The curious saga in Bangladesh of the Padma bridge proposal brings to the fore the classic dilemma of development cooperation. Poor countries in need of external assistance the most are the ones least able to make good use of that support.
Corruption, incompetence, short-sighted political calculation, and petulance of political leaders are common obstacles which put in jeopardy the expected results from development projects.
The competence and integrity deficits are not wholly one-sided. As seen by Bangladesh officials, the World Bank's bureaucratic and less than transparent approach has prolonged the matter of funding for Padma bridge, and has stood in the way of resolving the differences that have arisen. Critics of World Bank prompted it to appoint an "Integrity Vice Presidency" within its management structure.
"The proposed four-mile bridge over the Padma river was intended to link the underdeveloped south-western districts with Dhaka, the capital, benefiting over 30 million people in 19 districts in the south-west and increasing Bangladesh's GDP by 1.2%, according to a forecast by the Asian Development Bank." (The Guardian)
The boost in economic growth would push the GDP growth rate beyond 7% and raise per capita income to more than US$1,000, the benchmark for middle income countries. Reaching this status by 2020 is a political pledge of the government.
The other mega-bridge in the country, the Jamuna river, completed in June 1998, improved the connectivity of the northwest zone to the economically more developed east zone. This in turn accelerated socioeconomic development of the neglected north-west part of Bangladesh and helped reduce poverty in the country as a whole.
Similar advantages are expected with the proposed Padma bridge which would have a sub-regional impact by forming part of the Asian Highway Route A-1, the main Asian Highway route connecting Asia to Europe.
The World Bank on June 29 cancelled its loan pledge of $1.2 billion for the $2.9 billion project, precipitating withdrawal of other external fund donors from the project. The Bank said it had "credible evidence" of a "high-level corruption conspiracy" among Bangladeshi officials to misuse money earmarked for the bridge. "The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption," it said.
The Bangladesh government has refuted the corruption allegations. "Their credible evidence will be credible under our law when witnesses can be found," Finance Minister A.M.A Muhith said in Parliament on July 2.
The World Bank had set conditions to the government, the fulfilment of which would have prevented the loan cancellation. The conditions included:
A high powered probe of allegations of corruption;
Appointment of an independent body to monitor implementation of the project;
Suspension of officials linked to corruption allegations;
Allowing co-financiers to be actively involved in the procurement process for the bridge; and
Keeping a Bank panel informed of progress in the investigation of corruption and receiving advice from it.
The government balked at the idea of signing an agreement with these conditions, which would, in the eyes of the government, amount to admitting the accusations that were only alleged. It also had reservations about consulting and seeking advice from a WB panel on corruption probe, which would violate the Bangladesh Anti Corruption Commission laws.
It appears from media reports that a more informal understanding regarding the conditions, perhaps expressed in an exchange of letters, would be the government's preference.
Given the high stake in the bridge for both sides, and the potential development benefits for the poor here, neutral observers will find it amazing that the differences in position and perceptions, as outlined above, could not be bridged and a compromise to save the funding agreement could not be formed.
Predictably, there has been a series of disingenuous bluster from politicians, discovering sinister conspiracies and finding villains who must be defeated by the valiant people of Bangladesh.
Economist Abul Barakat, president of the Bangladesh Economic Association states: "Government can raise four times the cost involved in constructing the Padma bridge." "More than Tk.98,000 crore can be raised from 14 sources including bonds issued for non-resident Bangladeshis, putting aside a portion of foreign currency reserve, pension and insurance funds, incentive to capture undisclosed funds (so-called black money) and levies and surcharges," said Barakat in a seminar on Padma Bridge on Own Finance on July 19.
If building the bridge were the only development priority for Bangladesh, the argument for a war-like mobilisation would hold water. Relevant to this discussion of building a road bridge over Padma is the fact that not a single road of the 21,000 km network of roads and highways in Bangladesh is in good repair, causing immeasurable hardship to people and huge economic loss.
It is also not a question of raising the funds only, which seems to be the reaction of economists and politicians to WB loan cancellation. Effective development cooperation means that the government and external partners have to work together to address the dilemma of development by overcoming corruption, incompetence and lack of accountability and transparency.
There is still a glimmer of hope that good sense will prevail. The President of Japan International Cooperation Agency (JICA), Akihiko Tanaka, has been apparently persuaded to take on a mediating role. Mr. Tanaka was to fly to Washington for talks with the new World Bank President Jim Yong Kim about re-considering the bank's decision to cancel the Padma Bridge funding, according to Muhith.
Improving the life of millions of people in Bangladesh must not be held hostage to misguided petulance on either side.
The writer is Senior Adviser, BRAC University Institute of Educational Development.