Weekly News Clippings (March 20, 2014)

BASIC Bank slapped with Tk 10cr fine (The Daily Star, March 20, 2014)
Bangladesh Bank has fined BASIC Bank the hefty sum of Tk 10 crore for failing to control its loan growth within the mutually agreed ceiling. The state-owned lender's loan growth shot to 25.62 percent, which prompted the central bank last week to enforce the penalty stated in the agreement. BASIC Bank, however, has contested the central bank decision and appealed for withdrawal of the fine. BB in its routine investigations in 2012 linked BASIC Bank's abnormal credit growth, which ran as high as 40 percent at one point, to rampant financial irregularities, with many instances found where the bank's board of directors and top management gave out loans against false documents and inadequate collateral.

Each Rana Plaza worker to get Tk50,000 from Trust Fund (Dhaka Tribune, March 19, 2014)
A decision to give every garment worker housed at Rana Plaza will be given a compensation of Tk50,000, was made at a meeting of the Rana Plaza Compensation Coordinating Committee. This fund would be distributed among workers by the coordinating committee through bKash by April 15. The Trust Fund, backed by the International Labour Organisation (ILO), includes IndustriALL, UNI Global Union and the Clean Clothes Campaign. Currently, the Trust Fund has $8m. About $40m is needed to pay 3,000 workers or the families of those killed in the collapse on April 24 last year. At least 1,133 workers were killed and over 2,500 injured in the incident. Meanwhile, Primark would pay 20% compensation of claim for those who are missing, dead and needs long-term treatment by March 31 and plans to pay the rest 80% compensation by May.

Rmg safety: Inspections lead to fear of job loss (Dhaka Tribune, March 19, 2014)
Suspension of production in two garment factories in Dhaka has instilled job insecurity in some 6,000 workers. On March 6, the Accord on Bangladesh Fire and Building Safety, an initiative of European retailers, asked the factories to suspend production as the building was inspected flawed. . The owners of the two factories said they might no longer resume production in the building which Accord-designated hazardous. However, workers go to the factories every day hoping to get back to work.

DoE agrees to place importance on sludge management rules (Financial Express, March 19, 2014)
The Department of Environment (DoE) has agreed to add the industrial sludge management guidelines to the environment regulations. The agreement came following a stakeholder consultation organised by GIZ in the city on Tuesday. Academicians, international consultants, representatives of Bangladesh garments and knitwear manufacturers and exporters associations, and other experts took part in the discussion.  Though there are laws making installation of effluent treatment plants (ETP)s mandatory  there are no regulations to punish the perpetrator, which discharge untreated sludge. Sludge is the solid residue generated during treatment of wastewater. Currently there are no guidelines on how to dispose of this sludge in an environmentally friendly manner, which is growing concern with the rising number of wastewater treatment plants.

About 22,572 ready flats remain unsold till December last year (Financial Express, March 18, 2014)
Around 22,572 ready flats worth about Tk 215.06 billion have been on the market since December, 2013, causing an adverse impact on the country's real estate sector. According to the Real Estate and Housing Association of Bangladesh (REHAB) leaders, though local real estate business witnessed a sluggish trend in last two years, the situation deteriorated further following the country's recent political turmoil. A five-day long REHAB fair will start on March 20 at the Bangabandhu International Conference Centre in an effort to nudge the market up.

22 Bdesh missions fail to achieve export target in 7 months of FY14 Financial Express, March 18, 2014)
Twenty-two of the 51 Bangladesh missions abroad have failed to achieve respective export targets for the first seven months (July-January) of the current fiscal (2013-14), reports UNB. The key Bangladesh missions like Washington, London, Ottawa, Canberra and New Delhi failed to achieve their July-January export target while some other important missions-Berlin, Madrid, Paris, Rome and The Hague-reached their target for the period. Of the 51 Bangladesh missions, 29 met their respective export target for the July-January period of the current fiscal (FY14), according to the latest figures provided by the Export Promotion Bureau (EPB).

WB nudges nine slow projects (The Daily Star, March 18, 2014)
The World Bank in its latest appraisal found the progress of nine of its 22 development projects in the country “unsatisfactory” and accordingly drafted in action plans to expedite the projects.
Among the nine problem projects is the Siddhirganj Peaking Power project, for which the multilateral lender has committed $350 million in October 2008. To ensure completion of the project by March 2016, the WB set deadlines for the construction of the plant. However, the WB found a few projects satisfactory, including: the Emergency 2007 Cyclone Recovery and Restoration project worth $324, the Disability and Children at Risk (for $21.6 million) and the Clean Air and Sustainable Environment ($62.2 million) projects.

Power tariff hike concerns BGMEA (Dhaka Tribune, March 17, 2014)
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed deep concern over the recent power tariff hike and urged the government to keep the power prices for the RMG sector unchanged to maintain competitiveness in the global market.  “The BGMEA thinks 6.96% hike in power tariff will impact negatively on ready-made garment sector as it will push up the cost of production,” the trade body said in a statement yesterday. On Thursday, BERC increased the retail power tariff by an average of 6.96% per unit.

Labour rights, safety standard below required level (Financial Express, March 16, 2014)
The Department of Inspection of Factories and Establishments has found labour rights and safety standard unsatisfactory.   The issues are: formation of trade union, insurance facility for the garment workers, daycare centre, maternal welfare, participation committee, safety record book and safety committee etc.

Bangladesh property: Dhaka’s growing high-end market (Financial Times, March 14, 2014)
Dhaka is ranked as one of the least liveable cities in the world, according to the Economist Intelligence Unit. Similarly, foreign visitors feel bewildered at how, the capital of Bangladesh manages to survive. Few Bangladeshis can afford Dhaka apartment, however Many new upmarket properties are making enterprising use of the only space left – roofs. This means that wealthy buyers can have pools and enjoy fine views across leafy Gulshan. . According to Fawaz Rob, an architect who teaches at the city’s North South University, investing in property is risky because the high-end market is prone to fluctuations and liable to wobble when there is political instability. Investors with assets use property as a means to launder “black money”, he adds.

Bangladesh ups electricity prices to offset power company losses (Reuters, March 13, 2014)
Bangladesh has increased electricity prices by about 7 percent on average for all types of consumers after regulators on Thursday approved the measure to curb losses at the country's power company.The new tariffs have taken effect since March 1 and are part of a government move to cut subsidies for electricity generation.Khan said prices will rise 6.96 percent on average per unit. BERC hiked electricity prices by about 8 percent for wholesale and retail consumers in March 2012.Operator Bangladesh Power Development Board is losing around $769 million a year by buying electricity at higher prices from privately-owned power plants and selling it on at lower prices.

Weekly News Clippings (March 13, 2014)

Foreign television channels under NBR's scanner (The Daily Star, March 13, 2014)
The National Board of Revenue plans to look into whether foreign satellite television channels broadcasting in Bangladesh are paying taxes properly. "We get an insignificant amount of taxes from the foreign TV channels and cable operators," NBR Chairman Md Ghulam Hussain said yesterday.
Currently, distributors of foreign channels have to pay 15 percent VAT (value added tax) and 25 percent supplementary duty. Leaders of the association said it is the advertisers who pay VAT for giving advertisements in the print media, but in case of advertisements in the electronic media, owners of the television channels have to pay the VAT.

Major flaws in 10 garment factories (The Daily Star, March 12, 2014)
Engineers hired by European brands and retailers have identified major electrical and structural flaws in 10 leading local garment factories. In their first scrutiny, the teams from the Accord on Fire and Building Safety in Bangladesh, a platform of 150 retailers and brands mainly from Europe, found complete lack of safety as electrical cables were lying on the floor. The inspection teams also found overly heavy structure on the upper floors, insufficient space through the exit doors, cracked beams, lack of sprinklers and tangled masses of electric wires on the factory floor. Of the 68 factories it inspected so far, two were temporarily closed last week although work was allowed to continue in one factory after some of the problems were addressed. The Accord will inspect 1,500 factories by the end of August this year. There are around 3,600 active factories under Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and nearly 2,000 under Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Bangladesh’s readymade garment sector employs over 4m workers of which 80% are women.

Emerging economies holding back global recovery: OECD (Financial Express, March 12, 2014)
The recovery in developed economies is on track although the slow pace of activity in big emerging markets means global growth will be only moderate at best in the near term. According to the OECD, the gradual recovery in the advanced economies is encouraging, even if temporary factors have pushed down growth rates in the early months of this year, while the slowdown in emerging economies is likely to be a drag on global growth.

80pc flood flow zones filled up (The Daily Star, March 12, 2014)
Realtors have destroyed more than 80 percent of the capital's conservable floodplains and water retention zones, mostly in the last five years, as the government stalled implementing key recommendations of the detailed area plan (DAP), say experts. One key recommendation in the DAP was reclamation of more than 2,500 acres of flood flow zones and agricultural land from illegal housing scheme developers. The DAP was finalised twice by technical experts and published in official gazette in June 2010, after a long struggle and much foot dragging. Floodplains are essential for recharging underground aquifers, balancing temperature, and for agriculture and fishing while water retention zones are crucial for preventing floods.

World Bank expands support to Bangladesh cyclone victims (Reuters, March 11, 2014)
The World Bank has extended another $140 million in additional support to Bangladesh to help people affected by two deadly cyclones in 2007 and 2009. The World Bank has now contributed a total of $324 million to the assistance project, which began in 2008, the Washington-based lender said in a statement. The project has also received contributions from the Global Facility for Disaster Reduction and Recovery ($2.96 million), the Bangladesh Climate Change Resilience Fund ($25 million), and KfW (euro 3.82 million). Total available funds are now $356.9 million. Cyclone Sidr in 2007 killed around 3,500 people in Bangladesh, while Cyclone Aila in 2009 killed more than 300 people in Bangladesh and around 150 people in India.

800 Sonali Bank branches prone to burglary (Dhaka Tribune, March 11, 2014)
The government has prepared a three-month road map to reinforce the security systems in all state-owned banks to prevent further bank robbery, especially at Sonali Bank as 800 of its branches have been found risky. According to officials of the Bank and Financial Institutions Division (BFID) most of these risky branches were housed in rented buildings. However, the execution of the road map could not be completed unless the government took policy decisions on three major issues – insurance of the money kept in a branch, purchase of land for banks, and building strong iron vaults, he said. Rest of the measures, including arrangement of security guards for the Sonali Bank branches, would be implemented on short-term basis, he said.

Exports rise 6pc in Feb (The Daily Star, March 11, 2014)
Bangladesh’s exports rose 6.36 percent in February from a year earlier to $2.39 billion, boosted by stronger garment sales as political turmoil eased after an election in January. According to the Export Promotion Bureau, the exports totalled $19.83 billion, up nearly 14 percent from the same period a year ago in the first eight months of the financial year beginning July 1. Garment exports rose 9 percent on year to $1.96 billion in February and were up 16.7 percent to $16.7 billion for the eight months. Garment exporters said orders are rebounding but the pace is not impressive and urged global retailers to ensure fair price for apparel.

Bangladesh warns of rising climate change costs as donations plummet(The Guardian, March 10, 2014)
Bangladesh needs $5bn over the next five years to adapt to current climate changes, and the cost is rising each year. According to a lead negotiator for developing countries in the UN climate talks, which resume in Bonn on Monday, Bangladesh and other developing countries, may have been promised $30bn as "fast-start finance" before $100bn a year is theoretically mobilised for developing countries in 2020, but the global recession and reluctance by rich countries to match their pledges with money have meant that most of them receive far less than they expected and has led to a loss of trust in the talks. "So far Bangladesh has received $200m from the fast-start finance, half of which has come from Britain. We had hoped for much more," said Quamrul Choudhury, who is also Bangladesh's climate envoy to the UN. But Choudhury is hopeful that countries will negotiate a legally binding global treaty in Paris next year.

Food adulteration a ‘silent killer’ (Dhaka Tribune, March 10, 2014)
The food which is supposed to sustain lives and keep people healthy, has become hazardous to health. Poba and Doctors for Health & Environment (DHEN) will jointly start a month-long awareness programme from March 14 this year. A committee, comprising of 101 members, had been formed to run this month long programme. Speakers said that the process to add poisonous and substandard ingredients in foods starts from the production level and continues till the retail end.

Pry, mass education sector may lose $ 667m foreign aid unless donors conditions met (Financial Express, March 09, 2014)
The country's primary and mass education sector may lose US$ 667 million in foreign aid unless the government meets certain conditions set by donors, including reviewing its decision to cut the sector's development allocation beyond 15 per cent, officials said. Of the conditions, the government must not cut its total budget allocations for primary and mass education sector by more than 15 per cent and implement at least 30 per cent of the donor-funded development projects a fiscal year (FY), they mentioned. But, the total budget outlay for education sector has already been slashed by 18.72 per cent in the Revised Annual Development Programme (RADP), sources at the ministry of primary and mass education (MoPME) said.

Bangladesh ranks 92nd in rule of law index (The Daily Star, March 8, 2014)
The administrative agencies and courts in Bangladesh are inefficient and affected by corruption and political interference. According to a report of the World Justice Project, Bangladesh ranks 92nd out of 99. According to the WJP Rule of Law Index 2014, Bangladesh holds 92nd position in civil justice, 94th in criminal justice, 95th in absence of corruption, 80th in constraints on government powers, 85th in open government, 87th in fundamental rights, 76th in order and security, 91st in regulatory enforcement. The Washington-based organisation identified human rights violations and police abuses as significant problems in Bangladesh.

H&M creates a new paradigm for skilled labour in Bangladesh (The Guardian, March 8, 2014)
H&M has announced its commitment to the Business Call to Action (BCtA) as part of its goal to make continuous and lasting improvements for the garment industry in Bangladesh. The company will invest in skills training that will benefit an estimated 5000 individuals by 2016. he company's initiative as a member of the BCtA is to create a Skill Development Centre of Excellence to help raise the levels of vocational training and provide certificates which in turn help increase productivity, as well as the long term employability of industry workers. If successful, the retailer also plans to establish a certified and replicable model for training and support for skilled labour within the export Ready-made Garment (RMG) industry.

Bangladesh hotspot for regional connectivity:US (The Financial Express, March 8, 2014)
Bangladesh has the potential to develop tremendous commercial ties with the rest of Asia through its very strategic location and natural resources, said US Assistant Secretary of State for South and Central Asian Affairs Nisha Desai Biswal.  Biswas said the US was very interested in supporting India's economic connections both west into Pakistan, Afghanistan, and Central Asia and east with Bangladesh, Myanmar and Southeast Asia. Biswal, who paid her three-day visit to India on March 4-6 after being appointed as the US assistant secretary of state, said that Asia represented more than half of the world's population and was the most dynamic and fastest growing economic region in the world.

US economy adds 175,000 jobs in February (BBC, March 07, 2014)
February's jobs figure, known as non-farm payrolls and based on a survey of employers, compares with the 129,000 new jobs created in January. But the unemployment rate, based on different statistics, went up slightly from January's 6.6% to 6.7%.  Analysts had been expecting a rise of about 150,000 last month. A large chunk of the gains came from financial and other services, which were responsible for an extra 79,000 jobs. Construction companies, many of which had been affected by the bad weather, added 15,000 jobs. But the information sector lost 16,000 jobs, most of them in film and sound recording. The US Federal Reserve has said the severe winter was to blame for recent weaknesses in jobs numbers, retail sales and housebuilding.