LDC
Australia to continue duty-free market access for Bangladesh
Australia will continue to provide Bangladesh with duty-free access in its market after the country’s graduation from the LDC category.
High Commissioner of Australia to Bangladesh Jeremy Bruer informed BGMEA President Faruque Hassan about the Australian government’s decision when he paid a courtesy call on the envoy at the High Commission in Dhaka recently.
BGMEA First Vice President Syed Nazrul Islam, Vice President Miran Ali, Directors Asif Ashraf, Barrister Vidiya Amrit Khan and Chair of BGMEA Standing Committee on Foreign Mission Cell Shams Mahmud accompanied the President during the visit.
Read Bangladesh Missions in Australia, Denmark & Switzerland get new envoys
Duncan McCullough, Second Secretary (Commercial and Economic Diplomacy) at the Australian High Commission in Dhaka was also present on the occasion.
BGMEA President Faruque Hassan hailed the Australian government’s decision of continuing duty-free market access for Bangladesh, saying that it would support Bangladesh in maintaining the momentum of its economic growth after the LDC graduation.
He hoped that the friendly support of Australian for the development of Bangladesh would continue in the coming years.
Also read: Envoy urges BGMEA to consider setting up joint ventures in Egypt
Different issues, especially potential areas of expanding trade and investment between Australia and Bangladesh were discussed at the meeting.
They opined that huge opportunities lie ahead of both countries in reaping mutual trade benefits by further deepening collaboration and cooperation.
The BGMEA leaders expressed Bangladesh’s interest in importing more cotton and wool from Australia to meet the growing demand of the RMG and textile industry.
Also read: BGMEA seeks govt support in implementing RMG industry's sustainable dev vision
They sought cooperation of Australia in developing knowledge and skills of the students of BGMEA University of Fashion and Technology (BUFT) in textile, apparel, fashion, design and business through collaboration with leading Australian universities and fashion institutes.
Budget 2022-23: Economic self-reliance, adequate supply of commodities to be key challenges
Renowned economists and businesses opined that the Russia-Ukraine war, related supply crises, and LDC graduation would be the key challenges to the upcoming budget of the country.
They said production disruptions, supply hindrances, and economic problems related to increasing import costs will have to be identified in the next budget.
Speakers said these at ‘The Business Post’ roundtable discussion on ‘Economic Challenge and the Upcoming Budget for FY23’ held at the ‘Business Post’ auditorium on Saturday.
Besides, internal economic capacity will have to be increased to face the global economic pressure. At a time, increasing government and private investment, creating employment opportunities, and boosting the social safety net along with other facilities need to be addressed in the upcoming budget of the next fiscal year, they said.
A B Mirza Azizul Islam, former finance adviser, caretaker government, was present at the roundtable as the chief guest.
The Business Post Editor Mohammad Golam Sarwar presided over the roundtable while its Executive Editor Nazmul Ahsan moderated the programme.
In his speech, Mirza Azizul Islam said, “The main challenge of the budget is to control the inflation. The global unstable situation is the source of the present inflation. The fuel prices have soared due to the Russian invasion of Ukraine. While inflation creates because of global reasons, it would not be resisted by internal policy. In this case, the next budget should focus on how much safety they can provide to the affected. For this, social safety might be increased. However, needy people are always deprived of the facilities. Opportunists embezzle the social safety fund. This fund is also not adequate. That’s why; allocation in the social safety net should be increased in the next budget.”
Pension should be dropped from the social safety net, he asserted.
He said, every year, the size of the budget becomes small in the revised budget. The capacity of expenditure should be increased as Bangladesh expenses the lowest amount in South Asia.
Mirza Azizul also raised the question about the size and number of the budget.
The senior economist said the amount of expenditure will decrease if revenue does not increase. The tax-GDP ratio in Nepal and India is 22 percent while 15 percent in Pakistan. It should be increased by a 10 percent ratio in Bangladesh.
The government gives pressure on those who submit tax returns regularly although half of the total TIN (Tax Identification Number) holders do not submit a tax return. It should also be investigated, he added.
Mirza Azizul said at present the unemployment rate is more among the educated people. The upcoming budget should address the issue because the investment in the private sector remained stagnant in the last decade. In this case, funding and capital market problems should also be resolved.
Center for Policy Dialogue (CPD) Research Director Khondokar Golam Muazzem said the supply chain system has been disrupted during the post-Covid period. At the same time, expenditure also increased. The economic impact is prevailing in the country for the hike of fuel and its supply due to the Russian-Ukraine war.
At present, the challenge is the ‘balance of payment’. Export increased in the country but the cost of imports is higher than the export amount. Only remittance and foreign loans can level this ratio. The foreign exchange market will remain unstable in the upcoming days. The central bank should take logical measures to stabilize the money market. The price of the dollar is higher in the kerb market. If the central bank does not take action in this regard, remittance through hundi will be increased, he added.
Former chairman of the National Board of Revenue (NBR) Abdul Majid said, “We need to target a three-year rolling system. The ADP has implemented 45 percent in nine months, and the rest in three months. The next budget should have suggestions and the opportunity to introduce changes in this regard.”
Also read: Debapriya wants more allocation for social safety in next national budget
PM urges US companies to boost investment in Bangladesh
Prime Minister Sheikh Hasina on Tuesday said Bangladesh needs enhanced investment from its friendly countries, especially from the USA, as it aspires to become a developed and prosperous country by 2041.“Bangladesh has been recommended to graduate from the LDC in 2026. We are aspiring to become a developed and prosperous country by 2041. For that purpose, we need enhanced investment from our friendly countries, especially from the USA,” she said.The prime minister said this at a meeting with the first-ever visiting Executive Business Delegation of the US-Bangladesh Business Council at her official residence Ganobhaban.She said that Bangladesh is now an attractive investment destination. Along with physical infrastructure, the government has upgraded and eased the rules and regulations relating to investment and business.“Bangladesh has the most liberal investment policy in South Asia and that foreign investment is protected by acts of Parliament and bilateral treaties,” she said.
Also read: PM urges ADB to finance Bangladesh's Delta Plan 2100Highlighting her government's development programmes she mentioned that the entire country has recently been brought under electricity coverage.“We are upgrading our road, railway and water communications by implementing some mega projects,” she said.Hasina told the delegation that her government is setting up 100 special economic zones for domestic and foreign investors across the country.“We may earmark one of the zones exclusively for the US investors, if you desire so,” she said.She said that demographic dividend, and government’s focus on developing skilled manpower ensures that investors here get skilled human resources at competitive wages.The prime minister said that Bangladesh-US friendship is based on common values and shared interests and it is reflected in expanding overall business relations.“Our trade relations can be further strengthened with duty-free access and other trade privileges in the US market,” she said.In this regard she said Bangladesh is ready to commence Free Trade Agreement-FTA negotiations with the US at an appropriate time.She mentioned that export volume increased by more than USD 3 billion during the last five years. The export volume rose to USD 7.6 billion in 2021-22 from USD 5.8 billion in 2016-17.Since independence, she said, the US has been one of the trusted development partners and it is contributing to Bangladesh’s socio-economic progress. The USA is the single largest source of FDI and export market for Bangladesh.“I believe US companies will take the advantage and invest more in potential sectors like power and energy, ICT, infrastructure, light engineering products, mobile phone and electronic goods, automobile, agro-processing, pharmaceuticals, ceramics, among others.”
Also read: Don’t go to foreigners with complaints: PM to labour leadersShe said that the government is pursuing a long-term growth strategy for its citizens which is sustainable as acknowledged by the global economists and organisations.Hasina said that the government has taken pledge to realise the “Golden Bangla’’, the dream of Father of the Nation Bangabandhu Sheikh Mujibur Rahman to turn Bangladesh into a poverty- and hunger-free prosperous country.“With such strong prospect, I would now assure you of the best possible policy framework to ease our business and investment climate," she told the delegation.She hoped that the US-Bangladesh Energy Taskforce which was launched in September 2021 will help advance energy cooperation between the stakeholders of both countries.“Likewise, the proposed US-Bangladesh Digital Economy Taskforce will contribute in deepening the cooperation of companies of both countries to ensure our sustainable development.”She hoped that the business delegation would be able to understand the congenial atmosphere and feel confident for their potential investment in Bangladesh.In this connection, she said that Bangladesh is now recognised for the state-of-the-art manufacturing factories in various sectors like RMG, leather, plastic, jute, ICT, agro-processing and many more.“It is our TIME now and please make your TIME taking opportunities of our conducive investment regime. I wish every success of the US-Bangladesh Business Council,” she said.Board Chair of US-Bangladesh Business Council Jay R. Pryor,Board members of the US-Bangladesh Business Council andbusiness executives from Bangladesh and US also spoke at the meeting.
Bangladesh’s creditworthiness becomes high after graduation from LDC
Bangladesh’s graduation to lower middle income country from low income bracket has improved the credit worthiness of the country, according to an official document.
This has also opened new windows for financing of Bangladesh development projects by the World Bank and other development partners with slightly higher interest rates, says the document obtained by UNB.
In line with the Public Money and Budget Management Act, 2009, the government aims at minimizing interest costs and risks by choosing an appropriate borrowing mix.
Also read: International solidarity key to achieving DPoA for LDCs: Bangladesh
The document says Bangladesh's concessional financing facilities from bilateral and multilateral development partners has shrunk slightly in the recent past as the country elevated itself into the lower middle income status.
The government has been pursuing a medium term deficit financing strategy to strike a balance between domestic and external source as interest rate of foreign loans is still cheaper than
that of domestic loans despite some foreign exchange risk.
Further, the document mentions, global interest rate is likely to remain reasonably low as the global economic recovery might be delayed due to the advent of new variants of COVID-19 amid supply shortage of vaccine doses across the globe.
Therefore, deciding on an appropriate borrowing mix between external and domestic source is critical to reduce overall financing cost and slowing down accumulation of debt stock.
As the government meets the major share of its financing requirements from domestic sources, appropriate borrowing mix between bank and non-bank financing is critical to reduce domestic
debt servicing cost, and hence the overall financing cost.
The official document says the government has been trying to reduce the share of nonbank financing in its domestic portfolio towards relatively cheaper bank financing by implementing several reform measures in the National Saving scheme, postal saving scheme, and the postal banking system.
For instance, it says, NID-based national database is being used to sell NSCs to ensure that any individual cannot cross his maximum allowable limit of investment in NSCs and the source tax on interest income from NSCs was raised to 10 per cent from 5 per cent since fiscal 2019-20.
Besides, the postal savings scheme and the postal banking system have also been automated to improve efficiency in government financing.
Also read: Bangladesh to enjoy DFQF market access to Australia in post-LDC period
To widen the scope for domestic financing the government has been taking various reform measures to increase the depth of the domestic bond market, the document adds.
The government has introduced a Shariah-compliant bond called 'Sukuk' in fiscal 2020-21.
The fund raised by the Sukuk will be invested in a large infrastructure project titled "Safe Water Supply for the Whole Country".
The Shukuk could be a new frontier for financing large infrastructure projects by the government and thus, could reduce government's dependence on foreign finance which is not always easily accessible.
It could also ease pressure on the domestic market as the government might reduce its dependence on traditional financing such as bank borrowing or nonbank borrowing by issuing NSC.
International solidarity key to achieving DPoA for LDCs: Bangladesh
Bangladesh has underscored the need for "international solidarity and partnership" in achieving the concrete commitments and deliverables of the Doha Programme of Action (DPoA) for the least developed countries (LDCs).
Permanent Representative of Bangladesh to the UN, Ambassador Rabab Fatima, said these while addressing the first part of the 5th United Nations Conference on the LDCs (LDC5) in the General Assembly Hall of the United Nations in New York on Thursday.
Ambassador Fatima, along with the Permanent Representative of Canada Ambassador Robert Rae, co-chaired the preparatory process of this conference.
The General Assembly had earlier decided to hold the LDC5 conference in two parts. The second part will take place from 5th to 9th March, 2023, in Doha, according to a message received from New York.
The first part of the conference has been organised to adopt the Doha Programme of Action for the LDCs -- a decade-long development roadmap for these countries. The second part will focus on other substantive issues, where heads of states and governments are expected to attend
Speaking on behalf of the two co-chairs, Ambassador Fatima highlighted the unprecedented crisis created by the pandemic and uneven and inequitable responses to tackle it.
READ: Bangladesh to enjoy DFQF market access to Australia in post-LDC period
She commended the commitment and solidarity of the member states to adopt the DPoA, which provides an ambitious and well-defined action agenda for the LDCs and their development partners for the decade 2022-31.
She requested everyone to support the follow-up and monitoring mechanism of the DPoA with due diligence for its successful implementation. The Ambassador also urged the international community and the development partners to remain deeply engaged with the LDCs during the entire cycle of the DPOA implementation.
In this regard, she underscored the need for integrating the DPOA in the strategic plans and country programmes of the UN agencies, funds and programmes to ensure that the UN’s impact on the LDCs matches their needs and ground realities.
At the outset of the meeting, Deputy Prime Minister and Minister of Foreign Affairs of the State of Qatar, Sheikh Mohammed bin Abdulrahman Al-Thani, was elected as the president of the LDC5 conference.
Ambassador Fatima thanked him and Qatar for the leadership and support to host the 5th United Nations Conference on the LDCs.
The meeting was also attended by Lazarus Chakwera, President of Malawi, as the global chair of the LDCs and the Secretary-General of the United Nations, among others.
Dhaka seeks Berlin’s support to face post-LDC challenges
Commerce Minister Tipu Munshi on Monday sought GSP support from Germany for Bangladesh to face the post-LDC challenges after its final graduation as a developing nation.
He also urged the European country to increase mutual understanding between the two countries over the trade and business issues.
The Commerce Minister made the call when German Ambassador to Bangladesh Achim Tröster met him at the Bangladesh Secretariat.
Also read: National strategy soon for smooth graduation from LDC: PM Hasina
Tipu urged Germany to allow the access of more Bangladeshi products to its market.
He said since environment-friendly green factories have been set up and other necessary compliances are followed here, the production cost of goods went high in Bangladesh.
The minister expects Germany to extend cooperation in giving fair prices of readymade garments from Bangladesh.
He called on German entrepreneurs to invest in 100 economic zones and 33 hi-tech parks of Bangladesh.
Also read: FBCCI preparing a master plan to face post-LDC challenges
The German envoy praised the recent development in Bangladesh under the leadership of Prime Minister Sheikh Hasina and said Germany would continue its assistance to Bangladesh in its development journey.
National strategy soon for smooth graduation from LDC: PM Hasina
Prime Minister Sheikh Hasina on Sunday said the government has taken a step to formulate a ‘National Smooth Transition Strategy’, aiming to make the graduation of Bangladesh from Least Developed Country (LDC) group to a developing one smoother.
“To ensure a smoother graduation to a developing country, the process is on to formulate a National Smooth Transition Strategy. All kinds of directives have to be incorporated in the strategy to face the future challenges,” she said.
The PM said this while addressing an official celebration programme marking the Graduation of Bangladesh from the LDC to a developing country.
Also read:Maintain Covid precautions: PM Hasina
Solih attributes ‘milestone achievement’ to Hasina’s ‘exemplary’ leadership
President of the Maldives Ibrahim Mohamed Solih has commended Prime Minister Sheikh Hasina for the “outstanding” socio-economic progress achieved in Bangladesh under her leadership.
He also congratulated her as Bangladesh qualified for graduating from Least Developed Country (LDC) category to a developing country status.
President Solih attributed this “milestone achievement” to Prime Minister Sheikh Hasina’s "foresight and exemplary" leadership, coupled with the hard work of Bangladeshi people, according to a joint communiqué issued on Thursday night.
Both leaders noted the untapped scope for economic cooperation between the Maldives and Bangladesh.
They agreed to expedite the work in translating this potential into tangible outcomes through trade and investment initiatives.
In the context of graduation from LDC status, and the need to maintain benefits enjoyed under the South Asian Free Trade Area, Hasina reiterated Bangladesh’s offer to conclude a Preferential Trade Agreement (PTA) with the Maldives.
Solih welcomed Hasina’s initiative for PTA and to hold Commerce Secretary-level meetings to discuss trade related issues in detail at the earliest.
Read: Bangladesh-Maldives ties must grow further: Hasina
Both leaders reviewed the progress made on the commitments announced during the state visit of President Solih and the official visits of Vice President Faisal Naseem and Minister of Foreign Affairs Abdulla Shahid to Dhaka earlier this year.
They expressed satisfaction on timely holding of the first bilateral consultations at Foreign Secretary level, between the two countries in November 2021 in Malé.
The two leaders noted the need to expedite the implementation of the other instruments concluded during the visit of President Solih in March 2021.
Solih and Hasina held official talks on Thursday and reviewed the entire range of bilateral engagements including exploring new avenues for further strengthening cooperation on trade, investment, connectivity, health, culture, agriculture, Information and Communication Technology, human resources development, consular and community welfare.
They also exchanged views on regional and international issues of mutual interest.
Read: Bangladesh-Maldives ties must grow further: Hasina
During the visit, Vice President Faisal Naseem, Speaker of People’s Majlis, former President Mohamed Nasheed, Chief Justice Ahmed Muthasim Adnan and Minister of State for Foreign Affairs Ahmed Khaleel paid courtesy calls on Hasina.
Solih recalled his successful state visit to Dhaka in March 2021, to participate in the epochal celebrations commemorating the birth centenary of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman and the Golden Jubilee of the Independence of Bangladesh and congratulated Prime Minister Sheikh Hasina on these festive occasions.
Solih and Hasina discussed the global Covid-19 pandemic and noted the devastating impacts it has had on the economies, livelihoods and wellbeing of the people in both the countries, as well as across the globe.
Both leaders agreed on the importance of equitable access to vaccines to combat the pandemic.
FBCCI preparing a master plan to face post-LDC challenges
The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) is preparing a 10-year master plan to face post-LDC challenges in trade and commerce and determine the necessary strategies for logistics in the coming days.
FBCCI President Jashim Uddin said this at a press conference held at the FBCCI office on Sunday.
After emerging as a developing country from a least developed one, he said numerous opportunities will be created for Bangladesh and the FBCCI is formulating the master plan to avail of the opportunities.
“Businesses will create demands for new products.. The size of the economy will also get bigger. Once the implementation of various infrastructure projects taken up by the government is completed, foreign investment will also increase. Then the capacity of transporting goods and ports will also have to be increased,” the president of the apex trade body said.
Also read: 25% price hikes of construction materials: FBCCI urges government to curb price
He said the biggest challenge in the post-LDC period is to increase sector-based capacity to meet the changing global demand. “To address this challenge, the FBCCI is going to set up an innovation centre to enhance the capacity of domestic industries. The concept paper will be submitted to the government next month.”
Jashim Uddin said North South University is working with the FBCCI on Circular Economy and recycling. The FBCCI President hopes that with the completion of these ongoing activities, power generation and recycled products from the country's waste will increase.
The press conference was organized on the occasion of “Bijoyer 50 Bochhor: Lal Shobujer Mohotshab” a 16-day gala celebration.
Also present at the press conference were FBCCI Senior Vice President Mostofa Azad Chowdhury Babu, Vice President MA Momen, Md Aminul Hoque Shamim, Amin Helaly, Salahuddin Ahmed and MA Razzak Khan Raj.
Also read: 50 years of Independence: PM inaugurates FBCCI’s gala celebration
WTO Ministerial: Bangladesh’s focus should be on transition period extension
While Bangladesh is graduating from LDC, the first and foremost priority for Bangladesh in the upcoming the 12th Ministerial Conference of the WTO should be on the extension of the transition period for 12 years, said BGMEA president Faruque Hassan.
“The LDC group has made a submission to the WTO for extending the timeline for 12 years. A consensus on this proposal will not only help us to sustain the growth momentum but also crucial to build internal capacity,” he said.
Read:BGMEA for branding 'Made in Bangladesh'
He made the remarks while speaking at a webinar on “Upcoming MC 12: Bangladesh’s Expectations and Possible Stance” organized by the Centre for Policy Dialogue (CPD) on Thursday.
CPD Chairman Professor Rehman Sobhan presided over the session while Syed Manzur Elahi, Treasurer of the CPD Board of Trustees, Md. Hafizur Rahman, Director General, WTO Cell, Ministry of Commerce, Dr. Nazneen Ahmed, Country Economist, UNDP, Dr Mostafa Abid Khan, former Member, Bangladesh Trade and Tariff Commission, and Dr. Khondaker Golam Moazzem, Research Director, CPD attended as panelists. Professor Mustafizur Rahman, Distinguished Fellow, CPD was the keynote speaker.
In his speech Faruque Hassan said trade competitiveness is going to be crucial in the upcoming days, especially for the graduating LDCs like Bangladesh.
“We have to make use of support programs like UNCDF, LDCF, UN technology bank for LDCs etc. We need to make most use of these options.”
Read: BGMEA, Jetro want to expand Japan-Bangladesh trade
Laying emphasis on Free Trade Agreement (FTA) he said, “While we keep engaging through multilateral trade system, given the rise in regional and bilateral FTAs, it will be very difficult for Bangladesh to cope up with competitors if we cannot make our ways through to that direction.”
Along with exploring potential and emerging markets, in the upcoming days, Bangladesh will have to focus on intra-regional trade block, he added.
The BGMEA President also stressed the need for capacity building for trade negotiation.
“We have to work on our internal capacity building as far as trade negotiation and economic diplomacy is concerned.”