Private sector credit flow up again in Oct

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Private sector credit flow up again in Oct
Siddique Islam

Private sector credit flow again witnessed a rising trend in October after a month of declining growth, indicating that the country’s overall business activities have started improving slowly.

Private sector credit growth rose to 15.40 per cent in October from 13.65 per cent in September, against lower growth recorded in about last two years, according to the central bank statistics.

“The credit flow to private sector increased during the period mainly due to the rise in financing small and medium enterprises (SME), agriculture and trade,” a senior official of the Bangladesh Bank (BB) told the FE Sunday.

The BB officials and senior bankers expect that the upward trend of private sector credit might continue in the near future also due to recovery of major economies from the global meltdown and restoration of confidence of the country’s business community.

They also said private credit would increase sharply, if the government could fast-track projects under the newly-launched Public Private Partnership (PPP) investment initiative.

The credit flow to private sector recorded a growth of 15.40 per cent to Tk 305.946 billion in October 2009 on a year-on-year basis compared to 24.82 per cent or Tk 395.149 billion of the previous year, the BB’s data showed.

“The upward trend of private sector credit flow will continue and it should increase gradually,” Agrani Bank Limited Managing Director and Chief Executive Officer Syed Abu Naser Bukhtear Ahmed told the FE.

He also said project financing is yet to be increased because new entrepreneurs are not interested to set up industrial plants due to shortage of gas and electricity.

“We need employment generations in the country through industrialisation,” Bukhtear said, adding that credit flow to private sector would grow gradually as soon as better supply of gas and power in industrial units will be ensured.

Disbursement of agricultural credit during July-October 2009 stood at Tk 29.746 billion compared to Tk 25.076 billion in the same period of the previous year, the central bank said.

“Recovery of agriculture credit during July-October 2009 also stood higher at Tk 32.489 billion compared to Tk 16.97 billion during July-October 2008,” the central bank said in its ‘Major Economic Indicators: Monthly Update’ of November 2009.

Software fair starts Feb 10

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Software fair starts Feb 10
Star Business Desk

A five-day software exposition will kick off on February 10 at Bangabandhu International Conference Centre in Dhaka, organisers said in a statement yesterday.

Bangladesh Association of Software and Information Services (BASIS) will organise SOFTEXPO-2010, themed as Digital Bangladesh in Action.

Habibullah N Karim, BASIS president, disclosed the date of the fair at a press meet in a city hotel yesterday.

Karim said the IT event is expected to have a large software display and IT-enabled services breaking all previous records.

A Towhid, chairman of National Events Committee, MA Mubin Khan, director, and Nahid Ahmed, secretary general of BASIS, also attended the programme.

Mubin said the fair would focus on the government’s Vision-2021 — a deadline to make a Digital Bangladesh.

The fair is expected to see around five lakh visitors at its stalls of over 200 local and international companies.

Bangladesh has earned $32.91 million by exporting software accessories this year, a $5.91 million rise from last year. “The volume will increase by 30 to 40 percent next year.”

SOFTEXPO aims to create a platform for showcasing immense potential of the industry by synchronising all sorts of software resources and skills available in Bangladesh, said organisers.

Local shipbuilding sector to save foreign currencies

http://www.theindependent-bd.com/details.php?nid=154531

Local shipbuilding sector to save foreign currencies
ECONOMIC REPORTER

Minister for Shipping Shajahan Khan on Saturday said country would save huge foreign currencies, as a local shipbuilding company Western Marine Limited, was building a Ro-Ro ferry for the first time in Bangladesh.

Terming this a milestone for domestic ship building industry, the minister said the country had to procure such kind of vessel from Europe in the past since there was no large, sophisticated and technologically modern shipbuilding companies here capable of building specialized vessel, says a press release.

“It will help the country to save huge foreign currencies since we have to buy those vessels in foreign currencies,” the minister said while inaugurating the keel-laying of the Ro-Ro ferry at the Western Marine’s shipyard at Kolagaon Union under Patiya Upazila in Chittagong Minister as the chief guest.

Country’s leading ship building company Western Marine Shipyard Limited is building the Ro-Ro ferry for Bangladesh Inland Water Transport Corporation (BIWTC) at a cost of Tk 29 crore after winning a competitive bidding.

The ferry with the capacity of carrying 20 heavy vehicles, 340 passengers and 25 crews is expected to be delivered by December 2010. The vessel will be build under the supervision of classification society Germanischer lloyd .
After completion, the Ro-Ro ferry will be commissioned at the Charjanajat Ferry terminal in Munshiganj for transportation of passengers and vehicles.

Acknowledging contribution of Western Marine in flourishing the ship building sector, the shipping minister said that Bangladesh had made strong foothold in global shipbuilding industry within short time and building of Ro-Ro ferry will take it to another step of accomplishment.

Shamsul Hoque Chowdhury, Member of Parliament from Patiya, Abdul Mannan Howlader, secretary of Ministry of Shipping, Golam Mostafa Kamal, chairman of BIWTC and Commodore R. U. Ahmed, chairman of Chittagong Port Authority (CPA) also delivered their speech at the ceremony as the special guests.

Earlier, Western Marine chairman Saiful Islam and managing director Sakhawat Hossain welcomed the guests at the shipyard.

Four tunnels to ease congestion in Dhaka

http://www.newagebd.com/2009/dec/21/front.html#9

Four tunnels to ease congestion in Dhaka
Staff Correspondent

The Dhaka City Corporation has taken up a plan to construct tunnels at four important intersections in the capital to facilitate smooth movement of vehicles, said official sources on Sunday.

The tunnels will be constructed at Shahbagh, Sheraton, Banglamotor and Sonargaon intersections which are plagued by heavy traffic, according to the decision taken at the meeting held at the DCC on Sunday with its chief engineer in the chair.

A proposal for the envisaged project worth Tk 170 crore, to be implemented in one and a half year, will be submitted to the LGRD ministry very soon, said meeting sources.

The tunnels at Shahbagh and Sheraton will be two-way, going in both directions. The vehicles from in front of the Shishu Park on the Mowlana Bhasani Sarani will cross the intersection through the tunnel on the right, while vehicles from Minto Road will also cross the Sheraton intersection through the left tunnel.

The tunnels at Banglamotor and Sonargaon will also be two-way with two lanes, said sources.

‘If the tunnels are constructed, no congestion at these intersections will be seen again,’ said a DCC official.

The DCC has already consulted the engineers of the Bangladesh University of Engineering and Technology in this regard.

The engineers have suggested that the construction of the tunnels should be started immediately to improve the traffic situation and prevent the nagging congestion that kills hundreds of working hours and burns a huge amount of fuel uselessly.

Searching for investment recovery

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Searching for investment recovery

When it comes to investment there seems to be no dearth of good ideas around, some really innovative by Bangladesh standards like the Public Private Partnership (PPP). If all the talk about boosting domestic investment were to materialize, economic growth would get a boost in no time. Yet, reality is something else. For five years running, the economy’s investment-GDP ratio has been stagnant at 24 per cent. Economists have pointed out that without a substantial increase in this ratio, growth rates of 7.0-8.0 per cent per annum will remain a far cry. Where lies the problem?

The phenomenon about the level of public investment suffering due to poor implementation of the planned Annual Development Programme (ADP) is unlikely to change overnight. While mega projects in the public sector are on the cards, financing and implementation of these can hardly be thought of as exclusive public sector undertakings. A lot rests on the shoulders of private entrepreneurs, domestic and foreign, in giving concrete shape to the mega infrastructure projects that will have to be undertaken over the next five to ten years. There is no alternative to PPPs in such endeavours.

Properly conceived and orchestrated, roadshows in major financial centers of the world – e.g. London, New York – could be highly productive in attracting foreign investment while dispelling some of the misgivings about the Bangladesh economy. The recent London roadshow looked ambitious in its goal of mobilizing $5.0 billion for the energy sector. This paper earnestly hopes for its success in getting the job done. More of these might be necessary in the months to come. But they must be results-oriented and will be judged by their outcomes, rather than ending in a lot of fanfare signifying little.

On paper, Bangladesh has among the most liberal foreign direct investment (FDI) regime, especially in South Asia. That, however, is merely a necessary condition. It has not yielded the desired results, for various reasons now well known. The overall investment climate in the country has not been conducive to attract massive amounts of foreign investment the way it has occurred in, say, Vietnam which drew $12 billion (or 13% of gross domestic product or GDP) of FDI even in 2009 despite all the adverse developments for capital flows during the global crisis. Bangladesh has only managed to attract FDI of $700-800 million in the past couple of years, which is less than 1.0% of GDP. More than capital, FDI brings technology, skills, and ideas, besides creating jobs. That is what Bangladesh is missing – and Vietnam is gaining – by its inability to attract sufficient FDI.

In the past two decades private investment has begun to play a dominant role as the prime mover of the economy. The share of public investment has accordingly shrunk. Now, only one-fifth of total investment takes place in the public sector. Lately, however, part of the problem has been a lacklustre performance in domestic private investment which has contributed no less to the stagnation in national investment. That bodes ill for foreign investors looking at Bangladesh as a place to invest. If domestic investment is not ticking, FDI will be hard to come by. And symptoms are not bright at all. Quite apart from the uncertainties created by the global recession, energy constraint has stifled private investment as banks stayed away from lending to new projects that would require additional gas and power supply that was not there. Consequently, capital machinery imports have declined signaling weaker industrial performance in the near-term. While robust remittance growth has fueled monetary expansion and created excess liquidity in the banking system, the slowdown in private investment has made the excess liquidity situation only worse.

It is imperative for the economy to come out of this investment stagnation, sooner rather than later. The nation is thus faced with an enormous challenge of resuscitating the economy’s investment drive. Confidence of investors has to be restored by concrete gestures and sound policies. The time for talk is over. What is needed is action that leads to augmentation of investment. At this juncture, a lot of synergy and interface is required between public and private investment in order to bridge the enormous gap that currently exists. As a rapidly growing economy, there is endless thirst not just for infrastructure but also for private investment in industry, agriculture and services. Complimentarity of public and private investment must be invoked for best outcomes such that the former crowds in – not crowds out — the latter, producing the green shoots of investment the economy is looking for.

Govt plans digital database to monitor prices, combat cartel

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Govt plans digital database to monitor prices, combat cartel
Mehdi Musharraf Bhuiyan

The government has planned to monitor prices of 50 essential commodities through a central database updated digitally in real time in an effort to embolden market surveillance and track down manipulators, officials said Saturday.

Commerce ministry officials said the database would be launched within the next four months with assistance from the United Nations Development Programme (UNDP) and made available online.

The real time database of the items would digitally track down latest price situation in cities and all 64 districts in the country and their global rates in major commodity hubs around the world.

The move comes following repeated failures by successive governments to contain “unexplained and artificial” rises of major food and commodity prices in the market.

Due to lack of real evidences and monitoring the government has so far failed to clamp down on the members of the so-called ‘syndicate’ accused of manipulating prices at the expense of poor and middle income people.

Officials said commerce ministry is currently looking to recruit a private firm to develop the sophisticated digital database, with UNDP doing the procurement job as part of its ‘Access 2 Information (A2I)’ aided programme.

“We have already started receiving tender documents from the interested companies. Hopefully, a work order will be issued within the next 15 days”, a UNDP official said.

“We are expecting the central database system to be operational within four months after issuing the work order”, he said.

A commerce ministry official said the database would mostly monitor prices of essential food items nationwide in collaboration with web teams of offices of all 64 district commissioners.

Officials said at the end of the initial trial time of approximately six months, the database would be open to public through online so that the people have access to any information on market prices of the 50 listed commodities.

UNDP would not comment on actual operational cost of the project.

Farming of spicy crops progresses, early varieties appeared in northern markets

http://www.bssnews.net/newsDetails.php?cat=0&id=77658&date=2009-12-20

Farming of spicy crops progresses, early varieties appeared in northern markets

by Mamun Islam

RANGPUR, Bangladesh, Dec 20 (BSS)-Expanded farming of different variety spicy crops has been progressing successfully and the early variety of the crops have already appeared in the local markets of the country’s northern region now, official and markets sources said.

The concerned departments and Spices Research Centre at Bogra have taken adequate steps in making the spicy crop farming programme successful during this Rabi season in the region by proving inputs, assistance and technologies to the farmers.

Meanwhile, newly harvested early variety onion, ginger, garlic, pepper and other spicy crops have appeared in the local markets everywhere putting positive impacts on the market prices.

Sowing of seeds of all variety spicy crops have been completed mostly achieving the fixed target this time and the crops are growing well under favourable climatic conditions. Both the farmers and officials are expecting an excellent production of the spicy crops.

The Department of Agriculture Extension (DAE) has fixed a record target of producing 7,99,543 metric tons of different variety spicy crops and also taken special steps to make the programme successful in the country’s northern region this season, officials said.

The DAE and other agriculture related departments have taken the steps to increase production of all kinds of spicy crops in the region to meet local demand and reduce dependence on their imports saving huge hard- earned foreign exchange.

Spicy crop production is expected to increase this season following disbursements of agri-loans for farming spices at only 2 percent interest by Rajshahi Krishi Unnayan Bank (RAKUB) and other banks and financial institutions this time.

Disbursement of these agri-loans with the lowest-interest rate for farming spices got momentum this time following stronger directions of Bangladesh Bank Government Dr Atiur Rahman during his visit to Rangpur, Bogra and Joypurhat districts recently.

The DAE has intensified its motivational activities for the farmers under the ongoing seven-year Special Action Plan (SAP) that was launched in 2004 for increasing oil seed, pulse and spice productions in the region as elsewhere in the country.

Under the SAP, the DAE has been conducting massive awareness building activities for encouraging the farmers and providing them with the latest technologies, quality high yielding seeds, inputs and imparting proper training, DAE officials said.

The SAP is being implemented with financial assistance of Bangladesh Agriculture Research Council (BARC) and technical assistance of Bangladesh Agriculture Research Institute (BARI), Deputy Director of DAE Kamal Shariful Alam told BSS today.

Under the SAP, hundreds of block exhibitions have so far been demonstrated under the supervision of the DAE experts and high quality foundation seeds, necessary fertilizers, pesticides and inputs are being distributed among the farmers.

Under the intensive spicy crop farming programme, a total of 7,99,543 tons onion, garlic, dhania, pepper, turmeric and ginger will be produced from a total of 1,51,777 hectares land during this Rabi season in the region.

Of them, 4,69,679 tons onion will be produced from 72,292 hectares land, 1,83,480 tonnes garlic from 30,580 hectares, 5,892 tons dhania from 4,796 hectares, 41,294 tons peeper from 27,527 hectares, 34,122 tons turmeric from 11,374 hectares and 65,076 tons ginger from 5,206 hectares land.

During the last 2008-2009 Rabi season, the DAE had fixed a target of producing a total of 7,09,407 tons of these spicy crops from 1,48,206 hectares of land in the region, the sources said.

While talking to BSS today, experts in the DAE, BADC, BARI, BARC and NGOs said that there are brighter prospects of increasing productions of all variety spicy crops in the region though their productions are increasing satisfactorily in recent years.

They said that the northern region has tremendous potentialities to increase production of all varieties of spices further through proper crop diversification, maximum utilization of lands including homesteads and utilization of the latest technologies and quality seeds.

Following various steps taken towards the directions, the farmers are now responding very positively and becoming more interested in cultivating spicy crops, especially during summer and winter as they are earning high profits, they said.

Head of Agriculture of RDRS MG Neogi said that the mixed and inter-cropping methods of crop farming with proper seed and pest management has been proved to be very effective for increasing production of spicy crops in the region in recent years.

The experts said that increased oil seed, spices and pulse cultivation would not only boost their productions and meet the local demand but would also improve soil health and meet nutritional demand of human body simultaneously.

Experts for South Asian Bank to cut dependence on IFIs

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Experts for South Asian Bank to cut dependence on IFIs

DHAKA, Dec 20 (BSS) – Experts today mooted the idea of setting up a South Asia Development Bank for mutual financing of development activities of countries of the region to reduce dependence on the international financial institutions (IFIs).

The experts representing Bangladesh, India, Pakistan and Belgium suggested that the proposed bank be set up with the financial support of foreign currency reserves of the South Asian countries.

The idea was floated at a press conference at the end of a two-day workshop on ‘International Financial Institutions (IFIs) and Debt’, jointly organized by South Asia Alliance for Poverty Eradication (SAAPE), Institute of Environment and Development (IED) and India-based Vikas Adhyayan Kendra (VAK) at YWCA auditorium here.

Eric Toussaint of Belgium-based Committee for Abolition of Third World Debt, SAAFE Bangladesh chapter focal person Rokeya Kabir, chairperson of IED Prof Dr Rashidi Mahmud, Sushovon Dhar of VAK and Faruk Tarique of Pakistan spoke at the press conference.

Eric Toussaint said the proposed bank could be a powerful tool to come out of the complicated terms and conditions of the IFIs. He mentioned the formation of such a bank in Latin America with foreign currency reserve.

If such a bank is set up in South Asia, he said, it would have a tangible impact on the overall economy of all South Asian countries.

Rokeya Kabir said South Asian countries have long been facing identical debt burden from the IFIs and this problem could be solved through potential resource mobilization by the SAARC member states. The proposal of setting up the bank would be placed before the upcoming SARRC Summit so that necessary steps could be taken to take initiative to set up it in the interest of SAARC countries.

She underscored the need for launching a mass awareness campaign to get rid of the debt burden of the IFIs.

Sushovon Dhar said India does not want to keep the debt burden for the future generation and that is why a campaign must be launched in this regard.

Bumper oil seeds output expected in the north

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Bumper oil seeds output expected in the north
Bss, Rangpur

The farmers and concerned officials are expecting a bumper production of all variety oily crops following various government steps and favourable climatic conditions in the northern region this Rabi season.

Farming targets of the oily crops have been achieved in most of the northern districts and the crops are now growing excellent predicting bumper productions, farmers and officials in the Department of Agriculture Extension (DAE) said yesterday.

Harvesting will begin next month and the farmers will bring most of the same land under Boro farming after completion of harvests of the oily crops, officials said.

The DAE has fixed an enthusiastic target of producing 1,12,188 tonnes of oily crop seeds from 1,06,459 hectares of land in the northern region during the current Rabi season.

DAE, BARI, BARC, BADC and many NGOs have taken adequate steps in collaboration with other departments this season to achieve the fixed production targets and increase oil seed productions in the region as elsewhere in the country.

The DAE and other agri-departments and NGOs have provided quality seeds, necessary inputs and trainings on the latest technologies to make the programme successful.

Under the programme, a total of 91,731 tonnes mustard will be produced from 97,731 hectares of land including 41,835 tonnes from 41,835 hectares in Rangpur Zone and 55,896 tonnes from another 55,896 hectares in Rajshahi Zone during this season.

A total of 1,257 tonnes of ‘Til’ seeds will be produced from 1,257 hectares including 997 tonnes from 997 hectares in Rangpur Zone and 260 tonnes from another 260 hectares land in Rajshahi Zone.

A total of 13,041 tonnes of groundnut will be produced from 7,245 hectares including 4,187 tonnes from 2,326 hectares in Rangpur Zone and another 8,854 tonnes from more 4,919 hectares in Rajshahi Zone.

Besides, 159 tonnes ‘Tishi’ seeds will be produced from 226 hectares including 25 tonnes from 35 hectares in Rangpur Zone and 134 tonnes from another 191 hectares in Rajshahi Zone during this Rabi season.

The landless and marginal farmers have also brought vast tracts of the sandy char lands under cultivation of the oily crops this time in the Brahmaputra and Ganges basins and the crops are growing excellent everywhere now in the region, officials said.

Deputy directors of DAE Kamal Shariful Alam, Mohsin Ali and Aftab Uddin Khan and BADC expert Asadur Rahman and Head of Agriculture of RDRS MG Neogi said the country has immense prospects to achieve self-reliance in oil seed productions.

They stressed the need for using the latest agro- technologies and disseminating proper knowledge to the farmers for increasing oil seeds in achieving self- reliance in edible oil to save Taka 6,000 crore being spent annually for importing the same.

They laid special emphasis on the need for increasing mustard, groundnuts, soybean and palm farming to move further forward in achieving the goals using the latest agro- technologies in the country’s food granary of the northern region.

Farmers of the region always produce huge surplus quantities of rice, potato, maize, vegetables and they should explore tremendous potentialities to increase production of oil seeds through proper crop diversification and land management, they said.

They urged for cultivating hybrid varieties of oil seeds invented by BARI and BINA in between the gap of harvesting the short duration Aman paddies and Boro farming period to get the maximum productions and quality seeds.

Raw jute ready for shipments gets export ban exemption

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Raw jute ready for shipments gets export ban exemption
BSS, DHAKA

Raw jute ready for shipments got exemption from the export ban that came into effect last week.

The government last week imposed an indefinite ban on exporting raw jute to help meet the local demand.

Shipments of raw jute at Chittagong port remained suspended following the decision, but an inter-ministry meeting decided Sunday to allow export of raw jute awaiting shipments.

Minister for Textile and Jute Abdul Latif Siddiqui chaired the meeting, attended by the representatives from the ministries of finance, foreign affairs and commerce.

The ministry of textile and jute at another meeting on Sunday also took some major decisions to revive the glory of the country’s golden fibre-jute.

The decisions include providing Bangladesh Jute Mills Corporation (BJMC) with the state guarantee for bank loan and paying the interest on credit to BJMC by this month.

The meeting also advised the commercial banks to provide loans to the private sector for producing jute and jute goods.

High government officials and representatives from different organisations of the jute industry were present at the meeting.

Dhaka, Delhi likely to ink deal on standardisation certifications

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Dhaka, Delhi likely to ink deal on standardisation certifications
Nazmul Ahsan

Dhaka and New Delhi is likely to strike a deal to recognise the standarisation certificates of each other for both goods and services during the upcoming visit of Prime Minister Sheikh Hasina to India next month, sources in the Ministry of Foreign Affairs (MoFA) said.

The draft of the proposed agreement, styled, ‘Bilateral Cooperation Agreement between the Bangladesh Standard and Testing Institute (BSTI) and the Bureau of India Standard (BIS),’ has recently been sent from the Indian High Commission in Dhaka to the MoFA, sources said.

The foreign and industries ministries are now scrutinising the draft to finalise the Bangladesh position before inking the deal.

According to the draft agreement, both the BSTI and the BIS or laboratories under the institutions must be accrediated either by Asia Pacific Laboratory Cooperation or by the International Laboratory Accrediation Cooperation.

Both the international bodies are meant to develop and harmonise laboratory and inspection accreditation practices, promote laboratory and inspection accreditation to industry, governments, regulators and consumers and assist and support developing accreditation systems, officials said.

Both the parties (BSTI and BIS) will authorise each other to carry out pre-certification and certification of goods and services to be exported to countries of each other, an official in the Ministry of Industries (MoI) said.

‘Both BSTI and BIS will recognise the certification on standardisation of goods and services if the proposed agreement between the two institutions is signed,’ a top official in the MoI told the FE.

“The non-tariff barriers generally imposed on products originating from Bangladesh to India, will be reduced to a great extent if mutual recognition on standarisation certificate is established,” he added.

The agreement will be signed for a period of three years, said the draft.

The BIS authority will impart trainings to officials of BSTI on standarisation, quality assurance and testing matters under the proposed agreement, officials said.

”We have to upgrade the overall testing facilities of both BSTI and Bangladesh Council of Scientific and Industrial Research soon after the agreement is signed,’ an official concerned said.

The up-gradation of local testing laboratories would be required to get those accredited with global reputed testing body, which is also an integral part of the proposed agreement, he added.

The BSTI and BIS signed a Memorandum of Understanding (MoU) in June, 2007 to extend cooperation to each other for the purpose of mutual recognition of tersting certificates.

However, little has so far been achieved towards recognising the mutual standarisation certificate after signing the MOU more two years back as India showed no interest for further development towards the end, alleged an official in the MoI.

Sources in the MoFA said, they want some export potential items be included in the draft agreement so that first track recognition on these items are given by India.

The number of such items could be around 10 including food products, cosmetics, and leather and textile products, hinted a commerce ministry official.

The two-way trade balance was $968.71 million in favour of India in the 2001-02 fiscal year, when Bangladesh exported goods worth $50.19 million to India against her imports of $1.01 billion. The gap increased to $3.03 billion in 2007-08.

Bangladesh exports about Tk 1.50 billion worth of processed food and bakery items annually to India, which might be increased manifold if non-tariff barrier like mandatory certification from BIS, which often takes more than a week to issue certificate, is lifted and certificate of BSTI is accepted, exporters said.

They said India should be true to its commitment for the sake of friendly relations with its close neighbour-Bangladesh.

Western Marine starts making ro-ro ferry

http://www.newagebd.com/2009/dec/20/busi.html#3

Western Marine starts making ro-ro ferry
Staff Correspondent . Chittagong

Ship building company Western Marine Shipyard Limited on Saturday started making a ro-ro ferry, first of its kind in the country, at a cost of Tk 29 crore for the Bangladesh Inland Water Transport Corporation.

Shipping minister Shahjahan Khan inaugurated the construction work of the ferry as chief guest at a function at the shipyard at Kolagaon area under Patiya upazila in Chittagong.

Member of the parliament Shamsul Hoque Chowdhury, shipping secretary Abdul Mannan Hawlader, and Chittagong Port Authority chairman RU Ahmed attended the inaugural function as special guests.

The company sources said the company was expecting to deliver the ferry, with capacity to carry 20 heavy vehicles, 340 passengers and 25 crewmen, by December 2010. The ferry will be commissioned at the Charjanajat ferry terminal in Munshiganj, the sources added.

Credit to private sector on rise

http://nation.ittefaq.com/issues/2009/12/20/news0130.htm

Credit to private sector on rise
BSS, Dhaka

Credit to private sector is moving upward, showing increasing business confidence as the global economy is recovering from recession and the domestic situation is improving.

The credit to private sector, which has been rising since July this year, marked a significant increase in September. The economic update of the Bangladesh Bank (BB) for November shows that the private sector got 4.07 percent more credit in September compared to the same period of the last year.

The central bank report does not have the figure of total loan amount to the private sector, but it says the total amount was up by Taka 8877.6 crore over the previous year’s disbursement.

It says that the increased lending to the private sector raised the total domestic credit by 1.99 percent to Taka 296,255.8 crore during the July-September period this year, which was around Taka 260,000 crore in same period in 2008. The report also says that the net government’s borrowing in July-September this year decreased by 2.88 percent or Taka 1,673.6 crore, compared to 7.97 percent or Taka 3737.8 crore during the same period of the last year.

According to the BB report, revenue collection by the National Revenue Board (NBR) in August this year increased by Taka 137.59 crore or 3.64 percent to Taka 3922.30 crore compared to Taka 3784.71 crore in July this year.

During July-August 2009 the revenue collection increased by Taka 482.38 crore or 6.68 percent to Taka 7707.01 crore compared to Taka 7224.63 crore during July-August in 2008.

The annual rate of inflation (12-month annual average) decreased to 5.15 percent at the end of September from 10.06 percent at the end of September 2008, the report says.

Envoys of 6 countries visit Shinepukur Ceramics plant

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Envoys of 6 countries visit Shinepukur Ceramics plant
ECONOMIC REPORTER

Ambassadors and High Commissioners of six Asian countries yesterday visited the state-of-the-art manufacturing facilities of Shinepukur Ceramics Ltd (SCL), country’s leading ceramic tableware manufacturing company and largest ceramic tableware exporter.

The envoys are; Nguyen Van That, ambassador of Vietnam, Haji Abdul Razak Bin Haji Mohd Hussaini, high commissioner of Brunei Darussalam, Afzaal Mahmood, acting high commissioner of Pakistan, C Munasinghe, acting high commissioner of Sri Lanka, Dasho Bap Kesang, ambassador of Bhutan and Panne Lickanajule, minister counselor of Thai Embassy in Dhaka.

The envoys were very delighted to see the ‘world-class quality’ of the tablewares that Shinepukur Ceramics manufactures in its Bone China and Porcelain manufacturing plants.

The ambassadors and high commissioners highly appreciated the quality of the manufacturing systems of SCL’s manufacturing plant. They were highly impressed by the hygienic environment and high-tech quality control process that SCL put in place during its production.

Chief Operating Officer (COO) of the Shinepukur Ceramics Ltd Rizvi Ul Kabir welcomed The ambassadors in SCL manufacturing plant.

“Currently, SCL is exporting both its Porcelain and Bone China products to the world renowned companies of Europe, USA, Australia and Asia” Rizvi said adding that the visit of the ambassadors and high commissioners of the Asian Countries in the SCL plant would definitely help SCL in exploring in the Ceramic markets in Asia.

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 capacity of producing bone china products.’

Taking Bangladesh to a higher growth path

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Taking Bangladesh to a higher growth path
Sadiq Ahmed

In 2005 I edited a book published by MacMillan: “Transforming Bangladesh into a Middle Income Economy” that projected that with concerted efforts Bangladesh could achieve middle income status by 2016. Many at that time thought it was too optimistic. Have I changed my mind after four years? My short answer is no. I continue to believe that this is an achievable target. Although we have lost some very valuable time due to the political impasse of 2006-2008, I still think we can catch up provided we put our heart and mind to this task. The restoration of the democratic process and the emergence of a new government with a resounding majority in the parliament provide an exciting opportunity to tackle the growth challenge head on. While higher per capita income alone is not a panacea for tackling Bangladesh’s multi-faceted development challenge, without higher income sustained long term reduction in poverty and improvement in human development will not be possible.

A little bit of history and the power of compounding will help illustrate the importance of accelerating the growth effort. In 1975 Bangladesh and India both had per capita income of about 210 in current US dollars. Today, India’s per capita income is about $1070, which is nearly double that of about $600 in Bangladesh. This is a huge gap. This happened because India grew at a much faster rate than Bangladesh. Thus as compared with India’s per capita income growth of 5.0 per cent in current US dollars, Bangladesh grew at 3.2 per cent. The power of compounding is obvious here: even a 1.8 percentage point annual growth differential in current dollars caused India’s per capita income to become double that of Bangladesh over a 33 year period.

What will it take for Bangladesh to transit to the middle income group? For projections purposes we will need to talk in constant dollar terms. If per capita income in Bangladesh continues to grow at the present rate of 4.0 per cent (average per capita dollar income growth between 2003 and 2009 in 2003 prices), it will reach only $800 by 2016 and Bangladesh will remain in the group of low income economies. If on the other hand Bangladesh could raise this to 8.0 per cent (the rate prevailing in India over the past six years in 2003 US dollars), per capita income would exceed $1000, thereby placing Bangladesh in the group of lower middle income economy.

This is difficult but not an impossible challenge. Past experience shows that the return to good policies is substantial. This is illustrated in the two books edited by this writer. The books — entitled “Transforming Bangladesh into a Middle Income Economy” and “Explaining South Asia’s Development Success: Role of Good Policies” — are published by McMillan, New Delhi (2005) and World Bank, Washington DC (2006) respectively.

Bangladesh has succeeded in accelerating its per capita income growth from around 1.0 per cent per annum in the 1970s to 4 percent now. This did not come by on its own. A review of experience shows that policies including economic liberalization, investment in infrastructure and human development, outward orientation, and promotion of private sector all contributed to higher growth by increasing the domestic saving and investment rates, boosting the growth of exports, and contributing to higher total factor productivity. These were first round, relatively easy reforms implemented in an environment of very low level of initial economic base.

The stepping up of the growth effort to achieve an additional 4.0 per cent growth in per capita income over a much higher economic base than in the early 1970s will not be an easy task and will require a bold new vision and the willingness to tackle the second generation economic and institutional reforms. These new reforms will likely entail tougher political trade-offs and sharper resistance by vested interests than in the past. Sound analysis and strong political leadership will be the key.

The doubling of per capita income growth strategy requires exploring new and additional sources of growth. Bangladesh has three major assets: abundant supply of potentially high productive labour, access to sea, and enviable geographic location. Some effort has been made to exploit the cheap labour force advantage through investment in education and health and also through a liberal policy of labour exports. It is not surprising that remittances today are the single most important source of foreign exchange earnings and also provide the best source of social protection. Yet, the agenda for converting the labour force to its full productive potential is a long one and there are still miles to go. Additionally, supportive policies to use remittance inflows productively and to avoid the “Dutch Disease” problem associated with these foreign exchange flows remain to be tackled. So far as the second asset is concerned, our effort to convert the advantage from the excellent access to sea is very weak. There is considerable economic evidence that access to sea is a major favourable factor for higher economic growth. Our two major ports, Chittagong and Mongla, remain underutilized and fall far behind in contributing to their full potential. The experience of Rotterdam, Singapore and Hong Kong are all examples of what this true potential might be. Similarly, we have also failed to exploit the other advantage presented by geography: location. Bangladesh is fortunate that it is the gateway connecting South Asia with East Asia. Taking advantage of this location asset by providing connectivity in all forms of transport modes to all Asian neighbours can transform Bangladesh in ways that cannot be fully imagined in a static context.

There are many other politically less dramatic policy decisions that Bangladesh can take to spur the growth effort. While the overall macroeconomic environment is favourable in terms of the foreign exchange situation, the investment effort is weak. Domestic investment rate is lower than the domestic saving rate, suggesting the need for better investment policies. The policy reforms need to focus on the investment climate, especially to attract foreign investment, by reducing the cost of doing business and improving competitiveness. Public investment performance is especially weak with associated problems for the supply of infrastructure services and better human development. Indeed the shortage/inefficiencies of infrastructure services like power and transport threaten to choke off Bangladesh’s growth momentum and require urgent and comprehensive actions, including a stronger public resource mobilization effort. Export diversification remains a challenge. Remittances and garment exports have kept Bangladesh afloat and there is much to celebrate their contribution, but these are not likely to be dynamic sources of growth and employment in the future. Creating good jobs will require a much stronger and diversified manufacturing base. Loss of competitiveness from the appreciating real exchange rate needs to be carefully monitored and managed. Trade policy reform, which risks being reversed by protectionist tendencies, needs to be carefully reviewed and put back on track to support export diversification.

My development economics professor at the Boston University, the late Prof. Rosenstein Rodan, used to say ‘when the British government were deciding where to locate the first textile industry, the choice was between Bombay (now Mumbai) and Lancashire. In the end, they chose Lancashire. If they had instead chosen Bombay, the course of history and the associated first industrial revolution would have been so different that it is unthinkable today”. Indeed, opening up of Bangladesh by taking advantage of its location and the access to the sea requires a new vision for Bangladesh and strong political leadership. One will never know what we are missing out on the growth front without taking these and other similar bold policy decisions. (The writer is vice chairman of the Policy Research Institute of Bangladesh)