Country Programme Evaluation  ¹

This document records an agreement between the International Fund for Agricultural Development (IFAD) and the Government of Bangladesh (GOB) on the recommendations of the IFAD Country Programme Evaluation (CPE) in Bangladesh 1994-2004.  It includes an introductory summary of the main findings and conclusions reached by the IFAD Office of Evaluation followed by a list of the evaluation recommendations found in the CPE report.  After each recommendation is a description of the follow-up actions that the partners have agreed to adapt and implement.

Overview of the main evaluation findings

One of the main strengths of the GOB/IFAD collaboration from 1994-2004, was GOB performance with respect to macroeconomic policies that created a favourable environment for growth, complemented by investments in health and education that contributed to improvements in human development.  Good project performance was attributed, in part, to these conditions.  There was also close compatibility between the IFAD mandate and the prevailing GOB priorities for development and poverty reduction – as articulated in the Fourth and Fifth Five-Year Development Plans, and the interim Poverty Reduction Strategy Paper (iPRSP). This made the IFAD-financed programme quite relevant to country policies and rural conditions.

Nine loans providing project financing for a total of USD 118 million went mostly for area-based agricultural and rural development projects. Investments were primarily in infrastructure, microfinance and agricultural production, complemented by expenditure for community development and institution building. Projects tended to be slow to start and plagued by delays.  Yet most were eventually effective, successfully achieving expected results in terms of physical and financial outputs. Overall, according to project monitoring and evaluation systems, the number of people who benefited from the projects was more than 130% of targets set in project design documents.

The programme had a positive impact at the household level on the people reached in terms of income, food security - in terms of the quantity and quality of food consumed - and ownership of fixed and other assets such as livestock, land and tube wells.  More than half of all beneficiaries were rural women.  Project designs explicitly targeted women. Activities like microfinance and livestock husbandry that suited their needs were included in project design and were followed through by project implementing agencies during implementation.

IFAD performance in strategy formulation was weak, at first lacking overall vision and later setting somewhat unclear goals and basing them on unrealistic assumptions.  IFAD made only limited efforts to mobilise resources and develop working partnerships with others including non-governmental organizations (NGOs).  Approaches to selecting NGOs were poorly specified and roles they should perform were poorly conceived.

Good GOB macroeconomic policies and public sector investments in human development were contrasted by weak mid-level GOB performance in project start-up, aggravated by IFAD project design documents that made inadequate or unrealistic assumptions about start-up and implementation capacity.  During project implementation, GOB had a very limited ability to respond in a timely fashion to changing conditions.

Too little information was available on the achievements that were made through the implementation of loans and grants in terms of technology development, innovation, replication and policy dialogue.  Potential benefits were very probably foregone due to insufficient attention given by GOB and IFAD to sharing information with others or documenting and disseminating good practices.
Projects generally did not succeed in fostering viable community-based organizations, except in the case of some microfinance institutions and water management cooperative associations where mutually beneficial financial relationships or narrowly-defined shared economic interests held members together.

A vibrant private sector now exists in agriculture and related enterprises in rural areas.  IFAD and GOB have supported self-employed private sector producers through credit and training. There are now further opportunities to work with larger producers to harness their knowledge and networks to the benefit of the poor.  These need to be further explored. There is also an important opportunity to reach those poor agricultural producers classified as marginal and small farmers. To date, these have had access to the microfinance services they need to achieve significant productivity gains.  IFAD has experience working with these groups in technical training, and experience with other groups in microfinance service development. There is an opportunity to combine these two types of experience to find new ways to reach this sub-group of the rural poor to increase their incomes and contribute to rural economic growth.

Recommendations agreed upon by all partners

The CPE made eight recommendations. One recommendation covers the quality of the new Country Strategic Opportunities Paper (COSOP) that will contain the future strategy for cooperation between IFAD and the Government of Bangladesh.  Two cover major substantive areas where IFAD has already acquired experience that it can build upon to deepen the related policy dialogue and commit itself to developing sustainable approaches for replication and up-scaling by government. These would be developed into strategic thrusts. Five further recommendations cover ways that operations could be improved to strengthen the overall quality of the results and impact of investments financed by IFAD in Bangladesh.

Recommendation one:  set clear strategic goals and specific attainable objectives.

GOB and IFAD should clearly define the strategic goals that they wish to obtain through collaboration. Their next cooperation strategy should identify a limited number of specific objectives that can reasonably be expected to be reached with the available resources and within the time period foreseen by the COSOP.

Agreement by the partners: The partners agreed that they will clearly state their overall goals and jointly select a limited number of objectives that they commit to reaching in collaboration, with the available resources within a specific time period. These will be set down in the next IFAD COSOP for Bangladesh.

Recommendation two: development of financial services to microenterprises and small and marginal farmers. 

IFAD should continue its important new work in the Microfinance for Marginal and Small Farmers Project, (MFMSFP) developing financial service providers and products for agricultural production and for microenterprises in rural areas. Investments in this area should be accompanied by policy dialogue with responsible GOB agencies, partnership building with fellow development agencies, and knowledge dissemination in the local microfinance community. Projects should work with established financial institutions in order to leave institutions and services that will be sustained beyond project implementation periods.

Agreement by the partners: The partners agreed to adopt the development of financial services to microenterprises and small and marginal farmers as one of the main strategic thrusts of the future collaboration between GOB and IFAD.  They agreed to consider, inter alia, working to develop loans with customised repayment terms and loan sizes, better arrangements for savings, the possibility of insurance for livestock, and training and technical assistance for borrowers.

Recommendation three: continue investment in infrastructure to provide economic benefits to the rural poor and employment to poorest.  IFAD should continue to finance rural infrastructure targeted for the poor.  Tested participatory arrangements, such as labour contracting societies, should be used for constructing infrastructure to benefit the poorest through direct employment.  Investments should focus on village and Union level roads to serve poorer groups. Existing procedures to obtain beneficiary commitment to operation and maintenance of infrastructure should be applied and improved. Furthermore, beneficiaries should be involved in site selection and design as much as possible. Investments made should be accompanied by continued policy dialogue with GOB, building of partnership with concerned development partners, and dissemination of knowledge acquired to partners and other concerned parties in the country.

Agreement by the partners: The partners agreed that rural infrastructure to reduce rural poverty will be one of the main strategic thrusts of the future collaboration between GOB and IFAD. They agreed that GOB and IFAD will seek to collaborate with other financiers and institutions to see that infrastructure in rural areas serves the needs of poor, less advantaged and vulnerable groups.  They agreed that the types of investments to be considered for financing could include, among others, landing centres for fishermen, embankments surrounding large water bodies, village connector roads, village market improvement, small bridges and culverts on village roads, and re-excavation of village canals.  They also agreed that employment of the poorest, including the use of Labour Contracting Societies, will be envisioned wherever possible.

Recommendation four: build partnerships to tap private sector know-how, networks and resources.  IFAD should work with GOB to help stimulate the development of the private sector, particularly the participation of poor small-scale producers in that development. IFAD should also help GOB to build partnerships with selected private sector operators to tap their know-how, networks and resources.  Ways of doing the latter might include:  (i) briefing private sector suppliers of inputs and services on planned project activities to make them aware of new upcoming input and output marketing opportunities; (ii) contracting more sophisticated private sector operators in areas like seed supply to provide technical assistance and training to agricultural extension staff; and (iii) sponsoring joint applied research projects on topics not normally commercially attractive but identified by the poor as important for them.  Similar approaches could be taken with private sector agro-processing firms and even with banks and other private sector suppliers of financial services.

Agreement by the partners: The partners agreed the new COSOP will include specific objectives for further assisting poor producers to participate in the development of the private sector in local rural economies.  They also agreed that the new COSOP will favour the inclusion of efforts to build partnerships with the private sector in areas such as training, research and marketing in the context of IFAD-financed loans and grants.  They agreed to gather more information about their own experiences and those of others in-country before expanding in this area. In terms of developing the private sector and the participation of the poor in that development, they agreed that they could explore the options of working with producer and consumer groups.  In terms of forming partnerships with the private sector, they agreed that they could experiment in the areas of training for and by the private sector, joint trials, seed and other technology testing, marketing agreements and contract growing.  They agreed that this could be done not only on a contract basis, but also with possible long-term relationships in mind.

Recommendation five: set principles and procedures for NGO partnership.  IFAD and GOB should identify what kinds of partnerships with NGOs they feel would be most conducive to the achievement of their rural poverty reduction objectives and what outcomes can best be obtained through partnership with NGOs.  They should consult with NGOs to learn their views on these questions.  They should then identify basic principles for collaboration with NGOs and outline transparent criteria and procedures for approaching and selecting NGO partners, in particular for collaboration with NGOs in matters other than microfinance where well-functioning criteria and selection processes are already in place.  These efforts should be made in consultation with the NGO Bureau and the recently established NGO Foundation.

Agreement by the partners: The partners agreed that the new COSOP will provide for the development of basic principles for collaboration with NGOs in Bangladesh, including transparent criteria and procedures for approaching and selecting NGO partners.  To do this, IFAD will identify the kinds of partnerships with NGOs that will best contribute to their rural poverty reduction objectives.  It will also meet and discuss with a range of NGOs to learn their views on these questions.  Principles, selection criteria and procedures will be agreed upon with GOB prior to their adoption. Partners agreed that these efforts should be made in consultation with the NGO Bureau and the NGO Foundation. They also agreed that eventual NGO selection should be job-oriented and transparent, with accountability on both the GOB and the NGO side.  They agreed that, in the selection process, considerable weight should be given to the ability of the NGO to sustain activities beyond the project period, especially in remote areas.

Recommendation six: establish a permanent field presence in Bangladesh.

A formal IFAD presence in Dhaka should be established, particularly considering the size and relative importance of the country programme for IFAD.  The exact nature of such a presence should be determined considering the potential and the need for an in-country representative to: (i) improve the efficiency and quality of the working relationship with GOB; (ii) support the implementation of on-going projects, possibly including project supervision; (iii) contribute to the design of new loans and grants; (iii) facilitate important ‘non-lending' activities like the sharing of knowledge and information, policy dialogue, and resource mobilisation; (iv) improve understanding of in-country trend and conditions; and, (v) strengthen partnerships with fellow national and international development agencies.

Agreement by the partners: 

The partners agree to review the current arrangements of employing a Dhaka-based international consultant to facilitate IFAD operations in Dhaka.  They agree to propose to management for approval of an improved arrangement for IFAD in Bangladesh.

Recommendation seven: finance communications and knowledge components in all projects.

Specific plans for managing and communicating knowledge and information should be made part of each project.  To get the most benefit out of IFAD-financed investments, projects should set objectives and priorities for outreach.  They should then actively document and disseminate knowledge to partners according to those objectives and priorities.  In addition, more information on project costs, expenditures and procurement should be made available to the public to increase transparency and accountability.

Agreement by the partners

The partners agreed to include investments and activities in all future projects to undertake communications and knowledge outreach.  They agreed to use all means, including information technology wherever feasible, to make information on project costs, expenditures and procurement available to the public wherever IFAD and GOB regulations permit.

Recommendation eight: reduce opportunities for corruption in relation to projects.

Although IFAD has taken some steps to mitigate corruption including implementation of audit log procedure and use of NGOs approved by the government agency known as the Palli Karma-SahayakFoundation (PKSF), additional steps are needed.  Two such steps are described in above recommendations. They are: (i) better IFAD procedures and criteria for selecting NGO partners that are not microfinance institutions and thus not suitable for the application of PKSF criteria; and, (ii) establishment of communications components to disseminate information to the public.  In addition, IFAD should carefully check cost estimates in project designs and budgetary allocations in implementation plans. IFAD and its cooperating institutions (CIs) should obtain timely compliance with existing reporting requirements and impose sanctions for non-compliance. IFAD loan agreements should call for all financial, procedural, administrative and technical information related to project design and implementation to be made available to the public.

Agreement by the partners

The partners agreed to take the following steps to reduce opportunities for corruption in relation to IFAD projects: (i) implement IFAD audit log procedure in all projects; (ii) use only GOB-approved NGOs in microfinance activities; (iii) establish and apply NGO selection criteria and procedures for other activities; (iv) establish communications activities to make information available, as agreed in recommendation seven above; (v) carefully check cost estimates in project design documents and budgetary allocations in implementation plans; and (vi) ensure full compliance with existing report and audit commitments with use of sanctions in cases of non-compliance.

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1/ This Agreement reflects the understanding reached among key partners to adopt and implement recommendations stemming from the evaluation.