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“Development Planning In Bangladesh: During 1973–2003: A Critical Analysis”
CHAPTER – I
1.1 INTRODUCTION
The classical theory of ‘development planning’ envisages economic growth as a process of capital accumulation for investment. W Arthur Lewis descried the process of development as one of transforming a country from five- percent saver and investor to a twelve- percent saver and investor. It implies that a society does not apply the whole of its current productive activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods, tools and instruments, machinery’s and transport facilities, plant and equipment – all the various forms of real capital that can increase the efficiency of productive effort.
But the neo-classical & modern theory of ‘development planning’ envisages the term development something more than that of economic growth. A few statements would make it understandable to us. Development is fundamentally a process of change that involves the whole society, its economic, social, political & physical structure as well as the value system & way of life of the people (Weilz, 1971). Porter (1995) defines development as a complex of three important criteria: – (i) Economically sharp and sustained increase in national product, (ii) Socially redistribution of national income on an egalitarian basis, and incorporation of the marginalized masses into the economy, (iii) Culturally, emergence of a new national self image. Development has been defined as the process by which powerless people every where are free from all forms of dependency social, cultural and political, so that create a personal sense of history for themselves and thereby express their full potential as human being (Kim, 1973). Development encompasses wide ranging changes in techniques of producing, and distributing goods, in the sale and organization of production and in types of outputs and inputs (Richard, 1968). It embraces major shifts in industrial, occupational and spatial distribution of productive resources and in the degree of exchange basis and monitization of the economy. On the social and demographic side, it involves significant alterations in fertility, mortality, migration of residence, family size, structure, educational system, and in provision of public health. Its influence extends into the areas of income distribution, class structure, government organization and political structure.
According to Schumpeter, “Development is a discontinuous and spontaneous change in stationary state which for ever alters and displaces the Equilibrium State previously existing”. Professor Bone says, “Development requires and involves some sort of direction, regulation and guidance to generate the forces of expression and maintain them.” Development may be conceived as a multi-dimensional process involving changes in social structures, popular attitudes and national institutions as well as the acceleration of economic growth, the reduction of inequality and the eradication of absolute poverty ( Todaro,). Thus, development means growth plus change viz. – improved performance of the factors of production, techniques of production, man’s growing control over nature, development of institutions and changes in values and attitudes, where distribution of income is more equitable, minimum level of consumption, calorie intake, housing, sanitation are ensured, composition of the consumption is desirable and balanced and minimum level of unemployment (Meier,).
Ursula Hicks and Schumpeter has opined that development planning refers to the problems of developing and ‘less developing countries’ (LDCs). That the problem of these countries are concerned with the development of unused resources, even though their uses are well known. With development and increase in per capita GDP, the structure of demand for goods and services changes. Though both agricultural and non agricultural sector develops, the higher demand for manufactured goods and services leads to the development of tertiary sector, migration of population from rural to urban and expansion of marketing activities take place.
According to Albert Waterson, “Development requires social and cultural change as well as growth; that is, qualitative transformation must occur concurrently with quantitative increases. There is , in fact, a reciprocal relationship between the two; and neither process is likely to continue for a long or go very far without the other. Hence, development means change plus growth.
The quest for development planning throughout the developing and ‘less developing countries’ has been predicted largely upon the formulation and implementation of development plan. The core idea of development planning is that the political process in a society is used in an intelligent way to allocate scarce resources to achieve certain goals and objectives. Waterson considers a country engaged in development planning if its government makes a deliberate and continuing attempt to accelerate the rate of economic and social progress and to alter institutional arrangements that block the attainment of such goals.
According to W. Arthur Lewis, development planning may contain any or all of these elements:
(i) A survey of current economic situations;
(ii) A list of proposed public expenditures;
(iii) A discussion of likely developments in the private sector;
(iv) A macro economic projection for the whole economy;
(v) A review of government policies;
(vi) Proposals for improving the institutional framework of the economic activity;
The plan normally begins reviewing progress in recent years, especially since the last plan was issued. Such information is merely a curtain raiser, suggesting the problems which must be selected for further attention. Changes are noted in population, national output, investment, saving, consumption, government expenditure, taxation, the balance of payments etc. The macro- economic projection is useful for testing the mutual consistency of the quantitative assumptions and proposals in the plan; and may also stimulate investment by revealing unsuspected relationships. Its usefulness depends on the quality of statistics that go into it. Given adequate statistics, it is useful in large complex economies, not useful in small and simple economies. The danger of the exercise lies in the possibility of being dazzled by an array of doubtful figures.
Development plans in the developing and ‘Less Developing Countries’ basically seek to achieve the objectives:
# Rapid economic growth measured in terms of GDP;
# Expansion of employment opportunities for the unemployed & underemployed by a suitable combination of projects and programs;
# Distribute justice through effective fiscal and pricing policies and by opening economic opportunities for lower income groups;
# Order into planning and execution of government expenditure, especially in capital sector;
# Promoting an increase in savings both public and private;
# Provision of adequate infrastructure( water, power, transfort, communication);
# Provision for specialized training facilities as well as adequate general education thereby ensuring necessary skills.
Mainly examining what is proposed under each of these heads (objectives/ policies) should test the quality of a development plan. The recent trends towards putting more figures into development plans have unfortunately tendered to obscure the fact that what matters in planning are not mainly figures but mainly policies. These objectives encourage the governments to seek to influence the activities of the private sector through Investment Schedule. The core of planning for the higher productivity in private sector lies in a set of policies, which induce private persons to employ their time and resources more productively.
The quality of a plan depends on the quality of its policies rather than on quality or quantity of its arithmetic.
Michael P. Todaro observed differential role of planning, that is, the concept of planning may be limited to the formulation of a few related capital projects or it may encompass the use of all resources, public and private, human and physical. In mixed economies, governments generally set target figures for output to each sectoral activity in different time frames. The development plans show macro economic projections and output targets and also indicate how government proposes to raise money and recruit people to carryout the objectives.
The process of planning may be ‘top down’ to the extent that investment are planned and controlled by a single central planning organization. It also may be a bottom up planning process whereby participation of masses in the development activity is sought and devolution of planning functions to regional local governments. While the ‘top down’ approach has been widely practiced even in Bangladesh. But ‘bottom up’ approach is yet to be tried in a market economy. Tanzania is said to have been trying this for limited purpose.
Development plans are conducted in different time frames: (a) Perspective plan (10 – 20 years); (b) Medium term plan (5 – 7 years); and (c) Short term plan (1 – 2 years). The perspective plan outlines the hopes and aspirations of the society on long time frame for social and economic development with predictions about mobilization of resources for attainment of these goals. The long-term goals are broken into phases through medium term plans, mostly five-year plan, on operational basis. Usually a medium term plan will proposes to take measures for three basic goals – life sustenance, self – esteem and freedom from servitude. These are again broken to a number of specific objectives. Usually, a medium term plan is annexed with a list of projects, which are expected to translate the plan objectives into realities. A short-term one-year plan is called Annual Development Plan (ADP). It is an operational plan of the medium term plan and typically integrated into the Annual Budget. ADP may also include economic policies, controls and directives that may extend beyond the budget. In ADP, specific allocations are made for economic development projects of public sector for the fiscal year concerned. In private sector activities, investment programs are outlined in ‘ Investment Schedule’.
Every long term and medium term plan would have built in strategy for achieving the stated objectives. I . G. Patel says, ‘strategy implies essentially a deliberate choice – a choice of the point and timing and manner of attack on the problem at hand.’ For example, the ‘First Five Year Plan’ of Bangladesh has been designed to generate a rate of growth, which would have a minimum consumption standard, expanded employment and socially desirable income distribution.
The basic strategy was to concentrate on increasing output in those sectors of the economy which would use large number of labor and labor intensive techniques of production.Within the general strategy, it envisages to reduce dependence on imports of food grains and export promotion. The objectives of the development plan and the strategy adopted for attaining those objectives may not work as planned. The act of making priority choice in project selection and resource allocation may also cause failure in achieving plan objectives. Regional imbalance in development may lead to allocation of resources to less productive sectors. Social structure may also lead to injudicious resource allocation in a small elite group controlled society. Again, the governments may have their own political imperatives depending on their nature and character. Such imperatives are usually results of interest articulation. Too much donor dependency leads to their interruption in internal policy formulation.
The ‘Medium Term’ five-year plan and its operational ‘Annual Plans’ are assemblages of development projects. According to Gittinger, a development project is a specific activity with a specific ending point intended to accomplish specific objectives. In a short, a project is a planned hypothesis with a starting time, a finishing time, a cost and a geographical location for achievement of purpose. The relationship between projects and development plans has been dramatized by Little and Mirrless by presenting the twin propositions that ‘plan require projects and project require plans’. The best economic appraisal of projects cannot, however, be made without a plan.
Macro – economic planning in terms of figures aggregated for the whole economy, can be gradually improved in light of improvements in micro-planning, that is, planning at the sectoral level and project levels and vice versa. Professor Nurual Islam says, “ The plan, however, provides for adquate flexibility so as, to be able to incorporate, in terms of projects and programs, the results of subsequent analysis and additional statistical information, as soon as they are available. The annual plans are expected to provide necessary mechanism of adjustment and flexibility. It is said that projects are the building blocks of development plan. Project has three stages of cycle:
(a) Design ( includes feasibility study and appraisal);
(b) Implementation ( includes monitoring and on-going evaluation );
(c) Evaluation (post evaluation).
Institutional arrangements are required to support the development planning process and the project cycle. In Bangladesh, the Planning Commission is the central planning organization, which through macro – model, makes macro economic projections and sets targets for each sectoral activity. The agencies or subordinate offices of the Ministries/ Divisions select the projects on felt need basis and design them for inclusion in development plan. Technical and Economic feasibility of development project is basically done by the respective Ministry/Division. The Planning Commission also undertake the preliminary evaluation as to whether a project is technically and economically feasible & viable. The NEC is entrusted with the function of taking the ultimate decision on the basis of the Planning Commission recommendation. The Cabinet has the final authority to select from the list of viable project for inclusion in the ‘Annual Budget’. According to Planning Commission ‘Guide Lines’ the executive Ministry /Division and Department/Agencies, thereunder are responsible for the preparation, processing and implementation of the approved projects. The project implementation unit (PIU) is responsible for implementation of projects, and Ministry/Division is primarily entrusted to monitor the progress of its implementation, while ‘Implementation Monitoring and Evaluation Division’ is responsible for monitoring progress of projects against their pre – set objectives/ targets. History of planning in many countries indicates that a plan easily degenerates into an academic exercise, if political leadership and administrative machinery are not seriously committed to its implementation. An important prerequisite for plan implementation is the presence of speedy decision making process. The delegation of authority and fixation of clear-cut responsibility are recognized to be the best method of ensuring the growth of initiative and responsibility. Decision making ability improve with that of joint decision making process through consultation. In adequate coordination between different Ministries/Divisions are adversely affects the execution of development projects and smooth functioning of the economy. The difficulties of coordination increase in proportion to the number of Ministries/Divisions and Department/Agencies need to be coordinated.
Plan evaluation works necessarily fall on the ‘Central Planning Agency’. The Planning Commission has to undertake the preliminary evaluation as to whether a project is technically and economically feasible and viable. It also collects information on the progress of a particular plan during the course of its implementation and uses this information as a feedback for the preparation of the next short-term plan. Usually, such evaluation results find place in the ‘macro- chapters’ as well as in the ‘sectoral – chapters’. In Bangladesh, no one medium/ short term plan was evaluated although a mid term review of the Third Five Year Plan and Fifth Five Year Plan was done by the central planning agency. This has created a communication gap between the planners and the people at large about, what is happening as a result of ‘development planning’.
1.2 STATEMENT OF THE PROBLEM
Development Planning as a practice in Bangladesh has its roots in the pre- liberation days, when a Provincial Planning Board, constituted in the Mid- Fifties, was busy in pushing projects prepared by Parastatals or Ministries for securing larger share of available public resources in pursuit of parity in allocation. Because, lack of experience and political overtone, many projects were not properly formulated and analyzed. The proforma used for preparation, formulation, appraisal, monitoring and completion had bias towards budgeting the resources. The ‘macro consistency model’, which was used for the Second Five Year Plan of Pakistan, was basically for broad sectoral allocation. During Pakistan regime, planning strategy was for industrialization with the aspiration of ‘trickle down effect’ to the toiling mass. After the independence of Bangladesh, the Planning Commission was established by the ‘Presidential Order’ in January 1972.
The development planning process has been started in Bangladesh through the initiation of the First Five Year Plan (1973 – 78). During the period of 1973 – 2003, Bangladesh has implemented five medium term (five year) plans and a short term (Two year) plan & also witnessed a two year ‘plan holidays’. The central planning agency carried out the mid-term review of the TFYP and FFYP. But it did not carry out evaluation of any of the medium term or short term plan.
Despite the country’s efforts at planned development for more than three decades, the economic scenario that obtains dismal one. Although there has been some modest growth in over all productivity since the initial disastrous years following the liberation war, the average standard of living in Bangladesh still remains pitifully low. There has been worsening of the distribution of income. The increase in impoverishment and pauperization is a part of the dynamic process linked to the pace and pattern of economic development in the country.
Historical evidence shows that during the 20 th century development decades, in a wold bank study on ‘redistribution with growth’, H. B. Chenery has made the following statements. ‘In the development decade of rapid growth, under developed countries has of little or no benefits to perhaps a third of their population. Although the average per capita income has increased 50% since 1960, this growth has been very unequally distributed among countries and socio- economic groups. Thus the very idea of growth has increasingly being questions.’ International Labor Office reports on Columbia shows that growth took place but distribution is unequal, unemployment increased and number of persons below absolute poverty line also increased. The experience of development planning during 1950s and 1960s has made W. Arthur Lewis skeptic about efforts of governments of LDCs in planning for development. According to Lewis, ‘development in these countries were undertaken – to show that government is doing something, to obtain foreign aid and to distribute patronage to its elite clientele.
In Bangladesh, though the growth rate is about 5% for the last three decades but poverty situation & also the socio-economic indicators did not improve as expected by the development planners.
The number of households in the rural areas below the minimum calorie need increased from 53 per cent in 1962-64 to 59 per cent in 1975/76 and further to 76 per cent in 1981/82. The trend was undoubtedly on the increase despite that food grain import more than compensated the loss of crop. The per capita availability of food grain increased by 6 per cent over 1980/81, from 15 oz. a day to 15.9 oz. Against this increase in per capita availability of food, the increase in the proportion of households below the prescribed calorie intake the working of a complex set of socio-economic forces which have come to deny adequate food to an ever increasing proportion of households. Access to income and employment is undoubtedly necessary for access to food.
Though, it itself is not adequate for probably three times as much man-days of employment was created in 1981/82 than in 1975/76 through the Food For Works Program which has come to constitute the fulcrum of rural employment since the 1974 famine. In Bangladesh, although growth takes place but income distribution was skewed.
The deteriorating poverty situation against planned efforts in LDCs, likely to strengthen the heresy about planned growth. In fact growing poverty in the Third World led to reawakening of planners in 1970s and new ideas like equitable growth and basic needs flourished. There are some Pharisees who profess growth first, distribution later [Haq, Mahbubul, 1963]. In South Korea, where continued high growth rate, raised the real wages and standard of living of the common man. But the experiences of Sri Lanka in the last three decades show that the high growth is not only the way of reducing poverty. During this period the index of ‘ Physical Quality of Life ’ increased from 65 to 80 ( Roemer, M & Stern, J.U , 1981), though GDP growth rate was around 4.5% a year between 1980 – 1982, about half of that of South Korea. This is possible because of the institutional developments beyond market mechanism. In Bangladesh, where poverty has remained a continued theme of development and growth has been considered as a necessary condition for poverty alleviation.
1.3 PURPOSE AND OBJECTIVES OF THE STUDY
The major purpose of the study is to investigate the ‘development planning process’ followed in Bangladesh during the period of 1973 – 2003. The specific objectives of the study are as follows:
(i) To study the macro economic planning and policy implications used in development plans;
(ii) To study the strategies followed to achieve the plan objectives;
(iii) To study the development planning related to design, approval, implementation, monitoring and evaluation of projects;
(iv) To study the level of coordination of intra and inter department projects at all levels;
(v) To asses the effectiveness of the role assigned to planning commission and the importance given to the process of planned development;
(vi) To assess the deficiencies and possibilities of the institutional arrangements effected for accelerated social development through a local government system to identify the problems of coordination and integration.
(vii) To have a comparative picture of development experience in other developing countries specially – India, Tanzania, Malaysia, South Korea, Srilanka; and
(viii) To prescribe development perspective/ strategies/ models for Bangladesh.
1.4 JUSTIFICATION OF THE STUDY
The need for ‘development planning’ for attaining growth plus qualitative change in developing and ‘less developing countries’ is a leading issue. In case of Bangladesh, emerging out of protest against economic exploitation and political & social decrepit, independence did not imply a stage of fully equipped onslaught on poverty and ill development of the national economy with a long term social philosophy for society – building with planning techniques. After the initial steps of dealing with ‘ enemy property’ and ‘alien industry/ business’, the new independent regime found the whole arena a clean state except the colouring of heritage of Pakistan ideas of development planning based on encouragement of capitalism. In that situation, the new constitution framed in 1972 provided for the establishment of ‘an exploitation – free society’ with five basic changes in the approach to a new identity of ideological choice within the broad frame-work of the 4 ‘State principles’: Democracy, Nationalism, Secularism and Socialism. These are:
(i) Conditions are to be created to emancipate the toiling masses from all forces of exploitation;
(ii) Every citizen is to enjoy the right to work;
(iii) All citizens are to be assured equal opportunity so that an egalitarian society can be established;
(iv) Enjoyment of unearned income is to be discouraged;
(v) Limits to private ownership of means of production to be fixed by law.
The Government of the People’s Republic of Bangladesh has implemented five ‘Medium term’ and a ‘Two Year plan’ & also a two- year ‘plan holidays’ during 1973- 2003. Except the mid-term review on Third FiveYear Plan and Fifth Five Year Plan, the Planning Commission did no other evaluation. An indept critical analysis of the plans already implemented is necessary to identify the bottlenecks in plan formulation, implementation and their achievements during different political regimes to develop an appropriate perspective/ strategy for the future. The study focuses the intrinsic aspects of the future development planing in Bangladesh, which would be helpful for the policy makers.
1.5 HYPOTHESIS
(i) The strategies followed in development planning during 1973 – 2003, mismatch with that of objectives stated in the plan document;
(ii) The lack of proper coordination of implementation of development projects/ programs at all stages led to the failure of plan development;
(iii) Development planning during 1973-2003 led to growth but not over all development of Bangladesh.
(iv) The Macro- Planning and policy implications thereof do not have a significant impact on actual development process in the country.
1.6 Assumptions
(I) The data and statistics available for its use and further reference.
(II) The continuity of political stable government will exist.
(III) There should be a national consensus on major social, political, and economic issues among the political parties.
(IV) There exists continuous equilibrium in the market (factor and product market).
(V) The government is capable of preparing and prioritizing the sectoral projects and is able to initiate appropriate policies, which influence the realization of public sector plans.
(VI) There should be government intervention where market does not function well.
(VII) The presence of democratic policy, accountable government and relative independence of ‘ planning machinery’ exists in Bangladesh.
1.7 METHODOLOGY OF THE STUDY
The study is based on both primarily and secondary data available in Planning Division, Economic Relations Division, Finance Division, Implementation Monitoring and Evaluation Division, Local Government Division and in Donor Agencies. The Research Study Reports, Articles published in local and international Journals also are reviewed. The primary data through an ‘interview schedule’ of the Planners, Monitors and the Project Directors collected. Both primary and secondary data would be analyzed statistically by using mean values, standard deviation, and coefficient of variation, multiple correlation and trends of growth rates.
1.8 The Chapter Plan.
Chapter I: Introduction, Statement of the problem, Purpose and objectives of the study, Justification of the study, Hypothesis, Assumptions. The Plan of the study.
Chapter II: Review of relevant literatures, studies, and critique of earlier studies.
Chapter III: Theoretical and Conceptual Framework of the Study.
Chapter IV: Critical Review of Plan objectives, strategies, implementation and achievements.
Chapter V: Methodological issues related to selection of sample, nature and sources of data. Techniques of analysis.
Chapter VI: Analysis and interpretation of data, testing of hypothesis, major observations and limitations of the study.
Chapter VII: The Planning experience of India, South Korea, Malaysia, Srilanka and Tanzania.
Chapter VIII: Summary and Conclusion, Policy Implications. Bibliography. Lists of Appendices.
CHAPTER – II
Review of related Literature & Research Reports
2.1 Planning Commission (‘Handbook’, November 1983) defines the term ‘Development Planning’. Development Planning entails determination of long – term development perspective of priorities and objectives, goals and strategies of medium and short-term plans within the framework of the achievement of planned goals and targets. Translated in terms of functions, the above scope of development planning deduces to the following elements:
(I) Policy Planning, i. e., determination of goals and objectives, priorities and strategies & policy measures for development plans;
(ii) Selectoral Planning, i. e., identification of the role that the various sectors of the economy are required to play in the context of the goals and objectives set out under element (i);
(iii) Program Planning, i .e., formulation of detailed sectoral programs to realize the sectoral plans identified under element (ii);
(IV) Project Planning, i.e., preparation of projects embodying investment decisions for the implementation of the sectoral programs formulated under element (iii);
(V) Project Implementation and Monitoring, i. e., institution of appropriate management apparatus for supervision and efficient completion of projects adopted under element (iv); and
(vi) Evaluation, i.e., review of effects of projects, programs and plans.
On reflection it will become apparent that some of the elements of planning stated above, taken individually, cannot be successfully implemented without being combined with some other element or elements. For example, element (i) i. e., policy planning cannot be performed without a combination of the macro aspect of element (vi) i. e., evaluation. Unless a policy planner has some sort of institutional link with macro evaluation activity, he will be at loss in the formulation of development policies. Again, it is impossible to implement element (ii) i. e., sectoral planning in isolation of elements (i)
i. e., policy planning. In fact, sectoral planning follows directly from the plan model formulated under element (i). Consistency requirement also dictates that sectoral planning i. e.; element (ii) should be combined with policy planning i. e., element (i).
Need for appropriate organizational arrangements for development planning.
2.1.1 The Bangladesh Planning Commission
Bangladesh Planning Commission assumed the characteristics of ‘Central Planning Agency’ since 1972 , under a unitary structure of government administration. The Commission was conceived to be a professional body at a very high level. The Deputy Chairman of the Commission was given the Cabinet rank and the Members were given the rank of State Minister. However, in recognition of the fact that planning is a political process the Minister of Finance was given in charge of the Ministry of Planning (Planning Commission). Subsequently, The Prime Minister became the Minister for Planning and later the Vice President took over the portfolio of planning. There was no separate Planning Division & one of the wings of Planning Commission looked after its administration as well as external resources mobilization. To start with the functions of Planning Commission also included monitoring of development projects. But subsequently, in order to accelarate implementation of projects the government felt the need for a separate agency for this purpose. Project Implementation Bureau (PIB) was established in 1975 as a Division under the Ministry of Planning. PIB later on upgraded as a Division and renamed as Implementation, Monitoring & Evaluation Division under the Ministry of Finance.
The high status given to the Planning Commission created some peculiar problems in as much as it eroded the authority of the Ministers even though the country did not opt for complete Central Planning. A change was, therefore, brought about in 1975. The Planning Commission became a professional body once again, but its status was reduced by down grading the rank of the Deputy Chairman and making Members equivalent to Secretary to the government. A little later the function of external resource mobilization was entrusted to a separate Division & was placed under the Ministry of Finance. This Division was named as External Resources Division now days renamed as Economic Relations Division. Simultaneously, the Planning Division was created to look after the administration and executive aspects of the Planning functions thereby relegating the Planning Commission to a kind of advisory body. In actual operation, however, the unitary structure of the government led Planning Commission to perform advisories as well as an executive body & authentication of the executive orders. Under the new structural transformation of the Planning Commission, it became necessary to strengthen the technical capability of Ministries/ Divsions in order to enable them to discharge their enhanced responsibility of planning functions. With this purpose in view, Planning Cells were created in the Ministries/ Divisions and some of the ‘Autonomous Bodies’ in 1975.
2.1.2 The functions of the Planning Commission
The Planning Commission has a three-fold involvement in development planning: (i) advisory, (ii) executive, and (iii) evaluation. Its advisory role is prominent in the element of policy planning.
2.1.3 Structure of the Planning Commission:
At the policy level the Commission consists of a Deputy Chairman and five Members. Below the Commission, there are six Divisions that are further sub-divided into thirty wings. Two of the Divisions deal with the general macro issues of the economy. These are (i) General Economics & Evaluation Division and (ii) Programming, Evaluation and Appraisal Division. The other four Divisions deal with the planning & policy issues of different sectors of the economy. The specific functions of the two macro Divisions and the four sectors Divisions are stated below:
General Economics Division: Functions.
(i) Evaluation of plans and policies.
(ii) Review of macro economic situation covering national income, international economic relations, saving, investment, fiscal & monitory situation, employment & other macro economic aspects of the economy.
(VI) Determination of macro economic policies.
(VII) Co-ordination of plan preparation Perspective, Five Year & Annual.
(VIII) Coordination of research on macro economic issues.
Programming and Appraisal Division – Function
(i) Co – ordination of preparation of annual development programs.
(ii) Authorization of development projects & release of funds for unapproved projects.
(iii) Economic appraisal of development projects.
Sector Division. Function
(i) Formulation of sectoral plans consistent with the macro planning objectives.
(ii) Coordination of sectoral development programs consistent with sectoral plans.
(iii) Processing of development projects including project appraisal & serving as a secretariat of the sectoral Project Evaluation Committees.
(iv) Preparation of the sectoral annual development programs in consultation with the sectoral Ministries/Divisions and Agencies.
(v) Formulation of sectoral development and planning policies.
The functions of the Commission stated above are discharged through a six tier structure of officials, namely Member, Division Chief, Joint Chief, Deputy Chief, Senior/ Assistant Chief. The working Units of a Division are Wings headed by a Joint Chief, Deputy Chief heads Branches. Senior/ Assistant Chief heads desks.
2.1.4 Linkage of the planning Commission with other government offices
The Commission is invariably required to maintain close liaison with all other Ministries/Divisions and Agencies of the government. At first, in the field of policy planning, the Commission needs data support & advice on policy issues connected with sectoral plans. Secondly, in the preparation of the annual development programs it depends entirely on the allocation proposals of the Ministries/Divisions & other Agencies. Thirdly, its project-processing role starts after the preparation of those by the Ministries/ Divisions.
A part from these, the Commission has to depend for planning inputs on some specialized agencies of the government. It depends on, Economic Relations Division for quality & quantity of foreign aid & also for micro level project financing through project aid and authorization. Finance Division & Internal Resource Division advice the Commission in matters of resource availability and formulation of fiscal & monitory policies. The day to day involvement of Finance Division in project authorization is essential for the Commission’s work. The allocation of funds to individual projects in the ADP is guided by the progress reports of IMED. The field experience of IMED is also utilized in the project processing work of the Commission. The Bureau of Statistics meets the comprehensive data requirement of the Commission.
2.1.5 M. A. H. Khandkar (1988) in an article entitled “ Institutional structure for development planning in Bangladesh” stated the elements of ‘development planning’ in a more elaborate way. In the introduction he mentioned the form of Bangladesh government, degree of devolution of administration. Bangladesh posses a mixed economy with a unitary form of government. Although at the time of emergence as a free nation it had probably had some commitment for a socialist economy which, however, did not come into being & even lost its ideological mooring within a short period of time. During the 1980s, through a limited devolution of planning responsibility to the local governments, called Upazilas, a shade of federalism has been cast in the character of development administration. However, the degree of devolution is not high enough to style the country as yet a federation. The Upazilas have been given the responsibility of planning & implementation only of local level projects and programs, which in all probability will get dovetailed with the central plans. Thus, Bangladesh still retain the character of unitary form of government. Under a unitary form, the entire responsibility of administration falls on the central government. The central government, however, executes its administrative responsibilities through the creation of a number of institutions/agencies with specified tasks. The development planning function is also discharged in the same way. This is how planning function is performed in Bangladesh. It remains to be seen as to which element of the planning function is done by which institution/agency. He then agrees with the elements of ‘development planning’ as stated in the handbook of Planning Commission. In the following paragraphs, he narrated each of the elements of ‘development planning.’
(i) Policy Planning
On the various functional elements, policy planning comes first. In this sphere, the National Economic Council (NEC) exists at the apex of the organizational hierarchy. The President (the then head of the government now the Prime Minister) of the Peoples Republic of Bangladesh heads the NEC and all members of the ‘Council of Ministers’ are its members. The Deputy Chairman of the planning commission (vacant) and the Governor of Bangladesh Bank attend the meetings of NEC on invitation. The NEC is the highest economic policy making body including policies on development planning and on it is vested in the country the authority to decide policy issues on matters of development planning. But NEC is not a permanent body in an organizational sense; it works as a committee. It needs assistance from a staff organization, which is to feed it with policy options. This staff function is performed by a central agency named ‘Planning Commission.’ In keeping with this functional responsibility, the planning commission, by its charter of duties, interalia, has been made responsible for the ‘preparation of national plans, annual, five year and perspective, for the economic and social development. In essence, the planning commission is the executive arm of the NEC and accordingly prepares policy papers and plans in consultation with other agencies of the government and experts on various aspects of the economy. The range of consultation that the commission caries on in its that the policy planning work is so wide. It will not be wrong to state that the policy suggestions prepared by the commission represents the feelings of the entire nation. However, the commission is only a recommendatory body. The final decision on planning policy issues is taken by the NEC.
(ii) Sectoral program planning
The planning commission plays the major role both as initiator of ideas and coordinator of views received from the respective sectoral agencies. The Government of Bangladesh functions through a number of Ministries/Divisions, each of which has been entrusted with some Sectoral functions in the sphere of development. These Ministries/Divisions are the executive arms of the government so far as the implementation of plans, programs and policies concerned. It is quite obvious that these agencies should have an active role in the preparation of sectoral programs given the macro objectives. The planning commission in its technical wing has a number of sector Divisions, such as Agriculture, Industry, etc. These sector Divisions coordinate the program planning activities and finalize the programs for incorporation in the final plan. Specific panel of experts are also constituted to refine the program proposals prepared by the commission in consultation with the respective agencies.
(iii) Project planning
The entire responsibility of these remains with the executive Ministries/Divisions and the agencies set up under them. Each development Ministry/Division has one or more agencies under it, some of the character of para-statal bodies and some full-fledged government bodies. The para-statal bodies are called the corporations and pure government bodies are called the departments/directorates. These bodies are the executive arms of the Ministries/Divisions projects are invariably prepared by the agencies for further processing for approval. If the Ministries/Divisions become satisfied about the relevance of projects to the sectoral objectives, they then process it for approval. There exists a well-defined procedure for approval of development projects. Each development Ministry/Division has an inter-Ministerial Project Evaluation Committee (DPEC) for examining projects towards approval. The DPEC, after being satisfied about the techno- economic aspects of a project in relation to sectoral objectives submits its recommendation for approval of the project. The project is than approved by the Minister in charge of the concerned Ministry, if the costs of the project does not exceed 2 crores (1982). Projects exceeding the costs limit of taka 2 crores are submitted to the planning commission for further processing. Each sector, Division of the planning commission has an inter – Ministerial project evaluation committee, under the chairmanship of the Member planning commission in charge of the sector. Projects submitted to the planning commission, this evaluation committee examines for approval and is than submitted to the Minister in charge of Planning, to a subcommittee of the NEC called ECNEC. The Minister in charge of the Ministry of Finance with a few other Ministers as Members (composition of ECNEC has changed from time to time) usually chairs it. Since, the NEC can not find time to meet as frequently as it required to dispose of business like project approval and other day to day policy issues concerning planning and development, it has delegated some of its power to the ECNEC. The functions of the ECNEC are :
(i) Consideration and approval of development projects costing taka 2 crores.
(ii) Consideration and approval of investment projects in the private sector costing taka 15 crores.
(iii) Review of progress of implementation of development projects.
(iv) Consideration of proposals for investment companies as private or joint ventures or with foreign participation.
(v) Monitoring of the economic situation and review of overall performance of the economy and related policy issues.
(vi) Consideration of performance of statutory corporations specially their financial results.
(vii) Consideration of rates, fees and prices of public utility service or products of public enterprise.
In the ‘Hand book’ stated the procedure for processing of development projects in the public sector. It includes the time frame for processing by executing agency, concerned Ministry/ Division, Planning Commission, ECNEC &NEC; category of projects in terms of investment costs (APPENDIX-I). Project proforma is also stated in the Handbook (APPENDIX-II). The project proforma (PP) is the basic document, which is prepared for approval of project details by the competent authority. Four types of project proforma are used (1982) for processing of various types of project proposals for sanction. They are:
(i) PC-II
(ii) PPP
(iii) TAPP
(iv) PP
PC-II forms were used for submission of proposals for feasibility study/survey for development of projects, which require preliminary feasibility study/survey before a project can be firmed up. The preliminary project proforma (PPP) is used as a project preview in situation, where negotiation for obtaining external assistance is required to be initiated well before formulation of a full pledged PP or a project required to be included in ADP on mandatory consideration, but it is not possible to prepare a usual PP for unavoidable reasons.
TAPP is used for submission of proposals for technical assistance project. These projects include:
(a) Transfer of technology and acquisition of desired knowhow by an organization in Bangladesh, which may include import of expertise and/or equipment’s for certain, duration of time within the framework of the development programs for unavoidable reasons.
(b) Preparatory assistance for investment proposals/programs and utilization of expatriate experts therefor;
(c) Imports of expertise for management improvement for organization or projects.
(d) Overseas training of Bangladesh personnel in desired fields;
(e) Institutional support.
The project proforma are to be submitted for all projects other than Technical Assistance Project indicated above. The PPP is not a substitute for the project proforma that is in force nor it is intended to dispense with the requirement with a usual PP. Besides, there were other proforma, which are used for submission of reports to IMED in connection with implementation of projects. These are:
(v) proforma for Progress of Development projects;
(vi) proforma for Annual Physical Progress of projects;
(vii) Proforma for Completion Reports of the projects.
Proforma for submission of progress reports are in two parts, Part-I deals with Monthly progress on financial matters, while
Part-II deals with quarterly report on physical progress. Annual physical program of on-going projects is also submitted for each project to IMED and Planning Commission. These are submitted in IMED forms. Moreover, proforma for completion report is submitted on completion of a project.
(iv) Project Implementation & Monitoring
With the approval of a project starts its implementation phase. Once a project is approved, it is included in the annual development program (ADP). The ADP is the development budget of this country through which all development projects are financed. It is prepared on an annual basis by the planning commission in consultation with the concerned Ministries/Divisions and agencies under them. Since availability of resource is the prime factor, which determines the ADP, the Finance Division and the Economic Relations Division are intimately associated in the work of its preparation. It should be mentioned here that, notwithstanding the normal rule that no unapproved project should be included in the ADP, the ADP’s of successive years have contained many unapproved projects for historical as well as other extraneous reasons. With the financial backing from the ADP, a project becomes ready for implementation. All projects are implemented by the executive agencies i. e. the corporations, directorates and departments under the concerned Ministries/Divisions. Appropriate administrative set ups as required by the nature of the different projects are instituted for the implementation of projects. Lots of financial administrative powers are delegated to the project implementation authorities so that it can be implemented unhindered.
The bottlenecks that may arise in the implementation of a project should be solved by regular reviews of progress of projects. This reviewing function is known as monitoring of projects. The higher tier of the project implementation authority does the most immediate level of monitoring. This type of monitoring is called internal monitoring (mostly the task of coordination). This comes first before the external monitoring. This level of monitoring is done by the administrative Ministries/Divisions. Higher level of monitoring at the national level i. e. at the NEC level is also regularly done to keep a strict watch over the state of affairs in the implementation of a particular plan. Since the NEC is not a permanent institutional agency, it has set up a permanent staff organization to prepare monitoring reviews of development projects. This is at present known as Implementation Monitoring and Evaluation Division (IMED) headed by a Secretary under the Ministry of Planning. The NEC and ECNEC periodically examine reviews prepared by the IMED. At these review meetings manifold problems in the way of project implementation are solved.
(v) Evaluation
Evaluation has two facts: (I) project evaluation i. e. evaluation of the impact of a completed project on the economy in relation to its stated objectives, besides an assessments of resource use compared to the estimates made in the project document; and (II) Plan evaluation, i. e. evaluation of the impact of the programs included in the short term plans compared to the objectives and targets of the plan. As per rules of business of the government, project evaluation work is under the IMED. However, nothing substantial has done in this respect by IMED or by any other agency of the government prior to the vesting of this responsibility to IMED.
Plan evaluation work necessarily falls on the central planning agency i. e. Planning commission. The planning commission collects information on the progress of a particular plan during the course of its implementation and uses this information as feed back for the preparation of the next short plan. Such evaluation results find place in the plan documents as a review of past planned development both in the macro chapters as well in the sectoral chapters. Annual review of progress of implementation of a plan are also published by the planning commission, though not as timely and as regularly as desirable. These reviews have been found mostly to be of statistical in nature, absolutely lacking of analytical materials explaining the background factors behind the statistics. The most disappointing vacuum that still exists in the field of evaluation is the evaluation of a complete plan. Absence of such evaluation has created a communication gap between the planners and the people at large about what is happening as a result of development plan.
(vi) Planning at local level
Devolution of some planning functions has been given to the local level authority i. e. Upazila Parishad. All the rural Thanas have been upgraded to Upazilas and made nuclei of administration of local affairs. The Upazilas would be administered by elected executive bodies. Being vested with the administrative responsibilities, these bodies will also be made responsible to under take planning and implementation of some specified development activities at local nature. The exact relationship of these local level development agencies is not very clear. It appears that these local agencies will be allocated some specific planning functions, which they will perform partly with the financial assistance from the central government and partly revenues collected by them. That is, all local level development would be delegated to these Upazilas including the functions of local development planning.
(vii) Economic Relations Division
Economic Relations Division under the Ministry of Finance has a very important place in development planning. This Division has been entrusted with the task of mobilization of foreign assistance and negotiation of assistance for specific development projects & programs. It provides the link between the government of Bangladesh & the donor agencies, both bi-lateral and multilateral. Foreign assistance plays a critical role in development planning in Bangladesh. So the procedures followed in external resources mobilization for development projects and plan have a strong bearing on what happens in the field of development. Through a period of experimentation during which the intricacies of internal and external coordination in matters of foreign aid mobilization and utilization has been appreciated. The modus operandi of the work of ERD vis-à-vis other agencies of the government and outside donors has been fully institutionalized. Under this dispensation, mobilization of aid remains the exclusive domain of ERD. However, the use of the available aid should have to the subjected to plan objectives and discipline.
ERD should not under take negotiation for aid with any donor unless the project or program has been scrutinized carefully by the concerned agencies of the government & also by the planning commission. It has also been laid down that no definite indication of use of aid for a particular project/program to a donor should be given by ERD without getting the aid proposal examined by an inter ministerial committee including the representative of planning commission & aid user agency. For this purpose, first a project profile in which the broad objective of the project for which aid is being considered is to be prepared and then the same is to be cleared by the said committee.
After preliminary negotiation, an appraisal mission may be invited from the donor for a detailed feasibility study of the project/program. The donor agency is expected to conduct the feasibility study in collaboration with concerned department/agencies of the government. There should be a broader consensus among the donor and the government department concerned about the details of the project. It is only after the approval of the project by the competent authority, or at least cleared up by the Project Evaluation Committee that the aid lining up is to be finalized. In order to shorten the time for aid negotiation, the lists of aid worthy projects should be finalized through inter–ministerial committee meeting instead of planning commission alone. This at one stroke will give lists of projects which ERD or donor agency can consult for sponsoring aid negotiation for particular project. The lists for this purpose will besides the name of projects, contain information about the objectives of each of the projects. It may also include any other broad details that would be useful for understanding the nature and purpose of the individual project. In fact, a proforma has been devised for this purpose. With these measures of coordination, it is expected that the utilization of foreign aid for development will be rationalized and it would be utilized for the best needs of development.
2.1.6 Dr. A. H. Shahadatullah, in the summary of his article entitled “ economic development and planning in Bangladesh” states the need for economic development and rational development planning. The need for economic development in Bangladesh necessities comprehension of the overall situation existing in order to identify the future objectives and for preparation of policies & programs to implement such objectives. Though development planning in Bangladesh in the post independence period succeeded to eliminate certain biases inherent to the planning objectives and process; it also inherited certain conflicts and dilemmas in the formulation and implementation of a development plan, which are consistent with the set of basic/key objectives. Issues taken as priority objectives centered on the need for accelerated economic development and elimination of social disparity. With this in view, the First Five Year Plan was formulated within a socialist frame work by establishing public sector dominance over the administration of assets and resources management for fulfillment of the basic objective of equitable and appropriate distribution of gains from economic development.
Failure to fulfil plan objectives since then has become a rule rather than an exception. The reason behind such repeated short fall of plan targets and poor performance in plan implementation involve problems originating from factors associated with the political body, domestic and international economic situation. Administration, management and evaluation of programs and policies designed to execute the plan. There is a lack of comprehensive awareness of the secondary effects at project level. The analytical framework used for selection and formulation of projects lacks the mechanism to quantify and accommodate for the socio -economic impact on the target population resulting evolving from the primary effects in through its implementation and consequences.
The need for rational development planning calls for formulation of programs and projects based on eliminating poverty, administrative decentralization, rural based development programs, employment generation programs, etc. But the decentralization of the economy proceeded without accounting for similar changes in management of assets and resources, which can bring about an accelerated economic development through elimination of poverty. The absence of labor as a determinant in the master plan results in bringing a