News Clippings from the Week (October 18)

Furniture exports rise 27% (The Daily Star, October 18) 

The 11th National Furniture Fair going on now has brought attention to the growth of the furniture sector.  According to data from the Export Promotion Bureau, furniture exports grew by 26% between fiscal year 2011-2012 and the previous fiscal year to Tk 220 crore.  The local furniture market is estimated at Tk 11,000 crore.  In total the industry is believed to employ 30 lakh people.  

Solve infrastructure and power shortage to create jobs: MCCI Seminar (New Age, October 17)

In a seminar organized by the Metropolitan Chamber of Commerce & Industry, speakers pointed to several barriers to business development, including inadequate infrastructure, shortage of power, lack of skilled workforce, and unavailability of soft loan. They also emphasized the need to develop more skilled manpower. The seminar was entitled "Job creation in Bangladesh- an effective means to poverty reduction."

Apparel sector faces stagnation for bank's reluctance  (New Age, October 16)

Four apparel sector trade bodies reported  stagnating financial flows in the wake of the Sonali Bank – Hall Mark loans scandal that is hurting business.  Commercial banks are reportedly hesitant to accept Bills of Acceptance after Sonali Bank’s failure to ensure the quality of the Letters of Credit (on which Bills of Acceptance are based) that it issued to Hall Mark.   The speakers said that this situation can be eased if Sonali Bank pays against the bills of acceptance of Hall Mark group.

Bangladesh gets 3G, finally (Bdnews24.com, Oct. 14)

Bangladesh has finally launched third generation mobile communications technology (known as 3G), which offers faster data connectivity.  Currently the service is limited to customers of the state run TeleTalk, which controls only 1.5% of market share.

Chittagong port haven for dishonest importers (The Independent, October 14)

The importers of Chittagong port regularly submit incorrect and illegal customs declaration when importing of goods. The customs department has evidence of some 3,200 wrong declarations, which has resulted in hundreds of crores of taka tax evasion.

Corruption main hurdle to get MCC fund (The Independent, October 12, 2012)

Representatives from the Millennium Challenge Corporation (MCC), an independent United States foreign aid donor, said that Bangladesh should reduce corruption to obtain access to MCC funds. At a press conference organized by the US Embassy it was noted that corruption is also associated with other problems undermining the rule of law, port capacity, rail, road, power, energy and credit facilities.

News Clippings from the Week (11 October)

Dhaka Declaration commits to pursue industrial co-op among members (The Financial Express, October 11, 2012).

The third ministerial meeting of the Muslim Developing-8 (D-8) countries, including Bangladesh, Pakistan, Egypt, Iran, Indonesia, Malaysia, Nigeria, and Turkey, concluded yesterday.  The “Dhaka Declaration” outlines measures for mutual investment on industrial and technological development, technology transfers among member nations, and technical and industrial cooperation

IMF won’t loosen strings on loans (The Daily Star, October 11, 2012).

The IMF is threatening to not release the second installment of a US$987 million credit to Bangladesh worth US$141million if the parliament fails to move forward on proposed reforms to the VAT and the Banking Companies Act by November.  The IMF expressed its concerns that a proposed 15% VAT in initial draft legislation has been undermined by exemptions.  In addition, the IMF wants greater authority for banking oversight transferred from the Banking Division of the finance ministry to the more independent Bangladesh Bank. The finance ministry is also seeking an exception to allow high bank exposure limits in the stock market.    

Bangladesh: next pharma hub  (The Daily Star, October 10, 2012)

In the ministerial meeting of the Development-8 (D-8) pharmaceutical leaders of Bangladesh said that country will soon become a major global source of low-cost generic medicines and vaccines. As Bangladesh is capable of producing high-quality products with state-of-the-art manufacturing facilities and it can provide sophisticated quality control equipment and highly-skilled human resources. A number of pharmaceutical companies have obtained certifications from the UK, the European Union, Australia, the Gulf countries and other regulatory authorities.

Economists want more clout for BB to govern state banks  (The Daily Star, October 8, 2012)

The speakers on a discussion on Hall-Mark scam said that the government should give more authority to the central bank by disbanding the Bank and Financial Institutions Division of the finance ministry. In case of the state banks, the BB can only advise the government to take actions and it does not have any direct control over them.  In case of the private banks, the BB it has full regulatory control.

Speakers stressed need for easy bank loan (The Financial Express, October 7, 2012)

Association of Grassroots Women Entrepreneur, Bangladesh (AGWEB), in a conference stressed the need for easy bank loan. The speakers suggested that the government should arrange training program on entrepreneurship development and awareness, skill development, business counseling, networking support for the overall development of the grassroots women entrepreneur.

IT outsourcing earnings rise by 56% (The Independent, October 6, 2012)

BASIS said that earning from outsourcing IT jobs has increased by 56 percent in last one year. In the 2011-12 fiscal year the earning were US$70.6 million. At present there are more than 500 software companies according to BASIS.

BB opens probe as banks' dues against accepted bills soar (The Daily Star, October 5, 2012)

In response to the Hall-Mark/Sonali Bank loan scandal, "The central bank has opened an investigation into the rise in banks' dues against their accepted bills. Banks accept foreign and local bills against letters of credit. But due to complaints of false documentation and faulty accepted bills against local and foreign LCs, the banks later refuse to pay the bills. Influential businesses in collusion with some bank officials provide these false documents to banks to siphon money."

Hong Kong investors keen on investment in leather sector  (The Daily Star, October 5, 2012)

The president of Hong Kong New Territories Manufacturers Association proposed for a special industrial zone for composite leather to the government of Bangladesh. He suggested the government for issuance of bonded warehouse licence with easy terms for foreign investors, uninterrupted power supply, and registration processes for companies of foreign investors. He also urged the government to speed up the process of setting up the leather processing zone in Savar.

News clippings for October 4

Slow exports to pull down GDP growth to 6pc: ADB (4^th October 2012, The Daily Star)

The Asian Development Bank said that due to sluggish exports and a decline in domestic demand Bangladesh's economic growth may come down to 6 percent in the current fiscal year. The decline is primarily due to the financial crisis in the European Union, which is affecting Bangladesh's exports.  The central bank's continued credit tightening efforts have also had an impact.

Citi launches twin projects to help underprivileged children (1^st October 2012, The Daily Star)

With an aim to improve the lives of about 800 underprivileged children, Citibank NA yesterday launched two community projects in the capital. "Citi Bangladesh has partnered with Underprivileged Children's Education Program (UCEP) to launch the Citi-UCEP Pre-technical Education Project. The children will gain financial literacy, practical mathematics and communicative English skills."Citi teamed with SEID Trust to provide education to some 450 underprivileged children with autism, intellectual disability and multiple disabilities for the other project.

Skilled woman entrepreneur can drive economy (1^st October 2012, The Independent)

To achieve a higher sustainable economic growth, employment generation and enhance the standard of living, Bangladesh Bank is taking a more proactive role in enhancing the number of skilled women entrepreneurs in the country. Through a workshop organized by Bangladesh Bank and International Finance Corporation, it is providing practical solutions to management issues of small and medium sized enterprises.