Bangladesh Economy: News & Updates

[extra terrestrial]

Bangladesh's Summit to invest $1 bln to produce 1,310 MW electricity by 2020

Summit Group, the leading power generator in Bangladesh, will invest at least $1 billion to build five power plants capable of producing 1,310 megawatts (MW) of electricity by 2020, aiming to ease a prolonged crisis in the country's energy supply, a senior executive said.

Ayesha Aziz Khan, finance director, told Reuters that by 2016 at least 300 MW would be added while the rest would be added by 2020.

"The plants will be fired by a combination of fuel oil and gas (and) will go into production starting from next year," Ayesha said, noting the biggest plant with a capacity of 660 MW will be in operation by 2020.

"If we don't start developing new projects now we will again see the mismatch between demand and supply widening, resulting in acute shortages and blackouts," Ayesha added.

"Our current total investment in Bangladesh's power sector is $1.4 billion and we will invest at least another $1 billion in the next few years to implement new power plants."

Demand for electricity in Bangladesh is rising 7 percent annually.

Ayesha also said Summit Group, whose listed sister companies include Summit Power Ltd, Summit Purbanchol Co Ltd , Summit Alliance Port Ltd and Khulna Power Co Ltd, planned to explore opportunities in neighboring counties, "but for that we need favorable laws and regulations related to foreign exchange ... which at the moment is lacking."

"The way our regulations are structured Bangladeshi businesses have very limited ability to raise and structure capital," she said, noting financial derivatives such as hedging products and bonds were in their infancy in the country.

Up to now the growth that has taken place in Bangladesh has been largely dependent on subsidised natural gas and low-cost labor. "Both these factors are not and should not be sustainable. We need to work towards more value addition, employment creation," she said.

Energy is a fundamental need for development.

"We must access and develop regional hydro electricity potentials and nuclear energy. But fossil fuel will remain our main energy source for many years to come."

Bangladesh produces 7,000 MW of electricity but demand far exceeds supply, with a daily deficit of up to 1,500 MW with only 65 percent of its 160 million population having access to the national grid.

Summit has a 12 percent share of Bangladesh's national power generation, however this is expected to rise to almost 16 percent, contributing around 1,200 MW in 2015, the official said. (Editing by David Holmes)

 

[bongbang]

Govt to sign $473 million deals with WB for two projects

DHAKA, June 29, 2015 (BSS) - The government is signing Tuesday two agreements with the World Bank (WB) involving $473 million for two projects.

One of the two agreements include $300 million Financial Sector Support Project, which aims at improving financial market infrastructure, regulatory and oversight capacity of Bangladesh Bank (BB) and access to long-term financing for private firms in Bangladesh.

The major objective of the other $173 million Bangladesh Urban Resilience Project is to strengthen the capacity of government agencies to respond to emergency events and to strengthen systems to reduce the vulnerability of future building construction to disasters in Dhaka and Sylhet.

Economic Relations Division (ERD) Senior Secretary Mohammad Mejbahuddin and Acting head in WB Dhaka office Christine E. Kimes will sign the two separate agreements on behalf of their respective sides.

The financial sector support project includes four components. The first component will build on previous efforts and improve financial market infrastructure further, specifically focusing on activities in the four broad areas: payment and settlement system development; expanding and modernizing the Credit Information Bureau (CIB); strengthening the systems of the Bangladesh Financial Intelligence Unit (BFIU) and integration with systems of other stakeholders and strengthening the information technology (IT) governance and IT management of the BB, optimizing the IT assets of the BB, and raising awareness of IT security aspects for the financial industry.

The second component is the strengthening the financial sector regulator. This component aims to strengthen BB's capacity to regulate and supervise the scheduled financial institutions (banks and nonbank financial institutions), run the FIU more efficiently, and further develop and deepen the financial sector with new and innovative products.

The third component is the supporting long term finance. This component will support long-term financing (an expected average of five years of financing) through private finance initiatives (PFIs) to firms, particularly exporters, in Bangladesh.

Finally, the fourth component is the project management and monitoring. Management of project implementation will be assumed by the Financial Sector Support Project (FSSP) cell in BB. The component will include costs for project management, monitoring and evaluation (M&E), capacity building and Governance and Accountability Action Plan (GAAP) implementation.

News Details



BD inks 2 loan deals with ADB over railway connectivity

Bangladesh on Sunday signed two loan agreements with the Asian Development Bank (ADB) for implementing a project titled ‘South Asia Subregional Economic Cooperation (SASEC) Railway Connectivity: Akhaura-Laksam Double Track’. The deals are US$ 400 million ordinary capital resources (OCR) and US$ 105 million Asian Development Fund (ADF). The project will be implemented by Bangladesh Railway under Railways Ministry’s overall supervision. The total estimated cost of the project is US$ 837.13 million out of which the ADB will provide US$ 400 million as OCR loan and US$ 105 million as ADF loan, while the European Investment Bank (EIB) US$ 175 million. The rest of the amount will be borne by the government of Bangladesh. The project is scheduled to complete by June 2020. Economic Relations Division (ERD) Senior Secretary ERD Senior Secretary Mohammad Mejbahuddin and ADB Country Director Kazuhiko Higuchi penned the loan deals at the ERD on behalf of Bangladesh government and ADB respectively. Senior officials of the government and ADB were present, according to a news agency.

BD inks 2 loan deals with ADB over railway connectivity | 24 News | The financial express

 

[bongbang]

Remittance inflow to Bangladesh hits record $15.31b

In the just concluded fiscal year, migrant workers sent home $15.31 billion in remittance, the highest in the country's history.

The remittance in 2014-15 also rose 7.6 percent from $14.23 billion in the previous fiscal year, according to Bangladesh Bank (BB) statistics released yesterday.

A huge increase in manpower export, backed by the central bank's proactive measures to facilitate the inflow through formal channel, is believed to have driven the remittance growth.

"The higher inflow of remittance is the outcome of our continuous effort of the last couple of years," BB Governor Atiur Rahman said in a statement.

The central bank along with the commercial banks has worked hard round the year aiming to increase the flow of inward remittance from across the world, he said.

Stable exchange rate of the Bangladeshi taka against the US dollar has also helped achieve the steady growth in remittance inflow, Atiur Rahman explained.

"Delivery channel of inward remittances to the beneficiary has improved significantly because of the bank-led effective mobile banking under the leadership of BB," the governor added.

Bangladesh received $1.43 billion remittance in June alone, up by $109.98 million from that of the previous month, according to the central bank.

Remittance hits record $15.31b | The Daily Star


Getting ready to become a middle income country

Becoming a lower middle income country is certainly something to cheer about. It makes us firmly believe that we will soon elevate to the status of middle income country. It makes us feel good. It gives us confidence. And it makes others turn around and glance at us with respect. We become a target for investment.

But it also cautions us about some pitfalls. It also cautions us to know the challenges and prepare ourselves to brace the crosswinds. It also alerts us about the so-called middle-income trap that may embrace a country when it elevates to middle income category.

As a middle income country gains in wages, as we have and will further in future, we face the challenge of remaining competitive with the cheap products of the low income countries. We must not forget Bangladesh had once snatched the jobs of countries like Korea, Thailand and Singapore when they geared up to the higher ground.

While we will face the possibility of not competing with low income countries, we will also not be able to compete with the high-tech products of developed countries.

So we have to consider upscaling our productivity by infusing it with better technology and also by training our workers. Slow transformation of our agricultural workforce into an industrial one will lead to unemployment and low wage as has happened in countries like India and Thailand, leading to increase in poverty. So we must focus on this job at hand before we soon reach the middle income category.

We are already suffering in productivity because of the sudden spurt in small and medium enterprises which because of their economy of scale cannot integrate modern technology. This factor needs to be resolved quickly.

Egypt and Nigeria are such cases which saw wage increases that adversely affected productivity. But then there is the bright case of South Korea which was one of the poorest countries in the 1960s with about $100 per capita income and soon became a middle income country with attention to productivity through its policies and institutions.

The other challenge we will face is how to keep rising inequality in check and how to make basic services accessible to the poor. It will need proper policy, institutions and financing.

As countries open themselves up to trade in goods and capital, they also face risks of vulnerabilities to different global crises. We have seen how the South-east Asian countries were floored by the financial crisis of the 1990s. So we need to reform our financial sector as we integrate more and more with the global financial markets.

We need to have the proper institutions for industrial policy and trade. We need to think of relating export policies to growth. Here the biggest issue at stake is the zero duty access of our garments to the European Union not least because the EU is our largest export market for apparels.

We can still get GSP Plus facility but that would depend on fulfilling a number of stringent conditions on human rights, labour rights and environmental issues. Bangladesh already has poor records on all these counts and fulfilling them would need sincere effort on the government's part.

In the end, we can say that while we celebrate our achievement we also need to get ready for tackling the next level of tough challenges looming ahead.

Getting ready to become a middle income country | The Daily Star



Bangladesh higher in OECD rankings

The OECD has upgraded the overall country ratings of Bangladesh by one notch for the resilience by its economy.

The Bangladesh Bank in a statement yesterday said the country moved to category 5 from category 6, which puts it just behind India but ahead of other South Asian countries.

Bangladesh has surpassed its neighbouring countries like Pakistan (7/7), Sri Lanka (6/7), Nepal (6/7), Myanmar (6/7) and Mongolia (7/7) in the OECD country classification, and is only behind India (3/7).

The major reasons for the promotion were the resilience of the Bangladesh economy and the high and stable growth for well over a decade despite political upheaval and weak external demand.

Due to long spells of macroeconomic stability, Bangladesh has now become a new frontier market, shifting away from a highly development aid-dependent nation, the statement said.

The upgrade was made in the Organisation for Economic Co-operation and Development (OECD) classification committee meeting on June 17, according to the statement.

A delegation led by Bangladesh Bank Governor Atiur Rahman met the delegation of Swiss Export Credit Agency (SERV) on June 29 at Zurich. In the meeting, Herbert Wight, director of SERV, informed Bangladesh about the country's upgraded status.

Rahman expressed his satisfaction over the enhancement in OECD classification, which should lead to significant lowering of costs for Bangladeshi entrepreneurs and banks in securing guarantees and letters of credit confirmations.

Bangladesh higher in OECD rankings | The Daily Star

 

[Bilal9]

 

[gslv mk3]

posting CGIs ? .You were criticizing Indians for posting renders of under construction projects..and now you are posting renders of a project that is not even under construction yet... ?

 

[Ryuzaki]

BD is progressing fast under Hasina

 

[anyrandom]

BD is progressing fast under Hasina

RAW means development!

 

[extra terrestrial]

Tk 20b project taken up to modernise Mongla port

Mongla seaport is being modernised under a Tk 20 billion (2,000 crore) project to turn it into Bangladesh’s second shipping hub to handle an increased volume of domestic and transit cargoes.

Officials said the Mongla Port Authority (MPA) has taken up the project as the seaport would have to take greater load of import-export consignments once investment thrives in greater Khulna region in the near future.

Also, the port has to handle transit trade of the region’s landlocked countries under the deals struck recently.

Khulna University of Engineering and Technology (KUET) got the task of conducting feasibility study on the port’s capacity building under the mega-project.

The government will explore funds from both the Chinese government and the Islamic Development Bank (IDB) for the works.

The project is scheduled to start in the current fiscal year, 2015-16, and expected to be completed in four years.

MPA chairman Riazuddin Ahmed told the FE that connectivity is a major barrier for investment in Khulna region and thus the Mongla port has been handling lower volume of cargo.

“But the problem is now going to be over with Padma bridge construction and the project taken for rail connectivity between Khulna and Mongla port,” he said.

Mr Ahmed said investment is going to see a big boom surrounding Mongla soon as BEZA (Bangladesh Economic Zones Authority) and Mongla Export Processing Zone have been extending facilities to investors here. These two organisations took lands for establishments from the Mongla port.

He also said apart from these two special zones, businessmen are also making large investments surrounding the port on the bank of Poshur River. Besides, he said, the Rampal coal-fired power plant will bring a big volume of trade for the port.

“Unless we expand the facilities of the port now, we won’t be able to handle such big load once the investments take place with smooth connectivity facility with the capital,” Mr Ahmed said.

He also noted that the Dhaka-Chittagong highway always witness large volume of traffic and so traders will prefer Mongla port for handling their export-import cargos once the Padma Bridge is built.

The chairman said the port, which was built in the 1950s, is not properly designed for container handling.

It has five old jetties for handling bulk and general cargoes. Construction of two jetties with local-foreign consortium will be started soon under public-private partnership to substantially enhance its container-handling capacity.

A separate container terminal will also be built to handle the load of container smoothly.

Last year the port saw 29 per cent growth in break-bulk cargo handling, up from average 10 to 12 per cent in the past, he pointed out.

Documents show that under the mega-project, a container terminal will be built at a cost of Tk 7.44 billion, construction of a container delivery yard will cost Tk 3.190 billion, and a multi-storage car-parking yard will cost Tk 7.280 billion.

“A large number of reconditioned vehicles are imported through the port, which are now kept in a scattered way. The multi-storage car-park will help remove the problem,” said the chairman.

“The project is big in size but a requirement of the time,” he said. The project document states that implementation of the project will increase the economic activities of the port and bring about positive impact on the enhancement of cargo handling, income generation for the workforce and port-users.

 

[bongbang]

Foreign aid hits new high

The amount of foreign aid available to the government to spend on development purposes reached a new height of $21.71 billion at the end of last fiscal year, boosted by higher commitments from development partners.

The foreign aid commitment stood at $5.21 billion in fiscal 2014-15, against the target of $6 billion. It was $5.84 billion a year earlier.

The World Bank, the largest donor, gave $1.01 billion in fiscal 2014-15, which was $930 million a year ago, while the Asian Development Bank disbursed $710 million, nearly twice the amount it gave a year ago.

The country has been receiving handsome amounts of foreign aid commitments in recent years but the absorption capacity of the ministries and divisions did not improve, leaving a huge stockpile.

Until fiscal 2009-10, the country received commitments worth $2 billion on average every year, but since fiscal 2011-12, it rose to upwards of $5 billion, according to statistics from the Economic Relations Division.

Economists say the government's ability to utilise aid has lagged behind its ability to negotiate new aid.

They cite the implementation capacity constraints of the line ministries for the wide discrepancy, adding that usual problems in land acquisition, resettlement, procurement, appointing project management and politicisation of tendering process continue to haunt project implementation.

Although the government has given some reasons for the difference, the explanation has been the same over the years.

The reasons include delays and allegation in bidding process, faulty project documentation, unrealistic requisition for fund allocation and delays in land acquisition.

But the development partners blame the tardiness while appointing consultants and awarding contracts for the mounting unused aid in the pipeline.

Some 62 percent of the delays were caused due to bottlenecks on the government's side and 19 percent due to the development partners; 12 percent were due to both government and development partners, and 7 percent were affected by outside causes like political unrest, according to an ERD report.

The tardy tendering and contract awarding processes jointly caused 26 percent of the delays.

Finance Minister AMA Muhith never shies away from admitting different ministries' failure in utilising the aid money. In April, he said the disbursement process became lengthy, as various procedures set by the donors have to be followed.

In practice, the amount is deposited in the pipeline and is ready for use right after the agreement is made with bilateral or multilateral donors.

“What actually happens is that we are not ready to use the amount right away,” he said.

The frequently changing project directors and the responsibility of a host of projects on each director also do not help matters.

Things are not all negative.

In recent years, the government and the development partners have found a way to boost fund disbursement in order to take the benefits of development efforts to the people.

Nowadays, the ERD, development partners and line ministries sit in a tripartite meeting regularly and discuss the barriers case by case to find out their remedies and expedite the implementation of projects.

Besides, Bangladesh has become one of the few countries in the world to set up a locally developed online aid information platform called Bangladesh Aid Information Management System (AIMS).

Launched in October last year, the web-based software application will help the country to track and manage its aid flows. AIMS is expected to play a key role in promoting effective development partnership, said ERD Secretary Mohammad Mejbahuddin.

“It must be remembered that enhancing aid transparency and ensuring better aid management are joint responsibilities of the government and the development partners and by working together we can move faster towards that goal.”

The government managed to hit its disbursement target of $3.01 billion last fiscal year, from $3 billion a year ago.

Foreign aid hits new high | The Daily Star

 

[bongbang]

Construction of Uttara-Kutubkhali expressway starts

The construction work on the 20-kilometre long elevated expressway from near Shahjalal International Airport to Kutubkhali has finally started.

Road Transport and Bridges Minister Obaidul Quader inaugurated the work in Kaula area on Sunday morning.

“Prime Minister Sheikh Hasina will inaugurate the Padma Bridge in 2018. The work of the elevated expressway would also finish by then,” Quader said.

The cost of the expressway to be built under Public-Private Partnership (PPP) with Bangkok-based Italthai group has been fixed at TK 89.40 billion.

The group’s construction wing has been assigned the work.

The expressway will cover a 19.73-km stretch. However, the total road would work out to 46.73 km if the length of 31 ramps and link roads are taken into consideration.

The first agreement of this project was signed on Jan 19, 2011. Its foundation stone was laid on Apr 4 of the same year.

But rise in costs due to changes in the plan and inflation necessitated a new deal, which was signed on Dec 15, 2013.

Two deadlines for starting the work – October last year and June this year – were missed.

The expressway will connect the northern and southern parts of the capital Dhaka, linking the Shahjalal International Airport with Jatrabarhi's Kutubkhali area via Mohakhali, Tejgaon, Moghbazar, and Kamalapur.

Another Tk 24.13 billion will be needed to rehabilitate and compensate people from whom land was acquired for the project under the Bangladesh Bridge Authority.

Quader on Sunday cited ‘complications in land acquisition’ as the reason for the delay.

“The expense has also gone up for this. The work will continue rapidly from now,” he said.

According to the minister, 205 acres of land have been acquired. Of this, 29 acres is privately owned.

In line with the plan, the project will be implemented in three phases.

Elevated road with 7.45-km stretch from the airport to Banani will be constructed in the first phase.

The second phase from Banani to Moghbazar will be of 5.85 km and third of 6.43 km will be from Moghbazar to the Dhaka-Chittagong Highway’s Kutubkhali.

Quader said the work to set up utility lines and remove establishments for the first phase was supervised by the army.

“The work of the second and third phase is under way and will be completed by next June,” he said.

The minister said those who lost land for the first phase of the project had been compensated.

The work to develop 40 acres of land at Uttara was underway to rehabilitate them, he said.

“They will be given apartments in multi-storey buildings there,” he added.

Construction of Uttara-Kutubkhali expressway starts -
bdnews24.com

 

[Nabil365]

But our garments sector got affected,which is the backbone of the country economy

 

[Bilal9]

But our garments sector got affected,which is the backbone of the country economy

I doubt that it did. The way you're posting I could have sworn you are a false-flagger....no offense.

 

[damiendehorn]

But our garments sector got affected,which is the backbone of the country economy

Effected by what? Are you Bangladeshi?

 

[Bilal9]

Effected by what? Are you Bangladeshi?

Bhatijarey Dhakaiya Banglai kichu jigailei bujha jaibo mokkel ashol na nakal.

 

[Nabil365]

Yeah I am Bangladeshi