Bangladesh Economy: News & Updates

[eastwatch]

South Asian Media Net
Green light to 6,740 new cabs
Tuesday, October 26,2010

DHAKA: The government will allow private companies to import 6,740 new taxicabs for the capital by this year under a revised policy structure. According to the new policy, a government committee will select capable companies to import the taxicabs under a reduced duty structure instead of previous "first come, first get" system. The policy is on its final stage of formation. The Ministry of Communications has sought opinions about the final draft from all stakeholders by this week and is expected to finalise it by this month, says a high official.

The policy proposes to increase the fleet of a new company to minimum 1,000 taxis instead of present 20. The companies that have minimum paid-up capital of Tk 2.5 crore will be able to import the vehicles.

The present amount of paid-up capital is Tk 10 lakh.

"Our main objective is to bring back discipline in the sector to ensure safe and smooth public transportation at big cities. The revised policy will ensure availability, quality, affordability, and secure service," adds the communication ministry official.

Currently, 11,260 taxis are operating in the capital, of which 4,513 are AC and 6,747 are non-AC cabs. Of the new taxis to be imported, 4,740 will be AC and the rest 2,000 non-AC.

The new taxi companies have to be environmentally compliant and should possess their own premises for workshop, garage, depot and other facilities.

Besides, the companies will have to maintain own radio link and global positioning system (GPS) so that they can provide services through phone calls. The customers will have to count additional Tk 20 for telephonic service.

According to the revised policy, no company will be able to lease their vehicles to other companies or individuals and will require Bangladesh Road Transport Authority's (BRTA) permission for ownership handover.

The commercial banks will be able to finance for taxicab procurement, but in that case the taxis will not get registration for the financing banks alone.

The new policy says no 800cc vehicles would be allowed to operate and minimum 1,200cc vehicles will be allowed to hit the streets.

Economic life of a taxi will be increased to 10 years from existing eight years. Reconditioned vehicles would be allowed as taxis, but they have to be less than three-year old, while the ceiling is up to five years for 2,000cc vehicles, the official says.

As per the policy, separate driving licence will be introduced for taxi drivers, who by no means can refuse short-trip services to passengers. Moreover, owners will be obliged to have radio communications between taxis and their very own refuelling facilities, he adds.

Cabs were introduced in the capital in 1999, but the aim collapsed within a few years. Currently, about 80 percent of the taxis are out of service.

The owners blame selection of wrong vehicles, unskilled drivers, carjacking and road condition as major reasons behind the dismal state of the industry.

According to BRTA, out of 10,857 registered taxis in Dhaka around 7,500 have been discarded over fitness issue.

SR Khan, president of Cab Association of Bangladesh, observes the new policy will improve the service and upgrade it to international standard.

 

[TopCat]

At least finally.. my gosh, taxi is a nightmare in Dhaka city. I hope this policy of awarding license to big companies will bring some discipline in this sector. At least govt can make them accountable.

 

[fallstuff]

Time to go high-end

Bangladesh should now target the high-end value-added segments of garment products, as the country has already developed a sustainable industry and a diversified customer base, said a top official of a US-based apparel sourcing giant.

Martin Trust, president of Brandot International Ltd, said it is time for the country to come out of the traditional low-cost basic exports and focus on 'moderate to premium' items to secure a long-term sustainability.

Recently, Brandot tied up with Ananta, a local leader in apparel manufacturing, and a Chinese entrepreneur to set up two factories in Adamjee Export Processing Zone (AEPZ) to make high-end sweater and metal button.

Ananta has been in the sector for the last two decades with an annual turnover of $54 million now. It runs three big factories with around 11,000 employees.

The $11 million sweater factory -- Ananta Huaxiang Ltd -- and $4.5 million button factory -- T and S Button (Bangladesh) Ltd -- will go into production in May next year, said the apparel supplier.

Trust said the production target of the sweater factory is three million pieces a year and it would be upgraded to six million pieces within the next five years.

He sat with The Daily Star at the Dhaka Westin on Saturday.

Three thousand workers will be employed in the sweater plant, while 200 in the button factory.

He targeted the Bangladesh market as the demand for metal buttons has gone up due to the increasing exports of jeans from the country over the years.

"I have chosen Bangladesh for establishing the joint venture projects as we have found good partnerships here. They have good ability to be a good partner. The partners have a good customer base," said the US-based entrepreneur.

The Brandot president, who has been running garment factories in Sri Lanka for the last two decades, is quite happy with the labour-abundant Bangladesh market. "They (the workers) are quick learners too."

Around 30,000 people work in his plants in Sri Lanka.

"We have plan for further expansion in Bangladesh, but it depends on the satisfaction of the customers," he said, adding that Bangladesh's garment industry has the potential for achieving a substantial growth in the near future.

"We are targeting the moderate and high-end markets now," he said.

The world is recovering from the worst recession and so is the garment industry, he said.

"We do not have retail stores, but have high-profile customers," he said.

He said the workers will get higher wages than those set by the government as they will be trained as skilled labourers for handling high-tech machinery.

Bangladesh might have problems such as shortage of gas and frequent power outages in the industrial units. But the country still has low production costs, Trust said.

He said the recent surge in cotton prices will fuel the prices of apparels on the international market.

Cotton prices have gone up worldwide, as the growers have switched to corn cultivation for more profit, he said.

The farmers in the US have shifted focus to corn cultivation as the government is providing them with subsidy to encourage ethanol production.

"The nature of business is that it moves from the high-cost end to the low-cost. Garment business also follows the same," said the Brandot president.

"The garment business started in Europe, and then moved to Japan, and later from Korea to China, Cambodia and Taiwan. It has now moved to Bangladesh for low production costs."

He was the president and chief executive officer of MAST Industries, established in 1970, before he founded Brandot International Ltd in 2003.

link:
Time to go high-end

 

[fallstuff]

Hassle-free e-tendering by next Jan


Initially, 17 procuring entities of four departments will come under the system; more will follow.


Wednesday, 27 October 2010
Author / Source : JAGARAN CHAKMA



n a welcome fillip to the e-tendering rollout process, the Central Procurement Technical Unit (CPTU), a planning ministry arm, is now seeking to introduce the service to four target departments by January 2011. Once implemented, the system is expected to lend greater efficiency and transparency to the public procurement process, officials told The Independent.
According to CPTU director Mohammad Yamin Chowdhury, this division of the planning ministry, engaged in implementation monitoring and evaluation, is working to implement the electronic government procurement (e-GP) plan, under the public procurement reform project (PPRP-II).
He says the government has taken the initiative, with financial assistance from the World Bank, to make public procurement system more dynamic, strong and transparent.
The present government has envisaged the e-GP system as a step towards building Digital Bangladesh by 2021. Under e-GP, the bidders will be able to take part in government bids, sitting elsewhere. It will cut out the hassles of physically submitting the bids to government offices.
The integrated e-GP system, in four target agencies, is likely to be set up by the end of 2011. Later, other procuring entities of the government will be brought under it. According to sources, e-GP saves time and cost overruns that normally plague public procurement. E-GP would encourage more bidders to take part in the process. This would increase competition among them, which in turn would improve the quality of government purchases.
Initially, 17 procuring entities of the four departments, including CPTU, Roads and Highways Department (RHD), Local Government and Engineering Department (LGED), Bangladesh Water Development Board (BWDB) and Rural Electrification Board (REB) will come under the system. GSS America Infotech of India has been chosen as the lead consultant for the project, while ABC Procure (e-Procurement Technologies Limited) of India has been working as the sub-consultant. Dohatech New Media and Aviation Support Ltd of Bangladesh is implementing electronic government procurement system in Bangladesh.
Earlier, in April, an agreement had been signed in this regard. The consultants have since gone through the Public Procurement Act (PPA) 2006 and Public Procurement Rules (PPR) 2008 with other relevant documents. They have also reviewed the requirements and capacity of the target agencies to operate under the e-GP system.
On August 22, a workshop on finalising the draft guidelines on e-GP, prepared by CPTU, was held at the Planning Commission. Suggestions and recommendations of both
public and the private sectors have been incorporated in the draft guidelines.
Yamin says that it will be sent to the cabinet committee
for finalisation by December,
this year.
While operating e-GP, if any section of the PPA and PPR appears contradictory with the provisions of the e-GP guidelines, the latter shall prevail, as mentioned in the PPA 2006. According to Yamin, the government is implementing reforms in public procurement, in a bid to ensure transparency and accountability along with a refined compatibility, with supports from the World Bank.
Bangladesh Computer Council (BCC) is working on a digital signature system, which is a much-needed aspect of e-tendering. According to CPTU experts, e-tendering will be introduced by January, next year, with electronic signatures, even if the system of digital signature is not put in place by December, this year.
Meanwhile, GSS America, the e-GP system development and implementation consultant, has completed the system requirement study and the system design document, for the first phase and submitted a detailed report on the e-GP system design (SD) to the CPTU. It
is also developing the e-GP
software.
The central data centre, required for e-GP operations, is being installed at the CPTU. Information on public procurement activities done by the entities will automatically be transferred to the data centre, through the system.
With the experience of the piloting of e-tendering, the system will be rolled out in all other entities of the target agencies, across the country. Gradually, all other relevant components, like procurement management information system (PROMIS), e-payment system, e-contract and workflow management system, etc, will be integrated into the e-GP. The internet connection required for the process comes from the BracNet.
Presently, the CPTU is in talks with the banks, on the issue of payments, for participants in tenders. Banks will be able access certain modules of the e-GP system, where they can mention the necessary information on transactions with the bidders. The users will be automatically informed about it through the e-GP system.
For participating in e-tenders, bidders need to register with the e-GP system, along with their electronic or digital signatures. Besides, they need to provide their national ID numbers and photographs.

link:

Hassle-free e-tendering by next Jan

 

[fallstuff]

Solar pumps to replace diesel sets

AKRAM HOSSAIN

Resource development Foundation (RDF), a non-government development organization, is aiming to set up ten modules of its innovative ‘solar irrigation system’ (SIS), a combination of panels, inverter, submersible pump and accessories deigned in-house. The modules lift and discharge required volumes of water for irrigation.

The modules will be set up under a use-and-pay model and after paying for the modules for 10 years, users would acquire ownership of the asset.

The modules will be commissioned by the end of December 2010 at a cost of Tk 3.70 crore at locations as diverse as Kolapara, Amtoli, Borguna Sadar, Betagee and Bamna Upazillas of Patuakhali and Barguna districts.

M Golam Mostafa, chief executive officer of RDF, told The Independent that RDF was willing to set up a total number of 50 SIS plants in Bangladesh within December 2011. the modules would reduce the country’s power shortage and bring down use of fuel used in all-too-common diesel pumpsets, besides helping to establish environmentally-friendly farming practices.

RDF said this technology had been developed for the first time in Bangladesh.

It estimated that a normal SIS plant would cost of Tk 39.75 lakh with life span of around 20 years.

One unit now in use at Kumrakhali-Fultala Adorsha village in Barguna was covering total 40 acres of land with irrigation water, Mostafa said.

Rahimafrooz Renewable Energy Ltd. (RREL) prepared the technical support while Mutual Trust Bank Ltd. (MTB) provided financial support for the project at 9 per cent interest rate.
The SIS plant can supply 8 lakh liters water over 8 hours daily for the irrigation of 40 acres of land.

Mostafa said the design team was working to design a SIS plant that could provide irrigation water to as much as 100 acres of land.

The cost of establishing the existing SIS units was to be realised through installments over 10 years by a total number of 83 farmers who were benefited by this project.

Bangladesh Bank (BB) had provided refinancing fund at 5 per cent rate of interest to MTB and MTB would forward this credit line to RDF at 9 per cent interest for only 5 years, sources said.

For the successful implementation of the SIS plant, sources pointed out, a committee of 15 farmers out of the 83 beneficiaries was formed to continuously monitor the project side by side technical and periodic training is given to the farmers for ensuring the project successful implementation.

Earlier, there was lack of knowledge and awareness about solar-based technology and most people in Bangladesh believed that these systems were very costly, and this perception was the major problem in the development and marketing of SIS, Mostafa said.

RDF has established that SIS modules offered a proven, sustainable and cost competitive technology, he claimed.

Mostafa called upon the BB to reduce the bank interest to 2 per cent for 10 years.

Mostafa pointed out that a number of banks including Rupali Bank, Mercantile Bank, Uttara Bank, had expresssed keen interest in RDF’s forthcoming SIS projects.



link:

Solar pumps to replace diesel sets

 

[TopCat]

Imports up by 42pc in Q1

The country's overall imports grew by over 42 per cent in the first quarter (Q1) of the current fiscal, thanks to a jump by nearly 229 per cent increase in import of food grains, officials said Thursday.

Letters of credit (LCs) against imports worth US$ 6.915 billion were settled during July-September period of fiscal 2010-11 (FY10) compared to $4.847 billion in the last corresponding period, according to Bangladesh Bank (BB) statistics.

"The overall imports increased during the period due to higher import of food grains, other essential items including petroleum products and capital machinery to meet the domestic demand," a senior official of the central bank told the FE.

He also said fuel oil import may increase further in the near future due to rationing of gas supply through imposing restriction on selling of the natural resources in the recent months.

The owners of CNG filling stations have been keeping their stations closed from 3:00pm to 9:00pm every day since August 16 this year in compliance with a government order.

The government has ordered keeping CNG filling stations shut for six hours a day to increase gas supply to the power plants to ease the unbearable load shedding across the country.

Import of petroleum products grew by 67.20 per cent to $591.34 million during the period against $353.67 million of the corresponding period in the previous fiscal.

During the period, the import of food grains and other consumer goods increased by 228.71 per cent and 46.97 per cent respectively over the same period in the previous fiscal.

The import of food grains stood at $352.30 million during the period as against $107.17million in the corresponding period of the previous fiscal, while other consumer goods rose to $451.66 million from $307.32 million.

Import of capital machinery -- industrial equipment used for production -- was up by 36.87 per cent to $462.05 million, reflecting a rising level of confidence among the entrepreneurs about the country's future industrial prospects, BB officials added.

"The upward trend of capital machinery imports will continue if the government ensures adequate supplies of gas and power, particularly in the industrial units," a central bank official said.

However, import of intermediate goods like coal, hard coke, clinker and scrap vessels decreased by 16.63 per cent to $374.58 million during the period from $449.29 million in the corresponding period of the previous fiscal, the BB data showed.

Industrial raw material import grew by 41.85 per cent to $2.703 billion during the period under review from $1.905 billion in the corresponding period of the pervious fiscal.

During the period, import of machinery for miscellaneous industries witnessed a 42.34 per cent rise to $613.01 million compared to $430.66 million in the same period of the previous fiscal.

 

[TopCat]

Import up by 42%, export up 31%, stock market daily turn over reached to half a billion dollar. Anybody want to take a bet on 7-8% growth rate this year? I believe we dont have to wait till 2014 to get to that growth rate.

 

[eastwatch]

I would welcome the increased imports of capital machineries, raw materials, intermediate industrial goods and fuel, but, it is not acceptable if the payment for food imports increase by 2.29 times than it was last year.

It seems the present govt is failing to upkeep the trend set by General Moeen during the two years of military rule. Gen. Moeen was the de-facto agriculture minister at that time. He had mobilized all the resources to successfully increase food production.

But, somehow Ms. Matia Chowdhury is unable to keep up the trend set by Gen. Moeen, although I believe she is quite efficient and is not corrupt.

 

[Capt.Popeye]

Import up by 42%, export up 31%, stock market daily turn over reached to half a billion dollar. Anybody want to take a bet on 7-8% growth rate this year? I believe we dont have to wait till 2014 to get to that growth rate.

Good Luck to the Republic of Bangla Desh. All the indicators are looking good. i hope and pray that they get even better.

@iajdani
i would like to share your bet. Then i'll also wait to share the sweet "Mishti" when it happens. It will, it must.

 

[BritishBangladeshi]

I think the goverment is finally starting to wake up!

 

[eastwatch]

I think the goverment is finally starting to wake up!

It is the private companies that work as an engine and pull the economy of a country. But, then, in order to support private efforts, a govt has to adopt policies that would directly support the activities by private companies.

The main function of a govt is to run the administration and to build the necessary social and physical infrastructures. These may be schools, govt institutions, such as bureaucracy & NBR, and Banks, ports, railways, roads, bridges, power plants etc.

When a govt takes measures to build these infrastructures, only then the govt can be said as actively participating in nation building. I believe that the BD govt is now trying to build a foundation that will keep on propelling the economy upward for the next few years.

 

[Skies]

Bangladesh accounts for third of IMF Sep gold sale
Published on: October 30, 2010 at 11:10

LONDON (Commodity Online) : Following big brother India , Bangladesh bought huge chunk of IMF’s gold sale in September.

According to an official statement by the IMF, the multilateral lender sold 1.04 million ounces of gold in September, with nearly a third of it going to Bangladesh. The central bank of Bangladesh bought 10 metric tons of the precious metal for about $403 million.

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The sale was part of a plan announced late last year for the fund to sell 403.3 tonnes of gold to boost its lending resources.

IMF said the sale would avoid disruptions to the gold market, which has been buoyed by huge liquidity injections of central banks around the world.

Gold prices hit an all-time high of $1387.10 earlier this month before cooling off a bit.

The rally was driven in part by expectations that the Federal Reserve will embark in a second round of monetary easing by buying up U.S. Treasuries, a move that has also pushed the dollar sharply lower.

The price of bullion has rallied more than five-fold from about $250 an ounce back in 2001.

Demand has been driven in part by renewed desire from central banks around the world to hold gold, often used as a hedge against economic uncertainty, as part of their monetary reserves following the global financial crisis of 2007-2009.

Last year India acquired 200 tons of the precious metal, with Sri Lanka buying 10 tons and Mauritius purchasing 2 tons.

Print

 

[CaPtAiN_pLaNeT]

Malaysia keen to invest in shipbuilding industry

Saturday, 30 October 2010 21:34

Malaysia keen to invest in shipbuilding industry

Malaysia keen to invest in shipbuilding industry
FE Report

Malaysia has showed keen interest to invest in the country's prospective shipbuilding industry and import halal meat and agricultural products from Bangladesh.

Dr M Isa Bin Sabu, chief minister of Perlis State of Malaysia and leader of the visiting, said this at a meeting with Industries Minister Dilip Barua at his secretariat office on Saturday.

Malaysian entrepreneurs are interested in investing in the country's shipbuilding industry, Mr Sabu said adding that the entrepreneurs have already made their initial groundwork.

"Bangladesh can build modern shipbuilding industry by utilising the experiences of Malaysia's Perlis State," he said.

Malaysia is also interested to import potato, tomato, carrot, pineapple, banana, mangoes and other agro-products from Bangladesh, he added while discussing bilateral interest including investments in ICT, light engineering, pharmaceutical and shipbuilding sectors.

Mr Barua suggested Malaysian entrepreneurs to invest in Bangladesh's shipbuilding industry. It can be fully owned or under joint venture, he added.

"The government will give all-out support to Malaysia in this regard," he said.

Seeking the Malaysian Chief Minister's active role, the Industries Minister said Malaysia can import more manpower from Bangladesh.

KH Masud Siddiqui, secretary of Ministry of Industries, Jamaluddin Sabeh, high commissioner of Malaysia in Bangladesh, Norsiake Bin Kassim, general manager of Perlis Marine Engineering Company Ltd, were among other delegation members present during the bilateral meeting.

 

[Skies]

Bangladesh implements wage hike for garment workers

Mon Nov 1, 2:31 AM


DHAKA (AFP) - A controversial 80-percent minimum wage hike for Bangladesh's three million garment workers came into force Monday with the government vowing to prosecute factories that fail to comply.

All of the country's 4,500 garment factories, which produce clothes for top Western brands, must pay workers at least 3,000 taka (43 dollars) a month, up from the 25 dollars minimum wage set in 2006.

Unions had asked for an even bigger increase and tens of thousands of workers staged violent strikes and protests in late July and August, which shut factories manufacturing for groups such as Wal-Mart, H and M and Tesco.

The turmoil was brought under control when the government launched a crackdown, arresting five union leaders, at least one of whom remains in jail, and filing charges against hundreds of workers involved in the protests.

"Legal action will be taken if any employer fails to implement the new pay scale," Labour and Manpower Minister Khandaker Mosharraf Hossain promised on Sunday, adding that factory owners should also pay bonuses.

The new wage rates were fixed by a government-appointed wage board on July 27 following consultation with factory owners and union leaders.

Some pro-government unions have welcomed the new scale, but independent labour groups have slammed the hikes, saying the new rates will not ensure decent living standards for workers and do not keep up with inflation.

The government Sunday also launched a new industrial police unit designed to prevent a repeat of this summer's violence and maintain security in major export-orientated manufacturing zones.

Garments accounted for 80 percent of Bangladesh's 16.20 billion dollars of annual exports last year. The country's factories employ more than three million workers, about 85 percent of them women.

 

[Skies]

Diamonds in Bangladesh – An Unlikely Industry

03.11.10, 13:26 / World



A mention of Bangladesh is more likely to conjure up images of flood and famine than a rapidly developing economy, but the small southeast Asian nation – which boasts a population of over 150 million, 80% of whom are under 35 – is progressing rapidly as both a producer and a consumer. Five years ago, a visionary Bangladeshi decided the time was ripe to bring the diamond manufacturing industry to his country. On the opening day of the Kimberley Process plenary meeting, Mr. Onu Jaigirdar – Bangladesh's sole diamond manufacturer – spoke to the Israel Diamond Institute about falling in love with diamonds, Bangladeshis' growing taste for diamond jewelry, and why he employs women only.



"Diamonds are a pre-emerging industry in Bangladesh, suffering all the birth pains," Jaigirdar, Managing Director of Brilliant Hera, tells the IDI. "It's never been done."

While Bangladesh has a long tradition of jewelry-making, Jaigirdar explains, traditional taste has always preferred "very yellow" gold – 23 or 24 karat, unembellished with gemstones. Now, he says, thanks to a rapidly developing economy, many Bangladeshis have disposable income and an appetite for diamonds fueled by Western influence.

Jaigirdar, who left Bangladesh as an adolescent and until a few years ago worked in finance, discovered diamonds mostly by chance when he happened to meet a Belgian diamond dealer on a flight out of the country. A few weeks later, he found himself in Antwerp and contacted the man, who gave him a tour of one of the world's renowned diamond centers.

"He showed me a huge pile of polished diamonds, and I fell in love," Jaigirdar recalls. Also, the idea of making something – rather than providing financial services – tickled his imagination.

Jaigirdar then proceeded to found the first diamond manufacturing company in Bangladesh. His company, Brilliant Hera Ltd, has been operating for five years and now employs over 125 workers – all of whom are women. When asked why he preferred a policy of "positive discrimination" in a sector that has traditionally been very much a boys' club, he replies simply and to the point: "Women are more trustworthy, more reliable, and easier to do business with."

But who can train workers in a country with no traditional diamond industry? Jaigirdar chose to hire Belgian instructors, and says with pride that his company's cut – and therefore the cut of Bangladesh – is of the highest quality.

"We have proved that our population is capable of cutting diamonds and doing good work," he tells the IDI.

Who supplies the rough diamonds for Jaigirdar's people to polish? For now, he buys rough mainly from the Antwerp bourse, where he has business contacts, but is looking into buying rough diamonds direct from diamond producers.

Nor is Jaigirdar content with launching a brand-new industry in a country with no historical connection to diamonds. He has founded his own jewelry brand, called Jaigirdar. "The linkage seemed perfect," he observes.

Market response to his jewelry has been "keen," he says, with a great deal of repeat business and excellent word-of-mouth advertising.