Bangladesh Economy: News & Updates

[eastwatch]

:The Daily Star: Internet Edition

TK. 6,200cr METRO PLAN OKAYED
Rejaul Karim Byron

The advisory committee on economic affairs yesterday approved a proposal for construction of a subway in Dhaka by a private sector firm with an estimated cost of Tk 6,200 crore.

The underground rail system will be constructed on Build-Operate-Transfer (BOT) basis under the supervision of Bangladesh Railway, meeting sources said.

"We have approved the proposal to include in the PICOM (Private Infrastructure Committee) list and now the remaining processes will be done to implement the project," Finance Adviser Mirza Azizul Islam, who chaired the meeting, said.

The government will now float fresh international tender inviting proposals and at the same time the Planning Commission will prepare a detailed study on the project, sources said.

Once built, the subway will save Tk 5,319 crore a year through saving human working hours and stopping wastage of imported fuel due to traffic congestions, says the proposal made by the Board of Investment (BoI) .

While the experts say that it requires for any mega city to have roads covering at least 25-30 percent of its area for easy traffic movement, the roads of Dhaka cover only 5-6 percent.

According to the BoI proposal, the 52-kilometre subway would have six routes with 50 stations connecting almost 80 percent of the city area. The underground rail system will have the capacity to transport on average 40 lakh passengers a month.

The first route would start from Gabtoli and end at Sayedabad via Mohakhali and it would be connected with the second route, Uttara to Mohakhali, at the Mohakhali bus terminal.

The third route, Pallabi to IDB Bhaban, will be connected with the first route as well.

The fourth route will be from Shyamoli to Elephant Road, which will cover Shyamoli, Adabor, Mohammadpur, Dhanmondi, Jigatola, Rayerbazar and Hazaribagh areas. It will be connected with the first route at Shyamoli and Elephant Road forming the first inner loop.

Starting from Sayedabad, the fifth route will end at Tejgaon Satrasta via Malibagh, Moghbazar and Kamalapur Rail Station. It will also be connected with the first route and it will form the second loop almost as long as the first loop in the network.

Completing the entire network, the sixth route from Sayedabad to Gulistan will connect all the entry points of the mega city.

The initiative to construct the subway in Dhaka was taken during the BNP-Jamaat government and a private company was primarily selected for the project.

After assuming power, the present caretaker government halted the work of the project and in February last year, it said that the next political government would complete the work.

Later in November that year, the government, however, shifted from its decision and made a fresh move about the project considering it as a priority work to ease traffic congestion of the capital.

 

[TopCat]

:The Daily Star: Internet Edition

TK. 6,200cr METRO PLAN OKAYED
Rejaul Karim Byron

The advisory committee on economic affairs yesterday approved a proposal for construction of a subway in Dhaka by a private sector firm with an estimated cost of Tk 6,200 crore.

The underground rail system will be constructed on Build-Operate-Transfer (BOT) basis under the supervision of Bangladesh Railway, meeting sources said.

"We have approved the proposal to include in the PICOM (Private Infrastructure Committee) list and now the remaining processes will be done to implement the project," Finance Adviser Mirza Azizul Islam, who chaired the meeting, said.

The government will now float fresh international tender inviting proposals and at the same time the Planning Commission will prepare a detailed study on the project, sources said.

Once built, the subway will save Tk 5,319 crore a year through saving human working hours and stopping wastage of imported fuel due to traffic congestions, says the proposal made by the Board of Investment (BoI) .

While the experts say that it requires for any mega city to have roads covering at least 25-30 percent of its area for easy traffic movement, the roads of Dhaka cover only 5-6 percent.

According to the BoI proposal, the 52-kilometre subway would have six routes with 50 stations connecting almost 80 percent of the city area. The underground rail system will have the capacity to transport on average 40 lakh passengers a month.

The first route would start from Gabtoli and end at Sayedabad via Mohakhali and it would be connected with the second route, Uttara to Mohakhali, at the Mohakhali bus terminal.

The third route, Pallabi to IDB Bhaban, will be connected with the first route as well.

The fourth route will be from Shyamoli to Elephant Road, which will cover Shyamoli, Adabor, Mohammadpur, Dhanmondi, Jigatola, Rayerbazar and Hazaribagh areas. It will be connected with the first route at Shyamoli and Elephant Road forming the first inner loop.

Starting from Sayedabad, the fifth route will end at Tejgaon Satrasta via Malibagh, Moghbazar and Kamalapur Rail Station. It will also be connected with the first route and it will form the second loop almost as long as the first loop in the network.

Completing the entire network, the sixth route from Sayedabad to Gulistan will connect all the entry points of the mega city.

The initiative to construct the subway in Dhaka was taken during the BNP-Jamaat government and a private company was primarily selected for the project.

After assuming power, the present caretaker government halted the work of the project and in February last year, it said that the next political government would complete the work.

Later in November that year, the government, however, shifted from its decision and made a fresh move about the project considering it as a priority work to ease traffic congestion of the capital.

No that plan is scrapped as that was not done in accordance with new transport plan. Under the new initialive they will implement metro through PPP for $3.2 billion.
How much they spent on Delhi metro?

 

[leonblack08]

Bangladesh moves down ranks despite reforms
Says Doing Business 2010 report



Star Business Report

Bangladesh fell four notches to the 119th position in a survey of 183 nations, mainly because of slower reforms, said the Doing Business 2010 report released globally yesterday.

The slip came despite three major reforms undertaken in the reported period (June 2008 to May 2009), it said.

“Despite successful reforms in the three areas, the country slipped a few places in the global ranking. This is because these reforms were not aggressive enough,” said Syed Akhtar Mahood, senior programme manager of Bangladesh Investment Climate Fund, managed by International Finance Corporation (IFC), at the launch of the report.

The World Bank explains that Bangladesh has reformed in three areas, but other countries have done more.

This is the seventh 'Doing Business' report published jointly by the WB and IFC. The report helps both local and foreign businesses understand business regulations in a country.

Among South Asian nations, Pakistan tops the list with the 85th position, followed by the Maldives at 87, Sri Lanka at 105, Nepal at 123, Bhutan at 126, India at 133 and Afghanistan at 160.

Of the 183 countries considered for this year's report, a record 133 nations carried out over 200 reforms.

The report covers 10 indicators affecting businesses -- dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Bangladesh has been recognised as the most active reformer in South Asia, implementing three reforms -- introduction of an online company registration system, corporate income tax cuts and expedited cross-border trade by automating customs clearance systems.

The report said Bangladesh has simplified business start-up by implementing an online company registration system, reducing the time required from 35 days to just a day.

Bangladesh also reduced the corporate income tax rate from 40 percent to 37.5 percent, while increasing the capital gains tax rate from 5 percent to 15 percent.

The time required to acquire a bonded warehouse was reduced by three months, while the time needed to register property dropped by nearly 200 days.

Trade was expedited by an automation of customs clearance at the Chittagong Port as it condensed the time required to clear goods, the report mentioned.

However, the report suggests Bangladesh needs to adopt a more strategic and institutionalised approach to regulatory reforms to keep up with an increasingly competitive global environment where other countries are reforming fast.

“To ensure the country retains its competitive edge, Bangladesh needs to spread its reforms across more regulatory areas,” said Mahmood in a videoconference from Nepal.

He said the reforms need to be deeper and implementation faster.

“So it is vital for Bangladesh to strengthen the Regulatory Reform Commission,” he added.

Of the other South Asian nations, India improved its score on the 'closing a business' indicator by taking steps to ease resolution of insolvency cases.

Nepal lowered property transfer costs. Pakistan eased business start-up procedures by introducing an e-service registration system, while Sri Lanka improved its access to finance indicator.

For the first time, a Sub-Saharan African economy, Rwanda, led the world in 'Doing Business' reforms in seven out of 10 indicators. The Arab Republic of Egypt, Liberia, Moldova, the Kyrgyz Republic and Tajikistan joined Rwanda on the list of global top reformers.

Singapore topped the list for the fourth consecutive time, followed by New Zealand in the second and Hong Kong in the third position.

The Daily Star - Details News

 

[Al-zakir]

Bangladesh most active business regulatory reformer in South Asia:
WB report
English_Xinhua 2009-09-09 19:35:37

DHAKA, Sept. 9 (Xinhua) -- Six out of eight economies, including Bangladesh, in South Asia strengthened business regulations between June 2008 and May 2009, which made them more efficient, creating more opportunities for local firms, said the World Bank on Wednesday.

Bangladesh, the region's most active reformer, simplified business start-up by implementing an online company registration system -- reducing start-up time by nearly a month, the Washington-based bank said in a press release issued here in Dhaka on Wednesday.

According to the World Bank (WB) report "Doing Business 2010: Reforming through Difficult Times," a record 131 of 183 economies around the globe reformed business regulation between June 2008 and May 2009.

The report, seventh in a series of annual reports published by the International Finance Corporation (IFC) and some other members of the WB group, said Bangladesh also reduced the corporate income tax rate from 40 percent to 37.5 percent, while increasing the capital gains tax rate from 5 percent to 15 percent.

It said trade was expedited by automation of customs clearance at the country's southeastern Chittagong port, some 242 km away of capital Dhaka, to shorten the time required to clear goods.

However, notwithstanding the reforms undertaken, the report's findings suggest that Bangladesh need to adopt a more strategic and institutionalized approach to regulatory reforms to keep up with an increasingly competitive global environment where other countries are reforming fast.

"Even with the success of Bangladesh's reforms, the country has slipped by a few places in the global ranking. This is because these reforms are not aggressive enough," said Syed Akhtar Mahmood, Senior Program Manager, Bangladesh Investment Climate Fund, a program introduced by the IFC.

He said, "To ensure that the country is retaining its competitive edge, Bangladesh needs to spread its reforms across more regulatory areas, the reforms need to be deeper and implementation needs to be faster. In this context, it is vital for Bangladesh to strengthen the Regulatory Reform Commission."

According to the report, Bangladesh's close neighbor India improved its score on the "closing a business" indicator by taking steps to ease resolution of insolvency cases -- a critical area in times of crisis.

It said Nepal lowered property transfer costs. Pakistan made it easier to start a business by introducing an e-service registration system. And Sri Lanka improved access to credit information to help expand access to finance.

"In an active year of business regulatory reform, economies in South Asia have picked up their reform pace -- though there is still room for more action," Dahlia Khalifa, an author of the report, was quoted as saying.

Bangladesh most active business regulatory reformer in South Asia: WB report _English_Xinhua

 

[eastwatch]

No that plan is scrapped as that was not done in accordance with new transport plan. Under the new initialive they will implement metro through PPP for $3.2 billion.
How much they spent on Delhi metro?

I have no idea about the cost of Delhi or Calcutta Subway. The Daily Star news is old. Does someone have any new route plan for the Subway? I will prefer one double-tracked loop (circular) line underground, overground or a combination of these two.

People usually like underground, but, sometimes I wonder why BD is going after a Subway instead of overground rail transport. Overground may mean also overhead facilities at say 7 metre above ground.

Underground is expensive. Of course, it will be a PPP system, but construction cost is much higher than the overground. More is the initial investment, more the train fare goes up. Whatever may be the system, it will require a much elaborate survey of existing facilities along a proposed route.

It cannot be done without full coordination among the city office, T&T, WASA, electric deptts, Road and Highways and other utilities departments. I am just hoping when the subway is completed, there will be enough electricity to run the trains. Steam engines cannot pull the underground trains.

 

[leonblack08]

Bangladesh eyes frozen food exports to Russia​

Bss, Dhaka
Bangladesh may start exporting frozen food, including shrimps, to Russia this year opening a new market.

A Russian veterinary delegation has recently visited Bangladesh and saw seafood plants. The delegation has initially selecting four plants to export shrimps and seafood to the Russian market.

Delegates have also issued export permission and necessary guidelines for processing the merchandise for Russian buyers. The fisheries department has sent a memorandum to the ministry for approval before signing it with the Russian importers.

Bangladesh exports frozen foods to 16 countries including the US, EU, UK and UAE. Russia will be the new export destination of the country's frozen food, Abul Bashar, an official of Bangladesh Frozen Food Exporters Association (BFFEA), told the news agency.

He said the association is also working on a scheme to increase export of frozen food to countries like Australia and Canada where expatriate Bangladeshis are living in large numbers.

Bashar said the delegation visited seafood-processing units at Chittagong and Khulna and were impressed by their high standards. In the process, they selected Apex Foods Ltd and ARK Sea Foods of Chittagong, Fresh Foods Ltd of Khulna and Bagerhat Sea Foods for opening export to Russia.

Explaining how frozen food processing facilities achieved impressive hygienic standard over the recent years working on earlier improvement, Bashar said a food and veterinary delegation of EU which visited Bangladesh recently offered 10 more local processing plants the export permission to EU market.

With it, the number of frozen food plants now exporting to the EU market stands at 68 including 27 in Chittagong and 41 in Khulna region. Moreover, the number of fish plants now operating having BFFEA licence is 145.

The Daily Star - Details News

 

[leonblack08]

Stone chips exports to India double on high demand​

Kawsar Khan

Export of stone chips, an important construction ingredient, to India doubled in the last two years, thanks to its high demand from Tripura and Methalaya, the two north-eastern states of the neighbouring country.

Sector people say although India is a natural source of stone, the two states import the construction material from Bangladesh since it is cost effective for the users there. They also point to the fact that the Indian construction contractors prefer collecting Bangladeshi stone to the one available in different parts of their own country, as transportation costs much more than it costs in case of the import from Bangladesh.

"Last year we exported around one crore cubic feet (cft) of crushed stone to the Indian states and the demand was created due to huge construction works in those regions," said Abdul Ahad, president of Bangladesh Stone Merchants Association (BSMA).

The annual sales of stone chips to India were between 50 and 60 lakh cft two years back, the sector people said.

In the Indian market, each cft of crushed stones costs around Tk 120, while it ranges from Tk 100 to Tk 120 in Dhaka.

"Though crushed stones price is almost the same in Dhaka and in export markets of India, we can make a little bit more profit by exporting because of the low transportation cost," said Abdul Matin Khan, general secretary of BSMA.

It costs around Tk 29 to transport each cft of crushed stone from Sylhet to Dhaka, while it ranges from Tk 15 to Tk 17 to send it to India, Khan added.

Besides earning foreign currency, crushed stone exports have also created job opportunities for around 10 lakh peopledirectly and indirectly, according to industry insiders.

They, however, denied any environment pollution extracting stones by machine, though the government slapped an embargo on it in February.

Jafflong and Volaganj of Sylhet are the main sources for natural stone in the country.

The embargo was enforced to save environment of the rivers of Piyain and Dauki in Sylhet, a source of the 75 percent of stone supply.

However, manual extraction of stones was allowed. Restrictions led to drastic reduction of stone collection, followed by supply crunch and price hike.

"Though we are exporting stone chips to Tripura and Meghalaya, a few companies have also started importing stone from India due to short of supply from the domestic source,", said the BSMA president.

Following the government embargo, some local contractors, who signed deals at the previous stone chips rate, have suffered a huge loss due to price hike of stones.

The Daily Star - Details News

 

[TopCat]

I have no idea about the cost of Delhi or Calcutta Subway. The Daily Star news is old. Does someone has any new route plan for the Subway? I will prefer one double-tracked loop (circular) line underground, overground or a combination of these two.

People usually like underground, but, sometimes I wonder why BD is going after a Subway instead of overground rail transport. Overground may mean also overhead facilities at say 7 metre above ground.

Underground is expensive. Of course, it will be a PPP system, but construction cost is much higher than the overground. More is the initial investment, more the train fare goes up. Whatever may be the system, it will require a much elaborate survey of existing facilities along a proposed route.

It cannot be done without full coordination among the city office, T&T, WASA, electric deptts, Road and Highways and other utilities departments. I am just hoping when the subway is completed, there will be enough electricity to run the trains. Steam engines cannot pull the underground trains.

No we will do elevated express way which might include Rail as well. PM sent back the elevated expressway proposal last week to incorporated rail in it.
Regarding subway, we must go underground. Otherwise it will be limited to to only over the existing few big roads in Dhaka as there is no more space to run them through in the residential and commercial areas. If we go by open cut method then the question of relocating existing utility will come but with boring method we dont have to, as the subway will be way deeper than the existing utility lines.

 

[eastwatch]

The Daily Ittefaq - September 12, 2009
THREE NEW RICE VARIETIES CAN SURVIVE 18 DAYS OF FLOOD

The above news is from 'Ittefaq', a Bengali vernacular newspaper. In short, the news says about three new breeds of rice that have been developed by the Bangladesh Rice Research Institute (BRRI). All these breeds will help the farmers in the southwest of BD where they suffer from floodwater, salty water, and too much of fluctuation of river water due to moon tides.

These varieties can cope with three different adverse conditions, such as when the paddy is even 7 ft underwater for upto 18 days, salty soil in the shrimp farming belt, and also water fluctuations due to daily moon tides.

After a successful field-tests, the seeds will be distributed this year among the farmers in the southwest. This is what Dr. M.A. Salam has told Ittefaq. In three different seasons a total of 961,944 hectares (2,376,931 acres) remain farrow due to adverse conditions. Now, these lands will be brought under plough.

=========================================
**Please note that the total farmland area in BD is 21 million acres. To this, in effect an additional 2.3 million acres will be added for one crop cultivation. So, it is not a small area and this land will help us raise our rate of food self-sufficiency.

eastwatch

 

[TopCat]

Record rise in import of scrap-vessels


Import of scrap-ships doubled in the last fiscal year due to sharp fall in its prices in the international market boosting the supply of raw materials to the country's steel sector.

Local importers purchased 2.2 million tonnes of old ships mostly big sized in 2008-09 fiscal against 0.97 million tonnes over the same period in 2007-08, according to statisitics.

"We've imported ships of over 2.2 million tonnes last year. This is a record in the history of Bangladesh's ship-breaking industry," Enamul Hoque, a senior consultant of Bangladesh Ship Breakers Association (BSBA) told the FE.

The number of ships imported during the last fiscal year was 193 against 120 in 2007-08, he said.

Currently, an old ship costs around US$300 a tonne in the international market, which was $750 before the recession hit the globe in 2008.

Mr Enamul said local importers have added 19 more shipyards taking the number to 69 to cope with the increased number of old ships being imported in the country.

"Our importers are beaching four to five ships each week and are finishing cutting the same number a week," Zafar Ahmed, president of the BSBA told the FE.

Earlier, there were only 36 active ship breaking yards in Sitakundu, 20 kilometres north of the port city Chittagong, which dismantled 110 ships on an average every year.

"We now dismantle nearly 60 per cent of the ships sent to scrap-yards across the globe," said Zafar Ahmed, a leading ship breaker.

India breaks around 1.5 million tonnes a year followed by China 1.3 million tonnes, Pakistan 1.0 million tonnes and Turkey around 0.60 million tonnes.

The country's ship breakers offer at least 20 to 25 per cent more price than their competitors in India and Pakistan, making Bangladesh the preferred choice for the 'burial ground' of a large and medium sized ships.

Sitakundu of Chittagong has become world's largest ship-breaking destination as Bangladeshi importers have alredy beaten their competitors in India and Pakistan to buy the highest number of scrap vessels sold in the international market.

Association officials said the country's importers are now financially better off than many of their competitors in India, Pakistan and Turkey, enabling them to scour the world for any old ships up for sale anytime.

China, a large player in ship breaking industry, has now stopped buying scrap vessels because it already built up a buffer stock, they said.

The old ships are the main source of construction steel in Bangladesh. The country's re-rolling mills melt it after dismantling in huge slabs of steel.

The ship scrap melts steel to make 40-grade mild steel (MS) rod which has a major market in the country's steel sector.

The ship breakers supply around 80 per cent of the country's annual steel rod demand, which is met from scrap ships.

Showkat Ali Chowdhury, who owns Namrin International, the country's largest ship breaker, said the business grew tremendously in recent times as the demand for the steel rose sharply amid recovery in the construction industry.

"Importers are taking the adavantage of the sharp fall in its internaitonal prices," he added.

However, there has not been any remarkable impact on the prices of MS rod at the retail level. The price of 40-grade MS rod which went up to Tk 45,000 a tonne last year is now hovering around Tk 40,000 a tonne.

 

[leonblack08]

Non-tariff barriers seen as obstacles​

Businessmen, experts point at infrastructure constraint
Sajjadur Rahman
The breakthroughs made in the recent Indo-Bangladesh foreign minister level talks on Bangladesh's connectivity with Nepal and Bhutan will not work if infrastructure constraints and non-tariff barriers in India are not removed, experts and businessmen said.

If everything works properly, Bangladesh might be able to capture new markets in Nepal, Bhutan and northeast India and revive the Mongla Port, they said.

They said Bangladesh, Nepal and Bhutan are yet to boost trade among themselves, despite persistent agreements, mainly because of the barriers, particularly within Indian territory.

"We need to discuss the connectivity issue under a comprehensive framework involving Bhutan and Nepal," said Prof Mustafizur Rahman, executive director of Centre for Policy Dialogue.

Director General of Bangladesh Institute of Development Studies Dr Mustafa K Mujeri said Bangladesh has some sort of connectivity with Nepal and Bhutan, but it is not in operation because of infrastructure constraints and non-cooperation of India.

President of Metropolitan Chamber of Commerce and Industry Abdul Hafiz Chowdhury and former president of the Federation of Bangladesh Chambers of Commerce and Industry Mir Nasir Hossain echoed the view.

Dr M Rahamatullah, a transport and communications expert, hailed the Indian offer, saying with the connectivity in operation these countries could be Bangladesh's sole markets.

Earlier on Thursday, Bangladesh and India issued a joint statement after a four-day foreign minister level meeting where India agreed to facilitate Nepal-Bangladesh and Bhutan-Bangladesh connectivity.

Economists and businessmen reacted to this cautiously.

India will get some connectivity with its northeastern states, starting with Tripura, as Dhaka has agreed to let India use the Ashuganj river port for goods transport to Tripura.

Despite being India's neighbour, only 1 percent of the country's imports are from Bangladesh whereas nearly 20 percent of Bangladesh's imports come from India. Bangladesh blamed non-tariff barriers (NTBs) and a large negative list of products imposed by India for its poor export figure.

Amid this one-sided business, trade experts and businessmen are in doubt whether the Indian offer of connectivity with Nepal and Bhutan would work or not.

Abdul Hafiz Chowdhury said Bangladesh's trade with Nepal and Bhutan did not work because of NTBs imposed by India.

"We have to take clearance from seven agencies of India for trading with Bhutan. Moreover, the transit point in India is not developed, which pushes the cost up," he said, adding that loading and unloading of goods from trucks also consume huge time.

Mir Nasir Hossain said, "We could not utilise the connectivity with Nepal and Bhutan effectively because of time limitation on Indian soil and restriction on trucks' movement."

Prof Mustafizur Rahman said, "Withdrawal of NTBs is vital to boost intra-regional trade." He said only a comprehensive plan could address the issue of NTBs and other tariff-related problems.

Although the proposed connectivity with Nepal and Bhutan is nothing new, this time it has come from India as a formal proposal, the trade expert said. "Bangladesh will have the chance to revive the Mongla Port if it is really connected with Nepal and Bhutan," he added.

Abdul Hafiz said the mindset of India has to change for mutual cooperation. Citing the example of duty-free export of eight million readymade garment products to India, he said, "It takes almost 18 percent duty to export those garment products."

Mustafa K Mujeri said besides removal of NTBs, huge investment in infrastructure is needed to utilise this connectivity for mutual economic benefit. Involvement of Bhutan and Nepal in the process is also necessary, he added.

The experts stressed the need for the connectivity, which could revive the Mongla Port.

"Bhutan, Nepal and seven northeastern states of India are fully land locked. These countries have no outlet and only Bangladesh can provide that outlet," said Dr Rahamatullah, former director (transport) of UN ESCAP.

On designating Ashuganj as a new port of call under the Inland Water Transit and Trade Agreement, he said it would enhance bilateral trade. He pointed out that currently there are four ports for use under the agreement.

Mir Nasir, however, said by allowing India on river routes up to Ashuganj, Bangladesh might lose its market opportunity in the seven northeastern Indian states. "Now India can easily carry its goods from Ashuganj to Agartala and other states through the proposed railway link," he said.

Abdul Hafiz echoed the view.

Mustafizur Rahman said, "It will be an advantage for India if it can transport goods from Ashuganj to its territories."

The foreign minister level meeting also agreed to reopen the Sabroom-Ramgarh trade point and the land route at Demagiri-Thegamukh on the Mizoram border for bilateral trade. India has also offered Bangladesh to provide 100MW electricity.

Manzur Ahmed, a trade expert and an adviser of FBCCI, urged the government to sit with businessmen and experts before taking decisions on those issues.

Previously on April 2, 1976, Bangladesh and Nepal signed a transit agreement without incorporating any provision for using the territory and ports and routes for entry and exit for Nepalese vehicles, which made the agreement almost non-functional.

A trade agreement between Bangladesh and Bhutan was also signed in 1980, but in the absence of a passage through Indian territory, the agreement could not be implemented. Later, a protocol on trade and transit agreement with India allowing passage through its territory made the trading between the two close neighbours possible.

Although South Asian countries formed the Saarc two and a half decades ago, integration between the countries is one of the poorest in the world. Intra-regional trade is still limited to 5 percent. Experts quite often blamed political mindset for this poor integration.

For years, Bangladesh has been suffering a significantly large trade deficit with India. According to data available, Bangladesh's export to India in 2008-09 fiscal year was only $276 million against India's $2.8 billion export to Bangladesh, which was $3.38 billion in 2007-08 fiscal year.

The Daily Star - Details News

 

[eastwatch]

Record rise in import of scrap-vessels
Local importers purchased 2.2 million tonnes of old ships mostly big sized in 2008-09 fiscal against 0.97 million tonnes over the same period in 2007-08, according to statisitics.

"We now dismantle nearly 60 per cent of the ships sent to scrap-yards across the globe," said Zafar Ahmed, a leading ship breaker.

India breaks around 1.5 million tonnes a year followed by China 1.3 million tonnes, Pakistan 1.0 million tonnes and Turkey around 0.60 million tonnes.

The ship breakers supply around 80 per cent of the country's annual steel rod demand, which is met from scrap ships.

It is a good sign that the ship breaking industry has again revived. It was nearly dead due to Peking Olympic purchases by the Chinese. The old ships became very expensive in those days.

By reading the newspaper, I can assume that the total production of steel and steel goods in BD is around 3 miilion ton per year. Before 1971, it was about 1/2 million ton. Increasing demand of steel is a sign of development and progress of the country.

 

[eastwatch]

South Asian Media Net

RMG export declines
Monday, September 14,2009
DHAKA: Export earnings from the readymade garment (RMG) industry is declining drastically facing the adverse effect of the global economic recession, stakeholders say. They said as the big buyers have downsized their order as well as offering low price by 25 per cent, the sector is facing acute order shortage resulting in closer of many factories. Big buyers are now shifting from Bangladesh to get goods at cheap rate, as factories here lost their competitiveness, they said.

Sources said, some big buyers like HNM, Marks and Spencer recently gave a big volume order to neighbouring countries, which usually Bangladeshi factories get. Many buyers have shifted to Bangladesh's competitor countries like China, India, Pakistan, Sri Lanka and Vietnam citing inability to supply goods at low cost. Till today, rich nations prefer low cost garments since the credit crunch started biting their economy some months back.

Recently both the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the BKMEA in separate press conferences have urged the government to provide them share of the stimulus package immediately to help survive the industry. They said RMG export has started experiencing negative growth from last June, which may reach to double digit in August this fiscal. EPB figure shows that export of woven garment plummeted by 4.66 per cent, home textile by 10.66 per cent and textile fabrics by 9.53 per cent during July this fiscal as compared to the same period of last fiscal year. The performance of other components of RMG sector is also frustrating. The overall export plunged by 6.80 per cent during the month.

Statistics show that the situation was totally reverse some months back. Export growth during the July-September period of last fiscal year (2008-09), was 44.66 per cent high than that of the corresponding period of previous year. The growth was 8.04 per cent in January-June period in the same fiscal, which plunged to 3.82 per cent in April-June period. The growth for the first time in the recent past came down to negative range (-0.11 per cent) in July of last fiscal year.

Experts identified the global economic meltdown as the main cause of the worst situation of the RMG industry. They said the RMG import of USA fell by 6.97 per cent due to the global economic meltdown, which had put direct affect on Bangladesh's export.

BGMEA and BKMEA sources said the major competitors of Bangladesh in RMG sector are India, China, Pakistan, Sri Lanka and Vietnam. Governments of those countries have provided stimulus packages in several stages to help face their industries the impact of global economic downturn. Those have rather raised their competitiveness amid recession.

India has provided 5 per cent subsidy on long-term loan, 5 per cent subsidy and 10 per cent cash incentive on term loan of dyeing and printing sector, released US$1.09 billion through modified revival scheme, Rs 433 crore fund to establish apparel park, and Rs 570 crore for overall infrastructural development of RMG industry.

Giant China has provided US$29 billion assistance in its US$171billion export, bank loan interest rate at 3 per cent and lift of 17 per cent tax on RMG industry. It is also going to announce a US$1,020 crore package soon following the success of its two previous stimulus packages.

Pakistan, Sri Lanka, Vietnam and Malaysia also provided different types of stimulus package to enhance the competitiveness of their industry.

On the other hand, Bangladesh announced a Tk 3,424 crore policy support on April 19 last, which did not include RMG sector. Later, in the budget of current fiscal the government kept a block allocation of Tk 5,000 crore as stimulus package but is yet to be disfursed. Exporters have long been pressing the government for distributing the fund to help make their sectors competitive.

 

[eastwatch]

Non-tariff barriers seen as obstacles​

For years, Bangladesh has been suffering a significantly large trade deficit with India. According to data available, Bangladesh's export to India in 2008-09 fiscal year was only $276 million against India's $2.8 billion export to Bangladesh, which was $3.38 billion in 2007-08 fiscal year.

The Daily Star - Details News

Please note the downsizing of Indian export volume to BD. It is about $580 million less in the last fiscal than the previous one. Most of this can be attributed to less import of foodstuff.

The caretaker govt (CTG), specially Gen. Moeen, used all his authority to boost food production immediately after SIDR. Only due to Gen. moeen's efforts, the country took only two years to become virtually self-sufficient in staple food production. The govt before the CTG intentionally discouraged food self sufficiency, so that the Party cronies could import Indian food.

I hope, the present govt will do all the follow up works to keep on increasing agri output.

 

[eastwatch]

A news from New Age (Sept 18, 2009)

BIBIYANA HAS MORE GAS THAN ESTIMATED, claims Chevron
Staff Correspondent

American company Chevron has submitted to the Petrobangla a new estimate of gas reserve in the Bibiyana field, putting the proven recoverable reserve・at 4.4 trillion cubic feet, up by a staggering amount of 2.7 TCF, said Petrobangla officials.

Energy officials at a meeting with Prime Minister Sheikh Hasina on Wednesday presented the new estimate of gas reserve in the country's second largest gas-field.

As per the new estimate, the gas in place or proven gas reserve・of the field has been put at 6.6 trillion cubic feet, of which 4.4 TCF is recoverable, said Petrobangla officials. The earlier estimate had showed that the proven gas reserve was around 2.51 TCF, and Petrobangla had estimated that around 60-70 per cent of the reserve was recoverable.

The PM told the meeting that it was good news for the country that the Bibiyana gas reserve was much higher than the earlier estimate. She was hopeful that more gas would be found,・said a source who was present at the meeting.

Petrobangla officials said that Chevron submitted its new estimate, made by another US consultant, Degolyer and MacNaughton, on September 13. We have now formed a committee to scrutinise the company's new estimate. If the findings are right, production at the Bibiyana gas-field could be increased to around 1,000 million cubic feet per day in the next two years from the present production of 670mmcfd,・Petrobangla chairman Muqtadir Ali told New Age on Thursday.

He said that the new estimate puts the total proven plus probable reserve・at more than 7 TCF and the proven plus probable plus possible・reserve at more than 8 TCF. He claimed that the new estimate would remove the confusion surrounding the gas reserve and daily production rate at the Bibiyana field.

Energy experts and a seven-member expert committee of Petrobangla had earlier criticised Petrobangla for allowing Chevron to extract more than 450mmcfd of gas as the second estimate of gas reserve by another US company, Ryder and Scott, had put the proven reserve at 2.51 TCF.

After the initial estimate of Degolyer and MacNaughton put the proven reserve at 1.2 TCF in 2000, Chervon and Petrobangla agreed to appoint Ryder and Scott for again estimating the reserve.

After Ryder and Scott put the proven reserve at 2.51 TCF in 2008, Chevron insisted on a further study of the reserve and Petrobangla earlier this year allowed Chevron to appoint D&M.

When the two initial estimates were made, there was no data on gas pressure in the wellhead. After three years of production, D&M got all the data and found the gas in place・or proven reserve・of the field at 6.6 TCF, of which 4.4 TCF was recoverable,・said Muqtadir.

One of the members of expert committee that scrutinised the report of the second estimate of the Ryder and Scott, however, was sceptical about the estimate.

The data we went through showed there was undeveloped proven reserve. I do not know whether they counted the undeveloped proven reserve to show a larger gas reserve. I will have to go through the detailed report of the D&M before making any comment,・he said.

Muqtadir, however, said that all the data on gas pressure in the Bibiyana gas-field showed that the reserve would be higher than what Ryder and Scott had estimated. The Titas gas-field of the Bangladesh Gas Fields Company Ltd is the largest gas-field in the country with a proven reserve of 9 TCF.