Business & Finance News

Thursday, August 03, 2004

Compiled by SDNP

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BGMEA Seeks Tk 300 Crore for Flood-affected RMGs

By Staff Reporter, The New Nation
Jul 31, 2004, 13:54

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has requested the Finance Minister to give a long-term block allocation of Tk 250-300 crore at a rate of simple interest for the rehabilitation of export-oriented garment industries affected by the flood.

The request was made to the Finance Minister when a delegation of BGMEA led by its president Annisul Huq called on him at his secretariat office yesterday.

During the meeting, members of the BGMEA delegation told the Finance Minister that about 60 per cent of the ready-made garment factories in Dhaka city and its suburbs had become affected by the current devastating floods.

Besides, transportation of ready-made garment consignments is being seriously hampered due to flood waters and production is also being affected substantially for the absence of workers. "As a result many shipments would fail," the BGMEA delegation told.

Expressing the apprehension, the delegation told that 25% to 30% of the consignments might subsequently be required air-shipment. Moreover, many garment factories might become the victims of forced loans for the payment of imported fabrics. In such a situation, it would be difficult for the garment exporters to pay the loans as well as salary of the workers.

The BGMEA delegation also mentioned that the BGMEA and EPB (Export Promotion Bureau) have already launched a joint survey to assess the damages of the ready-made garment factories caused by the flood, which would be placed before the Finance Minister shortly.

BGMEA president Annisul Huq also told the Finance Minister that they made some proposals for inclusion in the current year's budget for making the ready-made garment industry more competitive in the quota-free world trade regime ahead of the 2005. Those proposals were yet to be fulfilled.

The proposals were: (i) Withdrawal of VAT from different sectors of the export-oriented RMG industry; (ii) Lifting of duty and VAT from the import of spare parts for machinery used in the RMG sector; and (iii) Raising the time-limit of bonding for RMG industry to three years.

Huq also urged the Finance Minister to reconsider those three proposals for the greater interest of RMG industry.

In an instant response, the Finance Minister announced to withdraw VAT on gas and electricity used by the RMG sector. He also announced to withdraw duty and VAT on spare parts of the garment machinery.

Regarding the enhancement of time-limit for bonding, he said it would be done on case to case basis and the Bond Commissioner, instead of the National Board of Revenue would be authorised to look into the matter.

During the meeting, the BGMEA delegation apprised the Finance Minister of central bonded warehouse and rules of origin. The delegation requested the Finance Minister to give final endorsement to the central bonded warehouse which now awaits the cabinet approval.

The delegation also sought the cooperation of the minister to send necessary papers to the European Union by the Ministry of Commerce for receiving the derogation facilities for the expansion of RMG market in the EU.

About setting up the central bonded warehouse, the Finance Minister told that a decision would be taken considering the logic behind setting up the CBW.

The Finance Minister highly appreciated the contributions of the RMG sector to the national economy. He said the sector deserved the appreciation for generating employment opportunities for a large number of workers. "The government does not want that this sector is affected in any way," he said.

The delegation included BGMEA's First Vice-President Abdus Salam, Second Vice-President Alamgir Rahman, Vice-President M Golam Faruque and Vice-President (Finance) Anwar-ul-Alam Chowdhury.

Besides, Zainal Abedin Faruque, MP, Ataur Rahman, MP, MA Jinnah, MP, Finance Secretary Zakir Ahmed Khan and NBR Chairman Khairuzzaman Chowdhury were present.

The BGMEA delegation also made a courtesy call on Law, Justice and Parliamentary Affairs Minister Barrister Moudud Ahmed on the same day and requested him to amend some labour related laws for the necessity of RMG sector.

© Copyright 2003 by The New Nation
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Netherlands urged to help solve flood problem

The New Nation,

By BSS, Dhaka, Aug 2, 2004, 13:23

Prime Minister Begum Khaleda Zia on Monday expressed her optimism that the Dutch government would come up with assistance to help Bangladesh develop a lasting flood control system and its post-flood rehabilitation.

She was speaking to the outgoing Dutch Ambassador to Bangladesh Sjef Ijzermans who made a farewell call on her at the Prime Minister’s Office.

Ijzermans said the Netherlands, that developed an expertise in water management, is now working in different fields including water, health, education and rural electrification in Bangladesh.

Reciprocating to the Prime Minister gesture, the Dutch Ambassador said that after his return to the Netherlands he would make efforts to extend cooperation to Bangladesh’s desire for developing a permanent and lasting flood management system. He also showed his government’s intention to participate in post-flood rehabilitation programmes in Bangladesh.

Ijzermmans, who spent about four years in Bangladesh, commended the people of this country as friendly, likeable and hospitable.

The Prime Minister urged the Dutch entrepreneurs to come up with investment and joint ventures in Bangladesh and also to enhance trade relations between the two countries and said balance of trade is now in favour of Bangladesh. The Dutch Ambassador praised the quality of a number of Bangladeshi products including ceramics, leather, garments and processed food.

He also appreciated the successes of Bangladesh in the field of education especially female education and women empowerment

Begum Zia recalled her visit to the Netherlands with Shaheed President Ziaur Rahman in 1979.

During the meeting, they described the relations between Bangladesh and the Netherlands as very cordial and expressed her optimism that it would further enhance in the years to come.

© Copyright 2003 by The New Nation

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Flood-affected weavers seek interest-free loans, subsidy

Hit hard by the current flood, country's handloom entrepreneurs have sought cash subsidy and interest-free bank loans for recovering their losses.

The flood has affected about 80 percent handlooms across the country throwing thousands of weavers and their families into great miseries, they said.

The weavers who run their business with small amount of capital do not have the financial strength to recuperate the loss caused by the flooding.

"If the government does not take initiative for rehabilitating the weavers, I think 30 percent of them will be forced to close their looms," said Khondaker Jainal Abedin, owner of Jainal Silk Industries, Mirpur talking to The Daily Star.

Jainal along with 45 handloom owners from different parts of the country took part in a handloom fair that ended Sunday at the Bangladesh Shilpakala Academy premises.

Bangladesh Handloom Board organised the seven-week fair to popularise the traditional handloom products and protect the manufacturers. Board officials said the participants have sold products worth about Tk 4.50 crore during the fair.

Jainal said the demand for handloom products in the world market is increasing day by day. "So the government should take initiative to promote the sector."

At present, handloom products are exported to India and some Middle East countries, said MR Mostak, proprietor of Muslin Jamdani Weaving Factory.

"Within short time we'll export handloom products to Canada and UK as the buyers have shown their interest to import our products", he added.

Talking to The Daily Star, the participants said high price of yarn is a big problem for the weavers. They demanded reduction of import duty especially on silk yarn.

"If the government reduces the duty, we'll be able to expand the export market competing with other handloom producing countries," said Jainal.

Speaking at the closing function of the fair, Textiles and Jute Minister Shajahan Siraj said government has taken a Tk 50 crore programme for promoting the handloom sector.

"Under this programme we have already disbursed Tk 30 crore among 22,000 handloom entrepreneurs" he said. "We have decided to increase the allocation to Tk 100 crore."

About the plot allocation problem in the Mirpur Benarasi Palli in Dhaka, the minister assured the entrepreneurs of allocating 906 plots within next three months.

Azizul Islam, secretary in-charge of Textiles and Jute Ministry, Abu Solaiman Chowdhury, secretary in-charge of Cultural Affairs Ministry, and Abdus Salam, chairman of Bangladesh Handloom Board, also spoke at the function.

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WTO faces daunting task to deliver on trade promises

The World Trade Organisation (WTO), with its credibility restored and the Doha Round back on track, still faces a huge task to deliver on promises of freer global trade, officials said Sunday.

A last-ditch deal between the WTO's 147 members, setting out key guidelines for more work, prevented a potentially fatal failure for the round with its offer of deep cuts in rich power farm subsidies and more open markets to boost world growth.

"The multilateral trading system is alive after a period of doubt," said European Union Trade Commissioner Pascal Lamy, whose pledge to eliminate the bloc's hugely controversial farm export subsidies helped pave the way to the pact.

The Doha Round, launched in late 2001 with the world still reeling from the suicide plane attacks in the United States, aims to lower barriers to commerce across the global economy.

Its conclusion, the World Bank says, could lift hundreds of millions of people out of poverty and inject billions of dollars into a still fragile international economy.

But the round was derailed 10 months ago when bitter rows between rich and poor nations, particularly over the farmer's lavish farm subsidies, triggered the collapse of a ministerial conference in Cancun, Mexico, raising fears negotiations would never resume.

In Geneva, the WTO did what it failed to do in Mexico.

"I said in Cancun it (the multilateral system) was in intensive care ... today not only is it out of hospital, it is up and running," Lamy told reporters.

The round was due to conclude by the end of 2004, although few ever took that deadline seriously. But after the latest accord, Lamy said it could be done by the time ministers meet again in December, 2005, in Hong Kong.

But while analysts and business organisations applauded the Geneva deal, which came only after five days of almost round-the-clock wrangling, they warned that the framework accord was short on detail and put off many of the hardest decisions.

"It is clear from the ambiguity ... that important and difficult decisions have been deferred," the National Foreign Trade Council, a US business lobby, said in a statement.

British based advocacy group Oxfam, which campaigns on behalf of poor nations, was equally cautious about how far it went towards achieving the round's supposed main goal of promoting development.

"We are three years into negotiations, yet the results of this meeting fall far short of what is needed to reform world trade rules so that they work for the poor," said Celine Charveriat, head of its Geneva office.

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