Let us focus on poverty, the alleviation of which has historically been our overriding national priority. Admittedly, the budget has been prepared to implement the targets set in the Interim Poverty Reduction Strategy Paper (I-PRSP). It must be remembered that the I-PRSP was fashioned to reduce poverty by achieving 7 percent so-called pro-poor economic growth. Unfortunately growth has never been pro-poor in our country. The past efforts to promote growth ended up in creating monumental disparity of income and opportunities between the rich and the poor in our society. For example, the rich-poor income disparity increased from 27 fold to 46 fold in the last half of the 1990s. Thus, in spite of the rhetoric otherwise, we seemed to have followed a strange strategy of further enriching the rich to reduce the poverty of the poor. The proposed budget, which adheres to the same pro-rich trickle down principle, holds out no hope of reversing this ominous trend.

The proposed budget, we are afraid, is also unlikely to enhance the human development of the poor most of whom live in the rural areas. Yes, again there are increased allocations in the budget for health and education. However, the ever increasing allocations for the social sector in the past have not drastically reduced poverty -- the income poverty rate declined by less than only 1 percent during the 1990s. The sharp declines in the quality of rural health and education which accompanied the increased allocations and the resulting rapid expansion of infrastructure building and the hiring of more functionaries have contributed to this grim state of affairs. The cost of this deteriorating quality especially of education has been painfully high. It has impeded the intellectual growth and development of crores of our village boys and girls, clouding the future of their families. Quality education for their children has historically been the ticket to get out of the poverty trap for many families. Thus, allowing the quality of rural education to deteriorate perhaps represented the most flagrant betrayal of the trust placed by the rural constituents on the policymakers. This has unfortunately led to the creation of a permanent underclass. The proposed budget shows no serious initiative to address this issue of deteriorating quality of health and educational services.

Increasing allocations for health and education by themselves are not likely to benefit the poor. These investments need thorough and careful analysis. The per capita ADP spending on health, for example, is about Tk. 150, much of which is spent on bricks and mortar or salaries and benefits. Even the poorest person generally spends more in a year for his/her health than the government does. Thus, the best that the government could do is to make strategic investments that will magnify the returns on the spending of the individuals rather than be their substitutes. This would also require services to become demand induced, rather than supply driven from the top, as has traditionally been the case. The problem with supply driven services is that they often have little relevance and usefulness for whom they are intended. The proposed budget unfortunately shows no signs of remedying these problems.

Corruption is a monumental problem for us as a nation. This is the result of an overly centralised system where transparency and accountability are difficult to be ensured. In fact, they can be better achieved at the grassroots through institutions which are accountable to the people. Thus transferring of more resources to local bodies and requiring transparent spending of those resources through effective participation of the people (e.g., holding open budget meetings) may go a long way in rooting out corruption from our society. This will obviously require a bold initiative to democratically decentralise our system of governance. The budget shows no such initiative except for making an allocation of Tk. 40 crore for Gram Sarkar.

Let us come back to the issue of poverty eradication. On the one hand, eradicating poverty will require stimulating investments to create employment, and on the other hand empowering the people to create their own employment. Unfortunately, all our past efforts (including ensuring macroeconomic stability) to encourage private investments have not been very successful. In fact, we seem to be going through a process of de-industrialisation in our country. The proposed reduction of duties on imported finished products and raising duties on imported raw materials in the budget may unfortunately hasten this process.

Given the stagnant condition of investments and mass production in general in our country, we need to bring about a major shift in our strategy to encourage production by the masses and generate self-employment, if we are to eradicate poverty. Such a shift will require empowering people, especially the poor, to become the authors of their own future along with promoting large-scale manufacturing. This will in turn require eradicating the "poverty of their mind" and unleashing them to take responsibility of their own future rather than becoming mere beneficiaries of the generosity of others, as has generally been the case. Unleashing the creativity and productivity of the poor will not only help reduce poverty significantly, it will also help achieve much higher growth rate than the 7 percent required by I-PRSP. More resources, however, need to be channelled to the poor and an enabling environment created for them so that they can succeed in their own development. The government has allocated, among others, Tk. 600 crore for agricultural subsidy, additional Tk. 1,379 crore for micro-credit and a substantial amount for transfer payments for this purpose. Although these allocations represent commendable changes, their implementation or lack of it is the real challenge for us. For example, during the first seven months of the last fiscal year, only 31.4 percent of Tk. 300 crore earmarked for agricultural subsidy was implemented. The proposed budget offers no strategy to effectively deal with this problem

The shrinking capacity of the central bureaucracy -- which is increasingly being shrunk by graft, corruption, inefficiency and the breakdown of discipline -- is the root cause of the severe deficiency in implementation. This limitation may be remedied by increasing allocations to local bodies, which can also be an effective conduit for making more resources available to the poor. Unfortunately, the Honourable Finance Minister showed usual constraint in allocating funds for grassroots institutions. For example, the block grant allocations for Union Parishads (UPs) and Paurashavas in the proposed ADP are Tk. 190 crore and Tk. 125 crore respectively compared to Tk. 174 crore and Tk. 100 crore for the previous year. Even this small amount of block grant for UPs is not directly given to them and they do not also have the freedom to spend the money. By contrast, Paurashavas and even the Gram Sarkar have direct allocations.

To conclude, policies in Bangladesh have always been of the rich, by the rich and for the rich, despite the pro-poor slogans. The poor have been given the voting rights but no representation at the policymaking. The proposed budget unfortunately exhibits no bold departures from the past and represents the same state of affairs. And it is set to be passed on 30 June next

Dr Badiul Alam Majumdar is Global Vice President and Country Director, The Hunger Project Bangladesh.