Bangladesh already prepared its interim PRSP (I-PRSP) where it has highlighted several areas for reform in the country; some of those were already initiated and some are yet to be initiated. Central among these were the reform of judicial system, public administration reform, forming independent anti-corruption commission, decentralization, public expenditure management, as well as formation of ombudsman, and a system of caretaker government to conduct national elections freely and fairly already has been in effect from 1991. In the backdrop of Bangladesh's praiseworthy progress, especially in social indicators toward achieving Millenium Development Goals, the above-mentioned initiatives need to be further discussed.

The GDP growth has been stagnant at around 5 percent for the last several years and there is no sign of improving, while some of our neighboring countries with the same comparative advantages such as India, Vietnam, etc. are growing faster at a rate of 7 percent or above. Before preparing PRSP in 1999, as part of the World Bank's rethinking aid strategy, Bangladesh's GDP was growing at a rate around 4 percent.

Does this mean that growth is complementary to poverty reduction as by this time poverty was reduced to around 46 percent from 59 percent in 1991? The incidence of extreme poverty also decreased to 34 percent from 43 percent in 1991. Despite around 13 percent decrease in poverty, actual numbers of poor remains the same due to increase of population. Can this 13 percent reduction in poverty explain the 1-1.5 percent increase in real GDP growth?

For a country like Bangladesh where around 50 percent of the people live in poverty, we may rely on the hypothesis that "poverty reduction and growth strategy bear the same meaning," although PRSP concept of the World Bank comes as a growth-strategy paradigm shift to poverty reduction strategy. If we accept the hypothesis, then what is wrong with GDP being stagnant with 5 percent growth? Can it be explained by problems related to good governance, or in other words, structural problems? Let us analyze the governance issues described in the PRSP and the undertaken reforms briefly.

Judicial reform
Judicial reform is one of the main agendas for good governance in Bangladesh. The lower judiciary is entangled with administration, therefore it is not free from bureaucratic dominance and corruption. It

is a long-standing demand of the civil society and development partners to separate the judiciary from the administration. In this regard, the Supreme Court issued a ruling in 2001 to the government to take initiatives to separate the judiciary within a specified period of time. But the government failed to maintain the deadline till now, describing the situation as complex, as it has to design human resource management, budget allocation system, separate judicial recruitment process, etc. Although the reform in the judicial system is not explicitly related to poverty reduction or to the poor, but as it will ensure rule of law and justice in the society, it will definitely have positive impact on every sector of the economy.

Public administration reform
Public administration reform is also highlighted as an important aspect of good governance. The proposed reforms are broad in scope, such as introducing a merit-based civil service, recruiting skilled private sector personnel in specialized government positions, ensuring transparency and accountability, improving pay and incentive system, etc. Overall, these proposed goals are not clearly related to the goal of poverty alleviation, rather these are general commitments to improve government performance.

Anti-Corruption Commission
To fight against corruption, an independent anti-corruption commission (ACC) has been formed recently which is headed by a retired High Court judge. This is one step forward in containing widespread corruption in Bangladesh. The main target, described in PRSP, is to maintain transparency and accountability in public procurement, public expenditure management, and budgetary process, as well as in the private sector too.

The President appoints the commission chair and two other members and its tenure is five years for one-term. They will work independently without fear or favour. Butthe the commission has to depend on government for their finance and other logistic supports, which may put some pressure on them from the government side.

As corruption is widespread in Bangladesh, it has become the main impediment to economic development. Corruption takes place in the form of bribery, nepotism, forgery, etc. that actually deprive people from their own rights, especially those are in abject poverty and live in rural areas. Political institutions are also corrupted; transparency needs to be increased in fund rising process of the political parties as well as democracy must be exercised inside political parties.

Apparently it would be very challenging for the ACC to combat corruption inside the government as well as political institutions as it is dependent on the government for its financial support. However, with the sizable containment of corruption, it is expected that Bangladesh will find its rapid way to economic growth and the poverty reduction process will gain momentum.

Decentralisation

Decentralization has been figured out in Bangladesh's PRSP with greater importance. The government has already taken some initiatives. PRSP provides more plans to continue and strengthen the process -- strengthening the capacity of local governments, specifically for fiscal management and training for a wide variety of new tasks and responsibilities. UNDP also conducts some projects to help the government strengthening capacities and skills of local government bodies. The Bangladesh government now plans to allocate development funds directly to the root level local government Union Parishad (UP) for implementing development projects for the area on the basis of local needs, hoping that it would reduce time of implementing development projects, bureaucratic

entanglement, and corruption in disbursing fund through different stages of the government bodies.

The success of the new initiatives to allocate fund directly to the UPs would largely depend on strengthening their capacity and monitoring their activities. Training of UP members and awareness of the beneficiaries would be essential in this regard. These types of decentralizations of government funds would hopefully be milestone toward poverty alleviation.

Public expenditure management
This category has been discussed in a separate category of the PRSP, related to the discussion of good governance. The plans include efforts to increase efficiency and particularly to increase the capacity to manage information about public expenditures and to promote greater transparency in the budgetary process.

Nonetheless, if budgeting and public expenditure management reforms are carried out successfully, it will touch on many other aspects of governance including anti-corruption, increased management efficiency, transparency and accountability.

Office of the Ombudsman
It is a high priority of the PRSP to set up the office of Ombudsman to deal with irregularities and corruption in public expenditure management and government organizations. Although still it seems a far-reaching objective, but establishing Ombudsman will definitely help the governance to be good enough. By reducing corruption in government bodies, it will definitely help accelerating economic growth as well as poverty reduction.

Strengthening electoral institutions
Although this issue is not explicitly related to poverty alleviation, it is an important issue toward good governance. To make the electoral process transparent, an independent election commission takes all initiatives to conduct general and local elections. Moreover, an innovative "caretaker government" system is now working well in the country for more than a decade so that the ruling political party cannot take undue privileges in the election.

Criticisms of the reforms and PRSP
Most of the reform issues in Bangladesh toward good governance such as anti-corruption, independent judicial system, decentralization, and public expenditure management reforms, are partially in effect. Most of them were done in a hurry with a view to satisfying donor agencies like the World Bank, IMF, etc. Although the undertaken initiatives are praiseworthy with respect to the progress in other developing countries, they are incomplete. To make the reform measures more sustainable and effective, it needs more refinement. Moreover, the PRSP lacks in explaining some other clear and concise targets of poverty alleviation such as revitalizing rural banking sector to enhance the effective role of micro-credit, to reduce rural unemployment, to mitigate natural disasters, etc. However, if the government does not interfere in the activities of the ACC and the other reforms continue smoothly, it is hoped that the country would be able to achieve its MDG poverty reduction goals.

Conclusion
In preparing PRSP, highly indebted poor countries like Bangladesh were encouraged by the World Bank and the IMF to consider a more parsimonious list of governance related issues. These countries were asked to empower the poor by ensuring that there are fair elections, pro-poor policies, and good representative institutions in place. They were encouraged to adopt mechanisms for the effective delivery of basic services, an objective that is to be reached through budgetary measures, clearly defined responsibilities, committed civil servants, diverse methods for ensuring accountability, diverse modes of delivery, and local capacity. In addition, there might be a variety of economic protections for the poor such as laws and regulations, efforts to reduce exclusion, and investment in physical capital. The government must ensure law and order, and must have an effective judiciary to protect the poor from corruption and violence. These issues are proper to the issues of good governance.

In light of the above objectives, the government took reform measures and is thinking to take some other reforms that are good for governance and particularly relevant to poverty reduction. The reform issues are interdependent and one would not be successful if the others are not considered effectively. For example, civil service reform may improve pay and conditions of work for government officials, and it may even reduce corruption and patronage, but may mean little to the poor unless an effective political organization among the poor is in place to ensure that public officials treat them fairly. Decentralization may remove bottlenecks in decision-making and might even make regional and local officials more accountable, but it can easily lead to increased inequality among regions and constituencies if it is not taken carefully. Therefore, interdependence among the reform issues and honesty in taking reforms are essential to make the governance good enough and to achieve poverty reduction goals.

From the above discussion, it may not be wrong in the case of Bangladesh if we accept the hypothesis that poverty reduction and growth strategy are complementary. To accelerate our GDP growth rate beyond 5 percent, we need to make some effective and quick structural reforms in governance issues that will also be conducive to poverty reduction.

Monzur Hossain is a Doctoral canditate at the National Graduate Institute for Policy Studies, Tokyo, Japan.