Tata Investment

Militancy won't rock investment plan: Tata

Top executives of Indian business giant Tata yesterday said the recent rise of militancy in Bangladesh won't discourage them to go ahead with the planned $ 2.5 billion investment as terrorism is now a global problem.

"Terrorism is now a global problem... London is affected, New York affected, New Delhi too. This problem here will not affect our investment," Alan Rosling, executive director of Tata Sons Ltd., told reporters in the city.

His comment came when journalists drew his attention to the matter shortly after a press conference where he elaborated the findings of the Economist Intelligence Unit (EIU) on economic impact study of Tata's investment in Bangladesh.

Rosling said he is hoping to see one or two key people in the government shortly to sort out a timeframe for resuming fourth round of negotiations on the investment in power, steel and fertiliser sector in next couple of weeks.

He claimed positive outcome in the past meetings, but said the outstanding issues remained to be resolved, including fixing tariff for gas it will purchase and electricity it will sell, gas security, land acquisition, coalmine leasing and fiscal incentive.

He replied in negative when asked if they had any discussion with the opposition on the proposed projects.

"We are discussing with the government and if people of Bangladesh change the government after one year, we believe the successive government will honour the deal. It'll be a deal between Tata and the Bangladesh government," he said.

"This is an unprecedented investment proposal in whole of the South Asia, not only in Bangladesh. Nobody took forward an about $3b investment proposal before," he said.

Replying to a query on cross-border energy trade, Rosling clarified that they are not here to export electricity or gas. "We are here to purchase your gas for generating electricity and setting up world's largest urea fertiliser factory."

Dhaka Stock Exchange 1

DSE moves to expand inter-district trading of stocks

Inter-district trading of stocks is going to be expanded with the broadening of the wide area network (WAN) automated system as Dhaka Stock Exchange (DSE) hopes for a significant rise in its daily turnover. Currently, the average monthly DSE turnover is Tk 4.00 billion in value, but with such expansion, the main bourse expects the figure to double within next few months.

"We are optimistic about a surge in our business as our members are going to start their operations in Sylhet, Barisal, Rajshahi, Comilla, Rangpur and other parts of the country," one DSE director told. The DSE director said the number of individual investors will hopefully increase by around 50,000. Currently, there are about 0.2 million individual investors in the country's stock market.

DSE has already started online stock business in Chittagong through LankaBangla Securities, a member of both DSE and Chittagong Stock Exchange (CSE). The DSE move on business expansion was taken in view of an upgraded trading system launched on August 21 to cater to the growing demand for securities and enhance trading capacity to 50,000 howlas from 15,000 only per day. The capacity could be raised upto 100,000 howlas.

Hewlett & Packard (HP) of USA, Scandent Solutions of Chennai (India) and Syscom Information Systems Ltd of Bangladesh completed the upgradation project at a cost of Tk 60 million which doubled the previous 16-bit Tandem Electronic Security Architecture (TESA) application to 32-bit architecture.

DSE Members Equity Partners Ltd, Ershadul Huq and Co, E-Securities Ltd, Globe Securities Ltd, Jubair and Co, Anwar Securities Ltd, Banco Securities Ltd, Latif Securities Ltd, Mohd Shahidullah and Co, Ragib Ali and Co, Surma Securities Ltd and Tareq Ibrahim and Co are going to expand their business in Comilla, Rangpur, Chittagong, Rajshahi, Narayangonj and Sylhet.

Modern systems like radiolink, fibre optic and dedicated line have been installed for the brokers of Dhaka and other cities to log-on directly to the trading server of the DSE.

"DSE has a commitment to help broaden the securities market and the gradual expansion is the manifestation of the same," DSE vice president Ahmad Rashid said.He said the DSE will soon open a liaison office in Chittagong, the commercial capital of the country, in view of the enhanced stock business. A real time online trading platform will only bring the scattered investors under the mainstream stock trading, market operators said.

"Local investors had earlier faced problems in getting the latest disclosures and stock prices in absence of any online platform and from now on we'll be able to do business in a smooth and hassle-free way," KM Sufian, a Chittagong-based investor, told this correspondent.

Meanwhile, some of the DSE members have already opened branch offices in Dhaka city's different business areas like Uttara, Gulshan, Mohakhali DOHS, Dhanmondi and Purana Paltan.

Bangladesh 7

Bangladesh ranks 31 in terms of population density

The WB forecast that the population density in Bangladesh, with an area of 144,000 square kilometers, would gradually increase to 1,540 by 2030 from the existing 1000, reports BSS.

The WB development survey of indicators database mentioned that, among the 171 countries of the world, Bangladesh ranks 31 in terms of population density. According to the last census in 2003, Bangladesh's population per square kilometer was 1000, increased from 720 in 1991.

The report revealed that about 20 per cent of the total population lives in sub-districts with a population density above 1,500 per square kilometer and 47 per cent in other areas where population density was 1000 per square kilometer. However, per square kilometer population density in Sundarbans coastal area in the southwest and the hill areas along the border with Myanmar in the southwest is much below the average.

The report pointed out that about 28 per cent of rural population lives within less than 5 kilometers from an urban centre having at least 5,000 people. The urban population in the country has been increasing rapidly over the 3 decades from about 5 million in 1970 to 29 million at the time of the last census of 2001.

Bangladesh 6

Bangladesh got connected with global information superhighway on November 22 through the much-awaited submarine cable line

CHITTAGONG, Nov 26 (BSS): Bangladesh got connected with global information superhighway on November 22 through the much-awaited submarine cable line. Initially the country got connected with Middle East by 120 out of 220 channels. The rest of the channels will be activated by December 13, high officials of the Bangladesh Telegraph and Telephone Board (BTTB) said.

Installation of submarine cable line, construction of landing station at Cox's Bazar, domestic underground line in Bangladesh territory and other technical preparations like on-trial tests and cross examination have already been completed.

Islamic Development Bank (IDB) financed the $41.42 million-project for Bangladesh segment. 16 organisations of 14 countries across Asia, Africa and Europe earlier formed a consortium to install the 22 thousand-kilometre long submarine cable line titled "SEAMEWE4" (South East Asia Middle East and West Europe-4).

The work of the landing station of information superhighway in Bangladesh began on April 21 last year and had been completed on October 2 last. Sources said except the construction work of landing station in Annaba in Algeria, all works including wet part have been completed.

All tests including that of Bangladesh territory were completed on October 2 last and all the tests reports were sent to the consortium on October 15 last, the sources added. The BTTB officials said Bangladesh is going to be connected with Etislaat (UAE) through 220 channels information superhighway on December 13 next. BTTB officials said besides existing ones, the country would have the capacity to use more 7.0 million cell phones after it connects with global information superhighway formally.

The key-features of the new technology that will be beneficial for the cell phone users are, it will be of very lower cost and is enriched with high capacity Bandwidth of electric isolation. Talking to BSS, Mohammad Shah Alam, Divisional Engineer of BTTB, Chittagong said Bangladesh's linking with global information superhighway would create opportunities for setting up software development industries, attract foreign direct investment (FDI) in ICT sectors and foster radical advancement in the overall economy.

The government has adopted national ICT policy in October of 2002 for the development of the sector and the target has been set to earn $2.0 billion annually by exporting software, hardware products and from the data entry industry.

MDGs: Some global perspectives

Qazi Kholiquzzaman Ahmad*

The Millennium Development Goals (MDGs) were derived from the Millennium Declaration adopted in 2000 at the Millennium Summit, which was attended by 156 heads of state or government. There are 8 goals and 18 targets. The 8 MDGs are:

1. Eradicate extreme poverty and hunger;
2. Achieve universal primary education;
3. Promote gender equality and empower woman;
4. Reduce child mortality;
5. Improve maternal health;
6. Combat HIV/AIDS, malaria and other diseases;
7. Ensure environmental sustainability; and
8. Establish partnerships for development.

The first 7 goals and the 10 targets under them are the ones to be pursued by the developing countries, while the 8th goal involves action by the developing countries in terms of further expansion of the role of market and globalization but also calls for assistance to be provided to them by the developed countries.

The MDGs are now being widely discussed in seminars, workshops, and campaigns within the UN system and around the world. As required, the developing countries have also been preparing, on aid conditionality, Poverty Reduction Strategy Papers (PRSPs) with reference to these goals. That is, unless the PRSP is in place in a particular country, it cannot expect to receive foreign assistance for poverty reduction purposes. The targets under the goals have been formulated as global aggregates, i.e. in terms of aggregation over developing countries pursuing these goals. Of course, individual countries are expected to follow these targets in formulating their own strategies. The targets to be achieved have been set for 2015 with reference to 1990 as the base year.

The targets set are to reduce the relevant deficit by half or by two-thirds or by three-fourths or to be fully alleviated. In so far as poverty reduction is concerned, for example, the targets are to reduce the proportion of extremely poor people to half by 2015 in relation to 1990, and also hunger by the same proportion.

There is an ethical question relating to certain targets, which arises when the question is asked: which half, which two-thirds, or which three-fourths? Also, the Millennium Declaration was based on the United Nations Declaration on Universal Human Rights. But, in the way the MDGs have been formulated, the Universal Human Rights are not properly reflected. Therefore, there is a question mark relating to the universal ownership of the MDGs among the peoples of the concerned countries.

At least two conditions must be fulfilled, if a country has to achieve or at least make significant progress towards the MDG targets. One relates to the capacity of the country to implement policies and programs effectively. In most developing countries, governance is poor in terms of human capability on one hand and lack of transparency and accountability on the other. That is, inefficiency and corruption are the two hallmarks of governance in these countries. It is, therefore, essential that the developing countries take necessary steps to establish good governance, including rule of law and improvement in the economic and social management capacity. Obviously, these are involved tasks and cannot be fulfilled quickly. But it is crucial that governance targets are set and solid progress towards those targets made by taking necessary action with determination.

The other crucial condition is that they have access to necessary resources. In most low-income countries, the domestic resources are limited; many are heavily burdened with foreign debt. Therefore, debt cancellation for the heavily indebted developing countries and increased official development assistance (ODA) need to be provided to all the poor and resource-constrained countries to enable them to implement appropriate policies and programs to achieve the MDGs. Currently, conditionality imposed in relation to both ODA and debt cancellation are such that it is very unlikely that aid resources available to these countries will significantly improve. There are some initiatives relating to debt cancellation for Sub-Saharan African countries. But, how far the initiatives will translate into real money being made available remains to be seen. Regarding ODA, the OECD countries promised to provide 0.7 per cent of their GDPs annually to the developing countries and territories. But, so far the level reached is 0.22 per cent, which currently converts to around US$60 billion a year.

As estimated by the UN Millennium Project, developing countries would need US$140 billion in ODA in 2005, made up of US$74 billion as budgetary support to finance the MDGs in the low-income countries, US$18 billion for non-MDG investments in the low-income countries, US$30 billion for the middle income countries, and the balance to meet international operations including global public goods such as scientific research. It has also been indicated that the MDG-related ODA would rise to US$108 billion by 2015, implying that the total ODA required in that year would rise to US$177 billion, assuming that ODA for various non-MDG purposes remains the same as in 2005. The total projected ODA for 2005 and 2015 would account for 0.51 per cent and 0.56 per cent of the OECD countries' estimated gross national incomes (GNIs) for the respective years, substantially below the target of 0.7 per cent.

In the year 2004, the estimated ODA has been US$60 billion so that another US$80 billion was needed to make up the projected US$140 billion in 2005. But, in reality, the ODA in 2005 may be only slightly larger than in 2004. At the same time, developed countries have not eased the access of exports from developing countries into their markets, despite agreements reached under the Uruguay Round of Trade Negotiations. Para-tariff, non-tariff, and other barriers are imposed, restricting imports from developing countries. Also, export opportunities for many agricultural commodities from developing to developed countries are constrained by heavy agricultural subsidies in the latter.

In fact, subsidies to the tune of about US$1 billion a day is provided to agriculture in the developed countries and about US$2 per day per cattle in Europe. Also, unrealistic labor and eco-standards are applied at times. On the other hand, precipitous trade liberalization put in place in the developing countries, on aid conditionalities, essentially means import liberalization for these countries, which hurts them, particularly their poor farmers and workers constraining both employment and production as a result of unfavorable competition both at home and abroad.

Clearly, therefore, developing countries remain disadvantaged, often severely, in relation to their export prospects on the one hand and limited ODA on the other. It appears both because of inward-looking attitudes of the developed countries and aid-conditionalities imposed by them, that significant increase in the ODA and debt relief will not occur in the coming years. Clearly, therefore, the developing countries, in general, will remain resource-constrained on one hand and management capacity-constrained on the other so that progress towards the poverty reduction targets in most countries will not be achieved.

However, given that India and China together account for about half the population of the low-income countries and these countries are likely to make good progress in poverty reduction; there might be significant progress in relation to poverty reduction targets globally. But, a large number of countries in Africa, Asia and elsewhere will not be able to achieve these targets. While it is possible that some of the other targets under certain goals could be achieved by certain low-income countries, the poverty reduction targets would remain elusive for most of them. It emerges, therefore, that the MDGs are yet another agenda floated by the United Nations, which will remain unfulfilled in a large number of low-income countries around the world.

>> Dr. Qazi Kholiquzzaman Ahmad is President, Bangladesh Economic Association (BEA), and Chairman, Bangladesh Unnayan Parishad (BUP)

Bangladesh 5

Bangladesh not Aid-dependent country: Wallich

‘The government should be accountable to people, not to us or any other donor,’ Wallich said at a business audience on Sunday in response to remarks that the government seems to be more accountable to lenders than to the people. (The New Age, BD)

The World Bank’s country director, Christine I Wallich, has said Bangladesh is not an aid-dependent country as external assistance now accounts for less than five per cent of the GDP.

Due to dwindling share of external resources, development partners cannot influence the government, she said. ‘The government should be accountable to people, not to us or any other donor,’ Wallich said at a business audience on Sunday in response to remarks that the government seems to be more accountable to lenders than to the people.

‘We are trying to raise the people’s awareness to make the government accountable to them,’ Wallich told the discussion meeting on the World Bank’s role in the private sector organized by the Bangladesh Chamber of Industries.

Business leader Manzur Ahmed said in the absence of an effective parliament, the government was made accountable to the donors on different issues in the poverty reduction strategy review meetings. Former deputy prime minister, M Jamaluddin, stressed that the government should reduce its size, while the loss-making state-owned enterprises should be either privatized or shut down.

But Wallich said the size of the government in Bangladesh is small and can not be reduced further. ‘The most important thing is making the government functional and developing the capacity of public service delivery,’ she said.

Wallich said there are several reasons like corruption and inefficiency for the losses of the state-owned enterprises. She said Bangladesh Petroleum Corporation has been incurring huge losses due to oil price hike in the global market in response to which fuel prices were not adjusted locally.

‘But the private sector always demands that the government should not increase prices of energy and utilities,’ she added. Wallich said that, as a development partner, the World Bank like everyone also believes in free and fair election.‘The assets and incomes of the candidate should make public,’ she added.

‘But it is not our issue as we have to concentrate on development agendas,’ she said in response to a question raised by Awami League leader Faruk Khan MP. Wallich also praised significant achievements of Bangladesh in different areas of the social sector like primary education and gender disparity reduction. She, however, stressed the need for reduction of corruption in different sectors as well as continuation of reforms in the power and financial sectors.

Bangladesh 4

From Dhaka with hope…

By Junaid Ahmed*

The biggest surprise at the recent SAARC summit was not China’s quasi-entry into this South Asian body. It was Bangladesh’s quiet transformation. Lost in all the noise about South Asian strategy was the story of a South Asian turnaround. Consider these facts:

Considered once the test case of development, Bangladesh has quietly undergone a major transformation. Bangladesh has eliminated the gender bias in primary and secondary education — achieving this MDG at a historic rate — and attained dramatic declines in infant and maternal mortality. Similarly, once considered a population time-bomb, Bangladesh has achieved one of the fastest declines in fertility rates in the world. Overall, many of the country’s human and social development indicators place Bangladesh at the top for low income, developing countries and for South Asia in particular.

What have been the ingredients of this success story? Not enough work has been done to determine with accuracy, the factors responsible for Bangladesh’s transformation. We know with certainty, however, that no silver-bullet can be pinpointed. Rather it is probably an amalgamation of history, accidents and policy choices that has enabled Bangladesh to shed its burden of being a “bottomless basket.”

History must begin with the war of independence. The post-war construction saw the emergence of independent service providers funded through aid and self-help that catalysed a unique process of community mobilisation. History must also acknowledge the trials of economic and natural shocks common to a deltaic system have given rise to a risk-taking and innovative population. Mobilisation of an innovative and risk-taking population, therefore, has surely been an important contribution to Bangladesh’s success.

But, history is also replete with accidents. Two have been particularly important for the country’s development. First, the oil-boom saw labour migration to the Middle East and in return, a flow of remittances directly to the rural economy. Second, was the arrival of the garment industry to Bangladesh, jumping over Sri Lanka, then in the midst of ethnic tension and India still immersed in import-substitution. Single, rural women suddenly found employment in the formal sector. The remittances and garment industry saw an infusion of private income and wealth into the rural economy with social and economic transformative powers that should not be underestimated.

History and accidents alone cannot account for all the changes. The active choices made by policy-makers to capture the opportunities presented by the country’s history and accidents have been equally vital. The remittances allowed Bangladesh government to manage the unification of its exchange rate system and provide incentives for the economy to become outwardly oriented. While this shift would have happened on its own merits, the remittances enabled it to be implemented at a faster pace. An important beneficiary was the rural sector. Similarly, garment exports were scaled up by the decision of government to provide “free trade zone” status to garment producers in general, breaking the inward looking mentality of the nation in a significant fashion.

Equally important has been the willingness of policy makers to enable a partnership between government and the non-government service providers. From education, health, to the provision of micro-credit, this partnership has led to the scale-up of direct service provision to rural households. This was an important political economy choice. The alternative could well have been to invest solely in line agencies and the traditional public health engineering departments, commonly found across South Asia.

To be sure, public sector line agencies were supported, but balanced by an important investment in alternative providers. This partnership was around community mobilisation and service delivery directly to rural households. It was not based on the notion of free goods but one of respecting the poor as clients, consumers, and decision-makers avoiding, to paraphrase the great Akthar Hameed Khan, “the disabling promise of (charity) from government.” But even as service delivery was pro-poor, so were the structural policy changes.

Agricultural liberalisation coupled with the technological benefits of the Green Revolution enabled Bangladesh to shift from a food-deficit to a self-sufficient nation. This enabling environment for the rural economy dovetailed well with the emphasis on community-centered rural service delivery and the support provided by remittances and wealth of private, rural individuals that participated in the international labour market. In parallel, and very quietly, Bangladesh dismantled its “licence raj” in the 80s through a forward looking industrial policy.

The final boost to the rural sector has come from a sustained macro setting, actively achieved through interventions that enabled growth to stabilise around 5 per cent through the 90s. The lessons are clear. The turnaround in social indicators is a result of multiple changes over three decades.

But the pace of change is impressive as Bangladesh had to address issues of post-conflict democracy for close to two decades of its development history. The lessons also suggest that while economic growth is needed to support social development, it is not sufficient. The nature of growth — its stability, labour intensity, and rural focus — was also important in spreading the benefits of growth.

In addition, the focus on growth was matched by an equal focus on service delivery, recognising that growth does not automatically lead to service delivery improvements. But, the focus on service delivery was not simply one of more public sector expenditures — it was based on a willingness to engage in institutional reform of service delivery that strengthened the accountability of providers to the citizens and communities. It was also based on the evidence from history that without the State as a partner, it would be difficult to support and scale-up the innovations of communities.

There is a growing recognition that the changes in policy were not a result of a well-oiled policy apparatus. It was a result of political economy clashes — of dialectics — between stakeholders within and outside the country. Donors have been an important player in this midst, accounting for the good and the difficult, but without any doubt an important player in Bangladesh’s successes.

It is within this fluid context that Bangladesh’s political and administrative policy making system has emerged, and continues to emerge. And here the lessons of many countries are relevant. Decades of gains can be erased quickly if a country’s political and administrative systems do not keep pace with the demands of its citizens and the ever- changing global context. Indonesia and Argentina are two examples. If the past decades have been a challenge for Bangladesh in catalysing its social transformation, the next decade will be a test to sustain it. If history is any indication, Bangladesh has the capacity to deliver!

>>The writer, a Bangladesh national, is Manager, Social Development in the World Bank. The views expressed are personal.

BBC survey 2005

Most people in Bangladesh are happy with their life

Most of the country’s people are happy with their life today while 96 per cent feels proud to be a Bangladeshi, according to a BBC survey.

According to the survey, 74 per cent Bangladeshis said that they are happy with their current life, 97 per cent stated that the religion is very important to them and 72 per cent considered spending time with family as the most popular leisure time activity. Publishing the summery of the survey, Sabir Mostafa, acting executive editor of the BBC World Service Asia Pacific region, at a press conference in the city Tuesday said that Bangladeshis are family-oriented, religious and proud of their country.

BBC Bangla Service organized the press conference to give information about objectives and different aspects of their new project titled Bangladesh Sanglap, scheduled to start from November 17.

Held at the VIP auditorium of National Press Club Tuesday, the press conference was also attended and addressed by senior officials of BBC World Service. BBC World Service Trust conducted “ The Pulse Of Bangladesh”, a national survey to understand how Bangladeshis perceive themselves, their country and the rest of the world, along with their development priorities.

The survey was conducted in August. More than 5,000 people from all over Bangladesh talked about their lives and shared opinions about: family, religion, national identity, public life and governance. The main aim of Bangladesh Sanglap is to create greater understanding and increased quality of debate around key governance issues and their relationship to the development of Bangladesh.

According to the survey, national pride is universally felt, with 96 per cent being proud to be Bangladeshi and 69 per cent preferring to be recognized as Bangladeshi over religious or other affiliations. Most admired were the national poet Kazi Nazrul Islam and the Prophet Mohammed (SM).

The poll highlights the concerns of ordinary Bangladeshi, 45 per cent of whom felt unemployment was the most important national problem with commodity prices coming in second and transport third.

The government’s performance was also assessed. There were three issues upon which more than half the people felt the government had done well: education (65 per cent), promoting equality between men and women (56 per cent), and providing clean drinking water (56 per cent).

Trade and Development Index (TDI)- 2005

Bangladesh 3rd among South Asian Nations

The United Nations (UN) has ranked Bangladesh third in the SAARC region in a new index measuring trade and development performance of 110 countries of the world.

Prepared by the UNCTAD Secretariat under the guidance of Nobel Laureate economist Professor Lawrence Klein, the index measures integration of international trade in human development, and is capable of monitoring, benchmarking and ranking the trade and development performances of all countries, according to a message received in Dhaka Friday, reports BSS.

In a first for the UN system, the trade and development index (TDI) uses an innovative methodology to link factors affecting a country's foreign trade and human development. It is based on a total of 29 distinct indicators ranging from structural and institutional factors, to trade process and policy indicators, to human development indicators.

It should be noted that this set of indicators also includes the much discussed perception-based corruption index. Ranked at 59, Sri Lanka leads the South Asian region. India ranks 90th, followed by Bangladesh at number 93, Pakistan at 95, and Nepal at 98. Bhutan and Maldives are not included in the list of countries due to lack of data.

The 2005 TDI ranks Denmark as the world's most successful trade-and- development nation. Ranking second and third are the United States and the United Kingdom. Other countries in the list of top ten performers include Sweden, Norway, Japan, Switzerland, Germany, Austria and Canada. France is in 11th place, followed closely by Belgium and Australia.

At number 15, Singapore is the only developing country among the top 20. It is followed by the Republic of Korea at 25, Malaysia at 28, and Uruguay at 33. China, despite its impressive export performance in recent years, is ranked 51st. Among developing countries, the top-ranking nations include mostly the newly industrialising economies of East and South-East Asia, and some Latin American and Caribbean countries.

The top-ranking Latin American and Caribbean countries are Uruguay (33rd), the Bahamas (34th), and Costa Rica (35th). Among Arab countries, Kuwait leads in 39th place followed by Jordan, Saudi Arabia, and Egypt. The 10 lowest-ranked nations are from Africa and include nine least-developed countries (LDCs). South Africa and Mauritius are the only African countries in the top 50, ranked at 41 and 47, respectively.

SAARC and Bangladesh 1

Bangladesh, SAARC states trade gap $1945 million

Trade imbalance between Bangladesh and the rest of the SAARC member states is increasing alarmingly despite different initiatives to reduce the gap. The trade gap reached to US$1944.65 million in fiscal year 2004-05 while it was US$1584 million in FY 2003-04.

Heads of governments of the SAARC member states signed South Asian Free Trade Agreement (SAFTA) in the twelfth SAARC summit on January 2004 held in Islamabad with a view to increase trade among the stakeholders.

The negations of SAFTA clauses is going on but several bilateral and unilateral meetings of the SAARC member states pledged a lot to increase trade and reduce the trade gap. Participants of the meetings too pledged to enhance trade through removing the obstacles.

Meanwhile, a number of tariff and non-tariff barriers among the SAARC member states have been removed in recent years creating room for more bilateral and unilateral trade. According to the latest data available, trade gap between Bangladesh and India in FY 2004-05 is US$1864 million while it was US$1510.19 million in FY 2003-04 and US$ 1270.90 million.

At present trade gap between Bangladesh and Pakistan is US$ 75.80 million, Bhutan is US$ 3.82 million, and Nepal is US$0.88 million.

Bangladesh is in the advance position with Sri Lanka by US$ 0.71 million and with Maldives by US$0.002 million in the FY 2004-05. Business leaders hoped that full-fledged implementation of SAFTA will help SAARC member countries to increase trade and reduce the gap.

It may be mentioned here that the acceleration of economic growth is a Charter objective of SAARC. Cooperation in the core economic areas among SAARC Member Countries was initiated following the Study on Trade, Manufactures and Services (TMS), which was completed in June 1991.

The Study considered economic cooperation among the countries of the SAARC region as an imperative for promoting all-round development of the region.

The Council of Ministers at its Ninth Session in July 1991 endorsed the Study and established the Committee on Economic Cooperation (CEC) comprising Commerce/Trade Secretaries of the SAARC Member States.

Source: The New Nation (9.11.2005), Bangladesh

Bangladesh 3

Bangladesh cheapest source of innerwear

Bangladesh remains the cheapest source of innerwear in the global export market but falls behind its competitors in terms of volume because of infrastructure bottlenecks.

Although low labour costs make Bangladesh the cheapest destination for innerwear production, delays in delivery and import dependency on raw materials has prevented the country from topping the exporters' list in terms of volume, the New Age daily reported Tuesday.

The daily quoted the US Commerce Department report on textiles import released recently. The US report shows Bangladesh ranked fifth among global suppliers even though it sells innerwear at a cheaper 'per dozen' rate than the first four countries on the list.

Even after the global quota system was scrapped earlier this year, Bangladesh exported innerwear at a 'per dozen' rate lower than that of China.

The report shows that during January-September 2005, Bangladeshi exporters shipped more than 9.5 million pieces of cotton innerwear to the US market and shared about 5.53 percent of the market share.

Other Asian competitors - China, Thailand and India - remained behind in the race as they shared 5.36 percent, 4.46 percent and 3.71 percent respectively.

Honduras was the top supplier with 19.42 percent of the market share, El Salvador followed with 17.3 percent of the market share while the Dominican Republic and Costa Rica stood third and fourth.

The four Central American countries accounted for over half of all US innerwear shipments in 2005, although Chinese exports surged until they were finally embargoed in July. Recent trade rules stipulate that Chinese exports will be limited to around 20 million dozen from January 2006.