The light engineering sector

http://nation.ittefaq.com/issues/2009/11/24/news0378.htm

The light engineering sector

LIGHT engineering industries form an important sector of the national economy in terms of the number of units, employment and annual turnover. According to Bangladesh Engineering Industry Owners Association (BEIOA), a total of 40,000 such units are producing capital machinery, spare parts of imported machines – new or reconditioned. Their total economic value is claimed to be Tk 20,000 crore a year. The sector reportedly provides employment to some 20 lakh people. According to a recent report, export of light engineering equipment fetched US$220 million and US$189 million in 2007-08 and 2008-09 respectively. But potential of the sector cannot be fully utilised for lack of capital and support survices. In spite of having a large number of experienced technical hands, the sector cannot make innovations as they use age-old machinery. Banks and financial institutions are reportedly less interested to invest in the sector.

Bangladesh depends on foreign countries for costly capital machinery. Local light engineering industries can meet a part of the demand at cheaper prices if the industries are given financial support to produce modern machinery. These industries are already doing a significant part of maintenance works of the existing industries supplying spare parts fabricated locally and thus saving huge foreign exchange. Light engineering industries along with other SMEs are considered engines of industrialisation. They absorb more workforces and can help achieve the goal of poverty reduction.

Bangladesh has hardly any heavy industry. The country with about 30 million unemployed people needs labour intensive industries. Light engineering industries are specially suitable for their high labour intensity, innovativeness and low capital investment. Stakeholders in the sector want the authorities to create a special fund to provide loans at low interest rates. The SME Foundation may extend financial support to them. Policy support for the development of this vital sector would give rich dividends, say experts.

Dhaka fleshes out five points for WTO

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Dhaka fleshes out five points for WTO
Star Business Report

Bangladesh will push advanced countries to include its “commercially meaningful” products in the 97 percent duty-free category in the World Trade Organisation (WTO) ministerial meeting to be held in Geneva at the end of this month.

At a press conference, Commerce Minister Faruk Khan yesterday said the advanced countries had offered 97 percent duty-free facilities to the least developed countries (LDCs) at the Hong Kong ministerial meeting, but the inclusion of the major products in this category was not ensured.

As a result, Bangladesh, being one of the LDCs, failed to export its major exportable products duty-free to the developed world, Khan said.

According to an estimate, 30 major Bangladeshi exportable items were not included in the 97 percent duty-free category, although those products take up 70 percent of export volume.

Bangladesh paid $576 million as duties to the US in fiscal 2008-09 against exports, which is the same as the amount France paid in duties to the US despite being an advanced nation and exporting manifold to the country, according to trade body data.

Duty-free and quota-free access is among the five points Bangladesh is set to press at the WTO meeting.

Bangladesh will also highlight how to recover from global recession and tackle its impacts on the domestic economy.

Bangladesh will demand benefits from the developed world, as it is a “disproportionately affected country”. In the South Asian region, two countries — Sri Lanka and Pakistan — are enjoying benefits in exports as disproportionately affected countries.

As an agenda for negotiation, Bangladesh will also seek smooth export of human resources under WTO’s MODE-4, or free movement of natural persons to the developed world.

“It is our long cherished demand that the advanced countries will import skilled and semi-skilled workers from the LDCs under the WTO negotiation,” Khan said.

Bangladesh will ask the developed world to remove any restriction on the exports of food items to LDCs to avert any food crisis in poor countries.

Khan said representatives would hold several meetings on the sidelines with leaders of other LDCs, Saarc, BRIC (Brazil, Russia, India and China) leaders and Japan to harness economic, bilateral and multilateral trade benefits.

BBS opens ICT training labs

http://www.theindependent-bd.com/details.php?nid=151248

BBS opens ICT training labs
Economic reporter

Planning minister, Ministry of Planning, Air Vice Marshal (Retd.) A.K. Khandker (BU), MP, PSA inaugurated a modern ICT Training Labs of BBS Under the Project of “Strengthening ICT Training and System of Bangladesh Bureau of Statistics” assisted by Korea International Cooperation Agency (KOICA) on November 22.

Kim Chang Sup, Resident Representative of KOICA Bangladesh Office and Shahjahan Ali Mollah, Director General of Bangladesh Bureau of Statistics were also present at the opening ceremony.

Planning minister in his speech as chief guest mentioned that the Republic of Korea is a great country and is a very good friend of Bangladesh. He expected that KOICA’s assistance for developing infrastructure for training, ICT and Statistical Data Management System will help BBS to play pioneering role in the years to come for achieving ‘Vision 2021′ set by the Government of Bangladesh.

He also hopes that the Government of Republic of Korea will extend their co-operation in achieving the target of our government.

While delivering the speech as special guest, resident representative of KOICA, Kim Chang Sup mentioned that KOICA puts much importance in developing the ICT sector of Bangladesh.

Egyptian entrepreneurs urged to invest in Bangladesh

http://nation.ittefaq.com/issues/2009/11/24/news0392.htm

Egyptian entrepreneurs urged to invest in Bangladesh
BSS, Dhaka

Industries Minister Dilip Barua on Monday urged Egyptian entrepreneurs to invest here at different potential sectors by taking advantage of various lucrative offers provided by the government to increase the country’s Direct Foreign Investment (FDI).

“Egyptian investors can also come forward for joint investment with the local businessmen aiming at increasing economic relations between the two countries,” he said while holding a meeting with the Egyptian Ambassador to Bangladesh Fayez Noseir at his office at the ministry here.

The Minister also suggested exchanging visit of business delegation to identify the potential sectors of commerce and trade cooperation between Dhaka and Cairo.

During the meeting, they also discussed matters related to bilateral issues and mutual interest as well as vulnerable position of Bangladesh due to adverse affect of climate change.

The Minister said, the government is considering to build coal-based power plant for quick solving the acute electricity crisis in view to build a industrialized Bangladesh.

Referring that the government has put special emphasis on building skilled and trained human resources through vocational education, the minister sought support of Egyptian government in this regard.

Praising the Bangladesh government role in building skilled manpower, the envoy said his government is keen to provide support to Bangladesh in this regard.

He also hoped that the cooperation between Bangladesh and Egypt in industry and technical sectors would be increased under D-8 forum in the coming days.

Special economic zones on cards: Barua

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Special economic zones on cards: Barua
Star Business Report

The government will soon develop special economic zones (SEZs) to lure both foreign and domestic investments, said Industries Minister Dilip Barua yesterday.

“Bangladesh is a unique place for investment. Foreign investors can invest in the special economic zones with modern technology and help accelerate economic activity and generate employment,” he said.

“Foreign investors can come and invest in the various thrust sectors, such as ceramics, light engineering and shipbuilding.”

Barua made the call to foreign investors at the inauguration of a new production unit of ‘Maggi’ noodles by Nestle Bangladesh Ltd. The new unit has been set up at Nestles’ factory in Sreepur, Gazipur.

Deputy Head of Mission of Switzerland Gabriele Gerighetti and Nestle Bangladesh Chairman Latifur Rahman and Managing Director Laurent Therond were also present.

Nestle Bangladesh officials said the company invested about Tk 13 crore to set up the new production unit to meet growing local demand for noodles.

Officials said the new unit would raise the noodles production capacity almost threefold — from about 3,500 tonnes to over 10,500 tonnes a year.

“Nestle’s expansion is an important initiative. Such investment will allow us to realise our dream of making Bangladesh an industrially developed nation,” said Barua. “In the new Industrial Policy, we will focus on facilitating foreign and non-resident Bangladeshi investors.”

The minister said the government would take steps to safeguard foreigner’s investments and facilitate easy transfer of their profits and remittance.

“We want foreign investors to be our development partners,” he said.

Barua also said the government will protect worker interests, encourage companies to carry out their social responsibilities and develop the green industry.

Gerighetti said Bangladesh is truly a unique place for investment and tourism.

“The potential of Bangladesh is huge,” he said, adding that Swiss investors are investing here. “Some of them are also waiting to invest.”

Nestle Bangladesh Ltd, a subsidiary of health, nutrition and wellness company Nestle SA, began operations in Bangladesh in 1994.

The company manufactures and markets various brands, including Maggi Noodles, Maggi soup, Nescafe, Nido power milk and various infant cereals.

Therond said the expansion would help Nestle fulfil rising demand for noodles among consumers. “Thanks to the Bangladeshi consumers, our new production unit will certainly be able to meet demand. We will also bring some new products for Bangladeshi consumers.”

Grameen to introduce cheap IP Phone

http://nation.ittefaq.com/issues/2009/11/23/news0286.htm

Grameen to introduce cheap IP Phone
Staff Reporter

The country’s people, who are connected with Internet, can call others without charge from next month.

Grameen CyberNet Limited (GCL), a local Internet Service Provider (ISP), will launch the Internet Protocol (IP) Phone services’ delivery to the people immediately.

Golam Mohiuddin, Managing Director of GCL, at a press briefing at the Dhaka Reporters’ Unity (DRU) in the city yesterday said their own engineers developed ‘IP Phone Software’ by using totally local technology, for which they will be able to provide the services at the lowest cost.

The Internet connected people have to buy an IP phone for getting the service. GCL is selling IP phones by Tk 7,000.

GCL will charge Tk zero at call from an IP Phone connection to another IP Phone while below 10 paisa will be charged from IP Phone to other operators like mobile and call to foreign countries must be charged lower than the present rate, he said.

Those, who have already any telephone, can also be connect with IP Phone through an IP adaptor that can be bought by Tk 1,500.

The users can send voice mail to other persons if they are not available during calling and the mail can be checked later in mobile even Internet.

Different services including call waiting, teleconferencing across the world and call forwarding will be available at the GCL IP Phone. Those who are consumers of other ISP companies also can enjoy IP Phone services of GCL.

Bangladesh Telecommunication Regulatory Commission (BTRC) approved IP Phone license for GCL on August 18 this year.

Local companies to get forex loans from PCBs

http://www.newagebd.com/2009/nov/23/busi.html#1

Local companies to get forex loans from PCBs
Asif Showkat

The private commercial banks are actively working to bring the credit system at a competitive level offering loans in foreign currencies to local businesses at the interest rate of global market standard, official sources said.

‘We have advised the local business conglomerates not to take costly credit from the international sources,’ said Atiur Rahman, governor of the Bangladesh Bank recently.

Biman Bangladesh Airlines will save nearly seven million dollars taking loan from local private commercial bank instead of foreign sources, he mentioned.

According to a recent bidding, Eastern Bank Limited has won the bid to finance Biman with $117 million beating foreign Citibank NA while Apexadelchi Limited will take a credit of 7 million Euro from the Bank Asia Limited.

Interest rates for the loans will be EURIBOR (European Inter-bank Offered Rate) plus 3.5 per cent, a source at the Board of Investment said.

The scrutiny committee on foreign loans of the BOI last week has approved the Apexadelchi loan to enhance the working capital of the company which exports footwear to Europe and China, the source added.

The EBL sources said that the loan agreement with Biman is likely to be signed in December next.

‘This is for the first time in history that a Bangladeshi bank has taken the initiative to enter into a deal, which was earlier done only by foreign banks,’ Ali Reza Iftekher, managing director and chief executive officer said referring to the agreed loan for Biman.

The central bank’s recent lifting of restrictions on offshore banking or foreign currency loans for local banks has broken the monopoly that foreign banks enjoyed earlier in case of banking outside the country’s export processing zones.

Only foreign firms in the EPZ were entitled to foreign exchange loans before the lifting of the restriction by the central bank.

Now there are nearly a dozen local and foreign banks providing offshore banking services to investors and businessmen in EPZ and all its transactions are in foreign currencies, mainly in US dollar.

Providing all credits to the Bangladesh Bank, the EBL’s Ali Reza Iftekher said, ‘It has helped a lot as the central bank has agreed to use its foreign exchange reserve for national interests.’

Irteza Reza Chowdhury, senior executive vice-president of the Bank Asia Limited told New Age that his bank would arrange the foreign loan signing ceremony with the Apexadelchi today.

UK-based company to invest $5m in DEPZ

http://nation.ittefaq.com/issues/2009/11/23/news0298.htm

UK-based company to invest $5m in DEPZ
Business Report

UK based company Talisman Limited will set up a high fashion garment industry in Dhaka Export Processing Zone soon.

The company will invest US $ 5 million in setting up their unit and will produce garment items that will create employment opportunity for 1,800 Bangladeshi nationals.

An agreement to this effect was signed between the

Bangladesh Export Processing Zones Authority (BEPZA) and the M/s.

Talisman Limited in BEPZA Complex.

BEPZA member Moyjuddin Ahmed, Member (Investment Promotion) and Chairman & Managing Director of Talisman Limited M A Matin signed the agreement on behalf of their respective organizations.

BEPZA Executive Chairman Brig Gen Jamil Ahmed Khan and senior officials were present.

Re-launch of One Stop Service soon

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Re-launch of One Stop Service soon
Star Business Report

The state-run investment promotional agency will re-launch its One Stop Service to provide better services to entrepreneurs expediting investment processes, its chief told a seminar in Dhaka yesterday.

“Enhancing image through better service is our goal,” said S A Samad, executive chairman of the Board of Investment (BoI).

Canada-Bangladesh Chamber of Commerce and Industry (CanCham) organised the seminar on Bangladesh’s Potentials for Foreign Investment at the auditorium of Dhaka Chamber of Commerce and Industry.

The BoI boss listed some facilities offered to investors, both local and foreign, which include cash incentives, zero tariff benefit for importing some specific raw materials and guaranteed loans against opening of letters of credit.

In this context he also pointed his finger at opening up a widened area of investments for all except four sectors including arms and ammunition, forest plantation, nuclear energy and security printing and minting. “ You have a lot of areas you can make investment.”

Samad assured foreign entrepreneurs that their interests are protected by the law of the land.

At present there are 44 Canadian projects in Bangladesh with an accumulated investment of $296.37 million employing 11,087 persons, he pointed out.

“The government is relentlessly trying to improve the law and order for creating a better investment climate in the country,” Samad said.

The decline in corruption and crime is a clear indication of the better law and order, he added.

In his speech, Canadian High Commissioner in Bangladesh Robert McDougall stressed improvement in Dhaka’s traffic congestion to attract foreign direct investment (FDI).

“Practical actions are needed, rather than soft words for reducing the city’s traffic jam,” he said.

Urging an accelerating pace in the execution of annual development programmes, CanCham President Masud Rahman lauded the government’s public-private partnership (PPP) initiatives saying it is a good effort to lure FDI.

However, he lamented that current investment offers are not enough in the cases of much-needed physical infrastructures like energy, port, roads and railways.

These areas need huge money with slow return, Rahman said.

“Appropriate policy support that envisages joint ventures and incentives may be given to attract investment in these areas,” Rahman added.

CanCham Vice-president John Douglas Hearns also spoke.

BBF launches ‘Knowledge Centre’

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BBF launches ‘Knowledge Centre’
Star Business Desk

Bangladesh Brand Forum (BBF) has launched its innovative project, Knowledge Centre, yesterday.

Through its different sections, the centre aims to inspire managers to reach their full potential.

The available means of resources are: Library (books and journals), a computer centre, a video archive, a training centre and a creative centre.

Dr Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, was present at the ceremony along with Prof Ferhat Anwar, BBF chief adviser, and Shariful Islam, founder.

Shah Masud Imam, head of corporate affairs of Standard Chartered Bank, who was also present at the event, said: “The facility is equipped with all the necessary means to gain knowledge about the business world.”

Bangladesh Brand Forum promotes brands in Bangladesh’s corporate world.

Norway envoy visits Shinepukur Ceramics

http://www.theindependent-bd.com/details.php?nid=151097

Norway envoy visits Shinepukur Ceramics
ECONOMIC REPORTER

The ambassador of the Royal Norwegian Embassy in Dhaka Ingebjoerg Stoefring, on November 21, visited the state-of-the-art manufacturing facilities of Shinepukur Ceramics Ltd. (SCL), the leading ceramic tableware manufacturing company and largest ceramic tableware exporter of Bangladesh.

The Norway ambassador showed special interest in the high quality bone China tableware which SCL manufactures in its world class manufacturing plant.

Seeing different production lines of both Porcelain Plant and Bone China Plant of SCL, The Norway ambassador highly appreciated the quality of the products, as well as the quality of the manufacturing systems of SCL’s manufacturing plant.

She was also highly impressed by the hygienic environment and high-tech quality control process that SCL put in place during its production.

Rizvi Ul Kabir, Chief Operating Officer (COO) of Shinepukur Ceramics Ltd. welcomed the ambassador of the Royal Norwegian Embassy in Dhaka and the 15 member delegation from the Norway Embassy in the SCL manufacturing plant.

Rizvi said, “SCL is currently exporting both its Porcelain and Bone China products to Norway and this visit of the Norway ambassador to SCL plant will definitely further enhance SCL’s exports to Norway in the coming days”. He also mentioned that “Considering the huge demand of SCL’s high quality bone China tablewares in all its export markets, SCL is currently expanding its production capacity of bone China plant.”

Bangla may be used in net domain name

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Bangla may be used in net domain name
Staff Correspondent

The Internet Corporation for Assigned Names and Numbers (Icann) has agreed in principle to include Bangla as one of the languages to be used in top-level domain name, said a parliamentary committee yesterday.

“When I recently met Icann CEO Rod Beckstrom in Egypt he agreed in principle to include Bangla as one of the languages to be used for top-level domain names,” Hasanul Haq Inu, chairman of the parliamentary standing committee on telecommunications ministry, told The Daily Star after a meeting of the committee.

Inu said he asked Beckstrom why Bangla, which is spoken by about 40 crore people, will not be included for using in domain names while Russian and Arabic scripts are going to be incorporated in the domain name system.

“Beckstrom finally agreed in principle and advised me to apply formally from government level,” said Inu.

“The parliamentary standing committee today asked the ministry concerned to apply to Icann to this end and inform Prime Minister Sheikh Hasina about it,” he added.

Inu expressed hope that Bangla will be one of the top-level domain name languages by the next International Mother Language Day.

Icann is a non-profit organisation that was created on September 18, 1998, in order to oversee a number of Internet-related tasks including assigning Internet Protocol (IP) addresses and managing generic and country code top-level domain name system.

The parliamentary standing committee meeting asked the telecommunications ministry to declare about 29 acres of land of Telephone and Shipa Sangstha as telecom and electronic machinery production zone.

It also asked the ministry not to apply the government purchase policy to purchase of machineries or equipment for the organisation.

“We have also set a timetable for Telephone and Shilpa Sangstha to turn the losing venture into a profitable one,” Inu said.

Japanese investors’ interest on rise

http://www.newagebd.com/2009/nov/22/busi.html#1

Japanese investors’ interest on rise
Kazi Azizul Islam

Japanese investors and importers are choosing Bangladesh as one of their major destinations. Trade negotiations, agreements and visits by investors have marked a significant rise in recent times.

According to a Japanese trade diplomat in Dhaka, Japanese investors are showing more interest in investing Bangladesh.

‘The express of interests from potential investors and importers in the past six months was definitely much higher than before,’ Tomohiro Kinomoto, the country chief of the Japan External Trade Organisation, told New Age.

The JETRO official observed, ‘Bangladesh should not miss this chance.’

Top-level officials of Shimamura, Japan’s second largest clothing retailer, and Okamoto, Japanese socks and hosiery market leader, visited Dhaka early this month.

Kinomoto said their visits were successful.

In 2007, Bangladesh apparel shipment to Japan was worth less than $30 million exposing the country’s inability to extract from Japan’s $25 billion plus market of imported apparels.

But, the opening of the Dhaka sourcing office in Mid-2008 by Japan’s number one clothing brand Uniqlo drew attention of other Japanese, who mainly source from China with some procurement from Vietnam, Thailand, and Indonesia.

In nine months to September 2009, Bangladesh apparel shipment to Japan crossed $80 million, which is more than double of the 2008 shipment.

Kinomoto finds highly significant the partnership between Bangladeshi ISP BracNet and Japanese telecom and internet service giant KDDI Corporation.

KDDI, which is partly owned by Toyota and Kyocera and has business with Google, announced last week that it had bought 50 per cent stakes in BracNet.

Kinomoto declined to name more companies that are close to make investment deals or doing feasibility studies in Bangladesh.

Sources in the Japan Bangladesh Chamber of Commerce and Industry said at least half a dozen Japanese textile and garment companies were in process of registration as investors.

‘Companies are also doing feasibility studies in sectors like pharmaceuticals, information and communication technology and leather,’ said a JBCCI official.

The JBCCI president, Abdul Haque, said Kenco Logistics and Konoike-Euro Logistics opened their offices in Dhaka while QTECH, an inspection company, announced opening of its office in February next year.

‘Arrival of a freight forwarder and an inspection company in a new place indicates huge increase in business in the near future,’ Akhtaruzzaman, a member of parliament and the agent QTECH, said.

Syed Nasim Manzur, managing director of Apex Adelchi Footwear, the country’s largest shoe manufacturer and exporter, felt that eagerness of Japanese investors towards Bangladesh had increased significantly in recent months.

For years, business seminars in Dhaka discussed the potential of Japanese investment in Bangladesh or possibility of relocations of Japanese manufacturing industries in the country.

But in reality Japan’s investments in Bangladesh remain insignificant comparing with Korea, China, Taiwan or even the UK or USA.

Kinomoto of JETRO said due to the ‘China Plus One’ policy of the Japanese government, the Japanese manufacturers had started considering Bangladesh as an important investment and import souring destination.

‘The global recession has pushed the Japanese business to search lower cost manufacturing base and sourcing destinations,’ he added.

Power and gas supply would have to be improved, Kinomoto said adding that road condition would have to be improved and land has to be developed for setting up factories.

Citing establishment of a special economic zone by the Pakistan government for Japanese investors, he said, ‘The Japanese may not want that here, but spaces could be provided by expanding the existing EPZs immediately.’

The JBCCI president said the government and business bodies would have to actively welcome the latest interests of the Japanese investors and arrange necessary facilities in shortest possible time.

He said for meeting demand of Japanese investors immediately the government could offer them land belonging to closed state-owned enterprises.

Bumper production of winter vegetables expected in northern region

http://www.bssnews.net/newsDetails.php?cat=4&id=72361&date=2009-11-21

Bumper production of winter vegetables expected in northern region

RAJSHAHI, Bangladesh, Nov 21 (BSS)- Bumper production of the winter vegetables is being expected everywhere in the 16 northern districts under Rajshahi division during the current Rabi season by virtue of the favorable topography and weather.

All varieties of winter vegetables have now appeared in abundance in the local markets and the yield rate achieved so far are found to be higher than that of the target due to early farming of the vegetables, Officials in the Department of Agriculture Extension (DAE) said.

Meanwhile, the market price of all varieties of vegetables especially lalshak, palangshak, sheem and mula has been declined to abnormal level frustrating the farmers side by side with making the purchasers happy.

The DAE has fixed an average yield rate of all varieties winter vegetables at 15 tonnes per hectare this time, the sources said.

Under the programme, a total of around 18 lakh tonnes different varieties of vegetables will be produced in 1.23 lakh hectares in all 16 districts under Rajshahi and Rangpur agriculture zones in the country’s northern region this season.

Under the programme, 12,000 hectares in Rajshahi, 7,500 hectares each in Naogaon and Sirajganj, 6,500 hectares in Natore, 9,500 hectares in Chapainawabganj, 16,000 hectares in Pabna, 8,500 hectares in Bogra and 5,000 hectares will be brought under the cultivation of winter vegetables in Joypurhat districts under Rajshahi Agriculture Zone, the DAE sources said.

Apart from this, 8,000 hectares of land were brought under winter vegetables in Rangpur, 6,000 hectares each in Gaibandha, Nilphamari, Kurigram and Thakurgaon, 5,000 hectares in Lalmonirhat, 10,000 hectares in Dinajpur and 4,000 hectares in Panchagarh districts under Rangpur Agriculture Zone.

Officials said the DAE, Bangladesh Agriculture Research Institute, Bangladesh Agriculture Development Corporation and many NGOs have been supplying adequate quality seeds, other agro-inputs and providing necessary technical assistance to the farmers for making the cultivation a total success.

Additional director of DAE Akterul Afghan told BSS that emphasis is being given to increasing production of high yielding seeds and saplings through farmers’ level extension and application of the high yielding varieties.

Farmers are being habituated with homestead gardening through establishing projection plot of improved technologies adjacent to the localities for enhancing vegetable output.

As a result of this, he said gardening around homesteads in the Barind region is becoming increasingly popular with production of different common fruits and vegetables for own consumption and also to sell the surplus for extra income.

In addition to this, he said modern technologies are being transferred among the growers level through farmers training, projection plot, field day and different types of campaign so that the farmers could make their cultivation more effective and profitable.

Different commercial banks, including Rajshahi Krishi Unnayan Bank and other commercial banks, NGOs have been disbursing agriculture loans and interest-free loans among the farmers to make the cultivation of winter vegetables successful.

Exports await boost as west crawls out of recession

http://www.newagebd.com/2009/nov/21/busi.html#1

Exports await boost as west crawls out of recession
Khawaza Main Uddin

The country’s economy may find stronger grounds for consolidating exports as a result of rising consumer demands in the west with the advanced economies crawling out of the recession.

In the coming months, economists anticipate positive implications of the recovery worldwide for Bangladesh, which remains largely insulated from the global financial meltdown.

They forecast that the national economy is most likely to escape the ‘tail effects’ of the recession as exports of both goods and manpower are expected to bounce back to normal trends cashing in on the latest economic growth in Europe and North America.

Demands for Bangladeshi garments in the west next summer and fall are high, say industry sources adding that exports of items such as frozen foods, jute and jute goods and leather products may also rebound, should the gains by mighty economies in terms of gross domestic product sustain.

However, the economists suggest that the government should now focus on long-term strategy for sustainable export earnings and remittances taking lessons from the country’s vulnerability to external shocks and also its resilience proven during the global recession spanning 2008 and 2009.

‘Demands for our products in the western markets are going to rise with the increasing consumer demands and if more employments are generated in the aftermath of the recession. Signs of an end to the financial crisis are there,’ said Ananya Raihan, executive director of research organisation D-Net.

Nazneen Ahmed, research fellow of the Bangladesh Institute of Development Studies, pointed out that the sales of goods and commodities in the run-up to the Christmas Day celebrations would ascertain whether the recession in Europe and America was over and the west could increase imports from countries such as Bangladesh.

Both the economists recommended that the government should always keep an eye on the latest developments in the global economy before taking any policy measures to support the exports and other sectors that might have impacts on taxpayers’ money.

A sub-committee of the officially-formed task force has recently advised the government to provide textiles and clothing units with partial interest waiver on bank loans and also cash incentive for exploring new markets, apart from floating a Tk 200 crore revolving fund to support the apparel sector. An amount of Tk 5,000 crore has been earmarked as stimulus package in the current budget.

In the past week, gross domestic products in the euro-zone area of 16 nations reportedly rose 0.4 per cent from the second quarter and joined the United States and Japan in returning to growth from the worst recession since the Second World War. Germany and France – two main destinations of Bangladeshi exports to the European Union – contributed more to compensating for households’ reluctance to spending.

The news of economic recovery in Europe in particular came in the wake of almost 12 per cent decline in Bangladesh exports in the first quarters.

When asked about the trends in export order receipts, Zafar Iqbal, director of a foreign company named Gooryong Dhaka Limited, mentioned that they had already witnessed approximately 40 per cent rise in the export orders targeting the next summer and fall.

‘Many factories especially larger ones are flooded with orders. However, the prices of garment items may vary and it depends on the capacity, including quality of products and bargaining power of individual entrepreneurs,’ he told New Age on Friday.

Nazneen Ahmed felt that Bangladesh was ‘perhaps’ going to avoid the ‘tail effects’ of the recession. ‘So, I believe, the government should maintain caution in paying direct stimulus with the taxpayers’ money,’ she said suggesting long-term measures to boost exports and remittances.

Ananya Raihan suggested trading with services instead of depending only on trade in goods and said Bangladesh had opportunities to export banking services to Africa, the Middle East and even South Asian countries.

He also recommended that the government could consider devaluation of Taka against dollar to give incentives to exports at a time when there was no pressure of higher import bills and foreign exchange reserves swelled to $10 billion mark.