Bangladesh has been experiencing rapid urbanization since its independence in 1971. Urban population as a percentage of total population increased from around 8 % to nearly 23 % during 1974-2001 periods.By the year 2015 nearly one-third or 33% of the population of Bangladesh will be living in urban areas.
The phenomenal rate of urbanization is posing a major development challenge. The cities and towns of Bangladesh, suffer from acute problems of deteriorating infrastructure in the form of poor housing, lack of safe drinking water,paucity of drainage and sewerage facilities, logjam of urban transport, and pollution. ULBs are striving to address for operation and maintenance (O&M)of existing basic urban service systems. This does not necessarily mean that urbanization is bad.
At present urban dwellers constitute about 30 percent of the total populations of Bangladesh,but their contribution to GDP is more than 60 percent indicating that the productivity of labor in urban areas is much higher than in rural areas. The government always realizes that urbanization is an unavoidable element of economic development that requires careful planning and management. The government is committed to manage urbanization in such a way that beneficial aspects of urbanization are strengthened and negative aspects of urbanization are minimized.
In view of the above context and in order to utilize the experience and lessons learn from the successfully completed Municipal Services Project (MSP) the Government of Bangladesh requested the World Bank to provide financial support for another investment project. In response to the request the World Bank agreed to fund this Municipal Governance and Services Project(MGSP).
The World Bank Board has approved the project on 14 January 2014 while the Government has also approved the MGSP in the ECNEC meeting on 19 January 2014. The credit has been declared effective from April 06, 2014.
The Municipal Governance and Services Project (MGSP) will be implemented through Local Government Engineering Department (LGED), Bangladesh Municipal Development Fund (BMDF),and Local Government Division (LGD).