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On PDF, I've been called both a Razakar and a pro-Bharti dalal
True statement.
I feel you bro.
Awami govt set to destroy backbone of Bangladesh economy
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I feel you bro.
Monetary policy may shrink gross domestic product
Research organisation Unnayan Onneshan says in monthly economic update
Sunday, 12 February 2012
Dhaka, Feb 11: Contractionary measures enunciated in the recent monetary policy statement (MPS) of the central bank may cut back national output, says an economic think-tank. The hike in repo rates proposed in the MPS may dampen investment by increasing the cost of capital as the banks will keep borrowing at higher rates. This implies that there will be associated risk factors in terms of targeting productive sectors for further investment, thereby contracting gross domestic product, Unnayan Onneshan in its latest monthly update on economy said.
The rate at which the central bank lends money to commercial banks is called repo rate, a short term for repurchase agreement. Bangladesh Bank has increased the repo rate 100 basis points, which was 50 basis points in the last MPS.
Identifying curbing inflation and keeping growth momentum of the economy as the twin hallenges, the report argues that the recently announced MPS reveals the revision of governments wish list without having a reality check.
On the basis of this growth-inflation dynamics, the report recommends a balanced approach to control public spending and refocus on investment in productive sectors. Huge subsidies on energy sector must not turn in to high inflation, said UO in its January issue of Bangladesh Economic Update, an analysis of the MPS for January-June 2012 period.
A clear roadmap is required on the systematic shift of the balance of aggregate demand from public to private and from consumption to capital formation, with a view to keeping the inflation at an acceptable rate and easing the liquidity situation, added the UO report.
The report states that the central banks expectation of reduction of pressure on liquidity may not be materialised as high inflationary pressure may crowd out the attempt to increase the savings rate.
As of June 2011, the total liquid assets of the schedule banks were Tk 1,005.64 billion. By the end of December 2011, this went up by Tk 1,141.71 billion. The excess liquidity of the schedule banks decreased by Tk 43.50 billion in June 2011, 28.49 per cent lower than that of June 2010.
Due to higher inflationary pressure and increased food consumption in 2010-11 fiscal year (FY), domestic savings as percentage of GDP fell to 19.6 per cent in FY 2010-11 than that of FY 2009-10.
The think-tank states that the proposed instruments in MPS may not rein in inflation because of the inadequate diagnosis of the causes of continuous increase in prices.
The inflation has occurred for two reasons, namely, domestic prices are increasingly knotted to international prices due to trade liberalisation and administered prices are adjusted to global prices; and low level of emphasis on public distribution system has encouraged jacking up in prices, it said.
The report says that the government projected inflation of 7.5 percent in the current fiscal year will remain elusive and general inflation might climb up to 12.27 per cent at the end of the FY.
The UO report, contrary to the MPS prescription, suggests that harmonisation of monetary policies with fiscal measures is needed to address inflation, coupled with the expansion of domestic productive capacities.
The report also said dampened investment and unabated rise in prices would hurt different sections of society differently. Any failure to contain inflation is bound to increase inequality as the latter has been showing an upward trend for some time, the monthly update suggested.
Monetary policy may shrink gross domestic product
Research organisation Unnayan Onneshan says in monthly economic update
Sunday, 12 February 2012
Dhaka, Feb 11: Contractionary measures enunciated in the recent monetary policy statement (MPS) of the central bank may cut back national output, says an economic think-tank. The hike in repo rates proposed in the MPS may dampen investment by increasing the cost of capital as the banks will keep borrowing at higher rates. This implies that there will be associated risk factors in terms of targeting productive sectors for further investment, thereby contracting gross domestic product, Unnayan Onneshan in its latest monthly update on economy said.
The rate at which the central bank lends money to commercial banks is called repo rate, a short term for repurchase agreement. Bangladesh Bank has increased the repo rate 100 basis points, which was 50 basis points in the last MPS.
Identifying curbing inflation and keeping growth momentum of the economy as the twin hallenges, the report argues that the recently announced MPS reveals the revision of governments wish list without having a reality check.
On the basis of this growth-inflation dynamics, the report recommends a balanced approach to control public spending and refocus on investment in productive sectors. Huge subsidies on energy sector must not turn in to high inflation, said UO in its January issue of Bangladesh Economic Update, an analysis of the MPS for January-June 2012 period.
A clear roadmap is required on the systematic shift of the balance of aggregate demand from public to private and from consumption to capital formation, with a view to keeping the inflation at an acceptable rate and easing the liquidity situation, added the UO report.
The report states that the central banks expectation of reduction of pressure on liquidity may not be materialised as high inflationary pressure may crowd out the attempt to increase the savings rate.
As of June 2011, the total liquid assets of the schedule banks were Tk 1,005.64 billion. By the end of December 2011, this went up by Tk 1,141.71 billion. The excess liquidity of the schedule banks decreased by Tk 43.50 billion in June 2011, 28.49 per cent lower than that of June 2010.
Due to higher inflationary pressure and increased food consumption in 2010-11 fiscal year (FY), domestic savings as percentage of GDP fell to 19.6 per cent in FY 2010-11 than that of FY 2009-10.
The think-tank states that the proposed instruments in MPS may not rein in inflation because of the inadequate diagnosis of the causes of continuous increase in prices.
The inflation has occurred for two reasons, namely, domestic prices are increasingly knotted to international prices due to trade liberalisation and administered prices are adjusted to global prices; and low level of emphasis on public distribution system has encouraged jacking up in prices, it said.
The report says that the government projected inflation of 7.5 percent in the current fiscal year will remain elusive and general inflation might climb up to 12.27 per cent at the end of the FY.
The UO report, contrary to the MPS prescription, suggests that harmonisation of monetary policies with fiscal measures is needed to address inflation, coupled with the expansion of domestic productive capacities.
The report also said dampened investment and unabated rise in prices would hurt different sections of society differently. Any failure to contain inflation is bound to increase inequality as the latter has been showing an upward trend for some time, the monthly update suggested.
Monetary policy may shrink gross domestic product
UK report cautions about risks to BD economy
Nazmul Ahsan
The Bangladesh economy will come under some strong unfavourable pressures due to high inflation and heavy borrowings by the government from the banking sector, leading to a vicious downward spiral, said a report of UK Trade and Investment Department.
The report highlighted the need for a bailout package by the government for the worst hit commercial banks due to their huge losses for investing in the stock market.
The report, styled, "Bangladesh Quarterly Macro-Economic Updates (October-December 2011)", has suggested a four-point action plan that should include, among others, measures to tackle structural challenges to come out of the economic overheating and instability.
"The current combination of high inflation, and rampant public spending funded through borrowing from domestic banks will quickly re-inforce itself in the form of a vicious downward spiral," said the report.
"Since inflation will need to be tackled with continued high interest rates, this will ultimately result in a sharp contraction in real economic activity, as firms find themselves being crowded out of the financial markets," maintained the UK's report.
The report also said though the recent monetary policy of Bangladesh Bank is likely to play an effective role in containing inflation, it may also slow down already-slowing export earnings as the BB, as it noted, has been discouraging import, mostly required for export-oriented industries.
It said the stock market has continued on its path towards correction, following the drastic rises in 2010 as corporate earnings did not justify a three-fold increase in stock market capitalization.
"However, the broader consequences of this could be severe. The government would need to consider a fiscal bail-out, should some of the commercial banks, which are heavily exposed to the stock market, start to register their losses on their balance sheets," the report noted.
"This would come at a time when the fiscal balance is already under huge pressure," it added.
According to the available data from the Bangladesh Bureau of Statistics (BBS), inflation, the report pointed out, is continuing to persist. In December last year, the overall price-increase fell slightly to 10.63 per cent. This follows an increase of 11.58 per cent in November, 2011 and is consistent with the 12-monthly average figure, which is 10.68 per cent.
Suggesting a number of measures to stave off the worst aspects of any potential vicious cycle, the report suggested for tightening any further fiscal expansion, reducing subsidy on fuel and energy and keeping budget deficit within the projected five per cent.
"A trade-off that will emerge here is around prioritising discretionary public spending. It is important that the government maintains its long-term social sector investments (i.e. health and education), while rationalising spending on social safety nets and ensuring that subsidies and cash transfers are properly targeted," reads the report.
It suggested that BB should ensure the availability of funds to private sector to the desired level of economic growth and to contain risks in the financial sector.
"Finally, the risks around financial sector stability remain. Here, the oversight function of the central bank will be the key to ensuring that risks are managed and the liquidity squeeze which private companies are facing is reversed," the report further said.
The report of UK Trade and Investment said challenges in skill deficit, planned urbanisation, infrastructure and energy sector reforms, need to be addressed as these are long-term constraints to economic growth.
"Proper attention and adequate action on these long-term constraints will increase Bangladesh's productive capacity, and is the only way to get growth without another instance of overheating," the report concluded.
UK report cautions about risks to BD economy
Nazmul Ahsan
The Bangladesh economy will come under some strong unfavourable pressures due to high inflation and heavy borrowings by the government from the banking sector, leading to a vicious downward spiral, said a report of UK Trade and Investment Department.
The report highlighted the need for a bailout package by the government for the worst hit commercial banks due to their huge losses for investing in the stock market.
The report, styled, "Bangladesh Quarterly Macro-Economic Updates (October-December 2011)", has suggested a four-point action plan that should include, among others, measures to tackle structural challenges to come out of the economic overheating and instability.
"The current combination of high inflation, and rampant public spending funded through borrowing from domestic banks will quickly re-inforce itself in the form of a vicious downward spiral," said the report.
"Since inflation will need to be tackled with continued high interest rates, this will ultimately result in a sharp contraction in real economic activity, as firms find themselves being crowded out of the financial markets," maintained the UK's report.
The report also said though the recent monetary policy of Bangladesh Bank is likely to play an effective role in containing inflation, it may also slow down already-slowing export earnings as the BB, as it noted, has been discouraging import, mostly required for export-oriented industries.
It said the stock market has continued on its path towards correction, following the drastic rises in 2010 as corporate earnings did not justify a three-fold increase in stock market capitalization.
"However, the broader consequences of this could be severe. The government would need to consider a fiscal bail-out, should some of the commercial banks, which are heavily exposed to the stock market, start to register their losses on their balance sheets," the report noted.
"This would come at a time when the fiscal balance is already under huge pressure," it added.
According to the available data from the Bangladesh Bureau of Statistics (BBS), inflation, the report pointed out, is continuing to persist. In December last year, the overall price-increase fell slightly to 10.63 per cent. This follows an increase of 11.58 per cent in November, 2011 and is consistent with the 12-monthly average figure, which is 10.68 per cent.
Suggesting a number of measures to stave off the worst aspects of any potential vicious cycle, the report suggested for tightening any further fiscal expansion, reducing subsidy on fuel and energy and keeping budget deficit within the projected five per cent.
"A trade-off that will emerge here is around prioritising discretionary public spending. It is important that the government maintains its long-term social sector investments (i.e. health and education), while rationalising spending on social safety nets and ensuring that subsidies and cash transfers are properly targeted," reads the report.
It suggested that BB should ensure the availability of funds to private sector to the desired level of economic growth and to contain risks in the financial sector.
"Finally, the risks around financial sector stability remain. Here, the oversight function of the central bank will be the key to ensuring that risks are managed and the liquidity squeeze which private companies are facing is reversed," the report further said.
The report of UK Trade and Investment said challenges in skill deficit, planned urbanisation, infrastructure and energy sector reforms, need to be addressed as these are long-term constraints to economic growth.
"Proper attention and adequate action on these long-term constraints will increase Bangladesh's productive capacity, and is the only way to get growth without another instance of overheating," the report concluded.
UK report cautions about risks to BD economy
Credit squeeze to hit Boro farming
Loan disbursement declines by 7.94pc
Saturday, 18 February 2012
Dhaka, Feb 17: The central banks restrictive credit policy, consequential to high government borrowing from the banking system, has squeezed the flow of credit to the agricultural sector the main driver of Bangladesh's economy. Economists are of the opinion that the low disbursement of farm credit might lead to decreased productivity, which, in turn, would affect food security in the medium term.
In the July-December period of the current financial year (FY), farm loan disbursement declined by 7.94 per cent, compared to the same period of the previous fiscal year. By the first half of the current FY, total farm loan disbursed stood at Tk. 5,730.28 crore, while the amount, for the same period of the last FY, was Tk. 6,224.81 crore, according to statistics obtained from Bangladesh Bank (BB).
In the first half of FY 2011-12, farm loan disbursement has reached 41.52 per cent of the annual target. The BB had set a Tk. 13,800 crore farm credit target for the current fiscal year. However, first-half data show that lenders have not been able to cover half of that, with disbursement standing at Tk. 5,730.28 crore.
On the other hand, BB statistics show that farm loan disbursement, for the same period in FY 2010-11, was above half the target of Tk. 11,000 crore. Actual disbursement in 12 months of last FY was Tk. 12,184.32 crore.
The target for FY 2011-12 had been set 9.4 per cent higher than that of the previous fiscal year.
A senior BB official, on conditions of anonymity, said that high government borrowing, from the banking system, has created tremendous pressure on liquidity, which has led many banks to restrict credit flow.
Low credit flow to the agricultural sector might be caused by inadequate cash with the lenders, as banks often have to comply with government demand for cash, to import petroleum products, said the BB official.
According to finance minister AMA Muhiths statement in Parliament last week, the governments total borrowings have come down to around Tk. 16,000 crore, at the end of January 2012. In the first quarter of the current fiscal year, government borrowings, however, had touched Tk. 21,000 crore. It may be noted that total government borrowing, from the banking system, stood at Tk. 43,000 crore, over the last three years.
The central bank has also asked lenders to cut down disbursement of credit to non-performing sectors and encourage credit growth among better performing sectors of the economy. It may be noted that the BB seeks to reduce total credit disbursement for the current FY, so that average credit growth remains within 15 per cent.
However, former central bank governor Dr Salehuddin Ahmed said that banks should ensure proper flow of credit to the farming sector, which is essential for increasing agri output. He said farmers will need adequate cash, as the Boro season has already arrived and banks should ensure necessary support towards proper, hassle-free disbursement of farm loans.
Low credit flow may cause to lessening production that, in the medium-term, could lead to food insecurity, said Dr Salehuddin.
He said that one recent observation is farmers might have become cautious about seeking loans, as prices of harvested crops were not profitable. He said farmers were not happy with prices for paddy, following the Aman harvest.
Last time, we saw low cash return for crops, such as, paddy, wheat and potato, made many farmers cautious about borrowing money for cultivation. This is not favourable for increasing agricultural output, he said.
Meanwhile, the BB official said that decline in credit to agriculture does not mean that the farm production would fall. It (credit flow) varies in line with demand from farmers, said the official.
Another BB official, however, admitted the fact that farmers are not getting loans free of hassle and said that the incumbent central bank governor is working to accelerate monitoring activities.
The official said the BB governor has sent 64 newly appointed assistant directors for field-level inspections last week, with a view to bring transparency, accountability and pace in banks agriculture and SME credit disbursement programmes, as well as, achieve the loan disbursement target.
The BB official added that probationary officers from BB would visit and talk to farmers in 56 upazilas in 28 districts across the country, and report to the governor, regarding findings on return.
Credit squeeze to hit Boro farming
Loan disbursement declines by 7.94pc
Saturday, 18 February 2012
Dhaka, Feb 17: The central banks restrictive credit policy, consequential to high government borrowing from the banking system, has squeezed the flow of credit to the agricultural sector the main driver of Bangladesh's economy. Economists are of the opinion that the low disbursement of farm credit might lead to decreased productivity, which, in turn, would affect food security in the medium term.
In the July-December period of the current financial year (FY), farm loan disbursement declined by 7.94 per cent, compared to the same period of the previous fiscal year. By the first half of the current FY, total farm loan disbursed stood at Tk. 5,730.28 crore, while the amount, for the same period of the last FY, was Tk. 6,224.81 crore, according to statistics obtained from Bangladesh Bank (BB).
In the first half of FY 2011-12, farm loan disbursement has reached 41.52 per cent of the annual target. The BB had set a Tk. 13,800 crore farm credit target for the current fiscal year. However, first-half data show that lenders have not been able to cover half of that, with disbursement standing at Tk. 5,730.28 crore.
On the other hand, BB statistics show that farm loan disbursement, for the same period in FY 2010-11, was above half the target of Tk. 11,000 crore. Actual disbursement in 12 months of last FY was Tk. 12,184.32 crore.
The target for FY 2011-12 had been set 9.4 per cent higher than that of the previous fiscal year.
A senior BB official, on conditions of anonymity, said that high government borrowing, from the banking system, has created tremendous pressure on liquidity, which has led many banks to restrict credit flow.
Low credit flow to the agricultural sector might be caused by inadequate cash with the lenders, as banks often have to comply with government demand for cash, to import petroleum products, said the BB official.
According to finance minister AMA Muhiths statement in Parliament last week, the governments total borrowings have come down to around Tk. 16,000 crore, at the end of January 2012. In the first quarter of the current fiscal year, government borrowings, however, had touched Tk. 21,000 crore. It may be noted that total government borrowing, from the banking system, stood at Tk. 43,000 crore, over the last three years.
The central bank has also asked lenders to cut down disbursement of credit to non-performing sectors and encourage credit growth among better performing sectors of the economy. It may be noted that the BB seeks to reduce total credit disbursement for the current FY, so that average credit growth remains within 15 per cent.
However, former central bank governor Dr Salehuddin Ahmed said that banks should ensure proper flow of credit to the farming sector, which is essential for increasing agri output. He said farmers will need adequate cash, as the Boro season has already arrived and banks should ensure necessary support towards proper, hassle-free disbursement of farm loans.
Low credit flow may cause to lessening production that, in the medium-term, could lead to food insecurity, said Dr Salehuddin.
He said that one recent observation is farmers might have become cautious about seeking loans, as prices of harvested crops were not profitable. He said farmers were not happy with prices for paddy, following the Aman harvest.
Last time, we saw low cash return for crops, such as, paddy, wheat and potato, made many farmers cautious about borrowing money for cultivation. This is not favourable for increasing agricultural output, he said.
Meanwhile, the BB official said that decline in credit to agriculture does not mean that the farm production would fall. It (credit flow) varies in line with demand from farmers, said the official.
Another BB official, however, admitted the fact that farmers are not getting loans free of hassle and said that the incumbent central bank governor is working to accelerate monitoring activities.
The official said the BB governor has sent 64 newly appointed assistant directors for field-level inspections last week, with a view to bring transparency, accountability and pace in banks agriculture and SME credit disbursement programmes, as well as, achieve the loan disbursement target.
The BB official added that probationary officers from BB would visit and talk to farmers in 56 upazilas in 28 districts across the country, and report to the governor, regarding findings on return.
Credit squeeze to hit Boro farming
Biman fails to pay installment against purchase of aircraft
Boeing team in Dhaka to discuss issues
FE Report
The national flag carrier Biman is in financial discord with global aircraft giant Boeing because of the former's failure to pay the monthly installments against purchase two new aircraft for fund shortage.
Biman did not pay Tk 2.4 billion to the designated banks as first two installments for buying two Boeing 777. An official team of Boeing has arrived in Dhaka Monday to discuss the matter with the government.
Sources said Boeing officials may propose the government to delay the delivery of two aircraft by two years to 2015 and thus facilitate payment of installments by Biman. They may also ask the government to return the already delivered two aircraft.
Neither managing director of Biman Zakiul Islam nor secretary Atharul Islam would confirm the agenda of discussion with Boeing officials.
Biman sources told the Financial Express Monday that they had an operational deficit of Tk 8.74 billion during the first eight months of the current financial year. The airliner is in serious financial crisis due to poor fleet management, flight operation in non-profitable routes and poor occupancy rate in flights.
Sharp rise in jet fuel price during the last one and a half years, operation of age-old fuel guzzling aircraft like DC-1030 and alleged corruption are also blamed for the losses.
The government on February 26 last year approved the borrowing of US$327 million from two international banks for procuring two passenger planes from Boeing. As part of the agreement the government had to pay Tk 700 million as monthly installment to JP Morgan and Standard Chartered Bank for procuring two aircraft. Rest of the amount received as credit from the banks concerned, was to be repaid in monthly installments.
Of the total loan amount, JP Morgan was supposed to provide $262 million while Standard Chartered $65 million to the Biman.
Biman had signed a deal in May 2008 with American multinational aircraft maker Boeing to procure a total of 10 aircrafts for its fleet.
A high official of the Ministry of Civil Aviation and Tourism preferring anonymity told The FE that the government was the sovereign guarantor for payment to the foreign banks.
"There has no other alternative but to pay the monthly installments to the lease finance provider banks. Otherwise, the bank would take back the aircraft from the company," the official added.
He said Biman is in serious financial crisis for which it could not pay some installments. The government would manage money from any other sources.
Biman owes Tk 3.52 billion to its fuel supplier Padma Oil, more than Tk 4.42 billion to Civil Aviation Authority of Bangladesh (CAAB) and Tk 820 million to National Board of Revenue (NBR) in travel taxes, Biman officials said.
However, even after the purchase of the two aircraft in October and November this year, Biman's income has remained unchanged.
"The situation remains almost the same as no new route was explored and no new service offered," said Helal Uddin, President Bangladesh Pilot Association.
Biman incurring losses on 16 out of 18 routes it now operates. The two profit-making routes are Dhaka-Singapore and Dhaka-Jeddah, sources add.
"If the trend continues, the authorities will be forced to announce layoff," Helal Uddin added.
Faced with such shortage of fund, Biman sought Tk 25 billion in assistance from the government in October last year but the government did not respond, sources said.
Biman insiders said the national flag carrier has incurred a loss of over Tk 2.0 billion in 2010-2011.
According to Biman sources, they earned a net profit of Tk 150 million and around Tk 60 million in 2009 and 2008 respectively.
Last year, Biman incurred a loss of around Tk 800 million, for which the civil aviation ministry demanded an explanation from the Biman Board.
The airline was turned into a public limited company in July 2007 and the government exempted Biman from a debt of over Tk 11.94 billion to Bangladesh Petroleum Corporation and over Tk 5.73 billion to the CAAB.
Biman fails to pay installment against purchase of aircraft
Boeing team in Dhaka to discuss issues
FE Report
The national flag carrier Biman is in financial discord with global aircraft giant Boeing because of the former's failure to pay the monthly installments against purchase two new aircraft for fund shortage.
Biman did not pay Tk 2.4 billion to the designated banks as first two installments for buying two Boeing 777. An official team of Boeing has arrived in Dhaka Monday to discuss the matter with the government.
Sources said Boeing officials may propose the government to delay the delivery of two aircraft by two years to 2015 and thus facilitate payment of installments by Biman. They may also ask the government to return the already delivered two aircraft.
Neither managing director of Biman Zakiul Islam nor secretary Atharul Islam would confirm the agenda of discussion with Boeing officials.
Biman sources told the Financial Express Monday that they had an operational deficit of Tk 8.74 billion during the first eight months of the current financial year. The airliner is in serious financial crisis due to poor fleet management, flight operation in non-profitable routes and poor occupancy rate in flights.
Sharp rise in jet fuel price during the last one and a half years, operation of age-old fuel guzzling aircraft like DC-1030 and alleged corruption are also blamed for the losses.
The government on February 26 last year approved the borrowing of US$327 million from two international banks for procuring two passenger planes from Boeing. As part of the agreement the government had to pay Tk 700 million as monthly installment to JP Morgan and Standard Chartered Bank for procuring two aircraft. Rest of the amount received as credit from the banks concerned, was to be repaid in monthly installments.
Of the total loan amount, JP Morgan was supposed to provide $262 million while Standard Chartered $65 million to the Biman.
Biman had signed a deal in May 2008 with American multinational aircraft maker Boeing to procure a total of 10 aircrafts for its fleet.
A high official of the Ministry of Civil Aviation and Tourism preferring anonymity told The FE that the government was the sovereign guarantor for payment to the foreign banks.
"There has no other alternative but to pay the monthly installments to the lease finance provider banks. Otherwise, the bank would take back the aircraft from the company," the official added.
He said Biman is in serious financial crisis for which it could not pay some installments. The government would manage money from any other sources.
Biman owes Tk 3.52 billion to its fuel supplier Padma Oil, more than Tk 4.42 billion to Civil Aviation Authority of Bangladesh (CAAB) and Tk 820 million to National Board of Revenue (NBR) in travel taxes, Biman officials said.
However, even after the purchase of the two aircraft in October and November this year, Biman's income has remained unchanged.
"The situation remains almost the same as no new route was explored and no new service offered," said Helal Uddin, President Bangladesh Pilot Association.
Biman incurring losses on 16 out of 18 routes it now operates. The two profit-making routes are Dhaka-Singapore and Dhaka-Jeddah, sources add.
"If the trend continues, the authorities will be forced to announce layoff," Helal Uddin added.
Faced with such shortage of fund, Biman sought Tk 25 billion in assistance from the government in October last year but the government did not respond, sources said.
Biman insiders said the national flag carrier has incurred a loss of over Tk 2.0 billion in 2010-2011.
According to Biman sources, they earned a net profit of Tk 150 million and around Tk 60 million in 2009 and 2008 respectively.
Last year, Biman incurred a loss of around Tk 800 million, for which the civil aviation ministry demanded an explanation from the Biman Board.
The airline was turned into a public limited company in July 2007 and the government exempted Biman from a debt of over Tk 11.94 billion to Bangladesh Petroleum Corporation and over Tk 5.73 billion to the CAAB.
Biman fails to pay installment against purchase of aircraft
Dollar crisis hits atta, flour import
Shakhawat Hossain
A prolonged foreign currency crisis has hit the import-based supply chain of atta (coarse flour) and flour the prices of which have increased by 15 per cent on the local market in a month, food ministry officials said.
They said that only 0.78 million tonnes of wheat were imported in the current financial year compared with 3.3 million tonnes imported in the past financial year because commercial banks refused to foot wheat import bills.
Commercial banks are showing reluctance to support wheat import because of a crisis of the US dollar, they said.
A kilogram of atta sold for prices between Tk 30 and Tk 35 a month ago on the retail market, according to the Bangladesh Trading Corporation price chart.
Experts said that the scarcity of the dollars on the local market since early this year had already hit imports of many items, including petroleum fuel oils.
Now it started hitting the import of food items such as wheat although there is no shortage of commodity on the international market, they said.
The food ministry officials said that an increase in prices of atta and flour on the local market could be not checked unless import constraints were immediately resolved. The food secretary, BD Mitra, on Thursday told New Age that businessmen had expressed their concerns at an inter-ministerial meeting in the past week about wheat import because of a foreign currency crisis. The food division has sought intervention of the finance ministry and the Bangladesh Bank so that smooth import of food items such as wheat and rice could be ensured, he said.
Bangladesh Institute of Development Studies research director Zaid Bakth suggested that the central bank should concentrate more on foreign currency management. The priority of food grain import should not be ignored.
High import bills for petroleum fuel oils for the costly rental power plants, dearth in foreign loans and weak financial management are major reasons for the prolonged dollar crisis, he added. The food division has already sent a letter to the Bangladesh Bank asking it to take measures so that the state-owned and private commercial banks give priority to food grains import.
It pointed out that the production of food grains had increased threefold in 25 years. The production of rice and wheat has stood at 33.4 million a year in recent years. Local production of wheat is around one million tonnes and the country is totally dependent on import to meet the demand for at least three more million tonnes a year, it added.
The latest fortnightly outlook of the countrys food situation shows that the supply of wheat on the international market is steady. The world wheat export for 201112 is expected to reach 140.25 million tonnes, up by 0.9 million tonnes, said the outlook prepared by the food division. Wheat export from Russia, a leading exporter, is expected to increase by one million tonnes to 20.5 million tonnes. Ukraine has expanded its export destinations including Bangladesh.
New Age | Newspaper
Shakhawat Hossain
A prolonged foreign currency crisis has hit the import-based supply chain of atta (coarse flour) and flour the prices of which have increased by 15 per cent on the local market in a month, food ministry officials said.
They said that only 0.78 million tonnes of wheat were imported in the current financial year compared with 3.3 million tonnes imported in the past financial year because commercial banks refused to foot wheat import bills.
Commercial banks are showing reluctance to support wheat import because of a crisis of the US dollar, they said.
A kilogram of atta sold for prices between Tk 30 and Tk 35 a month ago on the retail market, according to the Bangladesh Trading Corporation price chart.
Experts said that the scarcity of the dollars on the local market since early this year had already hit imports of many items, including petroleum fuel oils.
Now it started hitting the import of food items such as wheat although there is no shortage of commodity on the international market, they said.
The food ministry officials said that an increase in prices of atta and flour on the local market could be not checked unless import constraints were immediately resolved. The food secretary, BD Mitra, on Thursday told New Age that businessmen had expressed their concerns at an inter-ministerial meeting in the past week about wheat import because of a foreign currency crisis. The food division has sought intervention of the finance ministry and the Bangladesh Bank so that smooth import of food items such as wheat and rice could be ensured, he said.
Bangladesh Institute of Development Studies research director Zaid Bakth suggested that the central bank should concentrate more on foreign currency management. The priority of food grain import should not be ignored.
High import bills for petroleum fuel oils for the costly rental power plants, dearth in foreign loans and weak financial management are major reasons for the prolonged dollar crisis, he added. The food division has already sent a letter to the Bangladesh Bank asking it to take measures so that the state-owned and private commercial banks give priority to food grains import.
It pointed out that the production of food grains had increased threefold in 25 years. The production of rice and wheat has stood at 33.4 million a year in recent years. Local production of wheat is around one million tonnes and the country is totally dependent on import to meet the demand for at least three more million tonnes a year, it added.
The latest fortnightly outlook of the countrys food situation shows that the supply of wheat on the international market is steady. The world wheat export for 201112 is expected to reach 140.25 million tonnes, up by 0.9 million tonnes, said the outlook prepared by the food division. Wheat export from Russia, a leading exporter, is expected to increase by one million tonnes to 20.5 million tonnes. Ukraine has expanded its export destinations including Bangladesh.
New Age | Newspaper
Non-food inflation goes up further
Country's non-food inflation jumped to an all-time high of 13.57 per cent in February last, 0.41 percentage more than that of January, national statistics office said Monday.
The Bangladesh Bureau of Statistics (BBS) said the non-food inflation stood at 13.57 per cent in rural area and 13.59 per cent in urban area in the month.
The non-food inflation hovered between 4.0 and 6.0 per cent in earlier years.
"Prices of power, pharmaceutical items and transportation cost have increased in recent times. This has contributed to the surge in the non-food inflation," said Shajahan Ali Mollah, director general of BBS.
However, point-to-point food inflation dropped in February to 10.43 per cent.
The food inflation in rural areas dropped to 8.05 per cent in February against 10.18 per cent in the preceding month.
The food inflation in urban area stood at 10.96 per cent against 12.56 per cent in January last.
BBS chief said: "The purchasing power of the people surged in February. So the rise in non-food inflation would not hurt them."
The wage rate index increased to 6595.37 in February against 6434.82.
Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies (BIDS) told the FE: "Food inflation has decreased as a result of good Aman and Aus harvest."
Mr Mujeri said: "This is the end of winter season. Prices of almost all food items have dropped."
"I think seasonal factor influenced the food inflation", he added.
He said: "I don't know whether the rate (food inflation) will be sustainable or not."
Mr Mujeri who is also a director of Bangladesh Bank said tight monetary policy announced by the central bank will take time to rein in inflation.
Ahsan H Mansur, executive director of Policy Research Institute (PRI), told the FE that the non-food inflation will surge further in the months ahead.
"The depreciation of the local currency has made imports costly, so we will see its impact in the coming months."
Mr Ahsan also said: "Monetary policy measures, taken to control the inflationary pressure, will take time, at least six months, to yield a tolerable inflation rate."
Mr Ahsan said the next Boro is very important for the country adding: "If we want to keep a lower food inflation, there is no alternative to good Boro harvest."
Non-food inflation goes up further
Country's non-food inflation jumped to an all-time high of 13.57 per cent in February last, 0.41 percentage more than that of January, national statistics office said Monday.
The Bangladesh Bureau of Statistics (BBS) said the non-food inflation stood at 13.57 per cent in rural area and 13.59 per cent in urban area in the month.
The non-food inflation hovered between 4.0 and 6.0 per cent in earlier years.
"Prices of power, pharmaceutical items and transportation cost have increased in recent times. This has contributed to the surge in the non-food inflation," said Shajahan Ali Mollah, director general of BBS.
However, point-to-point food inflation dropped in February to 10.43 per cent.
The food inflation in rural areas dropped to 8.05 per cent in February against 10.18 per cent in the preceding month.
The food inflation in urban area stood at 10.96 per cent against 12.56 per cent in January last.
BBS chief said: "The purchasing power of the people surged in February. So the rise in non-food inflation would not hurt them."
The wage rate index increased to 6595.37 in February against 6434.82.
Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies (BIDS) told the FE: "Food inflation has decreased as a result of good Aman and Aus harvest."
Mr Mujeri said: "This is the end of winter season. Prices of almost all food items have dropped."
"I think seasonal factor influenced the food inflation", he added.
He said: "I don't know whether the rate (food inflation) will be sustainable or not."
Mr Mujeri who is also a director of Bangladesh Bank said tight monetary policy announced by the central bank will take time to rein in inflation.
Ahsan H Mansur, executive director of Policy Research Institute (PRI), told the FE that the non-food inflation will surge further in the months ahead.
"The depreciation of the local currency has made imports costly, so we will see its impact in the coming months."
Mr Ahsan also said: "Monetary policy measures, taken to control the inflationary pressure, will take time, at least six months, to yield a tolerable inflation rate."
Mr Ahsan said the next Boro is very important for the country adding: "If we want to keep a lower food inflation, there is no alternative to good Boro harvest."
Non-food inflation goes up further
I am amazed there is a class of people created in Bangladesh who grew up with wealth and has no sensitivities; let alone clue about ordinary people, their life and livelihood. iphone is remotely a concern of price inflation for people of Bangladesh. With this level of inflation Bangladeshis are struggling with food, medicine, education and daily necessities.
Although, i brought up your iphone example, it is not purely directed towards you. This is rather a general observation.
scholseys
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I understand, it was a bad example to use. Even beef is more expensive in Bangladesh than Canada. AA graded beef is 1.75 dollars a pound where in bangladesh it is more expensive for a lesser quality. Clothes are more expensive in Bangladesh unless you go bongo or footpath and there is a quality problem. Our consumer bureau needs to be corruption free to serve the pblic better. I wonder if we even have a consumer bureau.
This is precursors to destroy Bangladesh industrial production and export.
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No gas for factories for 12 hrs a day
Step to feed irrigation pumps during Boro season
Thursday, 22 March 2012
Author / Source : Shahnaj Begum
Dhaka, Mar 21: The power and energy ministry has decided to feed irrigation pumps during the Boro season by diverting gas from power plants. As a result, the industrial sector will remain completely without any supply of gas for 12 hours a day. The energy ministry has been forced to take this decision as it failed to secure financial supports from the finance ministry for procuring liquid fuel to run power plants of the country. The government has also decided to keep all CNG filling stations closed for six hours, from 3 pm to 8 pm, every day, to ensure nonstop power supply to villages.
Power division sources said that these decisions were taken at a meeting on how to ensure uninterrupted power supply for irrigation during the Boro season.
With these decisions, gas-dependent industries would virtually become non-operational, said a senior official of the power division.
Sources also said that the PDB has asked to operate liquid fuel-based power plants at a lower price, to scale down fuel cost. Last month, the PDB has cut its production from rental and quick rental power plants.
We need minimum Tk. 600 crore to run our 1,603 liquid fuel-based power plants as well as 1 lakh metric tonnes of fuel every month, said a senior PDB official.
The PDB sought a TK. 9,000 crore subsidy from the finance ministry to operate liquid fuel-fired plants during summer. A PDB offcial, preferring anonymity, said the finance ministry has promised the power division Tk. 6,200 crore as loan.
According to the PDB, it buys electricity for Tk. 13.22 a kilowatt-hour (unit) from fuel oil-fired rental power plants, while the rate is Tk. 2 for power generated in gas-fired power plants of the public sector.
Its a gloomy scenario. We do not have any comprehensive plan, both in the short and long terms, thus the rental and quick rental failed to help us in moments of crisis, said Dr M. Tamim, a professor of BUET.
He also said that before taking any measure, the government should think about technology choice, financial capability and ensure primary fuel supply.
If the government fails to ensure cheap fuel sources like coal to produce power, it would creare despondence in the power sector, he added.
Factories have been asked to keep their production shut from 6 pm to 6 am to help ensure uninterrupted power supply to the rural area, said Mohammad Abul Kalam Azad, secretary to the power division.
Azad claimed that there is no problem regarding irrigation, and said that if any area requires more irrigation, power supply would be incerased accordingly.
According to the energy ministry, through these adhoc measures, Petrobangla would be able to increase gas supply to 850 mmcfd topower stations, so that it could produce around 1,500 MW to 1,600 MW more electricity during the Boro season.
Abul Aziz Khan, managing director of Titas Gas Transmission and Distribution Ltd, said the new decision would see 35 million cubic feet of gas added for power generation every day. Petrobangla is, however, supplying 700-720 mmcfd of gas, less than the requirement of gas-fired power stations, interrupting around 1,100Mw of power generation in the public sector.
This has resulted in a cost escalation of power generation from fuel oil-fired power stations, a PDB official said.
Petrobangla chairman Dr. Hossain Monsur expressed hopes that the corporation would increase gas supply to around 800 mmcfd to power stations within a short time. But it may take some more time to increase the supply by 50 mmcfd more to power stations, he added.
No gas for factories for 12 hrs a day
----------------------------
No gas for factories for 12 hrs a day
Step to feed irrigation pumps during Boro season
Thursday, 22 March 2012
Author / Source : Shahnaj Begum
Dhaka, Mar 21: The power and energy ministry has decided to feed irrigation pumps during the Boro season by diverting gas from power plants. As a result, the industrial sector will remain completely without any supply of gas for 12 hours a day. The energy ministry has been forced to take this decision as it failed to secure financial supports from the finance ministry for procuring liquid fuel to run power plants of the country. The government has also decided to keep all CNG filling stations closed for six hours, from 3 pm to 8 pm, every day, to ensure nonstop power supply to villages.
Power division sources said that these decisions were taken at a meeting on how to ensure uninterrupted power supply for irrigation during the Boro season.
With these decisions, gas-dependent industries would virtually become non-operational, said a senior official of the power division.
Sources also said that the PDB has asked to operate liquid fuel-based power plants at a lower price, to scale down fuel cost. Last month, the PDB has cut its production from rental and quick rental power plants.
We need minimum Tk. 600 crore to run our 1,603 liquid fuel-based power plants as well as 1 lakh metric tonnes of fuel every month, said a senior PDB official.
The PDB sought a TK. 9,000 crore subsidy from the finance ministry to operate liquid fuel-fired plants during summer. A PDB offcial, preferring anonymity, said the finance ministry has promised the power division Tk. 6,200 crore as loan.
According to the PDB, it buys electricity for Tk. 13.22 a kilowatt-hour (unit) from fuel oil-fired rental power plants, while the rate is Tk. 2 for power generated in gas-fired power plants of the public sector.
Its a gloomy scenario. We do not have any comprehensive plan, both in the short and long terms, thus the rental and quick rental failed to help us in moments of crisis, said Dr M. Tamim, a professor of BUET.
He also said that before taking any measure, the government should think about technology choice, financial capability and ensure primary fuel supply.
If the government fails to ensure cheap fuel sources like coal to produce power, it would creare despondence in the power sector, he added.
Factories have been asked to keep their production shut from 6 pm to 6 am to help ensure uninterrupted power supply to the rural area, said Mohammad Abul Kalam Azad, secretary to the power division.
Azad claimed that there is no problem regarding irrigation, and said that if any area requires more irrigation, power supply would be incerased accordingly.
According to the energy ministry, through these adhoc measures, Petrobangla would be able to increase gas supply to 850 mmcfd topower stations, so that it could produce around 1,500 MW to 1,600 MW more electricity during the Boro season.
Abul Aziz Khan, managing director of Titas Gas Transmission and Distribution Ltd, said the new decision would see 35 million cubic feet of gas added for power generation every day. Petrobangla is, however, supplying 700-720 mmcfd of gas, less than the requirement of gas-fired power stations, interrupting around 1,100Mw of power generation in the public sector.
This has resulted in a cost escalation of power generation from fuel oil-fired power stations, a PDB official said.
Petrobangla chairman Dr. Hossain Monsur expressed hopes that the corporation would increase gas supply to around 800 mmcfd to power stations within a short time. But it may take some more time to increase the supply by 50 mmcfd more to power stations, he added.
No gas for factories for 12 hrs a day
Imports of machineries fall 'alarmingly'
Mon, Mar 26th, 2012 11:06 am BdST
Abdur Rahim Harmachi
Chief Economic Correspondent
Dhaka, Mar 26 (bdnews24.com) Imports of capital machineries have decreased alarmingly in the first seven months through January of the current fiscal year.
Analysts say a lack of confidence among businessmen and industrialists is the main reason behind the fall in import of capital machineries.
The downslide has come as a contrast to the scenario compared with the previous fiscal year's.
The number of L/Cs (Letters of Credit) opened to import capital machineries had increased by around 82.41 percent in the same period of 2010-11 fiscal year, and the rise in import of such machineries, directly linked with investment, was 40.20 percent in the year.
The analysts say the central bank's contractionary monetary policy and the rise in value of US dollar against taka are the other reasons behind the decline. They warn that the situation will negatively affect foreign investment while growth in the industrial sector will be hurt.
They say the seven percent economic growth targeted in the budget may not be achieved if the downtrend in import of such machineries continues.
They also think that the drop in such import will decrease more if the ongoing political instability continues to dent the businessmen's confidence.
According to latest information given by the Bangladesh Bank, L/Cs to import capital machineries worth around $1.22 billion were opened during the first seven months (July-January) of the current fiscal year.
The amount is, however, $607.03 million or 33.22 percent less than that of the first seven months of the 2010-11 fiscal year. L/Cs to import capital machineries worth around $1.83 billion were opened in the 2010-11 fiscal.
During that time, the amount of L/Cs opened to import textile machineries declined $84.7 million, readymade garments machineries $69.20 million, packaging industry $6.5 million and others $443.40 million.
Zaid Bakht, research director of Bangladesh Institute of Development Studies (BIDS), has told bdnews24.com that investment in the country is going through a bad situation.
"The decline in import of capital machineries bodes a worse situation," he said.
"The Bangladesh Bank's contractionary monetary policy announced for the January-June period suggests reducing loans to private sectors. As a result, entrepreneurs are not getting necessary loans from banks to set up new industries or businesses.
"Naturally, the number of L/Cs to import capital machineries import has declined," he said.
"Moreover, dollar price has gone up. At present, more money is needed to import machineries. The industrialists are confused whether there would be any benefit of setting up factories with machineries costing more. They are suffering from a lack of confidence," Bakht added.
He believes the country's ongoing political situation is also impacting the import of capital machineries.
Asked what will be its impact on the country's economy, Bakht said, "Foreign investment in the country will decrease. In that case, 7 percent growth target may not be achievable."
BGMEA president Shafiul Islam Mohiuddin told bdnews24.com: "I believe the lack of confidence in investment is the prime reason behind the decline in capital machineries import."
He said Bangladesh has a lot of problems, including gas and power crises and infrastructural problems, and Bangladesh's major export market Europe is also going through an economic crisis.
"Under these circumstances, we are not getting confidence to set up new factories," he said.
The BGMEA president also thinks that increasing land price and high rate of bank interest are also discouraging the businessmen.
He demanded that the government take initiatives to bring the bank loan interest rate to single digit.
Imports of machineries fall 'alarmingly' | Bangladesh | bdnews24.com
Mon, Mar 26th, 2012 11:06 am BdST
Abdur Rahim Harmachi
Chief Economic Correspondent
Dhaka, Mar 26 (bdnews24.com) Imports of capital machineries have decreased alarmingly in the first seven months through January of the current fiscal year.
Analysts say a lack of confidence among businessmen and industrialists is the main reason behind the fall in import of capital machineries.
The downslide has come as a contrast to the scenario compared with the previous fiscal year's.
The number of L/Cs (Letters of Credit) opened to import capital machineries had increased by around 82.41 percent in the same period of 2010-11 fiscal year, and the rise in import of such machineries, directly linked with investment, was 40.20 percent in the year.
The analysts say the central bank's contractionary monetary policy and the rise in value of US dollar against taka are the other reasons behind the decline. They warn that the situation will negatively affect foreign investment while growth in the industrial sector will be hurt.
They say the seven percent economic growth targeted in the budget may not be achieved if the downtrend in import of such machineries continues.
They also think that the drop in such import will decrease more if the ongoing political instability continues to dent the businessmen's confidence.
According to latest information given by the Bangladesh Bank, L/Cs to import capital machineries worth around $1.22 billion were opened during the first seven months (July-January) of the current fiscal year.
The amount is, however, $607.03 million or 33.22 percent less than that of the first seven months of the 2010-11 fiscal year. L/Cs to import capital machineries worth around $1.83 billion were opened in the 2010-11 fiscal.
During that time, the amount of L/Cs opened to import textile machineries declined $84.7 million, readymade garments machineries $69.20 million, packaging industry $6.5 million and others $443.40 million.
Zaid Bakht, research director of Bangladesh Institute of Development Studies (BIDS), has told bdnews24.com that investment in the country is going through a bad situation.
"The decline in import of capital machineries bodes a worse situation," he said.
"The Bangladesh Bank's contractionary monetary policy announced for the January-June period suggests reducing loans to private sectors. As a result, entrepreneurs are not getting necessary loans from banks to set up new industries or businesses.
"Naturally, the number of L/Cs to import capital machineries import has declined," he said.
"Moreover, dollar price has gone up. At present, more money is needed to import machineries. The industrialists are confused whether there would be any benefit of setting up factories with machineries costing more. They are suffering from a lack of confidence," Bakht added.
He believes the country's ongoing political situation is also impacting the import of capital machineries.
Asked what will be its impact on the country's economy, Bakht said, "Foreign investment in the country will decrease. In that case, 7 percent growth target may not be achievable."
BGMEA president Shafiul Islam Mohiuddin told bdnews24.com: "I believe the lack of confidence in investment is the prime reason behind the decline in capital machineries import."
He said Bangladesh has a lot of problems, including gas and power crises and infrastructural problems, and Bangladesh's major export market Europe is also going through an economic crisis.
"Under these circumstances, we are not getting confidence to set up new factories," he said.
The BGMEA president also thinks that increasing land price and high rate of bank interest are also discouraging the businessmen.
He demanded that the government take initiatives to bring the bank loan interest rate to single digit.
Imports of machineries fall 'alarmingly' | Bangladesh | bdnews24.com
scholseys
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This is because the bank made it very strict to get any loan of bigger amounts. We barely have foreign currency in the land which resulted in banks not giving out loans and the taka value going down. It is getting better though, it is picking up.
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