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Deal signed for single window to boost trade

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Deal signed for single window to boost trade

Star Business Report
Some 38 government and private sector agencies yesterday signed a memorandum of understanding to speed up the process of clearing imported and exportable goods under a National Single Window (NSW).

The electronic gateway will allow businesses to submit information related to imports and exports to regulatory authorities only once to clear their goods from the ports.

The single entry point will deliver a user-friendly, electronic system that streamlines and automates procedures for international trade-related permits, licences, certificates and customs declarations, said the National Board of Revenue (NBR).

Once fully introduced, the NSW, which will connect the 38 agencies electronically, will benefit 319,000 Bangladeshi traders by cutting time and cost.

The average processing time for imports is expected to come down to 122 hours and the average processing time for exports to 88 hours.

 the International Finance Corporation (IFC) and the UK’s DFID. The customs authority will be the lead agency to implement the electronic gateway.

The NSW came at a time when Bangladesh scored 34.9 in the “Distance to Frontier” indicator in the Doing Business Index 2018, far below the South Asian regional average of 57.8 and behind countries such as Sri Lanka, India and Pakistan.

The measurement is based on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the highest performance.

Estimates suggested that modern customs and border clearance procedure can reduce the cost of trading for the lower middle-income countries such as Bangladesh, said Khondaker Muhammad Aminur Rahman, a member for customs audit, modernisation and international trade of the NBR.

Md Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, said, “As I understand, we will get a relief from submitting multiple documents thanks to the introduction of the NSW.”

“We look forward to its speedy and effective implementation,” he said. NBR Chairman Md Mosharraf Hossain Bhuiyan also spoke. The NBR and the IFC jointly organised the event.

Improve infrastructure to woo investors: MCCI

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Improve infrastructure to woo investors: MCCI

Star Business Report

Inadequate infrastructure, a lack of confidence in the economy and a shortage of power and energy are major impediments to the country’s growth, said a leading chamber yesterday.

“These impediments must be removed to restore the confidence of the foreign investors as well as the country’s own business and the investor community,” said the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI).

Bangladesh’s impressive growth and its journey towards a higher development trajectory have been globally admired, said the chamber in its review of the economic situation in Bangladesh for April-June of 2018.

As per the provisional estimate of the Bangladesh Bureau of Statistics, gross domestic product growth in the just-concluded fiscal year was 7.65 percent, up from 7.28 percent in 2016-17.

“Although the economy is progressing well, the achievements remain below their true potential.”

In the fourth-quarter of last fiscal year, some risk factors such as power and gas shortage and weak infrastructure appeared as major obstacles to the expansion of economic activity as those disrupted industrial production and discouraged new investment.

There are other downside risks such as the poor implementation of public investment programmes, the growing requirement of subsidy payments by the state to different public sector agencies, including the state-owned banks, and growing income inequalities.

“The corruption-ridden banking sector is perhaps the biggest downside risk now, which will call for strict vigilance by the central bank and the finance ministry to bring discipline to the sector.”

The review said the overall economic situation is positive as indicated by steady improvements in the major economic trends.

There has been steady progress in agriculture sector, moderately good growth in industrial sector despite a crisis in the power sector, decline in inflation rate, macroeconomic stability, build-up of a comfortable foreign exchange reserve and good progress in achieving Sustainable Development Goals, it said.

All these boost people’s confidence in the country’s ability to attain accelerated economic growth and emerge as a middle-income country by the turn of the present decade, it added.

ROAD SAFETY DEMO: BGMEA fears shipment slowdown

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ROAD SAFETY DEMO: BGMEA fears shipment slowdown

Star Business Report

Student demonstration and transport disruption, which partly halted movement of goods-laden trucks, have affected shipments of apparel items, exporters said yesterday.

Not only has there been a slowdown in shipments but also suspensions of trips of some important buyers to Dhaka who were scheduled to place work orders, said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), at a press conference at its office in Dhaka.

Rahman, however, could not exactly state the number of trips suspended, of shipments that could not be made from the port and of trucks stopped from reaching the Chittagong port.

“The most important loss from the demonstration and transport strike is the loss of image of the country as many buyers are asking us about the situation of the country,” said Rahman.

The BGMEA chief fears a massive loss of business if the demonstration continues for a long time.

Movement of exports and imports over the Dhaka-Chittagong highways has been hampered over the last past week for different reasons and the demonstration and transport strike compounded the woes of goods-laden trucks, he said.

Rahman said the BGMEA expressed solidarity with the movement of young students as they taught the nation a lesson on morality in everyday life.

“We are noticing that normalcy in transport is yet to be restored although it has started returning in people’s lives,” he said.

An adequate number of transport vehicles are not plying the roads, he said, adding that such a chaotic situation also brought a lot of suffering for people.

If the goods cannot be transported on time, factory owners will have to face order cancellations, offer discounts to buyers or go for expensive air shipments to maintain strict lead times, Rahman added.

“We are passing through a very difficult time as competing countries are performing well in the global apparel markets. So in such times we need a peaceful and business-friendly environment,” Rahman said.

Single digit interest closer to reality

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Single digit interest closer to reality

State enterprises promise to keep deposits at 6pc with private banks

Star Business Report

All state-owned enterprises have promised not to demand more than 6 percent from banks for parking their funds with them with a view to facilitating the long-delayed single digit interest rate for lending.

The development comes after private banks told Finance Minister AMA Muhith last week that it would not be possible to bring down the lending rate to 9 percent if the SoEs do not keep their funds with them. Of the 57 banks in the country, 40 are private.

Subsequently, Muhith yesterday sat down with the chief executives of 17 SoEs including Wasa, BPDB, BPC, Petrobangla, BTRC, Sadharan Bima Corporation and Jiban Bima Corporation at his secretariat office.

At present, the SoEs tend to keep their funds through an unofficial process of competitive bidding among banks; whichever bank offers the highest interest rate they go to them with their deposits.

Muhith told the SoEs the practice must now stop; they must deposit their funds with private banks at 6 percent interest or lower, according to an official present at the meeting.

The intervention paves the way for the lending rate to come down to 9 percent and deposit rate to 6 percent from August 9.

But a finance ministry official said the state-owned banks will bring down the interest rates from tomorrow.

However, the funds kept as fixed deposits will be lowered to 6 percent after the expiry of the existing term.

Earlier on June 20, banks announced that the interest rate on lending and deposit would come down to single digits from July 1. But, none of the rates came down, and banks blamed it on the deposit rates being sticky upwards.

Then last week, the banks said the lending rate would definitely come down provided the SoEs keep their funds with private banks and the interest rate on national savings instruments is lowered in line with the bank deposit rates.

The interest rate on national savings certificates will be reviewed on August 8, the finance minister had said on Thursday.

The lowering of lending rate is long overdue as the government and the Bangladesh Bank have extended private banks a host of benefits in the last four months to this end.

The benefits include lowering of corporate tax, slashing of repo rate and reduction in cash reserve ratio as the government moved to decrease the lending rate and ease their liquidity crisis.

Private banks were also allowed to hold 50 percent of the funds of state agencies, up from the previous ceiling of 25 percent.

Currently, the private banks’ lending rates hover between 10 percent and 16 percent while the deposit rates are below 6 percent.

But the rates on fixed deposit schemes for three months to three years range between 5 percent and 10 percent; the rates are above 10 percent in a few banks.

However, the interest rates on all types of deposit schemes at state banks are between 3 percent and 6 percent. Their lending rates vary from 11 percent to 13 percent.

Eunusur Rahman, senior secretary of the banking division; Abdur Rouf Talukder, finance secretary, among others, were present.

India to impose delayed tariffs on some US goods in September

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India to impose delayed tariffs on some US goods in September

Reuters, New Delhi
INDIA said on Saturday that delayed higher tariffs against some goods imported from the United States will go into force on September 18.

New Delhi, incensed by Washington’s refusal to exempt it from new tariffs, decided in June to raise import tax from August 4 on some US products, including almonds, walnuts and apples, and later delayed the move.

Officials from New Delhi and Washington, including US Secretary of State Mike Pompeo and Defense Secretary Jim Mattis, are scheduled to hold a series of meetings including strategic talks with their Indian counterparts in September.

Trade differences between India and the United States have been rising since President Donald Trump took office. Bilateral trade rose to $115 billion in 2016, but the Trump administration wants to reduce its $31 billion deficit with India, and is pressing New Delhi to ease trade barriers.

India, the world’s biggest buyer of US almonds, in June decided to raise import duties on the commodity by 20 percent, joining the European Union and China in retaliating against Trump’s tariff hikes on steel and aluminum.

It had also planned to impose a 120 percent duty on the import of walnuts in the strongest action yet against the United States.

India has proposed to buy petroleum products from the US to help narrow the trade deficit. The United States has also emerged as a top arms supplier to India and US companies are bidding for military aircraft deals worth billions of dollars.

China says tariff threat against US ‘justified’

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China says tariff threat against US ‘justified’

Afp, Singapore

China’s foreign minister said Saturday that his country’s threat to impose retaliatory tariffs on $60 billion of American goods in an escalating trade spat was “fully justified”.

Beijing threatened Friday to bring in the levies on products ranging from beef to condoms, after US President Donald Trump’s administration upped the ante in its plans for additional tariffs on Chinese goods worth $200 billion. Washington suggested the rate on the proposed extra tariffs could be increased from 10 to 25 percent.

The two countries have been embroiled for months in a trade conflict that has threatened to hurt consumers in both countries.

Washington claims that China’s export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.

Speaking on the sidelines of a security forum in Singapore, Foreign Minister Wang Yi said China’s threat of retaliatory tariffs was “fully justified and necessary”.

“These are measures taken out of the consideration for upholding the interests of the Chinese people,” he said, speaking through a translator.

He said the move was also aimed at upholding the “global free trade regime” that was underpinned by the World Trade Organization.

Wang also hit back at comments by top White House economic advisor Larry Kudlow, who ridiculed China’s tariff threat as “weak” and said the world’s second-largest economy was in significant “trouble”.

“As to whether China’s economy is doing well or not, I think it is all too clear to the whole international community,” Wang said, adding that China contributed a huge amount to global economic growth.

“I don’t see why he would come to the conclusion that China’s economy is not doing well.” In early July, the US imposed 25 percent tariffs on $34 billion of Chinese goods, with another $16 billion to be targeted in coming weeks, sparking retaliatory measures from China.

Days later, Washington unveiled a list of another $200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10 percent import duties.

But Trump raised the stakes this week with his threat to lift the tariff rate. China has said new duties will be applied only if Washington pulls the trigger on its new tariffs.

The Republican president has been keen to show he is tough on trade ahead of tricky congressional elections in November — but there are growing signs of concern in the White House that the dispute could affect Trump’s political base.

PHP plans to invest Tk 31,600cr in steel plant

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PHP plans to invest Tk 31,600cr in steel plant

Jagaran Chakma

 

PHP Family, a Chittagong-based business group, plans to invest about Tk 31,600 crore to set up an integrated steel plant on 500 acres of land in Mirsarai Economic Zone.

All kinds of steel products will be manufactured at the plant, including materials for factory buildings.

PHP Family will have to start manufacturing in the complex within three years of agreement signing, said Paban Chowdhury, executive chairman of Bangladesh Economic Zones Authority. The agreement will be signed today.

The plant is expected to create 15,000 jobs directly and indirectly, said a high official of PHP Family.

“We will make the investments in phases that may take five to seven years,” Mohammed Iqbal Hossain, a director of PHP Family.

Hossain said PHP has a steel mill with an annual capacity of 3 lakh tonnes and it is building another factory of that capacity also.

“Our new integrated steel complex will basically act as a backward linkage factory for our existing steel mills,” he said. Replying to a query, Hossain said now they are not thinking about taking any new foreign investment.

“We will assess if anybody shows interest later,” he said.

Hossain said Bangladesh is very open to foreign investors, but it gets very difficult for local ones.

Established in 1969, PHP Family has concerns in 29 fields, including steel, float glass, aluminium, textiles, power, petroleum products, ship recycling, fisheries and so on.

Solar-powered irrigation improves farming

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Solar-powered irrigation improves farming

Star Business Report

The solar irrigation system holds huge potential in Bangladesh and can provide sustainable solutions without requiring any fuel, reduce carbon emission and save millions in foreign currency, according to Infrastructure Development Company Ltd (IDCOL).

IDCOL issued a statement after carrying out an impact assessment on its pilot project undertaken in 2013 in some northern districts.

Being a country located in tropical delta, irrigation plays a vital role in Bangladesh’s agriculture and accounts for about 43 percent of the cost for cultivation.

Presently, the country has 1.34 million diesel pumps and 0.27 million electric pumps. The diesel-run pumps consume at least 1 million tonnes of diesel worth $900 million per year, with the government providing huge subsidy to keep its price affordable for farmers.

The electricity-run pumps consume about 1,500-megawatt of power.

In this backdrop, solar irrigation can provide sustainable irrigation solutions without requiring any fuel, said IDCOL in a statement. 

IDCOL initiated a pilot project in 2013 with a target to install 1,500 solar irrigation pumps by 2018. Later, identifying the prospects of solar irrigation pumps and its acceptance among farmers, the goal was revised to 50,000 by 2025 which will replace around a quarter million diesel-run pumps.

Notably, solar pumps being installed under the IDCOL Solar Irrigation Programme are of larger capacity and each pump can replace four to five conventional diesel-run pumps, said Mahmood Malik, executive director of IDCOL, in the statement.

So far, IDCOL has approved 1,119 solar irrigation pumps, with 925 of them already operational and the rest under construction. The pumps can supply up to 15 lakh to 20 lakh litres of water daily, which can irrigate 3,300 decimals of land for paddy and 1,815 decimals of land for vegetables each season.

In terms of costs, a farmer can irrigate a bigha of land at Tk 2,500 to Tk 3,000, down by Tk 500 to Tk 1,800 now being spent under existing methods.

“With the solar irrigation pumps in place, we can now irrigate our lands without any hassle and make more profit than before,” said Abdul Mazid, a farmer in Rangpur district.

Mazid said earlier they had to wait for days to get diesel for running their pumps for irrigation.

IDCOL said the solar irrigation system can’t only reduce carbon emission but can save millions in foreign currency. 

Given the immense potential of the solar irrigation, the IDCOL Programme aims to replace diesel-based systems with solar irrigation pumps in off-grid areas where there are possibilities to produce three types of crops throughout the year.

IDCOL has put in place arrangements to engage private sector sponsors such as private limited companies, microfinance institutions, and NGOs in the programme.

The private sector investor needs to invest only 15 percent of the project cost as equity and IDCOL provides the rest 50 percent as grant and 35 percent as soft loan with an interest rate of only 6 percent and 10 years as tenure.

Biman to buy 3 Bombardier aircraft

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Biman to buy 3 Bombardier aircraft

Star Business Report

State-run Biman Bangladesh Airlines yesterday signed a deal with Canadian Commercial Corporation to buy three 74-seater new Bombardier Q400 turboprop aircraft.

The aircraft will be delivered in March, May and June in 2020 under the government-to-government contract, said the Canadian High Commission in Dhaka in a statement.

AM Mosaddique Ahmed, chief executive officer of Biman Bangladesh and Carl Marcotte, acting president of CCC, signed the deal at a programme at the conference room of the civil aviation and tourism ministry in Dhaka.

“We are extremely pleased to be supporting Bombardier in selling their Q400 aircraft to Biman Bangladesh Airlines,” said Ian McLeod, vice-president for business development and sales of CCC, in the statement.

He said Canada and Bangladesh enjoy strong bilateral ties through trade and investment, development cooperation, and people-to-people links.

“Increasing the capacity of the national carrier supports these efforts and the economic growth of the country, improving the lives of Bangladeshis by increasing their access to domestic and international destinations.”

François Cognard, vice-president for sales for the Asia Pacific region of Bombardier Aerospace, said the Q400’s mix of turboprop economics and jet like performance was the best match for Biman’s mix of short and long-range routes, he said.

Benoit Préfontaine, high commissioner of Canada to Bangladesh, said this important transaction consolidates Canada’s position as a major aerospace sector partner of Bangladesh.

“It further expands the fleet of Canadian aircraft and helicopters being flown in Bangladesh skies by commercial airlines, private owners and government entities.”

Canada’s commercial relationship with Bangladesh has grown dramatically over the last 10 years. The value of bilateral merchandise trade has more than doubled from just under Can$950 million in 2008 to nearly Can$2.4 billion in 2017, according to the statement.

Bangladesh is the second largest destination for Canadian merchandise exports to South Asia, after India. CCC, a contracting agency, focuses on promoting and facilitating international trade on behalf of industries in Canada.

Bangladesh to buy 300 buses from India

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Bangladesh to buy 300 buses from India

Star Business Report

Bangladesh will buy 300 double-decker buses from Indian motor vehicle maker Ashok Leyland under a line of credit (LoC) from New Delhi.

The cabinet committee on purchase yesterday approved a proposal for the purchase amounting to around Tk 239 crore, equivalent to $29 million.

A finance ministry official said the purchase was part of a $74.66 million project to bring in double-decker and single-decker A/C and non-A/C buses. Of the project cost, India was providing $55.83 million under a $2 billion LoC.

As per the LoC’s condition, Bangladesh Road Transport Corporation (BRTC) invited tenders in which only Indian companies could participate.

The finance ministry official also said while giving the approval, the committee wanted to know about the condition of the buses procured earlier by the BRTC.

It also wanted to know why the buses previously bought by the BRTC were not plying on the roads.

Another cabinet committee on economic affairs led by Finance Minister AMA Muhith decided to conduct an environmental study to prevent casualties from landslides.

The committee had previously directed the communications ministry to give a detailed report on the snapping of communications in Rangamati due to hill slides last year.

Later, the communications ministry formed a four-member committee which presented a report yesterday incorporating a 10-point recommendation. The decision to conduct the environmental study was taken on the basis of the report.