25 -17 (- Other, net) -57 - -93 -103 -66 -7 28 -34 -46 29 Liabilities constituting foreign authorities' reserves, net -40 - - 0 0 0 0 0 0 0 Food borrowing, net 6 43 -21 -21 -19 -8 -11 0 0 0 (- Food Borrowing, gross) 39 55 0 0 0 0 0 0 0 0 (-Food Loan Amortization) -33 -12 -21 -21 -19 -8 -11 0 0 0 Errors &ommissions. netdi -1 -61 -112 -24 -62 -291 -259 -127 -406 -396 Change in reserves el (-increase) -145 -66 377 -381 -742 -518 -625 -274 1062 - 320 MEMORANDUM ITEMS: Reserve level end of June (US$ m) 856 913 520 880 1608 2121 2765 3070 2039 1719 -Reserves, excluding gold (US$ m) 832 892 500 857 1586 2095 2738 3043 2012 1694 -Gold, national valuation (US$ m) 24 21 20 23 22 26 27 27 27 25 Average annual exchange rate (Tk/US$) 31.25 3214 32.93 35.67 3815 39.14 40.00 40.20 40.90 42.70 --not available separately al Exports anx mponrs include that of EPZ since 1987/88 bi Mercnandise imnons are renorted on a mixed valLation basis, partly fob and partly of ci incsirag valuation cnanges ana ACU account changes otner than those of resernes (from 1994-958 it does not include ACU account cnanges) dThs ins cludes the difference between the shipment anc payment-based valeus ot exvonso ea rcluding Non Resilent Foreign Cun-ency Deposit (NFCD). P = Preliminery estimates, na = Not available Source: van-9ad-1r eank Stat trs eDarpm-nt 44 Table 4.2 COMPOSITION OF EXPORTS 1991192 1992/93 1993/94 1994/95 1995/96 1996/97 Ready-made Garments Value (million US $) 1064.0 1231.0 1287.0 1834.6 1950.3 2236.6 Knitwear Value (million US $) 118.6 204.5 264.1 145.8 597.8 764.1 Frozen food Value (million US $) 127.6 164.0 210.5 298.9 314.6 321.6 Quantity (million lbs.) 42.6 48.4 55.5 78.4 75.1 86.0 Unit value 3.0 3.4 3.8 3.9 4.2 4.1 Jute Goods Value (million US $) 293.3 290.0 283.0 319.0 329.7 318.3 Quantity ('000 metric tons) 491.1 503.2 502.9 539.6 536.9 542.1 Unit value 597.1 564.1 540.6 574.5 605.0 627.2 Raw Jute Value (million US $) 85.5 74.0 57.0 72.0 90.0 116.0 Quantity (million bales) 1.4 1.4 1.0 1.4 1.4 1.7 Unit value 61.5 54.7 57.0 56.0 64.4 65.5 Leather Value (million US $) 144.5 147.9 168.2 202.0 211.7 185.0 Volume (million square feet) 119.6 138.6 157.4 161.7 155.8 133.1 Unit value 1.2 1.1 1.1 1.2 1.4 1.4 Tea Value (million US $) 32.4 41.0 38.0 32.8 33.4 38.3 Quantity (million kgs.) 23.7 32.8 27.4 25.2 21.4 32.0 Unitvalue 1.4 1.3 1.4 1.3 1.5 1.5 Naphtha Value (million US $) 8.3 15.0 7.0 4.0 4.1 16.5 Fertilizers Value (million US $) 21.4 51.2 51.4 91.0 94.7 85.0 Other 98.4 177 7 158.8 462.9 282.7 336.6 Total 1994.0 2365.0 2525.0 3463.0 3883.0 4418.0 Source: Export Promotion Bureau (EPB). 45 Table 4.3 QUANTITY AND VALUE OF MAJOR IMPORT COMMODITIES 1984/85 1985186 1986/87 1987188 1988/89 1989/90 1990/91 1991/92 1992193 1993/94 '994195 1995196 1996/97 Major Primarv Goods 836 0 448 7 468 5 752 0 609 8 584 7 525 0 497 0 474 0 409.0 869 0 989 0 662 0 R ce a/(mil. US $) Vaierm,ll US$) 1760 80 49.5 150.0 170 1020 00 5.0 00 100 2080 3340 100 Quantity(OOOlongtons) 6900 390 2610 590.0 60.0 3000 110 39.0 19.0 74.0 813.0 11500 330 Unit Price a/ (US S) 255.1 205 1 189 7 254 2 283 3 340 0 0 0 128 2 0 0 135 1 255 8 290 4 303 0 Wheat al Value (mill. US $) 322 0 212 0 223 0 339 0 357.0 241 0 297 0 260.0 176 0 141 0 291.0 236 0 187 0 Quantity ('000longtons) 18990 11640 15080 2327.0 20770 12340 15660 1525.0 1164.0 8920 1754.0 13130 934.0 UntPricea/(US$ longton) 1696 1821 1479 145.7 171.9 1953 1897 1705 151.2 1581 1659 1797 200.2 0 Iseeds Value mill. US $) 6.0 01 250 39.0 11.0 13.7 160 9.0 350 65.0 63.0 750 70.0 Quantity ('OOO,rnt tons) 200 0 04 116 0 148 0 42.0 50.0 2 0 105 0 108 0 200 0 211.0 225 0 220 0 Unit Price (US$/mt ton) 300.0 250.0 2155 2635 261.9 274.0 80000 85.7 3241 3250 298.6 3333 318.2 Cruoe Petroleum Value m l US$) 226.0 177.0 1260 1360 131.8 123.0 1440 152.0 181 0 116.0 187.0 '640 205.0 Quantity ('000 tons) 985 0 1008.0 10000 9880 1096.0 1008.0 11820 10180 11290 1239.0 1364.0 1288.0 1200.0 Unit Price (US $/ton) 229.4 175 6 1260 1377 1203 122.0 1218 1493 1603 936 1371 '273 170.8 Raw Cotton Value mill. US$) 106.0 51.6 450 88.0 930 105.0 680 71 0 82.0 770 1200 '800 190.0 Quantity ('000 bales) 305.0 181.0 205 0 267 0 349 0 375 0 250 0 286 0 305 0 221 0 294 0 344 0 400.0 Unit Price (US $/bale) 347 5 285.1 219 5 329 6 266 5 280 0 272 0 248 3 268 9 348.4 408 2 523 3 475 0 Major Intermediate Goods 433 0 516 5 357 0 476 0 563 0 567 0 626 0 627 0 733 0 719 0 840 0 895.0 1130.0 Edible Oil a/ Value mill. US $) 103.0 135.5 115.0 1760 1700 200.0 1530 163.0 152.0 117.0 2280 88.0 1890 Quantity ('000 tons) 136.0 272.0 2830 382 0 408 0 425.0 5000 4260 259 0 310.0 337 0 315.0 315.0 Unit Price (US $/ton) 757.4 498.2 406 4 460 7 416 7 470.6 306 0 382 6 586 9 377.4 676.6 596.8 600.0 Petroleum Products b/ Value (mill. US $) 133.0 165.0 104.0 136.0 1530 1740 2040 1680 177.0 16880 209.0 274.0 361 0 Quantity ('000 tons) 570.0 805 0 732 0 790 0 926 0 973.0 711 0 825 0 821 0 951.0 1181 0 1511.0 1596 0 Unit Price (US$/ton) 233.3 205.0 142 1 172 2 1652 178.8 2869 2036 2156 176.7 177.0 '81 3 226.2 Fertilizer a/ Value (mill US$) 1370 1080 250 460 1080 46.0 900 117.0 131 0 135.0 1420 149.0 169.0 Quantity ('OO,long tons) 666.0 640.0 145 0 277 0 535.0 227 0 457 0 595 0 656 0 675 0 710.0 725.0 750.0 Unit Price (US $/10ng ton) 205.7 168.8 1724 1661 201.9 202.6 1969 196.6 1997 2000 200.0 205.5 225.3 Cement Value mill US$) 26.0 570 64.0 670 83.0 83.0 75.0 77.0 115.0 100.0 150.0 1560 1800 Quantity ('000, mt.tons) 588 0 1333 0 1601 0 '563 0 1893.0 1500 0 1800 0 1786.0 2040.0 1990 0 2200.0 2300 0 2400.0 Unit Price (US $/ton) 44 2 42 8 40 0 42 9 43 8 55.3 41 7 43 1 56 4 50.3 68 2 67 8 75 0 Staple F bres Value mill US$) 30 1 0 70 7.0 9.0 10.0 120 10.0 31.0 31.0 260 26.0 30.0 Quantity ('000 bales) 10.0 3 0 29 0 24.0 24.0 25.0 15 0 51.0 77.0 124.0 87 0 52.0 75.0 Unit Price (US $/bale) 300 0 333 3 241 4 291.7 375.0 400.0 800 0 196.1 402.6 250.0 298 9 500.0 400 0 Yarn Value (mill. US$) 31.0 50.0 420 44.0 40.0 54.0 920 920 1270 168.0 85.0 102.0 201.0 Quantity (million Ibs) 26.0 56.0 390 38.0 37.0 45.0 600 55.0 52.0 64.0 53.0 64.0 115.0 Unit Price (US cents/ lb) 119.2 89.3 1077 115.8 108.1 1200 1533 167.3 244.2 262.5 160.4 159.4 174.8 Capital Goods (mill. US $ 691 0 1003 0 856 0 1090.0 1070 0 1296 0 1231 0 1289 0 1346 0 1299.0 1480 0 1918 0 2000 0 Others mIl. US$1c/ 6870 3960 939.0 668.0 11470 1343.0 11280 11130 1518.0 1764.0 2645.0 3079.0 3328.0 TOTAL IMPORTS (mil US $) 2647 0 2364 2 2620.5 2986.0 3389 8 3790 7 3510 0 3526 0 4C71 0 4191.0 5834.0 6681 0 7120.0 al As a iarge portion of imports is financed on a grant basis, unit prices are often available for accounting purposes only bJ Inoludes petroleum products imported by BPC from its refining operatons in Singapore as well as imports of non-fuel petroleum products. c/ Consumer and other intermediate goods not seperately shown. N/A. Not availaDle Note 1 bale of raw cotton = 500 lbs: 1 bale of polyester = 618 lbs 1 bale of viscose - 441 lbs: 1 bale of yarn = 400 Ibs Source: Bangladesh Bank. Table 4.4 AID PIPELINE (US$ in Million) 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 (Est) FOOD AID Opening pipeline 194.4 323.8 207.4 270.9 201.0 173.2 88 4 73 2 130.0 95.6 90 3 85.1 Commitments 329 6 109 0 364.0 157.0 159.7 183.8 226.0 177 7 83.4 132.1 132 8 105.0 Disbursements 202.7 225.4 300.5 226.9 187.5 2686 241.2 121 0 117.8 137.4 1380 110.0 Closing pipeline 323.8 207.4 270.9 201.0 173.2 88.4 73.2 130 0 95 6 90 3 85 1 80.1 Pledges 260.2 164.6 168 6 153.1 109.3 91 5 92 6 156.2 208.7 157.4 130 0 160.0 COMMODITY AID Opening pipeline 387.2 402.7 562 3 304.1 367 7 341.7 229.5 419.2 383.2 297.3 498.8 498.8 Commitments 408.9 562.1 251.2 601 3 430.7 295.9 575 7 336.1 365.4 354 3 163.1 120.0 Disbursements 393 4 402.5 509.4 537.7 456.7 408.1 386.0 372.1 451.3 332.8 229 4 161.0 Closing pipeline 402 7 562.3 304.1 367.7 341.7 229.5 419 2 383.2 297.3 498.8 498.8 498 8 Pledges 431.4 183 0 279.6 214 5 598.3 387.8 494 4 409.5 274.1 253.3 250.0 170.0 PROJECT AID 4- Opening pipeline 4061.8 4632.8 4597.8 4681.8 4893.0 5312.2 5146.9 5196.8 4855.6 5827.5 5684.4 5591.6 Commitments 922.9 932.2 9145 1115.1 1584.6 890.6 1113.9 7607 1961.4 1125.8 9836 1200.0 Disbursements 709.8 967.2 830.5 903.9 1165.4 1055.9 1064.0 1101.9 989.5 12689 1076.4 11790 Closing pipeline 4632.8 4597.8 4681.8 4893.0 5312.2 5146.9 5196.8 4855 6 5827.5 5684.4 5591 6 5612.6 Pledges 1018.7 1106.4 1179.4 1237 3 1351.6 1235.3 1407.1 14746 1584.4 1675.4 1570.0 1610.0 TOTAL Opening pipeline 4643.4 5359.3 5367.4 5256.7 5461.6 5827.0 5464 8 5689.2 5368.7 6220 3 6273.5 6175 5 Commitments 1661 4 1603.3 1529.7 1873.4 2175.0 1370 3 1915 6 1274.5 2410 2 1612 2 1279 5 1425 0 Disbursements 1305.9 1595.2 1640.4 1668.5 1809.6 1732.6 1691.2 1595.0 1558.6 1739.1 1443.8 1450.0 Closing pipeline 5359.3 5367.4 5256 7 5461.6 5827.0 5464.8 5689.2 5368.7 6220.3 6273.5 6175.5 6191.5 Pledges 1710.3 1454.0 1627.6 1604.9 2059.2 1714.6 1994.1 2040.3 2067.2 2086.1 1950 0 1940.0 Ratio of Actual Commitments to Pledges (%) 97.1 110.3 94.0 116.7 105.6 79.9 96.1 62.5 1166 77.3 656 73.5 Commodity aid includes cash aid, and project aid includes technical assistance. Discrepencies between closing pipeline in one year and opening pipeline in the next year result from adjustments for currency revaluations, aid cancellations, and reclassifications Source: Economic Relations Division, Planning Commission. 47 Table 4.5 REAL EFFECTIVE EXCHANGE RATE (REER) INDEX (Base 1990=1 00) Panel - A Year REER Year REER 1991 1 97.43 11 98.73 11 101.37 III 86.56 III 100.05 IV 86.94 IV 93.85 1995 1 87.19 1992 1 92.65 II 84.12 11 94.50 III 86.34 III 90.39 IV 86.10 IV 91.61 1996 1 86.77 1993 1 93.86 II 85.77 II 90.18 III 84.77 III 90.42 IV 85.61 IV 91.72 1997 1 89.67 1994 1 91.00 Ii 88.86 Source: IMF Panel - B Month 1995 1996 1997 January N/A 86.53 88.77 February N/A 86.30 90.08 March N/A 87.50 90.16 April N/A 85.86 89.43 May N/A 85.54 88.57 June 84.28 85.92 N/A July 84.81 85.23 N/A August 86.67 84.70 September 87.63 84.38 October 86.19 85.54 November 83.95 85.11 December 86.16 86.19 N/A = Not available. Source: IMF 48 TABLE 5 1 SERVICE PAYMENTS. COMMITMENTS. DISBURSEMENTS, AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS ARE BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC 31, 1996. INCLUDES ONLY DEBT COMMITTED THROUGH DEC 31. 1996 AND DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) DATE DEBT OUTSTANDING AT TRANSACTION DURING PERIOD OTHER CHANGES END OF PERIOD DISBURSED INCLUDING COMMIT- DISBURSE- SERVICE PAYMENTS CANCEL- ADJUST- ONLY UNDISBURSED MENTS MENTS LATIONS* MENT** PRINCIPAL INTEREST TOTAL ____________________ (1) (2) (3) (4) (5) (6) (7) (8) (9)) 199112 13469522 17620779 901492 1056952 434033 197518 631,551 397024 - 199212 13895740 18032511 1176631 1063982 401936 172063 573,999 132489 -230182 199312 14615569 18704663 717408 707199 389306 175473 564,779 132083 476516 199412 16211245 20406655 1420674 1017013 406011 197346 603,357 534534 1223863 199512 16350900 20455506 686543 675280 542936 186419 729,355 164400 42162 199612 15841367 18770701 190278 941493 481062 188812 669,874 265443 -1089647 THE FOLLOWING FIGURES ARE PROJECTED ** 199712 16184194 18008535 - 1078098 526275 194568 720843 - -235890 199812 16430195 17464582 - 789954 543952 194609 738562 - - 199912 16370377 16887680 - 517085 576903 191502 768405 - 1 200012 16058322 16282045 - 293591 605646 185645 791291 - 10 200112 15629812 15695470 - 158089 586600 178335 764935 - 25 200212 15104583 15129370 - 40884 566113 170500 736613 - 13 200312 14557626 14568469 - 13943 560901 162143 723044 - - 200412 13975524 13978641 - 7726 589826 153860 743686 - -1 200512 13372146 13372177 - 3086 606465 145468 751933 - 1 200612 12765119 12765149 - - 607028 143210 750238 - - 200712 12164302 12164332 - - 600817 134239 735056 - 0 200812 11547669 11547699 - - 616633 126646 743278 - - 200912 10952461 10952490 - - 594868 119030 713898 - -340 201012 10359479 10359507 - - 592983 111926 704908 - - 201112 9770847 9770875 - - 588632 104874 693507 - - 201212 9186858 9186886 - - 583989 98047 682035 - - 201312 8606439 8606467 - - 580420 91313 671733 - - 201412 7986524 7986552 - - 619914 84723 704637 - 0 201512 7394399 7394428 - - 592125 77816 669941 - 1 201612 6806394 6806422 - - 588006 71492 659498 - - Includes Writeoffs; Projected amounts in this column are amounts excluded from projections due to unknown terms. ** This column shows the amount of arithmetic imbalance in the amount outstanding including undisbursed from one period to the next. The most common causes of imbalance are changes in exchange rates and transfers of debts from one catagory to another in the table. Source: World Bank. 49 Table 6.1: ACTUAL INCOME AND EXPENDITURE OF THE CENTRAL GOVERNMENT (In billion taka) FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY 95 FY96 FY97(E) Total Revenue 48 0 53 3 60.0 68 9 80 0 98 9 113.6 125.3 141 8 150 3 163.4 Tax 38.8 42.6 48.9 57.3 65.2 79.5 91.2 96.3 111.9 120.1 132.7 Non-tax 9.2 10.7 11.1 11.6 14.8 19.4 22.4 29.0 29.9 30.2 30.7 Total expenditure -930 -959 -107.3 -127.0 -139.9 -152.4 -169.2 -186.8 -221.5 -222.8 -238.2 Current expenditure a/ -41.6 -48.2 -56.7 -64.7 -72.3 -75.6 -84.6 -91.2 -103.1 -113.1 -125.4 Food account surplus -0.1 -5.6 -3.9 -8.8 -7.4 -5.8 -6.5 4.5 -7.0 -5.0 -0.6 Annual Development Program (ADP) -46.3 -38.0 -42.2 -47.2 -52.0 -57.0 -67.5 -87.1 -100.9 -96.1 -105.0 Other capital expenditure and net lending b/ -5.0 -4.1 -5.2 -5.2 -5.3 -5.4 -8.5 -12.5 -12.0 -8.6 -7.2 Residual di 0.7 -1.1 -2.9 -8.6 -2.2 -0.5 1.4 -2.0 0.0 Overall budget deficit -45.0 -42.6 -47.3 -58.1 -59.9 -53.5 -55.6 -61.5 -79.7 -74.5 -74.8 Net foreign financing c/ 40.4 41.4 46.7 48.6 51.9 44.1 52.9 50.4 57.5 46.1 48.1 Project aid 29.6 25.0 27.2 35.5 35.2 36.4 39.6 38.9 49.7 44.0 47.6 Commodity aid 11.1 14.1 15.5 13 5 16.3 6.4 17.2 18.2 13.4 9.4 6.9 Food aid 6.9 7.6 7.3 6.2 9.7 8.8 4.7 4.8 5.5 5.6 5.5 Commercial food borrowing -2.9 0 1 1.3 -0.8 -0.5 -0.8 -0.7 -0.4 0.0 0.0 0.0 Others 2.4 Debt amortization -4.4 -5.4 -4.6 -5.8 -8.8 -6.7 -7.8 -11.0 -11.0 -12.9 -14.3 Net domestic financing 4.7 1.2 0.7 9.5 8.0 9.3 2.7 11.1 22.2 28.4 26.7 Banking system 3.4 -0.7 -2.5 6.5 1.7 -2.9 -10.3 -5.4 5.2 15.6 17.1 Other domestic 1.3 1.9 3.1 1.9 3.5 9.2 13.0 16.4 17.0 12.8 9.6 (Annual percentage change) Total Revenue 13.5 11.0 12.6 14.8 16.1 23.6 14.9 10.3 13.2 6.0 8.7 Total expenditure 20.1 3.1 11.9 18.3 10.2 8.9 11.0 10.4 18.6 0.6 6.9 Current expenditure a/ 18.9 15.9 17.7 14.1 11.7 4.6 11.9 5.6 16.2 7.3 10.5 ADP 26.8 -18.0 11.1 11.8 10.2 9.6 18.4 29.0 15.9 -4.7 9.3 (As percent of GDP) Total revenue 8.9 8.9 9.1 9.3 9.6 10.9 12.0 12.2 12.1 11.5 11.7 Tax revenue 7.2 7.1 7.4 7.8 7.8 8.8 9.6 9.3 9.6 9.2 9.5 Non-tax revenue 1.7 1.8 1.7 1.6 1.8 2.1 2.4 2.8 2.6 2.3 2.2 Total expenditure 17.3 16.1 16.3 17.2 16.8 16.8 17.8 18.1 18.9 17.1 17.0 Current expenditure a/ 7.7 8. 1 8.6 8.8 8.7 8.3 8.9 8.9 8.8 8.7 8.9 ADP 8.6 6.4 6.4 6.4 6.2 6.3 7.1 8.4 8.6 7.4 7.5 Overall budget deficit 8.4 7.1 7.2 7.9 7.2 5.9 5.9 6.0 6.8 5.7 5.3 Net foreign financing 7.5 6.9 7.1 6.6 6.2 4.9 5.6 4 9 4.9 3.5 3.4 Net domesticfinancing 0.9 0.2 0.1 1.3 1.0 1.0 0.3 1.1 1.9 2.2 1.9 Banking system 0.6 -0.1 -0.4 0.9 0.2 -0.3 -1.1 -0.5 0.4 1.2 1.2 Other domestic 0.2 0.3 0.5 0.3 0.4 1.0 1.4 1.6 1.5 1.0 0.7 GDP Mkt. Prices 539.2 597.1 659.6 737.6 834.4 906.5 948.1 1030.4 1170.3 1301.6 1402.6 a/ Excludes food subsidies which are included under the food account deficit. bI Comprises non-ADP project expenditure, the Food for Work program, miscellaneous investment (non-development) and net loan and advances. A major pan of gross lending by Government is included within the ADP. c/ Including foreign grants. d/ Represents the difference between the balance of revenue and expenditure from the fiscal accounts and total financing estimates of the central Government. Note: E= Estimated outcome Source Ministry of Finance, IMF and BBS. 50 Table-6.2 ANNUAL DEVELOPMENT PROGRAM - SIZE AND SECTORAL ALLOCATION ( In billion taka) Sector FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 Revised Agriculture 3.3 3.1 42 3.7 5.2 5.4 4.5 6.4 Rural Development 1.8 2.2 32 3.7 4.8 6.8 6.8 10.3 Water Resources 9.8 6.8 5.4 6.2 5.7 6.5 5.6 10.6 Industry 4.3 1.0 1.2 0.7 1.6 1.3 1.5 1.9 Energy: 10.0 7.5 10.6 14.8 15.4 17.7 17.7 18.9 Power 6.5 3.7 7.4 10.1 12.1 15.3 13.7 14.1 Oil, Gas & NR 3.5 3.8 32 4.8 3.2 2.4 4.1 4.9 Infrastructure: 12.1 9.7 13.2 13.5 24.0 28.8 27.4 32.4 Transport 76 6.3 8.4 9.7 15.4 19.5 19.9 23.3 of which Jamuna bridge 0 1 4.4 4.2 10.0 Communications 1.7 1.1 1.6 1.5 5.4 4.5 2.9 2.2 Physical Planning 2.9 2.3 3.1 2.4 3.2 4.8 4.6 6.8 Social Sectors: 5.7 6.6 7.3 10.5 16.5 24.1 20.9 28.5 Education 23 1.7 30 53 92 14.7 13.0 15.8 Health 1.0 1.4 1.4 2.1 2.8 3.7 2.8 5.8 Family Pianning 2.2 3.1 2.7 2 8 4.1 4.7 4.1 4.9 Social Welfare 0.3 0.3 0.3 0.3 0.4 1.0 0.9 1.9 Local Government 1/ 3.5 1.6 3.2 5.5 6.9 4.3 5.2 5.0 Others 2/ 1.6 25.7 17.9 11.6 10.3 8.0 10.5 3.0 Total ADP 51.9 64.1 66.2 70.2 90.4 103.0 100.2 117.0 Food For Work (FFVV) 3/ ADP net of FFW 3/ Self Financing 4.7 12.1 92 2.7 3.3 2.2 4.1 1.6 ADP excluding self financing 47.2 52.0 57.0 67.5 87.1 100.9 96.0 115.5 1/ Local Government includes block allocation for District Councils, District and Thana infrastructure, development assistance to Thana and Union Parishad, development assistance to Municipal Corporations and Pourasha and local government bodies in Chittagong Hill-Tracts. 2/ Include ADP spending on Science and Technology Research Sports and Culture. Mass Media, Labour and Manpower Self Financing Program, Dhaka City Flood Protection, CDVAT, Canal Digging and Unallocated Bloc. 3/ A portion of Food For Work (FFW) is included in the FY98 ADP. but not in previous years. This makes intertemporal comparison of FY98 ADP size diff cult Thus in order to compare FY98 ADP s ze with previous years the portion of FFW included in the ADP is netted out. Source IMED 51 Table 6.3 PROFIT PERFORMANCE OF STATE-OWNED ENTERPRISES 1/ ( In Million taka Corporations 2/ 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/'95 1995/96 1996/97 Manufacturing: BSEC -85 -49 -62 -78 -365 -861 -1078 -1292 -903 -650 -645 -694 BSFIC -336 -315 -125 -237 170 -121 -722 -862 -150 78 -378 -679 BCIC 105 -86 198 374 455 -343 -554 206 255 -754 -1214 -2305 BTMO -566 -245 -354 -22 -188 -584 -434 -1355 -1539 -1142 -1344 -1248 BJMC -1583 -420 -1431 -1882 -3709 -2473 -3175 -5233 -640 -314 -962 -1005 BFIDC 28 10 -16 17 -39 -62 -142 -132 -113 12 301 124 Subtotal -2438 -1105 -1789 -1828 -3675 -4444 -6105 -8668 -3091 -2770 -4241 -5807 Utilities: BPC 1044 1410 840 1236 387 2488 3512 3800 4600 1017 757 -4481 BOGMC -27 -155 100 -159 -265 288 510 709 986 1170 1436 1088 BSC -117 -101 37 -244 -245 -527 -542 -172 -158 -129 -149 57 BIMAN -57 -352 -266 33 117 -249 348 679 714 719 496 408 PDB -285 172 -89 -363 -3375 -2802 -7482 -4262 -3892 -6469 -765 -3196 Subtotal 558 975 623 503 -3381 -802 -3654 754 2250 -3692 1775 -6125 Other BRTC -174 -183 -214 -235 -259 -246 -221 -241 -113 -88 -54 -49 DWASA -10 20 14 19 16 -4 5 11 36 -20 -67 14 CWASA -2 6 -2 -31 -63 -64 -57 -38 -27 -26 -33 -43 MPA 74 118 216 191 197 193 230 220 154 203 204 123 CPA 207 366 431 392 468 508 486 441 484 640 924 491 BJC -1623 -118 -1841 -1477 -1324 -142 -1675 -2038 -75 -63 -19 -18 BFDC -27 -1 -18 -26 -11 -20 -9 -11 -1 -9 9 -27 TCB 24 47 41 45 34 7 22 -94 179 16 -14 23 BFFVWT -5 -11 -28 20 24 35 5 -8 1 22 48 68 DESA 0 0 0 0 0 0 -853 -988 -1851 -1985 -1392 -1574 BADC -439 -525 78 152 133 78 -105 -112 -129 -118 -134 -234 BFDC (FILMi) 2 2 2 2 1 -20 -16 10 17 25 22 10 BIVTC -45 -55 -53 -73 -37 -37 -69 -30 -25 -7 17 100 EPZA -10 -8 1 3 -12 -2 -1 23 29 52 90 72 BSCIC 0 0 0 0 1 1 -6 -41 -34 -7 -19 -31 CDA -4 28 42 89 53 49 20 19 31 39 38 17 RAJUK 92 134 110 126 79 75 138 143 200 191 164 47 KDA 2 4 -1 15 11 13 7 8 20 68 42 26 BIVVTA -52 -48 -5 -1 -21 -31 1 -6 -51 -166 -215 -9 REB 0 -3 -26 -35 31 79 84 175 166 223 239 192 BPRC 16 -5 13 13 13 10 9 19 113 24 8 36 BSB -2 -2 0 -1 -1 -2 -2 -2 -14 -1 -14 -14 BHB 9 2 0 0 0 -4 -3 0 2 3 -2 0 Subtotal -1968 -234 -1239 -813 -668 477 -2011 -2543 -888 -984 -159 -779 Total Net Profit 2/ -3847 -365 -2405 -2138 -7725 -4769 -11770 -10457 -1729 -7446 -2624 -12710 Total excluding Petroleum (BPC) -4891 -1775 -3245 -3374 -8112 -7257 -15282 -14257 -6329 -8463 -3381 -8229 Memo items: Grand Total of Net Profit 3/ na na na na na na na na -1111 -6405 -1893 11838 Grand Total, excl. BPC na na na na na na na na -5711 -7422 -2650 -7357 Gross Losses 4/ na na na na na na na na 9700 11949 7419 15604 Gross Losses in S 242 297 181 364 na = not available. 1/ Profit after tax 2/ This table includes 34 out of the 39 non-financial corporations. Note also that this table does not include the financial profit/loss of Head Off ce of the corporations 3! Total of ali the 39 corporations 4! Total losses of the losing corporations. Source Monitoring Cell, Autonomous Bodies vVing. Ministry of Finance. 52 Table 6.4 COMPOSITION OF NBR TAX REVENUES Revenues Categories 1992193 1993/94 1994195 1995-96 1996-97 In billion taka Import Based Taxes 46.4 47.7 60.8 66.9 72.5 Customs Duty 28.8 29.8 36.8 37.73 40.07 VAT (import) 17.3 17.1 22.2 25.56 27.89 Supp. (import) 0.3 0.7 1.9 3.59 4.52 Domestic Activity Based Taxes 38.0 42.3 44.4 46.8 51.9 Excise Duty 3.3 1.6 1.8 1.83 2.00 VAT (Domestic) 8.3 10.3 12.5 13.05 15.18 Supp. Duty (Domestic) 9.8 11.8 13.4 14.64 16.19 Income Tax 16.1 17.0 14.9 15.33 16.41 Other Tax and Duty 0.4 1.5 1.8 1.97 2.14 Grand Total 84.38 89.96 105.22 113.70 124.41 Percent of Total Import Based Taxes 55.0 53.0 57.8 58.8 58.3 Customs Duty 34.1 33.2 34.9 33.2 32.2 VAT (import) 20.5 19.0 21.1 22.5 22.4 Supp. (import) 0.4 0.8 1.8 3.2 3.6 Domestic Activity Based Taxes 45.0 47.0 42.2 41.2 41.7 Excise Duty 3.9 1.8 1.7 1.6 1.6 VAT(Domestic) 9.9 11.5 11.9 11.5 12.2 Supp. Duty (Domestic) 11.6 13.1 12.8 12.9 13.0 Income Tax 19.1 19.0 14.2 13.5 13.2 Other Tax and Duty 0.5 1.7 1.7 1.7 1.7 Grand Total 100 100 100 100 100 Source: National Board of Revenue Table 7.1 MONEY SUPPLY AND DOMESTIC LIQUIDITY (Adjusted a/) (Taka in Billion) June 30 June30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 1989 1990 1991 1992 1993 1994 1995 1996 1997 1. Credit (net) to Government 12.7 20.1 21.9 19.0 22 7 46.8 46.14 63.1 80.2 2. Credit to Other Public Sector 46.3 50.1 53.6 57.0 60.3 44.6 52.6 54.8 57.4 3. Credit to Private Sector 133.6 160.0 178.2 191.2 199.6 215.5 262,1 316.6 356.4 4. Total Domestic Credit (1+2+3) 192.6 230.3 253.7 267.1 282.6 306.9 360.8 434.5 494.0 5. Net Foreign Assets 7.8 4.3 16.2 34.1 48.9 89.9 104.6 67.1 64.2 6. Other Liabilities (net) -9.6 -11.6 -19.8 -16.0 -13.7 -34.5 -43.4 -44.7 -51.9 7. Broad Money (M2) 190.8 223.0 250.0 285.3 317.8 362.4 422.1 456.9 506.3 8. Currency Outside Banks 26.2 31.9 36.1 40.7 44.8 54.2 65.7 71.2 75.7 9. Demand Deposits 28.5 31.8 35.9 41.8 45.8 57.5 66.1 73.4 75.9 10. Currency and Demand Deposits (Ml) 54.6 63.7 72.0 82.6 90.6 111.7 131.8 144.6 151.7 11. Time Deposits 136.2 159.3 178.0 202.7 224.7 252.3 290.3 312 3 354.6 Changes for major components (%) b/ 1. Credit (net) to Government and Public Sector - 19.0 7.4 0.7 9.2 10.2 8.0 19.4 16.7 Government - 58.6 8.6 -13.3 19.4 106.4 -1.4 36.8 27.1 Other Public Sector - 8.2 6.9 6.3 5.8 -26.0 17.8 4.2 4.7 2. Credit to Private Sector - 19.8 11.4 7.3 4.4 8.0 21.6 20.8 12.6 3. Total Domestic Credit (1+2) - 19.6 10.1 5.3 5.8 8.6 17.6 20 4 13.7 4. Broad Money (M2) - 16.9 12.1 14.1 11.4 14.0 16.5 8.3 10.8 a/ The data are adjusted for changes in cross exchange rate and discrepancies in data on Government debt. b/ Percent changes over preceding period. Source: Bangladesh Bank. 54 Table 8.1 PRODUCTION OF MAIN CROPS (thousand metric tons, unless noted otherwise) 1985/86 1986187 1987/88 1988/89 1989/90 1990/91 1991/92 1992193 1993/94 1994/95 1995/96 1996/97 Foodgrains 16084 16498 16462 16573 18750 19464 19319 19676 19172 18077 19056 20337 -Rice 15041 15407 15414 15551 17860 18460 18254 18500 18041 16832 17687 18883 (Aus) 2828 3130 2993 2860 2490 2330 2180 2070 1850 1790 1676 1871 (Aman) 8542 8267 7690 6860 9200 9170 9270 9680 9419 8504 8790 9552 (Boro) 3671 4010 4731 5831 6170 6960 6804 6750 6772 6538 7221 7460 -Wheat 1043 1091 1048 1022 890 1004 1065 1176 1131 1245 1369 1454 Other cereals 107 93 86 84 80 80 79 74 72 70 na na Pulses 496 487 515 395 490 503 499 488 513 518 508 -Gram 77 82 75 64 70 71 65 57 61 62 61 -Khesar, 167 164 182 118 170 177 185 172 188 189 181 - Mashkalai 45 43 52 47 52 52 50 51 52 53 50 -Masur 160 149 159 125 155 157 153 163 168 168 170 -Matar 14 14 14 13 12 14 14 14 14 14 14 -Mung 33 35 33 28 31 32 32 31 30 32 32 Oil seeds 469 438 448 420 437 449 462 475 469 479 472 - Rape and mustard 261 229 222 207 217 228 243 244 239 245 246 -Til 54 49 49 43 49 49 45 50 48 50 49 - Groundnut 34 34 48 45 41 41 42 39 40 40 38 Linseed 37 43 43 41 48 55 49 49 48 49 50 -Coconut 83 83 86 84 82 76 82 93 94 95 89 Fibres - Jute ('000 bales) 8660 6753 4701 4436 4639 5302 5273 4919 4453 5311 3750 C otton (000 bales) 28 22 39 41 77 88.21 77 88 57 70 100 Drugs & narcotics Tea (mln kg.) 44 38 41 41.16 41 45 46 49.3 51 51 45 - Tobacco ('000 MT) 47 40 42 39 38 34 34 36 38 38 43 - Betelnuts 23 22 22 22 23 24 24 24 26 26 27 27 - Betel leaves 61 62 65 63 65 67 69 70 71 72 72 Spices 246 240 256 256 272 267 271 269 275 269 265 - Rabi chillies 41 39 41 43 47 47 46 49 49 47 47 Onion 136 130 141 139 148 143 144 140 144 142 138 Garlic 38 36 39 38 39 38 40 39 40 40 39 - Turmeric 31 35 35 36 38 39 41 41 42 40 41 42 Tubers 1715 1617 1834 1633 1578 1720 1849 1818 1865 1903 2835 -Potato 1103 1069 1276 1089 1066 1237 1379 1384 1438 1468 2400 -Sweet Potato 612 548 558 544 512 483 470 434 427 435 435 Sugar plants -Sugarcane a! 6640 6896 7207 6707 7423 7682 7446 7506 7111 7446 7800 - Date palm (juice) 279 268 221 201 206 206 206 214 221 227 231 Fruits 1207 1226 1243 1156 1223 1218 1214 1225 1221 1224 1234 - Banana 691 703 684 609 637 624 626 636 632 630 634 -Mango 159 155 160 159 175 179 183 184 184 189 186 -Pineapple 128 133 145 137 157 162 150 148 149 149 149 : - Jackfruit 229 235 254 251 254 253 255 257 256 256 265 Vegetables 1300 : -Brinjal 167 162 164 116 182 186 185 189 188 188 189 : a! Based on total area and mill farm yield estimates; probably substantially overestimated = means not available Source: Bangladesh Bureau of Statistics Table 8.2 COMMERCIAL FERTILIZER DISTRIBUTION BY TYPE ('000 metric tons) 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 Urea 8318 794.9 915.1 1028.5 1135.1 1367.7 1323.3 1529.5 1547.4 1579.0 1748.4 2045.5 2119.8 Triple super-phosphate [TSP] 3457 297.4 335.7 389.8 416.0 480.7 514.7 458.7 4070 2342 122.9 111.0 72.6 Di-ammmonium phosphate [DAP] 0.4 0.10 65.9 0.0 0.0 0.0 0 0 4.0 2 0 28.7 1.8 - Muriate of potash [MP] 603 59.90 00 86.0 94.2 a/ 119.0 149.7 138.9 126.1 1039 154.2 155.8 219.3 Hyper-phosphate [HP] 0 3 0.20 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0.0 0.0 Super phosphate [SP] 0.0 0.0 0.0 0.0 0.0 0.0 11.4 34.2 119 8 170 6 5334 5968 525 2 Ammonium sulfate [AS] 0o0 00 0 0 6.4 b/ b/ 0.8 4.5 5,0 10 0 2.4 8.6 11.6 Potassium sulfate [PS] 0.0 0.0 0.0 0.0 61.6 70.4 0.0 0.0 0.0 00 0.0 0.0 0.0 NitroPhosKa [NPK] 10,2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0.0 0.0 0 0 Triple phosphate [TP] 0.0 00. 0 0 0.0 b/ b/ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Zincsulfate andoxy-sulfate 1.2 0.7 1.4 1.8 2.8 5.2 2.7 3.8 0,7 52 00 0.0 0.0 Gypsum 1.4 3.3 2 8 1.4 b/ b/ 101.7 115.4 108 1 861 77.1 103.5 866 Others 3.1 2.3 - 0.1 Total 1251.2 1156.5 1320.9 1513.9 1709.7 2043.0 2107.4 2291.3 2316.1 22178 2640.2 3021.2 3035.1 a/ Including PS TP and other types of fertilizer. b/ Included under PS Source: Ministry of Agriculture. I able 8.3 PUBLIC FOODGRAIN DISTRIBUTION SYSTEM OPERATIONS ('000 metric tons) 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 (estimated) Opening Stocks 1017 976 751 1498 962 1148 1040 1162 1117 541 772 933 Domestic Procurement 349 188 375 416 960 783 1016 233 166 277 422 616 Imports 1202 1767 2922 2136 1533 1577 1564 828 654 1555 1577 730 Total Availability 2568 2931 4048 4050 3455 3508 3620 2223 1937 2373 2771 2279 Statutory rationing 160 210 189 203 156 235 169 56 0 0 0 0 Priority categories a/ 467 668 585 687 737 772 760 310 200 278 245 263 Modified rationing 103 257 307 333 432 479 217 0 0 0 0 0 Food for Education 0 0 0 0 0 0 0 0 78 173 238 278 Others/Auction 0 0 0 0 0 0 0 0 35 4 0 0 Relief 205 248 603 815 335 340 427 249 342 392 440 392 Food-for-Work & Canal Digging 468 480 468 611 457 458 497 368 425 500 468 459 Marketing Operations b/ 8 40 0 0 0 0 0 18 0 0 0 0 Open Market Sales c/ 129 217 344 292 47 88 275 72 296 226 404 0 Total Distribution 1540 2120 2496 2941 2164 2372 2345 1073 1376 1573 1795 1392 Losses 52 62 55 200 143 96 113 33 20 28 43 26 Closing Stocks 976 749 1552 909 1148 1040 1162 1117 541 772 933 861 a/ Includes: essential priorities; other priorities; large employers; & direct sales to flour mills. b/ Marketing operations involve direct sale of grains to dealers at subsidized prices. c/ OMS in paddy and rice were initiated during 1981/82; wheat OMS began in 1978/79. P = GOB Projections. Source: Food Planning and Monitoring Unit, Ministry of Food. 57 Table 9.1 QUANTUM INDEX OF MEDIUM AND LARGE SCALE MANUFACTURING INDUSTRIES (1988/89 = 100) Weight 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995,96 Food Beverages and Tobacco 22.1 112.3 133.3 127.9 138.1 151.2 172.1 164.6 Fish & Seafood (Shrimps and Froglegs) 18 1059 117.1 10990 12592 1436 171 1 169.5 Vegetable Oil 04 1041 1041 1045 967 628 56.8 58.5 Black and blending tea 7 9 99 4 106,6 1094 118 5 123 5 112.9 123.7 FlourwMiling 1 2 979 982 939 115 1 115.9 132.6 116.0 Bakeryproduct 1.0 8994 116.9 1090 1280 1067 155.6 155.4 Sugar 2 . 167 6 224.3 176 1 179 9 201 9 246.2 167.5 Cigarettes 2 1 87 2 9.6 89 0 91 7 89 8 123 4 115.2 Bidis 3 9 12692 177 2 190 1 221 9 247 4 288 9 299.3 Edible Salt 0.3 105.0 1177 114.0 1021 199.5 426.2 421.5 Spirit& alcohol 0.7 10591 1587 61 1 62.4 90.2 102.0 61.4 Soft drinks 092 1659 1134 1448 145.4 194.1 174.1 147.4 Tetr h 36.2 197.9 111.9 128.6 141.4 1435 159.5 180.2 Cotton textile 7S 1044 1096 116.5 112.1 103.2 84.5 83.6 Jute textile 141 1037 851 81.7 875 828 83.5 79.5 Garments 91 1111 1643 230.5 2680 2744 356.2 441.2 Tanning & finishing leather 2.5 1233 84.3 93.0 10897 1234 126.8 133.9 Mfg offoots ear 1.6 131.5 100.0 100.1 1109 1395 162.1 174.8 Sik& synthetic 16 99a 102.4 1930 1200 132.7 1295 164.5 Dyeing & bleaching 12 1020 130.5 1345 1420 1923 149.6 131.1 Carpetl& ugs 03 10991 103.5 1021 1231 1582 166.2 170.9 Wo u t u 9.2 105.9 100.5 98.6 106.5 117.7 129.8 137.4 Board& particle board 0.1 1031 894 879 8091 934 95 1 104.4 Woodenfurniture 0.1 1085 1106 1084 1307 14090 161,7 167.6 Manufacture of Paper Products: 4.7 111.8 125.8 168.8 179.3 203.9 252.5 259.9 Paper(al hkind) 2.3 1097 1052 103.1 104.7 105.4 96.0 96.1 Newspapers 9.5 1356 130 9 137.1 135 7 154.1 253.6 160.7 Book & periodicals I 9 1091 149.2 256 4 290 9 335.9 439.6 483 6 Manufactare of Chemicals and Chemical Petroteut & Rubber 24.0 10998 178.1 196.3 229.9 272 285.8 306.8 Pharmaceuticals 7. 1193 128.4 15891 2028 2179 254.1 283.2 Compressed liquified gas 1.3 10933 91.0 88 8 109 2 136 0 171.4 187.7 Fertilizer 11.3 101 4 95.9 1086 129.3 1480 134.2 140.6 Insecticides 093 1102 1025 575 57.9 56.6 5962 54.4 Paint c arnish 9.1 116 5 121 5 126 9 139 0 151 1 215.6 240.9 Perfumes & cosmetics 0.5 702 44.5 115.5 133.0 139.2 174.8 232.9 Soap&detergents 17 977 905 82.2 93.4 104.6 126.6 133.5 Matches 04 716 73.1 81.8 91 3 1910 79.5 83.9 Petroleum products 0 7 93 8 103.6 97.0 126 0 114 0 130.8 110,6 Rubbertootwere 9.5 1029 81.9 60.9 671 704 63.0 65.1 PVC products 063 134 6 236.2 90 0 124 9 165 8 175.7 196 6 Manufacture of Non-Metalic 2.8 99.5 90.6 84.8 91.0 105.3 96.9 114.5 Ceramic 0.6 99 3 93 9 59 6 7598 78 . 69.1 73.4 Glass products 0.2 1167 1254 2900 205.4 198.8 262.3 249.4 Bricks 0.9 990 976 9891 121.0 12097 92 7 105.0 Cement 1.2 981 79 8 79 2 60 3 941 92.0 123.8 Basic Metal Industries 2.7 87.2 105.2 102.2 88.3 97.8 117.3 1169 iron and steel basic industnes 0.2 870 98.7 42.7 82 76 29.4 37.7 Re-rolling 1.9 93 9 75 / 5867 66 9 119 4 195.8 169.4 Utensils 05 1031 104.6 1064 999 93. 71 117.4 117.6 Plumbing equipments 02 128i5 1275 132.5 1198 213.0 148.5 147.0 Manufacture of Fabricated Metal Products Machiner. & Equopments 3.8 109.5 86.3 88.2 90.7 94.0 103.5 98.6 Fabrcated metal 0.2 9o9 862 91 4 8993 88.2 87.9 83.6 Electric appliances 0.4 1000 655 96.5 52.3 619 95.6 73.7 Electrical appartus 0.2 138 4 27 3 24.5 29.3 24 9 24.0 23.6 Engine and turbne 01 976 10899 33.2 37.1 332 24.5 23.5 Textile machinenery(P-Loom) 0.1 1435 194.8 244.0 2247 21 1 22.5 Z2.5 Machinery equip. NEC except elec 01 916 56.2 941 120 1 123.9 53.7 37.0 El.c. inds machina pparatus 01 1238 11697 138.2 133.5 826 136.5 196.6 Radio, TV& telephone 0.4 1049 72 4 55 5 75 3 87.7 87.6 71.8 Wires &cables 095 123.0 77.2 812 1013 116.6 171.8 190.6 Electriclamps 07 101.4 106.1 113.3 1199 139.9 147.1 147.4 Battenies 1.6 111.3 93.5 8894 8895 97.8 93.7 77.9 ShiepBi0 8.6 93.0 100.2 139.0 131.1 85.3 83.1 60.4 Motor vehicles 0Y8 1 24.3 84.6 58.1 3696 39.2 59.4 57.3 MotorCce 0.2 139.8 13092 112.1 113.1 89.0 100.1 140.2 TOTAL 100.0 109.2 112.9 122.8 1136.9 946. 1639 173.5 Source: Based on data trom Bangladesh Bureau of Statistics fBBSI 58 Table 9.2 PRODUCTION OF SELECTED INDUSTRIAL GOODS Goods Units 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 Shrimps & froglegs 000 MT 15 16 18 17 19 22 26 26 Sugar 000 MT 110 184 246 195 187 221 270 184 Veg.oils 000 MT 52 54 54 55 51 33 30 31 Tea 000 MT 42 41 44 46 49 51 47 51 Beverage M doz.bt 7 11 8 10 10 11 12 10 Cotton yarn M KG 49 51 56 61 61 58 49 50 Cotton cloth M meters 65 69 60 59 45 32 17 10 Jute goods 000 MT 509 528 434 416 446 422 425 405 Garments M doz 16 15 16 31 36 34 47 49 Leather M sq meter 12 15 10 11 13 15 15 16 Paper 000 MT 86 93 90 88 90 90 83 82 Fertilizer 000 MT 1599 1621 1533 1736 2051 2366 2145 2248 Soap & detergent 000 MT 37 36 30 30 34 37 46 49 Petroproducts 000MT 1048 984 1086 1017 1321 1194 1371 1160 Footwear M doz pr 386 397 316 235 259 272 243 251 Cement 000 MT 344 337 275 272 207 324 31 6 426 Steel ingots 000 MT 86 75 58 37 7 6 25 21 Textile machinery 000 NO. 1965 1314 3580 4484 4129 387 414 432 Radio 000 NO. 102 68 21 16 7 3 2 11 TV 000 NO. 79 83 57 44 61 77 79 61 Telephone 000 NO. 26 38 33 26 31 16 6 9 Dry cell Battery M NO. 66 74 62 58 58 65 52 55 Bicycles 000 NO. 30 34 34 17 13 13 13 13 Note on units used: M million, MT = metric ton, NO = number bt = bottles, pr = pair Source: Bangladesh Bureau of Statistics. 59 Table 10.1 CONSUMER PRICE INDICES (Annual Averages) weight 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 DHAKA,MIDDLE INCOME [19734 = 1001 Food 62.7 483.4 535.4 565.9 606.2 647.9 683.8 676.5 679.2 731.6 774.8 812.4 Fuel & Lighting 7.5 542.2 562.1 621.2 674 3 945.1 1008 4 1054.6 1061.2 1014 4 1033.1 1056.4 Housing 11 9 550 8 647 7 723.3 8C8 1 867 2 892 9 946 1 1018.7 1040 1 1048 9 1067.2 Clothing 6.2 292.6 3191 348.0 374.5 399.4 410 3 421.6 430.9 438.7 439.0 472.8 Miscellaneous 11.7 459.5 524.4 597.6 7C7 5 720.6 755.9 787.9 805.0 859.4 863.4 898.9 General 100 0 481 2 536.0 578.9 632.7 689.3 724.4 734.0 747.4 786.3 818.2 849.6 Percent increase 10.4 11.4 8.0 9.3 8.9 5.1 1.3 1.8 5 2 4.1 3.9 DHAKA S.M.A (1985/96=100J Food 50.8 115.8 123.7 134.5 141.8 148.1 157.6 157.8 162.7 176.7 190.1 192.6 Clothing & Footwear 5.0 107.8 112.9 124.5 130.4 142.0 146.9 150.7 154.8 159.6 164.5 1699 Gross rent, Fuel & Lighting 22.6 113.7 140.2 147.0 156.3 1681 170.7 176.9 190.9 198.5 198.5 2036 Furniture 1.8 116.1 125.0 130.6 138.9 150.0 151.7 150.0 153.5 158.7 162.9 164.7 Medical care 1.7 121.0 129.3 149.7 179 0 200.6 207.2 230.5 231.9 235.0 259.8 274.4 Transport 7.4 136.4 137.1 156.9 174 5 191.0 197.2 197 8 199.1 202.7 208.4 232.0 Recreauion & Educationi 6.2 100.5 103.4 111.0 129.9 140.1 143.2 156.6 174.1 195.1 224.8 230.2 M!isc. goodss& services 4.6 104.1 118.2 144.0 178.2 188.6 192.3 192.5 188.7 215.7 220.8 223.4 General 100.0 115.0 126.5 137.6 1484 157.7 164.4 167.3 174.6 186.3 196.3 201.5 Percent increase :: 10.0 8.8 7.8 6.3 4.2 1.8 4.4 6.7 5.4 2.7 ALL URBAN (1985-86=100X Food 57.3 112.8 121.8 132.3 137.8 1464 154.0 158.3 162.9 175.3 188.2 189.8 3/ Clothing & Footwear 5.9 107.8 112.7 118.6 1224 126.8 130.2 133.7 1385 142.1 148.4 156.1 Gross rent, Fuel & Lighting 18.1 110.5 117.9 125.6 132.6 140.3 150.7 1562 1624 171.3 190.0 195.7 Furniture 3.3 113.2 118.9 130.3 134.5 169.9 146.9 153.2 159.2 163.9 168.8 179.0 Medical care 1 4 120.6 134.6 149.3 161 8 170.6 179 4 201 5 216.9 230.0 251.4 271.3 Transport 6.4 106.3 113.8 146 1 147.5 169.9 170.5 170.7 170 9 202.8 185.9 196.1 Recreafioi, & iiducatrie 4.8 113.2 120.1 135.8 144.1 151.5 153.8 156.7 162.8 187.0 186.9 197.7 Misc. goods & services 2.9 105.8 114.8 132.0 139.5 149.1 158.1 163.9 171.1 175.1 179.9 188 0 General 100.0 111.6 119.8 131.49 137 1 146 1 153.2 157.7 1627 175.3 186.0 190.3 Percent increase :: 7.4 97 4 3 6,5 4.9 2.9 3.1 7.7 6.1 ALLBRURAL1frfl-WF1"0 Food 66.9 1154 123.4 1337 137.0 148.1 154.3 1572 161.8 1774 189.6 189.4 3/ Clothing & Footwear 5.9 109.8 114.6 119.2 124.3 130.6 134.6 139.3 141.5 144.7 152.2 159.5 Gross rent, Fuel & Lighting 13.9 110.1 115.9 123.5 128 4 141.9 150.7 158.5 165.8 189.1 203.2 213.3 Furniture 2.4 109.0 118.0 127.5 133.8 140.4 146.2 150.6 154.1 155.4 168.2 175.5 Medical care 1.4 129.2 137.6 154.1 1797 189.9 204.4 216.9 226.2 2384 242.6 237.9 Transport 2.3 111.4 113.6 143.3 163.6 182.9 186.4 168.7 193.0 216.2 228.8 229.7 Recreatio & Edtication 2.5 113.1 121.5 129.8 1404 156.9 170.3 179.9 190.2 217.1 248.6 264.1 Mi sc. yods & sei-vices 4.8 109.6 116.5 128.6 134.6 142.1 149.7 156.3 164.1 172.9 182.8 187.0 General 100.0 113.9 121.2 131.4 136.2 147.5 154.2 158.0 162.4 179.1 191.5 194.0 Percent increase :: 6.4 8.4 3 7 8.3 4.5 2.5 2.8 10.2 6.9 NATIONAL (85-86=lOO) Food 64.5 115.4 123.4 133 7 137 0 148.1 154.3 157.2 161.8 176.8 189.1 159.5 3/ Clothing & Footwear 5.9 109.8 114.6 119.2 124.3 130.6 134.6 139.3 141.5 144.2 150.7 157.3 Gross rent, Fuel & Lighting 15.0 110.1 115.9 123.5 128.4 141.9 150.7 158.5 165.8 184.6 198.1 207.3 Furniture 2.6 109.0 118.0 127.5 133.6 140.4 146.2 150.6 154.1 157.5 165.6 1747 Medical care 1.4 129.2 137.6 154.1 179.7 189.9 204.4 216.9 216.2 236.3 242.6 2434 Transport 3.3 111.4 113.6 143.3 163.6 182.9 1864 188.7 193.0 213.2 216.1 2196 Recreatioui &- Education 30.4 113.1 121.5 129.8 140.4 156.9 170.3 179.9 190.3 209.5 231.2 245.4 Misc, goods & services 4.3 109.6 116.5 126.6 134.6 142.1 1497 156.3 164.1 173.4 180.2 1863 General 100.0 113.9 121.1 131.3 136.4 147.7 1544 158.7 163.9 178.4 190.3 1931 Percent increase :: 6.4 8.4 3 9 8 3 4 6 2.7 3 3 8 9 6 7 Notes: 1. Dhaka middle income index (old) refers to families with 1973/74 incomes of Tk 300 to Tk 999. 2. BBS is now compiling new consumer price indices for Bangladesh with 1985-86 as the base. The national CPI is derived from the separate indices compiled for the urban and the rural households. The reference groups of the urban and rural indices are the average urban and rural households of Bangladesh. Their consumption pattern were determined from the results of the 1985-86 Household Expenditure Survey conducted by the BBS. In addition, a separate CPI has also been compiled for Dhaka Statistical Metropoliton Area (SMA) 3/ As of end December 1996. :: = means not available Source: Bangladesh Bureau of Statistics. 60 Table 10.2 CONSUMER PRICE INDICES (by month) Dhaka Middle Class DhaKa SMA (1973174=100) (1985/86=100) General Year-on-Year General Year-on-Year Index % Change Index % Change 1993/94 July 736 4 168.5 August 737.1 169.7 September 738.5 170.6 October 741.8 172 4 November 753.0 175.5 December 749.8 174 0 January 743.2 172.3 February 745.7 174.0 March 751.7 177.4 April 754 7 178.5 May 756.7 178.8 June 760.8 179.5 1994/95 July 762.6 3 6 181.8 7 9 August 762.6 3.5 182.1 7.3 September 773.4 4 7 180.3 5 7 October 778.7 5 0 182 9 6.1 November 779 1 3.5 183.8 4 7 December 784.6 4.6 185.5 6.6 January 790.0 6 3 186.2 8.1 February 791.7 6.2 186.4 7.1 March 797.6 6 1 189.2 6 6 April 803.3 6.4 190.9 7.0 May 804.0 6.3 191.4 7 0 June 808 0 6.2 192.9 7.5 1995/96 July 814.2 6.8 194 6 7.0 August 815.1 6.9 195.6 7.4 September 813.2 5.1 195.3 8.3 October 817 1 4 9 197.3 7.9 November 820 3 5.3 195.7 6.5 December 812.8 3 6 196.5 5.9 January 810.1 2 5 194 0 4.2 February 810.6 2 4 194.3 4.2 March 830.4 4.1 199.9 5.7 April 825.0 2 7 197.4 3.4 May 824.0 2.5 197.8 3.3 June 825.7 2.2 197.2 2.2 1996/97 July 825.7 1.4 198.3 1.9 August 833.4 2.2 197.0 0.7 September 827.8 1 8 196.7 0.8 October 843.2 3 2 201.7 2.2 November 844 0 2.9 200.8 2.6 December 845 5 4 0 200.0 1.8 January 856.0 5 7 201.0 3.6 February 855.0 5 5 200.0 2.9 March 859.0 3.4 2(1.0 0.5 April 865.0 4.8 204.0 3.3 May 867.0 5 2 208.0 5.1 June 876.4 6.1 210 0 6 5 Source. BBS g ! & | | w R ______ i ! i :!.e g l i B i l X l ' 'S 0 0 ::2 > l !if:' l:_i_'__l :'0l *g i