All posts by guru

Bangladesh Bank rolls out new monetary policy-2015 : Hopeful initiative for Capital Market

Bangladesh Bank (BB) has observed that the current political unrest has cast a shadow of uncertainty over achieving the target.Bangladesh Bank has set a target to reduce bank interest rate spread during January-June period of the current fiscal year, aimed at spurring the capital market of the country.

Higlights :
? Despite some upside risks, inflation will be kept under control to reach the target of 6.5
percent by June 2015.
? The economy is poised to achieve a respectable growth rate between 6.5 and 6.8 percent
in the fiscal year 2015 if political stability prevails. The bottlenecks of infrastructure and
energy must be addressed promptly.
? Over the last 20 years Bangladesh evidenced the highest amount of stability in inflation
and economic growth in the South Asian region that includes India, Pakistan and Sri
? Bangladesh’s growth performance is the second best (5.73 percent) after India (6.77
percent) and its inflation is the lowest (6.45 percent) in the region over the last two
? Bangladesh Bank will pursue a monetary policy of prudence to strike the balance
between objectives of moderate inflation and respectable growth. Money supply and
policy rates will be controlled accordingly while opening further avenues to promote
investment through greater financial inclusion.
? Banking governance will be up scaled further to clamp down on loan delinquencies.
While the cases of credit worthy borrowers will be reviewed, habitual defaulters will face
lawful consequences.
? Bangladesh Bank will endeavor to iron out excessive fluctuations in the exchange rate
which will remain largely market based.
? The central bank will continue to maintain comfortable amount of foreign currency
reserves to cover imports of 5 to 10 months. This safety net is required to avoid any
sudden collapse in the value of Taka and to ensure a healthy growth of imports of
productive inputs.
? Bangladesh Bank aims at supplying reserve money at the growth rate of 15.9 percent and
broad money at 16.5 percent at the end of FY2015.
? Private sector credit growth has been targeted to grow at 15.5 percent at the end of
? At the retail level both deposit and lending rates fell in July-December of FY2015 and the
interest spread has on average decreased from 5.31 percent in June 2014 to 5.17 percent
in December 2015. Bangladesh Bank will continue its effort to reduce this spread.

The target was set at the central bank’s monetary policy announced Thursday for the second half of the fiscal year (FY) 2014-15.

The policy was adopted to bring down the inflation rate to 6.5% from current 6.99% (12-month average) and achieve an economic growth within a range between 6.5% and 6.8%.

“I hope that our monetary policy issued today will play the same effective role as the previous issues in instilling and strengthening public confidence on Bangladesh Bank’s actions aimed at containing and stabilising CPI inflation,” Governor Dr Atiur Rahman said, releasing the Monetary Policy Stance (MPS) at Bangladesh Bank headquarters in Dhaka.

“I also believe that its attendant inclusive, environmental sustainability supportive credit and financial policies will make meaningful contribution in supporting the government’s pursuit of on the country’s path towards prosperity.”

Atiur said Bangladesh Bank’s attention in support of capital market stability will continue in seccond half of FY2014-15.

He said the central bank has the statutory responsibility of enforcing compliance of banks with the legal limits on their capital market exposures; but further to this, Bangladesh Bank has continued liquidity support for capital market transactions in volumes permissible within Bangladesh Bank’s monetary programs.

In the first half of this fiscal year, he said Bangladesh Bank has introduced a number of new investor-friendly regulatory reforms facilitating external transactions of foreign and local businesses including investors in the capital market.

Atiur said deposit and lending interest rates of banks and financial institutions have been coming down in line with decline in CPI inflation; intermediation spreads between weighted average deposit and lending interest rates of banks and financial institutions have come down to five percent or lower in the state owned banks and the majority of private sector banks.

The spreads are higher in the foreign banks and in some private sector banks with high engagement in riskier small enterprise lending, he said.

“Bangladesh Bank’s attention towards rationalization of these higher spreads will continue.”

The governor said competitive lending interest setting behavior not having yet fostered well in the local financial market.

Bangladesh Bank resorted to setting ceilings on lending interest rates in two priority areas – pre-shipment export credit and agricultural credit.

In the context of general declining trend in interest rates, in H1 FY2014-15 Bangladesh Bank has revised the lending rate ceiling for agriculture downward from 13% to 11%. Competitive rate setting behavior in the market would have rendered prescription of such ceilings unnecessary.

“Bangladesh Bank will therefore pursue ways of fostering of competitive price setting, rate setting attitudes and practices in our financial markets.” See the original policy new monetary policy

Bangladesh can expand trade through Hong Kong: trade analyst

Hong Kong Trade Development Council -HKTDC.Many garment, leather and footwear factories in China want to relocate production units to Bangladesh to utilise duty-free entry benefits allowed to exports.

The companies want to manufacture in Bangladesh and re-export the finished products to the world through Hong Kong, said Dannie Chiu, regional director for Southeast Asia and India of Hong Kong Trade Development Council or HKTDC.

Chiu highlighted Hong Kong as a sourcing and distribution hub in Asia.

“We are here to create opportunities, provide information and help match business partners for companies from Hong Kong,” she said at the programme co-organised by HKTDC and Dhaka Chamber of Commerce and Industry, at the Westin hotel in Dhaka on Tuesday.

Bangladesh could expand its external trade through Hong Kong, which will help to get more foreign direct investment from China and other countries, she said. Hong Kong channelled $377 billion foreign investment through to other countries in 2013, she said.

There are enormous opportunities to expand Bangladesh’s trade, and Hong Kong can be the bridge, said Mahbubur Rahman, president of International Chamber of Commerce Bangladesh.

“We should change our traditional approach and be more dynamic in dealing with trade issues,” Rahman said.

China and Hong Kong can invest more in Bangladesh to utilise benefits offered to foreign investors, as well as its duty-free access to many other countries, Subhasish Bose, vice chairman of Export Promotion Bureau, said.

China can relocate its sunset industries to Bangladesh to enjoy the general investment packages, said Hossain Khaled, president of DCCI.

“Hong Kong is a major sourcing and distribution hub in Asia and a gateway to world trade.”

China and Hong Kong rank as the first and 12th largest importing partners of Bangladesh and jointly account for $9 billion of the total import volume of the country, he said. Although bilateral trade shows an increasing trend over the years for both exports and imports; the total volume of trade is still very small and the balance of trade is in Hong Kong’s favour, he said.

HKTDC is a statutory organisation with a mission to create business opportunities for Hong Kong’s companies. It is the international marketing arm of Hong Kong-based traders, manufactures and service providers.

With more than 40 global offices, including 13 on the Chinese mainland, the body promotes Hong Kong as a business platform for trade with China and throughout Asia, according to HKTDC.

Dhaka Metro Rail project update : First tender for metro rail on January 31

Dhaka metro train

The first tender for pre-qualification of rolling stock (coach and locomotive) for the 20.1-km-long much-expected metro rail will be floated on January 31, said Road Transport and Bridges Minister Obaidul Quader.

The minister made the statement while briefing the journalists at the secretariat yesterday.

A total of 24 new locomotives and 144 coaches will cost Tk2,700 crore, said source in the ministry.

As per the rules, the estimated cost must be approved by Japan International Cooperative Agency (Jica), the major financier of the project, and then the Metro Rail authorities before the tender is floated.

The Metro Rail authorities are yet to approve the cost. They still need more time to verify it.

Road Transport and Highways Division Secretary MAN Siddique,
also the Metro Rail project chairman, said: “We hope to get the approval by the time.”

Meanwhile, about the Bus Rapid Transit (BRT) project Road Transport and Bridges Minister said: “The construction work of the project will begin in December this year and to be completed in November 2017.”

“Commuters can travel from Gazipur to Airport in only 40 minutes,” he said.

On Monday parliament passed an amended Metro Rail Bill, 2015 in a bid to curb traffic jam in the capital with providing quick and modern transport service to commuters.

Under the first tender, 24 locomotives and 144 coaches will be procured from manufacturers and suppliers. The 24 trains each having six coaches will run from Uttara to Bangladesh Bank.

The first part of the construction may end by December 2019 while the whole project to be completed by 2024.

The metro rail will run from Uttara Third Phase to Bangladesh Bank via Pallabi, the west side of Rokeya Sarani and Farmgate, Hotel Sonargaon, Ruposhi Bangla, TSC of Dhaka University, Doel Chattar and Topkhana Road.

The route was supposed to be extended up to Sayedabad from Bangladesh Bank through Atish Dipankar Road.

The Jica has committed to provide Tk16,594.59 crore while the government Tk5,390.48 crore.

A Japanese consortium is currently working on the detailed design of the project. It is also carrying out a topographical, traffic and geo-technical surveys in different parts of the project.
Metro Rail Act passed in parliament
Jatiya Sangsad on Monday passed the Metro Rail Act, 2015 which is aimed at providing fast and improved mass transport service in Dhaka city.

This act will give a legal framework to the overall activities of the proposed Metro Rail Project, including its operations, control and regulations.

Road Transport and Bridges Minister Obaidul Quader moved the bill in parliament that was passed by voice vote.

According to the act: “The government has taken initiative to build mass rapid transit (MRT) for easing traffic jam and rendering fast and improved mass transport service in Dhaka city. A specific law is needed for construction, operation and maintenance of the country’s first metro rail.”

The law will be effective in Dhaka, Narayanganj, Munshiganj, Manikganj, Gazipur and Narsingdi districts initially. The government shall include other districts in the list by issuing gazette notification in the second phase.

It has kept a provision of Tk 1 crore fine and 10 years’ imprisonment for operating metro rail without license or illegal handover of license for operating Metro Rail.

The authorities concerned will fix the rate of passenger fare against metro rail service following directives of the government from time to time. There will be a seven-member committee to fix the fares.

There is also a provision of one years’ imprisonment or Tk 500,000 fine or both for creating obstructions to running metro rail and unauthorised entry into the reserved area of the metro rail.

The punishment for breaching the security of the metro rail and its passengers is five years’ imprisonment maximum or Tk 50 lakh fine or both.

For unauthorised printing of Metro rail tickets or pass, selling, distorting and producing fake tickets is ten years’ imprisonment maximum or Tk one crore fine or both.

If any employee of the Metro rail misuses it or its equipment that person will have to face one year’s imprisonment or Tk five lakh fine or both.

For travelling on metro rail without ticket or pass, the punishment will be a fine maximum ten times the price of the actual fare or six months imprisonment.

The punishment for not maintaining technical standard regarding anything of the metro rail, will be five years’ imprisonment maximum or a Tk 50 lakh fine or both.

For not having the insurance of Metro rail, its passengers and third party the punishment will be maximum ten years’ imprisonment or Tk 10 crore fine or both.

There will be separate committees for issuing licenses of metro rail and fixing the fares.

Executive Director of the Dhaka Transport Coordination Authority will be the head of the committee for issuing license. The proposed law also kept provision for constructing and operating the metro rail under PPP basis.

The Cabinet on 10 November approved the draft of the Metro Rail Bill, 2014.

The Metro rail or Mass Rapid Transit Development Project (Line 6) is a priority project of the government and the Tk 220 billion project to build Dhaka’s first metro rail is expected to be complete by 2019.

A public limited company named Dhaka Mass Transit Company Limited (DMTCL) will operate the Metro Rail while the DMTCL will be supervised by the Dhaka Transport Coordination Authority.

The proposed route of the MRT Line-6 is Uttara 3rd Phase to Bangladesh Bank via Pallabi-Rokeya Sarani-Khamarbari-Farmgate-Hotel Sonargaon-Shahbagh-TSC-Doel Chattar- and Topkhana Road.

There will be 16 metro rail stations under the project. The stations include Uttara (North), Uttara (Centre), Uttara (South), Pallabi, IMT, Mirpur 10, Kazipara, Taltala, Agargaon, Bijoy Sarani, Farmgate, Sonargaon, National Museum, Doel Chattar, Bangabandhu National
Stadium and Bangladesh Bank.

According to the government, the metro rail will be able to carry some 1800 passengers every four minutes, transporting an estimated 60000 people every hour

Welcome Marcia Stephens Bloom Bernica -US Ambassador to Bangladesh

Marcia-Stephens-Bloom-BernicaWelcome Marcia Stephens Bloom Bernica -New US Ambassador to Bangladesh arrived in Dhaka on Sunday to begin her assignment.

She has replaced Dan W Mozena who retired on completion of his tenure in Bangladesh.
Ambassador Marcia Bernicat is going to start her tasks in Bangladesh at a critical period of bilateral relations, especially after reservations expressed by America about the 5 January 2014 elections.

On 17 November, the US Senate confirmed the nomination of Bernicat as 15th US ambassador to Bangladesh. Accordingly, she took her oath in Washington DC on January 6.

“I look forward to joining the US Embassy, Dhaka team and learning all about the people, rich culture and traditions of Bangladesh,” Marcia Bernicat tweeted on 25 November.

Bernicat said earlier that she would work hard to support efforts to promote accountability and strengthen human rights and democracy in Bangladesh

Foreign investment in Bangladesh : Niko dispute

IN the era of globalisation, foreign private investment plays an important role for the economic and infrastructure development of developing countries, particularly Bangladesh. Bangladesh offers generous opportunities and environment for foreign investment under its liberalised legal policies and principle of compliance with international norms and principles concerning foreign private investment. One of the impediments in encouraging foreign private investment is legal restraint as to the settlement of disputes arising out of investment contract.

Since the beginning of the 1990s, Bangladesh has adopted a number of policies to increase the inflow of foreign investment. Ratification of the 1965 Conventions on the Settlement of Investment Dispute between States and Nationals of other States (ICSID Convention), (hereinafter Washington Convention) by Bangladesh fulfills its commitment to the protection of foreign private investment in Bangladesh. The ICSID Convention entered into force for Bangladesh on April 26, 1980.

Bangladesh has also concluded a number of bilateral investment treaties (BIT) with several countries in order to promote foreign investments in its territory. At present, Bangladesh has concluded 29 BITs — 24 of which have come into force. The Foreign Private Investment (Promotion and Protection) Act 1980 is an investment protection statute in Bangladesh. Bangladesh is also a member of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and the UNCITRAL Model Law on International Commercial Arbitration 1985 (amended 2006).

Bangladesh’s commitment to fair and equitable treatment for foreign investment has again been reflected in the recent decision given by International Central for Settlement of Investment Dispute (ICSID) in the arbitration proceeding initiated by Niko against Petrobangla.

The government had decided to develop marginal or abandoned gas fields in Bangladesh. Niko, a company incorporated under the laws of Barbados, proposed to carry out this development. Niko evaluated three such abandoned gas fields and concluded that two of them, the Chattak and the Feni fields, were sufficiently favourable to continue with a work plan.

With the approval of the government, Niko concluded a Joint Venture Agreement (JVA) on October 16, 2003, with the Bangladesh Petroleum & Production Company, Limited (BAPEX) to develop those gas fields. The development of the Feni field was successful and gas supplies from two wells started in November 2004. The first dispute arose between Niko and Petrobangla as to the price of gas. BAPEX and Niko (the Joint Venture Partners) began to negotiate a Gas Purchase and Sale Agreement (GPSA) with the Bangladesh Oil Gas and Mineral Corporation (Petrobangla). Niko requested a price of $2.75/MCF and the buyer (Petrobangla) offered $1.75/MCF. On December 27, 2006, a GPSA was concluded where the price was fixed at $1.75/MCF. Petrobangla made some payments but much of the gas delivered remains unpaid for. As of April 1, 2010, it owed Niko and BAPEX $27.16 million and $8.55 million respectively. Niko served several reminders to Petrobangla for payment for the gas produced by Niko.

The second dispute that arose between Niko and Petrobangla and the government was over compensation for the damages caused by two blowouts that occurred during drilling in the Chattak field on January 7, 2005, and another on June 24, 2005. The Bangladesh Environmental Lawyers’ Association (BELA) and others introduced a petition in the Supreme Court of Bangladesh, High Court Division, against the Government of Bangladesh, Petrobangla, BAPEX, Niko and others, seeking inter alia a declaration that (a) the Joint Venture Agreement (AVA) reached between Niko and BAPEX was invalid; and (b) an injunction against Petrobangla restraining payments to Niko in respect to the Feni gas field.

The court issued the injunction against Petrobangla but denied the requested declaration on May 5, 2010. In May or June 2008, Petrobangla and the government of Bangladesh commenced legal action in the Court of District Judge, Dhaka, against Niko and others, seeking compensation on the order of Tk. 746.5 crore as damages for the two blowouts (the Money Suit). These proceedings are still pending.

As a result, the following three disputes arose between Niko, Bapex and Petrobangla and the government:

Niko claimed payment (payment claim) for the outstanding invoices for the gas delivered to Petrobangla;

Petrobangla and the government claimed compensation for the damages occurred due to the blowouts;

Niko sought a declaration that it was not liable for damages in relation to the blowouts (the compensation declaration).

Niko served a Notice of Arbitration on Petrobangla on January 8, 2010. Niko decided to refer these two particular disputes (payment claim and compensation declaration) for arbitration under the ICSID Convention. The ICSID Tribunal was constituted for the arbitration of such disputes, and proceedings began on December 20, 2010. The Tribunal delivered its decision on Niko’s payment claim on September 11, 2014, based on the argument and evidence before it. The Tribunal decided that Petrobangla owed Niko $ 25,312,747 plus Tk. 139,988,337 as per Niko’s invoices for gas delivered from November 2004 to April 2010, and Petrobangla must pay simple interest on Niko’s invoices at the rate of six month LIBOR + 2% for the US Dollar amounts and at 5% for the amounts in BDT.

But the present decision is not implementable due to the pendency of injunction given by High Court Division in the BELA proceedings; prohibiting payment to Niko by Petrobangla. The order of injunction given by High Court Division reads: “This order of injunction shall remain in force till disposal of the money suit or till amicable settlement amongst the parties, whichever is earlier.”

In the Tribunal’s decision, it invited the parties to seek an amicable settlement with respect to the modalities for implementing the present decision (payment claim).

The participation in the arbitration proceedings of ICSID by Bangladesh for the settlement of investment dispute between Niko and Petrobangla should be encouraging to foreign investors. Previously, Bangladesh complied with the decisions delivered by ICSID that involved substantial monetary awards against Bangladesh.

Compliance with the decisions given by ICSID in the Niko case will demonstrate Bangladesh’s positive attitude towards its commitment for the protection of the interest of foreign investors with the terms and conditions of BITs and the ICSID convention. This will be particularly important for those interested in investing in the growing marine resource sectors and energy sectors in Bangladesh. At the same time, the decisions of the ICSID Tribunals reveal the areas in which Bangladesh can build greater investor confidence. It is hoped that there shall be an amicable settlement between the parties as to payment claim owed to Petrobangla and compensation for damages caused due to blowout as per decision of ICSID. If this is done, it will increase the inward flow of foreign direct investment in Bangladesh as it will give confidence to foreign investors. The government should put emphasis on such an important issue.
Foreign Investment in Bangladesh

Bangladesh urged Malaysian investors to Invest more in Bangladesh

Bangladesh yesterday urged Malaysian investors to take up new investment ventures in the fast-growing manufacturing, services and infrastructure scoters to help the country reach newer heights of development.

Dhaka also sought technological support from Kuala Lumpur as it has developed expertise in the area.

Officials and entrepreneurs of Bangladesh made the call while addressing the inaugural session of a three-day trade show — “Showcase Bangladesh2014”, which began at the Kuala Lumpur Convention Centre.

Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) in collaboration with Bangladesh High Commission in Malaysia, Malaysia South-South Association, Malaysia External Trade Development

Cooperation and Malaysian Industrial Development Authority hosted the event for the third time.

Speaking at the function, Malaysian Deputy Minister for International Trade and Industry Dato Lee Chee Leong said there is much that Bangladesh and Malaysia can do for further expansion of bilateral trade and investment. “Events like Showcase Bangladesh provide us with a good platform to explore the business potential,” he said.

Malaysia’s investment in Bangladesh is currently concentrated on energy and telecommunications sectors, he pointed out. “The involvement of Malaysian companies in Bangladesh can be further expanded.”
Several areas like infrastructure, power generation, telecommunications, education and hospitality have been identified as potential sectors for Malaysian involvement and investment in Bangladesh, mentioned Lee Chee Leong.

He said Malaysia would be an ideal gateway for Bangladeshi companies wanting to expand their businesses in the region as Malaysia will assume the chairmanship of Asean next year.

Bangladesh High Commissioner to Malaysia Atiqur Rahman said Malaysia is among the top 10 investors in Bangladesh, but there is enough scope for further investment.

Relocation of labour-intensive industries, including the textiles and textiles accessories; furniture processing and agro-processing industries, from Malaysia might be the most promising options, said the diplomat.

BMCCI president Nasir A Choudhury, secretary general Raquib Mohammad Fakhrul, treasurer Syed Almas Kabir, chairman of the fair organising committee Syed Nurul Islam and former BMCCI president Syed Moazzem Hossain spoke, among others.

About 60 Bangladeshi companies from banking and insurance services, readymade garments, textiles, infrastructure, ICT and telecom and other sectors have joined the showcase with their products and services.

Partnerships for development: A shared responsibility

UN DayEVERY year on October 24, we celebrate UN Day, commemorating the founding of the United Nations. Since joining 40 years ago, Bangladesh has experienced significant gains in economic growth and human development. In 2000, world leaders met at the UN Headquarters in New York for the Millennium Summit, which introduced to the world the Millennium Development Goals (MDGs). These goals would guide development progress towards meeting basic needs and increasing quality of life for all. Bangladesh has become one of the best performing least developed countries (LDC) in MDG attainment, particularly for the goals on maternal mortality, child mortality, poverty reduction, and primary education. Nevertheless, there is still much to be done in the areas of gender empowerment and equality, nutrition, and environmental sustainability. This UN Day, the UN in Bangladesh shines the spotlight on MDG achievements and gaps through seven plays based on each of the human development goals of the MDGs, and performed in the seven divisions of Bangladesh. However, there is often one goal that is forgotten about — MDG 8: A global partnership for development.

What does MDG 8 currently look like?
Around the world, MDG 8 has had mixed success. Targets selected covered official development assistance (ODA), a fairer trade system, evening the competition in agriculture among countries, debt relief and services, and access to medicine and technology. While MDG 8 aimed to “untie aid,” development assistance is not immune from political realities, and can be influenced by shocks in a globalised economic system. Over the past years, ODA in Bangladesh has hovered around approximately $1.8 billion per year. Due to Bangladesh’s strong economy, this development assistance is declining as a percentage of the country’s gross national income even as absolute numbers of this assistance have increased, highlighting that the country has the lead role in its own development, and is better positioned to define the scope of development cooperation.

South-South cooperation and the intersection of global, national, and private sector actors
In Bangladesh, the UN has supported several initiatives in South-South cooperation between developing countries in areas of health, cultural preservation, social protection, homegrown school feeding and volunteerism in disaster management. Bangladesh and the UN are also members of substantive coalitions that identify regional priorities and mobilise on these issues together. As Bangladesh has a large migrant worker community, the UN in Bangladesh is active in the Colombo Process, which is a regional consultative process on the management of overseas employment and contractual labour for countries of origin in Asia. As a relatively nascent initiative, key achievements have included high level regional meets, a training curriculum for labour attachés of sending countries, agreed upon programmes and policies to ensure the safety and welfare of migrant workers, and implementation of recommendations at national level such as compliance of recruitment agencies in countries signatory to the Covenant of Ethical Conduct and Good Practices of Overseas Employment Service Providers.

In order to implement global agreements and protocols, it is also important to cast a wider net for development partners. An example of a multi-faceted partnership was Bangladesh’s approach to the implementation of the Montreal Protocol, which set out to eliminate “ozone depleting substances” that contributed to global warming. The partnership approach had three dimensions: the first was a global multilateral fund that resourced the implementation of various initiatives to meet Montreal Protocol targets; the second was strong government regulation and enforcement, along with UN capacity building initiatives and institutional strengthening of the Department of Environment; and the third was proactive private sector partnerships and compliance to phase out the use of substances harmful to the environment in their production methods. As a result, Bangladesh is phasing out the substances that contribute to ozone layer depletion, and it serves as an example of the efficacy of a partnership that involves a multitude of actors with the shared commitment to fulfill development objectives.

Partnerships for development: a national and global imperative
Although these are only two examples amongst many, they do illustrate that development is foremost a national imperative as much as it is a global one. While important, partnerships are not limited to financing but to find solutions together to meet development aspirations. Bangladesh’s performance in the MDGs has proven that political will, a strong local NGO community, civil society, and donors can work together effectively. This is apparent in the Local Consultative Group mechanism that brings together the different actors in the country’s development landscape, providing the policy environment and platform for sustainable and effective development partnerships to flourish. Beyond indicators and targets, MDG 8 is essentially a goal about shared responsibility. The MDGs were created to address the most pressing development issues in the world at the time, and as a result the world has seen the poverty rate halve well before the 2015 deadline. This UN Day serves as a timely reminder that we are all partners in development, that there is still work left to do, and that it is crucial to ensure that we maintain MDG momentum through delivering on the commitments made across all sectors both at national and global levels.

China, Bangladesh to work for regional infrastructure development

Silk Road BangladeshChinese President Xi Jinping said Bangladesh is welcome to join the Asian Infrastructure Investment Bank (AIIB) as a founding member, and the two countries must enhance cooperation in trade, agriculture, infrastructure development and maritime industry.

Xi made the remarks Saturday morning during his meeting with visiting Bangladesh President Abdul Hamid, who is in Beijing for a dialogue on strengthening connectivity partnership.

Xi said China’s vision to build the Silk Road Economic Belt and the 21st Century Maritime Silk Road will create chances for both countries.

The two countries should work together to push the building of an economic corridor linking Bangladesh, China, India and Myanmar, Xi said.

Describing Bangladesh as an important partner of China in South Asia and Indian Ocean region, Xi said the bilateral relationship features friendship, trust and cooperation.

China appreciates Bangladesh’s support in issues concerning China’s core interests and will as always support its cause to safeguard independence and sovereignty and realize stability and development, he said.

At the meeting, Hamid said Bangladesh expects to learn from China’s experience in poverty alleviation and seize the chance brought by the Silk Road Economic Belt and the 21st Century Maritime Silk Road to promote trade and connectivity.

Bangladesh will work with China in climate change and disaster control while helping promote cooperation between China and the South Asian Association for Regional Cooperation, he said.

Twenty-first Asian countries signed the Memorandum of Understanding on Establishing AIIB last month in Beijing, including Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.

The dialogue on strengthening connectivity partnership scheduled on Saturday in Beijing will be attended by leaders from China, Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.

The Bangladesh Development Update: Economy Progressing, but Below Potential

Bangladesh Young GenerationSTORY HIGHLIGHTS
Bangladesh continues to make progress on human development and reducing extreme poverty.
Political uncertainty and weak competitiveness are dragging acceleration of private investment and growth.
To sustain growth in the near- and medium-term, private investment need to increase significantly along with improving the quality of public investment.
The Bangladesh Development Update October 2014 notes that the economy is gradually recovering from prolonged disruptions, aided by political and macroeconomic stability. The challenge now is to consolidate this by accelerating economic growth in an inclusive and sustainable manner. Economic activities in FY14 suffered a setback due to political turmoil, declines in remittance and private investment. Bangladesh Bureau of Statistics (BBS) has estimated a 6.1 percent GDP growth for 2014, compared to 6 percent last year.

Progress in poverty reduction and shared prosperity is visible. The poverty incidence, based on national poverty line ($1.13 per capita per day), is projected to decline from 31.5 percent in 2010 to 24.47 percent by 2014. Employment and wage growth appears to have boosted shared prosperity — increased the income of the bottom 40 percent. The UN Human Development Report 2014 says, Bangladesh graduated from Low Human Development (LHD) category to Medium Human Development (MHD) category in 2013.

Overall macroeconomic stability maintained though inflation is still high. Inflation increased to 7.4 percent in FY14 from 6.8 percent in FY13, driven by food price increases. This was due in part to the supply disruptions caused by political unrest in 2013. Stable international oil prices and exchange rate as well as prudent monetary management reduced non-food inflation to 5.5 percent in FY14 from 9.2 percent in FY13.

Despite a lower trade deficit, the current account surplus narrowed in FY14 because of a decline in remittances and an increase in services account deficit. The surplus in balance of payment increased from US$5.1 billion in FY13 to US$5.5 billion, creating an excess supply of foreign exchange. Bangladesh Bank (BB)’s interventions in the foreign exchange market limited nominal appreciation of taka. The real exchange rate appreciated by 8.5% in FY14 relative to FY13 due to small (2.7 percent) nominal appreciation and higher domestic inflation relative to international inflation. Foreign reserve increased to US$21.6 billion in June 2014.

Monetary management was challenged by fast reserve accumulation. BB managed to keep reserve and broad money growth within target by stepping up sterilization operations. BB’s net domestic assets and reserve money targets were met. Private sector credit growth remained subdued at 12.3%. BB increased Cash reserve ratio (CRR) from 6% to 6.5% in June 2014.

Financial sector is not out of the woods yet. Credit and risk management status is unsatisfactory in banking sector. Asset quality in the state-owned commercial banks (SCB) deteriorated in FY14 due to political unrest, poor lending decisions and change in loan classification standards. BB has started implementing the new provisions related to lending and bank’s exposure to stock markets. This should prevent excessive risk taking by the banks.

Fiscal policy is affected by revenue collection and development budget implementation shortfalls. The overall fiscal deficit in FY14 was a modest 3.1 percent of GDP. Public debt as a share of GDP is declining. However, there is little improvement in the quality of the Annual Development Plan (ADP) expenditures. Yet, the size of ADP in FY15 is envisaged to increase by 34 percent relative to the FY14 revised ADP.

Overall pace of structural reforms is slow, but there has been significant progress in the garments industry towards improving working conditions for factory workers, amendments to the labor and the Export Processing Zone (EPZ) laws, government’s capacity in assessing factory safety and agreement on common standards to assess structural building safety. Speedier progress is needed in the implementation of the new VAT law, liberalization of exchange regulations, infrastructure management, and financial supervision.

Growth and inflation outlook is favorable for 2015. Political stability since January, increase in remittance inflows, expected recovery in exports following a weak start, and a buoyant consumption demand than last year, bode well for growth in FY15, which is projected at 6.2 percent. Macroeconomic stability, improved governance in banking system, market development for long term financing, trade liberalization, and stronger attention to efficient implementation of infrastructure investments remain key factors in this process. Underlying inflationary pressures are expected to maintain a downward trend on continued policy restraint. Achieving this will depend on international price trends, domestic supply conditions and macroeconomic policies.

What needs to be done in the near term to sustain growth?

Stronger attention is needed to complete the transition in garments including implementing wage increases and the new labor legislations, recruiting more factory inspectors and completing building inspections followed by remediation measures such as relocation of closed garments factories. Priority should be on completing the ongoing road development projects, i.e. Dhaka-Chittagong and Dhaka-Mymensingh highway; Double Tracking of Dhaka-Chittagong Railway; the Padma Bridge; Dhaka metro rail; and the two Bibiyana gas field based power plants. Immediate action should be taken to enact the Public Private Partnership (PPP) law, and awarding contracts for building Special Economic Zones (SEZs).

UN rights experts urge Bangladesh to halt the execution of opposition party leader Muhammad Kamaruzzaman

Justice GavelTwo United Nations human rights experts today urged the Government of Bangladesh to stay the execution of Muhammad Kamaruzzaman, leader of the opposition Jamaat-e-Islami party, condemned to death for crimes against humanity.

The UN Special Rapporteurs on summary executions, Christof Heyns, and on the independence of judges and lawyers, Gabriela Knaul, expressed serious concern at reports that Mr. Kamaruzzaman could be executed as early as Thursday 6 November 2014 at midnight.

Earlier this week, the Appellate Division of the Supreme Court confirmed Mr. Kamaruzzaman’s sentence to death handed down by the Bangladesh International Crimes Tribunal on 9 May 2013.

The International Crimes Tribunal is a special domestic court with the jurisdiction to try and punish any person accused of committing atrocities, including genocide, war crimes and crimes against humanity, in Bangladesh, including during the country’s 1971 independence war.

The UN human rights experts have on several occasions expressed alarm regarding serious violations of fair trial and due process guarantees in the judicial proceedings before the Tribunal that were reported to them.

“In countries that have not abolished the death penalty, capital punishment may be imposed only following a trial that complied with the most stringent guarantees of fair trial and due process,” the experts noted. “Any death sentence executed in contravention of a Government’s international obligations is tantamount to an arbitrary execution.”

“A person sentenced to death must also have the right to seek pardon or commutation of his sentence,” Mr. Heyns and Ms. Knaul stressed.

The UN Special Rapporteurs also reiterated their calls that all the defendants before the International Crimes Tribunal, including the Appellate Division, receive fair trials.

Krispy Kreme plans Bangladesh entry with Orion Group

Krispy Kreme’sKrispy Kreme has signed a development agreement with its newest international franchisee, Orion Group, for 20 new stores throughout Bangladesh throughout the next five years.

“We are very grateful to Krispy Kreme for choosing us as its franchisee in developing the brand in Bangladesh,” Orion Group’s Ifzal Ahmed said in a news release. “As the restaurant industry and consumer embracement of international food brands continue to grow in our country, we look forward to bringing Krispy Kreme’s unique products and in-store experience to Bangladesh consumers.”

Krispy_kreme_assortOrion Group has a presence in the hospitality, pharmaceuticals, cosmetics & toiletries, infrastructure development, real estate and development, power, high-tech agro products, textiles and garments, and aviation management sectors.

“Orion Group has positioned itself as a market leader across multiple business sectors in Bangladesh. Their proven business aptitude and first-hand knowledge of Bangladesh’s rapidly growing consumer market will be indispensable assets in establishing the Krispy Kreme brand and experience in Bangladesh. We expect Krispy Kreme to become an integral part of Bangladesh‘s culture for many years to come,” said Dan Beem, Krispy Kreme president — International.
About Krispy Kreme:Krispy Kreme’s story began in the 1930’
Krispy Kreme Doughnuts, Inc. is an American global doughnut company and coffeehouse chain based in Winston-Salem, North Carolina. Krispy Kreme founder Vernon Rudolph bought a yeast-raised recipe from a New Orleans chef, rented a building in what is now historic Old Salem in Winston-Salem, NC, and began selling to local grocery stores.

Products are sold in Krispy Kreme stores, grocery stores, convenience stores, gas stations, Wal-Mart, Target and Shaws stores in the United States. Internationally, doughnuts are sold in Loblaws supermarkets, Petro-Canada gas stations[citation needed], and as freestanding stores in Canada, along with BP Service Stations and BP Travel Centres and 7-Eleven stores in Australia.[ In the United Kingdom, Tesco supermarkets, Tesco Extra, and most Tesco service stations carry Krispy Kreme products. Service stations Moto, Welcome Break & Road Chef also carry self-service cabinets. The company’s growth was steady .