Bi-weekly News Clippings (March 7-19, 2015)

Bangladesh a bright example of women's employment: study (The Daily Star, March 9, 2015)

MasterCard’s Index of Women’s Advancement which covers 16 countries in the Asia Pacific region, sees Bangladesh gain more than 80 points in overall employment. In the ‘female participation in the workforce’ sub-category, Bangladesh scored higher than Sri Lanka, India, Philippines, Indonesia, Malaysia and South Korea. In the overall index however, Bangladesh came in second last ahead of India.

Unrest drags down housing sales (Financial Express, March 9, 2015)

The real estate sector and its backward linkages have been hit hard by the ongoing political turmoil, incurring losses of Tk. 17 billion (USD 220 million) during the period. More than 200 sub-sectors are making losses due to their inability to transport construction materials to the project sites. In addition, real estate sales have fallen by more than 60 percent.

Export diversification: the need for different eggs and baskets (The Daily Star, March 10, 2015)

Bangladeshi exports earnings comprise 20 percent of the GDP of which more than 80 percent can be attributed to readymade garments (RMG). In addition, with 4 million workers employed in the industry, high export concentration on RMG means that the economy is highly dependent on these exports. Because of its relatively small share of global exports, Bangladesh tends to be immune to shocks stemming from international financial crises. However, the country could stand to lose its comparative advantage over its competitors if its minimum wage levels are raised too much and it could lose market share to countries like Ethiopia due to lower minimum wages (nearly a third of Bangladesh’s) and zero duty benefits for their exports. It is thus imperative that the government considers other avenues for generating export revenue. 

Central packing house to boost vegetable exports (The Daily Star, March 12, 2015)

The government is in the process of constructing a central packing house in Shyampur,  in order to ensure safe and good-quality shipments of fruits and vegetables abroad. The government was under pressure to ensure pest-free exports and genuine phytosanitary certificates after warnings from a number of importing authorities – including the EU which has suspended the import of betel leaves till June 2015 for bacterial contamination.

Trade deficit widens after racing imports (The Daily Star, March 12, 2015)

As of the end of January, Bangladesh’s trade deficit had more than doubled to $5.72 billion from $2.79 billion a year ago. A 16.43 percent increase in imports during the period accounted for this substantial change. On a positive note however, the majority of the exports were that of capital machinery which could suggest that investment is finally picking up.

Study: Bangladesh to be 23rd largest economy by 2050 (Dhaka Tribune, March 16, 2015)

A study by PricewaterhouseCoopers (PwC) projects that Bangladesh will move up 8 places to become the 23^rd largest economy by 2050. Along with the Philippines, Colombia, Egypt, Iran, the Netherlands, Pakistan and Thailand, Bangladesh is one of 8 newly emerging economies to be recognized for indicating signs of sustained rapid growth in the long term. This progress however is contingent on surviving and adapting to adverse shocks such as political revolutions and natural disasters.

Global demand drives home textile investment (The Financial Express, March 16, 2015)

Growing global demand for local home textile products has attracted heavy local investment in the sector. A relatively new entrant in the market, Bangladesh’s home textile industry is growing fast and produces better quality yarn than its competitor Pakistan, which enjoys the benefits of the European Union’s General Scheme of Preference (GSP) facility. However, Bangladesh has a long way to go if it is to compete with China, India, Pakistan and Turkey – traditional and reputed producers of home textiles – especially amid the lingering political turmoil, unfavorable currency changes and its relatively small scale of operations.

Growth of BD's software export slow due to inadequate forward linkage (The Financial Express, March 16, 2015)

Bangladesh’s software exports are currently well short of the FY2015 target of $1 billion due to inadequate forward linkage factors such as – lack of branding, inadequate support from diplomats, insufficient government funds for arranging export fairs, complex money transfer procedures in capital accounts according to AKM Fahim Mushroor, Former President of Bangladesh Association of Software and Information Services (BASIS).

Britain raises minimum wage by 3pc (The Daily Star, March 18, 2015)

Britain raised its minimum wage for workers over 21 from £6.50 to £6.70 representing a 3 percent increase, the highest in real terms since 2008. However, the opposition Labour party opposed the move saying it fell short of the £7 minimum wage pledged by the government more than a year ago.

H&M to take aggressive buying approach for Bangladesh (Dhaka Tribune, March 19, 2015)

Global retailer H&M is planning to buy more readymade garments (RMG) from Bangladesh as part of a more aggressive approach. It hopes to play a facilitating role in helping Bangladesh achieve its RMG export target of $50 billion by 2021.

Weekly News Clippings (March 10, 2015)

SME financing hits new record (Dhaka Tribune, March 5, 2015)     

SME lending has grown by 13 percent over the last year to a reach a record level of Tk. 1,00,910 crore. Following the advice of Bangladesh Bank, banks (Tk. 98,032 crore) and non banking financial institutions (Tk. 2,877 crore) have increased their lending program for the SME sector which has created around 1.5 million new jobs across the country. The quality of SME financing has also improved due to constant and more effective monitoring of SME loans by Bangladesh Bank with loan recovery also improving.

Remittance drops for second month (Dhaka Tribune, March 3, 2015)

Remittance inflow continues to fall as February saw a 5% decrease over the previous month (which also saw a decline). The remittance amount for February stood at USD 1.17 billion.  Interestingly, remittance for January and February (USD 2.42 billion) was only slightly lower than the amount received in the same period in 2014 (USD 2.43 billion). Reasons for this drop include the ongoing political unrest and a fall in manpower export in the global market - mainly in the Middle East - which saw a decline of 23.38 percent in October last year.

IMF offers recipe to fuel economic growth (The Daily Star, March 5, 2015)

The International Monetary Fund has identified 6 areas that the government should focus on improving, in order to boost economic growth. These are: 1) prioritizing major infrastructure projects 2) making land available for investors 3) reforming the financial sector 4) revenue collection 5) enacting and implementing effective policies on power and energy 6) combating the impact of climate change.

Rice imports rise to high four-year (The Daily Star, March 5, 2015)

Traders have resorted to cheaper rice from India which has led to a four year high in rice imports. In addition to factoring price, traders and millers have made the most of the zero-duty facility for rice imports as well as the higher production of medium quality of rice in India. The import cost for one kilogram of Swarna - a medium-quality rice variety which is also grown locally – lies between Tk. 24.5 and Tk. 25.20 compared to the local wholesale price of Tk. 27.

Bangladesh becoming a top spot for Muslim travelers (The Daily Star, March 5, 2015)

MasterCard’s Global Muslim Travel Index of the top 20 destinations sees Bangladesh come in at number 18 (index score of 60.2), ahead of Algeria (58.5) and Azerbaijan (58.2) and just behind Kazakhstan (60.5) thanks to its availability of Muslim-friendly services and facilities. Malaysia leads the way with an index score of 83.8.

Exports rise 5 pc in Feb (The Daily Star, March 5, 2015)

Exports saw a 5.46 percent year-over-year rise to USD 2.51 billion in February attributed to shipment of garments, according to Bangladesh Bank. However, the negative impact of the political turmoil will likely be felt in the next two to three months in light of the fewer orders from retailers.

Natural disasters to threaten Bangladesh manufacturing (The Daily Star, March 5, 2015)

With 8 Bangladeshi cities featured among the top 100 cities most exposed to natural shocks, Bangladesh’s propensity for natural disasters could hamper its potential to become a manufacturing hub for investors leaving China. Dhaka came in at 35 below Barisal (24), Chittagong (27), Khulna (28) and Narayanganj (33). The index ranks cities over 1,300 cities from 198 countries, based on the combined risk posed by tropical storms and cyclones, floods, earthquakes, tsunamis, severe storms, extra-tropical cyclones, wildfires, storm surges, volcanic eruptions and landslides.

Accord garment makers warns of severing ties with 14 (Financial Express, March 5, 2015)

The Bangladesh Accord on Fire and Building Safety – a consortium mostly comprised of European buyers – has issued non-compliance letters to 14 factories which did not comply with the fire, electrical and structural requirements it had set in its inspections. One factory does not wish to do business with the Accord because of relative cost implications and as such have refused to comply with the requirements. The other 13 however, are taking immediate measures to do so. 

Eurozone prices, remains jobs firm but deflation threat (The Daily Star, March 3, 2015)

The 19-nation eurozone saw mixed results for its economic performance as the fall in consumer prices eased and unemployment fell but there remain fears of a deflationary spiral. Consumer prices fell 0.3 percent in February (compared to a drop of 0.6 percent in January) as tumbling energy prices (down 7.9 percent in February compared to a fall of 9.3 percent in January) lowered the cost of living.  Unemployment declined to 11.2 percent in December – the lowest since April 2012. 

Tk 10,000 crore loss a year for delay in Dhaka-Ctg highway upgrade: DCCI (The Daily Star, March 3, 2015)

Delays in upgrading the Dhaka-Chittagong highway (from 2 lanes to 4) have resulted in losses of Tk. 10,000 crore a year, according to the Dhaka Chamber of Commerce and Industry (DCCI). At a meeting between the DCCI President Hossain Khaled and the Planning Minister AHM Mustafa Kamal, the latter stated that the highway will be completed in the next six months.