Impact of Structural Adjustment Policies
An Assessment Using Participatory Techniques

Volume II: Main Report

Atiur Rahman
M M Shafiqur Rahman
Adul Quashem
Zulfiqar Ali
Arifur Rahman

September 2000

Structural Adjustment Participatory Review Initiative (SAPRI)



The main report presents the major findings of the participatory study on the impact of SAP. These findings have been drawn from the three sectors: agriculture, trade and industry, and interest rate liberalization. A number of qualitative techniques have been applied to catch the voices of the major primary stakeholders involved in each of the above three sectors. Although many of the findings are not conclusive, however, they indicate the kind of social impact which has been unleashed by SAP.

I am grateful to all my fellow researchers (M M Shafiqur Rahman for investigating agriculture; Zulfiqar Ali for trade and industry; and Abul Quashem and Arifur Rahman for financial sector) for sharing the pains and pleasures of this non-conventional study. Volume iii containing statistical appendices related to agriculture has been prepared by M. M. Shafiqur Rahman. I am also grateful to Waliul Islam, Shahidul Alam, Monira Hoque, Pallab Mojumder, Nafisa Halim, and Ashabul Huq for providing all types of research and computer support. Thanks also go to Gourango Nandi for his support in organizing the meetings and workshops in Khulna . Finally, we are indebted to all the participants of qualitative sessions for sharing their views on the impact of SAP with us.

While thanks go to all the contributors for their support, the study team takes the full and sole responsibility of any errors and omissions. The team also assumes full responsibility for the opinions expressed in the Report.

Atiur Rahman
Senior Research Fellow, BIDS
Team Leader
Participatory Component, SAPRI





Dr. Atiur Rahman
Senior Research Fellow
Bangladesh Institute of Development Studies

Team Leader



M. M. Shafiqur Rahman

Independent Consultant, Agriculture Component



Abul Quashem

Consultant, Financial Sector



Dr. Zulfiqar Ali
Research Associate
Bangladesh Institute of Development Studies

Consultant, Trade and Industry



Arifur Rahman

Junior Consultant, Financial Sector



Md. Waliul Islam

Project Manager



Pallab Mazumdar

Research Officer

Monira Haque

Research Officer

Nafisa Halim

Research Officer

F. M. Shahidul Alam

Research Officer



Mr. Md. Monowar Hossain

Field Officer

Mr. Hafizur Rahman

Field Officer

Mr. Abdur Razzak

Field Officer

Mr. Moniruzzaman

Field Officer

Mr. Md. Yahiya

Field Officer

Mr. M.M. Alam

Field Officer

Mr. Afzalul Haque

Field Officer

Mr. Aminul Islam

Field Officer

Aslam Parvez

Field Officer



Ashabul Hoque

Computer Operator

Table of Contents



Summary Report: Volume I
Preface i
Study Team ii
Table of Contents iii
List of Exhibits iv
List of Boxes v
List of Charts (Financial Sector) vi
List of Tables vii

1.    Introduction



2.    Objectives


3.    Methodology and Limitations

       3.1 Trade and Industry 2
       3.2 Financial Sector 14
       3.3 Agriculture 16

4.    Impact Assessment: Trade and Industry

       4.1 Introduction 38
       4.2 Trade Policy Reform and Privatization in Bangladesh: An Overview 39
       4.3 Impact Assessment: Trade Liberalization 40
       4.4 Impact Assessment: Privatization of Jute Manufacturing Industries 47

5.    Impact Assessment: Financial Sector

       5.1 Some Stakeholders Speak 52
       5.2 Background 53
       5.3 Study Results 55
       5.4 Findings from Secondary Sources of Data 65
       5.5 Debate on High-Low Interest Rate After the Liberalization 71
       5.6 A Summing Up of Banking Issues in Bangladesh 71
       5.7 A Lesson from FSR in Bangladesh 74

6.    Impact Assessment: Agriculture


A:   The Context

       6.1 Introduction and Background 79
       6.2 The Bangladesh Agriculture in Context: A Brief Survey of Critical Issues 82
       6.3 The Profile of the Study Locations 95

B:    Intermediate Outcomes of SAP-Led Measures

       6.4 Mechanized Irrigation 102
       6.5 Chemical Fertilizer 136
       6.6 Pesticides 162
       6.7 Rural Finance from Public Sector Lending Institutions 165
       6.8 Public Domestic Procurement 178

C:   Long-Term Outcomes of SAP-Led Measures

       6.9 Participatory Poverty Assessment 185
       6.10 The Markets: Labour, Land and Indigenous Credit 206
       6.11 Inequality: Polarity between Land-poor and Land-rich Households 230
       6.12 Food Security 241
       6.13 Gender Equity 246
       6.14 The Environment 252
       6.15 Corruption 259
       6.16 Social Capital 262

D:   Stakeholder Perspectives on SAP-Led Measures and Other Related Issues

       6.17 Stakeholder Perspectives: At the Institution Level 264
       6.18 Stakeholder Perspectives: At the Community Level 277

7.    Conclusions and Recommendation

       7.1 Trade and Industry  323
       7.2 Financial Sector 328
       7.3 Agriculture 331



Appendices (Agriculture): Volume III