BANGLADESH: More and Better Jobs to Accelerate Shared Growth and End Extreme Poverty Bangladesh Systematic Country Diagnostic Wednesday July 19, 2017

Outline of Presentation Using and Supplementing the Available Diagnostic Work Poverty trends and profile Poverty maps Labor market and gender analysis Analytic/Other Inputs from IFC and Sector Colleagues Energy, Transport, Trade, Urban, Climate Change CCSA etc. External Consultations and Validation

Bangladesh’s Much Improved Economic Performance

Pace of poverty reduction has picked up considerably since 2000   Poverty Headcount Rate (percent) * Projections 1991-92 1995-96 2000 2005 2010 2015* Upper Poverty Line National 58.8 51.0 48.9 40.0 31.5 24.8 Urban 44.9 29.4 35.2 28.4 21.3 Rural 61.2 55.2 52.3 43.8 Lower Poverty Line 42.7 34.4 34.3 25.1 17.6 12.4 23.3 13.7 19.9 14.6 7.7 46.6 38.5 37.9 28.6 21.1 PPP$1.25 Poverty Line 70.2 60.6 58.6 50.5 43.3 35.7

Benefits of growth have been equitably shared across the population Income Inequality in Bangladesh: 2000 – 2010   2000 2010 Gini (National) 0.307 0.299 Rural 0.271 0.273 Urban 0.368 0.330 Population share 80% 74% 20% 26% Source: HIES 2000 and 2010

More and better jobs have enabled millions to move out of poverty 13.8m net new jobs added between 2002/03 and 2013 10.5m outside agriculture vs. 3.3 in agriculture share of agriculture in total employment now 45 percent share of manufacturing up from 14 to 21 percent Women’s employment up 7m (16.8m in 2013) gender gap narrowed, particularly among lower age cohorts # women in manufacturing up sharply (from 1.7m to 3.8m) In FY14, est. 8m Bangladeshis working overseas sent home $14.5b in remittances Considerable potential/need for further improvement nearly half the workforce remains in agriculture only 1 out of 8 workers in formal sector employment(2010) unemployment among youth much higher than national average (20+ percent among 25-29 urban women) gender gap in participation rates and employment patterns remains quite large, and warrants further investigation.

Key Drivers: Remittances, Higher Labor & Farm Incomes, Demographic Changes

Considerable potential remains to expand labor-intensive manufacturing Promising sources of job creation in Bangladesh (millions) Today In ten years Ready-Made Garments 3.7 10.6 Footwear, leather/plastic goods, toys, electronics 1.5 5.0 Light engineering 0.6 2.0 Shipbuilding 0.2 0.4 Agribusiness 3.0 ICT/Pharmaceuticals 0.5 Total 8.0 23.0

Bangladesh has done well; however many other countries did even better   GDP per capita (Current USD) GNI per capita, Atlas 1980 2013 % change (annual) China 193 6,807 11.4 220 6,560 10.8 South Korea 1,778 25,977 8.5 1,900 25,920 8.2 Sri Lanka 273 3,280 7.8 280 3,170 7.6 Vietnam 239* 1,911 7.7 220** 1,740 9.0 Thailand 683 5,779 6.7 710 5,340 6.3 Indonesia 536 3,475 5.8 510 3,580 6.1 India 271 1,499 5.3 270 1,570 5.5 Philippines 685 2,765 4.3 700 3,270 4.8 Bangladesh 958 4.6 1,010 4.7 Pakistan 296 1,275 4.5 340 1,360 Source: World Development Indicators. * Data for 1985; ** 1989.

Rapid Urbanization Poses a Major Challenge, but is also a Key Opportunity Making urbanization work better for poor people could potentially have a transformative impact on accelerating the pace of poverty reduction in Bangladesh Rapid urbanization is adversely impacting economic performance and general livability of urban settlements. The urban population of Bangladesh more than doubled between 1990 and 2010, and is projected to continue to grow rapidly. Inadequate and poor quality of urban services, including transport, water supply and sanitation. Most government safety net programs are exclusively for urban areas; slum population tends to be excluded from public service delivery systems, and often have to pay much higher prices for key services and amenities Transform Dhaka and Chittagong into globally-competitive metropolitan regions Improve urban government in second-tier cities

Considerable spatial variation in poverty incidence

Infrastructure Ranking Infrastructure Score (Overall) Infrastructure quality in Bangladesh lags behind its regional competitors Country Overall Ranking Infrastructure Ranking Infrastructure Score (Overall) Electricity Roads Railroad Port China 28 46 4.7 5.2 4.6 4.8 Thailand 31 48 5.1 4.5 2.4 Sri Lanka 73 75 4.0 3.7 4.2 India 71 87 3.6 3.4 3.8 Cambodia 95 107 3.1 3.0 1.6 Pakistan 129 119 2.7 2.1 2.5 4.4 Bangladesh 109 127 2.9 Myanmar 134 137 2.0 2.8 1.8 2.6 Source: World Economic Forum, Global Competitiveness Report 2014-15; Ranking out of 144 countries

Looking Ahead: Key Priorities for Action

BANGLADESH: More and Better Jobs to Accelerate Shared Growth and End Extreme Poverty Bangladesh Systematic Country Diagnostic Wednesday July 19, 2017