Hartal cuts into business

An exporter was looking tensed when the opposition party called hartal last week, protesting the disappearance of one of its key leaders. The businessman was supposed to send his newly made apparels to a washing factory in Savar.
The exporter thought he would have got the clothes washed on April 23. But unfortunately that was a hartal day. So, he waited. But the next day was again a day of dawn-to-dusk strike.
Another exporter was scheduled to send a container of clothes to Chittagong Port, but he could not do so due to shutdown.
Both of them faced a common problem -- in transportation. Though Savar is around 30 kilometres away from Dhaka, no transportation was there to carry the clothes. So, taking anything to Chittagong Port was unthinkable.
In both cases, failure to take the products to buyers on time caused huge losses to the exporters. Many exporters lost a huge sum of money just because their buyers declined to receive the goods for delay.
The business community also expressed their concern seeing how the country's politics is getting self-destructive as the opposition parties observed five days of hartal in a span of eight days.
“We are worried…please help keep the wheel of economy moving,” said AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry, the apex trade body.
Azad said many foreigners who are in the country, cannot come out of their hotels due to the shutdown. The country's image is being tarnished, he added.
“Two days of hartal actually spoils three days as we cannot transport goods before the hartal day in fear of picketing and looting,” said Anwar ul Alam Chowdhury, a garment exporter and a former president of Bangladesh Garment Manufacturers and Exporters Association.
Unlike the Pakistan regime (1947-71) or that of Ershad (1980s), Bangladesh's economy now is not limited to a few areas of potentials or threats. Over 40 years of time, Bangladesh's economy has been developed and diversified to many areas and getting more and more internationalised.
The country's national budget is likely to be of Tk 160,000 crore in fiscal 2012-13 from Tk 786 crore in 1972-73. The budget size has grown by more than 20,256 percent in just 40 years. On the other hand, the country's dependence on foreign aid has decreased to 2-3 percent of the budget now, from as high as 50 percent in 1970s.
Bangladesh exported goods, particularly jute, worth a few crores of taka in 1970s, which has now become a few lakh crores of taka. The country has also been diversifying its export basket to come out from its excessive reliance on apparels. Now Bangladesh exports bicycle, ceramics, pharmaceuticals, frozen fish, leather and leather goods, vegetables, handicrafts and many more.
Local entrepreneurs continue to find newer markets by developing newer products. Their relentless efforts paid them off. Bangladesh bagged nearly $23 billion from exports in fiscal 2010-11. Such earnings were only $1.67 billion twenty years ago.
International trade that means export and import constitutes nearly 60 percent of Bangladesh's present gross domestic product of $110 billion.
The fate of the businessmen, who take risks and make investments for exporting finished goods, now depends on the whims of the politicians. Though the exporters get buyers, they cannot export on time due to strike, which is unacceptable in most countries.
“Transportation is the main problem during hartal. A lot of imported containers lie idle,” said Shamim ul Huq, managing director of Maersk Line, a subsidiary company of the AP Moller-Maersk Group, which is a leading liner shipping company in the world.
Ahmedul Karim Chowdhury, deputy director (traffic) of Inland Container Depot at Kamalapur in the capital, also echoed Huq.
On Monday, the second day of this week's hartal, he said some 1,300 containers were stockpiled at the ICD because of no loading and unloading by transporters.
Syed Farhaduddin Ahmed, secretary of Chittagong Port Authority, said they delivered 797 TEUs (twenty-foot equivalent units) of containers on Monday, down from 1,300-1,500 TEUs on regular days.

Libyan assembly dismisses PM

 

 

 

 

 

Libyan premier Mustafa Abu Shagur was dismissed on Sunday after the General National Congress rejected his proposed "crisis" cabinet of just 10 ministers, days after his first line-up was also turned down.
The embattled Abu Shagur, who had been given 72 hours to come up with a new cabinet, was relieved of his duties after his last chance to form a government, and the GNC will have to elect a new premier within the next three to four weeks.
Before he had even put forward his second cabinet list in just four days, a motion of no confidence in Abu Shagur was signed by 126 assembly members.
That was rejected by the GNC president.
But when his pared-down list was put to the vote, 125 members of the 186 members present in the 200-seat GNC did not express "confidence" in his choices, against 44 members for and 17 abstentions, according to a live state television broadcast.
Under GNC rules, the assembly will now have to elect a new premier.
"In face of the dangers threatening the country, I present to you a crisis government restricted to 10 ministers, rejecting all geographical considerations," Abu Shagur earlier told the GNC.
He was taking neither geographical nor political considerations into account, Shagur said.

What can governments do?

 

With recent UN figures showing food prices still near historic highs, how can governments help ensure that poor people have enough to eat? In a new paper for the International Centre for Trade and Sustainable Development, we reviewed the type of policies and mechanisms that poor, net-food-importing countries might use to overcome food security challenges during such price hikes. We argued that governments should heed the lessons of the 2007-08 price spikes, if -- as predicted -- prices remain high and volatile in the years ahead.
Consumers in net-food-importing countries, such as in Bangladesh or sub-Saharan Africa, have a lot at stake. Farmers in the big exporters, such as Argentina and Brazil, have most to gain.
Our research showed that 89 out of 136 countries examined are net importers of both food and non-food agricultural products. In addition, there are 22 countries that, while being net exporters of agricultural goods, are nevertheless net importers of food.
And since a decade ago, 20 countries have switched from net exporters to net importers of agricultural goods. Nations affected by civil war or political unrest feature heavily on this list of countries that have moved away from exporting farm commodities -- with Somalia, Sudan and Zimbabwe being among them. Other countries are now net importers of agricultural goods simply due to changes in their competitiveness in other activities relative to food.
On the positive side, with higher incomes people have diversified their diets, cushioning the international price shocks that affect basic commodities. More worrisome is the case of poorer, "captive" consumers of basic grains. Even in middle-income countries the food component of cost-of-living indices has risen faster than other prices, with a consequent rise in poverty levels.
Of course, even within food-importing countries, farmers could gain with access to rising world prices. Government policies and poorly-integrated markets might mean, however, that world prices are not passed on to poor producers -- especially those in remote areas. Moreover, the poorest in rural areas are often those who spend more on buying food than they make in selling it, and price hikes harm more than they help.
What can governments do? In the case of exporting countries, what we do know is that there are negative externalities of export restrictions, which have exacerbated global prices spikes, and undermined the reliability and credibility of world food markets. There is a vicious circle: Unreliable markets propel countries to shift toward self-sufficiency, incurring high social costs -- domestically and internationally. The resulting enhanced world price volatility reinforces the domestic political incentives to insulate national markets.
Although there are studies of the policy responses to the recent price spikes, the household welfare effects are not well understood. But importing-country policies can lessen the short-term impacts on the most vulnerable, as well as boost farm productivity in the longer term. Beyond lowering import tariffs, governments can use "safety nets" to assist with cash transfers those in need.
These importing countries should find that increased spending on farm advisory services or improved access to seeds and fertilisers is money well spent in the longer term: by boosting yields, farm incomes rise, allowing poor farmers to respond effectively to growing demand. The extra investment could make the difference in the future between what could be merely a food price rise and what could be another food price spike crisis.

Catering to own and regional business

 

The government's "go slow" approach in taking the initiative to develop a deep-sea port off Sonadia is going to cause the country serious problems after 2015. If we are to go by the Japanese Pacific Consultant International firm's Techno-Economic Feasibility study conducted for the Department of Shipping in 2009 that outlined a three-phase construction plan, the potential for GDP growth by 2% brought about by substantial employment generation and increase in bulk handling capacity should have been impetus enough for the government to have taken a decision by now.
Yet the first phase of the construction that was recommended to begin in 2011, at a cost of Tk.13,000 cr., and completed in 2015 has not seen the light of day.
While Bangladesh has been dilly-dallying with what to do, other countries have not sat idle. The deep sea ports in Karachi and Colombo, both scheduled to open in 2013 and 2014, will sport some of the most advanced facilities in the region. In an age of global economic downturn, it becomes imperative for countries to take strategic decisions to stay ahead by upgrading competitiveness, and in this case deep-sea ports play a crucial role in providing infrastructure that act as a gateway for the rapid movement of raw materials and cargo considered essential for manufacturing and reaching finished products to end users.
Although Chittagong port handles about 80% of the country's imports and exports, it will be in dire straits when meeting increased demand if transit facilities are granted to Nepal and Bhutan. Even if infrastructure were improved and better management practices introduced to improve turnaround time for ships, Chittagong port remains essentially a river port. The crux of the problem lies with the narrow approach of Karnaphuli River which means that large container ships more than 617ft. in length cannot pass through and transhipment of containers takes place either in Singapore or in other big regional ports.
The increased Chinese interest in helping Bangladesh develop a deep-sea port comes as no surprise particularly with Chinese wages increased to US$400-500 per month, while average wages in Bangladesh' readymade garments (RMG) sector hovers around $80 is obviously one of the key drivers for proposed relocation of the Chinese RMG sector.
In the backdrop of global consultancy firm, McKinsey & Company's study "Bangladesh's ready-made garments landscape: The challenge of growth" that predicts that Bangladesh can double its garments exports in the next decade, the arguments for a deep-sea port become more compelling. Beyond the "wage advantage," European and American companies believe that "with a current 5,000 RMG factories employing about 3.6 million workers from a total workforce of 74 million, Bangladesh is clearly ahead of Southeast Asian RMG suppliers in terms of capacity offered (e.g. Indonesia has about 2,450 factories, Vietnam 2,000, and Cambodia 260 factories)."
McKinsey forecasts that the RMG sector can look forward to an increase in sourcing by an annual growth rate of about 10% for the next decade resulting in an export value of $36-42 billion, up from the current $19 billion per annum. In other words, we are potentially looking at the market doubling by 2015 and nearly triple by 2020.
With lead-times for sea freight costing the country's RMG sector an additional ten days due to the lack of a deep-sea port, it highlights Bangladesh's vulnerability in both import and export. Going back to the suitability of the single sea port of Chittagong, it lacks the required draft (maximum at full tide 8.81 metres) that bars ocean going ships to berth in the port.
As a result 'mother vessels' anchor at the outer anchorage and we have to take the services of lighter vessels to carry goods to and from ships to harbour. This arrangement not only restricts the ports' cargo handling capacity but also adds additional costs and time. Additionally, the cyclone prone Bay of Bengal is not the ideal zone for lighter vessels operations.
Looking beyond the RMG sector prospects, it is worthwhile to point out that the government plans to generate 7,800 MW power using imported coal within 2015 by installing 13 coal fired power plants in the country. Apart from the investment and cost of power generation challenges, the major impediment is the absence of deep sea port.
The smallest coal carrying ocean going vessel carries 45,000 tonne coal (Handimax) and requires 12 metres minimum draft, therefore, Bangladesh cannot at this stage import large amount of coal (imagine small lighter vessels queuing at the Karnaphuli channel to unload a single coal carrying vessel). All the berths are busy only with coal unloading (8,000 MW power generation will require annually an estimated 24-25 million tonnes of coal import and handling facilities).
The latest Chinese proposal to finance construction of a deep-sea port is welcome news. What is interesting to note is that China has expressed its willingness to let other countries such as India and the US to come onboard in a joint development effort. We can take advantage of a deep sea port (if constructed) off Chittagong rendering services to our regional neighbours that are beneficial to both regional commerce and ensuring our own future needs.

Boy killed in Feni

Porshuram police yesterday morning recovered the body of an unidentified boy, aged about 6, from Shalia Eidgah field in the upazila. The body of the boy bore several injury marks. Police said, locals found the body at Eidgah field and informed the police. Himangshu Kumar Das, officer in-charge at Parshuram police station, said criminals might have killed the child somewhere else and dump the body at the Eidgah field

Man held with heroin

Members of Rapid Action Battalion (Rab) arrested a drug peddler along with 176 sachets of heroin from the old Railway Station area in the city on Sunday morning. The arrestee was identified as Ranjan Das, 42, son of late Harekrishna Das of Sadarpur village in Sadar South upazila of Sunamganj district. Acting on a tip-off, a team of Rab-9 conducted a drive in the area at about 7:30am and arrested Ranjan along with the contraband drugs. Later, he was handed over to police.

Man killed by thieves

An employee of Mymensingh municipality was killed by thieves at municipal staff quarter in the town early yesterday.
The dead was identified as Nurul Islam, 55, who worked at water pump station.
Police and locals said, when Nurul Islam retuned to his residence at around 1am from his duty, he found a gang fleeing with valuables from his house. Nurul raised a hue and cry and chased the gang.
At this, the thieves returned back and hit him with sticks killing him on the spot.
Locals rushed to the spot, chased the gang and caught one of the gang members identified as Mukta, 25.
They handed Mukta over to police after giving him a good beating.