Bangladesh Economy: News & Updates

[Al-zakir]

Bangladesh: Processed food exports rise 41pc

Agro-processed food exports rose 41.04 percent to $28.11 million in the July-January period of the current fiscal year, backed by competitive prices and upmarket buyers' shift to ethnic snacks as recession squeezes pockets of the consumers in the western economies.

Expanded market coverage of some food processors also helped maintain their export growth, exporters said.

“Price is the main factor. Many supermarket buyers are shifting from expensive food items to cheaper foods as their income shrinks amid recession,” said ME Dowla, managing director for Eurasia Food (Bd) Ltd.

“A section of consumers who preferred shopping at supermarkets is now showing interests to our products because we offer lower prices," said the MD for Eurasia that exports such ethnic foods as frozen parata, singara, dal puri and vegetables mainly to the UK market.

Dowla termed the latest trend of upmarket consumers' shift to Bangladeshi frozen snacks as an opportunity to carve a niche in the European mainstream market.

“Now we should try to make them habituated to these foods,” he said.

Thanks to the exporters' continuous drive to explore market that now expands from the Gulf to African regions, agro-export basket is now filled with many diversified products such as potato flakes, soft drinks, spices and various dry and frozen snacks.

Bangladesh also exports processed foods to Japan, North America and Australia.

“We are strengthening our marketing capacity. Quality and competitive prices contribute to such rise in exports,” said Raju Ahmed, general secretary of Bangladesh Agro Processors' Association.

But some exporters of dry snacks and spices said they now feel the pinch of a slowdown in exports to the markets such as Canada and Japan as the financial crisis erodes the consumers' purchasing capacity in those rich countries.

However overall exports increased although exporters lagged far behind their targets.

In the July-January period of fiscal year 2008-09, processed food exporters fetched $28.11 million, up from $19.93 million in the same period a year ago, according to Export Promotion Bureau.

Exports of processed foods surged 77.20 percent to $40.65 million in FY2007-08 from $22.94 million a year ago.

Bangladesh: Processed food exports rise 41pc

 

[Al-zakir]

First-ever polyester chips plant to be set up in N''ganj

The country has a demand of around 400-450 tonnes of polyester chips daily

Sunday March 29 2009 01:57:58 AM BDT

A local textile group will set up the country''s first-ever polyester chips producing plant by investing Tk 515 crore as the demand for such industrial raw material is growing tremendously in Bangladesh. The New Asia Synthetics Limited, a concern of Malek Spinning Mills Limited, has taken up the initiative(The News Today)

to establish the plant on 100 acres of land at Roopganj in Narayanganj.

Polyester chips (PET) are the intermediate raw material mainly used for producing synthetic yarn and pet bottle.

"The country has a demand of around 400-450 tonnes of polyester chips daily as need of local synthetic yarn and beverage products are growing," told A Matin Chowdhury, managing director of Malek Spinning Mills Ltd to the reporters at an informal press briefing. The briefing was held at a local restaurant on Saturday.

Malek Spinning Mills, is a subsidiary of Salek Textile Ltd established in 1999 at Shafipur in Gazipur. Other enterprises are Knit Asia Ltd and Rahim Textile Mills Ltd. The total investment of the group is around Tk 900 crore.

"We are fully dependent on import for the industrial raw material and at present Bangladesh is importing roughly Tk 1200 crore polyester chips annually," Chowdhury informed.

The entire PET is imported currently from India, Korea, the Middle-Eastern countries and Singapore.

He added that the demand for polyester chips is increasing on an average by 10 per cent annually when the country''s textile and beverage industries have been growing fast.

"We have a plan to produce at least 300 tonnes of polyester chips a day initially for the local market. And after targeting the export market, we will boost the production capacity to 600 tonnes," he added.

The construction work for the factory would start this year and will end by 2012.

The company will use Methyl Ethylene Glycol (MEA) and Purified Therapeutic Acid (PTA), two petrochemical by-products, which will be imported from the Middle East and Singapore.

"Produce of New Asia Synthetics Limited will grab around Tk 800 crore local market per year, which will save huge foreign currency," hoped the former BTMA president.

Though the market share for non-cotton fabrics increasing day by day in global textile market, the production of non-cotton yarn is still limited here, said industry insiders.

"When the local spinning factories have been producing cotton yarns in a large scale, the new industry will give a big boost to the country''s textile sector," they added.

At present 60 per cent of the world''s textile production is based on synthetic, whereas in Bangladesh it is less than 10 per cent. The reason for this gap is primarily due to the non-availability of this material locally.

World textile fiber consumption more than tripled over the last five decades. However, the cotton consumption increased one-and-a-half time during that period to reach 26.4 million tonnes in 2007, other fibers increased eight times to reach 45.7 million tonnes.

Consequently, the market share of cotton decreased from an average of 62.4 per cent in the 1960s to 39.8 per cent in the 2000s, according to International Cotton Advisory Committee.

http://newsfrombangladesh.net/view.php?hidRecord=254795

 

[BanglaBhoot]

Manpower exports fall 38pc in three months

Manpower exports fell by 38 per cent in three months to March from a year earlier, the BMET said Wednesday, the evidence of a continued slide in overseas jobs.

Some 138,000 Bangladeshi workers found overseas jobs in January-March period of this year, down by 85465 from the year before, according to data released by Bangladesh Bureau of Manpower, Employment and Training (BMET).

The figure for March was also depressing as the number of Bangladeshi migrant workers dropped by 25 per cent to 43946, down from 59183 a year earlier.

"The fast-softening Dubai economy remains a big worry," a senior BMET official said.

"But worst is yet to come. Still, the overall figures allow us to be optimistic. New markets are expected to help compensate the loss sustained in the traditional market," he added.

Officials also acknowledged that the flow of return migrants is also on the rise, threatening to slow down the boom in remittance flow witnessed in recent years.

The new figures portend bad omen for future and highlight the vulnerability of Bangladesh to rely mainly on the Middle-eastern nations and Malaysia for workers' employment, economists and migration experts say.

"I'm now less optimistic … I don't see any immediate prospects for a rebound in manpower exports," Zahid Hossain, a top economist at the World Bank, said.

"I think, the slowdown will continue as oil prices will hover at US$47 per barrel in 2009. If that happens, construction and hospitality sectors of the middle-east will not bounce back, impacting Bangladesh's labour migration," he said.

The World Bank economist noted that if oil prices remain the same throughout the year and major economies of the west, China and India does not pick up steam, those of the Gulf region will not revive.

The oil-rich region is also linked to Bangladesh's growth story, with around 63 per cent of the country's remittances coming from the economies of the Gulf Cooperation Council (GCC) that constitutes Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Oman and Kuwait.

Zahir Uddin, a professor of Anthropology at Jahangir Nagar University, shared the similar concern, saying manpower exports are set to take "a further dive" in the coming months.

"The situation seems to be grave. I'm fearful the drop in manpower exports will certainly slowdown the flow of annualised remittances," said Mr Zahir, who did extensive research on migration.

In parallel, BMET officials said, a total of 21966 Bangladeshi migrant workers returned home in January-March period, most of them from Dubai.

In March alone, they said, more than 3000 Bangladeshis returned from the Gulf tourism and business hub of Dubai, after losing jobs there.

The International Organisation for Migration (IOM) said the trend of return migration is on the rise and the government must "act now."

"Even if it is a global problem, it requires local solution," said Rabab Fatima, regional head at IOM.

Searching for alternative job markets is a long-term process, Ms Fatima said, adding creating employment opportunities within the economy for returnee migrants would be the best option so far available.

"Giving the returnees a space in the local job market will certainly help absorb the immediate shock," the IOM official said.

Mr Zahir said migrants played a crucial role during national crisis by sending remittances and "now it is the obligation of the state to stand by the returnees at these uncertain times."

"It's not the responsibility of the government alone. The corporate sector should also come forward to help the country navigate the evolving crisis in labour migration," the IOM regional chief told the FE.

Last year, the country drew in US$8.9 billion in remittances, boosted by record 8.75 million overseas jobs.

Manpower exports fall 38pc in three months

 

[BanglaBhoot]

Remittance jumps to single month high

Dhaka, Apr 5 (bdnews24.com)—Despite the global recession, Bangladesh received $881.3 million in remittances in March this year, the highest ever for a single month, the central bank governor said Sunday.

The March figure broke the record of $859 million earned in January, according to Bangladesh Bank numbers. February saw $784.5 million.

"Our foreign reserves have crossed $6.03 billion dollar due to the rise in remittance," central bank chief Salehuddin Ahmed told bdnews24.com Sunday.

"The global economic downturn is yet to cast its spell on remittance inflow. This is very positive for our economy," he said.

The World Bank, IMF, ADB and local economists have all predicted a dip in remittances, one of the economy's main indices, in the face of the global crisis.

The governor, however, is optimistic that remittances will maintain an upward curve in the remaining three months (Apr.-Jun.) of the current fiscal year

According to central bank figures, the first nine months (July 2008-March 2009) has seen remittance earnings of $7 billion, a 34 percent jump over the same period of the previous fiscal year (2007-08).

Total remittance in 2007-08 was $7.9 billion, and $6 billion in 2006-07.

Remittance jumps to single month high :: Business :: bdnews24.com ::

 

[gromell]

Column - Ifty Islam
SMEs have potential to fuel economy

Small and medium enterprises (SMEs) have long been considered as the principal driving force of Bangladesh's economy. Along with stimulating private ownership and entrepreneurial skills, SMEs are flexible and can adapt quickly to changing market demand and supply, generate employment, help diversify economic activity, and make a significant contribution to exports and trade.

Although in Bangladesh the SME Foundation and IFC-SEDF's efforts to create awareness among the banks and NBFIs to be more focused on SMEs are laudable, the sector still needs greater support from both financial institutions and the government.

Especially at a time such as now, when the impact of the global crisis is becoming more evident, in terms of declining export orders and remittance inflow, boosting the SME sector, the economy's thrust sector, should be an imperative.


Financial constraints


The biggest impediment to SMEs is the lack of sufficient capital needed to operate business. Most businesses often have to start with their own savings or by borrowing from friends and relatives, with bank financing coming later. Banks remain extremely reluctant to lend to small scale entrepreneurs who do not have any startup equity, despite sound business models.

It is very difficult for SMEs to raise fixed and working capital from commercial banks, as banks are unwilling to issue small loans due to the high monitoring and supervision costs, considering SMEs to be high risk borrowers because of their low capitalisation, insufficient assets, and high mortality rates. SMEs are usually also charged very high interest rates. Bank procedures are also prohibitive - project evaluation processes and the requirement for undocumented payments to bank officials often make it difficult for small entrepreneurs to comply with.

A World Bank (WB) paper titled “Bank financing for SMEs around the world”, which used data from 91 banks from 45 countries, reports banks are less exposed and charge higher interest rates and fees to SMEs relative to large firms. A number of studies using firm-level survey data have shown that SMEs not only perceive access to finance and the cost of credit to be greater obstacles than large firms do, but these factors also constrain SME performance more than in large firms.

However, the WB found through its survey of banks that most banks (80 percent or more), independent of where they operate and of ownership type, perceive the SME segment to be large with good prospects.


The impact of the global crisis

on SMEs


The global recession has directly affected Bangladesh's remittance inflow and exports. However the knock on effects of declining exports and remittance inflows on SMEs is also of great concern. Since workers' remittances traditionally help finance consumption and SME investment, the declining inflow of remittances poses a potential threat to the SME sector. The global crisis has exacerbated conditions for SMEs, especially in terms of access to finance and credit availability.

Most SMEs around the world are suffering from falling demand. Credit tightening has been severe in spite of the drastic easing of monetary conditions by central banks. Interest rate spreads have risen to unprecedented levels, thereby partially offsetting the effects of the easing of monetary policy. A concerted effort is needed to support SMEs to revive growth and job creation in developing countries.

SMEs in developed countries have also been hit hard by the global crisis. During the 'Turin Roundtable' held in Italy in March 2009, various stakeholders including governments, representatives of SMEs and financial and international institutions, attested that SMEs have been suffering due to the crisis.

Given the importance of SMEs in Bangladesh's economy, I would suggest a number of recommendations put forward during the Turin meeting, which could also be applicable to developing countries:


Resolving the problem of

insufficient working capital


The most widely used measure has been the extension of SME loans and loan guarantees. What was learned from previous crises was that capital injections into banks were not sufficient to increase lending and that government guarantees were also required. In countries where SMEs are export-oriented, governments are also expanding export credit guarantees. To deal with cash flow problems, countries reported a number of temporary tax measures they had undertaken such as tax cuts and deferrals. It was suggested that governments give priority to reducing taxes that are profit insensitive, that is, taxes that are paid regardless of whether the SME is making a profit, like payroll taxes.


Assisting innovative start-ups and high-growth SMEs


There was a general consensus that it is necessary to ensure that innovative start-ups and high- growth SMEs have access to adequate funding at times of economic recession. Some governments are stimulating the provision of private risk capital through co-investment and are also reducing or eliminating taxes on capital gains for investment in SMEs by venture capital funds.

Improving the SME and entrepreneurship financial environment in the long term: As SMEs often lack face-to-face contact with bank managers due to the impersonal structure of the modern banking system, banks could consider balancing their scoring approach to SME worthiness assessment with adequate room being left for 'relationship banking'.

To some extent, decision making on SME loans to local branches could help in cases where circumstances and viability of individual businesses need to be better accounted for.

In conclusion we need to develop an effective strategy to support a key engine of economic development and employment.

First and foremost, a standard definition of SME needs to be established by the government, in consultation with different stakeholders including donor agencies, NGOs, and private sector entrepreneurs the current opacity remains a barrier to targeted action. Given the constraints in the traditional banking system, limitations in the provision of finance needs to be addressed creatively - the government should provide grants, perhaps in coordination with donor agencies, to provide financial support to selected SMEs which have good potential and wide linkages.

More SME development funds may be created to subsidise projects and venture capital SME investments should be encouraged. The tax and VAT regime should be reviewed to be less prohibitive to SME growth.

Finally, technical support is critical for SMEs to grow and evolve through sector specific business support incubators and funding for collaboration with technical universities and vocational colleges.



The writer is the managing partner of Asian Tiger Capital Partners and welcomes feedback at ifty.islam@at-capital.com.

 

[gromell]

Friday, April 17, 2009
Temporary stimulus package Sunday
Says finance minister
Star Business Report

Finance Minister AMA Muhith has said the government will announce a temporary stimulus package on Sunday in a bid to build confidence among businesses amid global recession.

“It's temporary. The main package will come up in the upcoming budget,” he told reporters yesterday after a meeting with the leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at the finance ministry.

"It would be a confidence building package. It shows that we have not forgot the impacts of the global recession the country is facing," the minister said.

He also said the package will not only include the concerns of the export sector, but will address agriculture, food security, social safety net and employment generation issues.

Muhith said after one and a half months the government would announce a comprehensive package in the budget. It is better if the package comes up with the budget as all the issues will be addressed in it, he added.

The main objective of the Sunday's announcement would be to boost domestic economy. Local demand and production should be increased, the minister said.

As the BGMEA leaders raised the issue of the sick industries, he said he does not think that reviving the sick industries is possible.

He suggested the sick industries should be turned into other industries using latest technology and considering the changed market.

 

[gromell]

Friday, April 17, 2009
TechViews
Making digital Bangladesh: No time to waste
T I M Nurul Kabir

The present government took office with the vision of creating digital Bangladesh. There seems to be genuine interest for implementing the commitment made by the ruling party in its manifesto. Surely, it is an encouraging sign.

In the World Summit on Information Society (WSIS), it was decided that a knowledge-based society would be developed throughout the world by 2015, which is in line with the government's decision of building a digital Bangladesh by 2021.

There has to be a transformation to a digital system in infrastructure, governance and education, the three most vital areas for the growth of a nation. The government has to be prudent in taking steps to empower the citizens. All Bangladeshis must have access to ICT, and the skills to use it, in digital Bangladesh.

To transform the government, we have to have e-readiness. The issues impeding the growth of the hardware and software sectors must be resolved. Bangladeshi businesses, especially SMEs, need to be able to transact through credit card over the internet and/or mobile phone. New technologies such as WiMax can be integrated into the overall system.

In digital Bangladesh, we envision that the government will have the capacity to deliver services to citizens through the Internet, radio and TV, and also to make its internal operations more efficient and transparent through the use of ICTs. In the health sector, we hope that ICTs will be used for connecting relevant healthcare service providers and for connecting doctors with patients in remote areas.

In the education sector, utilisation of information technologies and communication networks for dissemination and exchange of knowledge must be present. The agriculture sector can grow phenomenally with proper implementation of IT. Land management can be properly done through IT as well.

In digital Bangladesh, we hope a transformation will occur in the realm of commerce and industry. ICT can be used for marketing and promotion of products, for increasing internal efficiency, and for communication and transaction between businesses.

It is essential that the software and hardware industry of Bangladesh becomes a part of the global supply chain for ICT products and services, while serving as a platform for enabling the above goals in the digital age. A communication infrastructure that allows ICT-based services to be deployed equitably throughout the nation will make digital Bangladesh a reality.

Essentially, there has to be implementation of ICT in virtually every sector -- agriculture to government budgeting, port management to National Board of Revenue's tax management, and media to security management.

In recent times, we have witnessed growing security threats in our country. Information technology can be a very useful tool in preventing a large catastrophe from taking place. A digital database containing fingerprints can be a tool for fighting possible threats.

In order to create digital Bangladesh, the present government can start by looking closely into all the previous ICT policies and take prudent steps. The ICT ministry and its subsidiary, Bangladesh Computer Council (BCC), should be strengthened. Skilled manpower needs to be developed. We need to train our teachers. We need to look at the best practices around the world when it comes to using ICT for development to better understand how we can incorporate those in to our system. Estonia is a great example, which we can follow in terms of ICT usage in different aspects of government and social life.

The government's promise for a better tomorrow though the promised 'dinbodol' can be fulfilled through an honest desire for the creation of a digital Bangladesh. All the relevant stakeholders must be brought to a common platform. A chief Information officer should be appointed for the proper and successful management of the project.

Making digital Bangladesh will take united effort. The private sector, NGOs and grassroots organisations need to be involved in this endeavour. Only through joint effort can we create a truly digital nation. Public-private partnership must be present.

The Millennium Development Goal of the UN suggests the making of an IT village. In accordance with this goal, we have to be a strong member of the global society. For that, we must synchronise our plans with global initiatives and work hard. Our actions plans need to be time bound and specific, and strong and accountable program management has to be present. The future awaits us with all its wonderful opportunities; the onus is on us to take the right step.


The author is the former Senior Vice-President of BASIS and CEO of Spinnovision.
E-mail: timnurulkabir@hotmail.com

 

[gromell]

Proposals galore on distribution line expansion despite power crisis

FHM Humayan Kabir

The government has taken a move to substantially increase power distribution lines in the rural areas, mostly in political consideration despite a severe power crisis in the country, officials said Friday.

The Rural Electrification Board (REB) has taken up schemes to install nearly 45,000 kilometres of distribution lines to connect over 1.65 million new village consumers within the tenure of the present government, which ends in 2013, a government official said.

The state-owned rural electrification firm has submitted six project proposals to the planning commission in a bid to construct the distribution lines in its countrywide 70 palli-biddyut samity (PBSs) under six divisions at a cost of Tk 61.28 billion.

"We've been getting lot of pressure from different members of parliament and political leaders of the ruling party to expand the distribution lines in different villages. So, we have taken the move," said a top REB official requesting anonymity.

He said they have sent the proposals to the planning commission to incorporate those in the next year's annual development programme (ADP).

A power division official said the REB took similar schemes in political consideration during the previous BNP-led four-party alliance government period between 2001 and 2006.

Under the schemes, REB constructed thousands of kilometres of new distribution lines without ensuring adequate power supply, he said adding a good number of those lines are still going without electricity.

It was also alleged that massive corruption had taken place in implementing those projects that time, sources said.

"The country has been facing nearly 1500-megawatt (mw) of power shortage during peak hours every day. How the government can take up such projects of the REB?" a top power development board (PDB) official said.

During BNP-led government's five-year tenure to 2006, the REB installed 75,000 km power distribution lines and the client base was doubled from 3.0 million to 6.0 million although it failed to boost power generation.

It was alleged that a syndi cate of 13 concrete pole manufacturers through bid manipulation and political influence sold 1.5 million overpriced concrete electric poles worth Tk 11.0 billion between 2001 and July 2006 to the REB.

Insiders said this syndicate sold another 0.2 million poles to the REB on record, but these poles were not found in the project areas.

A Planning Commission official said they had opposed the move of the REB as there was huge electricity generation shortage against demands. "But there is heavy pressure on us from different quarters for undertaking the projects."

The REB will install 12,950 km of distribution lines and 68 substations at a cost of Tk18.01 billion to connect 0.52 million customers in the 21 PBSs under Dhaka division.

At 18 PBSs in Rajshahi, the rural electricity supplier will construct 11,150 km distribution lines and 48 sub-stations at a cost of Tk 15.28 billion where some 0.35 million customers will get electricity connections.

In Chittagong division, some 7,750 km lines and 32 sub-stations at a cost of Tk 10.55 billion will be constructed under a scheme.

The state-owned electricity distributor will install 6,050 km lines and 17 sub-stations at a cost of Tk7.96 billion in Khulna division, 3,300 km lines and nine substations at a cost of Tk 4.43 billion in Barisal division and 3,750 km lines and 10 substations at a cost of Tk 5.02 billion in Sylhet division.

The state-owned PDB said in last two years, nearly 400mw of new power has been generated from different small power plants and rental power plants against the eight per cent annual demand growth.

Besides, during 2001 to 2006 period only about 500mw new electricity has been added to the national grid, which was very inadequate to meet the growing electricity demand across the country, PDB said.

 

[gromell]

WB analyst observes Bangladesh economy stronger in the region

Staff Reporter



Bangladesh is still not hit hard by the ongoing global economic recession and the economy of the country is stronger in comparison with other countries in the region, said the World Bank (WB) yesterday. "The economy of the country is stronger in comparison with other countries in the region and it has more time to anticipate effects than developed and other emerging nations", said Zahid Hussain, senior economist of the WB at a workshop on 'State of Bangladesh Economy and Policy Response to the Global Financial Crisis' at the bank office in the city.

Mehrin A Mahbub, public information associate delivered the welcome speech while Xian Zhu, country director of the WB made the opening remarks.

Zahid said the economy of the country was stable and the projected economic growth for the fiscal year 09 would be 5.5 per cent. He, however, said in the worst case of declining of export and remittance it could be as low as 4.5 per cent in the fiscal year 09.

The senior economist of the bank said that the inflation rate of 6.1 per cent in January of this year was quite satisfactory due to the falling prices of commodities in the international market.

Recession in the developed markets and slowdown in the Middle East has already begun to pose threat to Bangladeshi exports and remittance inflows, he added.

Citing a 30 percent decline in capital machinery import, Zahid said there might have been a significant slowdown in investments.

On the impacts of the global crisis he said, export, remittance, revenue and banking sector along with the employment would be affected severely.

"At least 2 to 2.5 million new local jobs will be needed until the global economy recovers, compared to 1.1 million job creation prior to the crisis," he mentioned.

"Demands for bailout packages from businesses might not help the poor and the agriculture, livestock and fisheries sectors are doing well", said the senior economist of the international donor agency.

Xian Zhu said the impact on Bangladesh's growth may not be severe during the current fiscal year and the government should prepare the best for the worst.

He said that government need to take precautionary measures to mitigate the impacts of the crisis especially for the poor by creating more jobs internally and safety net programmes should be given highest priority.

"The government needs to carry out the unfinished reform agenda to turn Bangladesh a middle income country," he added.

 

[gromell]

Friday, April 17, 2009

100 days of Mohajote Government​

Economy off to a steady start​

Shah Husain Imam

FROM day one of its assumption of office, the Mohajote Alliance, led by the Awami League, took a firm grip of the economy. At its very first cabinet meeting, fertiliser prices were halved and diesel price decreased by Tk 2 per litre. This reduced cost of cereal production by up to Tk 2.5 per kg. Boro cultivation, the mainstay for food security, received a boost with a message going out to the peasantry that it is in character with the new government to be friendly and caring to them.

The first moves along with the falling international oil and commodity prices triggered a fall in domestic prices, almost across the board. In the process, the syndicates were roundly left without any wind in the sail to be playing around with inflationary expectations in manipulating the market forces to serve their ends.

It so happens that warnings were issued by the finance and commerce ministers early in the day through all conceivable fora that illegal syndication, hoarding and speculative trading would be dealt with severely. With market intelligence available to a well-structured winning political party such as the Awami League, it has had the advantage of watching market behaviour on the radar.

Basically, the cautionary words carried weight because of the convincing electoral mandate the Awami League received and the relative ease with which the BNP reconciled to its defeat, accepting the popular verdict. Normalcy got quickly established from the hang-ups of uncertain and stormy two-year-long caretaker governance.

Altogether, the smooth transition of power from an un-elected to an elected government did generate a sense of confidence across various sectors of the economy.

Awami League was quick to turn its attention to the urban and rural poor with a pragmatic realisation that any failure to provide food to hungry mouths was a sure-fire way of courting social tension. So, we have seen the introduction of well-targeted safety net programs by way of test relief, food for work, rural rationing and OMS sale to urban poor. The initial sale price of rice had to be scaled down from Tk 18 per kg to Tk 16 per kg to give a slender attractive edge over the ruling market price.

This brings us to the justified fear that the declining price of cereals could force the farmers to shy away from food production due to lack of remunerative prices in the market-place. Responding to such a concern, Agriculture Minister Matia Chowdhury assured the farmers of price support in the government's procurement drives, much the same way, she added, that the 1996-2001 AL government had done.

With the existing subsidy package looking large and that in prospect being equally so, the need for belt-tightening is very compelling indeed. Nevertheless, to put it mildly, if people were to read some negative signals in the big, rather prodigal, purchase of luxury cars for newly elected MPs and upazila chairmen would they be wrong? The previous batch of cars was of 2004-vintage. And, even if it is assumed that all of them are too ramshackle for use, could they not be replaced with a less costly variety?

It simply does not sit in with the government's otherwise robustly populist and inclusive series of economic policies.

By external dependence we have traditionally meant reliance on foreign aids, loans and grants, but now as our economy has had to navigate the rough waters of the knock-on of global economic meltdown, the externality of our dependence seems widespread, encompassing as it does foreign trade and migrant remittances.

In both the areas, we are having to face twin problems; fall in garment export volumes topped of by decreased earning from under-pricing and the steady trail of returnee Bangladesh employees from abroad. A word for the plight of returnee migrant Bangladeshi workers, which seems poignantly depicted through reported arrival of some corpses lately.

The finance minister's plan to garner funds through private-public participation, including contribution from NRBs, aimed at rehabilitating the returnee Bangladesh wage earners is a good idea that will, however, entail considerable institutional preparations to materialise. The government's public spending needs to be geared to employment creation and the best channel for doing so would be provided by the ADP.

On the closing day of the first 100 days, the finance minister has announced broad outlines of a bailout package for recession-hit export industries worth Tk 2,500-3,000 crore. The cash subsidy comes on the back of introducing banking facilities in the shape of lower interest rate, and loan rescheduling in six sectors for as many months.

A new window of opportunity can fling open on our garment products if we can negotiate duty-and quota-free (DFQF) access in the US market, an agenda that should be taken up energetically with the Obama administration.

Finally, we ought to join with other LDCs in a bid to persuade the WTO in securing a better bargain in their trade with the developed economies. If this is not the time for the WTO to take a role, then what is?



Mr. Shah Husain Imam is Associate Editor, The Daily Star

 

[gromell]

PM wants link to Asian road, rail
Mon, Apr 13th, 2009 9:37 pm BdST Dial 2324 from your mobile for latest news


Dhaka, Apr 13 (bdnews24.com)—Prime minister Sheikh Hasina has said Bangladesh needs to connect to the Asian highway and railway network without fail, for the resulting economic gains.

"When the world itself is opening up, we cannot keep our doors shut. (If we do so) we will become recluse," she said at a meeting with communications ministry officials at the Secretariat Monday.

She said Bangladesh could become a bridge between the West and the East.

"We have a lot of resources. If we can use these resources prudently we definitely can be a developed and wealthy nation," said Hasina.

She said Chittagong and Mongla seaports were important from national and regional perspectives.

"If we can develop and modernise these ports neighbours Nepal, Bhutan, India and even China can also use these ports. Then, the ports can contribute hugely to the economy."

Fast communications system was key to development which was why Bangladesh and needed to have a developed communications system.

The prime minister also touched on the possibilities of building a deep-seat port.

She revealed her government's plans to erect elevated highway from Tongi to Narayanganj, launch commuter train service, build underpasses and ring roads and develop waterways on rivers around Dhaka to resolve traffic jam in the capital.

Hasina said her government was firmly committed to build road communications network with the southern regions and build the Padma bridge.

She told the meeting about her government's plan to develop rail and waterways already in place and stretch rail link up to Cox's Bazar.

She urged public servants to work as a team for the people without fears and said it was not possible to work in despair and threats.

"Many are hesitant because of the past events and think they may be asking for trouble if they worked; so it's better not to work."

Hasina assured them that the government will take care of any problems they might face. "You please do you job. I tell you on behalf of the government that if anyone has to go to jail, it'll be ministers."

The prime minister asked the officials to remember that they were being paid from taxpayers' money.

Communications minister Syed Abul Hossain briefed her on the communications system across the country.

The prime minister's press secretary Abul Kalam Azad briefed reporters after the meeting.

 

[Al-zakir]

Islami Bank wins top scores

Global Finance, a US-based finance magazine, has recently branded Islami Bank Bangladesh Ltd (IBBL) as the Best Islamic Financial Institution in Bangladesh for 2008, says a press release.

IBBL will join the world's best financial institutions to receive the award at a function scheduled for October in Istanbul, Turkey.

The magazine also awarded IBBL the same in 2008 and the Best Bank in Bangladesh in 1999, 2000, 2004 and 2005.

:The Daily Star: Internet Edition

 

[Screaming Skull]

Bangladesh remittances in April up despite global recession​

5 May 2009,

DHAKA: Bangladeshis working abroad sent home more money in April than in the same month last year, an official said Tuesday, despite warnings that remittances would take a hit from the global slowdown.

Bangladesh Bank executive director Khandakar Muzharul Haque told AFP that 857 million dollars were sent back last month, up from 782 million dollars in April 2008.

"We are not seeing a downturn at the moment but we don't know what will happen in the last quarter of this calendar year," said Haque, adding that the latest figures had pushed the country's foreign currency reserves to a new high of 6.52 billion dollars.

"The real test will come around November when we may see if the recession has an effect on remittances," he said.

In March, Bangladeshis overseas pumped a record 881 million dollars into the economy, despite the World Bank, the International Monetary Fund and the Asian Development Bank all forecasting lower remittances.

In 2008, Bangladeshis working abroad sent home nine billion dollars - more than 10 per cent of the impoverished country's Gross Domestic Product (GDP) and the second highest earnings after exports.

Anecdotal evidence suggests many Bangladeshis have returned to their homeland as work has dried up in Middle Eastern countries and Southeast Asia, where they have typically held low-skilled jobs.

Haque said that Bangladesh would weather the global economic storm if monthly remittance figures could stay above the 700-million-dollar mark.

According to government statistics, 6.3 million Bangladeshis currently work abroad, although unofficial estimates put the figure at around nine million.

Bangladesh, one of the poorest countries in the world with a population of 144 million, counts on the inflow of foreign exchange to fund its imports.

A government minister said last month Bangladesh would strengthen ties with Iraq in the hope the war-torn country would become a new market for its workers.

 

[BanglaBhoot]

Bangladesh to be ship exporter on May 10

BSS, Dhaka

Bangladesh, for the first time, is going to join multipurpose ship exporting countries by handing over a ship named 'Stella Moon' to the Danish government on May 10.

Ananda Shipyard and Shipways Ltd (ASSL), one of the premier shipbuilding companies of the country, has built the Stella Moon at a cost of 7.5 million US dollar.

Speaking at a press conference, Afruza Bari, managing director of the ASSL said that Stella Moon is the eighth oceangoing ship to be exported to Denmark.

Chairman of the ASSL Dr Abdullahel Bari, director Naval architect engineer Tariqul Islam and engineer Nazma Nowroz responded to the queries raised by the journalists at Dhaka Reporters Unity (DRU) here.

He said, Industries Minister Dilip Barua will inaugurate the handing over ceremony as the chief guest on the premises of the shipyard at Meghnaghat under Sonargaon upazila in Narayanganj district.

Within a short span of time, he said, Bangladesh will be recognized as a destination of shipbuilding in South Asia encouraged by the government's patronization of announcing green channel facility allowing the industry a priority sector.

As a result of the green channel facility, a number of companies have expressed their keen interest in investing in the sector, he said and expressed hope that the country can earn 20 billion US dollar annually if the government provide the shipbuilding sector with 30 percent cash incentive for next five years.

Referring to the Prime Minister's recent call to the engineers to build dredger equipped with local technologies, Nazma Nowroz said the country could save huge amount of foreign currency if the country's shipbuilding companies get the chance to build dredgers.

They demanded the government to allow bank guarantee at 1.5 percent rate like neighboring countries, reducing opening cost of letter of credit (L/C) and announcing working capital at seven percent interest rate.

The Stella Moon has the capacity of 3,000 dead weight tonnage (dwt) and some other ships being built containing up to 6,600 dwt, said Dr Bari.

The New Nation - Internet Edition

 

[white_pawn]

MoU May Be Signed On N-power Plant Wednesday ​

Bangladesh and Russia might sign a Memorandum of Understanding on Wednesday on installation of a nuclear power plant, officials said on Monday.

Prime minister Shiekh Hasina provisionally approved the draft MoU, officials said last week.

A high-powered Russian delegation is expected to arrive in Dhaka on Tuesday to sign the deal.

Science secretary Najmul Huda Khan told bdnews24.com on Monday that they made a lot of ground in the negotiations.

"We are also in favour of searching all avenues for competitive advantage for Bangladesh. Because it is a mega project," he said.

Bangladesh and Russia finalised the draft MOU following a three-day meeting last month in Dhaka where they had agreed on installation of the plant.


Ministry officials said the capacity of the power plant would be finalised in the final deal but the government decided to set up two plants, each with 1000 megawatt capacity.

Russia did not specify the financial terms which would be settled after the final agreement, said the officials with direct knowledge of the negotiations.

Sources said Russia was interested to provide loan, probably on easy terms, rather than grant. The Economic Relation Division will settle the financial terms and conditions after the MoU is signed.


Russia supplied 10 nuclear power plants last year and has supplied as many as 65 plants to Iran, India, China, Armenia, Ukraine, Hungary, Slovakia, Czech Republic, Finland, Bulgaria and Germany. Currently it is constructing 11 power plants in countries.

The first initiative to install nuclear power plant in Bangladesh in Rooppur, Pabna was taken in 1961.

Currently 439 power plants are producing 16 percent of total electricity around the world.

China and South Korea also approached Bangladesh to set up new clear power plant.


MoU May Be Signed On N-power Plant Wednesday