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RMG makers lodge complaints against Belgian buyer

June 30, 2009 Leave a comment

Refayet Ullah Mirdha

Many local knitwear manufacturers and exporters have complained that Malu NV, a Belgian buyer of readymade garment (RMG) from Bangladesh, is allegedly cheating them with charging heavy discount by conducting frequent inspections of the shipped goods.

Following such non-cooperation from Malu, some local manufacturers are losing their competitiveness in international trade, the exporters said.

However Malu NV has denied the allegation.

“I have sold my personal car to pay my workers”, said Mansoor Hamid, managing director of Marshall Knittex Ltd, which was supplying knitwear products to Malu NV.

He said the victims have already submitted their complaints officially to Malu NV and the local associations concerned demanding immediate solution to the problem as they are incurring losses from such anti-business attitudes from the Belgian buyer.

In the written complaint, Hamid said he was facing problems with his bank due to the Malu’s cancellation of shipment of 25,000 pieces knitwear products.

He alleged that all other buyers are doing fair business with them following the norms, but Malu is the only buyer, which has put the manufacturers under pressure of discount and other threats.

Hamid said after an order is finalised and once goods are ready for shipment, Malu takes the products to Chittagong Port and keep those at the port for 20-25 days unnecessarily.

When the goods reach Rotterdam port or Antwerp port in Belgium, Malu sends message to the suppliers that a pre-shipment test will be conducted for the final delivery, he said.

Aminur Rahman, managing director of GC Fashion Wear Ltd, another victim, alleged that Malu NV has deducted more than 20 percent from the value of its each delivery.

The buyer has taken away 40 percent from JR Knit Fashion’ delivery, 10 percent from Oaishe Composite Knit Garment Ltd, 10 percent from Tex Bay Ltd, 50 percent from Rising Sun Knit Ltd and 10 percent from Fourthway Knittex Ltd, officials of the companies alleged.

When contacted, Roger Van Craen, managing director of Malu NV, told The Daily Star that the claim made by the Bangladeshi suppliers was not true as the dispute was resolved through discussion.

He said Malu demanded discount from the factory owners due to delayed shipment and poor quality of goods of some suppliers.

“I have been doing business with Bangladesh for the last 10 years and I import garment items worth $35 million a year,” said Craen, the owner of Malu NV that has an annual turnover of $70 million.

“I am expanding the volume of business in Bangladesh as the country produces quality knitwear at cheaper price,” the Malu chief said.

Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association, said he was formally apprised of the situation.

“We will try to solve the problem through discussion,” Hoque said.

reefat@thedailystar.net

Source: The Daily Star, 30 June 2009

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Cancel debt, World Bank dared

June 30, 2009 Leave a comment

IF the World Bank wants to help the country survive the global economic recession, it should “walk the talk” and begin the process of debt cancellation, according to the Freedom from Debt Coalition (FDC).

In a statement, the FDC said on Monday that due to the automatic debt-service law, and the government underspending amid low revenues and unabashed borrowings to fill in the deficit, the possibility the country will sink into a recession is becoming clearer.

The FDC said that of the country’s total debt stock, $2.54 billion or P122 billion is owed to the International Bank for Reconstruction and Development (IBRD), or the World Bank.

“We are scheduled to pay $299 million to World Bank this year, or about P14.15 billion, of which P9.8 billion will go to interest payments alone. Imagine the results our country can achieve if the P122-billion WB debt is canceled
and used to fund development programs and projects,” said FDC secretary-general Milo Tanchuling.

“International financial institutions like the World Bank can help highly-indebted countries like the Philippines by starting to act like a development institution rather than a commercial bank and by canceling loans it is claiming from us,” continued Tanchuling.

The FDC said if the WB would indeed start the process of debt cancellation, it can also start with auditing its own loan-financed projects. The group said one loan that should be audited is the loan for the Second Social Expenditure Management Program (SEMP2) and the Small Coconut Farms Development Project (SCFDP).

The SEMP2 was funded by a $100-million World Bank loan, around $40 million of which was earmarked for the procurement of 17.5 million Social Studies textbooks and teachers’ manuals for public elementary and high schools.

“The project allegedly underwent a rigged bidding process involving a monopoly and was reported to have produced at least 600,000 defective textbooks,” said the FDC.

The group said officials from both the administration and the opposition already called for an inquiry into the SEMP2, of which the Philippines is scheduled to pay $5.5 million or P260 million as interest payment. The SEMP2 loan payments run until April 15, 2019.

The group referred to the SCFDP as “the original fertilizer scam,” and it was financed by a $121.8-million by the World Bank on June 4, 1990.

The group said around 40 percent of the funds intended for the project’s fertilizer deliveries had been reported to be malversed, with the Commission on Audit raising questions on insufficient documentation on the distribution of fertilizers.

The FDC said the Philippines is scheduled to pay a total of $11.46 million or P540 million, both for interest and principal, for the SCFDP loan this year. The loan will be paid until September 15, 2010.

“If it was able to investigate the case of NRIMP [National Roads Improvement and Management Project] 1 and 2, then it can also do so for SEMP2 and SCFDP,” said the FDC.

With the country’s debt totalling P4.229 trillion as of March this year, and with the deficit soaring 556.2 percent year-on-year from January to May, the economy will be in a more precarious situation should government increase its deficit further, according to the group. 

The Bureau of Treasury reported that from January to April, the government paid P320.19 billion in debt service—P122.16 billion in interest and P198.03 billion for the principal.

The group pointed out that interest payments alone already ate up 26.3 percent of government disbursements over the same period.   

Source: The Business Mirror, 30 June 2009

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RMG Workers’ Mayhem in Ashulia: It all started with the sacking in a sick unit

June 30, 2009 Leave a comment

Refayet Ullah Mridha

Sacking of about 1,000 workers of a sick garment factory was at the root of yesterday’s mayhem in Ashulia. But it fanned at a stunning speed the festering anger of workers of a large number of sick garment factories. Ultimately, some 50,000 workers took part in the wholesale vandalising and damaging of about 50 garment units in Ashulia.

The current global meltdown had a background part to play in the whole thing as scores of factories turned sick due to reduced orders.

Low and delayed wage payments following the recession also helped trigger the unrest that took at least two lives and left hundreds injured in three consecutive days of violence.

Ha-Meem Group in Ashulia was the latest factory to become a major victim.

Many factory owners had truncated their workforce to be more competitive against their international competitors, industry insiders said.

Retrenched workers of different garment factories were lobbying Bangladesh Garment Manufacturers and Exporters Association (BGMEA) over the last few months to have their jobs back, get their arrear wages, and get their pays hiked. But the association could do little for them.

“Due to declining orders from international buyers I sold S Suhi Industrial Park [six garment production units] to Pretty Group in February and all of the units were closed in October last year,” said Sirajul Islam, former managing director of S Suhi Industrial Park.

Sirajul said he could not run all six of his units as the number of orders from the recession-hit international buyers was declining. He said the units had 1,700 workers when it was handed over to the new owner.

The closure of the units of S Suhi Industrial Park Ltd was mainly responsible for the latest labour unrest in garment factories in Ashulia and Savar areas, a number of garment workers claimed.

Pretty Group in March started production only with the sweater-manufacturing unit and kept the five other units of the former S Suhi Industrial Park closed. Around 1,000 out-of-work workers of the five units were mounting pressure on the new management to restart those units soon, said garment workers.

The workers of the closed units along with other ill-paid workers of some nearby factories, which are not doing so well, started a movement to reopen the units and raise salary of workers, they said.

Failing to get their jobs back, they started to unite and threaten to halt production in other factories unless the former S Suhi units are reopened, a worker of Ha-Meem Group said requesting anonymity.

The agitating workers started vandalising the factories that were still in production and the units of Ha-Meem Group bore the brunt of their wrath, the worker said.

Manjur Rahman, manager and company secretary of Pretty Group, claimed that this labour unrest had neither anything to do with his factory nor was it triggered from his factory.

He, however, said that three workers behaved badly with a production manager of S Suhi Sweater Unit (of Pretty Group) on June 27.

He said there was an altercation between the three workers and the production manager over the workers’ getting to work late. “The production manager did not allow the three to enter the factory that day and they were kept outside the gate,” he said.

He said the three workers called others and tried to force their way into the factory and the management tried to obstruct them with the help of Ansar members.

At one stage, the workers entered the factory premises and snatched the weapons of Ansar members. “Other Ansar members opened fire on the workers to disperse them when Al-Amin, a worker, was seriously injured and he died in Dhaka Medical College Hospital [DMCH],” Manjur said.

“I do not believe that the latest labour unrest erupted due to the incident in former S Suhi Industrial Park Ltd…it is a deliberate attempt to destroy the readymade garment sector in Bangladesh,” he said.

He said he would open the sweater factory on July 1, as this is the peak season for sweater production. The other units would be reopened in phases in the near future, he added.

Source: The Daily Star, 30 June 2009

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WTO and UNEP launch a report explaining for the first time the connections between trade and climate change

June 26, 2009 Leave a comment

WTO: 2009 PRESS RELEASES

PRESS/559

26 June 2009

TRADE AND ENVIRONMENT

The world cannot continue with “business as usual” and there is a profound need for a successful conclusion to the current negotiations on both climate change and trade opening.

The WTO/UNEP report on “Trade and Climate Change” published today examines the intersections between trade and climate change from four perspectives: the science of climate change; economics; multilateral efforts to tackle climate change; and national climate change policies and their effect on trade.

The WTO and UNEP are partners in the pursuit of sustainable development and this report is the outcome of collaborative research between the WTO and UNEP.

“With a challenge of this magnitude, multilateral cooperation is crucial and a successful conclusion to the ongoing climate change negotiations is the first step to achieving sustainable development for future generations,” said WTO Director General Pascal Lamy and UNEP’s Executive Director Achim Steiner.

Both Steiner and Lamy urge the international community to seal an equitable and decisive deal at the crucial UN climate convention meeting in Copenhagen, Denmark in December 2009. They also urge nations to conclude the Doha trade round which includes opening trade in environmental goods and services, a complementary track towards reducing greenhouse gas emissions to scientifically-defensible levels.

The scientific evidence is now clear that the Earth’s climate system is warming as a result of greenhouse gas emissions which are still increasing worldwide, and will continue to increase over the coming decades unless there are significant changes to current laws, policies and actions. Although freer trade could lead to increased CO2 emissions as a result of raising economic activity. It can also help alleviate climate change, for instance by increasing the diffusion of mitigation technologies.

The global economy is expected to be affected by climate change. Sectors such as agriculture, forestry, fisheries, tourism and transport infrastructure which are critical for developing countries are more specifically affected. These impacts will often have implications for trade.

Opening up trade and combating climate change can be mutually supportive towards realizing a low carbon economy the new report says. Contrary to some claims, trade and trade opening can have a positive impact on emissions of greenhouse gases in a variety of ways including accelerating the transfer of clean technology and the opportunity for developing economies to adapt those technologies to local circumstances. Rising incomes, linked with trade opening can also change social dynamics and aspirations with wealthier societies having the opportunity to demand higher environmental standards including ones on greenhouse gas emissions. In addition there is evidence that more open trade together with actions to combat climate change can catalyze global innovation including new products and processes that can stimulate new clean tech businesses.

National policies, from traditional regulatory instruments to economic incentives and financial measures, have been used in a number of countries to reduce greenhouse gas emissions and to increase energy efficiency. The report highlights the effects that this complex web of measures might have on international trade and the multilateral trading system. In recent years, there has been a proliferation of technical requirements (voluntary standards and labelling) related to climate-friendly goods and energy efficiency. Likewise, financial support programmes for the use of renewable energies have also increased recently.

The report also reviews extensively two particular types of pricing mechanisms that have been used to reduce greenhouse gas emissions: taxes and emissions trading systems. Incidentally, the report reflects the debate that is taking place on policies aimed at preventing carbon leakage and protecting competitiveness, including on border measures.

Overall, the report highlights that there is scope under WTO rules for addressing climate change at the national level. However, the relevance of WTO rules to climate change mitigation policies, as well as the implications for trade and the environmental effectiveness of these measures, will very much depend on how these policies are designed and the specific conditions for implementing them.

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Knitwear on way to get a boost

June 26, 2009 Leave a comment

Kazi Azizul Islam

Bangladesh knitwear industry is on the way to get uplift from cotton-based produces to genuine woolen items as a leading organisation from Australia has established business relations with some leading local knitters.
   The business relations will facilitate Bangladeshi knitters to produce woolen sweaters those will yield more business, extra profit and help increase manufacturers’ image abroad.
   The organisation, Australian Wool Innovation, has recently grouped up with some Bangladeshi manufacturers to source Marino wool products from Bangladesh, said officials of the Bangladesh Garment Manufacturers and Exporters Association.
   The officials said Bangladeshi knitwear exporters, who used to produce cotton-wear, would now be producing woolen-wear for exporting those to global market.
   He said, some of the exporters had already started producing sample items for global marketing.
   Originated in Australia and New Zealand, Merino wool is regarded finest and softest and economically viable variety of wool.
   The AWI last week launched a programme titled ‘Out of Bangladesh’ to inform global importers that some Woolmark-accredited Bangladeshi knitters have proven performance in making fine-gauge Merino wool knitwear.
   Woolmark is the globally recognised Australian accreditation that specifies pure new wool through a stringent testing for quality and performance of the finished garment.
   After China and Turkey, Bangladesh has world’s third largest knitwear industry, but it so far concentrates on bulk quantity of cotton-based low-cost sweaters.
   In 2008 sweater exports amounted at $1.8 billion, which was 15 per cent of Bangladesh’s entire apparel export earning.
   A very few local sweater manufacturers are trying to produce high value cashmere sweaters by sourcing died wool yarns from Mongolia or India, the officials said.
   The BGMEA officials said AWI already provided technical supports to their Bangladesh partners to produce sweaters with wool yarn.
   ‘Such tie-up will not only create market in Bangladesh for Australian wool yarn, also uplift Bangladesh’s sweater and knitwear industry,’ said Saifur Rahman, former chairman of the textile engineering department of the City University, a private university in the capital city.
   Ghulam Faruq, chairman of SQ Group, one of the Woolmark licensed manufacturers, says, now importers pay between $60 and $72 for a dozen of cotton sweaters while export price for woolen sweaters ranges between $180 and $480.
   ‘High value cashmere and medium value Marino wool sweaters have tens of billion dollar worth market globally so Bangladesh should eye that market segment,’ said Faruq.
   He added that machines generally used now by the Bangladeshi sweater manufacturers were compatible to Australian wool yarn so the industry could go for producing wool-based sweater easily.

Source: The Daily New Age, 26 June 2009

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RMG EXPORT: Unhealthy competition threatens growth

June 21, 2009 Leave a comment

Kazi Azizul Islam

Unhealthy competition over repeated price cut by a section of Bangladeshi garment exporters has intensified in the recent months that may cost a huge price loss to the country’s prime export earning sector, industry people and experts fear.
   They say the growth of Bangladesh textile and apparel industries will be hindered if the price cut competition continues.
   ‘It is just a madness that many exporters offer the making charges for a dozen of basic jeans trousers at $6 while the cost in even a midsized factory is about $9,’ said Emdadul Islam, director of Babylon Group.
   Emdad, who started his career in the country’s pioneer garment exporting company, told New Age that a section of short-sighted entrepreneurs had always been engaged in price war and forced others to follow them.
   The top executive of the Babylon provides New Age with the latest comparison on the prices of T-shirts that European Union had imported from different countries, including Bangladesh.
   Citing European Commission data, he said in 2008, Bangladeshi exporters h ad shipped highest volumes of T-shirts to European market. But the unit price remained much lower than the exporters of others countries.
   A made-in-Bangladesh T-shirt was shipped just for 1.22 Euro which was 37 per cent less than the global average price. Exports price of a Turkish T-shirt was 3.35 Euro, Chinese 2.03 Euro, Moroccan 1.56 Euro while an Indian T-shirt was shipped at 2.10 Euro.
   Echoing Emad, a Bangladeshi merchandiser working with a Dhaka sourcing office of a world leading European retailer says as importers easily get discount on very next Bangladeshi supplier they always search for the cheapest one.
   ‘If a quotation on per dozen of basic T-shirt at $12 from a local knitter is negotiated with four suppliers, it can easily be settled at $9,’ said the executive seeking anonymity.
   Rafiqul Islam, the consultant in Dhaka for a Washington-based labour right group, points out that availing the world cheapest wages, cheaper gas and electricity and no cost for managing waste, local exporters produce cheapest garments.
   ‘Exploiting their workers local exporters continue making their price offers cheaper while importers instigate them as they find Bangladesh a fertile ground for such unhealthy competition,’ he said.
   The Bangladesh Knitwear Manufacturers and Exporters Association president, Fazlul Hoque, traced that unhealthy competition on price cut had been enhanced much in ongoing recession period.
   ‘With flow of orders squeezes the suppliers are in race to get the orders by an affordable loss while some buyers are taking the chances and making the suppliers victims,’ said Hoque.
   Hoque said if the Export Promotion Bureau monitored the unit prices of exports, the BKMEA would support their initiatives. ‘At least, for discouraging them psychologically, the EPB can check unit prices that don’t meet even the basic costs of production.’
   The executive director of the Centre for Policy Dialogue, Professor Mustafizur Rahman, says export price war in Bangladesh is a very critical economic behaviour, which is difficult to rule.
   ‘Buyers usually take this opportunity when competition on price cut goes on in a sourcing market like Bangladesh that has several thousands of suppliers,’ he says.
   Mustafiz, however, suggested that the government could strictly monitor the labour right and environment compliances and should ensure that a non-complaint exporter cannot compete with a compliant exporter.


Source: The Daily New Age, 22 June 2009

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Bangladesh: climate change as a burning political issue

June 13, 2009 1 comment

For a policy aimed at prevention can only be instituted at Bangladesh’s state level, if a massive effort is made towards mobilising popular forces from below. Instead of limiting oneself to demanding financial concessions from imperialist governments, a high target needs to be set towards limiting emissions of carbon dioxide and other greenhouse gases, writes Peter Custers

IN THIS brief essay, I propose to analyse the danger that Bangladesh in the future will be visited by a climate catastrophe, as also the way in which such a catastrophe can be averted. I will also discuss more elaborately why climate change is a political issue, and not a matter of Nature’s erratic behaviour or spontaneous conduct. Today’s climate change, as scientists have argued for long, is primarily the consequence of the choices which Great Britain and other rising European capitalist powers made when staging the 18th-century Industrial Revolution. The Industrial Revolution entailed a technological transformation, leading to the factory-based system of industrial production. Technological changes in methods of production were accompanied by a shift from reliance on renewable sources of energy, such as wind and fuel wood, towards reliance on non-renewable energy sources, i.e. fossil fuels, starting with coal. More than two centuries of industrial production – in which coal, oil and gas have been employed as principal energy sources – have resulted in emissions of such large quantities of greenhouse gases to the world’s atmosphere, oceans and forests, as to make dramatic changes in the world’s climate virtually inevitable.
   
   Bangladesh’s vulnerability
   BANGLADESH threatens to be one of the first, and surely will be one of the major victims. For the country is extremely vulnerable to climate change – more so perhaps than most other nations on earth. Visits made by journalists and scientists to Greenland and the Antarctic region – regions located towards the world’s far northern and far southern poles where massive sheets of ice exist – in recent years have brought out that processes of the melting of ice there are well underway. Once these processes of melting will take on more massive forms, they inevitably will lead to higher water levels in all the world’s oceans. Some climate scientists warn that the increase may be five metres or more within the present century. Climate change, if allowed to continue, then will affect many of the world’s civilisations, civilisations which more often than not have been built in coastal zones, in river deltas and along the world’s main rivers. Even a relatively ‘modest’ rise in seawater levels, for instance of two metres, would threaten to inundate highly populated areas, such as the vast urban conglomerates of Dhaka, Kolkata, Tokyo and Shanghai.
   However, Bangladesh’s vulnerability is more than average. It is larger for instance than that of deltaic regions belonging to the world’s global north. This is due amongst others to the fact that Bangladesh’s territory includes large rural regions which are both low lying and highly populated, such as the country’s south-western region. A two-metre rise in the level of water in the Bay of Bengal, as reports drafted under the United Nations system have warned, could result in reduction of Bangladesh’s land mass by as much as a quarter, necessitating the evacuation of 25 to 30 million people. Moreover, Bangladesh’s position is different from that of a northern deltaic country such as the Netherlands, which too is low lying and very flat. For whereas the Netherlands as central capitalist power has been able to exploit southern economies ever since colonial times, and in consequence has built up huge capital resources which it can harness towards protection of its own people, Bangladesh and other deltaic and low-lying countries in the global south do not possess the same capital wealth. Lack of proper capital resources is one – though not the only – factor that makes Bangladesh’s position highly vulnerable.
   Moreover, the issue of climate change, as the geography of poverty in Bangladesh brings out, is also, partly, a class issue. Landlessness is a problem which, of course, exists throughout Bangladesh. As well known, the percentage of people belonging to the category of (functionally) landless peasants has been growing throughout the country ever since Bangladesh gained formal independence, in 1971. Yet the concentration of landlessness and of rural poverty is especially large in the south-western region. Here, the percentage of those who have to survive on less than $1 a day reportedly is the largest in comparative terms. This, of course, does not mean that other sections of the people living in the south-western region will not face added hardship, once water levels in the Bay of Bengal dramatically rises. Surely, those belonging to society’s middle sections – small peasants, shopkeepers, teachers, health workers, etc – risk being uprooted as well. Nevertheless, it is no exaggeration to say that the issue of climate change is a class question, for the poor and extremely poor simply lack the means to protect themselves, or to shift towards safe heavens in the north.
   
   Accumulation of CO2 in atmosphere
   LET’S next return once more to the relationship between climate change and imperialist exploitation. Spokespersons of the previous, notorious American government of George W Bush, against all evidence, argued that the very existence of greenhouse gases in the world’s atmosphere is a natural phenomenon for which humans bear no responsibility. It is, therefore, important to hammer on the point that CO2 and other greenhouse gases under capitalism have turned into a (gaseous) form of waste. Although CO2 has been present in the world’s atmosphere since the beginning of planet earth and has mediated the world’s climate for hundreds of millions of years, it is the emissions of CO2 and other greenhouses as ‘by-product’ of industrial manufacturing and as side-effect of the use of fossil fuels in transports, which is the very cause of modern climate change. Greenhouse gases comprise a whole range of gases besides CO2. For instance: methane, emissions of which are a side-effect of modern agriculture; and water vapour, additional quantities of which are released in consequence of climate change itself. All greenhouse gases trap the rays of the sun’s light in the world’s atmosphere, intercepting sunlight and preventing it from being reflected back into outer space.
   Further, greenhouse gases once deposited in the earth’s atmosphere continue to reside there for a smaller or greater length of time. This results in a process of accumulation, i.e. accumulation of waste in the air as an accompaniment of the accumulation of capital on earth. For instance, carbon dioxide remains present in the atmosphere for a period of more than one hundred years. The time of residence of methane, which has a large absorbing capacity, i.e. absorbing 20 times as much heat as does CO2, is relatively shorter. Yet here too accumulation takes place, for methane that is deposited in the world’s atmosphere stays around for as long as a decade. To this must be added the fact that the quantity of greenhouse gas emissions taking place every year does not remain constant or even. For the process of capitalist accumulation on a world scale itself results in emissions of ever larger quantities of greenhouse gases. Each year more CO2 is added to the quantity of CO2 that was deposited in the atmosphere in the preceding year. Both because of the long residing time of greenhouse gases in the atmosphere, and in consequence of the exponential growth in the amount of greenhouse gases that is emitted, the dangers they pose for humanity’s future are huge.
   The question which may be discussed next is what quantity of greenhouse gases in the atmosphere is maximally permissible, before things do definitely go wrong. Here, truth requires us to admit that climate scientists are not all agreed on one figure. The method by which the size of gaseous depositions is quantified is through carbon dioxide equivalents. Scientists measuring greenhouse gases in the atmosphere further speak of parts in a million, i.e. parts of greenhouse gas in a million of molecules in the air. With regard to CO2, it is estimated that its presence in the atmosphere has increased by a third since the start of the Industrial Revolution, i.e. from 280ppm then to 385ppm by now. However, there is no unanimity of view as to what constitutes a safe limit. According to the IPCC for stance, 450ppm is a tolerable level. Yet some climate scientists, such as the respected American climate archaeologist James Hansen, argue that at 385ppm we have already transgressed the limit of what’s permissible: if we want to save planet earth from catastrophic climate change, CO2 levels need to be brought down to 350ppm at most. Surely, from a precautionary point of view it would be foolhardy to take unnecessary risks, and put the upper limit higher than is absolutely safe.
   Moreover, climate scientists increasingly point at the danger that tipping points will be reached suddenly. The concept of tipping points being referred to in the world’s media refers to the fact that climate change could suddenly be accelerated through what are called ‘feedback’ effects, i.e. secondary processes of change which follow initial climate change. For climate change does not take place in a linear fashion.
   Acceleration is for instance implied by the disappearance of the so-called albedo, which is the phenomenon whereby icecaps and icebergs reflect sunlight back into outer space. In as much as the melting of ice leads not only to a rise in oceanic water levels, but in the very same go also cancels out the albedo effect, the warming up of the earth’s atmosphere indeed tends to be speeded up by initial climate change itself. Nobody can predict with certainty when climate change will run out of control.
   Yet the concept of tipping points brings out the risks of a sudden deluge. Once climate change is accelerated in consequence of worldwide processes of the melting of ice and permafrost, the rise in the oceanic water levels could indeed be exceedingly fast.
   
   Cyclones and climate change
   PERHAPS this is the point in my discourse where the question of a potential relationship between climate change and cyclones can best be discussed. Bangladesh and its neighbour Myanmar over the last one year and a half have experienced three major cyclones. First, in November of 2007, cyclone Sidr struck, claiming over 10 thousand lives in Bangladesh’s south-west. Within roughly half a year from then, Myanmar experienced an even more devastating cyclone, one which probably caused over a hundred thousand deaths. Then recently again, the coastal regions of Bangladesh were hit by another cyclone, one which claimed fewer human lives, but which damaged coastal embankments and led to the displacement of half a million people. Cyclones are, of course, not a new phenomenon for Bangladesh. They have claimed much larger numbers of victims in the past, in 1970 and 1991, than on recent occasions. Yet the question that needs to be posed is whether the recent succession of cyclones has anything to do with the process of human-induced climate change. Might there perhaps be a connection between the frequency of cyclones and occurrence of climate change, or between the latter and the intensity of cyclones which strike the coastal regions in the Bay of Bengal?
   Climate scientists don’t seem to agree yet on the answer to these crucial questions, and the evidence contained in reports that have been drafted is contradictory. And yet there is much reason to be alert. Research carried out on hurricane Katrina, which hit the US city of New Orleans in 2005, for instance, indicates that this cyclone reached its peak precisely when passing over an area of the Gulf of Mexico that was heated by an infusion of deep warm water hailing from the Caribbean. Scientists have also stated more than once that the very occurrence of cyclones is related to the warming up of the surface water of seas and oceans. Hence, the prevention of the further warming up of the earth and of the surface of the oceans is crucial, if we are to reduce the risk that devastating cyclones in the future will take place. Even if we can’t be hundred per cent sure as to the precise ways in which climate change and cyclone events interact, the risks associated with cyclones come on top of those deriving from a rise in water levels in oceans and seas.
   Perhaps the most alarming implication of rises in water levels is that the impact of cyclones which strike from the Bay of Bengal is shifted farther north. First, a rise in water levels of just 1 or 2 metres will inevitably lead to the loss of low-lying coastal areas, of chars and islands which at present are being cultivated, and where millions of poor and landless families eke out a meagre living. Secondly, the inundation of vast tracts of low-lying land will shift the burden of effects created by cyclones towards the north. Whereas so far, these burdens were carried by people living in occupied chars and mainland areas belonging, for instance, to Patuakhali, Bakerganj and Barguna, after the inundation of Bangladesh’s south-western region the cyclones’ power of devastation will fall on Bangladeshi districts which in the past have been relatively carefree. The question which then needs to be posed is whether the nation can afford to take so many risks relating to climate change. Will the country allow the global north to play with Bangladesh’s future generations? Or do we need to agitate nationally and internationally, so as to avert the risk of a climate catastrophe?
   
   Adaptation or prevention?
   LET´S then briefly discuss what perspective we need for policymaking, for social change aimed at stemming climate change now. At the level of Bangladesh’s state bureaucracy certain awareness exists of the fact that the country in the future threatens to be victimised by climate change. Sections of the country’s national press and media and of nongovernmental organisations these last few years have been quite vocal as well. Yet in line with the country’s history of dependence on external financial support, much too much energy has so far gone into shopping for money, money aimed at implementation of so-called ‘adaptation measures’. Of course, coastal embankments and shelters aimed at protecting people living in coastal zones are essential. Yet the question that needs to be posed is how much can ultimately be achieved via adaptation measures alone. Will such measures suffice? Don’t we risk having to rebuild coastal embankments many times over? And what when climate change reaches the tipping points of which I have spoken above? Will adaptation measures still be adequate to cope with accelerated climate change, with rises in sea water levels of 2 metres or more? Is a different course of action, one straightforwardly aimed instead at prevention, at averting climate disaster, ultimately not to be preferred above measures which by themselves can only help to counter a part of the huge damages that threaten to occur?
   Here is, then, where the responsibility of Bangladesh’s progressive forces comes into play. For a policy aimed at prevention can only be instituted at Bangladesh’s state level, if a massive effort is made towards mobilising popular forces from below. Instead of limiting oneself to demanding financial concessions from imperialist governments, a high target needs to be set towards limiting emissions of carbon dioxide and other greenhouse gases. Whereas the world’s governments are still haggling over targets such as a 20 or 50 per cent reduction in CO2 emissions by 2020 or later, the people of Bangladesh have the right to demand that emissions be brought down speedily and by 90 per cent. Only a rapid transition towards a world economy which relies on renewable energy instead of fossil fuel resources will do. Such a transition is not only technically feasible, but is also feasible in an economic sense. Through the institution of Keynesian measures of state intervention, such as taxes and public investments privileging renewable energy, the given transition can well be staged. Yet it will not be achieved unless the world’s working class and the peasantry take the lead.
   Dr Peter Custers is a campaigner and theoretician based in Leiden, the Netherlands

Source: The Daily New Age, 12 June 2009 

 

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Govt unveils Tk 34,358cr deficit budget

June 13, 2009 Leave a comment

Net outlay Tk 1,13,819 crore, focus on industries, agriculture

Shakhawat Hossain

The finance minister, AMA Muhith, on Thursday proposed higher spending and fiscal measures aimed at spurring industrial growth and economic activities in the face of global recession as he placed in parliament the national budget worth Tk 1,13,819 crore for 2009-10 fiscal year.
   The first budget of the Awami League-led alliance government prioritised agriculture, rural development and human resources development, industry and trade and social safety net in line with the ruling party’s election pledges.
   ‘The budget for FY 2009-10 will be the first step towards our journey to realise the dreams enshrined in our Vision,’ he said in the parliament in absence of the major opposition Bangladesh Nationalist Party and its allies.
   He said the budget is not just a statement of the government’s income and expenditure, but a vehicle to ensure growth, poverty reduction and commitment to achieving the macroeconomic fundamentals.
   However, the finance minister relied heavily on borrowing — which amounts to Tk 34,358 crore — to finance the ambitious annual development programme of Tk 30,500 crore and the newly introduced public-private partnership worth Tk 2100 crore.
   Some Tk 13,215 crore has been earmarked as loans and grants from the multilateral lenders and another Tk 20,555 crore from domestic sources to meet a record deficit of 5 per cent. The revenue generation target has been fixed at Tk 79,461 crore.
   Muhith, however, admitted that the proposed Annual Development Plan was quite ambitious and would need effective supervision and monitoring for its proper implementation to achieve the targeted 5.5 per cent GDP growth in the next fiscal.
   Experts and economists said the main challenge of the government was to implement the ambitious budgetary projections by mobilising resources in the context of falling revenues amid the global financial recession.
   It will be a big task for the government to keep the balance of the budget without which inflation may rise, said MK Mujeri, the director general of Bangladesh Institute of Development Studies.
   ‘The cost of doing business of the local entrepreneurs and manufacturers may go up,’ he said, adding that higher government borrowing would crowd out the private sector.
   Besides, ‘misuse’ of the funds is a big concern as the highest budgetary allocation goes to interest payment constituting 14 per cent of the outlay.
   ‘The trend will eventually trap the country in a vicious cycle of borrowing,’ said MM Akash, a professor of economics at Dhaka University.

   Compared to the allocation for debt servicing at 14 per cent, projected allocation for health and education combinedfront2-a is less than 20 per cent. It raises doubts whether it would be sufficient to improve the limping state of public health and education.
   The Awami League election manifesto envisaged 100 per cent primary school enrolment by 2010 and universal access to pure drinking water by 2011.
   The experts and economists, however, agreed that the finance minister tried to meet the short-term challenges of the global financial meltdown with his measures to encourage higher public and private investment.
   In the proposed development programmes, the AL-led government earmarked 7.8 per cent for the agriculture sector, 22.1 per cent for local government, 14 per cent for power and energy, 15.7 per cent for communication and 23.5 per cent for human development.
   Muhith announced a stimulus programme of Tk 5,000 crore for continued assistance to the country’s exporters of readymade garments, jute and frozen food.
   He also laid the importance on domestic demand amid global financial recession, saying that the country should expand domestic and regional markets for goods and services.
   The finance minister announced a two per cent duty cut from the existing seven per cent on more than 2,000 imported raw materials that is expected to benefit local manufacturers.
   FBCCI president Annisul Huq appreciated the measures saying it would help revive domestic manufacturers after a decline of 1.29 per cent in the country’s manufacturing sector in the outgoing fiscal (5.92 per cent in 2008-09 from 7.21 per cent in 2007-08).
   The finance minister announced some ‘populist tax measures’ such as continuation of tax holiday, provision for legalising undeclared money (black money) in the share markets, real estate and other industries.
   Retaining the lowest income ceiling on income tax, Muhith announced a series of measures and reforms in the revenue board targeting an increase of 300,000 new taxpayers.
   As expected, he raised tariffs on luxury products including vehicles, electronics, dry fruits, juice and drinks and tobacco.
   Apart from the short-term measures, the finance minister clearly hinted about major changes in the government’s economic policies from the next fiscal.
   Muhith said he hoped to present a district level budget in 2010-11 fiscal to ensure transparency and accountability. He said the national budget is prepared centrally and fails to consider the hopes and aspirations of the people at the grass-roots.
   The finance minister stated that among other major shifts, the government would do away with the Poverty Reduction Strategy Plan, which was a three-year rolling programme, and resume the previously practised five-year plan from the year 2012.


Budget Highlights

Total outlay Tk 113819 crore
   Interest payment 13.9 per cent
   Public administration 13.6 per cent
   Education and information technology 11.9 per cent
   Local government and rural development 7.6 per cent
   Social security and welfare 7.3 per cent
   Subsidies 6.1 per cent
   Agriculture 4.5 per cent
   Energy and power 3.8 per cent
   
   
   Projections
   GDP growth rate 5.5 per cent
   Inflation rate 6.5 per cent
   Domestic borrowing Tk 20,555 crore
   Foreign borrowing Tk 8,673 crore
   ADP Tk 30,500 crore
   Revenue expenditure Tk 77,243
   Budget deficit Tk 34,353 crore
   Tax revenue Tk 63,955 crore
   
   Duties up
   Newsprint, mobile phone sets, refrigerators, old and reconditioned vehicles, powder milk, footwear, cigarette, bidi, cold drinks, ceramic tiles, table ware, sanitary ware, finished leather products like beg, suitcase, tooth brushes, biscuits, particle boards, hardboards, imitation jewellery, drycell batteries and liquid glucose.
   
   Duties down
   Textbooks, solar panels, parts of energy saving lights, new hybrid cars, taxi cabs, ships, capital machinery and basic raw materials for producing pesticides, phosphoric acid, dioctyl orthophthalates, local powder milk.


Dev thinkers see no departure
from past philosophy

Say budget will hardly deliver on AL polls pledges

Khawaza Main Uddin

Development thinkers believe the proposed budget for 2009-2010 fiscal can hardly help the government deliver on the promises made in the ruling Awami League’s election manifesto — A Charter for Change — although the finance minister has tried to insert the pre-polls pledges into the budget literatures.
   Terming the budgetary goals haphazard and largely inconsistent with the AL’s election manifesto, they observed on Thursday that the budget had not made a ‘departure’ from the philosophy of economic development followed in the recent past which perpetuated poverty, regional disparity, corruption and bad governance.
   The finance minister has kept the government’s trust in the lender-driven development document – poverty reduction strategy paper – which would remain valid until June 2011, despite a decision to revert to the five-year plan.
   The economists raised questions about the proposed budgetary measures such as opportunity to whiten black money, mere subsistence programmes instead of social protection and graduation programmes for the poor, lack of capacity to achieve the targets, absence of effective local government institutions to distribute resources equitably, lack of mechanism to keep prices stable and even about public-private partnership initiative.
   The election manifesto outlined five major goals – maintenance of economic stability and control over commodity price hike, elimination of poverty and inequality, effective action against corruption, establishment of good governance and solution to energy and power crisis.
   ‘Awami League is committed to freeing Bangladesh from its current crisis and building a country where citizens are able to live a prosperous and happy life,’ reads the party’s election manifesto on the basis of which the Awami League-led alliance swept to power in the 2008 general elections.
   Apparently burdened with ‘sky high’ expectations of the people, the finance minister, Abul Maal Abdul Muhith, in his budget speech, said: ‘It would be appropriate to remind that Rome was not built in a day and hence a reasonable time should be allowed to this government to fulfill its commitments.’
   ‘I don’t see any departure from the traditional line of development thinking in conformity with external agencies. Detailed guidelines have not been there to revitalise the economy, especially the rural sector, excepting the ministry-based programmes,’ said Sajjad Zahir, director of Economy Research Group.
   The economist, however, felt that the Awami League’s polls manifesto should have been better translated into policies under broader guidelines for making development-oriented the budget, which, he said, had bypassed some of the critical issues. For example, the proposed budget has made no mention of the land commission pledged in the election manifesto to address all problems relating to land as a major cause of poverty.
   Zahir said that the finance minister had sounded a bit complacent about deceleration in prices of essentials though it was not the result of the AL’s policies but of the impact of global recession.
   Muhith in his budget speech said the government — already in its sixth month after assumption of office — was ‘actively considering the issue of strengthening the Trading Corporation of Bangladesh to keep the prices of essential commodities stable.
   The budget has not projected any specific target of poverty reduction in the next fiscal although the election manifesto has set the target of bringing 20 million people out of poverty by the year 2013.
   Anu Muhammad, a professor of economics at Jahangirnagar University, said that the measures announced in the proposed budget were not consistent with the AL’s polls manifesto. ‘The finance minister only tried to paraphrase the contents of the election manifesto in his budget literature,’ he said.
   He referred to the issue of corruption allegedly committed during the BNP-led alliance government and said that the Awami League had followed suit in terms of policies and programmes that generated corruption and malpractices. ‘Initiatives like PPP will establish tyranny of the private sector and multinational companies,’ he added.
   The economist pointed out that the programmes such as safety nets and ‘one household one farm’ reflected the mindset of the policymakers to treat poverty and the poor from the point of view of giving ‘alms’ rather than increasing their capacity to engage themselves in productive activities.
   About the government’s promise to create massive employment, Mahbub Ullah, a professor of development studies at Dhaka University, wondered how the finance minister hoped to generate more jobs when both imports of capital machinery and exports of goods showed declining trends.
   ‘The election manifesto is too populist to be implemented in view of our economy. And the speech given by the finance minister is vague,’ he said asking why Muhith was now admitting that the government lacked capacity to implement the development budget.
   ‘We are particularly concerned about the possible implementation snags because of the ambitious size of the ADP for the next fiscal year,’ Muhith said in his budget speech.
   Mahbub Ullah said most of the pledges made by the finance minister were based on actions to be taken in the future. He, in this context, referred to Muhith’s budget speech in which he said: ‘I can assure you that this budget is only the beginning of the positive actions of the government.’
   Mujahidul Islam Selim, general secretary of the Communist Party of Bangladesh and a former student of economics, described the AL polls manifesto as flawed and said the budget, apparently containing smart programmes, had hardly had any reflections of polls manifesto.
   ‘The government continues the policy of looting and plundering national resources and the budget seems to be a backward journey,’ he said.


Finely-knit web of rhetoric: BNP
Staff Correspondent

The Bangladesh Nationalist Party on Thursday termed the budget proposed for the 2009–2010 financial year a finely-knit web of rhetoric and said the targets mentioned in the finance minister’s speech would hardly be achieved.
   The party’s secretary general Khandaker Delwar Hossain said the finance minister had tried to make the people dream for something, but the people will stop dreaming as they consider the speech similar to the Awami League’s electoral pledges.
   ‘It was full of contradictions. The most important thing is the implementation of the budget which needs rule of law and good governance. We think this budget will bring about no welfare to people because of the character of the ruling party,’ Delwar said.
   He also accused the prime minister and the Jatiya Sangsad speaker to keep the opposition out of the house over a trifle issue. ‘They said they would not judge the opposition on the basis of number, and forgot it all forcing the BNP to stay out of the house,’ he said.
   Delwar blasted the finance minister for leaking out the fiscal measures much before their placement in the parliament which befitted certain quarters. ‘We have heard of the leaking out of question papers of examinations, but we have never heard of any such thing with the budget.’
   The BNP formed a special panel involving former planning minister Abdul Moin Khan, former education minister M Osman Farruk, Dhaka University development studies teacher Mahbubullah, Dhaka University economics teacher Abu Ahmed, former Jahangirnagar University vice-chancellor Mustahidur Rahman, former Bangladesh Garment Manufacturers and Exporters’ Association president SM Fazlul Huq, former Dhaka Chamber of Commerce and Industry president Saiful Islam to analyse the budget.
   The panel heard the budget speech in the presence of the party chairperson, Khaleda Zia, in her office at Gulshan. The panellists gave their instant reaction to the budget.
   Mahbubullah criticised the estimation of the budget deficit at 5 per cent and the move to expand tax net.
   He also criticised the setting the income tax exemption limit at Tk 1,65,000, saying it would affect the people of fixed-income groups.
   Abu Ahmed said the government targeted the growth at 5.5 per cent, but the growth in the last budget of the immediate-past BNP government was 6.5 per cent. He also criticised the revenue target of about 80,000 crore which would be hard to achieve.
   Moin Khan said the government might have planned to borrow from commercial banks, but it would trigger severe competition in credit market and interest rates will go high, causing a slump in investment by private entrepreneurs.


Parties term budget pro-rich
Moloy Saha

A section of political parties that do not have representatives in the parliament criticised the proposed budget for the 2009-10 fiscal year on Thursday.
   The left-leaning political parties said that the fiscal measures are tilted in favour of the rich.
   They were also critical of the provision of whitening black money on the plea of investing it in certain sectors.
   ‘The budget will never serve the purpose of the poor people. It will only serve the interest of the rich and the looters,’ said the Communist Party of Bangladesh in an immediate reaction to the national budget.
   The government seems to have bowed down to the demands of the ‘looters’ instead of taking care of the real problems in agriculture and industries sectors, added the CPB.
   ‘Though this government had announced a charter for change, this budget will hardly help to achieve that goal,’ said the CPB’s central committee, adding that the proposed budget has ignored the problems of the working class.
   The Jatiya Party faction’s chairman, Anwar Hossain Monju, described the proposed budget as a product of the government’s imagination.
   ‘It is good if it can be implemented, but I doubt whether it can be,’ he said.
   The convener of the Bangladesher Samajtantrik Dal, Khalequzzaman, said the budget involves a huge amount of money, but it does not specify how it will extend the services to the people.
   ‘The government has violated the constitution by keeping the provision of whitening black money,’ said Khalequzzaman.
   The proposed budget has followed the old system which will not bring about the changes that society desperately needs, he added.
   The Jatiya Samajtantrik Dal faction’s general secretary, Abdul Malek Ratan, said the proposed budget would not help the Awami League to implement its election pledges.
   There is no indication of reforms in the economic sector so it will not be bring about the required changes, he said.
   There is also no indication of improving the law and order situation in the proposed budget, which will not be able to attract investments and create jobs for the unemployed.
   The Revolutionary Workers Party of Bangladesh’s general secretary, Saiful Huq, said that the big deficit budget would increase the government’s dependence on the donors.
   He termed the provision of whitening black money ‘immoral’ and said that it would encourage the looters.
   The budget has not ensured social security and has no allocation for disaster management and protecting the environment, said Saiful.
   The Islami Andolon’s central leader, ATM Hemayetuddin, said the proposed budget would neither generate employment nor reduce poverty.


Social safety net widened
Tanim Ahmed

Deviating from the standard practice of cash assistance, the finance minister on Thursday proposed to launch a programme to rehabilitate poor people in urban areas to their original addresses. He also proposed to introduce one-stop centres for the disabled.
   Although insignificant compared to the sizeable allocation of cash assistance, the proposed programme marks a refreshing change in the social safety net schemes.
   Constituting 15.2 per cent of the budget, the safety net programme has been given about Tk 17,300 crore.
   Although the 100-day employment programme will be discontinued due to corruption and irregularities, AMA Muhith said,
   ‘Having reviewed the problems and policy weaknesses of that programme during implementation stage, we are proposing to implement a changed programme titled Employment Generation for the Hardcore Poor in FY 2009-10.’
   He said the new programme would generate employment equivalent to 49 lakh man-months.
   Through ‘Ghare Fera Programme’ (programme to return home), he said ‘initiative will be taken to bring the poor people from the urban areas to their own address’.
   These people would be provided with accommodation, finances and training for earning a livelihood. He said, ‘Khas land will be provided where possible.’
   Muhith said that the government, mindful of its election commitment, was taking an initiative to establish One-Stop Service to provide health care and ancillary facilities to the disabled. He proposed an allocation of Tk 5.41 crore for launching the new programme.
   Alongside the operation of open market sales, the finance minister also proposed to allocate Tk 5,877 crore under the non-development budget for the Food for Works Programme, VGF, VGD, TR (Food), GR (Food) and also for the food assistance in the form of food security programmes for Chittagong Hill Tracts.
   Old age allowance has been raised by Tk 50 to Tk 300 with an increased coverage from 20 lakh to 22.50 lakh. The allocation has been increased from Tk 600 crore to Tk. 810 crore in the next budget.
   Allowances for the destitute women were fixed at Tk 300 per person. The allocation was increased from Tk 61.20 crore to Tk 331.20 crore in the next fiscal indicating that there would be a substantial increase in coverage.
   Muhith recommended an increase of the monthly allowance for insolvent freedom fighters from Tk 900 to Tk 1,500. Proposing an increase in coverage from 1 lakh to 1.25 lakh, he also proposed to increase the allocation to Tk 225 crore.
   He proposed a monthly allowance of Tk 300 for the insolvent-disabled and also increased the number of beneficiaries from 2 lakh to 2 lakh 60 thousand. For this purpose, Tk 93.6 crore 60 thousand will be required in the fiscal year 2009-10.
   The finance minister increased the allowance for poor breast-feeding (lactating) mothers by Tk 50 to Tk 350. This will require an allocation Tk 33.60 crore which is Tk 11.1 crore higher than last year.
   ‘At the same time, we are proposing to allocate Tk 25 crore for launching a similar programme namely “Allowance for Lactating Low Income Working Mothers in Urban Areas”.’
   There was a special fund earmarked for disaster under different sectors amounting to Tk 133.20 crore.


Tariff on luxury goods up,
essentials down

Staff Correspondent

AMA Muhith proposed to allow whitening of black money after payment of 10 per cent direct tax for the next three years if the undeclared monies were invested in certain specified sectors.
   He said on Thursday that individuals would be allowed to legalise undisclosed money without any question from July 1, 2009 to June 30, 2012. Besides the 10 per cent direct tax, these monies would have to be invested in physical infrastructure facilities, stock market and industries including start-ups in textiles, garments, leather, drug, IT enabled services and shipbuilding.
   The infrastructure facilities include ports and container facilities, fly-overs and elevated roads, mono and underground railways, telecom sector except mobile phones, water and waste treatment plants and solar energy plants.
   The minister proposed to impose 35 per cent tax on commercial banks, insurance, leasing companies and financial companies unless these institutions floated at least 10 per cent of their equity in the share market.
   He proposed to raise the threshold level for imposing excise duty on bank deposits to Tk 20,000 instead of the existing Tk 10,000.
   In case of purchasing apartments for whitening black money, tax would be imposed depending on the size and location of the apartments.
   Muhith exempted personal income tax for citizens above 65 years of age lowering it from the current 70.
   He reduced duty on basic raw materials from 7 per cent to 5 per cent in order to make local industries more competitive both in local and international markets. Other duty structures of 3 per cent on capital machinery and parts, 12 per cent on intermediate raw materials and 25 per cent on finished products remain unchanged.
   The finance minister imposed 25 per cent customs duty on mobile phone sets instead of existing specific duty of Tk 300 per set applied irrespective of its value. He also waived all existing duties and taxes on SIM cards.
   Muhith also waived the prevailing 3 per cent tariff on solar panels and fully exempted parts of energy saving lamps from the existing customs duty of 7 per cent and value added tax. This would facilitate production of energy saving lamps.
   He gave a tax holiday to garment exporters on the condition of a 40 per cent reinvestment of their income.
   He increased supplementary duty on imports of luxury vehicles and restructured duty slabs. He also fixed the consolidated rate of depreciation at 30 per cent for old, used and reconditioned vehicles not exceeding five years. Dealers’ commission for deduction from the value of such vehicles was fixed at 10 per cent instead of the existing 20.
   In order to offer exemption from supplementary duty against import of hybrid motorcars, which are fuel efficient, the finance minister proposed to create a new HS code for separate classification.
   To enable imports of durable and standard vehicles to be used as taxicab, Muhith attached a condition of minimum engine capacity of 1500CC and import of at least 10 vehicles in one consignment by any taxi company. He also waived all customs tariffs excess of 20 per cent and all supplementary duty and regulatory duty for taxi cabs fulfilling the above conditions.
   The minister increased income tax on air conditioned buses, minibuses and microbuses running on rent.
   He proposed 60 per cent and 45 per cent supplementary duties on air-conditioners and spare parts respectively. Muhith also proposed 30 per cent supplementary duty instead of the existing 20 per cent on import of refrigerators and 60 per cent supplementary duty instead of the existing 20 per cent on luxury lights and fittings.
   He withdrew the existing 7 per cent customs duty on ocean going vessels with a capacity of 3000 metric tonnes or more.
   For protecting the interest of the local paper manufacturing industries, finance minister imposed five percent customs duty on the import of newsprint to be used in the newspaper industry. Moreover, he also proposed to withdraw the value added tax applicable for importing pulp that is the raw material for the paper industry.
   He said all text books would continue to enjoy zero tariff while duty on other books, including fiction and novel would be reduced from the existing 12 to 5 per cent.
   He imposed 5 per cent regulatory duty in addition to 12 per cent customs duty on milk powder imported in bulk to protect the local dairy industry.


Allocation declines as power crisis on
Staff Correspondent

The Awami League-led alliance government has earmarked Tk 4,310 crore for the power and energy sectors for the next fiscal.
   Although the country is reeling under a serious power and energy crisis the allocation was actually Tk 31 crore less than that of the current fiscal.
   The military-controlled interim government had allocated Tk 4,341 crore for the energy sectors for the current fiscal, but the allocation was reduced to Tk 2,904 crore in the supplementary budget by the present government as many development projects were not implemented.
   Abul Mal Abdul Muhith, on Thursday, allocated Tk 4,310 crore for the power and energy sectors, Tk 3,578 crore for power and Tk 732 crore for energy, in the proposed budget for the 2009-2010 fiscal.
   Despite the reduced allocation for power and energy, he said in his budget speech, ‘Our development efforts are severely constrained by the dismal state of the energy and power sectors. We are committed to get rid of this impediment.’
   He said the government was determined to take steps to increase power generation to meet the country’s expected demand of 20,000MW by 2021 and attain a position to fulfil the minimum demand of electricity by 2011.
   Muhith, however, said that it was not possible on the part of the government alone to make the huge investment direly needed for the desired power generation. ‘We have, therefore, embarked upon involving the private sector in short, medium and long term plans.’
   ‘If we go ahead as planned, we hope that by 2013, 2,810MW of power will be produced at 13 projects under the public sector and another 1,350MW by three projects, including the 450MW Bibiyana project, under private sector,’ he said.
   The finance minister said that a project worth Tk 105 crore had been undertaken to produce energy saving bulbs and around 350MW of electricity would be saved if the project was implemented.
   He mentioned that 837 kilometres of power transmission lines, 17 power substations and 15,000 kilometres of distribution lines would be constructed in the next three years.
   He also cited that they were continuing dialogues with the neighbouring countries to import power to mitigate the electricity crisis on a short-term basis and import gas through pipelines on the basis of mutual cooperation.
   About gas reserves, Muhith said the country had a current proven reserve of 7.3 trillion cubic feet and it was depleting. Unless new gas fields were discovered, the supply would start diminishing from 2011, he added.
   The government will soon go for offshore gas exploration by the international oil companies, he said.
   He added that his government was actively considering creation of a gas development fund to enhance the capacity of the state-owned BAPEX for exploration of oil and gas.
   About the country’s coal resources, he said the government was seriously considering the use of coal with gas for power generation.
   ‘We shall set up coal-fired power plant using environment-friendly technology for extraction of coal. If required, coal may be imported to run these power plants,’ Muhith said adding, ‘A time-befitting Energy and Coal Policy is nearing finalisation.’
   About the nuclear power plant, he said, ‘It would not be advisable to avoid power generation using nuclear technology despite the element of risk of accidents involved. We have begun the preparatory work on this matter.’
   The government is considering establishment of a state-financed nuclear power project at Roopur with a capacity of producing 1,000MW, he said.
   About renewable energy, the finance minister said that the country was producing only 20MW of electricity from renewable sources and the government had encouraged production of renewable energy both at public and private channels by providing financial incentives.


Edn, health, tech sectors
to get Tk 21,367cr

Staff Correspondent

The finance minister, AMA Muhith, allocated Tk 21,367 crore for education, health and technology sectors in the proposed national budget for the 2009-10 financial year terming them integral part of total development planning.
   The amount is 19 per cent of the total budget.
   In current fiscal year, the allocation for education and technology was Tk 12,258 crore which was over 12 per cent of the total budget.
   Muhith, proposed to allocate Tk 300 crore in the next fiscal year for free distribution of text books at the secondary level to achieve the target of removing illiteracy from the country by the year 2014.
   Tk 3,904 crore has been proposed for disbursing monthly payment orders (MPO) to non–government school teachers. This covers 62 percent of the revenue budget of ministry of education.
   The finance minister proposed to allocate Tk 112 crore for additional MPO subvention to non-government institutions for FY 2009-10.
   The minister announced that the entire MPO listing system will be reviewed to identify fake institutions (institutions without teachers or students).
   In order to enroll more students in vocational and technical courses, the minister proposed to allocate Tk 322 crore for 2009-10 fiscal, which constitutes an increase of 56.3 percent over the allocation of current fiscal year.
   Keeping in his mind to build a digital Bangladesh, the finance minister has proposed an allocation of Tk 100 crore to meet the emergency expenditure in the ICT sector.
   Muhith said that the government has started reviewing the health policy and announced that some 13,500 community clinics will be established across the country.
   He also proposed to earmark Tk 498 crore for procurement of birth control related materials and equipment.
   In his budget speech, the finance minister announced that all hospitals at Upazila and district levels will be modernized and upgraded to 50-bed and 250-bed hospitals respectively to render better services to the patients.


Duty on newsprint goes up
Staff correspondent

The price of imported newsprint used in the newspaper industry is likely to increase as finance minister AMA Muhith on Thursday proposed to impose customs duty of 5 per cent on imported newsprint in the financial year 2009-10.
   He, however, proposed to withdraw the VAT applicable for import of pulp, the raw material for making paper, in order to protect the local paper manufacturing industries.
   He also proposed to reduce the duty on several categories of books, including fiction and literary novels, from 12 per cent to 5 per cent. Textbooks will continue to enjoy zero tariff.

 Budget for 1 dist in each division
in FY 2011 proposed

Staff Correspondent

 

 

District budget for one district in each division will be prepared for the 2010–11 financial year through partial modification and improvement in the classification structure and a few changes in the development project proforma.
   In his speech of the proposed budget for 2009–2010, the finance minister, AMA Muhit, told Jatiya Sangsad, ‘I hope I will be able to present a district-level budget in the budget for the 2010–11 financial year before this august house.’
   ‘If it is possible, the central budget will also
   be able to illustrate a district-wise budgetary break-up, which will ensure transparency of public expenditure and accountability in the implementation of programmes,’ he said.
   The national budget prepared centrally does not capture the hopes and aspirations of the people at grass roots and transparency and accountability cannot be ensured as none can say how much resources have been utilised in a particular district, he explained.
   ‘Once the process is begun, we shall be able to capture inputs for budgeting and planning from the district level,’ he said.

 

Creating hope

June 12, 2009 Leave a comment

Sharmin Chowdhury visits PSD, a school for underprivileged children, that has come up with an innovative idea to support slum children with their educational expenses through a programme called Aponjon Prokolpo.

I want to be a doctor’ says Rahima, a student of class three. Likewise, Nasrin, Josna, Kobita, Juthi, Bina, all express inside03their desire to become doctors in future.

    Dressed in their colourful uniform in red and green, the children studying enthusiastically are not a part of the privileged group who can afford formal education. In fact, the children are the residents of Peyarabag slum and are the students of a charitable school, named Program for Sustainable Development (PSD) School.

   The slum children are being educated here under the programme Shopno moder manush hobo run by PSD. The school started in 2001 with a view to include the slum children in education.

   ‘We wanted to bring about a change in the society by creating an opportunity for the unprivileged segment of the society. Thus, we came up with the idea of the school,’ said Shibnath Sarker the secretary general of PSD.

   ‘We started with 20 children and now we have 130 students in our school. At first we had to go and approach the guardians but after seeing our effort, guardians themselves now come to us requesting us to enrol their children in our school,’ he added.

   PSD school does not just educate the children; it supports an entire family to manage a sustainable development by supporting the mother with sewing training or by arranging jobs in the garments etc. They also support the father with his business through micro credit loans. So far, PSD has supported sixty families of the Peyarabaag slum and they now live a better life.

   The school conducts non formal primary education but follows the government curriculum. The drop out rate is almost zero and if any student wants to continue after class five, PSD school arranges the admission of the student in some mainstream school.

   PSD aims to include at least five hundred slum children in their education system within the next five years. Moreover, the school also creates an opportunity for the students to indulge into an array of co-curricular activities like painting, dancing, acting and singing through separate classes.

   The main problem that the institution is facing is not having enough funds. Some organisations like Agami Inc, Bangladesh Federation of University Women etc have come forth with financial support but only occasionally. There is no fixed fund to run the programme. For this reason, PSD has come up with an idea to support the children with their educational expenses through their programme called Aponjon Prokolpo.

   Aponjon Prokolpo is an initiative to bridge the gap between the privileged and the unprivileged segment of the society. The idea is that, one person from the privileged segment of the society will take up the educational responsibility of one child of the school. All one has to do is to pay a yearly fee of taka six thousand for the child. The person would be called the child’s educational parent.

   One person can take up the responsibility of more than one child. The programme started in 2008 and so far thirty-five students of the school have educational parents.

   ‘We started verbally informing people about our idea when we were searching for educational parents,’ said Shirin Rahman, the president of the school. ‘Those who appreciated have come forth and took up at least one child as their responsibility. One parent can take up the responsibility of more than one child if he wants. But since the idea is passing through mouth to mouth, we have not been able to reach many people,’ she added.

   Rahman also informed that the young generation has shown an amazing enthusiasm in supporting the kids with their education.

   ‘Last February 21, we arranged a get-together of all the educational parents and the guardians of the children, where the young educational parents in their speech referred to the children as ‘my son/daughter’. It inspired the children and their guardians a lot,’ she added.

   The cost of each child a month is Tk 500. Within this amount, the school arranges their uniform, books, pencils etc. and tiffiin for the child.

   ‘We wanted to give them heavy tiffin because all these children are in their growing years and thus need extra nutrition. I might be able to do it once in a while but with the little fund we have, it is not possible to do that on a regular basis,’ said Rahman.

   ‘Once someone becomes an educational parent we expect that with the payment of yearly taka six thousand and two dresses on Eid, the person would also grow an interest in the development of the child, monitored by us,’ said Sarker.

   ‘We also want that the child and the educational parent to build up an attachment, so that the child gets a support from the parent even after he/she finishes school,’ he added.

   To spend taka six thousand a year is perhaps not an issue for many and many parent do a lot more for the children than what is expected from them. Some of the educational parents bring in fruits and others food for the children of the school out of their own interest, informed Rahman.

   ‘We believe there are many people who can and who would want to help these children,’ said Rahman. ‘We need to reach out to them to tell them that PSD makes it easier to contribute and perform one’s social responsibility.’

   ‘So far we have educational parents for only 35 children out of 130. We need the number to grow. We hope more people would extend their hands to help these children and thus help the society,’ concluded Rahman with this plea.

   To join the project contact Shibnath Sarker
   451 Greenway, Magbazaar, Dhaka.
   Phone: 01711642622

Source: The Daily New Age, Xtra, 12 June 2009

Environment fears halt China dams

June 12, 2009 Leave a comment

China’s environment ministry has suspended construction of two dams on a tributary of the Yangtze River.

The projects on the Jinsha River had been started without environmental assessments or approval from the ministry, _45910858_threegorges_ap226officials said. The dams are part of a series of eight power stations planned for the Jinsha. The $30bn (£18bn) project has been criticised by conservationists, who say it will damage the region’s environment and biodiversity. The power stations are expected to generate as much electricity as the controversial Three Gorges Dam – about 20 gigawatts. The series of hydro-electric stations is planned for a 560km (350 mile) stretch of the Jinsha River in south-west China’s Yunnan province.

Public outcry

The dams suspended by the environment ministry at Longkaikou and Ludila were being built by two of China’s largest power-generating companies – Huaneng Power and Huadian Power. “To protect the management of the environment… and to punish the violation of the environment and illegal acts regarding the environment, the environmental ministry decided to suspend the construction projects in the middle reaches of the Jinsha River,” a statement from the Ministry of Environmental Protection said.

The ministry also suspended approvals for the two companies’ other projects, except those involving energy-saving and pollution prevention measures. At the same time, the ministry said it was suspending construction projects in eastern Shandong province begun by a state-owned steel company because it had not submitted an environmental impact assessment.

Two other dams in the Jinsha River project have received approval from the environment ministry, but another dam planned for the Tiger Leaping Gorge area was suspended after a public outcry in 2005.

Tiger Leaping Gorge and the nearby town of Lijiang are popular with tourists and trekkers. Further hydro-electric dams are also planned for elsewhere on the Yangtze River system, as Chinese authorities attempt to reduce their reliance on burning coal to produce power.

Source: BBC, 12 June 2009, For More: http://news.bbc.co.uk/2/hi/asia-pacific/8096860.stm