Effective development cooperation principles and quality of partnerships in the post-2015 and Financing for Development context ---Bangladesh perspective Rafique Ahmed Siddique Bangladesh

The changing development financing landscape Bangladesh achieved sustained economic growth of over 6%+ every year since ODA represents approximately 2% of GDP. In the fiscal year ( ), ODA represented only 12.31% of the total government budget. 50% of the Annual Development Programme (ADP) was funded with ODA in 2010, only 32% of the ADP was ODA funded in Tax to GDP ratio has gone up from 8.1 to 12.4% in recent years. Bangladesh received 15 billion in remittances last year, accounting for more than 6% of GDP and 77% of forex reserves. The Bangladeshi diaspora has the largest diaspora savings among the low-income countries, with savings of about $9.5bn as bank deposits in destination countries. Due to government’s prudent approach and pro-active policy, private sector is emerging very strongly accounting for 93% of GDP, 81% of investments and 80% of domestic credit. All these statistics indicates that the development financing landscape is changing profoundly in Bangladesh. Bangladesh this year joined the Lower Middle Income Group. Official Development Assistance, while growing in volume, is steadily declining as a percentage of the overall development resource envelope.

Bangladesh using effective development cooperation principles for better development results Ensuring mutual accountability: Bangladesh drafting the Development Cooperation Policy Joint Cooperation Strategy developed and reviewed regularly Focusing of results: Developed Development Results Framework and reviewed Ownership: Development of the Seventh Five Year Plan Government established the Development Effectiveness Wing at ERD to ensure effectiveness of development finance, covering not only ODA, but also South-South Cooperation, Climate Finance and Innovative Finance Local Consultative Group, a well structured development dialogue forum, helping country and providers to have effective development dialogue, ensuring the effective utilization of development cooperation and mostly practicing ownership and alignment with countries priorities. Inclusiveness: CSOs and Private sector involved in certain LCG WG level

Bangladesh using effective development cooperation principles (ii) Transparency Bangladesh launched an online, publically accessible Aid information Management System Thinking beyond ODA Bangladesh undertaking a “Development Finance Assessment”, mapping all types of development finance in the country (public, private, foreign, domestic) and making policy recommendations for more effective management Institutional reform in ERD: creation of the development effectiveness wing to watch over effectiveness of ODA, SSC, climate finance and innovative finance

Challenges and way forward Providers need to align with country priorities. Providers development strategy needs to be aligned with the national priorities. More sectoral program based support is encouraged Aid remains highly fragmented and transaction costs continue to rise. Its important to adopt concrete policy guidelines level to ensure that ODA genuinely triggers development and capacity; ensure aid untying; and ensure transaction costs reduce significantly In regard to use of country systems, there is genuine effort to improve country systems but reluctance among providers to use. Providers behaviour change and reform in their engagement strategy with the partner country. Recent promises of budget support come with high policy conditionalities. New types of finance, such as SSC, climate finance and blended finance, come with their own set of challenges around effectiveness, quality, accountability and ownership. Expertise around this needs to be developed. There are several Ministries and agencies in place to manage development finance and planning. A more integrated institutional approach is needed

GPEDC in the context of SDG The global agreements (Paris 2005, Accra 2008, Busan 2011, Mexico 2014) give recipient countries more leverage in discussions with donors. The international forums and events also help raise political awareness and buy-in from the highest to the technical level. GPEDC needs to watch over effectiveness and quality of not only ODA, but also the new types of finance identified in the Addis Ababa Addis Agenda and the “Means of Implementation” of the SDGs. GPEDC needs to take a clear, formal role in monitoring the Addis Accord and the SDGs Even though domestic resource mobilization at the country level has strengthened, but DRM alone will not be enough to realize the SDG targets. ODA will continue to play an important role as a source of development finances for many countries including Bangladesh. At the country level, DP offices seem to be less aware of the global effectiveness agenda. The momentum of the SDGs and Addis needs to be used to re-vitalise country-level engagement of DPs around quality and effectiveness of development finance