Bangladesh Economy: News & Updates

[Avisheik]

Salaam to all the Muslims,



Can someone please tell me what are official figures the Bangladeshi Expatriate community? According Wikipedia, there are 3 million Bangladeshis in Pakistan?!

Salaam to all the Muslims.

I think those three million bangladeshis(and their kids) were loyal to pakistan in 1971 and decided to stay with pakistan rather than moving to bangladesh

 

[Cyberian]

I think those three million bangladeshis(and their kids) were loyal to pakistan in 1971 and decided to stay with pakistan rather than moving to bangladesh

Salaam to all the Muslims,



Do they have dual nationalities? Are they recognised in Bangladesh?

Salaam to all the Muslims.

 

[Avisheik]

Salaam to all the Muslims,



Do they have dual nationalities? Are they recognised in Bangladesh?

Salaam to all the Muslims.

I dont think they have dual nationalities. They are pakistanis of bangladeshi origin

 

[saleen_s7]

HomePrintEmailAA
MONDAY, MARCH 25, 2013
FDI rules putting off investors
UN report identifies complex entry procedure, weak governance and unreliable power as major setbacks

STAR BUSINESS REPORT




Bangladesh is failing to attract the desired levels of foreign direct investment (FDI) due to the complicated entry procedures and weaknesses in regulatory framework, a UN report said yesterday.
The investment policy review of Bangladesh, prepared by United Nations Conference on Trade and Development (UNCTAD) with the help of the government, identified the issues that should be addressed if FDI is to play a larger role in the country’s development.
“So far, FDI attraction has been dismal even by the standards of least-developed countries (LDCs),” said the report.
Inward FDI volumes in relation to population and ratio to GDP, the report found, were consistently 80 percent less than the average for all LDCs and, on these metrics, 50 percent below the inflows to other populous low-income countries such as India and Indonesia.
The total FDI inflows to Bangladesh since 2006 of around $830 million a year are double those of the previous ten years, but have not risen as strongly as the inflows to comparable countries, according to the report.
“The regime for entry of FDI is not so open or clear and simple as many in the country believe,” Hans Baumgarten, a UNCTAD representative, said yesterday at a workshop on the study, co-organised by the UN body and the industries ministry.
FDI entry is affected by several laws and is further complicated by the implementation of industrial policy and licensing, he said.
The Foreign Private Investment Promotion and Protection Act of 1980 is the core law which enables the government to regulate FDI entry to the country — but its scope and coverage are too limited.
“The FDI entry policy is too decentralised — a single modern law is needed to consolidate it.”

Furthermore, Baumgarten thinks the Board of Investment (BoI) should move away from its roles as a gatekeeper (FDI certification) and a gateway (for fiscal incentives).
“BoI should instead focus on primary functions of investment promotion across all sectors and advocate of better administrative regulation of business.”
Congested roads, unreliable electricity, poor transport access for remote areas, lack of a deep sea port, the report found, were some of the serious bottlenecks to attracting more FDI.
Although the government is committed to boosting infrastructure through public investment and by introducing private investment through public-private partnerships, it has to be seen through.
In the electricity sector, the country has the enormous challenge of catching up on the existing chronic power shortages as well as catering for the rapid economic growth.
“Sustainability requires moving to commercial pricing of power and gas and abandoning the long-standing policy of energy self-sufficiency.”
An attractive standard business tax regime should be put in place and then complemented by targeted incentives for catalytic industries where justified on socioeconomic and strategic grounds, UNCTAD suggested.
Some specific features also need to be remedied, such as removing the multiple taxations of dividends as they pass between companies and establishing clear transfer pricing rules.
The complex and outdated laws that a new investor has to deal with for access to land has to be done away with.
The review also suggested improving public governance and judicial system to attract more FDI.
The country ranks “poorly” in the quality, fairness and timeliness of tax and regulatory processes and judicial enforcement of the rule of law.
“Client charters should be adopted and performance systematically monitored in all the key business regulatory agencies. These should include benchmarks such as response times.”
Wider adoption of e-platforms to administer business establishment and operations, the UN body said, would assist investors and provide tools to monitor performance.
Employment and residence of foreigners is governed by a long list of laws that dates back to 1946, and needs to be modernised.
The report recommended implementing a streamlined foreign worker approach similar to that of the United States’ H1-B visa scheme.
Although Bangladesh has intellectual property (IP) laws covering patent, copyright and trademarks protection, they are weakly enforced.
Despite its success in exporting garments, Bangladesh is little internationalised and exports are poorly diversified, said the report.
“As a nation it has yet to embrace a conviction that selling to the global economy is the surest way to provide better jobs for its population.”
Multinationals can help to provide world market access by including Bangladesh affiliates and local firms as part of their global value chains.
“In turn, Bangladesh can make best use of its competitive advantages by further reducing import duties, improving border clearance of exports and imports and by expanding its preferred access to markets.”
Meanwhile, Industries Minister Dilip Barua said the resilience showed by the country — as demonstrated by the consistent growth in GDP, export and remittance over the last few years — in the face of global slowdown, depicts a favourable investment climate.
“FDI is dramatically increasing in this age of globalisation. To keep pace with this trend, we should concentrate on reviewing the existing rules and regulations of Bangladesh related to investment.”
The report, Barua says, will be an effective tool for sustainable development and help bring about the reforms needed in line with the demands of time.

FDI rules putting off investors | The Daily Star

 

[eastwatch]

Kuwaitis want to offload Islami Bank shares - bdnews24.com

Kuwaitis want to offload Islami Bank shares
Reazul Bashar, Senior Correspondent, bdnews24.com
Published: 2013-03-24 16:15:54.0 Updated: 2013-03-24 17:22:09.0

Three Kuwaiti institutions want to sell off their stakes in the Jamaat-e-Islami-sponsored Islami Bank, which has been under huge international pressure for its alleged funding of militant activities.

The development took place at a time when Shahbagh’s Ganajagaran Mancha was urging the people to boycott the bank for ‘patronising war criminals and their organisations’. The Shahbagh movement is seeking capital punishment for war criminals and a ban on Jamaat-e-Islami.

The Public Institute of Social Security, Kuwait Awqaf Public Foundation and Kuwait Finance House, sponsor shareholders in the bank, together hold 15 percent stakes. Recently, their representatives wrote to the Ministry of Foreign Affairs about the procedure to offload stocks.

The ministry, in turn, wrote to the share market regulator Bangladesh Securities and Exchange Commission (BSEC). The SEC said there was no bar to selling off those shares if proper procedures were followed.

A copy of the letter is available with bdnews24.com.

The three organisations of the Gulf state jointly hold 200,433,225 shares of the 30-year old bank valued at more than Tk 8.61 billion. The bank’s website says its foreign shareholders currently hold 58 percent shares.

SEC Executive Director Anowarul Islam wrote, “In this connection we would like to inform you (the ministry) that aforesaid owners can sell their shares through the stock exchanges complying with the commission’s notifications. Therefore the seller may be advised to contact the stock exchanges for the next course of action.”

Dhaka and Chittagong stock exchanges were also copied in the Feb 28 letter sent to the ministry by the SEC. The Kuwati institutions, however, did not announce until Sunday that they were selling their stakes. As per law, if any sponsor shareholder of the stock market wants to sell its shares, it has to announce it at least a month before.

Islami Bank, however, denied any knowledge about the letter of the Kuwati firms. “We don’t know anything as such,” Ataur Rahman, spokesman for the bank, told bdnews24.com on Sunday. If any director wants to sell shares, it has to be approved the meeting of the bank’s board of directors. We’ve found nothing like this,” he added.

Earlier, the bank sought assistance from the Bangladesh Bank after it plunged into a massive crisis in the wake of calls by activists of the Shahbagh movement to severe relations with any institution having links with war criminals.

The call by the activists drew huge response with individuals closing their accounts with the bank, internationals banks refusing to do business with it and readymade garment buyers reluctant to trade through the bank.

The bank is under government watch for its suspected militant funding. The central bank appointed a monitor on 2010 to check its transactions.

 

[somebozo]

This is one way of blackmailing BD into letting their proxies go unquestioned.

 

[eastwatch]

I used to wonder what are the sources of fund for Jamaat. So, now it is clear, or it seems, that a major portion of jamaat's fund come out of the Islami Bank. However, GoB cannot close the Bank unless it secures definite proof of itsfunding of a milant outfit. I believe, soone or later there is going to be a run on this Bank. Under the Bank laws, the central Bangladesh Bank will take responsibiity for the depositors' money if such an extreme situation arrives.

 

[Kaniska]

ok...if 15%Z stake if offloaded then better to sale it to BD financial institution itself..It is good for your country and bank too..

 

[animelive]

I used to wonder what are the sources of fund for Jamaat. So, now it is clear, or it seems, that a major portion of jamaat's fund come out of the Islami Bank. However, GoB cannot close the Bank unless it secures definite proof of itsfunding of a milant outfit. I believe, soone or later there is going to be a run on this Bank. Under the Bank laws, the central Bangladesh Bank will take responsibiity for the depositors' money if such an extreme situation arrives.

as far as i know 30k people pay 5% of their monthly income to Jamaat. What a load of crap this article contains though. Nowhere do we see international pressure on Islami bank or Jamatis. Infact its the Awami leaguers who are facing it. Australians have already got the knowledge of the killings and are showing concern. This is another article to tell people that Jamatis are breeding terrorists whereas Chatra Shibir don't even use sharp weapons unlike the Chatra league who even goes to using guns. But what do you expect from BDnews

https://www.facebook.com/video.php?v=129698437213973

 

[CaPtAiN_pLaNeT]

GDP measurement this fiscal under new base-yr uncertain
Meeting of technical body for approval put off thrice
Published : Monday, 25 March 2013

GDP measurement this fiscal under new base-yr uncertain :: Financial Express :: Financial Newspaper of Bangladesh

Jasim Uddin Haroon

The estimates of the current fiscal year's gross domestic product (GDP), with a new base-year, have become uncertain as the technical committee is yet to give its final decision on the issue.

The size of the country's GDP is likely to be larger by at least 15 per cent in the current fiscal it the Bangladesh Bureau of Statistics (BBS) calculates it with adequate coverage, taking a new base-year into consideration.

The BBS, the official body to calculate the country's GDP, wants to do this job, taking the fiscal year, 2005-06, into consideration as a new base-year, alongwith the revision of the range of products in order to provide a more "accurate" reading of the economy's structure.

The BBS cancelled the meeting of the technical committee (TC) at least thrice following the recent 'hartal' (general strike) programmes and other unavoidable circumstances.

The BBS, however, is yet to announce any fresh time-table for the next meeting.

Director general of the BBS Golam Mustafa Kamal told the FE: "The technical committee guided us on how to proceed with the work. They will now just approve it."

The BBS chief said: "We're hopeful about measuring the GDP with a new base-year. We may announce the size of GDP on that basis in July this year."

Sources at the BBS said they are all now busy with the works relating to the economic census.

"We'll remain busy for two months from March 31. We are not hopeful about the GDP calculation this fiscal, on the basis of a new base-year for this purpose," a senior official at the BBS told the FE, seeking anonymity.

He, however, said GDP measurement under the old base-year will be calculated as usual.

Currently, the BBS is using the 17-year old base-year of FY 1995-96 to measure the country's GDP.

Earlier, Finance Minister AMA Muhith expressed his doubt over the accuracy of the data being provided by the BBS as it was using a very old base-year for calculating different macro-economic indicators.

The BBS had formed a technical committee, headed by renowned economist Professor Wahiuddin Mahmud, to revise the GDP.

In Bangladesh, the GDP base-year, generally, is revised every 10 years. In India, it is revised every five years to improve quality and accuracy of data in an updated manner as far as possible. The change in the base-year of the GDP is considered important, as new products and services will then come within its purview.

This base-year will also follow the revised GDP under System of National Accounting (SNA) 2008, in line with international standards.

The country's current methods of national income accounting are in conformity with the 1993 version of the United Nations system about the same on an international basis. The related UN system was revised in 2008.

The introduction of the new base-year will increase the size of GDP, leading to rise in the country's per capita income.

Jobdul Hoque, an expert in GDP measurement exercises, said: "The country's size of the real economy will grow by at least 15-20 per cent once the areas that have not been covered until now, are taken into account."

According to the BBS, the technical committee approved the FY 2005-06 as the new base-year early December last.

The change in the GDP base-year is considered very important, as new products and services will be reflected in it.

"Let alone the hidden sectors, there are many areas including informal sectors like footpath vendors that have remained outside the GDP measurement for long," Mr Hoque, a member of the technical committee on GDP calculation, said.

He said the members of the technical committee made some observations to calculate GDP on a more authentic basis. "We'll approve the GDP revision, if we get satisfactory result of our observations made earlier."

Research director of the ERG (Economic Research Group) Sajjad Zohir told the FE: "A number of estimations are based on small-scale surveys, leading to poor calculation."

He said: "I think the activities in livestock sub-sector are inadequately covered under, or reflected in, GDP, if we look at the production of milk each day."

Mr Zohir said even the extent of value addition of the financial sector in the services sector is still not properly measured by the GDP now.

A consultant of International Monetary Fund (IMF) Dr AC Kulshrestha trained the BBS officials and put forward some recommendations to the statistics and informatics division in this connection.

Updating the base-year through revising the GDP estimation exercise has become essential for various reasons including coverage of newer economic activities, progressive expansion and downsizing of various industries and encompassing all economic sectors as far as possible over the years.

 

[Zabaniyah]

COMMON ECONOMY THREADS IN THE ECONOMY SECTION

 

[eastwatch]

GDP growth to go below 6pc | The Daily Star

WEDNESDAY, APRIL 10, 2013
GDP growth to go below 6pc
ADB sees global economic crisis and domestic unrest as major headwinds
Muhith says the rate will be no less than 6.4pc
Rejaul Karim Byron

The Asian Development Bank has said Bangladesh’s GDP growth in the current fiscal year will edge down to 5.7 percent due to global economic crisis and political turmoil at home.
However, Bangladesh will be able to maintain the average growth rate among the South Asian countries, the lender said.

“Though political activities are expected to be volatile, social stability will be sustained,” the ADB said in its Asian Development Outlook, the organisation’s annual economic publication, released yesterday.

Finance Minister AMA Muhith, too, at a pre-budget discussion with the Economic Reporters’ Forum said the targeted GDP growth in the current fiscal year might not be achieved.
“But the GDP [gross domestic product] growth rate at any event is unlikely to go below the last fiscal year’s 6.4 percent.”

The government had earlier targeted a GDP growth rate at 7.2 percent for the current fiscal year.
Despite higher remittances, growth in demand for private consumption is expected to weaken, the ADB said.

Households adopt a cautious approach to spending because of political uncertainties, depressing production in industries oriented to domestic markets, it said. Export demand, a major contributor to GDP growth, is expected to slacken slightly, reflecting the Outlook baseline assumptions that the euro area economy stagnates and the US recovery remains frail. The lender also forecast that the GDP growth would be 6 percent in the next fiscal year.

It said the economic forecasts for FY2013 and FY14 rest on some assumptions. First, the central bank’s slight easing in monetary policy announced in January 2013 will not stoke inflation, given the declining trend in international commodity prices and a favourable domestic crop outlook.
Second, the government will contain subsidies by continuing to raise fuel and electricity prices and thus keep in check its need for bank borrowing.

Third, though political activity is expected to be volatile, social stability will be maintained. And, finally, weather will be favorable, the ADB said. Lower rice prices will further dampen consumer demand through reduced agricultural income. Ongoing decline in imports of capital equipment and slow import growth for raw materials indicate lower utilisation of existing production capacity and a lull in investment.

A drop in import letters of credit opened for machinery and industrial raw materials signals weak economic activity in the coming months, the ADB said. Industry growth is expected to slow to 6.5 percent in FY2013, reflecting slack demand externally and domestically.

The lender said the Monetary Policy Statement of the Bangladesh Bank released in January signalled greater emphasis on private credit growth target. However, these measures are unlikely to spur much more private borrowing as long as prevailing consumer and investor sentiment remains subdued, the ADB said.

It said headwinds to growth include worsening power shortages, the inability of new industrial units to get natural gas connections, increased fuel and electricity prices along with wage pressures, and sluggish activity in the real estate sector.

About agricultural growth, the ADB said favourable rainfall during planting and expanded acreage sown to the winter rice crop should help agricultural output in FY2013 recover to 4.2 percent growth.

Greater access to credit resulting from central bank initiatives is expected to bolster output from livestock, aquaculture, and non-cereal crops.

Services growth in FY2013 is expected to slow to 6 percent, reflecting weaker economic activity, and then expand by at least 6.1 percent in FY2014 on moderate recovery in overall demand.
There are downside risks to the projections. Economic developments in the euro area and the US may prove to be much weaker than assumed in the Outlook baseline, materially affecting exports from Bangladesh.

Another risk is budget revenues weakening if political unrest intensifies enough to markedly disrupt economic activity. Extreme spending policies to brighten reelection prospects could compromise monetary and fiscal discipline. Natural disasters pose perennial risks.

 

[DURJOY]

Bangladesh to be a lower middle income country by 2021: Mirza Azizul
Published : Sunday, 21 April 2013


FE Report

Bangladesh will be a lower middle income country by 2021 if it successfully faces some challenges, including weak governance and confrontational politics, along with ensuring a growth of 7.0 per cent.

Former finance adviser to the caretaker government Dr AB Mirza Azizul Islam said this Saturday while presenting a keynote paper on 'Macroeconomic Performance of Bangladesh' at a seminar at the department of Accounting and Information Systems (AIS) of Dhaka University.

The seminar was organised by Accounting for Capital Market Development (ACMD), a research project under the academic innovation fund of University Grants Commission (UGC) and the World Bank.

Mr Islam said Bangladesh has achieved successes in some areas, including poverty reduction, compared to some other countries in Asia, but the country will have to face some challenges if it wants to be a lower middle income country by 2021.

According to Mr Islam, the challenges Bangladesh facing are access to land, lack of infrastructure, weak governance, unsatisfactory human resources development, administrative incompetence, confrontational politics, climate change and recent problems in financial sector. "At the same time, apart from facing the challenges, the country will have to ensure a growth of 7.0 per cent to become a lower middle income country by 2021," said Mr Islam.

He said a sound macroeconomic performance is also required to make the stock market stable. Besides, there should be a focus on the growth acceleration and more investments.

He said Bangladesh has a large and growing population suitable to a huge market, cost effective labor force and young dynamic entrepreneurs to create hope for the nation's development.

He has also said that people should contribute to the national consensus to create ground for optimism for the greater interest of the country.

Associate Professor Mizanur Rahman of the Department of AIS of DU and the students of AIS department, among others, were present at the seminar.

Bangladesh to be a lower middle income country by 2021: Mirza Azizul :: Financial Express :: Financial Newspaper of Bangladesh

 

[DURJOY]

Forex reserve hits $15.06b mark
Published : Wednesday, 08 May 2013

he country's foreign exchange reserves hit Tuesday an all-time high of US$ 15.069 billion breaking the previous record of US$ 14.105 billion (March 5). "The reserve stood at US$ 15.069 billion today. It'll continue to increase," Bangladesh Bank assistant spokesperson AFM Asaduzzaman said. The central bank officials said the fall in import bills, increase in remittance and export earnings have contributed towards boosting the foreign exchange reserve. — UNB

 

[eastwatch]

The high foreign currency reserve will make BDT more expensive in the near future. It is unwelcome because it will make our textile products more expensive in the world market. One way the country can reduce the reserve is that its private sector imports machines for their factories.

This type of investment remains almost stopped for the last few years because of power shortage that started during BNP time. Now, the power output is higher than before.

The govt should also allow private companies to increase the capacity of the country's refineries and to build underground/ground level storage capacity of oil. Buy more crude oil when it is cheap and store it underground.