Category Archives: Business, Investment and Investing Opportunities

Budget industry friendly, growth supportive: EAB

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Budget industry friendly, growth supportive: EAB
It put forward 5-point proposals for Govt consideration
B&F Report

Exporters Association of Bangladesh (EAB) has termed the proposed budget for 2012-13 fiscal as growth-oriented and industry friendly and has welcomed the government for prioritising key sectors like power and energy, agriculture, communication and physical infrastructure.

Giving its post-budget reaction at a press conference in Sonargaon Hotel in the capital on Sunday, the leaders of the EAB, the apex trade body of export sector, also hailed the government initiative to protect the local industry as well as support the export-oriented sectors.

“All these would have a positive impact on the country’s industrialisation as a whole,” they said.
EAB belives the proposed budget is ‘a pro-people and growth-oriented’ one which will also help to accelerate growth of the export sector.

“A higher export growth will help to attain the key budgetary goal of achieving GDP growth to 7.2 per cent and inflation within 7.5 per cent for the next fiscal,” it added.

Reading out a written statement, the EAB President Abdus Salam Murshedy said steps like reducing tax on capital machinery imports for export sector and for Effluent Treatment Plant (ETP), withdrawal of VAT from the rented factory premises and continuation of incentive package for exploring new markets will certainly boost up export earnings.

Besides, emphasising on human resources development, block allocation for employment generation, incentive package for capital market, setting up a hi-tech park in Gazipur and API park in Munshiganj and incentive for ship building industry are also some bold steps proposed in the budget for the upcoming fiscal, he said.

Murshedy, however, expressed dismay over the budgetary provision of hiking tax at source on export proceed and put forward 5-point recommendations to the government “for its kind consideration”.

He also urged the government to consider some proposals for the interest of the export sector. The proposals are withdrawal of 1.2 per cent tax at soucre on exports uninterrupted power and gas supply to the export-oriented industries, cut in bank interest rate to single digit, unified exchange rate for exporters and a enhance rate of cash incentive (tax free).

“Hike in tax at source fro, 0.6 per cent to 1.2 per cent will adversely impact the export sector by reducing competitive edge of local goods in the international market. It will also hurt profitability of the entrepreneurs,” Murshedy added.

He pointed out that export sector is passing through a critical time influenced largely by various external and internal threats. On the other hand, he said a significant hike in power and fuel prices hit hard the industry by rising cost of production.

“In such a situation, the industry cannot afford a leap of tax at source because it will be an extra burden for it,” he noted.

KL, Doha pledge $12b investment for Bangladesh

http://www.thefinancialexpress-bd.com/more.php?news_id=131814&date=2012-06-04

KL, Doha pledge $12b investment for Bangladesh
Nizam Ahmed

Bangladesh, desperately seeking overseas funds for building its major infrastructures, has so far been assured of assistance and investment worth $12 billion from two friendly countries in Asia, officials said on Sunday.

The $12 billion investment pledges came almost simultaneously when two official teams from Malaysia and Qatar visited Bangladesh last month, officials at the ministry of foreign affairs (MoFA) said.

Malaysia has so far pledged some $9.0 billion including $6.0 billion for a new international airport and rest for the proposed 6.15-kilometre multi-purpose bridge across the river Padma.

Qatar so far offered to invest some $3.0 billion for building infrastructure in Bangladesh. The Gulf state is also likely to pledge another $2.5 billion investment in different sectors including energy, officials said.

“All these investment proposals are likely to be registered after the relevant authorities and concerned parties sign required deals,” a senior official of the Board of Investment told the FE.

Bangladesh launched the hectic drive for foreign funds after the World Bank refrained from giving its pledged portion of $1.2 billion for building a $3.0 billion Padma bridge alleging corruption in a bidding process last year.

The construction of the Padma Bridge was an election pledge of the government which won a landslide victory in the last general election in late 2008, officials at the ministry of communications said.

“It is our prime project and we want to start its construction before conclusion of our present term in January 2014,” communications minister Obaidul Quader told the FE.

Following the World Bank’s action other financers, including Japan International Cooperation Agency ($420 million), Asian Development Bank ($615 million) and Islamic Development Bank ($140 million) have also suspended their pledged funds.

Meanwhile, the authorities concerned are also expecting more foreign assistance in coming months as the oil-rich Qatar has shown great interest in investing in oil and gas exploration, power plants, expansion of airports, river dredging and manpower training institutes.

Bangladesh also hopes further pledges of another $2.5 billion investment from Qatar for setting up a proposed 1,000 mega watt liquefied natural gas-fired power plant at Moheskhali off-shore island, expansion of Hazrat Shahjalal International Airport, expansion of highways, procurement of five river dredgers and for setting up a technical training centre, MoFA officials said.

The far eastern Malaysia has offered a total of $9.0 billion investment in the bridge and the international airport projects while Qatar pledged for constructing the bridge across the Padma river.

Meanwhile, Qatar is also looking for other fields including energy, infrastructure including river dredging and human resources sectors.

Malaysian Prime Minister’s special envoy for South Asia Dato S Samy Vellu offered the new and the latest investment proposal worth some $6.0 billion for construction of the proposed Bangabandhu Sheikh Mujib International Airport near Dhaka, to Civil Aviation and Tourism Minister Col (retd) Faruk Khan on May 30.

The new offer was made when Mr. Samy Vellu visited Dhaka for submitting a formal preliminary proposal for construction of $3.0 billion Padma Bridge, which Malaysia had agreed earlier and a memorandum of understanding was signed in Kuala Lumpur on April 10.

Earlier in the last week, a Qatari official team led by Assistant Minister for International Cooperation Affairs of Qatar Sheikh Ahmed Bin Mohammed Bin Jabr Al Thani, offered some $3.0 billion assistance for building the Padma Bridge.

As Bangladesh and Malaysia have already signed a MoU for building the Padma Bridge, Qatar is likely to join the venture as a third party in the project, MoFA officials said.

“We have already signed a memorandum of understanding with Malaysia. If it is feasible, acceptable and agreed upon by all the parties, we can have a tripartite agreement,” Foreign Minister Dipu Moni told reporters after meeting with the Qatari delegation on May 28.

“If Malaysia and Qatar really can upkeep their pledges and come forward in investing, then the world scenario of financing will really change,” an official of the ministry of finance said without giving details.

How to bring in more FDI

http://www.thedailystar.net/newDesign/news-details.php?nid=237086

How to bring in more FDI

Fahmida Khatun

Foreign direct investment (FDI) has made enormous leaps since the 1990s in terms of its growth in the global economic landscape. Due to paucity of resources in developing and least developed countries, FDI has become an important component of their development strategies and in many cases it proved to be a win-win situation to both host and home countries. Host countries want to gain from FDI in multiple ways such as through having capital, technology and knowledge. Home countries also benefit through investing as they can penetrate into markets, gain access to raw materials and diversify business activities. They can also overcome trade barriers and reduce transport costs.

Bangladesh is considered to be one of the potential economies despite being besieged by multi-faceted adversities such as frequent natural disasters, high density of population, political turmoil and a low production capacity. The resilience and inherent strength of the economy, mainly due to its robust sectors such as agriculture, readymade garments and remittances, have been the basis of such optimism. However, in order to make its graduation to the next level of growth and fully exploit the growth potential, the country’s investment scenario has to be improved. The lack of adequate investment is one of the important reasons for the growth below the potential of the economy. The domestic investment rate has been stagnant at around 24 percent to 25 percent of the country’s gross domestic product (GDP) for the last ten years which is far below the level required for a country aiming to be become a middle-income country by 2021 with a growth rate of 10 percent. The sixth five-year plan (2011-15) of Bangladesh targets a GDP growth of 8 percent by the end of the plan period. This requires that the total investment has to grow by 8.1 percent per year and the share of investment in GDP has to be 32.5 percent by fiscal 2015. Low domestic investment has been a matter of concern as it holds back foreign investment as well.

Even though Bangladesh has been trying to bring in FDI since its independence and put in place FDI friendly policies in the early 1980s (Foreign Investment Promotion and Protection Act 1980 was such an attempt) much before some of its neighbours, it has been unable to accelerate FDI at the expected level. In the 1990s, there was an attraction for the East Asian and European investors to invest in the readymade garments industry of Bangladesh, thanks to the Generalised System of Preferences (GSP) and the availability of labour at a competitive price. Currently, the concentration of FDI is mainly on transport, storage and communication, manufacturing and power, gas and petroleum. Other sectors such as agriculture, trade and commerce and, services receive nominal FDI. In 2010, manufacturing sector was the highest recipient at 27.82 percent of total FDI, while the construction sector received the lowest with a share of 0.01 percent. The growth of FDI in Bangladesh has, however, been very inconsistent. A major inflow of FDI was observed in the mid 2000s and rose to $913.32 million in 2010.

While discussing the impediments to bringing FDI into the country, a host of issues have been raised ranging from infrastructural constraints to bureaucratic complexities to image building. However, the crux of the problem does, in fact, lie in three broad areas. First is the limited access to physical infrastructure, particularly supply of gas and electricity. This has emerged as a binding constraint on investment promotion in Bangladesh. For example, the supply of gas between December 2008 and December 2011 has increased only marginally from 1,606 million cubic feet to 1,960 million cubic feet, indicating an average growth of 7.4 percent. On the other hand, the demand for gas rose by 12.3 percent during this period, leading to a wide gap between demand and supply. At present, the demand for power in Bangladesh is around 6,500 megawatt, while the supply is 4,699 megawatt. In the recent times, the FDI rise has been observed mainly in the export processing zones (EPZ) as there is little or no gas and electricity supply constraint like the domestic tariff area. In order to overcome infrastructural bottlenecks, aid for productive capacity needs to be enhanced significantly. However, effective use of these funds has to be ensured. Public-private infrastructure development policy can also be a powerful tool to tackle the supply side constraints.

The second bottleneck is the culture of confrontational politics, which poses a serious threat for the safety of property and resources of prospective investors. Acrimony and bitterness among political parties often lead to destruction and affect lives and properties of people which in turn deter not only foreign investment but also local private investment. Many investors are even willing to spend on infrastructure to facilitate their investment in other sectors, only if there are political stability and predictability of return on their investment.

The third constraint is the lack of good governance and prevalence of corruption, which have put a scar on the reputation of the country at the global level. Because of advantages such as competitive prices for labour and other services, investors may find Bangladesh a lucrative investment destination. However, predicaments such as delay and a lack of transparency in decision making process, a dearth of effective implementation of regulations and policies, and discriminatory incentive packages act as stumbling blocks in bringing in FDI to the country.

FDI is not a panacea for slow growth, and it has several negative implications too. These include capital flight and repatriation of profit, dependency on technologies and limited transfer of technology and transfer pricing. With effective regulatory and oversight mechanism such issues can be addressed. FDI can supplement the local effort to produce goods and services and create jobs. If local businesses flourish, foreign investors will have confidence to bring their resources. Promotion of local businesses through access to adequate finance and creation of an enabling environment should also be a key target. Economic diplomacy is vital at this day and age to attract foreign resources. This has to be accompanied by good marketing skill which in other words is called ‘branding’. Such image building task has to be done primarily by the government but complemented by the private sector and all citizens of the country.

The writer is an economist and head of research at the Centre for Policy Dialogue.

13th Textech Bangladesh Intl Expo begins July 3

http://www1.bssnews.net/newsDetails.php?cat=2&id=254592&date=2012-06-05

13th Textech Bangladesh Intl Expo begins July 3

DHAKA, June 5 (BSS) – A four-day 13th Textech Bangladesh- 2012 International Expo, largest of its kind in textile and apparel industry, will begin in the city on July 3.

The annual exhibition on textile and apparel technology, machinery and allied services would be held at Bangabandhu International Conference Centre (BICC).

CEMS-Global, USA-Conference and Exhibition Management Services Ltd in association with CEMS Bangladesh is organizing the expo.

Textech series of exhibitions, has become a brand, held every year in Bangladesh, Indonesia and Sri lanka.

Commerce Minister GM Quader will be the chief guest at the inaugural session of this year’s show, organizers said today.

Over 450 exhibitors from various countries including the US, UK, China, India, Pakistan and Japan are expected to take part in the exposition.

Members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) take part in the show.

The Textech aims to introduce local stakeholders of Readymade Garments (RMG) and knitwear sectors with the latest development and the global trend of the industries so they can survive in the global competition.

Two more exhibitions — 12th Dye+Chem Bangladesh- 2012 International Expo’ and 6th Dhaka International Yarn and Fabric Show-2012′ — would also be held besides the 13th Textech.

Organizers say the expo would not only create a scope for Bangladeshi apparel and knitwear exporters to display their unique aspects of the products but also shed light on its progress to the global garment and textile community.

The 13th Textech will bring many decision makers and qualified buyers under one roof resulting in business transactions worth millions.

Bangladesh, being the second largest destination for RMG outsourcing after China, exported apparel merchandise worth $17.91b last year.

FTA with Malaysia to boost apparel, medicine export

http://www.thefinancialexpress-bd.com/more.php?news_id=132021&date=2012-06-06

FTA with Malaysia to boost apparel, medicine export
Nizam Ahmed

Bangladesh is expecting to boost its exports of garment and pharmaceutical products to Malaysia once a free trade agreement (FTA) is signed between the two countries, officials said on Tuesday.

Meanwhile, the far eastern Muslim country, which employs more than 400,000 Bangladeshi expatriate workers, is expected to approve the FTA proposal submitted by Bangladesh, soon.

“The two countries will start negotiations on the proposed FTA, immediately after the approval, which is expected to come, ahead of the upcoming exposition of Bangladeshi products titled Showcase Bangladesh 2012, in Kuala Lumpur,” a senior official at the ministry of foreign affairs (MoFA) told the FE.

Once the FTA is inked, there will be vast potential in trade and investment areas of both the countries, the officials said.

The three-day second exposition of Bangladeshi products to be held from July 13, after the first one held in 2010 is also likely to solve problems faced by Bangladeshi expatriate workers in remitting their earnings to Bangladesh.

“Besides manpower, we are looking for exporting ready-made garments (RMG), pharmaceutical products and several other non-traditional items to Malaysia,” Mostafa Azad Chowdhury Babu, vice president of Federation of Bangladesh Chambers of Commerce and Industry told the FE.

Malaysia with a population of some 28.5 million in an area of some 330,000 sq km and with a GDP of $238 billion, is now a solvent country and meets its apparel and medicinal demands by importing from different countries in Asia, Europe and the USA.

Import by Malaysia from Bangladesh is nominal at present while it exports mainly palm oil, petroleum products worth some 950 million euro to Bangladesh annually, according to a Malaysian government website.

Malaysia has recently come forward to cooperate with Bangladesh in its efforts to boost its economy.

It is the first country that offered Bangladesh necessary assistance in building a proposed bridge over the river Padma when the World Bank and other financers backed out from their commitment of funding, the government officials in Dhaka said.

Malaysia has so far pledged some $9.0 billion including $6.0 billion for a new international airport and the rest for the proposed 6.15-kilometre multi-purpose bridge across the river Padma.

Malaysia also legalised some 267,000 Bangladeshi workers recently who had been victim of unscrupulous manpower agents.

Presently there are some 400,000 Bangladeshis working in Malaysia, mostly in manufacturing, construction, plantations, agriculture and service sector.

Expatriate workers in Malaysia send some $13 billion every year.

Singapore keen to relocate factories in Bangladesh: HC

http://www1.bssnews.net/newsDetails.php?cat=0&id=254065&date=2012-06-03

Singapore keen to relocate factories in Bangladesh: HC

CHITTAGONG,June 3 (BSS) – Singaporean High Commissioner to Bangladesh Chan Heng Wing today said Chittagong could be a suitable destination for Singaporean investors.

Singaporean investors are now reluctant to continue industrial augmentation in China due to soaring of labour cost, Wing said.

So, he said, the investors are now looking for relocating their factories in Bangladesh.

Wing was exchanging views with leaders of Chittagong Chamber of Commerce and Industries (CCCI) on its Chamber premises here.

He also laid emphasis on infrastructural development, supply chain management and creating skilled human resources for attracting huge foreign investment.

Lawmaker MA Latif, CCCI president Murshed Murad Ibrahim, Senior Vice-President Mahbubul Alam, directors — Mahfuzul Hoque Shah and Mohammad Shahin Alam – and consuls of Singapore Darryl Lau and Derek Chua were present on the occasion, among others.

Speaking on the occasion, Murshed Murad Ibrahim favoured development of Bangladesh’s industry sector through Singaporean expertise.

He also stressed the need for making Singapore Visa procedure easier for businessmen.

Grape farming growing in N-region

http://www.thefinancialexpress-bd.com/more.php?news_id=131721&date=2012-06-04

Grape farming growing in N-region
Our Correspondent

RANGPUR, June 3: Cultivation of grapes is gradually gaining popularity in the northern region and the growers are earning handsomely by selling their products.

According to the agriculturists, the soil and climate of Dinajpur, Rangpur, Thakurgaon and Panchagarh are suitable for grape cultivation.

Presently, grapes are cultivated only in a limited extent due to non-availability of required seeds and other facilities.

The local growers say that proper training and financial and technical assistances can pave way for large-scale commercial production of grapes across the region.

Mominur Rahman, a grower at Mithapukur told FE he has been cultivating grape in his homestead for several years and selling those at a good price.

Growers say much of the grapes produced in the areas belong to the average grade variety called ‘Jatka’.

They also cultivate a number of high-grade varieties like Black Ruby, Cardinal, Pearl, Blue etc.

These local grapes are comparatively sweeter in taste than the imported ones, they claimed.

Non-formal education underscored

BSS report says: Discussants at a views-sharing meeting last evening stressed the need for continuation of the non-formal education programme for developing human resources as well as accelerating uplifts in the rural areas.

They were addressing the meeting jointly organised by Panchagarh district administration, Non- formal Education Bureau and Astha Social Development Organisation (ASDO) at the conference room of Panchagarh Deputy Commissioner.

Acting Secretary of the Ministry of Primary and Mass Education MM Neaz Uddin attended the meeting as the chief guest with Panchagarh Deputy Commissioner Md Tofazzal Hossain in the chair.

Director General of Non-formal Education Bureau Md Alauddin, Project Director of Post Literacy & Continuing Education for Human Development (PLCEHD-2) MA Mannan Hawlader and Executive Director of ASDO Nahid Parveen addressed as the special guests.

District level government and NGO officials and executives, teachers, public representatives, socio-cultural and political leaders and activists, professionals, journalists and local elite took part in the meeting.

Earlier, the acting secretary inaugurated Doluapara Non- formal Education Centre in Sadar upazila as part of official launching of educational activities at all 170 such centres in five upazilas in Panchagarh.

Thirty females and thirty males between 15 to 45 years of age have been attending the non-formal education and vocational training programmes in separate batches and shifts at each centre every day. Classes are being held both in morning and evening shifts.

As per agreement with the government, ASDO has been conducting non-formal education and vocational training on sewing, repairing shallow machines, bicycles and rickshaw vans, electric cable wiring and livestock in these centres.