What's new

Bangladesh Economy: News & Updates


DHAKA: Cargo handling at Bangladesh’s main Chittagong port rose 5.28% to a record 30.48 million tonnes in the fiscal year to June, port officials said on Monday. The port handled 28.95 million tonnes in the previous fiscal 2007-08 (July-June) year, the Chittagong Port Authority (CPA) said in a statement. The cargo handled in the immediate past fiscal year included 26.72 million tonnes of imports and 3.76 million tonnes of export shipments, including containers. Bangladesh imports mainly foodgrains, petroleum products, edible oil, sugar, fertiliser and cements and exports mostly readymade garments, jute, jute goods, frozen foods, urea and naphtha. Container handling increased 10 percent to 1.1 million TEUs (twenty-foot equivalent units) in the year from 1.0 million TEUs in the previous year. reuters
 
IMF defers Dhaka office closure until 2011-end

The International Monetary Fund has decided not to wind up its office in Dhaka until 2011, responding to requests from the government, official sources said.

Jonathan C. Dunn, IMF resident representative in Dhaka, conveyed the latest decision to the government on July 29 last.

"We are not winding up our local office in Dhaka in December this year as was decided earlier. Rather the office will remain open and operative until December 2011", Dunn told the FE on Tuesday at his office located in the Bangladesh Bank premises.

"The decision on the closure has been reversed following request made by the government to the IMF Headquarters in Washington, particularly by Mashiur Rahman, Economic Affairs Adviser to the Prime Minister", he said.

Earlier, the IMF in May last informed the government about its intention to close down the IMF local office from December next since the Fund had no financial programme in the country.

"No programme, no office", Dunn told FE, citing the general policy of the IMF.

"The general policy of the IMF as far as having offices in member countries will not be applicable in case of Bangladesh for the next two years", he said.

The IMF resident representative said the Fund has been suffering from significant budgetary constraints, forcing its management to wind up offices in many countries and cut jobs.

The IMF offices in South Korea, Hong Kong and Papua New Guinea were closed down last year following the global financial meltdown, Dunn said.

The IMF would continue to extend technical assistance to the government despite its having no programme in operation at the moment, Dunn said.

Presently, the IMF is providing technical assistance for upgradation of the accounting and auditing systems of the Bangladesh Bank, development of secondary market for government debt instruments, reform of the tax administration and tax laws, debt management and forecasting the macro economy on regular basis.

Speaking on the fundamentals of the local economy, Dunn said the economy has until now shown its resilience as far as export, remittance and foreign exchange reserve are concerned.

"I don't foresee any crisis in the balance of payments (BoP) situation of within the next one year", Dunn told the FE.

"The IMF will extend support to BoP whenever necessary", he said.

"The government will have full freedom to use such support if provided in future", Dunn said.

Jonathan C. Dunn said the economic situation of the country in 2009-2010 would be more dependent on the pace of recovery of the US economy and local agriculture production.

He, however, predicts a 15 to 20 per cent fall in remittance income in the current fiscal year over that of the previous year.

"The export growth in the current fiscal year is less likely to decline more than 8.0 to 9.0 per cent over that of the 2008-2009.' Dunn told FE.
 
Dhaka to be 2nd largest knitwear-exporter soon

In fiscal 2008-09, the Knitwear sector posted a 16.21 percent growth over


Thursday August 06 2009 12:22:03 PM BDT


When the country’s export growth is showing a downtrend due to global meltdown, Bangladesh is expected to emerge as the world’s 2nd largest knitwear-exporting country, reports UNB.

“It’s so easy to take over Turkish’s position (2nd position), if we can keep up the last fiscal year’s trend of the export growth,” BKMEA president Fazlul Haque told the news agency. Bangladesh earned $6.4 billion by exporting knitwear in fiscal 2008-09 while Turkey about $7 billion.

Fazlul Haque hoped that Bangladesh can secure the 2nd position in one year as its growth rate is much higher than that of Turkey.

In fiscal 2008-09, the Knitwear sector posted a 16.21 percent growth over the previous year’s earnings of 5.5 billion, according to the statistics provided by the Export Promotion Bureau (EPB).

The BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) president said they have set a target for a decade to become the number one export-earning country in the knitwear sector by dislodging China.

China exports knitwear worth $27 billion every year on average.

Fazlul Haque said the number one position is achievable for Bangladesh although it has been hit hard by the global economic recession, if the sector gets smooth power supply and other facilities from the government.

http://newsfrombangladesh.net/view.php?hidRecord=278334
 
Japan could eye Bangladesh for ITO services

Dhaka, Aug 6 (bdnews24.com)—Bangladesh could acquire a significant share in the global market for IT Outsourcing through public private partnership projects with developed countries like Japan, says a visiting IT specialist from Osaka City University.

Bangladesh has potential to build a strong ITO industry, said Professor Keiko Morisawa, of the Graduate School for Creative Cities under Osaka City University, speaking at a workshop on ICT services development by the Embassy of Japan at a Dhaka hotel on Thursday.

Morisawa suggested following the recent example of the Philippines and also Vietnam, who since 2005 have rapidly secured significant shares in the highly lucrative global ITO industry.

ITO (IT Outsourcing), BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing) include offshore services such as call and contact centres, back office support, transcription, animation, software, website and game development, as well as software engineering.

Morisawa also said Japan is offering to train up overseas students to increase human resources in the global IT industry and aims to welcome 3 million students by around 2020 as a part of a 'global strategy'

Currently, China leads among Japan's offshore destinations for ITO, BPO, KPO services, followed by India, Philippines and Vietnam.

Globally, the BRIC countries (Brazil, Russia, India and China) are predominant in this offshore service industry. The total value of transactions among these countries (both direct and indirect) in 2008 was $1b.

But BRIC countries faced recent problems, Brazil and China could not utilise their potential and Russia lacks government support, which is where Philippines and Vietnam secured their place, said Morisawa.

She said non-BRIC countries like Philippines were successful as they emphasised IT education and chose cooperation with India over competition. Vietnam ensured success by developing IT education and cooperation with Japan through both private and public partnership.

There is also a scope for Myanmar and Bangladesh to follow their examples, she said.

She suggested Bangladesh should pursue the Philippines' example in particular for near-shoring with BRIC countries, specifically India.

It should also be keen to get BPO (Business Process Outsourcing), not only ITO (IT Outsourcing) work orders.

Bangladesh could also increase offshore work orders directly from Japan by developing ITEE (IT Engineers Exam) skill standards, which is globally recognised and a must to get into the BPO market, she said.


:: biz.bdnews24.com ::
 
Country's first-ever hi-tech park open to investors in Sept: official

Dhaka, Aug 7 (bdnews24.com)—The country's first-ever hi-tech park at Kaliakoir will be open to investors in the IT industry by September, AKM Abdul Awal Mazumder, secretary of the ministry of science and ICT said on Thursday.

The government is taking initiatives to develop the country's ICT sector in line with its vision of a 'Digital Bangladesh', Mazumder said at a workshop on ICT services development by the Embassy of Japan at a Dhaka hotel on Thursday.

Mazumder told bdnews24.com after the session, "The initial infrastructure of the park will be completed by September this year."

"The park, on 62 acres of land, will create scope for investors in the sector."

He said the site would have its own power substation and be connected with Joydevpur by rail for easier communication for high-tech industries to be set up here.

"The site will be allotted in plots, same as in the EPZs, with many facilities."

An ICT training institute will also be established there, he said. "Korean investors have showed their interests in this."

The park would have an administration building and a resort for visitors to showcase the country's ICT sector, he said

"Another hi-tech park will be set up at Noakhali soon," he added.

The ministry of science, information and communications technology (ICT) initiated the Kaliakoir project in 2003, but there was virtually no progress in its implementation for several years except for acquisition of land at the project site.

In September 2007 the construction work started rolling. The government developed the basic infrastructure of the park at a cost of Tk 24.4 crore under the first phase of the project.


Country's first-ever hi-tech park open to investors in Sept: official :: Bangladesh :: bdnews24.com ::
 
PRIVATE OIL REFINING POLICY BY SEPTEMBER
BPC monopoly to remain intact
A Z M Anas

The government has started drafting a policy to allow private investors to refine oil and then sell in the domestic market on a limited scale, rolling back an earlier restrictive regulation, energy officials said Friday.

If approved, the first Private Oil Refinery Establishment Policy-2009 will empower private refiners to export petroleum products, but restrict wider sales within the country, thereby keeping the marketing monopoly of the state-controlled Bangladesh Petroleum Corporation (BPC).

The Bangladesh Petroleum Act 1974 bars private companies from "selling, distributing, transporting and otherwise disposing of petroleum and its refined products."

"Basically, the BPC will have an upper hand," energy secretary Mohammad Mohsin said.

"The new policy will have, however, flexibility. If needed, the government can buy products from private oil refiners," he said.

The top energy official said the policy is expected to boost investment in oil refinery, but will not give private investors a larger edge over the state agency in influencing the domestic petroleum market.

The Chittagong-based Eastern Refinery Limited (ERL) is now the country's only refinery, refining less than the country's yearly demand for petro products.

The move came as the Energy Division received at least two proposals from Bangladeshi business groups to set up oil refineries.

Local conglomerate Bashundhara Group is planning to establish the country's largest oil refinery in Chittagong investing as much as US$ 700 million with an annual capacity of 2.5 million tonnes of crude oil.

The embattled business group's proposed refinery would be built on 112 acres of land it acquired on the south bank of the river Karnaphuli and will dwarf investments by any Bangladeshi private investor.

East Coast Group, another business group, has also unveiled a plan to invest $110 million for a refinery in Chittagong to produce octane.

Energy officials said the private refining policy is crucial as many Gulf investors have backed off mainly in absence of such a policy.

They expect the policy to be finalised sometime in September, although the first draft has been reviewed.

Energy experts say the existing Petroleum Act is highly restrictive and does not provide room for participation of any private investor.

Mr Mohsin said that the policy would make it mandatory for private refiners-local and foreign-to maintain quality of international standards and environmental safeguards.

"But if the government needs refined oil, it can purchase from the private refiners," he added.

He said the Energy Division has already reviewed the first draft of the policy and work is now going on to modify the version.

The policy will allow private refiners to import crude oil and refine it, but will be barred from selling the petroleum products widely in the local market.

Energy experts have chided the draft policy's major provision, saying it would unduly protect the interest of the state agency, which lacks capacity. It will encourage more imports, they said.

Currently, ERL can refine 1.2 million tonnes of crude a year, about 30 per cent of the country's total demand. BPC buys the rest of the amount mostly from the Gulf nations.

Several Middle East refiners had earlier expressed their willingness to set up the capital intensive plants in Bangladesh, but they stepped back after getting no positive response from the government.

Private oil refining policy by Sept
 
FY09 EXPORTS TOTAL $15.36b
Monday, August 03,2009

DHAKA: The country’s export earnings amounted to $15.36 billion in the 2008-09 fiscal year, posting a 10 per cent growth amid export slide in many Asian countries, commerce ministry officials said.
The growth however was slower than previous year’s rise of 17 per cent. The country’s export revenues totalled $14.11 billion in the 2007-08 fiscal with apparels accounting for $10.7 billion or 76 per cent of the total.
Despite steep fall in global demands, readymade garments maintained 12 per cent growth and fetched $12 billion in 2008-2009 fiscal that ended in June.
Export Promotion Bureau officials are still analysing the export data to prepare sector-wise earning reports.
The complete annual export report is expected in a day or two, they said.
The starting of the fiscal year was robust for the garment exporters, but from October onwards apparel exports experienced seesaw in shipments to western market, hard hit by the worst recession in decades.
Exporters said they had to compromise on prices to stay afloat amid stiff competition from other Asian exporters.
EPB vice-chairman M Shahabullah told New Age on Sunday that price cuts on merchandises by the western importers impacted the overall export incomes.
‘It is very unfortunate that importers cited recession and forced Bangladeshi exporters to cut prices of apparels, whose prices are already lower than global average,’ he said.
Export target for the current fiscal may be set at $17.6 billion with 13 per cent growth projection, expecting $13.6 billion from apparel sales.
 
BRICK MAKER TARGETS MIDDLE EAST MARKET

Kawsar Khan: Local brick manufacturer Mirpur Ceramic Works Ltd (MCWL), which has been exporting the building material to Singapore for over a decade, is getting ready to inscribe its footprint on Middle East markets.

At present the company exports 80,000 to 100,000 pieces of different types of bricks every month, officials said. The cost of each container of bricks having 20,000 pieces hovers around $1,500.

"We mainly export plain hollow and bullnose bricks to Singapore that are used there in road and footpath decoration," said Mohammad Emran, manager (Marketing and Sales) of MCWL.

Bullnose is a decorative brick used in landscape design works and walkway edges.

The company was awarded national export trophy (bronze) for 1996-97 for exporting such a non-traditional item.

"The real estate sector is experiencing a boom in the ME countries including the United Arab Emirates and Saudi Arabia where there is a huge prospect for our bricks," said Emran.

As the Gulf states do not have enough clay to make brick to meet their needs, they import it from such countries as India, Sri Lanka and China.

"Now we are receiving export queries from the ME countries and also from the United Kingdom," he said.

He said the roof tiles made by Khadim Ceramics Limited (KCL), a concern of MCWL, have recently drawn attention of ME countries.

The roof tiles produced by the company are burnt in 1,200 degrees Celsius and coated with silicon that give the item greater durability compared to the traditionally made roof tiles in the country.

"People in the Middle East need roof tiles to keep their houses cool from the sun's heat and we hope to export around four containers of roof tiles within a very short time as negotiation in this regard is going on," said Emran.

He said the company could have started exporting roof tiles to the Gulf countries much earlier, but it was not possible due to high freight charges.

"We have taken different measures to cut production costs and become successful in some areas," he said.

He also sought cash incentive facility against brick export to make local bricks competitive in export market.

Sakif Ariff Tabani, director (Marketing and Administration) of MCWL, said their products have potential in Japan also. But the high freight charge is barring exports.

The combined daily production of MCWL and KCL ranges from 1 lakh to 1.5 lakh pieces of bricks that include facing bricks, reinforced bricks, bullnose, three-hole bricks, roof tiles and paving bricks.

The Daily Star - Details News
 
Dhaka firm seeks $7 mn Indian credit to buy CNG buses.


Dhaka, Aug 9 (IANS) The state-run Bangladesh Road Transport Corporation has sought a Taka 500 million ($7 million) credit from India to purchase 100 compressed natural gas (CNG)-run buses to replace its ageing transport fleet.

Bangladesh Communications Minister Syed Abul Hossain confirmed Saturday that the government has taken initiatives to purchase 500 more buses with financial assistance from India.

Hossain said tender evaluation process entered the final stage for the purchase of 100 CNG buses with financial assistance from Nordic countries (Norway, Sweden, Denmark, Iceland and Finland).

Ten bidders including contractors from India, China, Japan and South Korea have participated in the open tender.

Nordic countries are providing loan worth around $30 million to implement the 'Clean Dhaka Project', New Age newspaper said Sunday.

The project has received a political fillip since the present government of Prime Minister Sheikh Hasina took office in January. It is aimed at cleaning up a river, the ferry ghats and introducing environment-friendly transport.

Besides, BRTC officials said the communications ministry was looking for support from the Economic Development Cooperation Fund of South Korea to purchase another fleet of 300 CNG buses.

At present, the corporation has no CNG-run bus in its current fleet of 170 single and double-deckers in the capital.

The state-run transport agency has withdrawn from most of the city routes and limited its services to Volvo double-deckers on a few selected routes, where it recently initiated e-ticketing.

http://in.news.yahoo.com/43/20090809/836/tbs-dhaka-firm-seeks-7-mn-indian-credit.html
 
BANGLADESH TO EXPORT BRICKS TO INDIA
Friday, August 14,2009

AGARTALA: Bangladesh will export 400 million bricks to Tripura, with the first consignment reaching the bordering state Aug 20, officials said here Thursday. To boost the brick trade, the Indian government has removed the 2.5 percent central custom duty from this month while the Tripura government reduced the value-added tax (VAT) to 4 percent from 12.5 percent,” said Tripura Commerce and Industry Minister Jitendra Chowdhury.

To commence brick exports to northeast India, a formal function will be held Aug 20 at the Akhaurah check post, where Chowdhury will be present along with Bangladesh commerce minister Faruk Khan.

The India-Bangladesh Chamber of Commerce and Industry (IBCCI) expects Bangladesh’s exports to the northeastern Indian states to increase to $1 billion by 2011.

“We are ready to supply 40 crore pieces of bricks worth Bangladeshi Taka 2 billion (Rs.140 crore) to Tripura and a deal has been signed with the Tripura government last month,” said IBCCI president Abdul Matlub Ahmad, who led a team here.

Explained Chowdhury: “Since Tripura’s existing brick fields are not able to cater to the demand, the state government has decided to import bricks from Bangladesh.”

Tripura also imports large quantities of stone chips and cement from Bangladesh.

According to Ahmad, Bangladesh’s export basket will now include bricks, plastic goods, readymade garments, agro-products and frozen foods, apart from stone chips and cement.

“We targeting exports worth $1 billion mark to northeast India by 2011 to close the trade gap,” he added.

A “Bangladesh Market” will also in Tripura with the state government agreeing to hand over either land or a building. Products from both Bangladesh and the northeastern region would be available at the market.

Meanwhile, the Indian government has identified seven check posts along the border in West Bengal, Assam, Meghalaya, Mizoram and Tripura for setting up Integrated Check Posts (ICPs).

“Under the ICP scheme, infrastructure and communication facilities will be developed at these check posts to boost trade between the two countries,” a central government official said.

South Asian Media Net
 
GOVT'S MEGA PLAN TO PRODUCE 7,000 MW BY 2014
Hafeezuddin Ahmad

THE recent mega plan presented by the Ministry of Energy and Mineral Resources to Prime Minister Sheikh Hasina, envisaging zero load shedding by 2010, and increasing generation capacity to 7000 MW by 2014, is a piece of welcome news for the country. It gives a projection of the power scenario during the period 2009-2014.

Long Term 2014: The focus on 2000 MW coal-based power plants in four to five years' time is positive and an indication of the government's resolve to shift from sole dependency on our gas resources, which is depleting fast, to an alternative fossil fuel -- our coal. Although there is talk of importing coal, no doubt exploiting country's substantial coal resources is also on the cards. In fact, the generation cost of Tk 3.5 per unit is an indication of that, as imported coal would be much higher, estimated around Tk 8.5 per unit. The Economic Adviser to the Prime Minister, Dr. Mashiur Rahman has recently admitted in a meeting at the National Press Club that given the gas scarcity, our coal resources could be utilised to generate power. Regarding the opposition to coal extraction method, he said that it is politically very weak, and the government should take a brave decision, subject to ensuring proper compensation for the affected people.

Reiterating what the author has emphasised in one of earlier articles, since Bangladesh has substantial coal reserves at feasible and viable stripping ratios, is it not prudent to switch to coal-based power generation (5,000-10,000 MW) in the long-term using its own reserves? Approximately three million tons of coal are needed to generate 1000 MW per year, so 900 million tons of reserve would suffice for 10,000 MW for over 30 years. This can be sourced exclusively from the contiguous Barapukuria-Phulbari basins, which have an estimated reserve of 572 mt and 390 mt, totalling 962 million tons of thermal coal, out of country's known reserves of over 3.0 billion tons.

Immediate Term 2009-10: Because the mega plan envisages 752 MW new plants scheduled for commissioning by December 09, thereby hoping to alleviate load shedding, at issue is the question of the primary fuel which is needed. Are these gas- or oil (HFO/diesel)- or dual fuel (gas/oil)-based? This is a critical matter if these are gas based (188 mmcfd gas needed), and would be a daunting challenge as gas supply is short of demand. For example on August 03 and 04, 2009, Bangladesh Power Development Board (BPDB) sources show generation reduction due to gas shortage was 505 MW and 510 MW respectively. During these two days, according to Petrobangla sources, overall gas "demand" and "supply" for power generation was 951.5 mmcfd and 784.2 mmcfd respectively -- already a shortfall of 167.3 mmcfd.

So, unless additional gas is produced in excess of current production levels (1944.3 mmcfd), or unless gas is diverted from other consumers (fertiliser, industry, domestic), the new 752 MW-plants will not have gas if they are gas based. In fact, the government has decided to do this precisely i.e. increase generation of installed power plants during the ensuing Ramadan by diverting gas supply from other consumers to them. Otherwise, these 752-MW plants can become operational only (as per mega plan) if they are oil- or dual fuel (oil/gas)-based also.

Interim Term: Six to twelve months (2009-10): 500-1500 MW Rental Plants (HFO/diesel based): Eighteen to twenty four months (2011-2012): 800 MW Peaking Plants (dual fuel-oil/gas):

Government plan is fully endorsed, as being the preferred solution in the interim. They need to be pursued urgently. The rationale for planning dual fuel for the peaking plants is probably based on the expectation that additional gas may/would be available in the interim from existing gas fields, otherwise they would use oil. However, the cost of generation from HFO (about Tk. 10 per unit) or diesel (Tk. 16 per unit) is to be taken note of. Although these seem to be on the lower side, the key fact is generation from oil is much costlier than gas (Tk. 3.5 per unit).

Another point is whether the four peaking plants (each 200 MW) can be installed within a period of 18 to 24 months, considering the project cycle (feasibility, due diligence, financial closure, land acquisition, plant erection, start-up). A realistic time line may be three to four years.

Conclusion: The mega plan is conditionally feasible for the immediate term (2009-10), endorsed and do-able in the interim period (2011-2012), and is definitely sound for the long term (2013-14). For beyond 2014, considering Bangladesh's current state of acute power shortage, its substantial coal reserves, acute gas shortage and uncertainty of future gas supply, the option of more value added use of gas should more gas be discovered, and reserving gas reserves for domestic household consumption and installed gas fired power plants, it follows that the logical course of action is not to wait uncertainly for more gas discoveries (which in any case is at best five to six years away, if at all), but to immediately decide on coal mining in the Phulbari-Barapukuria basins, and to pursue a phased development of coal-fired power plants (5,000-10,000 MW).

In parallel, it is important to pursue renewable power generation capacity (wind in the coastal region, and solar inland), biogas (in rural homesteads) and nuclear. Alongside, efforts for gas exploration should be stepped up and coal exploration and coal gasification power plants in deeper reserves should be pursued.

Such a strategic power sector planning will not only take the country securely, energy-wise, through the next few decades, but at the same time establish global linkages to development and innovation in other forms of energy production which will ultimately replace fossil fuels. Electric power is at the heart of economic, social and political well-being for Bangladesh.

A MoEN/IEA joint workshop on "Fuel Options for Power Generation in Asean" was held in Bangkok on September 22-23, 2008, following the steep increase of oil, gas, and coal prices. Malaysia, Thailand and Indonesia gave presentations. Thailand, where 66% power generation was gas fired, stated that gas fired share would be reduced and coal-fired generation increased. Indonesia, where oil fired generation was 34% in 2007, planned to increase share of coal fired capacity from 41% to 68% by 2016. In the long term, all would consider nuclear power.

Government's mega plan to produce 7000 mw by 2014
 
BD to start FTA negotiations with SAARC
Saturday, August 15,2009

DHAKA: Dhaka will start fresh negotiations with New Delhi and Colombo for striking separate free trade agreement with India and Sri Lanka this year aiming at reducing the country’s ballooning trade gap with them.
‘We are going to start negotiations for entering into FTAs with the two neighbouring countries this year,’ commerce secretary Firoz Ahmed said.
India was showing keen interest for striking FTA with Bangladesh despite SAPTA, a trade pact among eight SAARC countries, which failed to bring expected result in enhancing trade.
But Bangladesh adopted a ‘go slow’ policy in this regard earlier. Talking to New Age, Firoz said an expert committee under the commerce ministry was working on the proposed FTAs with the neighbours. The committee is expected to give its opinion soon paving the ways for starting the FTA negotiations with New Delhi and Colombo, he added.
He pointed out that the start of FTA negotiations were imperative as the regional trade pact of SAPTA could not yield expected result in reducing the country’s trade gap with its major trade partner India.
Among the SAARC countries, India is the largest trade partner of Bangladesh.
Bangladesh exported goods worth $358.08 million against its import of items worth $3.39b from that country in 2007-08 fiscal year, making the two-way trade worth $3.74 billion. If the smuggled goods were taken into account, the figure was likely to become double.
Bangladesh has the longest 4,096km land border with India. The unofficial trading between the two countries was not recorded in the book, but it impacted the country’s economy seriously.
India had proposed to lock into FTA with Bangladesh in 2002 and two rounds of talk between the two countries were held in 2003 and 2004 without making any progress.
Apart from this, Bangladesh also held several inconclusive talks with Sri Lanka to enter into an FTA.
The country has also a plan to strike FTA with another major SAARC country Pakistan. However, the FTA negotiation between Dhaka and Islamabad will start after the talks with India and Sri Lanka, the commerce secretary said.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, told New Age that Dhaka should focus on special and preferential treatments, and relaxed rules of origin, during the FTA talks.
Rahman, who is also a member of the expert committee, said that Dhaka should bargain for including new products to the list under FTA. The goods which already get duty reduction under the SAFTA should not be enlisted under the FTA,’ he added.
The country’s oldest chamber body MCCI has long been advocating for signing FTA with India. Dhaka can easily capture the markets in seven north-eastern Indian states once an FTA was signed between the two countries, it said, adding that the terms and conditions of the proposed FTA would provide benefit to the Bangladeshi items.
World Bank is, however, opposing the FTA between Dhaka and Delhi. A WB study suggested that the trade between India and Bangladesh would be increased if a liberal trade policy was adopted, instead of entering into an FTA.
The bilateral FTA will provide substantial benefits to Bangladeshi consumers through offering access to cheaper exports of India. This consumer benefits will outweigh losses in government revenue and profit of the local manufacturers, it added.
Bangladesh and India are locked into several bilateral deals, including the Bangladesh-India Trade Agreement and the Bilateral Investment Promotion and Protection Agreement signed in February 2009.
During the 14th SAARC Summit, held in New Delhi in April 2007, its member countries had agreed on zero-duty market access for the products originating from the LDCs among the SAARC members, except the items in the sensitive list, with effect from January 01, 2008.
All these agreements are yet to provide much positive results in narrowing down the country’s trade gap, which is heavily tilted towards India.

South Asian Media Net
 
80km RAIL LINK ON BOTH SIDES OF PADMA BRIDGE
BSS, Dhaka

To bring the country's southwestern part under a robust railway network the government has planned for constructing 80 kilometres rail line on both sides of the proposed Padma Bridge and renovating the existing railway tracks in the region.

As the proposed double-decker Padma Bridge will have provision of the rail line, the government thought about expanding the railway network to put in place an useful and safe communication system in the region, sources in the Ministry of Communications said.

Under the plan, the sources said, new broad-gauge line will be constructed from Dhaka to Mawa and from Janjira to Bhanga, Faridpur at an estimated cost of Taka 4,700 crore.

Besides, the existing Panchuria-Faridpur-Pukuria railline will be renovated connecting Bhanga with Pukuria and Jessore with new broad gauge lines.

The whole project will be implemented in two phases, the sources said adding that in the first phase, new broad gauge line will be constructed on Dhaka-Mawa-Janjira-Bhanga-Pukuria-Faridpur and Panchuria route. And, the broad gauge line from Bhanga to Jessore will be constructed in the second phase.

The draft project profile (DPP) for renovation of the Panchuria-Faridpur- Pukuria rail line and construction of broad gauge line from Bhanga to Pukuria at a cost of Taka 291 crore were already been sent to the Planning Commission.

Communication Ministry has already completed the survey for alignment of the rail line from Dhaka to Mawa and Janjira to Bhanga. In the Dhaka side, the rail line will be 50 kilometers from city's Gandaria to Mawa and in the Janjira side the line will be of 30 kilometers from Janjira to Bhanga.

The sources said the DPP for 80-kilometer rail line on both sides of the Padma Bridge is now being prepared and the government has sought financial support from Asian Development Bank, World Bank and JICA for implementing the project.

http://nation.ittefaq.com/issues/2009/08/15/news0727.htm
 
Last edited:
DRAFT POLICY SETS MIN. $1.0b INVESTMENT FOR PRIVATE REFINERY
Nazmul Ahsan

The government would allow private petroleum refineries in the country only after a company invests a minimum $1.0 billion dollar on at least a 60-acre facility that maintains all global standards.

The pre-requisites were set in the latest draft of the Private Oil Refinery Establishment Policy 2009 prepared by the energy ministry amid a rush in offers from local and foreign companies to invest in the lucrative sector.

The draft, which also bars the refineries from selling their products in local market, has been finalised last week after inter-ministerial and expert consultations. It is expected to be sent to the Cabinet for approval.

Officials said they have prepared the draft on a fast-track basis, after two of the country's leading conglomerates Basundhara and East Coast Groups and a Czech and a Saudi companies sought permission to set up oil refineries here.

Investors see Bangladesh a ready market for oil refining as the lone state-owned company can only refine only 1.2 million tonnes of crude oil a year, accounting for a meagre 30 per cent demand of the country's fast-growing energy need.

Refining is still a no-go area for the private investors but the government has recently said it would end its monopoly in the key sector only after preparing a policy that would regulate investment in refining.

Huge capacity-constraint at the ERL has already prompted Basundhara Group to float a $700 million proposal to build the country's first private refinery in its 115 acres of land on the bank of the river Karnaphuli in Chittagong.

The group has already secured clearance from ERL and the state-run oil distributor Bangladesh Petroleum Corporation (BPC) to set up the facility --- billed to be the largest private sector investment in the country.

East Coast Group has also expressed its willingness while a foreign consortium led by the Czech state-owned export bank is learnt to have submitted a proposal to invest US$ 2.5 billion at the Kutubdia Island.

The draft policy won't say how many private refineries would be allowed by the government, but it makes it clear that "first come, first serve" policy would be pursued during the approval process.

The policy has made the compliance of all international codes and standards mandatory and environmental related regulation and equipment support compulsory for securing permission for a refinery plant.

The approved company has to start building the refinery, with a minimum investment of $1.0 billion and at least 60-acre of land, within a year after approval and it must go into production in three to five years after the date of permission, the policy said.

Private refineries will be barred from producing any petrochemical other than refining crude oil, it said.

Their refined oil can not be sold in the local market, but the government would enjoy the first refusal right in case it wants to purchase products from the company to meet local demand.

The approved company has to obtain clearance certificate from the Bangladesh Petroleum Corporation (BPC), which after assessing machinery configurations of the plant, will issue the certificate, the draft said.

The aspirant company has to submit technical report containing financial and economic analyses for the proposed refinery plant, which must be approved by a government appointed expert committee, it said.

The refinery must have waste treatment plant and sulfur recovery plant to stave off any environmental concerns.

The storage tank to preserve crude oil has to be built in line with the best practices in the American Petroleum Institute, Institute of Petroleum, International Electro-technical Commission and British Standard, the draft policy said.

An energy ministry official said the government would start approving private refinery proposals only after the policy is okayed by the Cabinet.

"We are preparing the policy to make a level playing field for the private investors. We don't want to give permission without setting the standards," he said.

Draft policy sets minimum $1.0b investment for private refinery
 
BANGLADESHI EXPORTERS PERFORM RELATIVELY BETTER IN ASIA
Shakhawat Hossain

GOODS worth $14.14 billion were shipped out of the country between July 2008 and May 2009, compared to $12.63 billion during the same period of last year, according to official data.

China, India, Pakistan, Malaysia, Vietnam and Thailand were struggling to stop the fall in their export shipments as the global recession cut demand for goods on both sides of the Atlantic.

China's exports fell by a record margin in May. Exports tumbled 26.4 per cent from a year earlier, exceeding February's previous record drop of 25.7 per cent, the Chinese customs agency reported.

The growth in India's merchandise exports dipped to 12.9 per cent for May 2009.

Pakistan's export contracted by 5.14 per cent after it managed to fetch $16.262 billion between July 2008 and May 2009 compared with $17.143 billion of the year-ago period.

Trade experts and exporters attributed Bangladesh's export success largely to the competitiveness of the country's garment sector and availability of cheap labour. Indeed, readymade garment sector led the way although exports of frozen food, leather and jute fell.

Our ready made garment (RMG) manufacturers produced lower-end products whose demand did not fall significantly in global destinations. Besides, the availability of cheap labour, as was stated earlier, was an added advantage for the RMG sector to stay competitive amid a fierce trade battle among major competitors. Besides, there are other factors too, which worked behind the good export performance of the RMG sector. Thus, better delivery, lower price and sewing quality kept Bangladesh still attractive when its rival countries pumped in billion of dollars stimulus package to halt the decline in their export receipts.

Vietnam's export turnover declined in the first five months of 2009, posting the first negative growth in more than 10 years. Vietnam's May export revenues are estimated at $4.4 billion, up 2.8 per cent month on month but down 24.4 per cent year on year.

The trade figures from Bank of Thailand show that Thai exporters continue to suffer, though a modest recovery is, of late, visible there. The value of Thai exports was 26.5 per cent less in May than a year ago. Annual exports have contracted for seven consecutive months.

Malaysia's exports fetched $58.70 billion for January-May 2009 period. Earning from major export products decreased from the corresponding period of 2008, except for liquefied natural gas which grew by 13.1 per cent.

Bangladesh exporters perform relatively better in Asia
 

Pakistan Affairs Latest Posts

Back
Top Bottom