Chinese assistance sought in infrastructure development.
February 9, 2010
Mr. Annisul Huq, newly-elected President of SAARC Chamber of Commerce and Industry (SAARC CCI) said the miraculous economic development of China could be beneficial to South Asian economies provided compatible measures to enhance bilateral trade and investment are taken at Government level as the private sector of South Asia was ready to share economic benefits.
Mr Huq, also the President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) made the comments at the inaugural ceremony of a seminar of South Asia-Sichuan Business Seminar held recently at Chengdu, China held recently.
The President, SAARC CCI said that China has emerged as role-model for developing countries and has witnessed incredible socio-economic growth and its strength can be gauged by the fact that despite global financial meltdown, the country managed to achieve 8.7 per cent GDP growth rate in 2009.
Mr. Annisul Huq said that numerous complementarities for trade and investment exist between China and South Asia. “We must acknowledge China for its ability to produce quality goods at highly competitive price as a great facilitator to poor and middle class society of the entire World”, adding that as an optimistic business representative of South Asia, China is a land of opportunities for small economies, provided they are given preferential market Access. For further promotion of economic cooperation he recommended China to relocates some Medium Sized Industries to SAARC nations in mutually interested areas, that could help bring two communities closer together. He said that Technical and non-technical barriers in China need to be removed as harmonized and simplified.
The SAARC CCI President said that China, being the biggest production house of many products, can provide technical assistance in areas of Science & Technology, Engineering, Hightech Machinery, Construction Industry, Automobiles, Chemicals, Textiles and Garments, Processed Fruits & Vegetables, Agriculture etc. China can help Infrastructure Building including energy in South as the region was facing shortfall of nearly 85000 MW of electricity and has inadequate infrastructure in roads, rails and transportation.
Delayed global recovery to weigh on B’desh economy, says ADB
September 27, 2009
The Asian Development Bank (ADB) has praised the government for “prudent” budgetary steps to stimulate the slowing economy, but cited a delayed global economic recovery as the major downside.
Even in the wake of the worst recession in living memory, the Bangladesh economy managed to avert a major economic slowdown and was relatively unhurt compared to its competing Asian peers.
The Asian lender, however, has blamed dampening demand exacerbated by slower growth in exports and remittances inflow for Bangladesh’s slight fall in growth last fiscal.
In its September economic update, the bank noted that the US$ 90 billion economy grew 5.9 per cent in the fiscal 2009, slightly down from 6.2 per cent in the 2008 financial year.
It said the budget for the 2010 fiscal strikes a “prudent” balance between the need to stimulate the economy against the backdrop of the global recession and to protect the poorest of the poor.
“It (new budget) increases spending on social safety net programmes to protect the poor, while preserving macroeconomic stability,” the ADB said in its update.
The report noted public investment declined further, sliding from 5.0 per cent of GDP (gross domestic product) to 4.6 per cent, as annual development programme (ADP) implementation continued to be weak.
“Taking the economy to a higher growth path and more rapid and sustainable poverty reduction will require large-scale infrastructure investment well beyond what the government can provide,” said the report, released Tuesday.
The government’s strategy to address the infrastructure gap includes action on two fronts: building a more conducive environment and enhancing the framework for public-private partnerships (PPPs).
The agriculture sector grew by 4.6 per cent in FY09, up from 3.2 per cent in the last fiscal, owing to high growth in food-grain production, aided by favourable weather and strong government support.
The bank said measures to speed up delivery of seeds, fertilisers, power, and credit and scaled up subsidies for fertiliser and power used for irrigation were key factors in boosting the sector’s output.
Industry sector growth, however, declined to 5.9 per cent last fiscal year, from 6.8 per cent in the previous year as export production in the second half of the fiscal year slowed due to the global slowdown.
Weak investor sentiment also affected manufacturing growth, as did slow implementation of power and energy projects, and weak construction activity, the economic update said.
Growth in the power and gas sub-sectors dropped to 4.5 per cent in FY2009 from 6.8 per cent in FY2008, while growth in the construction sector dipped slightly to 5.7 per cent.
The service sector growth, like that of industrial sector, also slowed slightly to 6.3 per cent in FY2009, due to the slowdown in remittance inflows and lower trading activities.
Slower export growth and a fall in import volumes affected trade and transport services. Retail and wholesale services were affected by moderating consumer demand.
Annual inflation declined to 6.7 per cent in FY2009 from 9.9 per cent in FY2008.
The ADB report said the successive cut in domestic fuel prices in October and December 2008 and January 2009, in line with the fall in international commodity prices and rise in domestic food supplies, has helped to ease price pressures in recent months, particularly of foodstuffs.
Revenue collection remained unchanged at 11.2 per cent of GDP in FY2009 because of the sharp fall in import growth due to the fall in international fuel and commodity prices, the global economic crisis and slower expansion of economic activity.
Revenue from the National Board of Revenue sources increased by 10.7 per cent, far below the budget target of 18.6 per cent and the 27.4 per cent growth of the previous fiscal year.
On the expenditure side, public spending was lower at 15.3 per cent of GDP, down from 15.9 per cent in FY2008, because of savings on food, fuel, and fertiliser subsidies given the fall in international prices and ADP underutilisation.
As savings on public spending were larger than the shortfall in revenue, the fiscal deficit of 4.1 per cent of GDP was lower than the budget target of 5.0 per cent.
Private sector credit growth slowed to 14.6 per cent year-on-year in June 2009, down from 24.9 per cent in June 2008, because of the slower trade growth and slackness in investment activities due to the global economic recession.
Exports grew by only 10.3 per cent in FY2009, a sharp deceleration from the 15.9 per cent in FY2008. Retail sales in developed economies fell, leading to a slowdown in garment export orders and shrinking profit margins for Bangladeshi exporters through price reductions.
Imports in FY2009 rose by only 4.1 per cent, mainly due to the sharp fall in imports of food items and capital machinery.
Minister assures all policy support to RMG sector
July 21, 2009
The commerce minister yesterday assured that the government would extend all necessary incentive and policy supports to the ready-made garments (RMG) sector in order to maintain industrial growth.
“We hope to shortly organise discussions with RMG sector leaders to identify the problems they face because of the global recession. We will then consider allocating incentives, if required,” said Faruk Khan.
He was speaking at the inauguration of the ’10th Textech International Expo 2009′, organised by Conference and Exhibition Management Services (CEMS) at the Bangladesh China Friendship Conference Centre in Dhaka.
“RMG sector performance has been good in recent months, as exports rose by 11 percent. However, this growth came following a 12 percent fall in the March-April period of 2009,” he added.
“We need to overcome the adverse effects of the crisis and move forward with determination,” said Khan.
He urged foreign buyers to take full advantage of the opportunities that Bangladesh offers, which include skilled labour at competitive wages, a low cost of production and high quality products.
Mohammad Shafiul Islam Mohiuddin, acting president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), urged the government to ensure uninterrupted supply of electricity to help industries grow.
“We (entrepreneurs) have to face loses worth Tk 600 crore a year for power outages. The government should seriously consider the issue and ensure supply,” he said.
Meherun N Islam, president and group managing director of CEMS USA and Asia Pacific, said the exhibition is the country’s oldest and biggest international textile and garments technology and machinery expo, which is expected to boost exports, as the sector still has untapped areas.
The four-day international fair is showcasing textile machinery, garment products and accessories.
Over 350 exhibitors from over 17 countries, including Korea, Singapore, China, India, Hong Kong, the United Kingdom, Canada, Taiwan, Australia, the United States and Bangladesh are participating in the fair.
Daily Shamokal and New Age are the media partners for the event, while ACER is the technology partner and Pan Pacific Sonargaon Hotel, Washington Hotel and Sarina hotel partners.
The exhibition will be open to visitors everyday from 10.30 am to 7.30 pm, upon registration at the expo venue.
BGMEA urges govt to introduce industrial police soon
July 7, 2009
Apparel manufacturers Saturday urged the government again to take immediate initiatives to introduce industrial police for saving the country’s highest foreign currency earning sector from extortion and vandalism.
They have been demanding formation of such police force from the last couple of years, as the apparel sector particularly witnessed a number of incidents of killing, extortion and vandalism at a time when the global financial meltdown strikes it.
“These incidents also create panic among the garments manufactures,” Bangladesh Garments Manufactures and Exporters Association (BGMEA) president Abdus Salam Murshedy said at a function, marking the handover of two pickup vans to the Gazipur district police by the organisation.
Home Minister Sahara Khatun was present as the chief guest of the programme, held at the BGMEA headquarters at Tejgaon area in the city, where the BGMEA president handed over keys of the pick-up vans to her.
The BGMEA president also urged the government to ensure a smooth law and order situation in the country, so that they can do their businesses without facing any hindrance.
“Police petrol will have to be increased on Dhaka-Chittagong highway, particularly at Gouripur, Mirersorai, Sitakundo and Kumira, where a gang is fully active to snatch away products from covered vans,” Murshedy alleged.
The BGMEA chief said they have already given 16 vehicles to the police administration in Dhaka, Chittagong, Narayanganj, Feni, Gazipur and Ashulia, so that the police can perform their duties more efficiently.
The Home Minister said the government is considering to introduce the industrial police very soon, and her ministry would provide all possible cooperation for forming the special police unit for the readymade garments (RMG) sector.
Responding to a plea of the BGMEA president to allow plying of 20 covered vans instead of five vans on Dhaka city roads during daytime, she said the government would consider the request after discussing the matter with the authorities concerned.
Sahara Khatun said her ministry would take all possible measures for creating a business-friendly atmosphere in the country. “Law and order situation in the country is improving apart from some isolated incidents,” she claimed.
Bangladesh to become commercially important like Singapore
May 9, 2009
Shipping Minister Dr Afsarul Amin on Sunday said Bangladesh could be turned into a commercially important country like Singapore with the implementation of the proposed deep seaport project. “If we can implement the deep seaport project at Sonadia Island in time and maintain the standard of service we may expect a new Singapore within Bangladesh,” he said, adding that the deep seaport might be a major vehicle of economic development of Bangladesh. The minister made the remarks while speaking as chief guest at a workshop titled ‘Techno-Economic Feasibility Study of a deep Seaport in Bangladesh’ held at Sonargaon Hotel in the city. Read more
BGMEA hopes to push garment export to $18b in next 3 yrs
March 10, 2009
Setting an export target of readymade garment (RMG) worth $15-18 billion dollars in next three years, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is going to hold its three-day apparel and textile exhibition here on November 15.
During the last fiscal (2006-07), the sector earned US$ 9.2 billion.
BGMEA President Anwar-Ul-Alam Chowdhury told members of the Overseas Correspondents Association (OCAB) that the exhibition called Batexpo-07, the largest textile fair in the Asia Pacific region, would facilitate foreign buyers to see Bangladeshi textiles, clothing and accessories.
He said significant number of buyers particularly from USA, Canada, UK, Middle East, Southeast Asia and many other countries of the world participated in previous Batexpo fairs.
Buyers from Pakistan, India, China, Japan, Hong Kong and host Bangladesh will display their products in the exposition for which 41 different companies have already registered.
The BGMEA president hailed US Congressman Jim McDermott for introducing a bill, “New Partnership for Development Act 2007”, in the US House of Representatives on October 18 to facilitate more market access of RMG products from the LDCs, including Bangladesh, to the US market.
He said BGMEA would send an 11-member delegation to USA to discuss with the US Congressmen, including Congressman McDermott, and officials of USTR and labour organisations so the bill is passed by both the House of Representatives and Senate.
Although China, India and Sri Lanka are major competitors of Bangladeshi garment products, the BGMEA president said Bangladesh would be the main source of RMG export in the ultimate analyses, mainly in low and medium price garments.
In reply to a question, Chowdhury said export of garment worth US$ 8 million to India is a starter, saying that in the near future India could be the third largest destination of Bangladeshi RMG after USA and Europe.
He dismissed campaigns in UK against Bangladeshi garments for alleged child labour and low wages, saying that the campaigners could not produce any evidence in support of their allegations.
However, Chowdhury said BGMEA is now giving attention to human resource development, image building and improved relations between entrepreneurs and workers.
Presently some 2.4 million people, 80 percent of them women, are directly employed in the garment industry in Bangladesh.
In reply to another question, the BGMEA president said buyers this time around would feel more confident in participating in the exposition because there is no political unrest.
The value of last year’s spot order was US$ 68.61 million, about 12 million higher than the previous year. The organisers expect more spot orders this year.
Chief Adviser Dr Fakhruddin Ahmed will inaugurate the exposition as chief guest at Sonragaon Hotel on November 15 and Army Chief General Moeen U Ahmed will be the chief guest at the concluding ceremony.
On the sidelines of the 3-day exposition, there will be seminars and fashion shows spotlighting the country’s vibrant and burgeoning RMG sector.
BGMEA with assistance from German Technical Cooperation (GTZ) is organising the exhibition.
This traditional annual exhibition provides an opportunity for Bangladeshi RMG enterpreneurs and their foreign buyers to meet and interact for further boosting the country’s apparel and textile sector which is a top foreign exchange earner.
The BGMEA president said Bangladesh’s RMG sector is competitive enough in terms of quality, prices and skilled workforce and it is possible to raise the level of exports to US$ 18 billion a year.
The world apparel market is worth US$ 500 billion, which in next few years is going to reach US$ 800 billion. Such burgeoning global market, Chowdhury said, would give Bangladesh newer opportunities to export more.
Stimulus package for RMG sector urged
March 10, 2009
BGMEA’s outgoing president Anwar-Ul-Alam Chowdhury Parvez cried out for immediate stimulus package to help the country’s export-oriented garment industry to face adverse impacts of global economic recession, reports UNB.
“Policymakers need to take immediate decision to support the ready-made garments (RMG) sector that experiences declining growth and price fall,” he told reporters at the Dhaka Reporters Unity Saturday.
Giving some statistics, he said the quarterly growth from July to
September 2008 was 48 per cent compared to corresponding period of the previous year while it came down to 4.5 per cent during the October-December period. He feared a negative growth during January to March this year.
Parvez said new orders would be coming and they were trying to negotiate with buyers, but price fell by 15 to 17 per cent, in the meantime.
Saying that Bangladesh had tremendous opportunity despite the recession, he added but some measures needed to be taken urgently. The measures included technical upgradation fund, export-performance-benefit scheme and export incentives on retention.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) leader referred to stimulus package already taken in India and China and pleaded that the Bangladesh government also needed to take some measures to protect this promising export sector.
“If stimulus package is given by the government, 20 per cent growth rate could be maintained,” he said on an upbeat note on the bright side of the situation.
Referring to his recent talks with representatives of top 10 companies, including Wallmart, Parvez said the representatives suggested five-year multiple visa, alternative port, low Internet cost and a good relation between workers and management of the garment factories.
The BGMEA leader said instead of depending on the World Bank and the IMF, the government could rely on the private sector for infrastructure development, including multiple-lane Dhaka-Chittagong highway on BoT (build own transfer) basis.
BGMEA vice-president Mahmud Hasan Babu, DRU president Shamim Ahmad and general secretary Pathik Saha were present.
Earlier, Parvez inaugurated a BGMEA-assisted new conference lounge at the DRU.
Indian Stimulus packages fail to enthuse apparel exporters
February 2, 2009
The Indian government has declared two stimulus packages in the last few weeks to boost exports and to tackle the global economic crisis, but a sense of euphoria seems to be missing in the exporter’s community. The apparel export industry in particular does not seem to be so happy with the announcements. All the apex apparel associations aver that, apparel exports will fall short of a wide margin of the targeted US $11.6 billion in the current fiscal year (2008-09).
Reacting to the announcement of the second stimulus package, the Chairman, Mr Rakesh Vaid, of the Apparel Export Promotion Council (AEPC), which has more than 6,000 member companies on its rolls said, “The government has done very little to help the $10 billion apparel export sector which employs nearly 3.9 million workers. Lakhs of workers have lost work due to global economic recession.”
“We are in consultation with officials and hope the government will come up with concrete measures soon to revive the textile and readymade garments industry,” he added by saying. Against the set target of $11.6 billion, the apex body of apparel exporters does not expect to cross $8.78 billion in the current fiscal year, compared to $9.69 billion achieved in the previous fiscal year (2007-08).
In response to the first package declared in December, Mr Vaid had said, “We were expecting an increase in duty drawback rates, but there is no mention of it in the package. We have also been demanding income tax exemption for five years to offset the huge losses piling up, but there has been no response.”
Mr Vaid said that the allocation of Rs 1,400 Crore for textile up-gradation fund is what the government owes to the industry. “The allocation which has been pending for many years is for payment of arrears. There is nothing new in it”, he added by saying. On two per cent interest subvention for exporters up to March 2009, Mr Vaid said the move will benefit the sector marginally”
The President of the Clothing Manufacturers Association of India (CMAI), Mr Rahul Mehta gravely said, “The $35 billion Indian apparel industry remains in severe crisis zone as there is nothing to stimulate production in the domestic segment and inadequate incentives in the export sector. The reforms package announced by the government offers no incentives for revival of the apparel industry facing mounting costs, shrinking local and global markets thereby compelling cut in production and employment.”
He vehemently said, “In contrast, China has increased its export incentives three times in the last six months, raising them from 11 to 17 percent and Pakistan too has announced a R&D rebate of 6 percent besides a 2.5 percent cut in interest rates.” Mr Mehta lamented by saying that, “armed with higher export rebates and incentives, countries like China, Vietnam, Cambodia and Bangladesh would continue to edge out Indian exporters.”
The reaction of the President of Tirupur Exporters Association (TEA), Mr Sakthivel to the second package was more vehement. He said he was totally disappointed with the second stimulus package and unfortunately the government had not considered requisitions put forth by TEA like, five year income tax holiday, two years moratorium on term loans, exemption from payment of all service and fringe benefit taxes to the apparel exporters.
Among other demands he said the government had not considered increasing duty drawback rate to 12 percent for cotton knitwear garments and provide 7 percent packing credit or in lieu increase interest subvention by 2 percent and increase the total interest subvention to 4 percent.
New Govt may alter laws for business
January 23, 2009
A visitor takes a look at a garment machinery at the four-day fair styled 'Garmentech Bangladesh' that began at Bangladesh-China Friendship Conference Centre in the capital yesterday
Commerce Minister Faruk Khan said yesterday the government is pledge-bound to amend any laws to help business activities run smoothly.
Khan said his government is ready to identify any problems to be solved to facilitate business activities, as it was committed in their manifesto. Read more
Signals to be wary of the export prospects
January 23, 2009
In a sharp contrast to their previous upbeat mood about the prospect of business in Bangladesh in the face of global recession, a recent official data prepared by the Export Promotion Bureau (EPB) has rung alarm bell among the business community, especially the exporters of the country. The data released by the EPB shows that the volume of export by the garment industry in last October fell by 8 per cent compared to what it was in the same month a year before.