Politics drag Kuwait behind Gulf partners

Political volatility means Kuwait lags behind most of its energy-rich
Gulf peers, but the emirate is still on track to post the largest
surplus in the region, Bank of America Merrill Lynch said on Monday.
"The lack of political determination for ( economic) diversification
has caused Kuwait to lag behind most of its GCC (Gulf Cooperation
Council) neighbours," the bank said in its quarterly report on the
region. "The volatile political cycle and populist policies have also
been a drag," it said. But the report also said that limited
investment and spending commitments mean Kuwait will continue to post
the largest GCC surplus, estimating this at around 12 billion
dollars. Kuwait, the first state in the Arab Gulf to embrace
democracy in 1962 , has been marred by political turmoil over the
past four years because of disputes between the elected parliament
and the government. Prime Minister Sheikh Nasser Mohammad al- Ahmad
al-Sabah, a senior member of the ruling al-Sabah family, has been
forced to form six cabinets since he was appointed to the post in
February 2006. Parliament has also been dissolved three times since
May 2006 and three general elections have been held over the same
period. However, relations between MPs and the government have failed
to improve and remain tense. Monday's report cited the striking
difference between the Kuwait Stock Exchange and other GCC bourses,
saying Kuwait "remained miles behind the rest of the region despite
the country's strong macroeconomic balances."

German investment in renewable energy sought

Commerce Minister Faruk Khan yesterday asked for German investment in
river dredging and renewable energy. The minister made the request
when Holger Michel, German ambassador to Bangladesh, met him at his
ministry in Dhaka yesterday. The minister also expressed its interest
to utilise the expertise of Germany in shipbuilding and textile
industries. Germany is the second largest export destination of
Bangladesh and hoped that the export volume would increase further,
said Khan. The German envoy said trade between the two countries
increased four times in the last 10 years and would increase further
as his government is willing to invest here more. He also thanked
the German government for providing GSP facility to Bangladeshi
products to enter its market. Last fiscal year, Bangladesh exported
goods worth $ 2269.75 million to Germany and imported $ 410.44
million from the country.

Banks remain fragile

The Financial Stability Board on Sunday warned the global financial
system remained "fragile," with banks requiring large inputs of
capital and balance sheets still clogged up with toxic assets. "The
financial system... remains fragile," said Mario Draghi, governor of
the Italian central bank and chairman of the FSB, a global watchdog
made up of senior representatives of national financial authorities.
"There are strong needs for capital, there are parts of the balance
sheets of banks that remain blocked," he told reporters in Turkey's
biggest city, Istanbul, after a meeting of a panel of the
International Monetary Fund. He also said that tests on the stability
of 22 of Europe's top banks whose results were announced last week
had shown "a relatively satisfactory state of things for European
banks." The European Union's Swedish presidency said the tests had
shown lenders were " sufficiently capitalised" despite credit losses
for 2009 and 2010 estimated at 400 billion euros (583 billion
dollars).

20 ,000 garment workers lose jobs in Cambodia

The global economic downturn has forced at least 20 ,000 workers to
lose their jobs in Cambodia's garment industry this year, a labour
ministry report showed Monday. Between January and September, 77
factories were closed across the country resulting in the loss of 30
,617 jobs, according to the report obtained by AFP. Although 40 new
factories opened in same the period and created more employment,
more than 20 ,000 job losses remained, it showed. Another 53
factories also suspended operations during the period but about half
have reopened. "The closure of the factories is due to fewer purchase
orders," Oum Mean, secretary of state at the Ministry of Labour, told
AFP. "We can assume that this has been caused by the global financial
crisis because the consumption in big countries has declined and this
made some factories receive no purchase orders," he said. In the face
of shrinking demand from the US, the largest importer of
Cambodian-made garments, the government is seeking new markets for
textiles in Asia and Europe, Oum Mean added. Cambodia's garment
industry is the impoverished country's largest source of income,
providing 80 percent of its foreign exchange earnings and employing
an estimated 350 ,000 people last year. The International Monetary
Fund said last month that Cambodia's economy will contract 2.75
percent this year as the global economic crisis takes its toll.

Govt reviews sugar price today

The commerce ministry will hold a meeting with sugar refiners and
traders today to review sugar price and the existing rules of sugar
distribution system from the mill gates to the retail level. "We will
meet the sugar refiners, dealers, wholesalers and the retailers to
look into the import and supply scenario. They ( businessmen) were
demanding a revision of sugar price. We will examine the situation
and then decide," Commerce Secretary Feroz Ahamed said yesterday. The
government is holding the meeting seven days into forming two
committees to investigate the sugar price manipulation during the
month of Ramadan. Sugar price at retail level went up to Tk 65- Tk 70
a kg in violation of the government- fixed rate of Tk 42 till
September 30. Even after the Eid-ul-Fitr, the price remained at Tk
58- Tk 60 , which is now Tk 55- Tk 57 a kg. Following the
announcement by Commerce Minister Faruk Khan that the dishonest
traders would be arrested, eight to ten businessmen of the capital's
wholesale market, Moulvibazar, had gone into hiding, while many
other businesses did not open their shops. After a September 29
meeting with the businessmen at the ministry, the traders returned
to the shops, but sugar supply is still not adequate in the market,
the traders said. "The millers used to supply 20 to 25 truck- load of
sugar to Moulvibazar everyday, but now the supply in the wholesale
market came down to only two to three trucks," said Abdul Hashem, a
sugar dealer at the market. Moulvibazar Traders' Association General
Secretary Golam Mawla said they would request the government to help
bring discipline in the sugar distribution and pricing system. "Under
the present system, the mills sell sugar in advance. But, when the
demand rises, the mills cannot deliver in accordance with orders.
This creates problems and prices go up," he said.

Stocks continue steady rise

The market was on a steady gaining streak for a third day yesterday,
with the premier bourse benchmark index reaching the second highest
level ever. Analysts said rallying of fundamentally strong shares,
such as banks, fuel and power companies, pharma-ceuticals and cement
companies, helped the DGEN touch the second highest level. "The
rising trend demonstrated investor enthusiasm and confidence on the
market," said Arif Khan, deputy managing director of IDLC Finance.
Some positive steps taken by the market regulator and bourse
authorities to discourage investment on Z category or junk shares
drove investors to fundamentally strong securities, he said. It was
anticipated that the market would experience a downward trend during
the Grameenphone IPO, the largest of its kind in the history of the
capital market, he said. But the positive market indicators have
increased investor confidence, he added. The benchmark index of the
Dhaka Stock Exchange, DSE General Index (DGEN), yesterday finished
at 3187.7 , a 1.33 percent rise over 41.9 points. The index hit an
all time high when it closed at 3 , 207.89 on June 1 last year. DSE
introduced the general index on November 27 , 2001 with a base of
817.62 points. The index, which excludes 'Z' category companies, is
calculated on the basis of individual stock price movement under
'A', 'B', 'G' and 'N' categories. Previously, there was only one index
that included all securities of the stock exchange. Starting with a
base of 350 points, the index rose as high as 3 , 648.75 points on
November 5 , 1996 , when the market witnessed a 'bubble and bust'.
The broader DSE All Share Price Index was reintroduced on March 28 ,
2005 , and the DSE- 20 was introduced on January 1 , 2001. Advancers
beat losers 123 to 119 with one security remaining unchanged. A
total of 4 , 80 ,29 ,398 shares and mutual fund units worth Tk
845.79 crore were traded on the DSE yesterday. Beximco topped the
list of turnover leaders with 15 ,85 ,700 shares worth Tk 44.64
crore being traded on the prime bourse. Modern Dyeing was the largest
gainer of the day, increasing 12.51 percent. Samata Leather was the
biggest loser, declining 10.2 percent. Chittagong stocks also rallied
yesterday. The CSE Selective Categories Index gained 102.78 points,
or 1.51 percent, to reach 6 ,899. 25. The CSE All Share Price Index
increased 168.96 points, or 1.56 percent, to reach 10 , 994.48. A
total of 67 ,48 ,101 shares and mutual fund units worth Tk 82.91
crore changed hands on the Chittagong Stock Exchange. Of the traded
securities, 92 advanced, 76 declined and one remained unchanged.
The biggest gainer, Rupali Bank, advanced 12. 89 percent. Jago
Corporation declined by 15. 77 percent to finish as the biggest
loser. Beximco topped the list of turnover leaders with 2 ,81 ,700
shares worth Tk 7.98 crore being traded on the port city bourse.

Petrobangla starts talks with ConocoPhillips

Petrobangla, the state-run oil and gas company, yesterday started
negotiations with ConocoPhillips, a US oil and gas company, aiming
to explore hydrocarbon potential in the Bay of Bengal. The government
evaluation committee had earlier selected ConocoPhillips and Irish
company Tullow as right bidders to explore gas within Bangladesh
maritime boundary to add energy resources to its reserve.
Petrobangla will sit with Tullow next week. "Talks with ConocoPhillips
will continue for the next two or three days. We will discuss
everything in detail and listen to them," Muqtadir Ali, chairman of
Petrobangla, told the news agency. Conoco offered to spend $2.496
million to conduct a two-dimensional seismic survey of 1 ,200 'line
kilometres' in the initial mandatory work programme of five years
for exploration, $ 58.1665 million for conducting a
three-dimensional seismic survey of 500 square kilometres and for
drilling one exploration well in the first extension period of two
years, and $50 million for drilling another exploration well in the
second extension of two years. The company made almost similar offers
for the six other blocks. "We need to spend some time to settle the
issue as it requires more negotiations," said a top Petrobangla
official. In 1974 , Petrobangla conducted the first- round bidding, in
which 47 companies took part. Petrobangla signed six contracts. In
1988 , Petrobangla called the second-round round bidding, but no
international oil companies showed interest. The third-round bidding
was initiated in 1993 and Petrobangla awarded three contracts to the
oil companies and the last biding was held in 1997-1999. Petrobangla
signed five contracts with the oil companies at that time.

Bangladesh to seek lower RMG tariff for US market

Bangladesh will push the US government to offer it lower tariff or
similar duty benefits like Sri Lanka and Pakistan under World Trade
Organisation (WTO) rules, said Mujibur Rahman, chairman of Bangladesh
Tariff Commission (BTC). Although Bangladesh is a least developed
country (LDC), it will seek the benefits, as it fears to lose
compositeness to developing Sri Lanka and Pakistan as they are
already getting privileges from the US for their embattled political
situation, he said. Discussions are running to bring down the tariff
rates at five percent for five selected garment items of Sri Lanka
and Pakistan within five years. At present, Bangladesh, Sri Lanka
and Pakistan are paying 15 percent duty on export of garment
products to US market. Talking to The Daily Star over phone, Rahman
said the LDCs are not supposed to pay higher duty for exporting
products to the developed countries. He said Bangladesh has already
started lobbying the US government through its mission there to
reduce the tariff rate. Rahman said a high-powered committee on WTO
negotiation is taking preparation to table the issue both in the
LDCs' mini- ministerial meeting in Tanzania to be held on October
14-16 and WTO Summit in Geneva from November 30- December 2.
Tanzania is the coordinator of LDCs for WTO negotiation. "Bangladesh
will also continue bilateral and multilateral negotiations for
gaining duty- and quota-free market access to the US," the BTC
chairman said. BGMEA President Abdus Salam Murshedy said Pakistan is
now performing well in exporting some garment products to the US
market. The US has also taken some initiatives to give more
facilities to Pakistan. "In end of June 2009 the US House of
Representatives passed a symbolic legislation providing duty-free
access to apparel made in tribal area in Pakistan. It is to
encourage Islamabad military offensive against Taliban and Al-Qaeda,"
he said, quoting from the PEACE Act 2009 of US. "So I think
Bangladesh will suffer from such benefits offered to Pakistan," the
BGMEA boss said. A senior official of Bangladesh Garment
Manufacturers and Exporters Association ( BGMEA) said the country paid
a total of $576 million as duty against its export of nearly $3
billion to US in 2008. Bangladesh mainly exported woven and knitwear
to the market during the year, the BGMEA official said. He said
France, being an advanced economy, also paid the same amount of duty
although it (France) exported 15 times higher than that of
Bangladesh to the US during the period. Meanwhile, the Tariff Relief
Assistance for Developing Economies (TRADE) Act 2009 was tabled
recently before the Committee on Finance of the US government to help
some of the poorest countries sustain export and economic growth.
This legislation will provide duty- and quota- free benefits for
garments and other products similar to those afforded to beneficiary
countries under the Africa Growth and Opportunity Act. The countries
covered by this legislation are the 14 LDCs as defined by the UN and
the US State Department, which are not covered by any current US
trade preference programme. The countries are Afghanistan, Bangladesh,
Bhutan, Cambodia, Kiribati, Laos, the Maldives, Nepal, Samoa,
Solomon Islands, East Timor, Tuvalu, Vanuatu and Yemen. The bill also
includes Sri Lanka as an eligible country.

Banks asked for progress report on farm loan

The central bank has directed the scheduled banks concerned to submit
progress report on disbursement of farm loan every month with the
first one on November 15. Bangladesh Bank (BB) asked for this report
to make it sure that farmers get adequate bank loans when they really
need it, official sources said yesterday. Earlier, the BB formed a
three-tier monitoring cell to watch over the disbursement of
agriculture loans. A BB official said the monitoring cell will review
the monthly report and take necessary steps to keep the credit system
on track. Such loan disbursement began on October 1 , prior to the
Boro season, aimed at boosting the country's agriculture sector,
revitalising the rural economy and achieving food security. The
government in the national budget for the current 2009- 10 fiscal
year allocated Tk 11 ,500 crore--the highest-ever loan to the
sector. The loan facility will cover all major sub- sectors of the
agro industries, including crop production, fisheries, livestock and
poultry farming.

Ashuganj Fertiliser counts Tk 6 lakh in daily loss

Ashuganj Zia Fertiliser Company Limited is facing a Tk 6 lakh loss
daily as inadequate storage facility has forced the company
management to go below its full production capacity. Around 47 ,000
tonnes of urea remained in the open on the factory premises until
yesterday. Besides, at least 500 tonnes of the surplus urea is being
added daily to this huge stock, making the situation go from bad to
worse. The factory's present storage capacity is around 95 ,000
tonnes. The urea factory now produces only 1 ,350 tonnes daily
against its capacity of 1 ,410 tonnes. As daily distribution of the
item among dealers is not over 850 tonnes, an amount of 500 tonnes
remains surplus. "The present situation will continue until the next
four months," said an engineer of Ashuganj Fertiliser, who preferred
anonymity. Meanwhile, the company efforts to get government's buffer
stock silos and BADC silos turned futile, as those are already filled
in with around 3 ,00 ,00 tonnes of fertiliser, an amount imported to
to face the peak farming season or any possible crisis in the input.
When contacted, Brahmanbaria's Deputy Commissioner Md Haiul Quaium
said he also put his efforts to solve Ashuganj Fertiliser's storage
crisis after the company sought his intervention. During a meeting
with urea dealers following his visit to the factory, Quaium warned
them of stern action against any lapses in timely withdrawal of the
allotted amount of urea from the factory concerned. Osman Ghani, the
managing director of Ashuganj Zia Fertiliser Company, said the
factory will restore its full capacity soon after the distribution of
urea, now stockpiled.

CURRENCY rate in BANGLADESH

Local Market FX Local inter-bank FX market was active today. There
was ample liquidity in the market and the USD/BDT rate traded in a
similar range to the previous working day. Money Market Money market
was active on Monday. The market was liquid; and the majority of
deals traded around 0.5 %. Call money rates were at such low
levels, as the market is flush with liquidity after the recent
maturity of bills. International Market The dollar weakened on
Monday after a G7 meeting at the weekend reaffirmed the market's
view policymakers are comfortable with a gradually weakening dollar,
a trade encouraged by the resilience in global equity markets.

Eurozone business activity rises in September: Survey

Private sector business activity in the 16- nation eurozone grew in
September with manufacturing and services each gaining on initial
estimates, a closely-watched survey showed on Monday. The final
purchasing managers' index (PMI) for the 16 countries using the
single currency, compiled by data and research group Markit, rose to
51.1 points from 50.4 in August when it ended 14 months of decline.
The flash estimate pegged it at 50.8. The services index rose from
49.9 points to 50.9 the previous month, beatint the 50.6 flash
figure and topping the emblematic 50- point boom-or-bust line to
indicate a return to growth in this segment for the first time in 16
months. Chris Williamson, chief economist at Markit, said the
results "show France and Germany continuing to expand which, combined
with slower rates of decline in Italy and Spain, raise hopes of a
tentative return to growth" across the eurozone for the third quarter
just ended.

Moscow airport set for privatisation

One of Moscow's main international airports is set to be privatised
next year as part of a new government drive to sell shares in state
firms, Russian financial daily Vedomosti reported on Monday. The
state-owned airport, opened in 1959 and then extended for the 1980
Olympics, is included in a draft plan for privatisations in 2010 ,
an airport official close to the board of directors and government
sources said. The transport ministry supports the idea of selling
Sheremetyevo, Svetlana Kryshtanovskaya, an aide to the chairman of
Sheremetyevo's board of directors and Transport Minister Igor
Levitin, told Vedomosti. A Sheremetyevo representative declined to
comment to Vedomosti. Government officials announced a new
privatisation drive last month. First Deputy Prime Minister Igor
Shuvalov said in a television interview that "now is the time that
we can return" to privatisation."

Sarkozy to seal major deals for French firms in Kazakhstan

French President Nicolas Sarkozy leads a high-powered business
delegation to Kazakhstan on Tuesday to seal a string of lucrative
deals on Caspian oil and gas, satellite technology and defence. The
contracts worth several billion euros in total will be the crowning
moment to France' s two-year diplomatic drive to upgrade economic
ties and give French businesses a major stake in the Central Asian
giant's energy boom. A French presidential aide said Sarkozy's visit
to Kazakhstan will "strengthen the economic partnership in a very
concrete manner" with the signing of deals. Oil giant Total and GDF
Suez are to formalise a venture worth one billion euros (1.5 billion
dollars) to develop the Khvalynkskoye gas field in the Caspian Sea,
said the aide who asked not to be named. Kazakhstan is set to
announce on Tuesday the awarding of a contract worth up to 1.2
billion euros to the Spie Capag consortium, owned by construction
giant Vinci, to build a pipeline for the Kashagan oil field. The
pipeline would bypass Russia and allow deliveries directly to Europe.
Kazakhstan has long been courted by Western governments for its
energy wealth and also as an alternative supplier to Russia, the
source for 25 percent of the gas sold to European Union countries.

Oil slips

World oil prices weakened on Monday as recent weak economic data
sparked fears about a recovery in the United States, analysts said.
New York's main contract, light sweet crude for November delivery,
eased 29 cents to 69. 66 dollars a barrel. Brent North Sea crude for
November delivery dropped 35 cents to 67.72 dollars a barrel.

Spain pledges 4 b euros for IMF

Spain on Monday pledged to lend more than four billion euros (5.8
billion dollars) to the International Monetary Fund to help global
recovery efforts as part of a European Union agreement, the IMF said.
The IMF said in a statement released in the run-up to annual meetings
of the IMF and World Bank in Istanbul that the money would help
"provide timely and effective balance of payments assistance to its
members in the current crisis."

Asian stocks broadly lower

Asian markets were broadly lower on Monday as investors grew anxious
following news that more jobs than expected had been lost in the
United States. Tokyo fell 0.59 percent, Seoul 2.29 percent, Sydney
0.62 percent and Singapore 0.80 percent. Sentiment was depressed
after a 0.23 percent drop on Wall Street Friday triggered by news
the US economy shed 263 ,000 jobs in September, after a revised loss
of 201 ,000 in August. Unemployment rose to 9.8 percent. The
regional losses followed Friday's sell-off, which had came as dealers
grew nervous about the pending jobs data. Investors are also cautious
ahead of the US corporate earnings season, which begins this week.
However, Hong Kong's bourse rose 0.26 percent on bargain hunting
after recent heavy falls. Shanghai was closed for a public holiday.
TOKYO: Down 0.59 percent. The Nikkei-225 dropped 57.38 points to 9
, 674.49. Stocks are at their lowest level in almost 11 weeks. The
strength of the yen continued to weigh on exporters. Honda Motor fell
2.8 percent to 2 ,595 yen and Nikon declined 7.0 percent to 1 ,
442 yen. HONG KONG: Up 0.26 percent. The Hang Seng Index finished
53.58 points higher at 20 ,429. 07. SEOUL: Down 2.29 percent. The
KOSPI lost 37. 73 points at 1 , 606.90. Technology firms fell sharply
on concerns their earnings may peak in the third quarter and the
won's strength against the dollar may hurt their price
competitiveness. TAIPEI: Up 0.35 percent. The weighted index rose
26.10 points to 7 , 437.98. SINGAPORE: Down 0.80 percent. The
Straits Times Index fell 20.80 points to 2 , 583.73. Singapore
Telecommunications closed four cents lower at 3.17 dollars but
Singapore Airlines was six cents firmer at 13.12. DBS dropped 18
cents to 12.60 and United Overseas Bank rose 14 cents to 16.44.
BANGKOK: Down 0.84 percent. The Stock Exchange of Thailand lost 6.09
points to close at 718.47. KUALA LUMPUR: Up 0.85 percent. The Kuala
Lumpur Composite Index gained 10.20 points to 1 , 216.45. JAKARTA:
Flat. The Jakarta Composite Index gained 0.57 points, or 0.02
percent, to 2 ,480. 41. MANILA: Flat. The composite index shed 0.55
points or 0.02 percent to 2 , 819.48. MUMBAI: Down 1.56 percent. The
30- share Sensex fell 268.14 points to 16 , 866.41.

Taiwan LCD makers eye China

Taiwan's producers of liquid crystal displays know that venturing
into the Chinese market is risky, but they are also fully aware they
have no choice, analysts said. Even though they are major revenue
earners, the island's LCD makers got off to a late start, struggling
for years to match stronger Japanese and Korean rivals, and they
hope China will give them the leverage they need to catch up. "We're
eager, if the government can give the go-ahead," said Hsiao Ya-wen of
AU Optronics, the world's third-largest flat panel maker after
Samsung Electronics Co and LG Philips Co. AU Optronics currently
operates two Chinese module plants -- low-end facilities that do not
give away much know-how -- and announced in June plans for a third one
in a joint venture with Sichuan Changhong Electric Co. It could soon
see its activities move to a whole new level. Economics Minister Shih
Yen-hsiang told parliament last week Taiwan may relax curbs on
high-tech investments in the mainland by local LCD companies. A
bigger role in China could be a huge boon for makers of LCDs -- used
in everything from cell phones to computers and e-books -- due to
the strong appetite among the mainland's newly rich for cutting-edge
electronic products. The interest runs both ways, with AU Optronics
vice president Paul Peng confirming recently that his company had
received invitations from several Chinese city governments to set up
plants once the high-tech curbs are eased. But analysts also see
risks that may face Taiwanese panel makers once they are permitted
by the government to open up " eighth-generation" production plants in
the mainland, introducing sensitive technologies. "Chinese companies
may ditch Taiwanese partners once they acquire their badly needed
cutting-edge LCD know-how," said Nancy Liu, an analyst with Taiwan's
quasi- official Industrial Technology Research Institute. Liu added
the same concerns are factors for Seoul and Tokyo while considering
whether to share their state-of-the-art technologies. But in Taipei
the concerns are all the more serious, because Taiwan and China were
arch foes for decades after they split at the end of a civil war in
1949. However, ties between Taipei and Beijing have been warming fast
since Ma Ying-jeou of the China-friendly Kuomintang party was
elected president last year on a promise to boost trade and allow in
more Chinese tourists. "It would be a very good opportunity for
local flat panel makers," said Alex Huang of Mega International
Investment Services. "It would allow them to get close to their
Chinese clients in addition to reducing costs. AU Optronics is a prime
example of how the entire industry is still burdened by having
joined late. The company started from scratch in 1996 and merged with
a Taiwanese company in 2001 and another one in 2006 , fast becoming
the leading flat panel maker here. But it faces intense competition
from abroad. "The huge number of patent rights owned by the Japanese
and Korean makers have formed high barriers for the latecomers," said
Liu of the Industrial Technology Research Institute. They may have to
pay high royalties for the patent rights owned by the industry
leaders or face infringement charges, she said. The huge demand from
the Chinese market may not just help Taiwan's LCD makers with their
long-term problem of narrowing the gap with rivals, but also the more
immediate issue of coping with the global crisis. Taiwan's screen
manufacturers were hit harder by the worldwide economic downturn
than their Japanese and Korean competitors. "Local panel makers are
short of brand names like Sharp, Samsung and LG," said Liu. In order
to meet overseas demand, the three global brands purchased panels
from Taiwan suppliers, but slashed orders when the economic meltdown
bit and demand slumped late last year. As a result, the utilisation
rate of Taiwanese makers tumbled to below 40 percent while their
Korean rivals still enjoyed a comfortable 80 percent utilisation
rate, according to Liu. "But they would be able to ensure outlets
for their products if they can secure orders from China by making
products there," she said.

Financial Crisis IMF takes on greater global role

The International Monetary Fund has taken on an enhanced global role
to promote lasting economic recovery in the world, with its 186
member nations pledging to keep stimulus support of growth in place.
The IMF's steering committee meeting in Turkey's commercial capital,
Istanbul, on Sunday endorsed a recovery plan agreed at the Group of
20 ( G20) summit last month amid the worst global economic crisis
since World War II. "We are off to the right start," IMF chief
Dominique Strauss-Kahn said on Sunday, adding that this was "a unique
opportunity to reshape the post-crisis world, to usher in a new era
of collaborative global governance. " Japanese Finance Minister
Hirohisa Fujii said: " After going through the financial storm, I
expect that the IMF will play increasingly important roles to
effectively develop a more solid and stable global financial system.
" The meeting in Istanbul took place after the IMF said that growth
had returned to the global economy but that the crisis was not yet
over because of rising unemployment in many countries and a very weak
banking sector. The International Monetary and Financial Committee
(IMFC) vowed to maintain stimulus spending "until a durable recovery
is secured" and act "to revive credit, recover lost jobs, and reverse
setbacks in poverty reduction." Mario Draghi, governor of the Bank of
Italy and chairman of the Financial Stability Board, a new watchdog
for the global financial system, warned IMFC members that the
financial system remains "fragile". The IMFC also approved a G20 plan
to increase voting rights by at least five percent for
under-represented countries in the IMF, a measure seen as helping the
group' s legitimacy as emerging markets take the lead in recovery.
The IMF last week forecast emerging and developing economies would
grow 5.1 percent in 2010 -- in contrast with just 1.3 percent in
advanced economies. China's economy was projected to grow by 9. 0
percent next year and India's by 6.4 percent -- far ahead of 1.5
percent expansion in the US economy. But Bernice Romero, director of
international aid agency Oxfam, called the reform in voting rights
"shameful" because it did not go far enough and said that "rich
countries are still making decisions for the rest of the world."
Argentinean Finance Minister Amado Boudou agreed, saying: "There will
be no 'new IMF' without a more representative and democratic
governance structure. "To achieve this goal, the voice and
representation of developing countries, including the poorest, must
be significantly increased." China's deputy central bank governor, Yi
Gang, said successful governance reforms, including a "significant"
quota realignment, were key to "the capacity of the fund to deliver"
by enhancing its legitimacy and effectiveness. Strauss-Kahn also
called for a "substantial increase" in resources from members to
reduce imbalances between countries that build up huge reserves and
others that accumulate giant deficits and to promote future growth.
He said this could be achieved if the IMF pooled reserves that
members could tap as a guarantee against financial shocks and gave
the example of new Flexible Credit Lines agreed with Colombia, Mexico
and Poland this year. "I think it's very important for the post-
crisis world," he said. "If you want to avoid countries, including
China, to build such big reserves, contributing to global imbalances,
we need to find another system." In an earlier speech to central bank
governors in Istanbul he said more than a trillion dollars may be
needed in order to put such a system in place.

Money transfer by mobile The electronic transaction project will take off in six months in BANGLADESH

Money transfer is about to go digital in six months, as Bangladesh
Bank has approved the launch of an electronic prepaid card system
that will have a mobile payment option. The central bank permitted
Trust Bank Ltd to act as a settlement bank for digital money
transfer. "The Electronic Prepaid Card System will be a multiple
bank, multiple channel platform, where Trust Bank will act as the
settlement bank," BB said in a recent notice. With the card, a
customer will be able to deposit and withdraw cash directly from
ATMs and all other channels. A card will have a secret PIN to access
the service. Also, the system allows an authorised user to transact
by mobile. In case of foreign remittance, any amount could be
withdrawn by prepaid card, but the amount is limited to a maximum of
Tk 10 ,000 for now, Bangladesh Bank officials said. In line with the
central bank directive, any bank having Q-cash or a similar platform
can issue prepaid cards for customers to transact money. Presently,
23 banks are linked with the Q-cash network. Besides the prepaid
card system, Eastern Bank received approval to handle international
and domestic remittance transfers. Dhaka Bank is allowed to disburse
foreign remittance through mobile operator Banglalink's outlets.
Neither of the new systems allows cross- border money transfer.
Industry insiders said people would be able to easily transfer money
to their loved ones at a fifth of the cost under the present system.
According to BB statistics, remittance inflows soared by 30 percent
from $ 721.92 million in August 2008 to $ 937.91 million in August
2009 -- a contribution of 60 lakh Bangladeshis living in parts of
the world. In a letter on September 1 , the central bank approved
Trust Bank to introduce the Digital Money Prepaid Card System with
mobile payment facilities within the next six months, in association
with Digital Technologies Ltd and Information Technology Consultant
Ltd. Under the digital money transfer system, intra- and inter-bank
account-to-account transfers, transactions at ATMs through Q- cash
and other similar platforms will be settled. A digital wallet is an
electronic prepaid card with mobile banking (M-banking) that utilises
the ATM (automated teller machine) and all kinds of electronic
communication technologies, including mobile phone. To obtain the
digital prepaid card, customers will have to fill out an application
form at banks or agents. The bank will verify the customer under its
'know your customer' ( KYC) process to issue a digital money prepaid
card. The customer's information must match the information with the
bank and the information he or she provided to telecom companies,
through host-to-host connectivity. The Q-cash host will tag the
cardholder's cellphone upon getting confirmation from the telecom
host, and then the customer will be notified immediately upon
successful digital money tagging. Since the customer owns the card,
he or she can transfer money and carry out transactions at a point
of service (POS) at bank-approved merchant stores and service
points, like gas stations, hospitals and cinema halls. In the case of
person to business payments, like utility bills, insurance premiums,
loan instalments, E-top-up for mobile phones, and e-ticketing, the
prepaid card will be used. In the case of government to person
payments, like agriculture subsidies, widow allowances, freedom
fighters allowances, payment will be transferred through the card.
Trust Bank will have to submit contract agreements between its
partners before launching the project. The pay points must be
accredited by Trust Bank under an approved accreditation policy and
the bank shall undertake all responsibilities of pay points. Trust
Bank will be responsible for mitigating of all kind of risks,
including credit risks, liquidity risks, operational risks, fraud
risks and technical risks associated with the digital money system.
Kazi Saifuddin Munir, managing director of Information Technology
(IT) Consultants Ltd, said, "We are ready to initiate the prepaid
card system for money transferring by December on a pilot basis." IT
Consultants Ltd, the lone payment service operator in Bangladesh
providing the Q-Cash inter-bank switching platform and connectivity,
thinks that if all the banks come under a single network, remittance
or any other transaction would be easier. Munir said through a
designated short mobile code number, a customer can transact money.
However all transactions would be settled through the banking
channel. "The mobile application will be used to just enter the
system," he said. Banking and mobile application systems will be
merged in a sense to settle the transaction. As per the central bank
notification, Eastern Bank Ltd (EBL) will conduct both international
and domestic remittance by introducing three products --EBL Smart
Remit Card, Smart Cash Point and Smart m- wallet. The EBL Smart Remit
Card will be a card based payment system, where senders can send
money to receivers prepaid VISA card and the cash can be withdrawn
using any VISA, ATM or point of service, at any appointed merchant.
EBL has not been approved transferring money from one m-wallet to
another m- wallet holder. Dhaka Bank Ltd has been approved to use
Banglalink outlets for disbursement of foreign remittance. Under the
approval, the bank can disburse foreign remittance through designated
Banglalink outlets, which must be approved by the bank's board. In the
remittance disbursement process, EBL and Dhaka Bank accredited cash
points will be used only for delivery in local currency for inward
remittance credited in Nostro accounts of the banks and not for any
other inland or cross border transfer.