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Introduction to Dutch Development Co-operation in Bangladesh

Bangladesh is one of 36 countries with which the Netherlands has a long-term bilateral development co-operation relationship. The development co-operation between the two countries began shortly after independence in 1971. By 2000, the Netherlands had contributed some 1.36 billion Euro. In recent years disbursement levels were between 35 and 45 million Euro.


During the 1970s support towards re-launching the economy of a war-ravaged Bangladesh was emphasised, and in the 1980s increased attention was given to activities that directly addressed poverty. The first half of the 1990s showed a substantial increase in project support to social sectors and aid through NGOs. Since 1997 the program focuses on social sectors, i.e. Primary Health Care, (including nutrition and population welfare) and Basic Education, as well as Integrated Water Resources Management, (IWRM).


An important element of the current development co-operation policy of the Netherlands is the sectoral approach. Another important aspect of increasing the effectiveness of development co-operation is the emphasis on poverty reduction strategies. The Netherlands attaches great value to the formulation of a thorough comprehensive poverty reduction strategy that reflects the views of the society at large and can give the necessary direction and focus to the poverty alleviation activities of all development partners. We welcome the Poverty Reduction Strategy Paper (PRSP) and look forward to assist with its implementation.


Good governance and respect for human rights are prerequisites for reaching the Millenium Development Goals. Improving governance is the key challenge for Bangladesh to safeguard and build on its developmental gains of the last decades. The Netherlands attaches great importance to the fight against corruption, democratisation and improvement of the human security, with a special focus on the empowerment of women.


One of the major bottlenecks for wider implementation of sectoral approaches in Bangladesh is the budget allocation system, notably the disconnection between the Annual Development Plan and the Revenue Budget. The Netherlands shares the view of the Government of Bangladesh that improvement of budget and control procedures are crucial for effective governance. The Royal Netherlands Embassy therefore co-funds the Financial Management Reform Program of the Ministry of Finance, with DFID.


The Sectoral Approach

The sectoral approach (also referred to as sector wide approach or SWAP) aims at replacing isolated projects by support to coherent sectoral programs. Under the sectoral approach the Netherlands provides support to a sector or sub- sector and commits itself to long-term co-operation. This support is tailored to the sectoral policy framework as drawn up by the recipient countrys government. Ideally it would take the form of sectoral budget support, mutually agreed upon and jointly provided by all donors involved. However, that ideal situation requires that certain criteria are met with respect to coherence, transparency, accountability and civil ownership and it will take time and effort before that stage is reached.


In many cases institutional capacity needs to be strengthened to enable the development of adequate sector policies and their implementation. Therefore, for the time being certain types of project support will continue to exist. However, program aid (budget support) should replace project aid when and where feasible. To speed up this shift, due attention is given to institutional support and strengthening. The sectoral approach is a dynamic concept: of crucial importance is the willingness and commitment to move towards a coherent sector wide approach. The Netherlands is eager to support the process where such a commitment exists.


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