Focus on organic products to grab share in $90b global mkt

/0 Comments/in /by

Focus on organic products to grab share in $90b global mkt

Businesses should focus on value-added organic products to get a sizeable share in the US$90 billion global green food market, sector experts said at a seminar on Tuesday. Considering the growing demand for organic foods and products, the government should also review its agricultural and commercial policies giving priority to green foods, they added. The Bangladesh Agro-based Product Producers and Merchants Association (BAPMA) in association with the help of Agro Products Business Promotion Council (APBPC) under the commerce ministry organised the seminar styled ‘Diversified Use of Agro Products and Value Addition at Global Standard Level in Bangladesh for Economic Benefits’ at the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) conference room in the city.

Speaking as the chief guest, Commerce Secretary Shubhashish Bose said the country has put especial emphasis on organic products which has been reflected in the organic farming policy 2016. He observed that local entrepreneurs should set up juice plants to maximize value addition. Citing an example, he said ‘Taiwan Food Ltd.’, a foreign company, is producing canned juice of pineapple and other fruits in Bangladesh and exporting them. FBCCI President Md Shafiul Islam (Mohiuddin) said the demand for organic foods has been at its highest for more than a decade. The economic meltdown in 2008-09 even couldn’t hit its growth (18-20 per cent) in the global arena, he added.

He also said the country has a long tradition of organic farming as 90 per cent of farmland was under green cover before the 1980. He said it could be somewhat easy for us to reintroduce green farming involving both local researchers and experienced farmers. The country should also be aware of negative impacts of genetically modified (GMO) foods, he said, adding that global seed and pesticide giants like Monsanto and Bayer are now in a war to capture the seed markets of countries like Bangladesh.

“We should learn about the experiences of Indian farmers who are suffering a lot for using GMO cotton,” he said. “The EU countries imposed a ban on food products imported from the USA as it largely grows GMO crops,” he added.

The FBCCI president also urged the food directorate to ensure that GMO wheat cannot enter the country.

Additional Secretary to the commerce ministry and coordinator of APBPC SM Rezwanul Hossain said his ministry has formed seven councils on different sectors to promote and diversify businesses. More than 3,000 farmers and entrepreneurs have been trained under the APBPC and most of them have turned into investors, he said.

WB to give $110m aid for sustainable enterprises

/0 Comments/in /by

WB to give $110m aid for sustainable enterprises

The World Bank will provide $110 million assistance for Bangladesh to implement the Sustainable Enterprise Project (SEP) which will help some 20,000 microenterprises adopt environmentally-friendly practices, reports BSS The project covers manufacturing and agribusiness sectors, including leather, mini textiles, light engineering, plastic, food processing, metal products, livestock, horticulture, aquaculture and poultry, said a World Bank official.

The loan agreement to this end will be signed today between the Economic Relations Division (ERD) and the World Bank at the ERD in the city’s Sher-e-Bangla Nagar area. ERD Secretary Kazi Shofiqul Azam and World Bank Country Director for Bangladesh, Bhutan and Nepal Qimiao Fan will sign the loan agreement on behalf of their respective sides. The official said the project will promote a cleaner and climate-resilient economy by creating opportunities for them to avail finance and technologies for environmentally sustainable practices. The project will incentivise microenterprise clusters to use cleaner technologies and joint amenities such as shared recycling or storage facilities. It will provide loans to microenterprises for innovative, environmental-friendly technologies and practices. About 30 per cent of the firms that will benefit are owned by female entrepreneurs.

The credit will come from the International Development Association (IDA), the World Bank’s concessional lending arm. SEP will receive interest-free IDA credit, which is repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 per cent. The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed nearly $28 billion grants and interest-free…..

90pc of furniture demand met locally

/0 Comments/in /by

90pc of furniture demand met locally

Local furniture makers are meeting 90 percent of the domestic demand, market players said yesterday. “Presently Bangladesh’s market size is around Tk 18,000 crore, of which only 10 percent is being imported,” KM Akhtaruzzaman, chairman of Akhtar Group, told reporters at a briefing at the office of the Export Promotion Bureau (EPB). The EPB organised the briefing to announce the inauguration of a three-day 5th Bangladesh Furniture and Interior Decor Expo today at International Convention City Bashundhara. All of the country’s leading furniture brands and home furnishing companies are participating in the fair that will remain open for all from 10am to 9pm.

The EPB, Bangladesh Furniture Exporters Association, Bangla Kraft, Bangladesh Jute Diversified Products Manufacturers and Exporters Association, and Bangladesh Furniture Industries Owners Association in cooperation with Bangladesh Jute Diversification Centre are organising the show. Businesspeople said the market has been growing despite limitations in the availability of raw materials and high import duty. “We have to import raw materials of furniture paying 50 to 60 percent duty,” said Selim H Rahman, managing director of Hatil Complex.

$5b flies out as remittance annually: Muhith

/0 Comments/in /by

$5b flies out as remittance annually: Muhith

As much as $5 billion is sent out of Bangladesh every year by foreign nationals working mostly in the export-oriented garment industry, said Finance Minister AMA Muhith. “This $5 billion is taken mostly by Indians, Sri Lankans and nationals from our neighbourhood,” he said at a discussion on Friday on the budget for fiscal 2018-19. Private television channel Maasranga and the Metropolitan Chamber of Commerce and Industry jointly organised the event at the capital’s International Convention City Bashundhara. Businesses, economists, politicians and analysts from various sectors spoke at the programme, which was broadcasted live. Muhith, who will unveil the national budget for 12th time as a finance minister, said the issue of skills development has got the highest importance in the pre-budget discussions that took place over the last couple of months.

To enhance the skills of Bangladesh’s human resources, the government took a project in 2011 under the finance ministry. There are 7-8 schemes under the project and the finance ministry provides funds to implement them.
Even though the schemes were established with a definite result in mind, they cannot bring the desired outcome in all cases. In this regard, Muhith mentioned the outflow of remittance from the country. “It is true that we get quite a good amount of remittances from abroad. But $5 billion is also sent out of our country as remittance every year.”

The money is taken by foreigners in the absence of adequate human resources for conducting negotiations and marketing of Bangladesh’s apparel abroad. The government took a project after noticing the remittance outflow and devised a course to develop skilled resources for the garment industry with the help of some industries and selected an institute to run the course. In response to a request from MCCI President Nihad Kabir to reduce supplementary duty on hybrid and electric cars, Muhith said: “Electric cars are our future, so we have to do something for facilitating their imports.” At the same time, the general public must tone down their fascination for second-hand cars.

Corporate tax cuts on way

/0 Comments/in /by

Finance Minister AMA Muhith speaks at a pre-budget discussion at the Bangabandhu International Conference Centre in Dhaka yesterday. Md Mosharraf Hossain Bhuiyan, chairman of the NBR, Golam Sarwar, editor of the Daily Samakal, Abul Kasem Khan, president of the DCCI, and AB Mirza Azizul Islam, a former caretaker government adviser, are also seen. Photo: Star

Corporate tax cuts on way

The government will cut corporate tax rates and bring in special measures for investors and exporters in the upcoming budget for the ease of doing business and encouraging investment. “I have made commitments about reducing the corporate tax rate in various pre-budget discussions,” said Finance Minister AMA Muhith. Muhith’s comments came at a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry, Daily Samakal and Channel 24 at the Bangabandhu International Conference Centre in Dhaka yesterday.

He said he has had discussions with the National Board of Revenue about the multi-layer taxation system and a decision will be taken on the issue within the next two to three days. On the national savings certificates, he said the government’s policy is to maintain the interest on the savings instruments a little higher than the interest rate on bank deposits. “But the gap between the two has now become wide. We are going to review it after we place the budget,” he added.

China approves US$1b loan for Sri Lanka expressway

/0 Comments/in /by

China approves US$1b loan for Sri Lanka expressway

COLOMBO: China has approved a US$1 billion loan to revive a long-delayed expressway in central Sri Lanka, the island’s government said on Monday (May 14).Construction of the first phase of the road linking the capital Colombo with the hill resort of Kandy had been delayed for more than two years …

More…

Employers face dearth of qualified employees: MCCI

/0 Comments/in /by

Employers face dearth of qualified employees: MCCI

Employers are not getting the supply of adequate quality manpower although thousands of people join the country’s workforce every year, speakers said yesterday. The industrial sector does not get the required number of skilled people because of the mismatch between education and industry requirement, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI). Every year 20 lakh people join the workforce but there is a lack of quality manpower, Nihad said. She said foreign employees remit at least $6.5 billion per year from Bangladesh. Local youths can occupy these positions by way of achieving quality. She was addressing the concluding session of “MCCI’s Youth Leadership Programme Agragami 2017” organised by the chamber at the International Convention City, Bashundhara in Dhaka on Sunday.

The chamber has been organising the event since 2014 in order to develop leadership skills and confidence among students. Nihad said, “I believe this event will give students access to leaders and organisations in the city, helping them understand context and unlock key leadership skills needed for today’s workforce.” Fazle Hassan Abed, founder of Brac, said the economy grew from $4.5 billion in 1972 to more than $250 billion at present. Literacy rate went up to 73 percent from only 25 percent in 1972, while fertility rate came down to 2.1 percent from 6.4 percent during the period, he said. In the last four decades, life expectancy rose to 72 years from 46 years and rice production to 37 million tonnes from 10 million tonnes.

“We have done well in many aspects of development and I must say that we have collaborated with the government, the private sector and civil societies in these achievement in the last 47 years,”Abed said. Mohammed Farashuddin, a former governor of the central bank, urged the young generation to play their role in building the nation. He said the young generation was advanced in thinking but not in work. “So, you should be innovative to generate ideas.” Syed Nasim Manzur, managing director of Apex Footwear Ltd, encouraged the youth to bear the vision to become future leaders.

Laila Rahman Kabir, a former president of the MCCI; M Anis Ud Dowla, chairman of ACI Group; Prof Imran Rahman, vice-chancellor of the University of Liberal Arts Bangladesh; and Syed Gousul Alam Shaon, managing partner of Grey Bangladesh, were present at the programme.

Bangladesh needs more warehouse space: WB

/0 Comments/in /by

Bangladesh needs more warehouse space: WB

Bangladesh will need 26.74 million square feet of additional warehouse space by fiscal 2021-22 thanks to the spiralling foreign trade, according to a survey of the World Bank. Currently, the demand for warehouse space, mainly for storing imported and exportable goods near ports, is 41.5 million square feet, according to the preliminary findings. In the next four years, such demand will hit 68.24 million square feet, 29.54 percent of which would be used by the manufacturing sector, the study said. The consumption-led demand will grow 27 percent and export-import demand will use 11.7 percent of the space, it said.

However, the emerging warehousing business has been facing a lot of challenges which should be mitigated as soon as possible for faster growth of business and to maintain the quality of exportable and imported goods. The major challenges for the sector are absence of regulatory policy, scarcity of land for warehousing, absence of common bonded warehouses, ceiling on land holding, limited availability of structured warehouses, high cost of land in major clusters and lack of ventilation and fumigation facilities in warehouses.

Sugata Sarkar, director for advisory and marketing research at Knight Frank India, a property consultant, presented the findings of the survey at a workshop titled “Bangladesh logistics study: key issues, prospects and priorities” at Sonargaon hotel in Dhaka yesterday. The WB Group commissioned a study on “Bangladesh logistics costs study: assessment of storage and warehousing” to analyse the current and future industry potential and estimate the market size of warehousing market in Bangladesh. Dhaka Chamber of Commerce and Industry (DCCI) and International Finance Corporation (IFC) jointly organised the workshop to reveal the preliminary findings of the study.

Exporters, importers, port users, logistics service providers, government high-ups, researchers and clearing and forwarding agents attended the event. Every year, Bangladesh sends back 7-8 lakh empty containers — which was used to carry the imported goods — from the Chittagong port due to lack of exportable goods. “So, please export more so that this huge number of containers can be used properly,” said Md Abdus Samad, shipping secretary. He said the government would update the warehousing policy soon. By 2043, Bangladesh will handle 1.22 billion cargos or 130 billion twenty-foot equivalent units, Samad said. The construction of four jetties by the government will be completed in Chittagong in the next two years to support export and import activities, he said.

However, the government has a plan to construct 22 such jetties in Chittagong, Mongla and Payra areas, the secretary said. Since 1986, Bangladesh has not increased the charges for port use, he said. “Our charges are lower compared to the ports in Singapore and Colombo.” Storage and warehousing competency is the core enabler of an efficient logistics landscape, said Abul Kasem Khan, DCCI president. “Bangladesh has been overburdened with communication infrastructure challenges which are deterring the potential of logistic growth and cross border trade expansion.” In the latest Logistics Performance Index, Bangladesh has ranked 87th while neighbouring India occupied the 35th position, Khan said.

The government should declare logistics and warehousing a thrust sector, he said. “Our export is increasing. Only manufacturing sector accounts for 26 percent of the total export volume which is a good sign,” said Masrur Reaz, senior economist of the IFC. “The demand of warehousing industries will be almost double in the next four to five years. That is why we need a modern warehousing policy framework.” Mahbubul Anam, president of the Bangladesh Freight Forwarders Association, stressed the need for necessary policy guidelines for structured warehousing and logistics system in order to be competitive in the global value chain. Wendy Werner, country manager of IFC for Bangladesh, Bhutan and Nepal, also urged for separate policy framework for warehousing and storage. She said the main problem for structured warehousing in Bangladesh is scarcity of land.

Power, infrastructure to get priority in upcoming budget: Muhith

/0 Comments/in /by

Power, infrastructure to get priority in upcoming budget: Muhith

Finance Minister AMA Muhith yesterday said education, health, power, energy, and infrastructure would get priority in the upcoming budget. He said the next budget would be placed in the House on June 7 and this would be the last budget of the current government. “The size of the budget will be Tk 460,000 crore,” he said. He was talking to the board of directors of the Dhaka Chamber of Commerce & Industry led by its president, Abul Kasem Khan, when they called on him at the secretariat. Muhith hoped that corruption in government offices would come down to a minimum level within five to 10 years.

He also hinted at a cut of the corporate tax in the next budget from the existing 35 percent, citing that a good number of young people were now paying taxes. “I am hoping for the corporate tax to be reduced and it is under consideration,” he said. He, however, said the demand for the corporate tax to be fixed at 25 percent was an extremely ambitious one. According to the minister, only 14 lakh people pay tax while there are 30 lakh taxpayer identification numbers. “The young generation pays tax willingly and their age limit is about 40 years. I think I will provide tax cards to all taxpayers. The higher taxpayers will get a tax card of a different colour,” he said. The minister said he plans to bring a good reform in the tax system on the basis of the young taxpayers.

On tax evasion, the finance minister said it happened not only in Bangladesh but also around the world. But the number of people evading tax is high in Bangladesh. He also hinted at reviewing the interest rate of savings certificates as there was a big gap between bank deposit rates and that of savings certificates. At present, savings certificates offer an average interest rate of 12 percent while the bank deposit rate is 5.18 percent.

“Normally the savings certificate interest is one percentage point higher or slightly more than the bank deposit rate. But this time the difference is very large,” he said, blaming the sudden liquidity crisis in banks for the gap. The minister said the government was putting emphasis on large infrastructure projects, including those in the power sector. So, big investors like Japan and China are coming to Bangladesh and have started competing to get contracts, he said.

About China Harbour Engineering Company Ltd, Muhith said the government debarred the company from the Dhaka-Sylhet four-lane construction project for corruption. The company was engaged in corruption on getting the contract, he said. The minister, however, said, “Though we have debarred China Habour from the Dhaka-Sylhet highway project, we could not debar it from other projects due to engagement of many parties.”  On investment, he said investments were still dependent on the banking system which was wrong.  He put emphasis on the capital market for investment as currently no specialised bank for investment existed in Bangladesh.

The DCCI president placed a budget proposal before Muhith, saying, “Our investment to GDP ratio needs to be increased from existing 29 percent to nearly 35 percent to accelerate development.” Liquefied natural gas is a short-term solution for meeting energy needs and its price must be fixed keeping in mind the competitiveness of industries and businesses, he said.

Much more needs to be done to attract FDI

/0 Comments/in /by

Much more needs to be done to attract FDI

Every year billions of dollars are crossing nation’s boundaries but Bangladesh is receiving only a tiny fraction of that. It is receiving much less foreign direct investment (FDI) compared to the size of its economy; many smaller economies are receiving more in this respect. Bangladesh wants FDI but the policy to attract it seems to be faltering, if not altogether failing. Mere lecturing on the need for FDI does not work. Had it been so, Bangladesh would have received a lot of FDI by this time. In fact, lecturing does not need to be there, if the atmosphere and policies are right, FDI will flow automatically. No matter what facilities and incentives we offer on paper, FDI will not flow if conducive atmosphere is not there. Any investment, whether domestic or foreign, flows into an economy for gainful return.Most of the economies are offering facilities same as those of Bangladesh. So, there is no special reason why more of FDI will flow only to Bangladesh.

Small and isolated economies do not get much FDI, neither those plagued by wars and conflicts. Only the stable economies with the right policy-setting like competitive tax regime and fair and quick arrangement for dispute settlement receive more of the FDIs. But now another thing has emerged as the determining factor in the case of receiving investment from abroad. That determining factor is the size of the market. FDI has a tendency to flow to big markets. No small economy with poor consumer base can attract FDI. These types of economies depend on investments from within for their economic growth. These economies only did good when they could partner with bigger economies.

Bigger economies accept small economies as partners only when they see economic and strategic benefit in them.  Otherwise, poor economies which are grouped as LDCs (least development countries) by the United Nations would remain poor for generations.  Economies like Taiwan and Singapore were once poor, but when they partnered with the Western economies on strategic grounds, they prospered. They prospered through export-led strategies. Though global scenario, to some extent, has changed since the days of the cold war when the world was divided between the so-called free economies and regimented economies, global trade and investments are still taking place more among the strategic partners. Bangladesh’s domestic economic size is not that small. A sizeable consumer base is there, but for achieving more, its economy must be partnered with the relatively bigger ones. For Bangladesh, export is the all-important factor for achieving continuous high economic growth. Once our exports surge, the flow of FDI will also surge.

Bangladesh has all the qualifying factors for becoming a strategic partner of other economies. The economies like China and India can offer Bangladesh bigger markets. Once Bangladesh is assured of market access to the Chinese and Indian markets, FDI will flow in a much larger volume just to take the advantage of accessing markets with the exports.

For high-tech goods, Bangladesh’s internal market is not enough. The country needs foreign markets for such goods. Also, Bangladesh should not count only on one product like the ready-made garments (RMG) when the question of export comes. Diversification of export basket will not be easy unless tech-based foreign investment comes in. The strategic location of Bangladesh is our asset, and Bangladesh must exploit this position to its advantage when it bargains with the potential partners in trade and investment. Once Bangladesh partners with powers, mighty both economically and militarily, others will count us, and then no lecturing will be needed for FDI.

For a while, Bangladesh needs to offer to foreign investors incentives bigger than those in other counties. Political decision in taking other countries as partners is important. The other factors, which matter in case of FDI, are the tax regime, the way of dispute settlement, availability of land, supportive infrastructures, and above all, supportive bureaucracy. Bangladesh has already achieved what is possible on its part without striking any FTA (Free Trade Agreement) deal or becoming a member of an economic union. Its future development will be difficult unless it becomes a partner of other economies in trade and investment.