No declaration needed to remit up to $5,000

The Daily star, Tuesday, July 24, 2012

Expatriate Bangladeshis now can bring home $5,000 without any declaration, according to a circular issued by the central bank on Sunday. Earlier the amount was $2,000.

A Bangladesh Bank high official said the step has been taken to make the process of sending remittances easier. It is expected that the move will increase remittance inflow, he said.

Bangladeshi citizens engaged in service and business abroad, except workers, will have to fill in a specified form to bring the money home through banks or carry cash in person through airports.

As the workers go abroad on work permit, they do not need to make any declaration.

The official said, in the form one had to provide various personal information like how the money was earned, to whom the amount would be sent and so on.

Many send money home through various informal channels to avoid hassles, he said.

The new move will increase the use of legal means for sending money home, he said.

Investment Climate: The Facts Which Are Not Pronounced So Much

It was end of December last year, I had an opportunity to visit some industries of the country (both local and foreign). While on that time our team visited some famous foreign company who have invested in Dhaka Export Processing Zone at Savar, Dhaka. The visit was organized by Dhaka EPZ authority. On the visit we interacted with world famous Japanese zipper company widely known as YKK. We talked to their management about their experience, expectation, satisfaction and plan about doing business in Bangladesh. It was really wonderful experience to know about their satisfaction about doing business in this country. While on our discussion, Mr. Masud Karim, the company manager told us the market size for their product is really large so that they need to expand their factory. But at present their factory has almost no area for expansion in Dhaka EPZ so that they are planning to set up new factory in other area. I asked “have you finalized your location”. “Yes almost, may be in “Comilla” or “Chittagong” and of coerce it will be on EPZ area”. “Why do you prefer these two locations?”- I asked. The manager said “it is not only the business environment but also the living environment”. Then suddenly the director of the company Mr. Yuji Yamase replied “the decision was taken by me”. “As a foreign investor I really want to stay in this country but to do so I need to have the environment”- he mentioned, “on Mongla EPZ there is no custom facility, banking facility is also very poor”. “Other areas are also poor in terms of facility. Beside of this housing, medical, schooling for foreign people, shopping centre- these are also absent in many places. Many foreign people may adjust in this place but if you really wish to invite Japanese people then you must remember that these people are very choosy. May be they are the choosiest nation in the world. So they are extremely serious about environment. Japanese people also need playground to play after noon time, they like quiet place like golf court and environment for safe-comfortable and free movement”. The conversation was not so long but it made remarkable image inside of myself. I also felt we need to create some places so that foreign people can celebrate on their cultural and national program. In the country our business people as well as our government make many statements to improve investment climate. But “how to improve it” is the question. May be government has many idea but I do not think they really think about creation of social infrastructure really fit for the foreigners. I also remember YKK and many investors clamed about weak infrastructure of the country specially the condition of roads, rail and weak and slow process of handling of goods in depot and ports. But even after all these condition foreign investors really want to expand their business specially to expand their manufacturing units here. To get these investments we really need to listen to the investors’ view otherwise the opportunity will never remain the same in our country.

Price of Salt Will Reduce Soon

Millers of salt industry will reduce salt price in this Ramadan again. Last Tuesday (17th July, 2012) they informed it by press conference at Reporter’s Unity, Dhaka. According to their declaration, highest price of salt on retail market from traditional processing will be 10 to 18 taka, which was 18 to 20 taka in the past; mechanically purified salt pirce will be 25 taka at retail, which was 18 to 32 taka in the past and purified salt by vacuumed processing will be 27 taka which was 33 to 35 taka in the past.
The written statement has been declared by president of Bangladesh Industrial Salt Manufacturers association Mr. Poritosh Kanti Saha. He said price of all commodities has increased for the last ten years only salt price was stable. But this year there was temporary crisis due to natural calamity. Due to the situation government has given permission to all millers to import 10 lakh ton of salt to face the crisis; so that price of salt is going to reduce soon.

GDP growth target set at 7.2pc

http://www.thedailystar.net/newDesign/news-details.php?nid=237405

GDP growth target set at 7.2pc
Staff Correspondent

The gross domestic product (GDP) growth for the next fiscal year has been set at 7.2 percent expecting that trade and agriculture will continue to thrive and the global economy will turn around by 2013.

The country’s GDP grew by 6.7 percent in 2010-11 and the provisional estimate was set at 6.3 percent for the outgoing fiscal year. Bangladesh now targets to take the growth to 8 percent by 2014-15.

According to the latest forecast, the growth of global economy may stand at 3.5 percent while that of the developing and emerging economies at 5.7 percent in 2012.

“In pace with economies of other emerging and developing countries, we have been able to sustain the economic growth in Bangladesh,” said Finance Minister AMA Muhith in his budget speech yesterday.

In the last three years, the country had an export growth of 21.2 percent. By April 2012, export grew by 8.4 percent compared to that of April last year.

The government hopes this trend will continue due to the expansion of regional trade, surge in internal demand and bumper Boro harvest.

The finance minister also expects there would be steady credit flow to development sectors and the deficits in power, energy and infrastructure will gradually decrease.

On an average the country’s import also increased by 22.2 percent in the last three years. Up to this April, import grew by 8.7 percent.

Biogas plants’ benefit visible in Rajshahi rural, sub-urban areas

By Dr Aynal Haque

RAJSHAHI, June 10 (BSS)- Low-cost biogas, an alternative fuel for cooking, is increasingly getting popular among the people at different rural areas even in outskirts of the metropolis for the last couple of years.

Biogas is not only used as fuel for cooking foods but the slurry, main effluent of the biogas plant, is also being used as organic fertiliser in the farming fields for boosting its production and in the ponds as fish meal.

The people, who never thought of having gas for cooking rice in their remote areas, are now regularly using for their domestic purposes like civic life. Currently, more than 400 rural families are using biogas instead of firewood to cook foods and to boost farm and fish production.

The Premtaly and some of its adjacent localities under Godagari Upazila has been identified as biogas village, local sources said.

Most of the users expressed their satisfaction over the biogas plants as they find this alternative fuel much cheaper than firewood and any other fossil fuel.

Marzina Begum, 45, a housewife of Bijoynagar area under Godagari upazila, has been using the biogas for the last one and half years. She cooks meal for her seven-member family twice everyday.

She said the use of the price hiked kerosene and LPG cylinder has become unbearable in the rural life.

In that case, use of biogas is very comfortable and it has no negative impact to the environment, she clarified.

“In addition to cooking meals of our eight-member family, I have been running a cow-fattening farm with 26 cattle and seed production project on 45-bigha of lands commercially with my two biogas plants simultaneously for the last one and half years,” said Aminul Islam Fatik of Bidirpur area.

He said that he had set up a 2.5 square-meter plant with his own initiative in 2007 for meeting up his domestic fuel demands.

Afterwards, he installed another 4.8 square-meter plant in 2010 for fulfilling his domestic and commercial demands through using the natural resources especially eco-friendly biogas and slurry.

Sabrina Reja, 30, wife of Selim Reja, of Premtali Dumuria, described her practice while she was cooking their midday meal in her double-burner oven. She said all of their daily family cooking is being done with the biogas excepting the winter season.

She added that the biogas is very effective for the cooking meal for any farming family as it requires more utensils and needs additional workforce for cleaning of those regularly.

But, the biogas has no smoke and black spot on the utensils, so there is no extra burden of cleaning and washing.

“We have eight cattleheads and all of their dung are being used in our plant,” she said adding, “We cook rice bran of four kilograms for the cattleheads besides three-time meals for our seven-member family everyday and regularly with the gas”.

In the process, she said there is no extra cost to feed the cows excepting the rice straw.

Referring to multifarious problems relating to cooking in conventional earthen stove Sabrina Reja attributed that the biogas cooking contributes a lot to remove the obstacles by large.

By dint of the biogas cooking, she said their life style has been changed at a greater extent.

Women members of the family are being benefited more in the new system as most of them are liable to manage the rural family especially cooking together with cleaning and washing the utensils.

Murshalin of Premtali Khetur area said the use of biogas has
brought a new dimension in his family.

As a whole, the plant has ensured security of the domestic consumption of fuel.

“In addition to cooking meals of our nine-member family, I have been running a tea stall at Premtaly Bazar where around 80 cups of tea are sold everyday and all the tea-water are being boiled by our own biogas,” said Shariful Islam of Kathalbaria.

‘We never thought of having such type of privilege in our village. But biogas has made things happen, by which we save at least Taka 900 per month as the water boiling purpose.’

Not only that, the harvested bioslurry is being used in 10 bigha of fish culture ponds as primary feeds for boosting fish production.

“Earlier, we had to use the cow-dung as cooking fuel, but now using those in the biogas plant by which, we are getting diversified benefits,” said Rafiqul Islam of Shekherpara adding that the dried slurry is also being used as cooking fuel.

He said a family of five to six members can easily cook their foods and fulfill the demands of organic fertiliser of his farming field and fish culture ponds from one plant.

Various vegetables and fruits especially banana are being grown well on surrounding grounds of the slurry dumping ditch without any extra fertiliser and care, he viewed.

Bangladesh: Flourishing Market and Investment Climate

Introduction

Bangladesh, a country with mass population and limited land area, may not be considered as a rich country but its economy is changing gradually. Income level of people both in urban and rural area is shifting to upward level in some extent. Change of its economy is evident by considering the country’s outlook in capital and even district areas. People are also getting familiar with hi-tech equipments and fashionable materials. As a result market growth as well as world market leader’s interest for more investment is also increasing remarkably.

Change of People’s Life Style (Newspaper report also reflect the fact)

Change of Bangladeshi people’s life style is evident from facts evident around us. It can be noted that the number of mobile phone subscribers recorded a significant increase of 1.103 million in January (2012) last reaching the total to 86.558 million in the country¹.(Official figure on March 2011 was 72.8 million⁸) These mobile phone users definitely use mobile sets and many of them frequently change phone sets after some interval- which reflects the size of market of mobile set in the country. Due to improvement of purchasing power of this country’s middle class people, sell of expensive, hi-tech and fashionable sets is getting higher.

Transport use is also getting higher day bay day. From 2003 to June 2010, about 220,000 motor cars, jeeps and micro-buses were registered with Bangladesh Road Transport Authority (BRTA) in Dhaka. Fast rising fuel cost, grid-locked roads and import duties could not limit the number of privately owned vehicles despite the government’s implicit discouragement toward private transport sector².

To book an expensive venue for social or cultural program someone need to book the venue at least three to four month before.

Now in Eid vacation it is difficult to find airline ticket to visit tourist spots, business purpose or for emergency need around the country.

Multi storied shopping malls are growing urban cities to upazillas. Many people come from outside districts to expensive markets on Eid season for marketing.

Remittance flow to the country touched 10 billion dollar in fiscal year 2009-10 and in 2010-11 it reached to 10,987.4 million dollar which is 13.4 percent higher than previous year. According to world remittance Data base, position of Bangladesh was 8^th and in 2011 (predicted by Migration and remittance Fact book 2011) it came to 7^th position⁷. This remittance flow is strengthening purchasing power of people of this country.

Although officially the number of people with greater than Tk.10 million wealth has been reported at 13,000 plus, the real number is estimated to be much larger. The flourishing number of private schools, private universities, private medical facilities, expensive restaurants and parlors all support the assumption².

The market size is remarkably big also. Statistics show that 30 million people make up the middle income bracket; this is more than the population of Sweden, Norway, and Denmark combined³. Atiur Rahman, the governor of the Bangladesh Bank, told in an interview with foreign television Al Jazeera, “In a decade or so we will be one of the 30 largest economies of the world, and one should keep that in mind. It is not the size of the country that matters, it’s the population and it’s a very entrepreneurial population, and there lies our strength.” Despite only one per cent direct foreign investment, the country’s GDP is growing more than six per cent a year. The rising middle class is investing heavily in the stock market and in domestic businesses. It is they who are behind the economic growth³.

Impact on Hospitality Industry 

The economic growth and people’s life style is also evident from the growth of tourism and hospitality industry. The capital’s hospitality industry has almost doubled in size and earnings over the last four years [2004 to 2007]. The luxury hotels in Dhaka have earned Tk 1.18 billion revenue as room rent in calendar year 2007 while it was Tk 577.29 million four years back in 2004¹⁰. Foreign businessmen, ready-made garment buyers in particular, have contributed to the growth of the hospitality industry. Optimistic ideas says that the hospitality industry in Bangladesh will flourish further in the coming days as the country’s economy is growing fast with the increased flow of tourists and businessmen to the country.

Improvement on Health Consciousness

Due to the rise of middle class as well as improvement on health consciousness people is getting careful on quality of health and medicine. Which is directly and indirectly improving Pharmaceutical industrial sector.  In this regard, quality of products, packaging on medicine are also improving. So that total sell is also growing.

Potential segment of the pharma market is now 130 billion US dollars. Presently, a good number of local firms meet 97 per cent of the demand of the local market that stood at Taka 7,000 crore. Export earnings from pharmaceuticals totalled $44.27 million in the last fiscal surpassing $ 40.97 million earned in 2009-10 fiscal, Export Promotion Bureau (EPB) data shows ¹².

In an interview with a news paper General Secretary of Bangladesh Oushod Shilpo Somity said 5 percent GDP growth helps the pharma industry grow at 15 percent, and 6 percent and 7 percent growth makes it 20 percent and 25 percent respectively ¹³.

Investment by Market Giants

On Automobile Industry

The attractiveness of Bangladesh market may be not largely pronounced in many countries but even though companies with huge investment are considering seriously to get in and its not only for trading but also for manufacturing. Newspaper report shows interest of market leaders like Mitsubishi Motors is interested to assembling project in the country. There we saw- Mr. Osamu Masuko, global president of Mitsubishi Motors visited Bangladesh on February, last year (2011); on his visit he strongly mentioned “It is an easy target to sell 200,000 units of (sedan) a year in the next five to 10 years, considering the country’s population size and growing economy”⁴. These are defiantly encouraging news for investment climate of the country.

Due to rappid market growth and also having potential manpower market leaders are considering for technology transfer to the country. Which was also reflected from the statement of Mr. Osamu Masuko, global president of Mitsubishi Motors. It need to be noted that Mitsubishi Motors explained Hyundai Motor, a Korean automaker, that has become a global player due to transfer of technology. But it took 39 years for to transfer technology. Mr. Mauko thinks, for the case of Bangladesh it may take only 10 to 15 years for the same task and it is just because of lot of potential in the automobile sector with its huge number of educated young people of Bangladesh⁴.

Similar investment news has been learned from Intraco-Hindustan motors company, who invested $10 million to build an assembly plant in Savar to assemble 5,000 cars on first two years⁵.

It need to be mentioned that presently, Bangladesh’s annual car market is around 30,000 units, dominated by reconditioned Japanese cars⁴. It automatically explains the huge opportunity of investment for Japanese automobile industry in the country.

Giant local and foreign Motor cycle industries including Walton, Runner are also expanding manufacturing of motor bike factory in the country. Honda is on the process to set up their factory soon in Tongi area.

Expanded Electronic Market

Due to the rise of middle class people consumption of electronic product has also increased, which is also evident by steps of famous companies’ steps. We have seen the news that ACI Limited plans to set up a plant in Bangladesh to assemble Panasonic-branded products after embarking on electronics business with distributorship of the Japanese company’s audiovisual items¹¹.

The company [ACI] had projected to sell 5,600 pieces of Panasonic audiovisual products worth Tk 128 million in the first year [after 2009], which will be 2.5 percent value share of the audiovisual product market².The product profile comprises colour television, flat panel television (LCD and Plasma), DVD home theatre, DVD player, mini hi-fi system, digital still camera and video camera¹¹. Among the product profile, liquid crystal display (LCD) and plasma-televisions are premium products that targeted high-end customers, corporate houses and hotels and motels. The company’s target is not only selling the premium products, but also regular or common items for middle income group to upper level¹¹.

ACI Consumer Brands, a strategic business unit of ACI, has already sold four 50’’ plasma televisions each at Tk 3.82 lakh, eight 42’’ plasma televisions each at Tk 2.30 lakh and eight 42’’ LCD televisions each at Tk 1.51 lakh¹¹.

( It need to be noted that the company is superior in manufacturing television with hi-definition plasma and LCD).

It need to be noted that Colour television is the biggest segment of the Tk 1,330 crore electronics market, with 15 percent annual growth, according to industry sources. Around 400,000 television sets worth Tk 440 crore were sold in 2008¹¹.

News paper reports expressed that among the television brands, Chinese Konka is the top player with 21 percent market share, followed by TCL with 18 percent, Singer with 12 percent, LG with 11.25 percent and Samsung with 10 percent in 2009¹¹. So that it is a place where many Japanese industries can easily come with investment to expand their business.

Electronic Industry for Home Appliance

News also published about intention of World famous electronic company LG-Butterfly’s plan for investment of $500 million to assemble electronics products in Bangladesh⁶. It is likely that the company will start assembling refrigerator in first stage and gradually produce other electronic items including television, microwave oven, air-conditioner, washing machine and other home appliances at their factory at Bhaluka in Mymensingh. The factory will be able to create job opportunity for 5000 people⁶.

Investment by domestic investors was recorded as 8,806 crore taka in 2001-02 which increased to 17,117.49 crore taka in 2008-09 fiscal year, it increased to 27,413.69 crore taka in 2009-10 and finally on nine month of 2010-11 it improved to 39,976.41 crore taka. At the same time direct foreign investment and joint venture investment with foreign companies’ record shows in 2007-08 it was 4,356.99 crore taka which increased to 14,457.72 crore taka in 2008-09 and finally on nine month of 2010-11 it increased to 26,519.37 crore taka⁹.

If investment climate continuously move with this positive trend than automatically lot of supporting industry, technology improvement, business environment will develop in this country.

^{1. Financial Express, March 26, 2012}

^{2. The Daily star, November 12, 2010}

^{3. Aljazeera news, http://www.aljazeera.com/video/asia/2011/09/20119411515723874.html}

^{4. The Daily star, February 10, 2011}

^{5. The Daily Star, November 20, 2011}

^{6. The Daily Star, December 16, 2011}

^{7. Bangladesh Economic Review 2011.}

^{8. Bangladesh Economic Review 2011,  p-218.}

^{9.Bangladesh Economic Review 2011, p-207 to210.}

^{10.  Financial Express, November 1, 2008; http://www.thefinancialexpressbd.com/more.php?page=detail_news&date=2008-11-01&news_id=49576}

^{11. The Daily Star, April 21, 2009; http://www.thedailystar.net/newDesign/news-details.php?nid=84890}

^{12. http://bangladesheconomy.wordpress.com/category/pharmaceutical-industryhealthcare/}

^{13.  The Daily Star, January 16, 2011; http://www.thedailystar.net/newDesign/news-details.php?nid=170187}