Unheard Voices

Complete lack of infrastructural growth and capacity building are killing our industries softly but surely.  But who is talking about these issues?

“Due to shortages of electricity and natural gas, lack of adequate financial resources and political uncertainty, the entrepreneurs are shy to invest,” said Mohammad Fazlul Huq, president of Bangladesh Knitwear Manufacturers and Exporters Association.

 

Bangladesh at present faces up to 250 million cubic feet of gas shortages and up to 2,000 megawatts of electricity shortages every day forcing hundreds of manufacturing firms to close down.

 Investment in Bangladesh textiles drops 26 pct

Bangladesh makes it to top of Motley Fool list of top performing stock market with a whopping 126% return. But when economic activity is in freeze, business houses are stalled, consumer prices are through the roof, and banks are reporting liquidity crisis, does the Stock Market bubble w/ insane PE ratios represent another 1/11 market distortion? Meanwhile, what of “middle income rich” buzzword. Everyone’s using it. ADB Chief, Army Chief, AL Chief. (more…)

The military-backed government of Bangladesh announced the country’s Budget for the 2008-09 financial year earlier this week. The task of a Bangladeshi finance minister is never easy, regardless of the political persuasion of the government. And striking the right balance at a time of rising inflation and global economic slowdown would have been difficult for any finance minister in the world.

Considering all this, the Budget is perhaps not as bad as the habitual knee-jerk reactions by opposition parties suggest. In fact, it probably is on balance not too dissimilar to what any other government could have achieved in the current circumstances. That said, I do have some reservations.

Let’s begin with some of the higlights of the Budget. The Budget is summarised here. Here is the Budget speech in English. The following points stand out.

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In 2004-05, Bangladesh exported goods and services worth 8.7 billion taka to India. This was double the amount exported in the previous year. But in that year, Bangladesh’s import from India amounted over 84 billion taka. This massive trade deficit is a major irritant in Indo-Bangla relationship. On any given day, one is likely to read an op-ed in the print media or hear a talking head in the electronic media arguing that India must take more action to narrow this deficit. And there is a degree of truth in these arguments. India does have significant non-tariff barriers against Bangladeshi goods and services while the Bangladeshi market is essentially open. You can’t export Bangladeshi books to Kolkata for example. Nor are Bangladeshi TV channels available across the border. But there is more to the story of our trade deficits. How often do you hear about our ‘massive trade deficit with China’, and how this is a proof that China is crippling our economy? (More at Mukti)

From Washington Post report:
1. Bangladesh is among at least 33 countries, many with shaky governments and destitute populations, that are at risk of serious political unrest if food prices keep rising, according to a recent World Bank study.
2. 20,000 garment workers defied a government ban…workers, mostly women, hurled rocks and bricks at police and vandalized factories in what the local media dubbed the start of the “Rice Revolution.”
3. Bangladeshis are suffering from what is called monga, a near faminelike condition whereby villagers often skip meals and eat only tiny amounts of food.
4. Some see use of the military to guard rice shops as an ominous sign. Sajjad Zohir: “There’s a real danger, particularly if political stability doesn’t return and prices for food keep going up.” (more…)

I reached Vietnam today for a conference. Thanks to Shubinoy Mustofi, I loaded up on my reading on Vietnam for my long arduous 15 hour plane ride from London. The story of Vietnam is a story of resurgence and the story of fighting against all odds. But ever since coming here I couldn’t help but just sigh deeply, thinking about how this could also have been the story of Bangladesh.

Don’t get me wrong, as a human rights activist, I don’t envy the fact that there is no freedom of speech or politics in Vietnam. But I also believe living a life of dignity with basic rights to food, shelter and security is every person’s most fundamental human rights. That is where Vietnam is a success story. With growths averaging to 7 percent every year, Vietnam is now the darling of investors, multi-lateral donors and every Tom, Dick and Harry. So how does this Vietnam look? A bustling capital city with eye popping sky scrapers, hotels and every signs of fancy globalization? Hardly.

The airport in Hanoi looks like the ones we have in Tejgaon — our old airport from 30 years ago. One small luggage belt, one terminal, three floors. (more…)

According to recent news reports, perhaps a sliver of relief is on the way for the price of rice. Apparently there is a bumper boro crop this year (see here. This, plus the expected arrival of imported rice, has apparently caused the price rises to cease, at least for now (see here). This is certainly welcome news.

But there are still serious grounds for worry. According to the Financial Times, rice prices rose more than 10 per cent last week as rice importing countries (including Bangladesh) tried to secure supplies from the handful of exporters still selling the grain in the international market. The price jump came as leading exporting countries including Vietnam, India, China and Egypt, banned foreign sales.
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UNDP hits the panic button on Bangladesh.

Skyrocketing oil prices have driven up the cost of food worldwide, but their impact has been particularly dire in Bangladesh, where almost half of the 145 million people live on less than one dollar a day, Dervis said in a statement Wednesday.

“The real issue is protecting the vulnerable from these shocks,” Dervis said as he ended a three-day visit to Bangladesh.

He said petroleum-producing countries that are benefiting from the high price of oil can use the gains to help people unable to afford adequate food.

“Support from oil-rich countries, as well as other donors, could have positive benefits for Bangladesh,” Dervis said.

He said annual food inflation in Bangladesh reached 16 percent in December. Many poor households spend nearly 70 percent of their income on food, according to government statistics.

For more succinct look on what’s going on with the price hike, check this excellent piece by Mustofi here.

Whoever is to govern Bangladesh for the next 2/3 years has their work cut out for them. Have we passed through such a crisis in Bangladesh before? Is there a silent famine in Bangladesh today when the majority of the country is spending 80 percent of their income in buying food? From tomorrow we will start a new series on this. One of our own visited some of the remotest areas to check on this and she filed a report that we will start publishing. The results are fascinating. Don’t forget to check the Mustofi piece.

This is an open thread to discuss the impact of the global meltdown that is taking place amid the world financial market. In a gloabalised world, Bangladesh will also face the consequence of the credit crunch. How is it affecting you ?

As the labor riots in Dhaka enter their second day, one has to wonder if the chaos caused by a garments factory closure should have caught anybody by surprise. Trade economists have long predicted upheavals in the post-MFA Bangladeshi textiles and wearing apparels industry. While it is true that many Bangladeshi garments are in a slightly different market than what our East Asian neighbors may produce, it was inevitable that our competitors would chip away at our market share. For Bangladesh, where almost three-fourths of our exports are textiles and wearing apparels, even the smallest of predicted declines should have sent the alarm bells ringing long before we would see hundreds of disgruntled workers on the streets facing off with riot police.

I would contend that these labor riots are a symptom of a much more serious problem than the disciplines of competition forcing down our exports, shrinking our garments industry, and reducing the incomes of our garments workers. For too long, our industrial base has had too narrow a focus. In the capital, one may hear about various services sectors – marketing, telecommunications, and what have you – growing and its urban, higher-educated workers prospering. As the services sector grows, so do the incomes of the workers. However, the reality of Bangladesh is that higher-skill services, while accounting for almost half our GDP, cannot be the primary driver of income growth for the masses when it only employs a fourth of our workforce. Stagnation in income growth is a reality for the vast majority of our workforce who are less-educated and, working in agriculture and manufacturing. Being employed in this manufacturing sector – where output prices and subsequently wages – are set by international markets, income growth is expected to be volatile. Slow growing and high variance incomes are at the heart of the current troubles.
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It is perhaps an understatement to say that 2007 has been the most eventful year for Bangladesh since at least 1975. Even in such a year, rising food prices stand out as a problem that, if left unresolved, could derail all political calculations and spell disaster for the country in 2008. In this post, I point to a global cause behind rising food prices that needs co-ordinated attention of activists and policymakers.

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Those who have been following the news carefully over the last two months may have noticed that there have been several instances of farmers clashing with Upazila Nirbahi Officers (UNOs) and other government officers “over fertilizer”. This has not attracted much attention yet among the Dhaka chatterati. The problem is of a local nature at the moment, with some sporadic incidents in Northern Bangladesh mostly. As a result, it has gone severely under-reported and badly reported in the Dhaka-centric media so far, with the New Age being the honourable exception (links below). (more…)

In light of the recent discussion, the recent mostly positive economist report, perhaps, will break a few hearts for one paragraph in it. That one paragraph, perhaps, will prevent it from reaching past Bangladeshi customs. Even though, the more scary part of the article is the one which describes the current state of Bangladesh economy.

For the regime, the anti-graft drive has had some useful side-effects. The intelligence services are systematically acquiring shares in private media companies, by offering the release from detention of their owners in return. Mr Zoellick called for a transparent battle against corruption, consistent with the rule of law. That will be a long, hard struggle in Bangladesh

Can anyone share more on this serious allegation by Economist of “intelligence services systematically acquiring shares in private media companies”. CSB TV channel, if you remember, still has not got the chance to win back his broadcasting rights. What’s the cost?

AFP, along the same line, reports on the release of the two business tycoons. I wonder what was the cost there as well.

Abdul Awal Mintoo, a two-time president of Bangladesh’s top trade body, was released on bail on Thursday night, deputy inspector general of prisons major Shamsul Haider Siddiqui said.

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I don’t follow Dhaka Stock Exchange (DSE) daily like I follow the US market. DSE remarkably had a good run at least in the last decade and maybe a little longer from what I gather from my periodic observation and news sources.

In Dhaka , I still remember getting started with the stock market but not with much experience in trading but more about knowing the companies that offered shares to public. I still remember buying shares of Bangladesh Thai Aluminum (BTI) when it went public and I was just a little boy at that time. Just hearing about everybody talking about using Thai Aluminum windows and doors in the newly built houses and seeing the start of the apartment construction boom, I just knew that this would be a profitable venture and it was.

Lately, I am seeing more and more news and reviews of Dhaka Stock Market in various internationally renowned sources. Most of these have positive and encouraging messages that hold promise of emerging international investment in our country’s private sector. Last week’s news on readymade garment export falling 25% in the first quarter was depressing, but this latest write-up in Bloomberg reports our surging stock market is up 66% this year and at its 10-year high, relieving some of the worries. Though the raging bull of Bangladesh Stock Market positioned itself second in Asia this year after China, it feels awkward to have anything beyond a cautiously optimistic outlook of the economy considering the “temporary” political condition (a.k.a. CTG) and the impending unknowns beyond that.

Here is the link of the article from Bloomberg: http://www.bloomberg.com/apps/news?pid=20601109&sid=ajYCq0jTs6Fo&refer=home

The legacy of corruption left behind the politicians is the reason why we are in such a mess today. Corruption is the fundamental evil that we have to eliminate if we want to become a prosperous nation with durable democracy. — I’m sure you’ve heard something similar many times in the recent months. I think sentences like these are dangerously simplistic and quite possibly misleading.

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