Weekly News Clippings (24 January, 2013)

FDI sluggish due to land scarcity, poor infrastructure (The Financial Express, January 24, 2013)

Foreign Direct Investment in the country is slowing due to scarcity of land, poor economic and physical infrastructure and bureaucratic obstacles. The chief of the Board of Investment said that significant investment took place in the services sectors but that the country has failed to attract investment in high technological sectors and fallen short of potential in oil and gas exploration.

Walmart refuses to take clothes from Simco Dresses: Tazreen fire link (The New Age, January 23, 2013)

Walmart the biggest US retailer terminated its relation and canceled an order of clothes worth $1 million from Simco Dresses Limited in the aftermath of the Tazreen fire.  The cancellation occurred because Simco had subcontracted the work to Tazreen Fashions without informing Walmart.  Simco officials supported by the BGMEA have protested the cancellation, because Simco had already shipped the goods to Walmart and because Simco is no longer able to pay their workers without payment from Walmart.

Wal-Mart tightens supplier policy after Bangladesh fire (The Daily Star, January 23, 2013)

After the November fire of Tazreen garment in Bangladesh, Walmart has warned its supplier of a 'zero tolerance policy' to take effect in March.  The retailer will immediately cut ties with any supplier that subcontracts work without Walmart’s knowledge.  This replaces a “three strikes” policy, which gave companies some leeway in addressing problems.    

Int’l Plastic Fair begins in Dhaka (The New Age, January 22, 2013)

The Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) kicked off their 8^th annual plastics fair.  While Bangladesh primarily exports to the European Union, the industry is currently enjoying duty-free access to the USA under the generalized system of preferences facility and its exports of plastic goods to the country have been increasing for last few years.  As such, the industry is worried about a potential US suspension of the facility.   Industry spokespersons report that 5,000 small and heavy plastic companies are operating in Bangladesh employing around 12 lakh people are working in the units. The industry export goods of Tk 2000 crore annually in addition to Tk15,000 crore of domestic sales.

Remittance from major countries shoots up (The Daily Star, January 22, 2013)

Due to the earnings and incomes of Bangladeshi expatriates, remittances have risen from most source countries with the exception of the US.  Bangladesh received a record US$14.17 billion in remittances in 2012, a 16.4% increase over the previous year. According to central bank, the highest number of remittance comes from Saudi Arabia, which experienced a 16% increase. The second highest comes from the United Arab Emirates (UAE), which increased 26%.  Oman experienced the largest growth: 55%.  In the US remittance inflow dropped 2.5 percent to $1.67 billion in 2012 due to the sluggish economy and the US migrants’ preference for saving money instead of sending it to Bangladesh.  The average amount per migrant is $1,672, which is low compared with the average Indian ($4,843) or Chinese ($6,112) migrant.

Premier Bank sues nine officials for fund fraud (The Daily Star, January 21, 2013)

Premier Bank filed criminal cases against nine officials for misappropriating nearly Tk 60 crore between 2011 and 2012. By bypassing the standard procedure for loan approval, the Motijheel branch manager, sanctioned a loan of Tk 59.34 crore to Alppa Composite Towels Ltd, a concern of Bismillah Towels Group.

Leather industry aims to cross $1b exports (The Daily Star, January 18, 2013)

Due to demand for leather and leather goods in the global market specially in US and China, Bangladesh aims to cross the US$1 billion mark in export earnings from leather industry this year.  This would be an improvement over 2012’s exports of just under $800 million.  Industry spokespersons are optimistic because of new potential buyers from the US and Japan for higher standard of product at competitive prices. The leaders of the sector said that the country registered a higher export growth in leather goods as the companies are now focusing more on value-added products. Bangladesh exports leather products mainly to Italy, New Zealand, Poland, the UK, Belgium, France, Germany, the US, Canada and Spain.