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Garment export to India may hit $2b soon: Tipu Munshi

Business Report

Commerce Minister Tipu Monshi said Bangladesh has the capacity to raise garment exports to $2 b in next couple of years if India keeps duty free access of garment items to its market unimpeded. Bangladesh’s export to India last year was $ 873.27 million as against its 8.61 b export to Bangladesh.
Munshi made the comments last week in the city at a press briefing in his office after a meeting with newly assigned acting Indian High Commissioner in Dhaka Adarsh Swaika. He said Bangladesh has more unused capacity to export expressing hope that apparel export to India may cross $2 billion-mark over the next couple of years.
In fiscal 2017-18, garment exports to India more than doubled to $278.68 million, according to the data from the Export Promotion Bureau.
“I think there is no impediment to Bangladesh’s export to India,” Swaika said. In 2011 India removed all duties on exports of Bangladeshi goods to India.  On the widening gap in trade balance between the two countries, the Indian envoy said India’s export to Bangladesh is growing as the country mainly imports raw materials for export.
For instance, Bangladesh is a major importer of cotton and active pharmaceutical ingredients from India, he said. Munshi said six more border haats would be opened soon to facilitate easy availability of goods for those living in the areas. He, however, did not name the areas where the markets will be set up. Currently, four border haats are in operation.
The minister assured that he would hold talks with the Indian government to resolve the trade dispute at the Feni border haat as Bangladeshi traders have been complaining about impediments in sales of their goods in the market.
He also said both countries agreed to resume the activities of the century-old Chilahati land port in Nilphamari district to facilitate trade between the two countries. He would also discuss the issue of imposing anti-dumping duty on Bangladeshi jute and jute goods by the Indian authority so that the long-pending dispute could be resolved amicably.
Swaika said a company would soon start developing the Indian special economic zone that the Bangladesh Economic Zones Authority awarded to Indian investors. Two more zones will also be developed soon for Indian investors at Bheramara and Mirsarai.
Swaika said a river cruise between Bangladesh and India would begin from March this year to facilitate the movement of people. Riva Ganguly Das, the newly-appointed Indian high commissioner to Bangladesh, will arrive in the middle of next month.

Comment

Business Report

Commerce Minister Tipu Monshi said Bangladesh has the capacity to raise garment exports to $2 b in next couple of years if India keeps duty free access of garment items to its market unimpeded. Bangladesh’s export to India last year was $ 873.27 million as against its 8.61 b export to Bangladesh.
Munshi made the comments last week in the city at a press briefing in his office after a meeting with newly assigned acting Indian High Commissioner in Dhaka Adarsh Swaika. He said Bangladesh has more unused capacity to export expressing hope that apparel export to India may cross $2 billion-mark over the next couple of years.
In fiscal 2017-18, garment exports to India more than doubled to $278.68 million, according to the data from the Export Promotion Bureau.
“I think there is no impediment to Bangladesh’s export to India,” Swaika said. In 2011 India removed all duties on exports of Bangladeshi goods to India.  On the widening gap in trade balance between the two countries, the Indian envoy said India’s export to Bangladesh is growing as the country mainly imports raw materials for export.
For instance, Bangladesh is a major importer of cotton and active pharmaceutical ingredients from India, he said. Munshi said six more border haats would be opened soon to facilitate easy availability of goods for those living in the areas. He, however, did not name the areas where the markets will be set up. Currently, four border haats are in operation.
The minister assured that he would hold talks with the Indian government to resolve the trade dispute at the Feni border haat as Bangladeshi traders have been complaining about impediments in sales of their goods in the market.
He also said both countries agreed to resume the activities of the century-old Chilahati land port in Nilphamari district to facilitate trade between the two countries. He would also discuss the issue of imposing anti-dumping duty on Bangladeshi jute and jute goods by the Indian authority so that the long-pending dispute could be resolved amicably.
Swaika said a company would soon start developing the Indian special economic zone that the Bangladesh Economic Zones Authority awarded to Indian investors. Two more zones will also be developed soon for Indian investors at Bheramara and Mirsarai.
Swaika said a river cruise between Bangladesh and India would begin from March this year to facilitate the movement of people. Riva Ganguly Das, the newly-appointed Indian high commissioner to Bangladesh, will arrive in the middle of next month.


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Cabinet approves amended EPZ labor law

Business Report

The draft amendment to EPZ labor laws has been approved by cabinet last week reducing registration procedure of workers welfare association (WWA) OR UNION from 12 steps to three. It has also reduced the requirement of the number of workers to 20 percent from 30 percent of a firm to make things easier.
The amended law will allow greater freedom of association for workers to WWA and strengthen workers bargaining power.  It will also guarantees greater job security to the elected leaders of WWAs in case of strikes and lockouts.
The amendments to the Bangladesh EPZ Labour Act, which will relax the labor law for the export processing zones will better ensure the rights of workers in factories inside the special industrial parks. The draft law was earlier approved in principle by the cabinet on December 3 last year.
The government was under pressure from buyers of Bangladesh garments from the western nations to amend the law to ally the critic of human rights groups in the USA and EU. The new step will remove many impediments to garment exports to western market.  
After the cabinet meeting, Cabinet Secretary Md Shafiul Alam told reporters that the draft law got the final nod yesterday without any change.
The EPZ workers will now enjoy the freedom of association to realise their demands, according to the new amendments to the Bangladesh EPZ Labour Act.
Earlier, 30 percent workers’ consent was required to form a Workers’ Welfare Association (WWA) in a factory in the EPZ.
The requirement threshold has been lowered to 20 percent because of the pressure from international communities such as the EU, Canada, the International Labour Organisation and the US.
The names of the WWAs have not been changed; the existing WWAs will act like unions.
The amendment will allow the officials of the Department of Inspection for Factories and Establishments to inspect the factories housed inside the EPZs apart from the officials of Bangladesh Export Processing Zones Authority (Bepza).
Previously, only Bepza officials could inspect the factories. The amendment also allowed the workers to constitute federation of WWAs. The mandatory required consent of the workers for calling strikes and lockouts has also been lowered. Now, workers will be able to call strike or lockout with the consent of two-thirds of the workers instead of previous three-fourths. Workers will be able to write the constitutions of the WWAs in line with the main labour law.
The election of the executive committees of WWAs will be held within six months of the end of the tenure of a committee, down from one year previously.
If a worker goes into retirement at the age of 60 or he or she resigns, they will receive basic salary equivalent to 45 days for each year of service up from the existing 30 days.
If a worker completes 25 years on the job, he or she will enjoy full compensation benefit.
The amended law allowed formation of WWAs in new industrial units within three months of their operation.
Factory owners have also given the go-ahead to form associations. As of fiscal 2017-18, eight EPZs employed 502,013 workers, invested $4.69 billion and exported goods worth $6.66 billion, according to data from Bepza.

Comment

Business Report

The draft amendment to EPZ labor laws has been approved by cabinet last week reducing registration procedure of workers welfare association (WWA) OR UNION from 12 steps to three. It has also reduced the requirement of the number of workers to 20 percent from 30 percent of a firm to make things easier.
The amended law will allow greater freedom of association for workers to WWA and strengthen workers bargaining power.  It will also guarantees greater job security to the elected leaders of WWAs in case of strikes and lockouts.
The amendments to the Bangladesh EPZ Labour Act, which will relax the labor law for the export processing zones will better ensure the rights of workers in factories inside the special industrial parks. The draft law was earlier approved in principle by the cabinet on December 3 last year.
The government was under pressure from buyers of Bangladesh garments from the western nations to amend the law to ally the critic of human rights groups in the USA and EU. The new step will remove many impediments to garment exports to western market.  
After the cabinet meeting, Cabinet Secretary Md Shafiul Alam told reporters that the draft law got the final nod yesterday without any change.
The EPZ workers will now enjoy the freedom of association to realise their demands, according to the new amendments to the Bangladesh EPZ Labour Act.
Earlier, 30 percent workers’ consent was required to form a Workers’ Welfare Association (WWA) in a factory in the EPZ.
The requirement threshold has been lowered to 20 percent because of the pressure from international communities such as the EU, Canada, the International Labour Organisation and the US.
The names of the WWAs have not been changed; the existing WWAs will act like unions.
The amendment will allow the officials of the Department of Inspection for Factories and Establishments to inspect the factories housed inside the EPZs apart from the officials of Bangladesh Export Processing Zones Authority (Bepza).
Previously, only Bepza officials could inspect the factories. The amendment also allowed the workers to constitute federation of WWAs. The mandatory required consent of the workers for calling strikes and lockouts has also been lowered. Now, workers will be able to call strike or lockout with the consent of two-thirds of the workers instead of previous three-fourths. Workers will be able to write the constitutions of the WWAs in line with the main labour law.
The election of the executive committees of WWAs will be held within six months of the end of the tenure of a committee, down from one year previously.
If a worker goes into retirement at the age of 60 or he or she resigns, they will receive basic salary equivalent to 45 days for each year of service up from the existing 30 days.
If a worker completes 25 years on the job, he or she will enjoy full compensation benefit.
The amended law allowed formation of WWAs in new industrial units within three months of their operation.
Factory owners have also given the go-ahead to form associations. As of fiscal 2017-18, eight EPZs employed 502,013 workers, invested $4.69 billion and exported goods worth $6.66 billion, according to data from Bepza.


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Fake trade invoices blamed over $5.9 b siphoned in 2015

Business Report

Devastating reports surfaced again to say that Bangladesh lost some $5.9 billion by way of illicit financial outflow in 2015, the year prior to national election mainly through trade misinvoicing. Global Financial Integrity (GFI) made the disclosure last week as part of its global search for illegal transfer of money.  
It said Bangladesh ranked second in South Asia in terms of illicit outflows of money.  The Washington-based research and advisory organisation made the disclosure analysing data of trade in goods of 148 developing countries with advanced economies. The report, based on International Monetary Fund (IMF) data, also said $2.36 billion entered Bangladesh in 2015.
The GFI said trade-related illicit financial flows (IFFs) appear to be both significant and persistent features of trade of developing countries with advanced economies.  “Trade misinvoicing remains an obstacle to achieving sustainable and equitable growth in the developing world,” said the GFI report titled “Illicit Financial Flows to and from 148 Developing Countries: 2006-2015”.
The GFI defines IFFs as money that is illegally earned, used or moved and which crosses an international border. Trade misinvoicing is a method of moving IFFs, and includes the deliberate misrepresentation of the value of imports or exports in order to evade customs duties and VAT, launder the proceeds of criminal activity or to hide offshore the proceeds of legitimate trade transactions, among other motivations, it said.
The new study comes more than a year after releasing GFI’s 2017 report which estimated that Bangladesh had lost between $6 billion and $9 billion to illicit money outflows in 2014. At that time, the GFI analysed discrepancies between bilateral trade statistics and balance of payments data, as reported to the IMF, to detect flows of capital that were illegally earned, transferred, or utilised.
This year, the GFI detected the IFFs by analysing the trade data on over invoicing and under invoicing. It found Bangladesh as one of the top 30 of countries, ranked by dollar value of illicit outflows in 2015. These countries not only include resource-rich countries such as South Africa and Nigeria but also European countries such as Turkey and South American nation Brazil.
The Asian countries in the top 30 countries in this category include Malaysia, India and the Philippines. The amount of IFFs from Malaysia was $33.7 billion, $9.8 billion from India and $5.1 billion from the Philippines.
Bangladesh lost the second highest amount of fund through IFFS after India among the South Asian nations. The illegal outflow through trade misinvoicing in other South Asian countries including Pakistan, Sri Lanka was less than a billion dollar.
The research and advisory organisation said increasing trade among developing and emerging market countries is seen by many economists as a primary path to greater development.
“However, high levels of misinvoicing, as a percentage of total trade, indicate that most developing country governments do not benefit from a significant portion of their international trade transactions with advanced economies,” said the GFI.
The GFI data showed that the amount of IFFs from Bangladesh was 17.5 percent of the nation’s total trade with advanced countries at $33.73 billion in 2015.
In its previous report, the GFI said Bangladesh lost $75 billion due to trade misinvoicing and other unrecorded outflows between 2005 and 2014.

Comment

Business Report

Devastating reports surfaced again to say that Bangladesh lost some $5.9 billion by way of illicit financial outflow in 2015, the year prior to national election mainly through trade misinvoicing. Global Financial Integrity (GFI) made the disclosure last week as part of its global search for illegal transfer of money.  
It said Bangladesh ranked second in South Asia in terms of illicit outflows of money.  The Washington-based research and advisory organisation made the disclosure analysing data of trade in goods of 148 developing countries with advanced economies. The report, based on International Monetary Fund (IMF) data, also said $2.36 billion entered Bangladesh in 2015.
The GFI said trade-related illicit financial flows (IFFs) appear to be both significant and persistent features of trade of developing countries with advanced economies.  “Trade misinvoicing remains an obstacle to achieving sustainable and equitable growth in the developing world,” said the GFI report titled “Illicit Financial Flows to and from 148 Developing Countries: 2006-2015”.
The GFI defines IFFs as money that is illegally earned, used or moved and which crosses an international border. Trade misinvoicing is a method of moving IFFs, and includes the deliberate misrepresentation of the value of imports or exports in order to evade customs duties and VAT, launder the proceeds of criminal activity or to hide offshore the proceeds of legitimate trade transactions, among other motivations, it said.
The new study comes more than a year after releasing GFI’s 2017 report which estimated that Bangladesh had lost between $6 billion and $9 billion to illicit money outflows in 2014. At that time, the GFI analysed discrepancies between bilateral trade statistics and balance of payments data, as reported to the IMF, to detect flows of capital that were illegally earned, transferred, or utilised.
This year, the GFI detected the IFFs by analysing the trade data on over invoicing and under invoicing. It found Bangladesh as one of the top 30 of countries, ranked by dollar value of illicit outflows in 2015. These countries not only include resource-rich countries such as South Africa and Nigeria but also European countries such as Turkey and South American nation Brazil.
The Asian countries in the top 30 countries in this category include Malaysia, India and the Philippines. The amount of IFFs from Malaysia was $33.7 billion, $9.8 billion from India and $5.1 billion from the Philippines.
Bangladesh lost the second highest amount of fund through IFFS after India among the South Asian nations. The illegal outflow through trade misinvoicing in other South Asian countries including Pakistan, Sri Lanka was less than a billion dollar.
The research and advisory organisation said increasing trade among developing and emerging market countries is seen by many economists as a primary path to greater development.
“However, high levels of misinvoicing, as a percentage of total trade, indicate that most developing country governments do not benefit from a significant portion of their international trade transactions with advanced economies,” said the GFI.
The GFI data showed that the amount of IFFs from Bangladesh was 17.5 percent of the nation’s total trade with advanced countries at $33.73 billion in 2015.
In its previous report, the GFI said Bangladesh lost $75 billion due to trade misinvoicing and other unrecorded outflows between 2005 and 2014.


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Cracks appear in China economy

AFP, Beijing

Cracks are opening in China’s mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs.
The world’s second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months.
While gross domestic product grew at 6.6 percent in 2018 — a rate that would be the envy of most nations — China’s efforts to cut its debt mountain have weighed on the economy. Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the United States has not helped.
Here is a look at some of the struggles faced by Chinese companies and people:
Feeding China’s addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home.
The game allows players to harvest wheat, raise chickens and plant apple trees — a bucolic refuge from the pressures of urban China.
But in real life, the tech firm has struggled to find investors.
“In December our company’s funding ran out, we had an investment lined up, but the money never came through,” said chairman Cui Yi.
“This month I arranged another investor, then he backed out too. I think we can’t hold out.”
His company is not alone.
Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13 percent from a year earlier, according to data from Preqin market research.Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say.
Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Comment

AFP, Beijing

Cracks are opening in China’s mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs.
The world’s second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months.
While gross domestic product grew at 6.6 percent in 2018 — a rate that would be the envy of most nations — China’s efforts to cut its debt mountain have weighed on the economy. Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the United States has not helped.
Here is a look at some of the struggles faced by Chinese companies and people:
Feeding China’s addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home.
The game allows players to harvest wheat, raise chickens and plant apple trees — a bucolic refuge from the pressures of urban China.
But in real life, the tech firm has struggled to find investors.
“In December our company’s funding ran out, we had an investment lined up, but the money never came through,” said chairman Cui Yi.
“This month I arranged another investor, then he backed out too. I think we can’t hold out.”
His company is not alone.
Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13 percent from a year earlier, according to data from Preqin market research.Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say.
Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.


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INDUSTRIAL PROGRAMME
Saudi seeks to attract $427b

Reuters, Riyadh

Saudi Arabia aims to attract private sector investments worth 1.6 trillion riyals ($427 billion) over the next decade through an industrial development programme aimed at diversifying the economy, Energy Minister Khalid al-Falih said on Saturday.
Investments will be made through the National Industrial Development and Logistics Program (NIDLP), one of the programmes set out under Vision 2030, a wider reform strategy led by Crown Prince Mohammed bin Salman and intended to wean the economy off hydrocarbons and create jobs for Saudis.
Falih said the kingdom would on Monday announce projects worth 70 billion riyals that are “ready for negotiations” under the NIDLP to boost industry, mining, energy and logistics.
At a later stage, it plans to announce projects in the military, chemicals and small businesses industries worth $50 billion, he added without giving a timeframe.

Comment

Reuters, Riyadh

Saudi Arabia aims to attract private sector investments worth 1.6 trillion riyals ($427 billion) over the next decade through an industrial development programme aimed at diversifying the economy, Energy Minister Khalid al-Falih said on Saturday.
Investments will be made through the National Industrial Development and Logistics Program (NIDLP), one of the programmes set out under Vision 2030, a wider reform strategy led by Crown Prince Mohammed bin Salman and intended to wean the economy off hydrocarbons and create jobs for Saudis.
Falih said the kingdom would on Monday announce projects worth 70 billion riyals that are “ready for negotiations” under the NIDLP to boost industry, mining, energy and logistics.
At a later stage, it plans to announce projects in the military, chemicals and small businesses industries worth $50 billion, he added without giving a timeframe.


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