Sustainable Development Goals (SDGs) in Bangladesh: Key Challenges and Missing Links: Focus should be on Internal Resource Mobilization and Effective Democratic Institutions

Equity and Justice Working Group Bangladesh (EquityBD)

The UN Committee for Development Policy (CPD) has recently announced Bangladesh’s eligibility for graduation from Least Developed Country, where it has been listed since 1975, to Developing Country. This begins the graduation process for Bangladesh, which met the requirements in March 2018, could receive official Developing Country status by 2024.

This success also brings confidence for achieving the SDGs. In the last 15 years, with limited resources, Bangladesh has witnessed one of the fastest reductions in poverty anywhere in the world. The country has met the target in reducing the proportion of population below the national poverty line (currently 22.4%) three years ahead of time.¹ It has reached the targets in reducing infant mortality rate from 92 per 1000 live births in 1990 to 46 now; and in decreasing the prevalence of underweight children less than five years of age from 66 percent in 1990 to 32.6 percent at present. In terms of education, the country has achieved nearly 100 percent enrollment in primary schools; and attained gender parity with more girls than boys in primary and secondary schools. It has also met the targets in preventing malarial deaths and in raising the share of people using an improved drinking water source. As one of the top performing countries in terms of reaching the Millennium Development Goals, Bangladesh is equally confident in embracing the new SDG targets and the Prime Minister has expressed her deep commitment to achieving these before the year 2030.

But, to achieve the SDGs, Bangladesh faces some considerable challenges. The Sustainable Development Solution Network has recently published a global report on the SDGs, which provides an SDG index of 149 countries, ranking them in terms of their 2015 status on each of the goals.² According to the report Bangladesh ranks last (118) among the BIMSTEC countries (India, Bangladesh, Bhutan, Nepal, Myanmar, Sri Lanka, Thailand) and second last among the SAARC countries (Afghanistan 139, Bhutan 82, India 110, Myanmar 117Nepal 103, Pakistan 115).

According to the estimates in the final report by the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF), achieving the SDGs in all countries will require additional global investments in the range of US$5 trillion to US$7 trillion per year up to 2030. A country like Bangladesh will need a huge investment for basic infrastructure like roads, rail and ports; power stations; water and sanitation and also for sectors like agriculture and rural development, climate change mitigation and adaptation, health and education.  But recent trends in investment in these sectors are not up to desired level. Budgetary allocation on social security is about 2 percent of GDP in FY 2010-2015 period, the average allocation for the health sector was about 0.7 percent of GDP during FY 2003-2014, compared to the recommended WHO level of 5 percent. Education gets 2 percent of GDP during FY 2003-2014, compared to the 6 percent advised by UNESCO.

Another big problem in achieving the SDGs is the relative lack of integration of these goals into the national planning process. At present there country has at least 14 national plans, policies and strategies, including the 7th Five Year Plan, the National Social Security Strategy (NSSS) 2015, the National Education Policy 2010; the Primary Education Development Programme (PEDP III) 2011-16 (extended to June 2017), the National Women’s Development Policy (NWDP) 2011, the Bangladesh Climate Change Strategy and Action Plan (BCCSAP) 2009. Research by the Centre for Policy Dialogue (CPD), an independent research organization, shows that of the 17 SDGs – eight Goals are better integrated in the existing national prioritization processes and about 20 percent of the targets are not currently reflected in national priorities.

The 5th Assessment Report of Intergovernmental Panel on Climate Change (IPCC-AR5) has predicted that sea-level rise threatens coastal and deltaic rice production areas in Asia, such as those in Bangladesh and the Mekong River Delta. According to the Bangladesh Planning Commission, by 2050, the country will face an incremental cost of flood protection of US$ 2.6 billion in initial costs and US$ 54 million in annual recurring costs.  Therefore it is evident that, climate change will be a serious threat to Bangladesh in achieving the SDGs.  

Table 1: Country initiatives in achieving the SDGs planning process

For the fast track implementation of SDGs, the Government has developed a mapping document that includes all ministries, divisions and agencies (see Table 2).

Table 2: SDG-1. End poverty in all its forms everywhere

SDG-3. Ensure healthy lives and promote wellbeing for all at all ages

In June 2017, the Government published the SDGs Financial Strategy, which estimates that to achieve the SDGs Bangladesh will need US$ 928.48 billion for the period 2017-2030. The annual cost of achieving the SDGs will be US$ 66.32 billion. Thus it is obvious that finance and resource mobilization are the key components in the coming years for achieving the SDG targets. Experts estimate that to achieve the SDGs in Bangladesh, domestic resource mobilization needs to be raised at least 18 percent from the present 12.1 percent over the next 5 to 10 years, but the projection of domestic resource mobilization is far from that (14.2-16.2% of GDP) in the 7th FYP. So, resource mobilization in this regard is still a big concern. 

The term “Sustainable Development” includes poverty reduction, human development, including health and job-oriented education and sustainable environmental management, all of which are primary in the context of Bangladesh. The 7th FYP states that all these spending plans will essentially entail an increase in the budget size to about 21.1 percent of GDP.³  An increase of at least five percentage points in the financial allocation in relation to GDP will be needed by the final year of the 7th FYP. The overview and analysis of budgetary expenditures show that investment in social sector (poverty, health, education) is less than 9 percent of GDP in last year’s plan and will be increased by 13.9 percent during the 7th FYP.⁴ So it is clear that the Government’s projection of financing is insufficient. Private sector investment is also found stagnant and moving to around 24-25 percent of GDP in the last couple of years, but needs to be at least 35 percent per annum in order to implement the 7th FYP.

Missing links and challenges for Bangladesh in achieving the SDGs

Reducing Inequality should be key focus
If economic growth is not shared equally and fairly, if the resources are not distributed properly, sustainable economic growth is not possible; rather it creates other types of economic crises. Development and income inequality is pretty much evident in Bangladesh, which has been another challenge for sustainable development. The incidence of poverty is higher in rural areas than in the urban areas and the rate of decrease of poverty is also higher in rural areas (1.24%) than in urban areas (1.13%).⁵  The 2010 Household and Income Expenditure Survey (HIES) estimates the incidence of poverty at 31.5 percent at the national level, 35.2 percent in rural areas and 21.3 percent in urban areas. Regional disparities are also apparent. It has been found that the highest decline in poverty incidence occurred for Dhaka division, after which are Chittagong and Sylhet. Poverty in Barisal is found to have stagnated and to have increased slightly in Khulna. The income gap is also evident: the 2010 HEIS shows the clear gap between bottom 5 percent (poorest of the poor) and the top 5 percent (richest of the rich).⁶ It shows that the income accumulating to top 5 percent of households was 24.61 percent, compared to only 0.78 percent for the bottom 5 percent. Gaps are also evident in the social Indicators for the Poorest and Richest Quintiles. For example child malnutrition rate in the Poorest Quintile is 50 while it is 21 in the Richest Quintile; Primary school completion rate in the Poorest Quintile is 65 and 97 in the richest quintile.⁷ So, to ensure proper and adequate implementation of SDG 10 on reducing inequalities, regional disparities issues must be addressed. 

Coastal People got less integration and priority in Government’s national plan
The Bangladesh coastal region covers about 20 percent of its geographical area where more than 50 million people are living and most of the populations are poor and living below the poverty line. A multidimensional impact of climate change is being observed in coastal areas. Salinity intrusion along with severe water crisis is causing lower crop yields and scarcity of drinking water, thus endangering livelihoods. Every year thousands of affected people are migrating and taking shelter in urban slums in cities especially in Dhaka and Chittagong. The Internal Displacement and Monitoring Center (IDMC) predicts that 30-50 million people will be displaced. But country preparedness in term of strategic planning and financial support is not yet much visible. The severe cyclone SIDR-2007 caused an economic loss of US$ 3 billion which has not recovered. Poverty was increased by about 5 percent. Government has committed to protect coastal people through building up the most essential and protection-oriented critical infrastructure like embankment and polders in the most vulnerable coastal areas and providing economic opportunities for their adaptation and ensuring sustainable livelihoods. But the 7th FYP and its implementation has taken a very traditional approach and focused on growth-oriented development infrastructure like transport facilities and export processing zones. Government has conducted a study on “Coastal Zone Management” to make the coastal areas resilient and sustainable, following an expert recommendation to develop a “Coastal Development Board” with a separate development plan and budget, but this is yet to be implemented.

It is also true that the development of critical infrastructure will require a huge amount of financial allocations and technical support. Bangladesh is innocent victim of, and not responsible for global warming and its impact and lacks sufficient capacity to finance mitigation in the above sectors. So receiving ODA is a special legitimate right of Bangladesh from those developed countries who are historically responsible for carbon emission and global warming. Effective CSO participation has yet to be facilitated by Government, although it is widely acknowledged that current development strategies require the participation of all CSO stakeholders, including public representatives, Government, the private sector, the media, civil society, NGOs, the knowledge community  and development  partners. In addition, the implementation process and follow-up and review of progress will be critically important for the attainment of the SDGs.

Since independence, the CSOs and NGOs are playing key roles in the economic and social development of Bangladesh, engaging in various development sectors like health, education and economic uplift of poor people alongside Government. Media has played a significant role to increase the awareness of people and communities on different development issues. CSOs have put their efforts towards achieving the MDG targets and now have been able to be involved in the SDG process based on their vast experience. But there is no legislative or constitutional provision or framework that supports the CSOs in engaging in the development planning and implementation process with Government on an equal footing. A few national CSOs are now proactively engaged with Government’s different planning and development process, bringing their own capacity. The Government has acknowledged the crucial role of CSOs in SDG implementation, but given the lack of policy space, it is often less effective because Government does not give proper importance to their role and contributions.

As the implementation and achievement of the SGDs depends on the inclusive participation of Government, the private sector and other development agents like civil society (SDG target 17.17), Government should develop a policy framework that will support CSO capacity development and effective engagement with SDG implementation at all levels.

Autonomous local government seems to be very important for development and poverty reduction in Bangladesh. Strengthening local government, allowing autonomy with a decentralized management system could help in preparing appropriate local development strategies for resource mobilization, poverty reduction, local leadership with people’s participation for effective development and also establishing accountability.

Internal Resource Mobilization should get priority and illicit finance flow loopholes stopped
It is almost beyond the means of Bangladesh to ensure the necessary finance to achieve the SDGs. Internal or domestic resources can play a vital role in this regard. The trend of illicit financial flows traps the Government in a shortfall situation in terms of domestic resource mobilization. In the last decades there has been an average resource loss of 1.2 percent of GDP moving out through illicit financial flows. The private, business sector and Multinational Corporations are engaged with these illegal financial outflow processes. As per the latest report-2015 of Global Financial Integrity (GFI) an estimated US$ 55.88 billion has illicitly been transferred from Bangladesh to foreign countries during the period 2003 to 2014 which is roughly 1.5 times the 2015-2016 national budget. Every year around US$ 6 billion has been transferred illicitly to other countries and Bangladesh became the 26th country ranked in the world in respect of illicit financial flows. The highest illicit financial flows happened in 2013, amounting to US$ 9.7 billion, which is about 12 times more than the foreign aid and 141 percent in excess of foreign loans for FY2015-2016. 

Many developed countries have created so-called tax havens for both individuals and corporations, enticing them to shift money through various processes, legal and illegal. Swiss Bank deposits and second homes in Malaysia are burning examples of money laundering. The 2014 Annual Report published by the Central Bank of Switzerland (SNB) shows that there has been increase of up to 40.72 percent by Bangladeshi depositors in different Swiss banks, that is, about US$ 170 million more than the year 2013. The same is true in the case of Malaysia. Since its inception in 2002, a total of 2370 Bangladeshis had received second home package facilities by June 2013 under the “, according to reports in the “Daily Sun”.⁸

Since independence, the Government has been receiving ODA annually from development partners. However, the Government has been simultaneously facing illicit financial flows as an increasing trend. Such flows are one of the major causes that are hindering domestic resource mobilization as required. The so-called development finance or ODA has contributed to the national debt burden along with Debt Service Liabilities. These liabilities together with illicit financial flows are together becoming higher compared to annual ODA. The illicit outflows eats away US$ 1.31 billion on average every year which is 1.1 percent of GDP and US$ 8.6 per capita,⁹ while ODA is only 1.19% GDP per year.¹⁰ This ODA is now creating a debt burden of US$ 169 per capita along with 2 percent of GDP in debt servicing per year. So stopping illicit flows is imperative to finance the SDGs as well as debt service relief as a poor country.

The current money laundering laws and policies are not able to control these incidents. Because it is impossible for Bangladesh to stop illicit flows alone, global coordination and support is needed to control the situation, encourage Government to stop tax dodging by MNCs and illegal mobilizing of resources. In this regard, developed countries have initiated Base Erosion and Profit Shifting arrangements but they didn’t include the developing and LDCs in this process. This reflects the vested interest of developed countries, allowing illicit flows from the LDCs. However, the SDG’s implementation relies on domestic resource mobilization which requires action to stop loopholes and so-called tax havens for money laundering activities, which should be done through a global coordination system through the UN or through inter-state action. CSOs are demanding UN Member States take action  to upgrade the UN Tax Committee into a UN Tax Commission, and to prepare Internal Bank  and Tax Transparency laws and rules that reduce the practice of “Race to Bottom” by countries seeking to attract foreign capital.

Downward accountability and building democratic institutions is a must to achieve SDGs
Government has prepared a development and progress report for donors and other development partners. Bangladesh has also prepared its Voluntary National Review (VNR) 2017 on SDGs. But at the national level, Government has little interest in showing accountability to its own people. Ultimately, accountability toward local government, the media, civil society and the private sector are also important for the country to achieve the SDGs, helping resource mobilization through accelerated citizen initiatives in this regard.

The spirit of the liberation war and the people’s fight for freedom was democracy, socialism, secularism and nationalism. But unfortunately, Bangladesh seems to be leaving these spirits continuously. The reality of free and fair elections, free media, an independent judiciary, rule of law, autonomous local government and independence of different constitutional commissions is a bit far from the desired level. This situation will surely hamper accountability for development. Bangladesh has a multi-driver development society; to achieve development goals those multi drivers should get the opportunity to contribute for which democratic instructions should be more active and must be correctly in place.

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