There is a narrative in the policy eco-system that notes that the present government’s capacity to implement the National Budget is weakening over time. Many argue that it reflects a core deficit in state’s capacity to implement the projects that it has taken up during its tenure. Moreover, they have used the downward trend in the Budget implementation rate – especially for the Annual Development Programme (ADP) – over the last decade to justify their argument. Putting it simply, from 2009-11 the implementation rate hovered around the 93 percent threshold, but now it stands at approximately 80 percent. For me, this is a superficial narrative and it misses some important nuances that need to be recognised.
First, in 2009 – the final Budget presented by the military-backed caretaker government – our planned ADP was roughly Tk 265 billion. But, what was actually implemented was Tk 207.15 billion – ie an implementation rate of 78 percent. Under the Awami League government, the implementation rate saw its peak in 2011 when it hit 97 percent with an actual ADP of Tk 470 billion, and since then it experienced a steady decline, hitting 78 percent in 2017 with an actual ADP of roughly Tk 860 billion. Furthermore, in the ongoing fiscal year, the expectation is that the country would have crossed the elusive Tk 1 trillion ADP threshold. Thus, going by this simple yardstick, just within a decade, the state apparatus was able to multiply its ADP expenditure five folds. Is that indicative of weakening capacity? If productivity is a measure of how much output can be produced from every given input, then the overall capacity of the state apparatus has actually significantly increased. After all, the size of the state machinery did not increase by a factor of five in the last 10 years. Nor did the population of Bangladesh. So, it is pragmatic to presume the state’s ‘development expenditure per capita’ has significantly increased over the decade. In fact, ADP per capita in 2010 was Tk 1,700 per person. But in 2018, it is expected to be approximately Tk 7,000 per person. Is that not suggestive that the state machinery has earned more capacity reflected in increased public development expenditure on its citizens?
The second issue that also needs recognition is that when the government implemented ADP of approximately Tk 200 billion during 2008, the majority of ADP was spent on short-term projects. Yet, under the current government, the absolute size of the ADP has not only increased five folds, but the composition is also very different. For the first time in our history the government has in its portfolio a diverse set of mega projects which Bangladesh had no previous experience managing. So it is only natural that some degree of trial and error will slow implementation, as such projects come with new management challenges that our public sector is slowly getting accustomed to. Various external circumstances have also delayed the implantation of mega infrastructure, such as World Bank’s irrational behaviour on Padma Bridge followed by geographical concerns, and Holy Artisan’s impact on Metro Rail’s implementation, and must not be overlooked.
Of course, if one examines any given project in detail, there is a good chance of pinpointing various aspects that could have been done differently to improve efficiency and reduce leakage. And it is precisely those learning-by-doing experiences that will help Bangladesh develop a modern effective state apparatus in the future. Yet, the prevalence of some degree of inefficiency and quality concerns cannot be used to formulate an inference on how capacity has evolved over time. Moving forward, the government needs to invest more resources in addressing the capacity-deficits that currently undermines its efficiency. Such endeavours are crucial and are likely to not end in near future; as the room for improvement for developing countries is always a large one.