ADB forecasts 5.5pc GDP growth this fiscal

Projecting a decline in Bangladesh’s GDP growth to 5.5 percent in the current fiscal from 5.9 percent of the last fiscal (2009-09), Asian Development Bank (ADB) on Tuesday said this will happen because of late-unfolding effects of the global economic recession.

The slowdown in growth will be partly due to lagged effects of depressed external demand for Bangladesh’s mainly low-end garment exports, it said.

Addressing a press conference at the multilateral donor agency’s Dhaka office marking release of ADB quarterly Economic Outlook, the officials said growth will likely improve in the coming fiscal (2010-11) as the worldwide economic recovery strengthens.

Laying special emphasis on resolving power and gas shortage, they said industries and other sectors are suffering a lot that impedes the overall growth of the country.

Failure to address power and gas shortage as well as the unexpected surge in commodity prices have been predicted to be the biggest risk for the economy, the ADB officials said.

They, however, noted that significant improvement in power and gas supply situation is unlikely in near future as it needs huge time to set up large base-load power plants.

Expressing concern about the overseas employment, the ADB said it has declined by 42.2 percent up to February with many workers returning home although remittance has marked a 19.2 percent growth up to that time.

ADB Country Director Paul J Heytens addressed the press conference while M Zahid Hossain made the presentation on economic outlook. ADB energy expert Rahman Murshed also spoke on the occasion.

The ADB said that the country’s economy was affected a little late by the global recession. But now the global economy is recovering and Bangladesh economy will also take a positive look in the coming days.

The multilateral donor agency predicted a dismal picture of the industrial, services and agriculture sectors in the current fiscal.

It said that industrial growth will slow down to 5.6 percent in the current fiscal as against 5.9 percent in the last fiscal. Similarly, the services sector growth will slow down to 5.9 percent from 6.3 percent.

But at the same time, ADB expressed hope for the coming fiscal (2010-11) that the industrial sector will grow robustly at 7.5 percent with recovery in global demand and improved domestic business confidence that will increase construction and investment.

Similarly, domestic support such as financial support to small and medium enterprises (SME) should also boost industrial output in the coming year.

Appreciating the growth in the revenue collection, the ADB said the revenue growth rose 16.2 percent in last 7 months from 9.5 percent in the first quarter of the current fiscal.

“With the current pace, revenue targets for the fiscal 2009-10 are expected to be attained,” revealed the ADB outlook.

The ADB said that inflation is predicted at 7.5 percent in the current fiscal and 7.8 percent in the next fiscal.

Women harassed at DU concert

At least 15 women were assaulted during a Pahela Baishakh concert on Dhaka University campus Wednesday evening.

The police came to their aid as the women were reportedly harassed at and around the concert that had drawn a large crowd around the Raju Bhashkorjo to celebrate the Bengali New Year.

Although the concert was set to end at 9pm, it was called off an hour early upon a request from the police, apparently because the situation was getting out of hand after dark.

Krishnapada Roy, deputy commissioner of Ramna zone, told bdnews24.com that since there were no complaints, the police had not arrested anyone.

“The police went to the spot upon hearing of harassment of women and made them go home.”

Witnesses said unruly youths harassed women at the concert which drew unexpectedly high number of spectators.

ADC Nurul Islam of Ramna zone told reporters that the police helped the women get away after complaints of physical assault.

Muktaban Shahitya Shangskritik Sangsad organised the concert.

President of Bangladesh Chhatra League’s Jasimuddin Hall unit, Abdur Rahman Jibon, is also the president of the Sangsad.

“We stopped the programme as soon as the police asked us to,” he told the bdnews24.com university correspondent.

Earlier on Feb 21, some activists of the Chhatra League, the ruling Awami League’s student wing, assaulted a woman on campus and severely beat up five of her friends who were accompanying her.

bdnews24.com reported on Feb 21 that this female student had triggered the ‘ire’ of Jibon’s cadres from Jasimuddin Hall when she refused to speak to them as they blocked her way.

One of the Chhatra League activists identified as Shetu, of Jasimuddin Hall, by a witness, first approached the woman and began harassing her.

They beat up her male companions when they protested.

West Bengal Bangladesh border storm kills 89‎

A powerful storm followed by heavy rains hit the border of India and Bangladesh, claiming lives of 89 people and destroying 60,000 houses. The cyclones hit the two Indian states – West Bengal and Bihar. The storm ripped down the houses, trees, telephone lines and electric lines in eastern Bangladesh too.

Bangladesh scores high on sovereign rating

MOODY’S Investors Service, a US based credit rating agency announced for the first time its sovereign credit rating for Bangladesh as Ba3 just after a week of S&P’s sovereign credit rating announcement of BB- on April 6, 2010. This is for the first time the Government of People’s Republic of Bangladesh obtained sovereign credit ratings from the two internationally reputed credit rating agencies.

Moody’s sovereign credit rating of Ba3 with stable outlook is in line with S&P’s sovereign rating of BB-/stable announced earlier. The sovereign credit ratings would give an assessment of the government’s ability and willingness to repay its local and foreign currency debts. Both quantitative and qualitative factors have been considered in deriving the sovereign ratings.

In the global financial arena the BB- and Ba3 sovereign credit ratings put Bangladesh at a position higher than Pakistan and Sri Lanka and in the same category of countries like Vietnam, the Philippines, Indonesia and Turkey. Bangladesh has also been categorised by Goldman Sachs as one of the Next 11 fast growing emerging countries after Brazil, Russia, India and China, which are referred to as BRIC countries.

Both the rating agencies have given high score to Bangladesh because of its continued macroeconomic stability on back of prudent macro-economic policy setting and microeconomic reforms. Both agencies highlighted Bangladesh’s strong and stable economic growth over the past decade. While S&P used the average of 4.2% real capital GDP growth as the barometer, Moody’s highlighted the 6.0% average GDP growth as a major contributor to its positive rating. They have also stressed on the resilience of the Bangladesh economy to external shocks as well as domestic stress as positive indicators. Strong and resilient readymade garments (RMG) sector as well as the continued inflow of workers remittances from abroad, also underpinned the economic growth. The strong growth in country’s foreign exchange reserve has also been rated favourably. Prudent macro-economic management and sound policies have been accredited for price stability as well as a stable exchange rate.

S&P further pointed out the positive impacts of substantial donor engagement that helped improve policy formulation and eased some of the burden of providing education and health services on the government. Moody’s remarked that the conservative institutional frameworks which are supported by capital controls have ensured better external balance and price stability. Also the growing role of micro finance institutions (MFIs) has helped to supplement domestic consumption as well as developing a critical social safety net. Debt roll-over risk is also contained by the government’s cash balances in the banking system and the country’s respectable savings rates that provide greater debt absorption capability compared with its peers. There is also less contingent fiscal pressures on the government because outstanding guarantees for non financial state-owned enterprises (SOE’s) are relatively low. The banking sector is not reliant on external funding and is not likely to pose any serious contingent sovereign risks.

While the ratings were positive, the rating agencies pointed out certain constraints that are holding Bangladesh back from moving to a higher growth trajectory. They pointed to the high public and external debt, lack of fiscal flexibility due to poor revenue collection as well as capacity constraints in state institutions. S&P noted that the debt burden is mitigated by the fact that external debt service cost is about 3.0% of exports, mostly on concessional terms and has a weighted average maturity of 22 years. They also pointed the constraints imposed on the economy due to the energy and infrastructural deficiency, the difficult operating environment and perennially low foreign direct investment. Moody’s also highlighted the need for export diversification and overreliance on the readymade garments (RMG) sector, ideological politics, banking system weakness and government’s ability/dependence on borrowing from the local debt market where the cost is high.

The ratings will be reviewed annually. Standard Chartered Bank and HSBC were advisors to the Government of Bangladesh for S&P’s rating, while Citibank NA advised for rating from Moody’s.

12,500 lawmen to cover city for Pahela Baishakh

A combined force of nearly 12,500 police and Rapid Action Battalion members will be deployed in the capital to ensure security for Bangla New Year celebrations.

A four-tier security will be in place and Ramna area, the focal point of the celebrations, will be guarded by 6,500 police and 1,000 RAB and other security agency, officials said on Monday.

Dhaka Metropolitan Police commissioner AKM Shahidul Haque said a total of 10,000 police men will be deployed in 117 venues throughout the capital

Haque and Col Motiur Rahman, RAB assistant director general (operations), informed reporters on Monday of the various security measures to be in place for Pahela Baishaikh, the Bangla New Year.

After visiting Ramna Batamul, which was shaken by a bomb attack during the Pahela Baishakh in 2001, the DMP chief said security is tighter than in recent years but “nothing will be done in excess” to spoil celebrations.

Haque said extra security measures were being taken not for fear of any attack but to create a sense of safety among the public.

Rahman said the security operations at Ramna will include RAB members, bomb disposal teams, dog squads, medics and CCTV.

He said a total of 30 CCTVs will be especially set up at key spots, and another 8 CCTV at Rabindra Sorovor in Dhanmondi, another point of the day’s celebrations

He said 2,500 RAB members in all will be deployed in the capital, of which 1,000 will patrol around Ramna and special security measures will also be taken for the Mongol Shovajatra, or special New Year parade starting from Charukola, added the RAB official.

At least 10 people were killed and 50 others injured when militants carried out the bomb attack on April 14, 2001amid thousands of people gathered at Ramna Batamul in the capital to celebrate Pahela Baishakh.

Investigators filed two separate cases – one for murder and the other under the Explosives Act – with Ramna police which finally launched into trials last year.

Next budget to focus on power, prices

The next budget will focus on building up power and energy sectors and curbing food price inflation, the finance minister said on Monday.

Budgetary measures for ADP implementation, population control and proper utilisation of research funds were also identified as priority issues at a pre-budget discussion.

The talks at the ministry between finance minister AMA Muhith, economists and professionals, as part of a series of pre-budget discussions, predictably emphasised the grave power and energy crisis.

Touching on budget priorities, Muhith said allocations for the power and energy sectors would naturally top the agenda, along with agriculture, social welfare and measures to control food prices.

He also said the size of the annual development programme (ADP) would be around Tk 380 billion.

ADP EXECUTION

Economists present stressed the need for incorporating measures into the budget itself to realise the ADP, rather than simply setting allocations and targets.

“The budget should have guidelines for institutional initiatives to implement the ADP,” said Mustafizur Rahman of Centre for Policy Dialogue, a Dhaka-based research organisation.

His view was echoed by Qazi Kholiquzzaman Ahmad, chairman of the Palli Karma Sahayak Fund, a micro-credit funding agency, also chairman of non-governmental organisation Bangladesh Unnayan Parishad.

“The capacity of ministries should be enhanced to spend their allocations,” he said.

POPULATION, RESEARCH

Ahmad, a former president of the Bangladesh Economic Association, also emphasised the need to strengthen population control programmes.

“These were running at full swing during the ’80s, gradually decreasing through the ’90s and now there are no such activities.”

He also expressed concern for unused research funds.

“Allocations in the last budget for research into agriculture and climate change impacts have been left almost untouched.”

“A national research council should be formed to coordinate all academic research programmes and involve policy makers too,” said Ahmad.

SAVINGS

The much debated issue of cutting interest rates on saving certificates also came up at the meeting. The current interest rate is around eight percent.

“The government is thinking to revise the interest rate, but should keep inflation in mind,” said CPD executive director Mustafizur Rahman.

He also pointed out that the portion of bank borrowing by SMEs is significantly lower than that of large industries.

“SME’s should get exemptions from VAT and excise duty, which will result in lower revenue but will boost the confidence of the entrepreneurs.”

Simplification of income tax return, measures to boost investment as well as reducing regional disparity also came up at the discussion.

ENERGY

Rationalising prices of CNG in line with fossil fuels like petrol and octane was strongly voiced in context of rising traffic congestion as well as the energy crisis by former Bangladesh bank governor Mohammed Farashuddin.

He was echoed by Nurul Islam, who heads the institute of alternative energy of BUET.

“Price of CNG used for vehicles should be a certain percentage of the price of octane and petrol while in case of gas for households it should aligned with the price of LNG gas,” he added.

Bangladesh gets Moody’s rating, outlook stable

Credit rating agency Moody’s Investors Service yesterday for the first time assigned Ba3 to Bangladesh and termed the country’s outlook stable.

The rating was released about a week after Standard & Poor’s assigned BB- to the country amid much acclaim by the government and economists.

Moody’s rating put Bangladesh on a par with the Philippines, Vietnam and Turkey. In the South Asian context, Bangladesh’s position is higher than Pakistan and Sri Lanka, but below India.

In a statement, the US-based Moody’s said the rating reflected Bangladesh’s reasonable level of robustness in finance and balance of payments, and the prospects for continued microeconomic stability.

Bangladesh’s relatively robust external position, and its strong foreign currency reserve were reasons behind getting the rating, Moody’s said.

It added that these reflect Bangladesh’s recent dynamic apparel exports, large remittance inflows, minimal foreign commercial borrowing and advantageous external debt servicing profile.

Moody’s also assigned Ba2 to the country’s foreign currency bond ceiling, B1 to foreign currency bank deposit ceiling, and Baa3 to long term local currency bond and deposit ceilings.

Bangladesh Bank Governor Atiur Rahman said Moody’s rating on Bangladesh reflects the country’s dynamic efforts to maintain macroeconomic stability.

“The rating is slightly lower than India, but three steps ahead of Pakistan and equivalent to the Philippines,” Rahman told reporters at his office.

In a statement released yesterday, Aninda Mitra, Moody’s vice president and lead sovereign analyst for Bangladesh, said: “The combination of a conservative institutional framework for managing the economy, supported by capital controls, has ensured better external balance and price stability than at many other emerging markets at a similar levels of development.”

Bangladesh achieved a steady rate of economic growth of 6 percent in the past decade, said the analyst. He attributed the success to policy stability, underlying demographic shifts and an increasing rate of trade openness.

“The economy has also withstood several recent external shocks, periods of domestic political stress and supply-side bottlenecks,” he added.

Expressing his reactions on the rating, Mamun Rashid, Citi country officer in Bangladesh, said this is an exceptional result considering Moody’s traditional conservative outlook.

Citibank NA worked as an adviser for Moody’s rating.

“These are exceptional results that convey global recognition of the resilience and potential of the Bangladesh economy,” he said, adding that gains for Bangladesh from this rating are manifold.

“The rating will create confidence and provide access to capital for development. This is a vital international benchmark, which should have favourable impacts on FDI and portfolio flows,” he added.

However, Moody’s found Bangladesh’s relatively high industrial and export dependence on the ready-made garments sector as a rating constraint, suggesting broader sustained industrial diversification, supply side and financial sector reforms, and regional economic integration.

The country faces more pressures from debt affordability and fiscal flexibility than most of its rating peers, it said. In this regard, Moody’s pointed to low revenue collection of only 12 percent of GDP.

Mitra said: “The government’s absolute parliamentary majority should support a broad emphasis on economic reforms, regional integration and political reconciliation.” He hoped with caution that “narrow identity or ideological politics and capacity constraints may slow down the pace of reforms but are unlikely to derail the economic policy framework.”

17 new HC judges appointed

The government on Sunday appointed 17 additional judges in the High Court.

A senior information officer of the law ministry, Mizanur Rahman, confirmed that a circular of the ministry, announced the appointment.

According to the circular, president Zillur Rahman, with the consent of the Chief Justice, appointed the new judges.

The judges are – Supreme Court lawyer M Faruk, Supreme Court registrar Shawkat Hossain, deputy attorney generals FRM Nazmul Ahsan, Dhaka District and Sessions judge Krishna Debnath, Dhaka Sessions judge ANM Bashirullah, Supreme Court lawyer Abdur Rab, Dr. Kazi Reza-Ul-Haque, Md Abu Zafar Siddique, additional attorney general AKM Jahurul Haque, Supreme Court lawyer Jahangir Hossain Selim, Sheikh Md. Zakir Hossain, Habibul Gani, Md. Ruhul Kuddus Babu, Gobinda Chandra Thakur, Sheikh Hasan Arif, former deputy attorney general JBM Hasan, deputy attorney general Muhammad Khasruzzaman.

Flood havoc in haor areas

About 30 thousands hectares of cultivating lands of haor areas of some north-eastern districts went under water due to the onrush of water from the upstream hill region of last two days.

Thousands of flood affected people and farmers of the areas, particularly the farmers of Sunamganj, are passing their days with miseries.

Ministers, lawmakers and representatives of local government bodies could not visit the flood affected areas that if they visit the areas, the angry farmers and local people will create pressure on them. Already local lawmaker, officials and representatives of local government bodies in different areas faced the pressure from the local angry people and farmers.

Meanwhile Speaker Advocate Abdul Hamid already visited the flood affected areas of Kishoregonj, Netrakuna and Habiganj.

Our Kishoregonj correspondent informed that Speaker Abdul Hamid yesterday in the last two days visited different flood affected areas. Those are Kaliajuri, Itna and Madan of Kishoregonj, Madanganj of Netrakuna and Ajmiriganj of Habigonj.

He assured the farmers affected in ‘Boro’ field in the district of providing compensation. He also stressed on strengthening the embankments of river at a view exchange meeting with affected farmers and government officials at Lianpasha Bazar and Joysidhhi High School of Itna upazila under the district.

The Speaker said he would request the Prime Minister to constitute a separate ministry for the ‘haor’ areas.

Our Sunamganj correspondent informed that about 15 thousands hectares of paddy lands of the districts, particularly Dharmapasha, Tahirpur, Jagannathpur, Dirai, Salla and other upazilas, now under water coming from Meghaloy in India across the river Surma from last two days.

Thousands farmers and villagers lost their crops for the flood. They were crying over their loss caused by the flood. Farmers apprehended that they might not be able to harvest the crops as hilly water rolled down their paddy lands.

The flood situation has been created due to the substandard embankments constructed by the contractors of Water Development Board (WDB), blamed the local people. So they are anger on the officials of WDB and local lawmakers. For this reason, UP chairman of Taral of Salla upazila of Sunamgonj Akikur Reza has been injured recently by farmers when he was visiting the flood affected area as the representative of local lawmaker.

Power, water hungry people mount protest: Road block at Mohakhali, UNO, Engr in Barisal assaulted

Vehicular movements on the Mohakhali-Gulshan link road came to a halt for half an hour as locals blocked the road yesterday to press their demand for uninterrupted supply of water.

In Barisal, Power hungry demonstrators ransacked Palli Bidyut Samity office, assaulted UNO and power engineer in Wazirpur upazila town yesterday.

The residents of Block-C of Mohakhali took to the streets at 10:30am and blocked the road resulting in huge traffic congestion on both sides of the road and adjacent areas.

The water crisis has been mounting in the capital due to frequent load-shedding as power demand increases with the approach of heated weather.

The demonstrators took position on the road with pitchers and buckets at around 10:30am, said Md Nurul Alam, Assistant Commissioner (Gulshan zone) of Dhaka Metropolitan Police.

They lifted their blockade an hour later as the representatives of the demonstrators went to the WASA office to hold talks with the water supply authorities, Alam said.

The protesting locals blocked the same road last week to press the same demand and withdrew their protest after they were assured of a quick solution to the water crisis. But the water problem has not been solved yet, the residents said.

The protesters said they were not getting water from March 18 that forced them to stage the protest,

The blockade was lifted after police stepped in and talked to the protesters.

Residents in other parts of the city, including nearby Badda, have also launched protests in recent weeks.

In Barisal, Power hungry demonstrators ransacked Palli Bidyut Samity office, assaulted UNO and power engineer in Wazirpur upazila town yester and police picked four of them from the spot. Priya Sidhu Talukdar, UNO, said the demonstrators submitted a memorandum demanding power supply at 10:30 am. They were angered to see resident engineer of Palli Bidyut Samity Lutfar Rahman in his office. They assaulted him and also four staff of UNO office who tried to protect him.

After preliminary treatment, injured Lutfar Rahman was sent to Barisal under police escort.

Residents said normal life and activities have been paralyzed by unprecedented load sheddintg – 13 to17 hours every day.

They accused Palli Bidyut Engineer Lutfar Rahman of corruption. “He has ensured power supply to saw mills, workshops and others in exchange of bribe,” said Abdul Majid, a demonstrator.

Later the mob carrying lethal weapons attacked the Palli Bidyut office at B N Khan College Road in the town, ransacked and assaulted officials.

Perturbed by the situation, the administration held a meeting with elite of the town at UNO office. Officials urged the residence for patience and help maintain peace.

M A Aziz, officer in charge of Wazirpur thana, claimed situation is now under control. Four demonstrators – Chandu Molla, Matiur Rahman, Jalal Shikdar and Kharu Noman – were picked up from the scene and detained.