Inside Economy

Bangladesh ready for extensive foreign investment

Publish: 09:25 AM, 29 Nov, 2021


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A hundred economic zones and a dozen hi-tech parks in the making, 11 thrust sectors with high prospects, and unexplored newfound territorial waters are among the strengths Bangladesh has showcased to potential global investors.

In addition, a significant decrease in the poverty rate and gradual increase in per capita income make the fast-growing, $411-billion South Asian economy offer an enormous market for a wide range of products and services.

And this Bangladesh is the right choice for foreign investors to put their money into, development partners, diplomats, and businessmen told the plenary session of a two-day investment summit in Dhaka on Sunday.

Attending the first day's sessions of the summit, top executives of multinationals operating in Bangladesh acknowledged the government's seriousness in fast-tracking infrastructures and a growing consumer market are major incentives for foreign investment.

They, however, said the tax regime needed to be simplified and a one-stop solution was needed so that a cruise ship does not need clearance from 40 offices to enter Bangladesh's waters.

While opening the two-day summit hosted by Bangladesh Investment Development Authority (Bida), Prime Minister Sheikh Hasina assured the investors of a business-friendly environment.

In the keynote paper at the summit, PM's Principal Secretary Dr. Ahmad Kaikaus said the 11 thrust sectors have an investment opportunity of more than $75 billion in the next couple of years as Bangladesh is now encouraging private investors more than ever.

Rupali Haque Chowdhury, president of Foreign Investors' Chamber of Commerce and Industry (FICCI), emphasized boosting foreign direct investment for the country's economic goals.

"We are here to extend full support to the government in promoting the investments," she noted, adding that FICCI is in touch with the foreign investors to help build confidence about the government policies and commitments.

Sanjiv Mehta, president of Unilever South Asia, said, "Unilever has been in Bangladesh since independence. The journey began with a lone factory in Chattogram, but the second one was set up in Dhaka later in the face of rising local demand."

With a huge consumer base, the country looks very lucrative to foreign investors and it could be a great investment destination if the tax structure is simplified, he added.

Dr. Mercy Miyang Tembon, World Bank country director for Bangladesh and Bhutan, said the economic zones in Bangladesh are now playing a crucial role in product diversification, technology transfer, and job creation.

"I have visited the economic zones. To me, some 1 lakh new apparel jobs at the industrial zones will be a game-changer for poverty alleviation," she added.

Nuzhat Anwar, acting country manager for Bangladesh, Bhutan, and Nepal at the International Finance Corporation (IFC), said, "At this stage, we believe Bangladesh has turned into a development model.

Now the country needs a strategy ranging from new financing techniques to policy amendments to go to the next level."

Referring to the Eighth Five-Year Plan, she said Bangladesh will require $608 billion by 2040 for infrastructure, while 75% of the funding will have to come from the private sector.

"The IFC's role will be important to build the confidence of private investors in bringing in the funding," she added.

Robert Chatterton Dickson, the British high commissioner to Bangladesh, said, "Bangladesh has been making the impossible possible which is widely recognized across the world."

On opportunities and challenges in drawing British investment, the British high commissioner said Bangladesh needs to ramp up its engagement to the global economy.

He said, "Internal resources will not be necessarily enough to take the economy to the next level. So, the public and private partnership will be needed for sustainable growth."

"The second thing would be financial sector reform to increase foreign capital. I think the capital market has a tremendous opportunity to be modernized and to grow in a way which will attract foreign investments."

"I think increasing the attractiveness of Bangladeshi bond and capital market to international investors would be tremendously important," he said, adding, the implementation of cross border higher education act between the UK and Bangladesh would be a win-win situation to make internationally competitive British education availed by the talented Bangladeshi youths.

At a different session of the summit on the blue economy, Nurul Qayyum Khan, president of, Bangladesh Marine Fisheries Association, said it is vital to develop technology and skilled manpower to attract local and foreign investment.

His recommendations include joint ventures for fisheries survey, setting projects under public-private partnership for Tuna fishing, subsidies for fuel, long-term loan facilities with reasonable interests, and restructuring corporate tax.

Foreign minister Dr. AK Abdul Momen said, "The vast resources of the blue economy are mostly untapped. We are befitting ourselves from a fraction of it. We need integral approaches for sustainable use of these."

At another session, Major General Abul Kalam Mohammad Ziaur Rahman, executive chairman of Bangladesh Export Processing Zones Authority (BEPZA), said eight Export Processing Zones are now in operation with 459 factories.

"Investors from 38 countries have investments there as the factories generated 47,000 jobs," he noted.

M Erfan Sharif, executive member of Bangladesh Economic Zones Authority (BEZA), highlighted the tax holidays, duty-free import facility, and other tax exemptions to investors at the industrial zones.

However, national revenue board Member Syed Golam Kibria earlier in the plenary session said the board often finds itself in a tight spot as they have to ensure an uninterrupted money supply to infrastructural development and provide investors with tax exemptions at the same time.

Bangladesh Bank Executive Director Mohd Humayun Kabir said the central bank is ready to provide foreign investors with maximum policy support.

Salman F Rahman, an adviser to the prime minister, said, "It is a new, different Bangladesh that is resilient and adaptive at the same time. It does not shy away from challenges.

"We are more than ready to embrace the post-Covid world – its new possibilities and opportunities. We welcome you to invest in Bangladesh and be an integral part of the remarkable prosperity that Bangladesh's Vision 2041 will entail," he added.

The Business Standard is the media partner of the two-day event.



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Inside Economy

Ekushey Boi Mela sees rising visitor numbers but mixed sales

Publish: 10:55 AM, 08 Feb, 2024


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As the Ekushey Boi Mela (Book Fair) 2024 crossed its seventh day yesterday, publishers and book sellers are hopeful for increased sales and public engagement, despite not yet reaching their anticipated sales targets.


The Dhaka Metro Rail has infused the fair with a new vibrancy, making it more accessible for visitors from distant areas like Uttara, Mirpur, and Motijheel. Ovi Islam, from Farmgate, shared his positive experience of using the metro rail to bypass traffic jams, despite the initial long wait for tickets.


Although some visitors, like Ovi who visited the fair three times without purchasing books, contribute to the growing foot traffic, the overall sales have yet to see a significant boost.


Another group of visitors from Uttara noted the ease of accessing the fair this year, thanks to the metro rail, which has offered a way to avoid the infamous Dhaka traffic congestion.


Book sellers expressed mixed feelings about the fair's progress. While visitor numbers are on the rise, actual book purchases remain lower than expected. Nur Hossen Sarkar from Anupam Prokashoni observed that many attendees are more interested in browsing than buying. Similarly, Mohammad Jabed from Mowla Brothers noted a slight decrease in sales compared to the initial days but remains hopeful for an uptick in activity.


Some exhibitors have faced challenges with their stall placements, leading to visibility and accessibility issues. Sumon Saj from Nongor Publication voiced concerns about being allocated a less favorable location and has reported the issue to Bangla Academy without seeing significant action.


Some publishers also expressed dissatisfaction about the overall arrangement and environment. These issues suggest that while the metro rail has made the fair more accessible, improvements are still needed in its organization and visitor experience.


With the fair still underway, publishers and sellers are optimistic about a surge in sales and visitor numbers, especially with the upcoming weekend.

-UNB


Ekushey Boi Mela  


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Inside Economy

Shahjalal Islami Bank in great trouble with loan to Dhaly Construction

Publish: 12:13 PM, 11 Jun, 2023


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Private sector’s Shahjalal Islami Bank is in trouble with realisation of the loan from Dhaly Construction and grant of new loan of Tk 408 crore to the company. The loan was disbursed without adequate collateral and verifying the financial status of the customer.

According to the report of Bangladesh Bank, the then managing director and board of directors, along with the officers of the relevant departments of the bank's branch and head office, cannot avoid the responsibility of this irregularity, said a report of the Bangladesh Bank.

It is known that Dhaly Construction took a loan of Tk 129 crore in 2013 from Trust Bank's Dilkusha branch in the capital. At the end of 2015, the loan amount increased to Tk 156 crores.

In November 2015, Dhaly Construction applied to Shahjalal Islami Bank to acquire the Trust Bank loan. Dhanmondi branch of Shahjalal Islami Bank acquired Dhaly Construction Limited's loan of Tk 118 crore from Trust Bank in December of that year.

In December, Shahjalal Islami Bank disbursed an additional Tk 188 crore funded and Tk 70 crore unfunded loan to Dhaly Construction Limited. In August 2017, Shahjalal Islami Bank gave another loan of Tk 115 crore. Of this, 85 crores are funded and 30 crores are non-funded. But Shahjalal Islami Bank could not tell Bangladesh Bank how much money has been loaned and against which assets.

According to the report, Shahjalal Islami Bank gave the loan forcefully to Dhaly Construction due to the failure of various companies to pay their debts. As a result, at the end of April this year, the amount of loan disbursed by Shahjalal Islami Bank to Dhaly Construction stood at Tk 408 crore. Out of this, 350 crore are funded and 58 crore non-funded.

Shahjalal Islami Bank was unable to collect the money despite repeated efforts. Dhaly Construction has mortgaged 721 acres of land and a building measuring 37,000 square feet as security against the loan.

In this regard, a deputy managing director of Shahjalal Islami Bank, on condition of anonymity, told the media that “Dhaly Construction is in a good position among the country's construction companies. We have business relationship with them since 2015. The company is facing big challenges due to the epidemic. Although we are hopeful of recovering the loan, it will take more time to get the money back.”

Regarding cashing the bill of Dhaly Construction through another bank instead of Shahjalal Bank, the Deputy Managing Director said that Dhaly Construction did this due to the need for cash. They thought that if they deposit the bill in the bank, the money will be deducted to pay off the loan.

However, when asked about the violation of the bank's board of directors policy in disbursing loans, he refused to make any comment.

Dhaly Construction chairman Rafique Uddin told the media that “Our company has implemented large road and construction projects including several university buildings in the country. We have been facing challenge since Covid pandemic as some our projects had to be stopped. Moreover, the abnormally high prices of construction materials also increased the project cost."

When asked about repayment of loan from Shahjalal Islami Bank, he said that new projects will be taken up and the loan will be repaid. The business relationship with the bank will also continue.

Dhaly Construction Advisor MM Mizanur Rahman told the media that there were some errors in the documents. It will be resolved quickly. He said, the bank can collect the debt by selling the company's assets. Apart from this, the company is involved in several construction projects. If the work of these projects is completed, the loan can be paid.

According to the central bank report, it was directed by the Board to take security equal to the investment while disbursing the loan. But, only Tk 90 crore of collateral (land and building) was taken against the funded loan of Tk 188 crore. The board was not informed of the investment with less security.

According to the report, Shahjalal Bank could not provide any information to the central bank's inspection team about the amount of money invested against specific work orders and the number of bills received in respect of those work orders.

The report said that the board of the directors of the bank advised taking a legal opinion before approving funded loans of Tk 188 crore and non-funded loans of Tk 70 crore and mortgaging 721 khata land. But the bank did not take into consideration the legal opinion while giving the loan. As no collateral is taken for new loans, the bank's investment becomes risky.



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Inside Economy

Price fall in large-cap drives stocks further down

Publish: 06:21 PM, 17 Oct, 2022


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Country's both the bourses, Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) today plunged further due to mainly price fall in large-cap securities.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), slid 65 points, or 1.01 per cent, at 6,413 at the end of the day. The DS30, the index that consists of blue-chip companies, went down 0.93 per cent to 2,277, while the DSES, the Shariah-complaint index, plummeted 0.80 per cent to 1,406.

Turnover at the DSE dropped 3 per cent to Taka 1,297 crore which was Taka 1,343 crore on the previous day.

At the DSE, 26 stocks advanced, 153 declined and 182 did not show any price movement.

Bangladesh Monospool Paper Manufacturing topped the gainers' with an 8.64 per cent rise. Fine Foods, Rahima Food Corporation, Eastern Cables, and Eastern Lubricants also advanced over 5 per cent.

Apex Foods suffered the highest correction, sliding almost 13 per cent. Far East Knitting, BDCOM Online, Navana CNG, and Apex Spinning declined more than 9 per cent.

The CASPI, the all-share price index of the Chattogram Stock Exchange, decreased 164 points, or 0.86 per cent to end at 18,895.

Of the issues on the port city bourse, 34 advanced, 104 declined, and 80 remained unchanged.

- BSS



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Inside Economy

ECNEC approves 6 projects with Tk 7,018cr

Publish: 02:11 PM, 11 Oct, 2022


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The Executive Committee of the National Economic Council (ECNEC) today approved six projects with Tk 7,018 crore.

The meeting was held under the chairmanship of ECNEC Chairperson and Prime Minister Sheikh Hasina on Tuesday (October 11).

The premier joined the meeting virtually from her official Ganabhaban residence here while ministers, state ministers, planning commission members and secretaries concerned were connected to it from the NEC Conference Room in the city's Sher-e-Bangla Nagar area.

After the meeting, Planning Minister MA Mannan gave details in the press conference.

thousand 362 crore 63 lakh will come from the government funding, Tk 2 thousand 386 crore 48 lakh from foreign funding and Tk 269 crore 62 lakh from the organization's own funding. 



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Inside Economy

Remittance sinks to 7-month low

Publish: 09:10 PM, 02 Oct, 2022


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The remittance inflow sinks to lowest in seven months. The inflow of remittance dropped around 25% in September to $1.54 billion compared to August earnings. 

Bangladesh received $2.04 billion in remittances in August, according to central bank data published Sunday (2 October).

The total remittance inflow in the current financial year is $5.67 billion, which was $5.41 billion during the same period last year.

According to experts, the cost of living for expatriates increased due to global inflation. Additionally, they are preferring hundi over legal remittance channels as they are getting Tk5-6 per dollar more than the bank exchange rate.

They had expressed concern that the Hundi channel may become more active. 

Remittances dropped to a seven-month low in September as the central bank fixed the dollar exchange rate for inward remittance. Bangladesh received a lower remittance of $1.49 billion last February.

Bankers said the downfall happened after, on the advice of the central bank on 12 September, the banks fixed the dollar exchange rate for remittances at Tk108.

However, bankers had initially feared that remittances may decrease due to fixing the exchange rate. The exchange houses said that the remittances came in less in the first week after the rate was fixed as remitters could not be given higher rates. 

A visit to the website of several exchange houses including Moneygram and Western Union shows that they are paying Tk106-107 per dollar for remittance inflow. However, the houses also charge $1-2 as transfer fee. 

As a result, those who send remittances in small amounts do not get an average rate of more than Tk104-105 a dollar. 

At present remittance through Hundi yields Tk113-114 per dollar. Due to fixed exchange rate at banks, the difference between dollar price of Hundi and the banking channel is at least Tk6-7. 


Remittance   Bangladesh  


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