Weekly News Clippings (21 March 2013)

HC asks Government to demolish BGMEA Bhaban in 90 days (The Financial Express, March 20, 2013)

Due to illegal occupancy of the government’s land on Hatirjheel Lake, the High Court has ordered the authorities concerned to demolish the BGMEA Bhaban within 90 days. Last year, the court had declared the high-rise as illegal and had ordered for its demolition. According to the court, the land on which the building stands is the property of the government. It was initially acquired for the railway in 1960. However, the Export Promotion Bureau gave the land to the BGMEA by a memo, in 1998, which was an illegal act, as EPB did not own the land until 2006.

Wal-Mart 'to reduce reliance on BD (The Financial Express, March 20, 2013)

Wal-Mart (WMT) has plans to reduce its reliance on Bangladesh. According to a report, published in Women's Wear Daily, the world's largest retailer intends to stop sourcing from Bangladesh from early next year. Wal-Mart has options to tap the labour markets in China and Cambodia where workers’ safety laws are more stringently regulated and monitored. Bangladesh is the world's second largest apparel exporter with an industry worth $19 billion.  

Exports to EU likely to be severely hit if India, EU sign FTA: Experts (The New Age, March 21, 2013)

Export of readymade garment, to European Union will be adversely affected in the long run if India and EU signed a proposed free trade agreement, according to experts. A study conducted by Bangladesh Foreign Trade Institute, listed the industries mostly likely to be affected because of the deal, which include-- RMG, textile, fish and aquatic products, footwear, rawhides and leather, tobacco and manufactured tobacco substitutes and ceramic products. Exporters will also lose 2-3% of profit if EU reduced tariff to 5 per cent from the existing 12 per cent for RMG products.

Foreign investors, buyers shying away from Bangladesh (The Financial Express, March 20, 2013)

The recent political unrest has taken quite a toll on foreign investments and export-oriented businesses. Faced with strikes, foreign buyers and investors may decide to divert their investments to countries like Myanmar, Cambodia and Vietnam. A large number of foreign buyers cancelled their visits to Dhaka during the last two months and many of them threatened to cancel shipments and orders. Import of raw materials, transportation and shipments of finished goods has also been seriously hampered due to frequent strikes or hartals.

Strikes, political unrest take toll on RMG sector (New Age, March 18, 2013)

The RMG sector has expressed its concern at the rise in the production cost due to rampant strikes and political unrest. Exporters claim to be incurring huge losses in the form of wages for longer working hours and cost of air shipments to maintain deadlines. They are worried that a number of small and medium sized companies would be forced out of business as they have been facing threats of discount, cancellation of orders and deferred payment from buyers.

Bangladesh identified as "star performer" (The Guardian, March 17, 2013)

According to a groundbreaking academic study, some of the poorest countries in the world have successfully managed to shrink poverty levels. The report by Oxford University's poverty and human development initiative identifies Bangladesh as one of the "star performers" along with Rwanda and Nepal.

Trade deficit decreases by 29.36pc in 7 months (New Age, March 16, 2013)

The country’s trade deficit in the current fiscal year has decreased by 29.36 per cent compared to that of last year’s, mainly due to negative import growth, according to Bangladesh Bank officials. However, the lowering of deficit does not necessarily have any positive impact on the country. A decreased import of capital machinery and industrial raw materials, which are essential for an emerging economy like Bangladesh, contributed significantly to the reduction in trade deficit.