Rich countries fail to help achieve MDGs

Local development campaigners yesterday blamed rich countries for not
fulfilling their pledges to provide official development assistance
(ODA) to least- developed countries for achieving millennium
development goals (MDGs). "International cooperation is critical to
the countries like Bangladesh to achieve the MDGs. But it's sad that
global actors have not fulfilled their commitment to provide
official development assistance to us," said Abdul Awal, chairperson
of SUPRO, a campaigner for good governance. "For Bangladesh, debt
cancellation is important for increased budgetary allocation in
various sectors for attaining the MDGs," he said at a discussion on
the progress towards achieving MDGs in Bangladesh organised by the
local chapter of UN Millennium Campaign. Among others, Minar Pimple,
deputy director of United Nations Millennium Campaign, Asia, was
present at the discussion in Dhaka. Analysts said developed countries
earlier had promised a role in achieving MDG-8 to address the
problems of unfair trade and financial systems. The advanced
countries are also supposed to provide 0.7 percent ODA of their GDP
in the global bid for development. But as per government data, net
ODA inflow into Bangladesh has been on the decline since the 1990 s.
In fiscal year 1990-91 , Bangladesh received net ODA of $1 ,240
million, but it nosedived to $110 million in 2006. In fiscal
2007-08 , net ODA stood at $96.1 million. "The developed countries
should fulfil their pledges to help us attain MDGs within the
stipulated time," said Awal of SUPRO. According to MDG, Bangladesh
will have to reduce its poverty rate to 29 percent by the year 2015.
At present, around 40 percent people of the country are poor.
Discussants said Bangladesh has made progress in attaining some MDGs
such as in poverty reduction, universal primary education and
promotion of gender equality and women empowerment.

IMF promises voting reform

A key panel of the International Monetary Fund said Sunday that it
supports giving more voting power to emerging market and developing
countries, warning that the legitimacy of the institution was at
stake. The group's International Monetary and Financial Committee
said it backs a shift of at least 5 percent of voting power from
countries with ample representation to those with little influence.
The move would seek to reflect changes in the global economy, with
strong growth in countries that once lagged far behind the elite
club of rich nations.

WB pledges to stand by Bangladesh

World Bank President Robert Zoellick yesterday assured Bangladesh of
all-out cooperation in the country's efforts to face the challenges
of the global recession. Zoellick gave the assurance while talking to
Bangladesh Bank Governor Dr Atiur Rahman at a session ahead of the
World Bank/IMF Annual Meetings in Istanbul. The Bangladesh Bank
governor presented a keynote paper at the conference on "
Strengthening Remittance Flows and Impact: Policies, Practices,
Prospects" at Istanbul Congress Centre. "The World Bank president
wanted to know what they can do for Bangladesh," Rahman told the
news agency by telephone from Istanbul. He said Zoellick was present
at the session without any prior schedule and appreciated the
measures Bangladesh has taken so far, particularly the Bangladesh
Bank's steps to boost agriculture credit to sustain economic growth
amid recession. The central bank governor apprised the session of the
measures while presenting the keynote paper titled "Macroeconomic
policy challenges of large remittance inflows". "The World Bank
president appreciated the measures and assured all cooperation to
Bangladesh," he said. The governor said remittance inflows from
migrant workers have for some years now been playing a major role in
underpinning external sector viability of balance of payments of
Bangladesh. Contrary to apprehensions, workers' remittance inflows to
Bangladesh grew buoyantly during the global financial turmoil. But
the challenge is that a major part of remittance inflows go into
consumption expenses while around 40 percent is utilised for
acquisition of capital assets and/or for financing migration and
costs of job acquisition abroad for other family members or
relations. Rahman said the central bank has adopted various financial
sector policy measures supporting and promoting lending to under-
served productive real sectors including agriculture, SMEs, renewable
energy and environmental protection.

GP IPO pulls in huge crowd

Grameenphone yesterday received overwhelming responses on the first
day of its five-day nationwide subscription for an initial public
offering (IPO), the largest of its kind in the history of Bangladesh
capital market. Hundreds queued up outside several bank branches in
Motijheel, Dhaka's commercial hub. Prospective investors from across
the country, comprising retired officials to students, converged at
503 branches of the 15 selected banks and Investment Corporation
of Bangladesh, to deposit money against Grameenphone shares. "We are
delighted at the response for the shares on the first day of the
Grameenphone IPO subscription and hope the sentiments and interest
will continue," said Silmat Chisti, head of Capital Markets of
Citigroup Global Markets Bangladesh Private Ltd, issue manager of
the IPO. "We seek support from all capital market stakeholders to
complete the landmark transaction smoothly," she added. Grameenphone,
the country's largest mobile phone operator, looks to raise Tk
486.08 crore from the public by issuing 69 ,439 ,400 ordinary shares
worth Tk 10 each, in addition to a Tk 60 premium per share. The
market lot has been fixed at 200 shares, which means a prospective
investor will have to deposit Tk 14 ,000 along with his/her IPO
application. The subscription will close Thursday for resident
Bangladeshis, but will remain open for non-resident Bangladeshis till
October 18. Grameenphone, which received the final approval from the
Securities and Exchange Commission on August 20 , will use proceeds
from the issue to expand its network and develop information
technology and for general corporate purposes. Brokerage houses and
merchant banks were busy till yesterday to open new BO ( beneficiary
owners') accounts, which fresh investors will use in the Grameenphone
IPO. "We are experiencing intense pressure from new comers to open BO
accounts," said a broker. Some 2 ,00 ,000 new BO accounts have so
far been opened, targeting the Grameenphone IPO, and the figure may
reach 3 ,00 ,000. Grameenphone is 62 percent owned by Telenor of
Norway and the rest by Grameen Telecom, a subsidiary of micro-finance
giant Grameen Bank, which was set up by Nobel peace prize winner
Muhammad Yunus. It has around 21.16 million of Bangladesh's fast
growing 48 million cellular subscriber base. It is also the
country's largest private company by revenue.

China's XAC takes over Austrian aircraft components builder

China's Xian Aircraft Industry group (XAC) has taken over Austrian
aircraft components builder FACC, an announcement said Saturday.
FACC said XAC, which provides the wings for Chinese-made Airbus
airliners, had taken a 91.25 percent stake in FACC. "After the
completion of the acquisition, a share capital increase will be
carried out, raising shareholders' equity from the current 40
million euros (56 million dollars) up to no less than 80 million
euros," an FACC statement said. "This primary equity capital raising
will assure the planned business development of FACC." FACC
specialises in parts for wings, engines and cabin furnishings, and
employs 1 ,580 people in Austria, Slovakia, Canada and the United
States. Turnover in 2008-9 was 264.2 million euros.

VW seeks to cut ties with Magna after Opel takeover

German car maker Volkswagen is seeking to end or sharply reduce its
ties with car parts maker Magna after the Canadian group's takeover
of VW rival Opel, according to a report to be published Monday. VW
purchasing chief Francisco Garcia Sanz will be meeting Magna boss
Siegfried Wolf in the next few days, Der Spiegel says. Volkswagen,
which buys two billion euros (2.8 billion dollars) worth of parts from
Magna every year, does not want its rival deducing from VW's orders
what might feature in future models, it adds. The threat to halt
orders from Magna would also apply to luxury sports car maker
Porsche, which now belongs to the Volkswagen group. The development
follows Chrysler's decision reported on Wednesday not to renew its
contracts with Magna for the production of vehicles for the European
market. A spokesman for Fiat, which recently bought Chrysler, said
that in future the cars would be built at the Fiat-owned Bertone
plant in Italy. The Opel takeover has raised concern among
competitors who do not want to see a key supplier transformed into a
direct rival.

IMF hails Japan's plan to boost social spending

The International Monetary Fund welcomed on Sunday the new Japanese
government's plan to use stimulus funds to boost social spending,
saying it would bolster much- needed private demand. "We certainly
welcome the government's intentions to improve public sector
efficiency in a way that will allow them to reform social spending in
a way that's going to raise imports and demand," Anoop Singh,
director of the IMF's Asia Pacific department, said at a news
conference in Istanbul ahead of annual meetings of the IMF and the
World Bank. Japan's centre-left Prime Minister Yukio Hatoyama, who
took office last month after his Democratic Party of Japan won a
landslide election victory that rejected the long-dominant
conservative Liberal Democratic Party, pledged to freeze part of his
predecessor's supplemental budget to put more money into the pockets
of ordinary people. Former premier Taro Aso in May pushed a
supplementary budget through parliament to fund economic stimulus
measures.

On UN mission, Bill Clinton promotes tourism in Haiti

Former US president Bill Clinton, visiting Haiti in his capacity as a
United Nations special envoy, wrapped up a two-day trip with a call
for tourists to visit the Caribbean country. "I love this place. It's
wonderful. I see the potential," he said as he visited Cap-Haitien,
on the country's north coast. With infrastructure improvement, such as
better roads, visitors from the United States and elsewhere would be
able to experience what Haiti has to offer, he added. Haitian
children would benefit too, he added, by being able to "learn about
the greatness of their country's history." Clinton, who was appointed
in June to serve as a special envoy for United Nations Secretary
General Ban Ki-moon, has been visiting Haiti in a bid to boost
investments in the Americas' poorest nation. He called on Haiti's
government to build a national airport in the north of the country,
home to most of the nation's touristic and historic sights. Clinton
noted the success of Haiti's neighbor on the island of Hispaniola --
the Dominican Republic -- which attracts around two million tourists
a year. He encouraged Haiti to carefully preserve its monuments and
historic sites, while working to protect the country's environment.

Africans demand G20 seat

Africa's poorest nations on Sunday demanded representation within the
Group of 20 ( G20) developed and emerging economies. "There has to be
at least one seat for nearly a billion Africans who need to be
heard," Cameroonian Finance Minister Lazare Essimu Menye told
reporters ahead of annual meetings of the International Monetary Fund
and World Bank.

Business team off to Europe

In a mission to project investment opportunities Bangladesh offers
for foreign entrepreneurs, a high profile business delegation left
Dhaka yesterday on a 4- nation tour. The 42- member team from the
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)
will visit Germany, France, Switzerland and Italy, according to press
statement. The team also targets an export basket diversification.
Kamaluddin Ahmed, director of FBCCI, is leading the delegation.

Tk 500 cr security bond soon for BANGABANGDHU Bridge

The government will issue security bonds of Tk 500 crore on
Bangabandhu Bridge against its toll collection revenue in near
future. The proposal was approved yesterday at the 95 th board
meeting of Bangladesh Bridges Authority (BBA) in its conference room
at Setu Bhaban in Banani in the capital. Communications Minister Syed
Abul Hossain chaired meeting. After the meeting, the minister told
reporters that the tender process is on to repair the cracks appeared
in the Bangabandhu Bridge over the Jamuna river. Maintenance and toll
collection of the Bangabandhu Bridge came up for discussion in the4
meeting. On the appointment of a panel of experts for the Padma
Bridge, the minister said the mater awaits Prime Minister's approval.
Replying to question on the Kuakata road, he said it will be repaired
soon for conveniences of tourists as well as local people.

US economic decline forges new world order

The crisis is redrawing the world map of economic power as the
influence of US consumer spending declines and major emerging
markets like China and India take the lead, finance chiefs said. "One
of the legacies of this crisis may be a recognition of changed
economic power relations," World Bank president Robert Zoellick said
Friday in Istanbul ahead of annual meetings of the World Bank and the
International Monetary Fund. "Recent forecasts show that China and
India are helping to pull the global economy out of recession.... A
multipolar economy less reliant on the US consumer will be a more
stable world economy," he added. Consumer spending accounts for around
two- thirds of economic activity in the United States -- by far the
world's biggest economy -- and experts say lower spending could have
radical effects on the US's world standing. The IMF on Thursday
forecast emerging and developing economies would grow 5.1 percent in
2010 -- in contrast with just 1.3 percent in advanced economies.

BANGLADESH BANK GOVERNOR Atiur Rahman spotlights downside of high remittance

Bangladesh Bank Governor Atiur Rahman said yesterday high remittance
inflows have created a liquidity overhang in the country's financial
markets and put strain on macroeconomic management. Dr Rahman's
comment on the downside of high inward remittances came in his speech
to the Small States Forum 2009 , sponsored by the World Bank and
International Monetary Fund, in Turkey's biggest city of Istanbul.
Growing remittance is a lifeline to Bangladesh, but it threatens to
create risks of a bubble with a partial use of the funds in
productive investment activities. "Rising labour migration and the
attendant high remittance inflows are not altogether unmixed
blessings. They pose some challenges to macroeconomic management
that require careful handling," said the central bank chief.
Expatriate remittance jumped to $9.7 billion in 2009 from just $2.5
billion in 2002. Even in times of global recession, Bangladesh's
remittance inflow showed 32.4 percent and 22.3 percent growth in
2008 and 2009. The remittance inflow fuelled foreign currency
reserves to a new high of $9.3 billion, according to statistics
updated until September 24. The theme of this year's Small States
Forum focused on how to strengthen the remittance flow and its
impact. The theme recognises twin facts: (a) small states are
disproportionately reliant on remittances and (b) remittances to
small states are projected to decline by 9 percent in 2009 from a
year ago, hurt by the global financial crisis. The global recession
intensifies the challenges faced by the poor and deepens the
difficulties faced by small states in funding their external
financing gaps. In his speech, Dr Rahman said the excess liquidity
tends to spill into "speculative outlays in real estate and other
asset markets, creating bubble-like asset price pressures". The high
inflows of worker remittances into the relatively small and shallow
local inter- bank foreign exchange market has created appreciation
pressure on exchange rate, adversely impacting the remittance
recipients, he said. It is also hurting exporters already affected by
weak demand in external markets in recession, the central bank chief
said. Rahman however pointed out that a domestic shortage of skilled
manpower is typically associated with high manpower exports and high
remittance inflows have not emerged as a major concern for Bangladesh.
The current demographics of Bangladesh and the country's institutions
for general, professional and technical education are providing
steady streams of new unskilled and skilled entrants into the labour
market. "It leaves ample scope for manpower export without causing
domestic shortage," he said. While a major part of remittance goes
into consumption expenses, a substantial part ( around 40 percent)
is utilised for acquisition of capital assets and or for financing
migration and costs of job acquisition abroad for other family
members or relations of the remitting migrant workers, Rahman said.
On risk management, the central banker said fiscal policies in
Bangladesh have provided quick measures to stimulate real sector
investments, including supports to sectors affected by the global
downturn, public- private partnership in infrastructure investments
and support for microfinance self-employment. Besides, Bangladesh
Bank has adopted policy measures for the financial sector to promote
lending to under-served productive real sectors including
agriculture, SMEs, renewable energy and environmental protection, he
said. Over the longer term, he said, strengthening the capacity of
domestic financial markets for handling and absorbing large inflows
will require deepening of secondary markets in treasury and
corporate securities, creating new secondary markets in asset-backed
securities, supporting growth of new capital market institutions like
venture capital and private equity institutions.

Global banking alliance makes new financial pledge

A new network of banks has pledged to roll out $2 billion in lending
to disadvantaged communities and green projects around the world.
The Global Alliance for Banking on Values made the announcement at
the Clinton Global Initiative's Annual Meeting on September 25 ,
according to a press statement released yesterday. The banks in the
alliance range from ShoreBank, the first community development and
environmental bank in the US, to BRAC Bank, part of BRAC Group, the
world's largest microfinance institution, and Triodos Bank, Europe's
leading sustainable bank. The network of 11 leading sustainable banks
that serve over seven million customers in 20 countries, with a
combined balance sheet of over $10 billion, was launched earlier
this year in the Netherlands. "We commit, over three years, to assist
our members and other sustainable finance institutions to secure
$250 million in additional capital," says Peter Blom, chair of the
Global Alliance for Banking on Values. "This capital will lead to $2
billion in new lending. At a time when the global financial system
is struggling to lend, our members and other genuinely sustainable
banks will benefit millions of borrowers -- from individual
entrepreneurs in Asia, Africa and South America, to pioneering new
green projects in North America and Europe." "If we are to tackle the
global problems we face, we are going to need international action
to do it. We believe these banks have the potential to change the
architecture of the financial world, and start delivering lasting
solutions for unserved and underserved communities and sectors," said
Fazle Hasan Abed, founder and chairperson of BRAC.

ICC stresses conclusion of Doha Round

The International Chamber of Commerce (ICC) said yesterday the Group
of 20 must have a political will to conclude the Doha Round. The ICC
has welcomed a decision to make the G20 the primary forum for
international economic cooperation. With member countries
representing 90 percent of global gross national product, the G20
has reflected the new distribution of economic power in today's
world, ICC said in a statement from Paris. On the fundamental issue
of the Doha round of trade negotiations, ICC was disappointed that
the G20 leaders did no more than repeating their previous
incantations calling for an "ambitious and balanced conclusion". ICC
said it was discouraged that the G20 leaders did not commit
themselves to an earlier target for the conclusion of the talks than
the end of 2010. "The G20 leaders need to spend more political capital
to push for a quick conclusion of the Doha Round," said Jean
Rozwadowski, ICC secretary general. "An agreement would send a shock
of confidence to governments and businesses around the world,
increasing the momentum towards restoring worldwide economic
growth." "ICC welcomes the stronger global governance and leadership
shown by the G20 and looks forward to increasing cooperation among
the world's major economics, which is vital to resolving the major
challenges facing mankind today," Rozwadowski added.