Bangladesh Economy: News & Updates

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Bangladesh to make optical fibre cables

Posted on December 9, 2010

Bangladesh to make optical fibre cables

Bangladesh to make optical fibre cables
Quazi Amanullah, Khulna

Bangladesh Cable Shilpa Ltd in Khulna will start producing optical fibre cables from January.

The factory, which went into commercial production in 1973 after its establishment in 1967, has also decided to go public from March to raise fund for its new project.

To this end, an agreement was signed on Monday with Swadesh Investment Management Ltd, which would work as issue manager.

Managing Director of Cable Shilpa Bahadur Ali and Managing Director of Swadesh Investment Mamun Ahmed inked the deal in the conference room of the plant.

Cable Shilpa, a state-owned enterprise, will offload its shares as intended by the government, said Ali.

“Swadesh has been asked to complete all the processes for offloading our shares within the stimulated time,” said Lutfor Rahman, manager (administration) of the plant.

The decision to assign Swadesh Investment for the job was taken in the 161st meeting of the board of the cable factory.

Cable Shilpa will also set up a power cable and electrical house wire plant in Khulna.

The company has a reputation for not incurring financial losses since its inception. It earned a net profit amounting to Tk 12.83 crore in the last financial year, said its managing director.

Optical fibre cables to be produced in this plant will meet the domestic demand, said Ali.

At present, Bangladesh imports such cables from different countries including India and China.

 

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New insulin plant opens

Posted on December 17, 2010

New insulin plant opens

New insulin plant opens
Product to be available in Oct
Staff Correspondent

A high-tech insulin manufacturing plant opened in Bangladesh yesterday amid hopes of providing world-class medicines to the country’s growing diabetic patients.

The plant in Tongi is a tie-up between the world’s biggest insulin maker Novo Nordisk and Eskayef Bangladesh Ltd, a leading local pharmaceutical company, which will start selling drugs in the local market in October next year.

Lise Kingo, executive vice president and chief of staff of Novo Nordisk, inaugurated the plant on the premises of Eskayef.

The Nordisk-Eskayef plant will manufacture over 5 million vials a year, maintaining the high quality standards followed by Novo Nordisk across the world.

Senior Vice President of International Operations Jesper Høiland, Vice President for Oceania and South East Asia Sanjeev Shishoo, Bangladesh Diabetic Association President Prof AK Azad Khan and Eskayef Director Simeen Hossain were present at the inaugural.

Kingo said producing insulin drugs in local settings has become important for Bangladesh, as the number of diabetic patients has increased in the country as elsewhere in the world.

“With Eskayef as our partner, we will continue to work to improve the lives of the people in Bangladesh,” she said.

Simeen Hossain said the joint venture represented a milestone in the history of Eskayef. “There would be no compromise in delivering quality products,” she assured.

Jesper Høiland said there would be proper technology transfer under the joint venture, as Novo Nordisk believes in uniform global standard.

He said the tie-ups among Novo Nordisk, Eskayef and Diabetic Association would make a significant difference in looking after patients with diabetes.

Novo Nordisk officials were in Dhaka yesterday to attend the inauguration of the insulin making plant.

During the ceremony, they also expressed confidence that the plant would be able to make quality insulin matching global standards.

They also inspected Eskayef’s various departments and facilities, particularly the manufacturing unit, quality control measures and water treatment plant and expressed satisfaction.

The partnership deal, signed in 2009, has facilitated establishment of the hi-tech plant to make these sophisticated biotechnological products in Bangladesh.

The plant, the third set up by the company in Asia after China and India, opened at a time when nearly 6 million Bangladeshis are said to be suffering from diabetes.

The number is expected to cross 10 million in the next 20 years due to changes in lifestyle, rapid urbanisation, obesity, lack of physical work and ageing of people.

Novo Nordisk enjoys more than 80 percent share in the insulin segment of diabetic care market in Bangladesh.

A Rajan Kumar, managing director of Novo Nordisk Pharma Pvt Ltd, and general managers of Eskayef were also present on the occasion.

 

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IMF to lend Dhaka $1.0b soft loan
Muhith says ‘no conditions imposed’

IMF to lend Dhaka $1.0b soft loan

FE Report

The International Monetary Fund (IMF) Wednesday agreed to lend Bangladesh one billion dollars under a soft-loan facility to shore up the country's balance of payments and boost economic growth, officials said.

The Washington-based lender reached a "broad agreement in principle" with the Bangladesh government to provide the zero-interest loan for a three year period, head of IMF's visiting delegation David Cowen said.

The IMF will lend the money under its Extended Credit Facility (ECF), starting from early next year, subject to approval of the lender's management and executive board in February, Mr. Cowen said.

It is the largest chunk of soft-loan the country would receive from the Fund and Cowen said it aimed at putting "Bangladesh on higher growth trajectory, as necessary to accelerate poverty reduction and achieve middle income status by early next decade."

The loan would bolster Dhaka's balance of payment (BoP), which is expected to take a hit in the coming months due to high cost of food, fuel and cotton import and a slowdown of remittance since July this year.

Remittance growth has flattened to a meagre three per cent in the first five months of the current financial year after growing at an average 20 per cent annually over the past three years. Import bill soared nearly 40 per cent in the first three months to September.

Bangladesh signed a similar three-year agreement with the IMF in 2003 and key reforms such as floating of taka were carried out in exchange for a soft loan worth 550 million dollars.

Under the new credit programme, the government has planned to raise tax revenue by around three percentage points of the Gross Domestic Product and pass and implement new VAT and income tax laws, Cowen said.

Securing the soft loan would also require reforms in the country's financial sector, increasing public sector investment, strengthening oversight of the central bank and trimming energy subsidies, Cowen said in Dhaka.

The IMF said the government has also committed to "improving monetary and exchange rate operations, and enhancing Bangladesh's integration into the regional and global economy through a more open trade and investment regime."

The government plans to boost development spending in key infrastructure such as roads and power plants "by strengthening financial management and operationalising the private-public partnership framework," the fund said.

Finance Minister AMA Muhith told reporters after meeting Cowen at his Secretariat office that Bangladesh would take the loan to prop up BoP, but he ruled out imposition of any conditions by the IMF for securing the credit.

"There are no conditions imposed from outside. These (reforms) are all prepared by us," he said, according to UNB news agency. He added Dhaka could not avail IMF credit last year, because the BoP was on sound footing.

"For the last three years, the country's balance of payments has been going up, but this time it will decline," he said, defending the planned credit loan deal with the IMF.

Muhith said rising import bill, falling remittance growth and requirement of outflow of funds for financing investment are the main reasons for BoP decline.

Concluding the Article XI mission, the IMF said Bangladesh would clock a growth of over six per cent in the current 2010-11 fiscal year with inflation averaging at seven per cent and budget deficit rising 0.75 per cent to around four per cent of the GDP.

It asked the Bangladesh Bank to curb financial institutions' overexposure to the stock market, saying the BB should "work in tandem with the securities regulator to ensure the banks and their subsidiaries take necessary actions to mitigate risk."

"As I mentioned our main concern is the banks reduce their direct exposure to the stock market in lines with the guidelines issued by the Bangladesh Bank," Cowen said, answering a query.

In view of the recent rise in inflationary pressure, the Fund has asked the Bangladesh Bank to tighten money supply and be vigilant in containing price pressures.

Cowen said the BB should scrap caps on interest rates, bringing in greater flexibility in the lending regime - a key demand of the private sector banks which have been affected by the recent liquidity crisis.

"Greater exchange rate flexibility could also safeguard foreign reserves and reduce external vulnerability," the fund said in the statement, adding that BB should continue to strengthen its banking supervision and oversight.

The IMF also asked the BB to improve financial health of the state-owned commercial banks such as Sonali, Janata, Rupali and Agrani and ensure that all banks meet new capital adequacy requirements.

 

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Govt mulls power, gas price hike, says Muhith

Govt mulls power, gas price hike, says Muhith
The government is considering power and gas price increase to rationale the tariff and reduce subsidy, report agencies.

"We will soon increase the price of CNG (compressed natural gas), but, the price of electricity will be increased only after attaining stability in production and supply," Finance Minister Abul Maal Abdul Muhith said Wednesday.

The finance minister, after attending a meeting with the visiting International Monetary Fund (IMF) Mission in city.

 

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Bangladesh stock market gets exposure in Bloomberg


FE Report

LankaBangla Securities Ltd Monday became the first stock brokerage company in Bangladesh to subscribe the Bloomberg Professional Service (BPS).

LankaBangla Securities, the top brokerage house of the country formally launched the service on the day under an agreement with Bloomberg L.P, the global financial service provider.

By availing subscription of Bloomberg terminal, LankaBangla Securities has been a member of community comprising approximately 2,50,000 subscribers like Foreign Fund Managers, world's Central Banks, Financial Institutions, Investment Bankers, Brokerage Houses, Government offices etc in over 150 countries.

It will also facilitate LankaBangla Securities to access a massive data stream, unparalleled in scope and depth delivered in real time. Outsider investors will also be able to know about the Bangladesh economy, prospect and financial performance of Bangladesh and research reports of capital market and listed companies of the two stock exchanges of the country and about LankaBangla Securities.

In the launching ceremony Ms. Natasha Mehta and Ms.Tanya Chopra from Bloomberg India, Mr. Mahbubul Anam, Director of LankaBangla Securities Ltd, Mr. Mohammed Nasir Uddin Chowdhury CEO & Director, Mr. Wali UI Islam, Deputy CEO, Mr. Md. Khairul Anam Chowdhury, Chief Operating Officer and other high officials of the LankaBangla Securities Ltd. were present.

"Our latest venture with the global financial data provider company is the gateway of our future development," Mr Nasir said.

 

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Harnessing the economy's potentials


A conference under the auspices of the Dhaka Chamber of Commerce and Industry (DCCI) last Tuesday deliberated on the strategies to be adopted to set Bangladesh on a higher growth path with the goal of attaining the status of a middle income country for it by 2021 and to become one of the strong economies in the world by 2030. The participants in the conference highlighted the potentials that this country has in the economic field. The potentials that are largely known for long include the country's abundance of easily trainable workers who can be made to work devotedly at comparatively lower wages by the global standards, relatively strong and stable macro-economic fundamentals, a favourable policy environment for investments etc. An investment report on Bangladesh by the Washington-based Asia Society - the findings of which were presented at a luncheon meeting at American Chamber of Commerce in Bangladesh (AmCham) in Dhaka last Wednesday - did also highlight such potentials, along with the constraints to unlocking them.

It is worthwhile to recall here that the recent country ratings by Moody's and Standard & Poor's -- two international credit rating agencies -- have also been positive about Bangladesh. Furthermore, international investment banks like Goldman Sachs and J. P. Morgan have put Bangladesh in the list of the 'Next Eleven' and the 'Frontier Five' in their respective reports. All such ratings and reports do take note of the changing situation in Bangladesh -- the improvements of its economy and in its social sectors -- in past several years. The new entrepreneurial class in the country deserves a large part of the credit for the resilience and dynamism of the Bangladesh economy.

On their part, investors, local or foreign, would however, prefer to see more successes of enterprises operating in Bangladesh and to read more positive reports by credit rating and investment banks, before they make their decisions about investment. Indeed, nothing succeeds like success. For this, hard efforts in areas that affect the actual business or investment climate are, therefore, of prime importance so that operations become easy, smooth and hassle-free for existing and potential investors and costs of doing business remain at a comparative level with other economies in this region and other parts of the world. In this context, the government has to do, sooner rather than later, lots of things to expand and further improve the infrastructural facilities in areas of power, energy supplies, ports, transportation, telecommunications, information technology (IT) etc., so that Bangladesh is placed on a much better footing than now to harness its potentials for accelerated growth.

This growth is critically dependent on the volume and quality of investments to help raise output, create job opportunities and generate income for the country's teeming millions. Along with result-oriented actions to attract and encourage more investments, an effective strategy has also to be put in place to help raise the quality of the country's human resources. Other institutional and structural problems, including, those relating to access to finance, availability of land for industrial units, taxation and revenue administration, employment and labour issues, legal framework and broader problems of economic governance, will require to be addressed on a priority basis. All these highlight the need for a synergy of actions, supportive of accelerated growth.

The new economic dynamics in Asia at a time when its high performing economies are witnessing some major changes in the composition of their manufacturing or industrial structure, as a sequel to rising labour costs and other related factors, provide now a strong reason for Bangladesh to expedite its actions. The world economy itself is now undergoing see-saw changes, as most developed economies are endeavouring hard to help overcome the effects of global recession. It is, thus, an opportune moment for Bangladesh to put effectively in place its strategy for accelerated growth, taking its potentials into consideration, without any loss of further time.

 

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DCCI sees infrastructure deficit ‘biggest bar’

DCCI sees infrastructure deficit ‘biggest bar’


FE Report

Infrastructure deficit is biggest roadblock to Bangladesh as the nation aspires to become a "China-plus 1" economy, the head of a chamber body said Monday.

"Infrastructure has to be modernised as the country's appetite for energy and roads is growing," president of Dhaka Chamber of Commerce and Industry (DCCI) Abul Kasem Khan said.

Speaking at a press briefing, Mr Khan said: "Bangladesh must devise effective policies to take advantages of becoming China plus 1 country. We must aggressively try to attract relocation of Chinese sunset industries to Bangladesh."

The briefing was organised in the city to brief the media about the outcome of its just-concluded conference, dedicated to strategy for growth.

DCCI chief said that due to the soaring labour costs, China has started shifting its some industries such as apparels and toy making to other low-cost Asian locations.

He said if the country can address energy shortage, improve port-handling capacity, and ensure smooth communication between Dhaka and Chittagong, the country would be able to draw the Chinese investments.

But he warned if the country fails, this opportunity will go to Vietnam, Indonesia and other low-cost Asian hubs.

The DCCI president said currently the clothing sector contributes about $ 14 billion in export earnings, which can reach as high as US$40 billion over the next five to six years.

He insisted that Bangladesh could emerge as the 30th largest economy in the world in the next 20 years if political stability is there and entrepreneurs were offered necessary infrastructure.

"I can bet 8 to 10 per cent growth is not difficult for us," said the leader of the DCCI that represents mostly members of small and medium enterprises.

Today, the size of the Bangladesh economy is estimated at US$99.80 billion with a per capita income of is $684. In 2010 fiscal, the country exported merchandise worth $16.20 billion while it imported $23.70 billion goods.

In 2025-2026 the population of the country will reach 177.7 million with GDP $ 614 billion having per capita income $ 3455. The export and import will be $ 100.62 billion and 108.91 billion respectively.

"Economic growth needs to be accelerated for the next two decades. This will make the country 30th largest economy of the world by 2030," Mr Khan told reporters.

He said to achieve the targeted higher growth, Bangladesh needs to adopt pragmatic strategies and policies and develop skilled manpower.

DCCI also came up with a string recommendations including developing Dhaka- Chittagong communication links, gearing up ports handling capacities, reduction of traffic jam in the capital, skill development and boosting productivity.

In 2030, the DCCI projected the country's population to hit 184.9 million. The GDP will stand at $967 billion with per capita income $ 5230. The export will be $ 159.03 billion and import $ 159.45 billion.

 

[akash57]

Allahabad Bank plans to open offices in Singapore, Bangladesh

NEW DELHI: In a bid to expand its overseas footprint, state-owned Allahabad Bank is looking at opening branches in four countries including China and Singapore.

"We have approached the regulator Reserve Bank of India for approval to set up a branch in Shanghai, China and Singapore ," Allahabad Bank chairman and managing director J P Dua.

Besides, the bank is also looking to open a branch in Bangladesh and another branch in Hong Kong, he said.

Currently, Kolkata-based bank is having one overseas branch at Hong Kong, which has earned net profit in 2009-10. Besides, the branch has been earning operational profit during last two years.

The bank also has a Representative Office at Shenzhen, China, which is eligible for upgradation into a full-fledged branch.

With the one full-fledged branch in Hong kong and one representative office in Shenzhen, the bank has overseas business of around Rs 1,200 crore. It expects overseas business to triple in the next two years.

Dua said, the bank plans to open 40 more branches in the next three months.

For the second quarter ended September 2010, Allahabad Bank reported a 20.6 per cent rise in net profit at Rs 402.5 crore against Rs 333.5 crore in the same quarter of the last fiscal.

At the same time, the bank reported 21.6 per cent rise in total income for the quarter at Rs 2,189.6 crore, against Rs 2,451.5 crore in the year-ago period.

The Net Interest Income (NII) of the bank rose by 60.6 per cent at Rs 969.2 crore against Rs 603.2 crore in the same quarter a year ago.

Further, the bank earned an interest of Rs 2,636.9 crore during the quarter, compared to Rs 2,046.6 crore during the same period last fiscal.

Allahabad Bank plans to open offices in Singapore, Bangladesh - The Economic Times

 

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Airtel rebrands in Bangladesh

Bharti Airtel Limited today announced the launch of its mobile services in Bangladesh under the airtel brand.

The airtel brand in Bangladesh will be launched with the brand promise: Bhalobashar tane pashe ane. Chris Tobit, CEO-Airtel Bangladesh said, “The people of Bangladesh are very passionate about their identity, their culture and their language. The airtel brand will represent these values, while retaining the youthfulness and dynamism of the global brand.

Airtel Bangladesh customers will now be able to experience rich multimedia contents with the launch of ‘airtel live’ - the WAP portal offering customers content like Games zone, Video post, Picture post and various other first of a kind VAS such as “Gaan Bolo, Gaan Pao”, Cricket Caller tunes, Classified services and App Central (with 20,000 rich apps).

Airtel Bangaladesh also unveiled a GPS-based Vessel Locating Service to enable tracking of fishing vessels for the fishermen community, in line with the promise of taking mobile telephony into rural areas. Customers in rural Bangladesh can look forward to experiencing many such innovative services in the near future as part of airtel’s focus on contributing towards the vision of Digital Bangladesh.

Airtel Bangladesh has around 4 million customers to date and covers 64 districts in the country.

Airtel rebrands in Bangladesh

 

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Sri Lanka-Bangladesh trade discussion

External Affairs Minister Professor G L Peiris had a bilateral meeting with Bangladesh Foreign Affairs Minister Dr Dipu Moni on the sidelines of the Third Asia Middle East Dialogue Ministerial Meeting held this week in Bangkok.

The two Ministers noted the excellent relations between Sri Lanka and Bangladesh in the political as well as the economic spheres. They expressed satisfaction with the growing volumes of trade and explored avenues for enhancing trade in the New Year.

The tariff structures applicable to some of the major commodities involved in trade between the two countries were examined in the discussions between Prof Peiris and Dr Moni.

The export of jute from Bangladesh to Sri Lanka, as well as emphasis on rubber based products, gems and jewellery and ceramic products as Sri Lankan items which had the potential for export in greater quantities to Bangladesh, were prominent features of the bilateral discussion.

Dr Moni informed Prof Peiris that there is scope for Bangladesh to import larger volumes of tea from Sri Lanka, and the Ministers agreed to pursue this in earnest.

Given the importance of the apparel industry in the economy of both countries, Prof Peiris and Dr Moni agreed to look closely at synergies which would enable collaboration in some fields in the mutual interest of both countries.

Dr Moni noted the exceptionally successful performance of Sri Lankan companies in the service sector in Bangladesh, and said that further development is possible in this sphere.

With regard to mutual assistance in respect of training programmes, Prof Peiris referred to the large number of students from Sri Lanka, especially in medicine, receiving training in Chittagong and elsewhere in Bangladesh and characterized this as a contribution of distinct value. Dr Moni, for her part, requested additional facilities for training in Sri Lanka in the nursing sector - a suggestion which Prof Peiris readily agreed to act upon.

Sri Lanka News | Online edition of Daily News - Lakehouse Newspapers

 

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Exports shine

Exports shine
Refayet Ullah Mirdha

The export trend indicates a brighter future in overseas trade, as the main export destinations are recovering fast from recession, said business leaders yesterday.

In the first five months of the current fiscal year, Bangladesh exported goods worth $8.27 billion, logging 35.80 percent growth, compared to the same period a year earlier, according to data from state-owned Export Promotion Bureau (EPB).

“The export trend is very bright. We expect the December exports will go even higher, as calculation of the export figures is going on,” said Jalal Ahmed, vice-chairman of the EPB.

Exports to Eurozone will increase significantly in January because of the implementation of the zero-tariff facility for Bangladesh by the European Union (EU), he said.

The EU has relaxed the rules of origin (RoO) under the generalised system of preferences for the least-developed countries such as Bangladesh for a greater access to Eurozone.

Ahmed also said some exporters are now delaying their shipments to cash in on the duty-free facility from January. “They will export at the end of December or in early January,” he said.

Md Musa Meah, president of Bangladesh Frozen Food Exporters Association, said frozen food exports are maintaining growth with the recovery of the western world from recession.

During the July-November period, the export of frozen food grew by 40.30 percent from the same period a year ago.

“The exports will go higher in March when the EU is scheduled to relax its strict nitrofuran test on shipments of shrimps out of Bangladesh,” Meah said.

SM Jahangir Hossain, president of Bangladesh Fruits, Vegetables and Allied Products Exporters Association, said the exports of vegetables and allied products showed signs of recovery.

“The prospect of vegetable export is bright,” Hossain said. But, he said the export of lemon to EU is held up for the last one and a half years for some test-related problems.

Bangladesh exported vegetables and allied products worth $23.89 million in the July-November period, registering a 28.03 percent growth.

Mohammad Hatem, acting president of Bangladesh Knitwear Manufacturers and Exporters Association, said the prospect of his sector is also good, as the buyers are now shifting their focus from China to Bangladesh.

Moreover, Bangladesh has started exporting garments to new destinations: Japan, South Africa, Latin American countries, Australia, New Zealand and China.

The country exported knitwear products worth $3.6 billion in the first five months of the current fiscal year, registering 36.56 percent growth compared to the same period a year ago.

Bangladesh exported woven garments worth $2.89 billion in the July-November period with a 35.83 percent growth.

Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association, said: “It’s not impossible to reach $20 billion garment exports in three years if the current export trend continues.”

The government will have to ensure adequate supply of gas and power and smooth operation of port, he added.

reefat@thedailystar.net

---------- Post added at 09:09 AM ---------- Previous post was at 09:08 AM ----------

Investment proposals mark big leap

Investment proposals mark big leap
Kamrun Nahar

New data show the number of investment proposals has shot up significantly in November, reflecting increased confidence in the country’s overall business climate, officials said.

The Board of Investment (BoI) said it received 165 investment proposals worth 190 billion taka in the penultimate month of the year, marking a 450 per cent increase over the planned investment amount of the previous month.

Officials said while most of the proposals may not bear fruits, it shows wider investors’ interest in the country’s infrastructure and manufacturing sectors such as power, garments, textile, pharmaceuticals and processed food.

“We can now say that local and foreign investors are more confident to invest here because of the government’s sincere efforts to improve infrastructure and business environment,” said a BoI official.

He said investors are convinced that government’s nine billion dollars investment programme in the power sector would cut crippling shortages. “Their morale got a boost after the government resumed electricity connections to new industrial ventures in October,” he added.

The BoI only keeps the data of registered investment proposals, but it does not track down whether the proposed investment eventually sees the day-light.

Of the proposals, 16 came from foreign and joint-venture investors, according to the BoI statistics. Most of these proposals contain sizeable investment amount and together they are worth 147 billion taka.

During the same month, local entrepreneurs planned to set up 149 industrial units with a total investment of 43 billion taka, which the investors said would create job opportunities for 30,442 people.

In October the BOI registered 154 investment proposals with investment worth 43 billion taka. The units would employ 42,523 people, the BoI said.

Officials said proposed investment from the foreign and joint-venture entrepreneurs in November show a 667 per cent increase from that of October.

Five foreign and 10 joint-venture proposals amounted to Tk 19.15 billion were registered in October.

Officials said foreign and joint-venture investors are mainly interested in the country’s fast-booming power and ICT sectors.

 

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New Western Marine to build double hull tankers for local client

New Western Marine to build double hull tankers for local client
Star Business Desk

Leading shipbuilder New Western Marine Shipbuilders laid keels of two double hull tankers for a local company to transport fuel oil across the country.

In September, the company signed a deal with Carbon Holdings and Coastal Gas Ltd to build two tankers for transporting fuel oil of Jamuna Oil Company through river routes.

Both the 64-metre tankers having a capacity of 1,350 tanker dead weight will be built under the supervision of international classification society Germanischer Lloyd (GL) and are expected to be delivered by September 2011.

The ceremony was held at New Western Marine’s shipyard at Kolagaon in Patiya where CF Zaman, country manager of GL, handed over keel-laying certificate to the shipyard and owners of the vessels, according to a statement released yesterday.

Bangladesh needs more tankers to transport oil through river routes to reduce traffic congestion on roads, said Sakhawat Hossain, managing director of New Western Marine.

These tankers will play a vital role in easing the power crisis in Bangladesh, as the tankers will be used to carry fuel safely and cost-effectively in various fuel generated production sites within the country, Hossain added.

Ezazur Rahman, managing director of Carbon Holdings, hoped the project will prove to be successful in future.

Mizanur Rahman, managing director of Jamuna Oil, said Western Marine should build more of such tankers to contribute to the economy.

 

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Bangladesh ranked among 30 countries for offshore services

Bangladesh ranked among 30 countries for offshore services

Staff Reporter

DHAKA, DEC 23: Bangladesh has been ranked among the world’s top 30 emerging nations where IT services could be shifted in 2010-2011. Gartner Inc. the World’s leading information technology research and advisory company, has included Bangladesh for the first time along with 29 other top countries.

In its report, eight new countries have made their debut among the Top 30, reported online news portal WEBWIRE.

Eight new countries have moved into the Top 30 – five for the first time – Bangladesh, Bulgaria, Colombia, Mauritius and Peru – along with three re-entrants – Panama, Sri Lanka and Turkey.

“This year the Top 30 countries are exclusively emerging nations,” said Ian Marriott, research vice president at Gartner.

Marriott said many organizations that choose to shift IT services to lower-cost countries are daunted by the task of determining which country or countries would best host their operations.

“As the pace of change is slower in developed countries we have chosen to focus on those locations that are still maturing and developing, domestically and internationally,” the Gartner vice-president said.

Nine countries from Asia/Pacific were represented in the 30 leading countries, compared with 10 in previous years. These included the leading country in offshore services – India – and the greatest challenger in terms of potential scale – China.

Emerging nations have placed significant emphasis on IT and business process services providing a vehicle for their economic growth, as many potential trading partners are moving from recession to tentative growth, Marriott said.

Bangladesh along with other countries in the region was rated “very good” for cost, with the exception of Malaysia, which was rated “good”.

Overall, the cost dimension for the Asia/Pacific region continues to offer an advantage over the Americans and EMEA.

In the remaining categories, however, the region is noticeably weaker. The political and economic environment remains a concern for many companies when moving work to offshore locations, and global and legal maturity is still an area of weakness for the region, with only India and Malaysia reaching a rating of “good”, Gartner said.

Bangladesh, China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam are from Asia/Pacific region. Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and Peru are from Americas.

Countries from Europe, the Middle East and Africa are Bulgaria, the Czech Republic, Egypt, Hungary, Mauritius, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Turkey and Ukraine.

 

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Economic growth likely to improve in FY'11: ADB

Economic growth likely to improve in FY’11: ADB
FE Report

The Asian Development Bank (ADB) has said Bangladesh’s economic growth is expected to improve in FY2011, if the trend of export growth observed so far can be sustained.

The country could grow at a higher rate, if the pressing infrastructure constraints in the power and energy, ports, and urban services sub-sectors are urgently removed and measures for enhancing labour productivity adopted,” said the ADB quarterly economic update, released Thursday.

Economic reforms, especially reforms in the trade regime, revenue mobilisation, and government development spending, and reduction of the cost of doing business, are essential for higher economic growth.

The Manila-based lender also said despite impacts of the global economic recession, Bangladesh attained reasonably a high 5.8 per cent GDP growth in FY2010, slightly higher than 5.7 per cent in FY2009.

“Although the late unfolding of the effects of the global crisis negatively affected Bangladesh’s exports and remittances in FY2010, a pickup in domestic demand neutralised the impact,” the donor said.

The ADB’s economic update during July-September ’10 said the better than expected growth was made possible by a boost in consumption, stimulated by credit expansion to the private sector and a rise in public sector wages.

In addition, robust growth in the agriculture sector along with satisfactory growth in the services sector more than compensated for the lower industry sector growth, the economic update said.

“Bangladesh needs to increase current investment to at least 30 per cent of GDP to attain the significantly higher economic growth needed to reduce the country’s massive poverty,” the ADB said.

The country’s current investment-GDP ratio shows a stagnating trend with an average of 24.5 per cent since FY2005. The investment-GDP ratio rose by 0.6 percentage points to 25 per cent in FY2010 from 24.4 per cent in FY2009.

The Manila-based lender said stagnation in investment stems from shortages of power, energy, and other infrastructure facilities; poor investment climate reflected in the higher cost of doing business; underperformance of complementary public investment because of slow implementation of the annual development program (ADP) and weak governance.

“These factors impinge on the efficiency and profitability of domestic and foreign investment. Underperformance in public investment is caused by the lengthy and inefficient project approval process and lack of implementation capacity of the concerned ministries,” it said.

The government has made progress in developing a regulatory framework for investment through public-private partnerships (PPP), the ADB said stressing on the need for operationalisation of the PPP office and start implementation of a few flagship projects.

After moderating at the beginning of FY2011 from the rising trend observed in the previous year, year-on-year inflation has been rising again, reaching 7.6 per cent in September 2010 up from 4.6 per cent in September 2009.

“The steady growth in money supply over the past years appears to be the key contributing factor for the rising inflationary trends,” the report said adding “The steady rise in inflation is a concern.”

In addition, the effects of natural calamities on crop production in large producing countries created volatility in food stocks in the international market, leading to supply disruptions and pushing up prices, the ADB said.

Agriculture sector grew by 4.7 per cent in FY2010 up from 4.1 per cent in FY2009. “Favorable weather conditions along with broad-based government support are the major contributing factors,” ADB said.

Industry sector growth was 6.0 per cent in FY2010 down from 6.5% per cent in FY2009. Growth in manufacturing was lower at 5.7 per cent compared with 6.7 per cent in FY2009.

In the first half of FY2010, lower industry sector growth, particularly related to exports, and compression of domestic demand due to slowdown in remittance inflows affected services sector growth, especially transport and financial services, the ADB said.

“However, several compensating factors such as higher agriculture growth, pick up in imports and continued expansion of telecommunications, health and education services aided satisfactory services sector growth,” the report said.

Growth in services sector slightly rose to 6.4 per cent in FY2010 from 6.3 per cent in FY2009.

The lender said Bangladesh’s tax-GDP ratio (9.3% in FY2010) is still one of the lowest among South Asian and other developing countries despite improved revenue collection in recent years.

The strong revenue performance is attributed to expansion of domestic economic activities, broadening of the tax base, better compliance aided by tax reforms and publicity campaign, and commitment of the NBR officials, the quarterly report said.

Trade deficit widened to $1.3 billion during July-September of 2010, up from $739 million during the year earlier period because of the higher growth in imports compared with the growth in exports, it said.

The bullish trend in major stock market indicators continues during FY2011. The index rose 129.2 per cent year-on-year in October 2010, reaching 7,710.8 points, because of the significant involvement of institutional participants and retail investors in daily transactions, the report said.

The combined capital and financial accounts recorded a deficit of $646 million against the surplus of $258 million during the year earlier period because of the large outflows on account of trade credit.

Consequently, the overall balance of payments turned into a deficit ($426 million) in July-September of 2010, sharply lower than the surplus of $1.3 billion during the corresponding period of 2009, the report said.

 

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Bangladesh to make optical fibre cables

Bangladesh to make optical fibre cables
Quazi Amanullah, Khulna

Bangladesh Cable Shilpa Ltd in Khulna will start producing optical fibre cables from January.

The factory, which went into commercial production in 1973 after its establishment in 1967, has also decided to go public from March to raise fund for its new project.

To this end, an agreement was signed on Monday with Swadesh Investment Management Ltd, which would work as issue manager.

Managing Director of Cable Shilpa Bahadur Ali and Managing Director of Swadesh Investment Mamun Ahmed inked the deal in the conference room of the plant.

Cable Shilpa, a state-owned enterprise, will offload its shares as intended by the government, said Ali.

“Swadesh has been asked to complete all the processes for offloading our shares within the stimulated time,” said Lutfor Rahman, manager (administration) of the plant.

The decision to assign Swadesh Investment for the job was taken in the 161st meeting of the board of the cable factory.

Cable Shilpa will also set up a power cable and electrical house wire plant in Khulna.

The company has a reputation for not incurring financial losses since its inception. It earned a net profit amounting to Tk 12.83 crore in the last financial year, said its managing director.

Optical fibre cables to be produced in this plant will meet the domestic demand, said Ali.

At present, Bangladesh imports such cables from different countries including India and China.