2010 January 13 | gurumia.com

Archive for January 13th, 2010

Bangladesh Business Forecast Report Q1 2010 -new

Wednesday, January 13th, 2010

Bangladesh Business Forecast Report Q1 2010: http://www.companiesandmarkets.com/r.ashx?id=I827XH42V195580

Challenges Abound For Hasina In 2010 Having posted an impressive 5.9% real GDP expansion during the troubled FY 2008/09 (July-June), we believe that weak growth in the agricultural and industrial sectors will weigh on the Bangladeshi economy in FY 2009/10 and thus maintain our 5.5% real GDP growth projection for the fiscal year. Indeed, growth in the agricultural sector (which makes up roughly 20% of GDP) will be depressed by a high base after the 4.9% increase recorded in FY 08/09, while industrial sector growth (at a 10-year low of 5.9% in FY 08/09) should suffer from continued power shortages. Moreover, we expect fierce competition from the likes of China and Vietnam in the important textile sector to impair a recovery of exports and keep a lid on investment in the manufacturing sector.

We expect Bangladesh to continue to benefit from a higher degree of political stability under the civilian government of Sheikh Hasina Wajed. However, deeply ingrained fault lines are still apparent, making a return to the political unrest and violence that preceded the declaration of a state of emergency in January 2007 a possible scenario over the medium-to-long term. Indeed, the interim government’s pledge to eradicate public corruption and reform Bangladeshi politics fell by the wayside with Sheikh Hasina and opposition leader Begum Khaleda Zia both remaining in firm control of their respective parties, the Awami League (AL ) and the Bangladesh Nationalist Party (BNP). We are forecasting real GDP growth to slow to 5.5% in FY 2009/10 (July-June) as the effects of improved political stability are offset by a poor outlook for agricultural and industrial sector growth. A continued rise in remittances from overseas workers in the short-to-medium term should provide a boon for the Bangladeshi economy by stimulating domestic demand as exports experience a very gradual recovery.

We expect real GDP growth at an average of 5.9% from FY 2011/12 onwards as an expected slowdown in remittances should see private consumption growth settle at a lower rate. Bangladesh’s score in Transparency International’s Corruption Perceptions Index rose from 2.1 to 2.4 between 2008 and 2009, raising it from 147th to 139th place out of 180 countries surveyed. This was largely on the back of institutional and legal reforms implemented by the caretaker government in office between January 2007 and January 2009. A failure by the civilian government of Sheikh Hasina Wajed to uphold this momentum on fighting corruption would likely impair much-needed foreign direct investment (FDI ) and domestic capital expenditure.

Tags: Bangladesh, Business
Posted in Uncategorized | No Comments »

Recharged Bangladesh-India relations

Wednesday, January 13th, 2010

Bangladesh Prime Minister Sheikh Hasina Wednesday hailed her four-day visit to giant neighbour India as a success that would usher in stronger economic and development cooperation.

Hasina, on her first visit to India since coming to power in December 2008 polls, secured one billion dollars of credit from Asia’s fourth-largest economy for bolstering infrastructure in Bangladesh.

“We feel it will open a door, a new era,” Hasina told reporters before concluding her India trip.

Cross-border ties have warmed considerably since Hasina came to power a year ago and the Awami League leader has received strong support from New Delhi.

India, which signed five accords with Bangladesh in areas ranging from cultural exchanges, security, preventing crime and power supply, also deemed the visit as “extremely fruitful.”

“This is one of the most successful visits in recent times. It is a major step forward that will transform bilateral ties,” an Indian foreign ministry official told

PRIME Minister Sheikh Hasina’s visit to India, marked by the signing of three agreements on security and control of terrorism, exchange of sentenced prisoners; memoranda of understanding on cooperation in power sharing and cultural exchanges, and finally, the joint communiqu? asserting the granting of transit to India through Chittagong and Mongla ports and of transshipment facilities for Bangladesh from Nepal and Bhutan through Banglabandha look set for having far reaching consequences in the relations between the two countries. The Bangladesh Prime Minister, before her return from Delhi, underscored the need for equitable water sharing of Teesta and other common rivers, and hoped that the large neighbour would be generous in reducing trade imbalance.

India has committed to extend assistance to develop infrastructure and Prime Minister Mahmohan Singh has said that his country would do nothing on the proposed Tipaimukh Dam that might be harmful to Bangladesh. India has withdrawn 47 Bangladeshi goods from its negative list. The Bangladesh Prime Minister on her return to Dhaka yesterday said the visit was crowned with success. Her political critics however, said that India got what it wanted and the Bangladesh side got only assurances. India’s most important concern for support to combat separatist elements in the north-east are believed to have been helped by the agreements that have been signed.

The people of Bangladesh would love to see the bilateral relations between the two countries to be at the higher plane to the benefit of both the peoples. Again, something has to be done about sharing of water of common rivers on which the survival and progress of the people of this deltaic land depends. Thus, while Bangladesh has demonstrated its eagerness to develop bilateral relations, it should get reciprocal responses from India on the questions of trade, water sharing and regional connectivity. Without reciprocity it would be difficult for the government to implement the agreements, MOUs and assurances.