Global recession to hit remittance, affect poverty reduction

The global recession is likely to hit Bangladesh’s remittance inflow and affect the country’s efforts in reducing poverty that now on a path to achieve the MDG, according to a World Bank assessment released here Sunday, reports UNB.
If the 2000-05 growth rate (average 5.3 percent) is maintained, the poverty rate will be 27 percent by 2015 from 57 percent in 1991-92, says the study.
The study titled “Poverty Assessment for Bangladesh: Creating opportunities and Bridging the East-West Divide” was released at a press conference at the Bank’s Dhaka Office.
Country director Xian Zhu gave an overview of the study while the Bank’s economists Ambar Narayan and Hassan Zaman made a presentation on the findings.
The report said the projection in achieving the poverty reduction target would, however, depend on remittance, exports and frequency of domestic and external shocks.
“Impending global recession poses risks to growth and poverty reduction due to the impact on remittance and export growth,” it said, adding that 63 percent of the remittances come from the Gulf where construction industry is likely to take a downturn.
Replying to a question, economist Hassan Zaman said they have no evidence that Bangladeshi construction workers have been sent back, but they understand that the construction industry there was slowing down.
The report said frequency of shocks like rise in food price and natural disasters could reduce the GDP growth, affecting poverty in a certain year.
It also pointed out that if inequality increases there would be less poverty reduction for same GDP growth while continued decline in fertility would be crucial.
The report added that inequality increased between the eastern and western regions of Bangladesh. Till 2000, the largest difference was between Dhaka and the rest of the country, while from 2000 to 2005, the broad divergence was between East and West (Khulna and Barisal).
The regional divide was due to less incidences of remittance receipt, poor infrastructure and agro-climatic factors, it said.
“We clearly do not have the full answers to why Bangladesh has an emerging East-West divide,” country director Zhu told the press conference, adding that the Padma Bridge would be essential to improve connectivity, market access and migration from the lagging regions.
He said investments in power generation would be essential to attract private sector industries in the lagging regions while international migration from the Western part of the country would also need to be stimulated to help remittances grow faster.
Replying to a question, Zhu said the World Bank in partnership with the government has undertaken some technical and vocational education programmes in the lagging regions while PFSF was running a promising project to send workers abroad from the north western region of the country.
Replying to another question, he said no matter what type of government is in power, infrastructure is essential to stimulate growth in the lagging areas.
Asked whether Padma Bridge could stimulate growth in the western region as the Jamuna Bridge could not meet the expectation, economist Zaman said the poverty rate reduced from 56 percent to 51 percent during the 5-year period. “Part of that happened due to Jamuna Bridge…we can’t say only the Padma Bridge can reduce the poverty of that region.”
The study found that the existing safety net programs are inadequate even after the progressive expansion in the safety net budget. “Less than a quarter of the poorest 10 percent of the population are recipients of at least one safety net program.”
Moreover, it said, resources can be targeted better. For example, in spite of its low poverty rate, Sylhet has the highest safety net coverage among its population.
Due to a sharp increase in the number of people entering the job market, the report said around 2.2 million new jobs would need to be created per year over the next decade - this is twice the rate of job creation during 2000-05.
“This is both a challenge for Bangladesh, but also an opportunity since the new income earners can contribute significantly to overall poverty reduction.”
It also showed that public spending per capita in both education and health is among the lowest in South Asia. Raising them can provide the resources to improve the quality of service delivery and reduce the rich-poor gaps in access, said the report.

DSE sees biggest jump in 4 months as signs for election bright

The Dhaka Stock Exchange (DSE) Sunday witnessed the biggest jump in four months amid political developments indicating elections with the participation of all parties, reports UNB.
As the country’s premier bourse started the day, the General Index (DGEN) rose sharply as high as 110 points to 2,726 just before the close of the trading. It, however, closed a little lower and recorded 101 points or 3.86 percent gain at 2,717 compared to 2,616 points on Thursday.
Earlier, the benchmark index hit its single-day high by 105 points increase on July 24.
The DGEN started sliding from the level of 2,720 points recorded on November 4 and was hovering just over the 2,500 mark until Thursday.
“The market will be even better if the fresh schedule for elections is announced today (Sunday),” said a share investor on the trading floor of a merchant bank, who echoed many fellow investors.
Stockbrokers said the banking shares that have been ignored for long found their ways during the day’s trading as the investors took position on the low-priced stocks to tap the benefit of the speculations over the political situation.
Trading of National Bank Limited and Dutch-Bangla Bank Limited faced trade halt as their prices shot up to touch their respective circuit breaker.
On Thursday, the uncertainty over holding the elections has sparked fears among the investors of political instability, pushing the Dhaka Stock Exchange back on losing streak.
Brokers said investors placed huge buying orders outnumbering that on sales, sharply pushing up the prices of scrips that gained across the board. Of the total 224 issues traded on the day, 173 registered gains, 43 incurred losses and eight remained unchanged.
As a result, the day’s total turnover increased to Tk 2.70 billion from Tk 2.01 billion on Thursday while market capitalization rose to Tk 996 billion from Tk 959 billion.
The All Shares Price Index (DSI) increased 82 points or 3.79 percent to close at 2,244 from 2,162 points on Thursday while the DSE-20 index of selective shares rose 87 points or about 4 percent to close at 2,281 from 2,193 points on Thursday.
Uttara Bank, Beximco Pharma, National Bank, Titas Gas, AB Bank, Brac Bank, GRAMEENS2, Beximco, Islami Bank and Dutch-Bangla Bank were the day’s turnover leaders in terms of value.
The day’s volume leaders were AIMS 1st Mutual Fund, GRAMEENS2, Beximco Pharma, Beximco Textiles, Golden Son, Beximco, Agni Systems Limited, Keya Detergent and Fu-Wang Foods.
Top gainers of the day were National Bank, IFIC, Prime Insurance, Brac Bank, Kay & Que, Apex Footwear, Shyampur Sugar, Renwick, AB Bank and Apex Spinning. Top losers were National Tubes, Dandy Dyeing, Fine Foods, Metalex Corporation, ACI Formulations, Power Grid, Eastern Lubricant, Sonargaon Textiles, 8th ICB and BD Luggage.

Bangladesh to receive $109m credit from WB

Bangladesh will receive US$ 109 million from the World Bank to implement Emergency 2007 Cyclone Recovery and Restoration Project (ECRRAP), reports UNB.
An agreement, to this effect, was signed between the Government of Bangladesh and the World Bank at the Economic Relations Division here today (Sunday), said a Finance Ministry release.
ERD secretary M Musharraf Hossain Bhuiyan and World Bank Country Director in Dhaka Xian Zhu signed the agreement on behalf of their respective sides.
Under the credit, Bangladesh will receive US$ 109 million from the World Bank in usual terms and conditions of World Bank (0.75 percent service charge on withdrawn amount, a maximum 0.50 percent commitment charge on un-withdrawn balance, 40 years of repayment period including 10 years of grace period). Credit closing date is June 30, 2013.
The project aims to assist and strengthen current initiatives of the government to facilitate recovery from the damage to livelihoods and infrastructure caused by Cyclone Sidr and to build long-term preparedness through strengthened disaster risk reduction and management.
This credit will finance the following components: recovery of agriculture sector and Improvement Program, reconstruction and Improvement of Multipurpose Shelters, rehabilitation of Coastal Embankments, long-term Disaster Risk Management Program, monitoring and Evaluation of Project impact, project Management, Technical Assistance, Strategic Studies and Training and Emergency Support for future Disasters.
Agriculture Ministry will implement the project with the assistance from FAO, Local Government Engineering Department (LGED), Disaster Management Bureau, Bangladesh Water Development Board and the Programming Division under the Planning Commission.

Zillur for proper preservation of animal hides

The country can earn an additional amount of Taka 300 crore from exports of animal hides and skin every year if proper measures can be taken for its separation and preservation, reports BSS.
Commerce Adviser Dr Hossain Zillur Rahman said this at a daylong seminar on ‘Necessity of proper separation and preservation of cattle hides and skin’ at a city hotel here today.
Joint secretary of the ministry of commerce M Golam Hossain presided over the seminar organized by Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association (BFLLFEA) and Bangladesh Tanners Association (BTA).
President of BFLLFEA Rezaul Karim Ansari and chairman of BTA M Harun Chowdhury addressed, among others, on the occasion.
Dr Zillur said there is no alternative to expertise to compete in the field of economy, trade and education in the global arena.
He said leather is the third highest exporting goods of Bangladesh from which the country earns about Taka 3,200 crore annually.
He asked the concerned officials to expedite the work for establishment of a Leather Industrial City at Savar and make people aware through the media about flawless separation and preservation of hides and skin of the slaughtered animals.
He said about 18 percent of total available hides and skin of 2.20 million cft in the country is being destroyed due to flaws in separation and preservation system.

Dhaka achieves higher poverty reduction in SA

Bangladesh achieved higher poverty reduction in current decade compared to other South Asian countries but lagged behind the East Asian standard, World Bank said in a report released here today, reports BSS.
The report said Bangladesh will be able to achieve its millennium development goals (MDGs) halving the proportion of its population below poverty line by 2015, despite the adverse impact of many recent internal and external shocks.
WB country director Xian Zhu released the report to the press at its local office. Senior WB officials were present.
The report titled ‘Poverty Assessment-Creating Opportunities and Bridging the East-West Divide’ disclosed some significant poverty reduction trend in the country’s Eastern and Western regions.
It said more than 6 million people graduated above the poverty level from 2000 to 2005. The number of extremely poor graduated above the poverty line during this period, further stood at 8 million, it said.
Using a database of 2005, the report said poverty level at that time stood at 32 percent in Dhaka division and 34 percent in Chittagong and Sylhet divisions. But it was more than 45 percent that time in Khulna, Barisal and Rajshahi division on the other side of the rivers Jamuna and Padma.
The Western region is lagging behind the Eastern region in many respects, the report said pointing to some reasons, for example, 24 percent household of Chittagong division and 16 percent in Sylhet Division received remittances.
On the other hand, less than 5 percent households of Rajshahi, Khulna and Barisal divisions received the inflow of external remittance keeping the poverty level at much higher level in those divisions, the report said.
Another aspect of the report is that the country’s existing safety-net programs are inadequate even after its progressive expansion in the current budget. Less than a quarter of the poorest 10 percent of the population are recipients of at least one safety-net program it said, indicating the need for greater efforts in this area.
It emphasized the need for better targeted placement of resources to drastically reduce poverty at an accelerated pace. The report said Sylhet division enjoys the highest safety-net coverage despite its low poverty rate for better targeting the resources.
Referring to the need for new jobs for new comers in the employment market, it estimates at least an annual growth of 2.2 million jobs from now, which is twice as much annual need from 2000-2005.
It is a big challenge, but Bangladesh can also achieve higher prosperity if it can use its workforce and turn it into better human resource, the report said.
It said higher growth in agricultural productivity and manufacturing will remain vital to accelerated poverty reduction and achieving sustainable socio- economic growth.

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