Weekly News Clippings (August 29, 2013)

ICT ministry to give people outsourcing training (The Financial Express, August 29, 2013)

The ministry of information and communication technology (MoICT) has initiated a move to impart training on outsourcing to make people self-reliant. The budget management committee of the ministry has proposed a project to the ministry concerned that will help people earn their livelihood by staying at their respective homes. The training will start from October and the estimated total cost of the training of the project is Tk 98.8 million. Trainees in 175 batches will take part in the two-day training programme and they are expected to help a total of 7 0,000 women to participate in the outsourcing training. Each batch will have minimum 40 participants. The training programme will continue till 2015.

SME credit disbursement increases (Dhaka Tribune, August 28, 2013)
The credit flow to small and medium sized enterprises during the second quarter of the current calendar year increased 16% from the first quarter, Bangladesh Bank sources said. According to central bank data, the total loan disbursement to SME sector rose to Tk225bn in the April-June from Tk194bn in the January-March. In total, the SME sector received a total of Tk419bn during the first half of the year. While SME credit flow has grown significantly, the private sector credit growth is appearing disappointing.

Fonterra products free of botulism, says New Zealand (BBC News, August 28, 2013)
New Zealand has said that Fonterra products at the centre of a global contamination scare did not contain botulism-causing bacteria. Earlier this month, Fonterra had said that some of its products were contaminated by a dirty pipe at one of its processing plants. The discovery led to inquiries into the contamination and triggered concerns over the impact on New Zealand’s dairy sector. Fonterra is the biggest dairy firm in New Zealand, which is the world’s largest exporter of dairy products. Meanwhile, Bangladesh customs authorities have restricted the import of more than 600 metric tonnes of powdered milk from Fonterra on Tuesday.  (See Bangladesh restricts Fonterra dairy products for details)

Govt, BGMEA seek to be part of factory inspection team (The Daily Star, August 28, 2013)
The government and garment exporters are disappointment to have been excluded from a core inspection committee by IndustriALL, a global trade union. The committee will inspect Bangladeshi factories under an accord signed by 85 global retailers and brands next month. According to an official of IndustriALL, the Bangladesh sides were barred from the panel as it fear that they could influence the inspection. Eight-five retailers and brands will pay $12.5 million each in the next five years for the inspection and as compensation to workers, but the Bangladesh government and the garment manufacturers will have no such contribution. The IndustriALL Global Union initiated the accord to inspect 800 factories after the deadliest Rana Plaza building collapse in Savar that claimed 1,132 lives in April.

GP to invest $345m in network expansion (Dhaka Tribune, August 28, 2013)
Grameenphone is set to receive $345 million funds from the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to expand its coverage in the rural areas. Currently one of the largest private sector financing packages in Bangladesh, it is intends to increase access to telecom services for both voice and data, help smaller businesses create employment and support both public and private sectors to better deliver education, health and other basic services using mobile technology. IFC’s own investment in the package is $150 million, while the remainder came from a consortium of lenders that include Standard Chartered Bank.


GE gas turbines for Bhola power plant (The Daily Star, August 26, 2013)
General Electric (GE) will supply two gas turbine-generators to a power plant in Bhola, Bangladesh. The new plant is supporting a plan to increase electricity capacity nationwide from 8 to 20 gigawatts (GW) over the course of eight years, as it adds exports and prevents load shedding. China Chengda Engineering is an international contractor on the project ordering the two GE 6F gas turbines. Commercial energy consumption in Bangladesh is around 66 percent on gas-fired power. Bangladesh is reported to have very large natural gas resources, producing 2000 millions of cubic feet of gas per day (MMCFD) as of 2011, however, natural gas reserves are expected to be depleted by 2020.

Bangladesh Airlines to go public in 2016 (eTN, August 26, 2013)
Biman Bangladesh Airlines, the country’s flag carrier, is set to become profitable by 2015, after breaking even in the current fiscal year ending June 2014. According to a high official, the airline is also planning an initial public offering (IPO) in three years. The airline has already improved its on-time performance from 40 to 65 percent, reducing delays in flight operations. The airline carried 1.6 million passengers last year and is on course for a 30 percent growth this year. In order to improve yields, Biman is also focusing on increased business class passengers but only after improving its performance, reducing bottlenecks and offering a much better experience on board.

Rice revolution (The Daily Star, August 25, 2013)
The National Seed Board (NSB), the authority to approve new crop varieties, is due to give its approval of the country’s first biologically fortified rice variety. According to the agriculture ministry, the hi-zinc rice will also be the most early-mature variety to be grown in Aman season (another rice-growing season during November and December). Rice varieties, being cultivated in different countries of the world, have a maximum average zinc content of 14 to 16 parts per million (ppm), while the one bred by the BRRI scientists has 20 to 22 ppm.

Govt set to take $132m China hard loan for power plant (New Age, August 24, 2013)
A government committee on non-concessional loan is likely to approve a Power Division proposal to take $132 million in buyers’ credit from two banks of China with an interest rate of around 4 per cent for setting up a 150-mega watt power plant. The Economic Relations Division will place the Power Division’s proposal before the committee, headed by finance minister AMA Muhith, to take the loan from the Export Import Bank of China and Industrial and Commercial Bank of China.

Bangladesh to lead Asia Pacific’s telecom forum (The Daily Star, August 23, 2013) Bangladesh has been elected to lead the Asia Pacific Telecommunity and ICT Development Forum (ADF) which comprises 38 countries, for the next two years. Md Giasuddin Ahmed, vice chairman of Bangladesh Telecommunication Regulatory Commission (BTRC), will chair the forum. The forum works to bring together policymakers, regulators and other relevant officials from the region on issues of common concern with special attention on the rural areas in the developing countries.






  

Weekly News Clippings (August 22, 2013)

BD for setting value addition limit at 30pc for LDCs (The Financial Express, August 22, 2013)

Bangladesh will request the Developing-8 (D-8) countries to set the value addition limit for the least developed countries (LDCs) at 30 per cent, instead of 40 per cent, for preferential trade among the member states, sources said. Bangladesh is the lone LDC in the grouping. Other members -- Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey -- have declared themselves developing countries.

Cops hardly corrupt (The Daily Star, August 21, 2013)

A recent report showed that the majority of city residents were “satisfied” with the services of Dhaka Metropolitan Police (DMP). The report draws a sharp contrast with another recent survey by Transparency International Bangladesh (TIB), which had found the police, along with political parties, as the country’s most corrupt public service institution. The study, “Public Satisfaction with Current Policing Practice”, was conducted by the Dhaka University’s sociology department and was funded by the DMP. In the survey, 81 percent of 617 respondents expressed satisfaction with the services provided by the 46 police stations in the DMP area, while 54 percent said they were never asked to pay speed money.

Ominous draft cleared by govt (The Daily Star, August 20, 2013)

The cabinet has approved the draft of the ICT (Amendment) Ordinance-2013 which proposes to empower law enforcers to arrest anyone without warrant and has the highest punishment up to 14 years. In the original Information and Communication Technology (ICT) Act-2006, the maximum punishment was a 10-year jail term and a fine of Tk 1 crore. Also the offences were bailable but now the bail is at the judge’s discretion. Destroying computer data with malicious intent, transferring data without proper authority, hacking, and releasing vulgar and defaming information in electronic form will be considered as serious offences as per the proposed amendments.

Bangladesh to import 5,000 tonnes of onions to tame prices (Reuters, August 20, 2013) Trading Corporation of Bangladesh plans to import 5,000 tonnes of onions to counter soaring prices of the commodity. The state purchasing agency is making all efforts to increase supply in the domestic markets to hold down the prices of onions. Prices of onions nearly doubled in the south Asian country in recent weeks following sharp price rises in India, which is the main supplier of onions to Bangladesh along with Myanmar. Onion prices in India hit a two-and-a-half-year high last month due to a drought last year in key growing areas.

Jute genome decoding shows value of funding research (Dhaka Tribune, August 19, 2013) A team of Bangladeshi scientists have successfully decoded the genome sequence of a local variety of jute plant, opening up a new vista in the development of the golden fibre. Maksudul Alam, a professor of the University of Hawaii, who earlier decoded the genome of papaya in the U.S. and rubber plant in Malaysia, led from the forefront in sequencing the jute genome. Experts said the discoveries would help improve the fibre length and quality, including colors and strength, and develop high yielding, saline soil- and pest-tolerant jute varieties through genetic engineering.

Four state banks to get Tk 5,000cr (The Daily Star, August 19, 2013)

The government will inject Tk 5,000 crore into four state-owned commercial banks to make up for the significant capital shortfall that has alarmed both the World Bank and the IMF. On June 30, the capital shortfall of Sonali, Janata, Agrani and Rupali banks stood at Tk 9,062 crore, according to statistics from the central bank. The capital shortfall in the banks had also prompted the International Monetary Fund to impose a condition on the government saying that it will have to recapitalise the banks to help them meet the deficits by the end of the current fiscal year.

Bangladesh risks losing EU leather market (The Financial Express, August 19, 2013)

Bangladesh risks losing the country's largest leather export market -European Union - as work on the tannery estate development project in Savar will not be completed before June 2016. According to the Minister for Industries, the reasons for delay in the relocation were non-cooperation from the tanners along with a number of legal complexities in the shifting the tanneries. The EU, the leading destination of the country's leather exports, had threatened to stop buying products from Bangladesh beyond 2014 if the CETP (Central Effluent Treatment Plant) is not established in the industrial zone by then.

Free regulator, only (The Daily Star, August 18, 2013)

Leading civil engineers and architects at a recent discussion on updated version of Bangladesh National Building Code (BNBC) and building safety organized by The Daily Star came up with the following problems areas and some possible suggestions:

·         An independent commission should be formed and local government bodies, like a municipality, and development control authority, like Rajuk, aspiring to obtain from this commission the authority to approve building construction must have competent manpower to qualify.

·         To look into the matter that high-rise buildings are being constructed on land meant for parks and gardens.

·         Testing facilities at BSTI should be upgraded. Also there should be a single window so that people do not have to run to 20 different places to obtain permission and services before constructing buildings.

·         It should be investigated that many government agencies and public institutions that do not follow the building codes.

·         The building code should be regularly updated.

·         Proper land use planning is vital, as the country is losing 1 percent of its cultivable land to housing and industrialisation.

·         Soil tests (geotechnical examination) of a building’s foundation must be carried out only by a licensed professional.

·         There must be coordination among service providers (Titas, Wasa, Desa etc) as their works had been overlapping.

·         Should launch an awareness campaign to convince the people that it would not cost much if they build their buildings with proper designs from the certified professionals. Around 90 percent building drawings submitted to Rajuk were not made by certified professionals, but by draftsmen.

Weekly News Clippings (August 15, 2013)

Forex reserve hits record $16bn (Dhaka Tribune, August 15, 2013)

Bangladesh’s foreign exchange reserve has crossed $16bn for the first time in the country’s history due to export growth, strong remittance flow and falling import payments. This has turned Bangladesh into the second highest foreign currency reserve holder in South Asia, right behind India. “Bangladeshi expatriates are turning more to regular banking system to remit their earnings as the payment system has improved,” said Bangladesh Bank Governor Atiur Rahman. He also said that the $16.03bn reserve is enough to meet the country’s import payment for five and a half months.

Realtors slash apartment prices to rope in customers (The Daily Star, August 14, 2013)

The real estate industry is trying to revive itself by cutting down apartment prices.

“The apartment prices in Dhaka are around 25 percent cheaper now than three years ago,” said Toufiq M Seraj, managing director of a real estate company. Meanwhile, according to a latest Bangladesh Bank directive, commercial banks will not be able to spend more than 30 percent of their paid-up capital on real estate and are forbidden from buying any new property unless they bring down their portfolio to the new threshold, which suggests that apartment prices are likely to fall even further.

Dhaka seeks duty free access of 24 items to Bangkok (New Age, August 14, 2013) Dhaka has sought duty- and quota-free market access for its 24 selected products, mainly readymade garments, to Bangkok in a bid to boost export to Thailand and increase bilateral trade. According to the commerce ministry, Bangladesh has recently requested Thailand to allow such access of the products to its market. Among the 24 products, 13 are from woven and knitwear, three from jute and textiles, two each from electrical machinery and equipments, pharmaceuticals and raw hide. Thailand is the fourth largest trading partner of Bangladesh within the ASEAN countries.

BGMEA suspends services to 160 factories (The Daily Star, August 14, 2013)

The BGMEA has suspended ‘utilisation declaration’ (UD) certificates—mandatory export documents—of 160 of its members for not leaving adequate space on rooftops of the factories. Bangladesh Garment Manufacturers and Exporters Association stipulates at least 25 percent open space on a building’s rooftop to facilitate exit in cases of fire. The suspension of UD certificates means the BGMEA will not give these factories a vital export document. The move comes after the Obama administration put pressure on Bangladesh to improve factory conditions.

WB to provide $100m to upgrade state banks’ tech infrastructure (Dhaka Tribune, August 13, 2013) The World Bank has offered to give US$100m (Tk 8000m) to help upgrade technological infrastructure of the state-owned commercial banks – Sonali, Janata and Agrani. The mission pointed out the lack of technological infrastructure to support online banking by the state-owned commercial banks. The fund is likely to be provided as budget support for the current fiscal year and finalised immediately after a visit of the bank’s vice president for South Asia Philip Harran to Dhaka in October.

Tk 0.5m fine, 10-year jail for cheating in manpower export (The Financial Express, August 13, 2013)

The cabinet approved the draft of the Overseas Employment and Migration Workers Act- 2013 with the provision of maximum 10-year imprisonment and Tk 0.5 million fine for irregularities, cheating and forgery in manpower export by recruiting agencies. The existing law has the provision for punishment of one year imprisonment and a fine of Tk 5,000. The new law will also increase the punishment to minimum five years in jail and Tk 0.1million fine for any forgery and irregularities in manpower export by the recruiting agencies. And in the case of unauthorised and deceptive advertisements, the minimum punishment will be seven years in jail and a fine of Tk 0.5 million.

$ turns costlier in kerb market (The Financial Express, August 13, 2013)

The difference in US dollar prices between the kerb market and the scheduled banks has widened by Tk 3 to Tk 4 per dollar primarily because of purchase of dollars beyond permissible limits in recent times. Money market experts suspect that some people are transferring money abroad sensing an uncertain political situation in the months ahead. Lax monitoring of exchange houses by the central bank and flexibility shown by Customs officials at airports has helped locals carry foreign currency beyond permissible limits.

Biman faces cash crunch (The Daily Star, August 12, 2013)

Biman has failed to pays its dues to Padma Oil for aviation fuel which led to the oil company threatening to cut off the national flag carrier’s fuel supply. As of July 24, Biman owes Padma Oil Company Ltd, a subsidiary of Bangladesh Petroleum Corporation (BPC), a whopping Tk 724 crore. Padma in a recent letter to Biman said that the company may not be able to ensure smooth supply of fuel during the hajj flights when the demand for fuel rises. Padma issued the warning after Biman, which has been in the red for years, failed to keep its promise to pay fuel bills and the dues.

(No newspaper was published in Bangladesh on August 9, 10 and 11 due to the Eid holidays)

 

 

Weekly News Clippings (August 8, 2013)

Ministry to step up security against milk imports (The Daily Star, August 8, 2013)

The commerce ministry has started working towards preventing the entry of contaminated milk through imports. The move was made after Fonterra, the world’s largest dairy producer, admitted that some batches of its infant formula and sports drinks contained a whey product contaminated by a bacteria that can cause a fatal illness. There have been no reported illness so far, but many countries including China have temporarily banned the import of some of the products of the New Zealand-based company.

Children toil in sweatshops (The Daily Star, August 8, 2013)

Children, mostly aged between 10 and 18, work as apprentices at jeans factories in Keraniganj on the outskirts of Dhaka, without any salary. For Eid, however, they receive a small, one-off payment. After work, they sleep in the poorly ventilated rooms of the factories, which do not have safety measures like fire exits or fire extinguishers. There are about 150-175 such commercial buildings in Keraniganj, where at least two lakh workers in about 10,000 factories, said Mizanur Rahman, president of Keraniganj Garment Traders and Shop Owners’ Association. The factories have been there for about 20 years.

NBR exempts telecos from VAT on revenue sharing (Dhaka Tribune, August 6, 2013)

Cell phone operators have been exempted from paying a 15% VAT on their revenue sharing with the BTRC through a Statutory Regulatory Order issued by the tax regulator. The National Board of Revenue (NBR) that according to the law, mobile companies had to pay a VAT when they shared 5.5% revenue with the telecom regulator, although they pay 15% VAT on their total earnings.

Govt plans duty privileges for car importers (The Daily Star, August 5, 2013)

The National Board of Revenue plans to give duty benefits to a section of reconditioned car importers. The move will reduce the duty burden on the importers who are yet to collect around 3,700 vehicles from the ports. The tax privileges known as depreciation benefits—now 45 percent—are meant for the current fiscal year. The NBR will now provide the same benefits to the vehicles imported in the last three fiscal years, which will cost the state coffers roughly Tk 100 crore. The depreciation benefit to assess the duty of five-year-old cars increased to 45 percent this fiscal year from a flat rate of 35 percent on the previous year.

48pc of migrant workers lack training: BMET (The Daily Star, August 4, 2013)

About 48 percent of the five lakh Bangladeshis who migrate abroad each year are under-skilled or unskilled. They do not have enough training to compete with the workers of countries, such as India, Pakistan, Sri Lanka, Nepal and the Philippines, said a director at the Bureau of Manpower, Employment and Training (BMET). The majority of these workers have little or no education. According to BMET, 33 percent of the workers are semi-skilled while only 19 percent are professionals.

Pledges not fulfilled (The Daily Star, August 4, 2013)

A group of civil society organisations have launched an initiative to follow through on the commitments made in the aftermath of the Rana Plaza collapse, which are yet to be fulfilled after over three months into the incident. Given their slow implementation, the Centre for Policy Dialogue (CPD) in partnership with 14 other organisations have formed the forum to accelerate the process. Rehman Sobhan, chairman of CPD, said the forum would put pressure on the government and other stakeholders so that “they discharge their responsibilities properly”.

Biman Bangladesh Airlines inks 10-year deal with SITA “(eTurbo News, August 4, 2013)Bangladesh Airlines has formalized a 10-year deal with SITA to transform and manage its infrastructure, targeting to double its passengers within the next two years. Under the multi-million-dollar agreement, SITA will upgrade Biman's global network and operational messaging and help transform its workspace, helping the airline achieve substantial savings. SITA is a Switzerland-based multinational information technology company specialising in providing IT and telecommunication services to the air transport industry.

'Undisclosed' income investment facility yet to create any impact (The Financial Express, August 3, 2013)

The country's real estate operators are yet to witness any impact of ‘undisclosed income’ being allowed in the budgetary measures. They blame the inclusion of 'contradictory' provisions for discouraging the buyers. A section of the Income Tax Ordinance says:

“The provision of this section shall not apply where the source of such investment, made by the assesses for the purchase or construction of such residential building or apartment is

• Derived from any criminal activities under any other law for the time being in force or
• Not derived from any legitimate sources."

According to Sheltech’s managing director Taufiq M Seraj, the company sold around 15 flats during last Ramadan but has not sold a single one this year. The realtors also blamed recent social and political instability ahead of the 10th parliamentary elections behind the poor response.