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Finance and Planning Minister M Saifur Rahman hinted on Sunday that the lending rate for rice millers would be increased to discourage hoarding and stabilize prices.
   ‘Prices of rice have come down by this time and initiatives like hiking interest rate for millers to discourage hoarding practice are under active consideration to contain price hike,’ Saifur told newsmen after a meeting of the Fiscal Coordination Council.
   Ruling out any possibility of further hike in rice price, the minister told that about 30 lakh tonnes of rice and wheat were imported last month, while the country witnessed a bumper rice crop recently.
   Saifur observed that the financial strength of farmers has increased in recent times and that they are able to hoard crops for longer, which he cited as a reason for rice price hike.
   ‘The holding capacity of the country’s farmers has increased in recent times, which is one of the reasons behind price hike as they now afford to hoard,’ claimed the minister.
   Held at the planning ministry, the meeting was attended by council members — commerce minister Altaf Hossain Chowdhury, Bangladesh Bank governor Salehuddin Ahmed, finance secretary Zakir Ahmed Khan and economic relation division secretary Ismail Jabiullah.
   The Council, headed by the finance minister, was formed on March 10, 2003 by amending the Bangladesh Bank Order 1972.
   It is supposed to sit at least once a quarter to review the consistency of macroeconomic policies and also to revise the limits and targets set in the budget during formulation.
   On the issue of inflation, Saifur told global fuel price hike is largely responsible for the situation as the government had to spend additional $800 million on the oil import head during the couple of months compared with the corresponding period of the previous year.

Middlemen blamed for rice price spiral
STAFF CORRESPONDENT

Research personnel of a development organisation Sunday blamed the middlemen for price hike of rice in the country.
   For defusing their sinister influence, the government should fix rice price for farmers so that they can sell their produce to mills at due rate, they said at a seminar in Dhaka.
   Researcher Rashed Al Mahmud Titumir of the Unnayan Onneshan, a research and development organisation, found that because of meddling of middlemen the farmers lose at least Tk 9,000 crore every year.
   He said at present 65 per cent farmers in the country earn their livelihood from other activities than farming as the latter does not offer any sound profit.
   ‘Peasants still continue farming because they never take into account their own labour when they calculate profit’.
   Rashed urged the government to increase subsidy in agriculture so that the farmers can earn greater profit for agriculture.
   Inaugurating the national seminar and two-day workshop on Civil Society Organisations, Evidence and Policy Influence at the BRAC centre, the state minister for finance and planning Anwarul Kabir Talukder said the government intends to frame policy with people’s participation.

The government plans to make it compulsory for every businessman to get his or her business concern affiliated with the designated trade body for the sector concerned, commerce ministry officials said.
    Such mandatory representations or memberships will help the government keep track on the businesses, widen the revenue base and smooth the way for public-private interactions on issues relating to trade facilitation, they said.
   An inter-ministerial meeting, initiated by the commerce ministry today, will discuss a 1996 statutory regulatory order that advised businessmen for having trade body memberships.
   Representatives from leading trade bodies have also been invited to the meeting that aims to outline rules and regulations for compulsory membership, a trade official said.
   ‘In fact, the new set of rules will be the amended version of the 1996 SRO, but enforcement will be stricter this time,’ said a leading trade body executive, who is invited to today’s meet.
   Trade bodies of the country are regulated by the office of the director of trade organizations, a wing of the commerce ministry.
   Trade bodies are supposed to be affiliated with the Federation of the Bangladesh Chambers of Commerce and Industry, but most of them are still not members of the apex trade body.
   A recent report of the office of the Registrar of the Joint Stock Companies showed that till the end of the fiscal 2004-05, total number of the trade organisations in the country stood at 636.
   But only some 200 trade associations and 65 district level chambers have so far been affiliated with the FBCCI.
   Low rate of affiliation led to the poor capacity of the apex trade body as the custodian of the private sector. In most cases leaderships of trade bodies have gone under the grip of fake businessmen, who use their office for making their own fortune instead of promoting the caused of the private sector, business sources said.

The parliamentary committee on the agricultural ministry on Sunday observed that farmers did not get benefit of fertiliser subsidy as the corrupt cliques plundered bulk of the money distributed as subsidy.
   The parliamentary body formed a one-member committee to submit a report on how to get rid of plundering of the
   subsidy.
   ‘A group of importers, with help from some corrupt government officials, are plundering most of the fertiliser subsidy,’ Golam Mohammad Quader, a Jatiya Party member in the parliamentary body, told New Age after a meeting of the committee on Sunday.
   ‘The government distributed about Tk 165 crore as cash subsidy for importing fertiliser in last six months. But the farmers did not get its benefit as the dishonest importers plundered the money,’ he said.
   Meanwhile, the government allocated about Tk 271 crore to provide 25 per cent cash subsidy on the total import cost of 7 lakh tonnes of fertilisers since January to June this year.
   The meeting was told that the government distributed Tk 165 crore as subsidy among the importers, who claimed to sell out about 4.60 lakh tonnes fertiliser among the farmers.
   ‘Some importers are now opening letters of credit to import more fertiliser to plunder the rest of the money,’ Quader said.
   Shafi Ahmed Chowdhury, a ruling BNP member in the committee, gave an instance how the fertiliser subsidy was plundered by showing false sell.
   Shafi also said that some of the importers had received additional money by showing inflated price of fertiliser by over-invoicing and tempering import documents.
   ‘We observed that the farmers were not getting the subsidy,’ Quader said. ‘The middlemen are getting the benefit of the subsidy.’
   ‘The chairman formed a one-member committee led by Shafi Ahmed Chowdhury to find out a way to take action against the cliques although we sought to include more members in the sub-committee,’ Quader said.
   ‘We will, however, discuss suggestion made by Mr Shafi at the next meeting of the committee,’ he said.
   The committee also observed that the farmers at the ground level are deprived of soil testing facilities. ‘The farmers are applying fertilisers without testing soil, risking harming of soil, as there is dearth of test kits,’ Quader continued.
   The committee also lamented the shortfall of seeds in the market.
   ‘We asked the ministry to provide necessary funds to provide soil test kits and quality seeds to the marginal farmers,’ he said. ‘But the ministers, specially the state minister, were saying that the finance ministry does not allocate money to this end.’
   According to the ministry documents, placed at the meeting, 88 ministry vehicles, out of 168, were out of order.
   Abdul Mannan, chairman of the committee, presided over the meeting, which was attended by the agriculture minister, MK Anwar, the state minister, Mirza Fakhrul Islam Alamgir, BNP members Shah Shahid Sarwar, Khurram Khan Chowdhury, Awami League member Md Motahar Hossain, and Jamaat-e-Islami member MA Aziz.

Brokerage houses have to make a choice between the two—either staying as stockbroker or stock dealer as the regulators will no longer allow them to enjoy both the facilities simultaneously.
   The Securities and Exchange Commission on Sunday at a board meeting decided to go for full enforcement of the provision by the September 28 deadline set five years back.
   According to the global practice, stockbrokers are allowed to trade on behalf of their clients only while stock dealers are authorised to trade for themselves alone.
   The SEC also directed the proprietorship based brokerage houses to form limited companies by previously-set deadline of December 31 and rejected a plea of Dhaka Stock Exchange for time extension.
   Otherwise, they will risk losing broking/dealing licences, it warned at the meeting, presided over by chairman Mirza Azizul Islam.
   Corporate entity of the brokerage houses is one of the conditioned tagged by the Asian Development Bank for its $80 loan for the capital market development programme.
   ‘The commission has decided not to extend the time,’ the SEC executive director, Mansur Alam, told reporters after the meeting.
   ‘If anybody [brokers] fails to comply with the requirement, they will not be allowed to run the business,’ he said.
   At present, 90 brokerage houses have proprietorship licences while 83 have the corporate licences at the Dhaka Stock Exchange.
   Corporate entity will ensure their corporate responsibility and accountability in the stock business, the SEC official said.
   At the Chittagong Stock Exchange, all the brokerage houses have already formed companies.
   The SEC meeting decided to warn five companies for their failure in submission of financial statements and delay in holding annual general meetings.
   Federal Insurance, Fine Foods Ltd and Sonali Paper will be warned for delaying in submission of financial statements, while Excelsior Shoes and Gachihata Aquaculture have already been cautioned for delaying AGMs.

China is thinking over various measures for narrowing a yawning trade gap with Bangladesh, said the Chinese Ambassador, blaming the imbalance largely on Bangladesh’s scanty export basket and various hurdles to investment.
   ‘We are in anxiety about the rapidly growing trade gap between the two countries, and to minimise the imbalance, the government of China has decided to import more products from Bangladesh,’ Chai Xi said at an FICCI meeting in Dhaka on Sunday.
   He mentioned that 82 categories of Bangladeshi products had already been awarded duty-free access to the Chinese market under the Bangkok Agreement.
   The envoy identified ‘limited export capacity’ of Bangladesh as the main cause of the wide trade gap between the two countries and suggested strengthening its export capacity to utilise the market-access facility provided by China.
   Chai Xi alleged that lack of ‘work effectiveness’ at different levels in the country was
   affecting the economy as a whole.
   ‘Bangladesh has not such work effectiveness to use the foreign grants,’ he told his business audience from the foreign investors’ chamber.
   On a more serious note in his critical appraisal of the situation in Bangladesh, the Chinese diplomat spoke of widespread ‘corruption’ and ‘infrastructure obstacle’ as the major factors behind the country’s poor success in attracting foreign direct investment.

Seven business leaders, disgruntled not to see their names in the list of candidates for the FBCCI election, complained to the election board that they were blackmailed by two FBCCI leaders.
   They appealed to the election board for allowing them afresh to submit nomination papers to contest in the apex trade body election scheduled for August 21, FBCCI sources said.
   Six business leaders including a director of the apex trade body claimed that they handed over their nomination papers to former FBCCI vice-president Mohammad Ali in good faith, but Ali did not submit those.
   Another business leader lodged a separate complaint against A Rouf Chowdhury for not submitting his nomination paper.
   Bazlur Rahman of Narayanganj Chamber and Belayet Hossain of Chemical Importers Association, whose candidatures were dropped from the primary list, also appealed to the board claiming that their documentation was correct.
   he election board will sit on July 26 to discuss the appeals, sources said.

Import from India through Benapole land port remained suspended for the 4th consecutive day on Sunday as Indian truckers continued their strike demanding release of four trucks held by Bangladesh’s authorities.
   The Benapole customs recently seized four Indian reconditioned trucks while being illegally sold to some local traders.
   The Bongaon Border Transport Owners’ Association of India on Thursday imposed the indefinite strike after their negotiation with customs people failed to solve the dispute.
   However, export through Benapole land port to India is continuing as usual. Trucks loaded with import-bound goods remained stranded at Petrapole for entrance. About 400 trucks enter into Bangladesh’s territory on an average every day. The strike costs customs at least Tk 4 crore a day in import revenue loss.
   Customs Clearing & Forwarding Agents Association on Sunday at a press conference here announced an indefinite work stoppage at the land port from Thursday in support of their 12-point demands.

India’s oil minister said on Saturday a proposed gas pipeline from Iran across rival Pakistan was a risky venture that would be difficult to finance, but added that talks on the $7 billion project should continue.
   ‘The pipeline proposal is, as the prime minister stated, fraught with terrible risks,’ Mani Shankar Aiyar told a news conference.
   The Indian prime minister, Manmohan Singh, expressed concerns about the project during his visit to the United States this week, when president, George Bush, recognised India as a responsible nuclear state and promised cooperation with its civilian atomic power programme.
   Some officials suggested India may abandon plans to import Iranian gas in return of a nuclear energy deal with the United States, which has expressed concerns over the Iran-India project, because of its opposition to Tehran’s nuclear programme.
   Aiyar said the issues were not related.
   ‘I do not think there is any connection between the two,’ he said, but he added the project faced formidable challenges.
   ‘In my view it is going to be extremely difficult to put together an international consortium, which should be willing to finance this project,’ he said.
   The proposal to build the pipeline has been on the drawing board for years, but uneasy relations between nuclear-armed rivals Pakistan and India, have prevented any progress.
   Indian officials said besides worries about relations with Pakistan — the countries have fought three wars — security for any pipeline was a concern, because it would run across volatile areas of Pakistan, where other pipelines have been attacked in the past.
   But the plan for India to pipe Iranian gas across Pakistan gained momentum after a peace process was launched last year.
   Energy-hungry India imports 70 per cent of its oil needs and is able to supply only half its gas demand of 170 million cubic metres a day.
   Aiyar said India should import piped gas as it faces a deficit of 200 million cubic metres a day in 20 years even if more gas was discovered in the country.
   ‘It is essential that we continue the process of negotiations, which, as the prime minister said, is at present at a very preliminary stage,’ Aiyar said.
   India is also keen to develop nuclear energy, which meets only 3 per cent of its power requirement, but the government aims to increase that to about 25 per cent by 2050.

The managers’ conference of Dhaka division branches of United Commercial Bank Limited was held on July 20 at bank’s head office in Dhaka.
   Chaired by the managing director, Hamidul Huq, and attended by branch incumbents, divisional heads and senior executives of head office, the conference reviewed the activities and achievements of the branches in core sectors during January-June, 2005 and expressed commitment to continue concerted efforts for increasing the volume of business, growth and profit during the coming months, to face the existing challenges in the banking sector.
   The managing director, and the deputy-managing director, Niaz Habib, advised the branch incumbents to strengthen operational activities with adequate business drive, effecting full range services to the clients with professional dedication and hard work.

The Dhaka Mercantile Co-operative Bank Ltd will open its 36th branch in Rajshahi on August 1 as part of its planned expansion of micro-credit network targeting urban low-income people.
   It will start operation in Comilla and Cox’s Bazar in the next couple of months.
   ‘We look to raise our branch strength to 40 by the yearend,’ the bank’s vice chairman, Belayet Hossain, said.
   Registered in 1973 under cooperative law, the Dhaka Mercantile has seen a significant growth since 2001 under a new management spearheaded by Abu Zafar Chowdhury, a retired group captain of the Bangladesh Air Force.
   In the last fiscal year ending on June 30, it saw a net profit of Tk 72.50 lakh while its advance totalled Tk 33.75 crore, 75 per cent of which was micro-credit ranging from Tk 10,000 up to Tk 5 lakh in some cases.
   Lending rates range between 18 to 22 per cent and recovery rates average 96 per cent.
   ‘We’ve already scaled down the interest rate and have planned to cut the rates further in future,’ Abu Zafar Chowdhury, the chairman, told New Age.
   The total number of beneficiaries stands at around 16,000, mostly small traders.
   The cooperative bank will introduce online banking and man its management with skilled hands to improve the service delivery and reduce cost of operation, he said.
   It has also built a strong deposit base, giving small fixed-income savers an outlet to put their money in various monthly savings schemes. Its deposit stood at Tk 39.41 crore as of June 30.

The Eastern Bank Limited at its 13th annual general meeting of the shareholders on July 19, declared 43 per cent cash dividend, which would be — Tk 43 per share of Tk 100, for the year 2004, with the unanimous approval of the shareholders, said a press release.
   The meeting held at the Dhaka Ladies Club, was presided over by the chairman of the board of directors of the bank, M Ghaziul Haque, was attended by the directors, Ahmed Jamal, Asif Mahmood, Gazi Md Shakhawat Hossain, Meah Md Abdur Rahim, Anis A Khan, managing director and chief executive officer, K Mahmood Sattar, company secretary, Safiar Rahman and a large number of shareholders.
   M Ghaziul Haque presented the directors’ report and financial statements for the year 2004, before the shareholders, while Mahmood Sattar replied to the shareholders queries wherever needed.
   The shareholders appreciated the board for a splendid business result, operational and financial performances and also for declaring highest cash dividend among the higher capital based private commercial banks during the year under review.

JCI Bangladesh donated 85 handlooms to the weavers of Jamdani Palli recently, in association with Rotary Club of Dhaka Metropolitan and FEMA.
   JCI Bangladesh national president Safina Rahman was present at the event, also attended by its members and Rotarians.
   The local chapter of the global young executives’ club last year distributed 300 handlooms in three phases among the weavers just after the flood.

A new sales and service centre of Rahimafrooz Energy Services Limited was opened at Tejgaon Industrial Area recently.
   The chief executive officer of Rahimafrooz Group, Feroz Rahim, inaugurated the centre, where the director, KM Ali, along with the general manager and other senior officials were also present.
   Rahimafrooz Energy had made significant contribution to the development of industries and other establishment by providing standby power in Bangladesh, said a press release.

Beximco Pharmaceuticals Ltd has launched a new inhaler, Iprasol, in the local market for the asthma patients.
   Adult asthma patients can use the new inhaler but further survey is required to administer it to children, said a press release issued by Impact PR.
   The release added Iprasol can also be useful for the treatment of Chronic Obstructive Pulmonary Disease.
   Experts at an opinion-exchange meeting on Saturday said both adults and children can use the new inhaler for COPD treatment.
   A number of asthma specialists from across the country took part in the discussion on the newly-launched inhaler. Moderating the discussion, Professor Mustafizur Rahman, director and head of the Department of Respiratory Medicine at the NIDCH, said Iprasol could also be used as an alternative to nebulisation.
   According to him, most places of the country lack proper nebulisation methodology. “Iprasol can be used in those places,” Rahman viewed.
   Iprasol, available in metered-dosed inhaler (MDI) form, is a combination of Salbutamol and Ipratropium.
   Rabbur Reza, executive director (marketing) of the BPL, was optimistic that Iprasol would meet patients’ demand at an affordable price, available at Tk 230 a piece.

Dutch-Bangla Bank Limited organised a half-day workshop on audit and internal control compliance for the branch managers of the bank, said a press release.
   The managing director of the bank, Md Yeasin Ali, inaugurated the workshop at the bank’s training centre, in Dhaka on July 24
   Yeasin Ali stressed on the importance of conducting thorough audit in a banking company.
   He categorically mentioned that though the branch managers remain very busy with the day to day affairs, as well as development activities of the branch, they should allot specific time at the close of the day’s affairs, for going through all the transactions very minutely, to ensure correctness of the day’s transaction.
   The senior vice president and head of training wing, KS Nazmul Hasan, was also present on the occasion.

The Bangladesh Small Industries and Commerce Bank Limited handed over a cheque of Tk 5,06,25,000 recently, against cash dividend and bonus share for Tk 13.5 crore, towards payment of 27.5 per cent dividend for 2004, to the government — the loan shareholder of the bank, said a press release.
   The chairman of the board of directors of the bank and industries ministry secretary, Md Nurul Amin and the managing director, AH Ekbal Hossain, handed over the cheque and bonus share formally to the finance and planning minister, M Saifur Rahman at the planning ministry office at Sher-e- Bangla Nagar, Dhaka.
   Other directors and senior executives of the bank were also present on the occasion.

Syed Almas Kabir, director, career and professional development services at the North South University, has been elected to the Executive Office of Asia Pacific Development Council of Junior Chamber International recently.

China and India were tipped to emerge as big winners when global textile quotas were abolished January 1 but even domestic manufacturers are stunned by the speed with which their goods have flooded global markets.
   'We have been caught by surprise by our own success in recent months,' said BK Patodia, chairman of India's Cotton Textiles Export Promotion Council.
   'China and India are emerging as the two biggest textile players and we are working hard at developing a good understanding with China so that we do not undercut each other,' he added.
   'Business is booming and there is enough room for both of us to flourish in the new competitive environment.'
   India's textile exports to Europe in the five-month period between January and May 2005 rose 11 per cent to 2.21 billion euros ($2.69 billion) from a year earlier, according to EU import data.
   Similarly during the same period, India exported textiles worth 987.81 million dollars to the United States, up from 788.48 million dollars in 2004, US import data shows.
   Indian textile exports to these two markets grew the fastest next only to China, while countries like Bangladesh and Sri Lanka are concerned early export trends may signal a loss in business
   to Asian rivals The end to quotas and a loosening of regulations is expected to quadruple India's slice of the 400 billion dollars-a-year textile market to 15 per cent from four per cent, according to World trade Organisation calculations.
   That, however, is still far behind China whose market share is seen potentially more than tripling to at least 50 per cent from 17 per cent in 2003, according to the same WTO forecast.
   D Rajagopalan, a senior official of India's trade department, noted China and India enjoyed several advantages in the new quota-free world 'Both countries are big cotton producers and have a strong textile and apparel base. They not only have the raw materials but established textile industries and cheap, abundant labour,' said Rajagopalan.
   Last week's revaluation of the Chinese yuan which will make the country's products more expensive could help Indian exports. But analysts say the 2.1 per cent upward revaluation is too small to give a major boost.
   At risk with the end of the quotas are countries such as Mauritius and Madagascar, which have been importing European, Chinese and Indian fabrics and turning them into garments in low- wage workshops, then selling them to rich countries.
   These nations have enjoyed preferential access to wealthy countries because of the quotas. But with the quotas gone, they could see their competitive advantage wiped out by competition from China and India.
   Indian textile exports are expected to touch 15 billion dollars in the fiscal 2005-2006 from 13.6 billion dollars the previous year.
   In April this year, the Export Import Bank of India forecast the country's textile exports would jump to 70 billion dollars by 2014 from 13.6 billion dollars last year.
   'India's aim is to achieve an annual growth of 25 per cent in its global textile exports so as to touch 50 billion dollars by 2010,' said an official.

China may have won only a short breathing space in its testy trade relations with the United States after enacting a small but highly symbolic revaluation of its currency.
   The yuan’s move from a fixed peg against the US dollar to a ‘managed float’ against a basket of unspecified currencies carries more political than economic weight, analysts said.
   In itself, experts argue, it is unlikely to make a serious dent in the yawning US trade deficit with China, which in May hit nearly 16 billion dollars. And US pressure on other trade fronts has not disappeared.
   Gary Hufbauer, senior fellow at the Institute for International Economics, noted that Congress will shortly break for its August recess and then will be consumed by hearings for a new Supreme Court judge, among other domestic issues.
   ‘There’s only a certain capacity for Washington to focus on (more than) one thing at a time. But I would be surprised if the China issue does not resurface later in the fall,’ he said.
   ‘Other trade issues haven’t gone away: We still have intellectual property rights (IPR) and textile imports. And most congressmen say this wasn’t enough on the currency front, anyway,’ Hufbauer said.
   China announced on Thursday that the yuan was being revalued at 8.11 to the dollar, compared with 8.28, a 2.1 per cent revaluation.
   The currency will be allowed to trade 0.3 per cent either side of a daily fixed rate, and fluctuate in a managed float against a basket of trade- weighted currencies.
   While welcoming the revaluation, Treasury Secretary John Snow said the United States would ‘monitor’ China’s new currency system.
   US Manufacturers Alliance President Thomas Duesterberg said the yuan’s ‘true value’ is another 25 per cent to 40 per cent higher against the dollar.
   ‘The appreciation of the yuan is a significant first step in addressing China’s global trade imbalance, but it is so small that it will have little impact on the trade deficit with the
   United States,’ he said Economists are in no doubt that China will loosen the peg
   further in due course. Morgan Stanley chief economist Stephen Roach said the revaluation was ‘unambiguously positive’ for the global economy.
   He said it was good for China, as by moderately curbing export growth, it provides ‘the cushion to engineer a soft landing in the Chinese economy’.
   ‘It derails Washington’s protectionists and the serious threat they posed to geopolitical stability,’ Roach added.

Cambodia’s crucial garment sector has bounced back after the end of a global quota system saw orders dip due to competition from China, but experts warn the industry’s socially responsible image will not ensure its long-term survival.
   The 1.9-billion-dollar sector, which provides the destitute kingdom with more than 80 per cent of its export earnings and employed 270,000 workers at the end of 2004, feared the fallout from the end of the quota system in January.
   Under the 30-year-old multi-fibre arrangement (MFA), Cambodia was given special access to the US market through a 1999 trade deal that granted quotas in return for improved labour conditions monitored by the UN’s labour agency.
   The arrangement was hailed by international buyers, such as US company Gap Inc., which helped local manufacturers to mould an image of themselves as responsible corporate citizens who eschewed sweatshop labour.
   With the end of the system, the industry hoped its labour- friendly image would help it stand the onslaught of competition from Asian giants China and India, but sector employment spiralled about 10 per cent lower to less than 250,000.
   ‘In the first four or five months, orders shifted to China because they were able to export freely,’ said Ken Loo, secretary general of the Garment Manufacturers Association of Cambodia.
   In May, the United States, which buys more than three- quarters of Cambodia’s exports, invoked safeguards contained in China’s WTO accession agreement, which allowed it to impose quotas on seven types of textiles from China.
   The European Union, which purchases most of the rest of Cambodia’s production, took similar action in June.
   Employment is back up to about 268,000 and of the more than 200 factories in the kingdom, 25 have closed but 24 new ones opened.
   The International Labour Organisation’s Better Factories Cambodia Project continues to carry out independent monitoring—factories must agree to be monitored to get an export licence—in a bid to help the industry survive.
   ‘What we’re increasingly doing is looking at how do we provide industry, both unions and employers, with support services to help them improve working conditions,’ Ros Harvey, chief technical adviser to the project, said.
   Improved conditions—which growing evidence suggests helps to also improve productivity and quality and therefore bottom lines—are however just one of a slew of issues Cambodia needs to work on to remain competitive.
   GMAC’s Loo described the project as ‘important’ but not enough on its own to lure extremely price-sensitive manufacturers to the kingdom, arguing rampant corruption must be reined in.
   ‘I wouldn’t say we’re upbeat but I think the industry will still be around for the next couple of years because of the safeguards,’ Loo said.
   ‘But we see certain difficulties along the way, (such as) the reduction in the cost of doing business in Cambodia not going down as quickly as we had hoped. In fact, in certain areas it’s gone up.’

Iranian authorities are trying to halt the downward plunge of Tehran’s stock exchange, which has
   lost nearly six per cent of its value since the June 24 victory of ultraconservative president Mahmood Ahmadinejad.
   ‘The stock exchange has dipped 5.9 per cent since the presidential election, which has raised many concerns, but this dip is not surprising,’ bourse chief Hossein Abdo Tabrizi was quoted as saying Wednesday in the Iranian press.
   Since Ahmadinejad’s shock election win, the Tehran Stock Exchange (TSE) has steadily dropped, marking gains on only two days since June 24.
   The trend began some months before the presidential election but gained momentum with the election of Ahmadinejad, whose promise to distribute wealth more evenly among the population frightened investors.
   Of equal concern is uncertainty regarding international affairs.
   Hardliner Ahmadinejad was elected with the reputation of being reluctant to compromise when it comes to the West.
   The outcome of Iran’s negotiations with European countries on Tehran’s nuclear preogram remains unclear, and the UN Security Council has threatened sanctions if they fail.
   To try and reassure investors before he takes office on August 3, Ahmadinejad invited the head of the troubled bourse for a visit last Monday.
   According to Tabrizi, Ahmadinejad told him his government ‘will do everything in its power to develop financial markets... support the development of the bourse... in order to allow more people to buy stocks and thereby boost the private sector.’
   Ahmadinejad also said his government will establish ‘a sweeping plan to distribute shares to Iranian families,’ adding the shares would be from state-run companies that must be privatised.

Weak sales, heavy costs and stiff competition from Asian competitors have taken a huge bite out of the US auto industry.
   The Big Three have fought back with aggressive pricing campaigns that offer consumers employee discounts, but many analysts say incentives will not be enough.
   And after General Motors Corp. announced its second quarter of major losses this week, while Ford Motor Co. managed to squeeze a profit despite 906 million dollars in losses in its North American automotive business, some analysts are predicting that recent job cuts are just the tip of the iceberg.
   ‘I don’t think GM is going disappear. But in order for GM to become a healthier company, it has to become a smaller company,’ said Joe Barker, an analyst with CSM Worldwide in Farmington Hills, Michigan.
   ‘Ford has the same problem. They have to become a smaller company,’ he said.
   Both Ford and GM said last week that they are looking at closing more plants, while GM said it is also planning to purchase more material in Asia and Ford said it will be making additional cuts to its salaried workforce.
   But current plans offered by GM management are not sufficient to help turn the company around, said professor Peter Morici of the University of Maryland’s Robert H. Smith School of Business.
   ‘GM makes cars and trucks that cannot sell for a profit, and that is not likely to change anytime soon,’ he said.

China is assiduously wooing petrol-rich Angola, extending an oil-backed two-billion-dollar credit line to a country emerging from a brutal 27-year civil war and becoming the biggest player in the reconstruction process.
   The Chinese offensive has raised questions but Beijing is furiously extending its presence in the southern African nation by rehabilitating hospitals and schools, revamping the communications network, building homes and providing fishing trawlers, and trucks.
   By 2006, Chinese firms are projected to be the largest presence in Angola, sub-Saharan Africa's second largest oil producer after Nigeria.
   Since the signing of the credit line in 2004, the Chinese inroads into Angola has quickened pace. The first phase of the projects involving mostly buildings and structures built by Chinese firms and totalling one billion dollars has been approved and most of them are due for completion by 2006.
   "The others were not there and we could not wait. The country is so destroyed, there are so many things to be done," said Maria Madalena do Rego Ramalho, who is in charge of the Chinese credit line in Angola's finance ministry.
   China, which aims to have strategic oil reserves of about 100 million barrels between three and five years from now, has become the second largest importer of Angolan petroleum after the United States.
   And the credit line it accorded has put Beijing in a favourable position for winning tenders for oil exploration.
   But China's advantageous position has raised questions from critics who point out that the Angolan government is using it to bypass concerns that it is not transparent in the handling of its huge oil resources and stress that the benefits of oil money have yet to trickle down to the large majority of Angolans.
   The International Monetary Fund has rapped Angola for lack of transparency.
   British non-governmental organisation Global Witness wrote a letter to the World Bank in February complaining about the situation.
   "The long standing concerns about the lack of fiscal transparncy and accountability also extend to the reconstruction process," it said.
   "There has to date been no public scrutiny of either specific reconstruction projects nor of the procurement process managed by the national Reconstruction Office, including of projects selected under the terms of the two-billion-dollar credit line extended to Angola by China."
   Many Angolans have voiced fears that local firms may get waylaid in the reconstruction process by Chinese firms, who are already building several structures in the country including the finance ministry office.
   "Under the agreement, there has to be 30 per cent of local content. According to the Angolan law, every foreign company has to employ at least 70 per cent of local staff," said Ramalho.

China’s aggressive quest for a slice of the foreign market saw success and failure a week indicative of Chinese companies’ determination to step onto the global stage.
   With its economy firing about 9.0 per cent growth on average during the past quarter century, Chinese companies have become cashed-up and more ambitious and are increasingly making forays overseas.
   Just in the past week, energy concern China National Offshore Oil Corp., the country’s largest domestic appliance maker Haier Group, and car-maker Nanjing Automotive have made headlines for their bids for famous foreign brands.
   State-owned Nanjing Auto’s purchase on Friday of collapsed British car firm MG Rover adds to a growing list of Chinese businesses with forceful acquisition strategies.
   It may be that Nanjing is not part of the elite rich set of multinational titans such as Siemens, HSBC, or General Motors, but flush with money, Chinese companies are spending billions on expansion plans and are catching up as fast as they can.

Asian currencies largely rose on the back of China's announcement Thursday that it had revalued its currency and scrapped the yuan's decade-old peg to the dollar in favour of a managed float against a basket of currencies.
   JAPANESE YEN: The yen rallied to three-week highs against the dollar after China announced in midweek it was revaluing its currency. But it eased off toward the weekend as the market began to look beyond China's sudden but cautious monetary action.
   The Japanese currency stood at 110.83-85 to the dollar late Friday, up from 111.78-81 to the dollar a week earlier.
   It shot up to 109 levels after China announced on Thursday it was revaluing the yuan by some two per cent-smaller than what the market expected-and dropping the dollar peg in favor of a forex regime tied to a basket of currencies.
   The rally reversed the yen's plunge on Wednesday to 113.19 to the dollar, its lowest level in 14 months.
   Japanese Minister for Economic and Fiscal Policy Heizo Takenaka said Friday that the effects of the revaluation would be felt in Japan only in the mid to long-term.
   Japan had backed US-led pressure on China for a bigger revaluation, arguing that Chinese exports were artificially cheap because its currency was undervalued. China is Japan's biggest trading partner.
   AUSTRALIAN DOLLAR: The Australian dollar recorded positive gains in the week to Friday following China's decision to revalue the yuan, dealers said.
   The Australian dollar closed at 76.57, up more than a cent from the previous week's 75.31 US cents.
   HONG KONG DOLLAR: Hong Kong's US-pegged dollar was at 7.7705 on Friday from 7.7783 the previous week.
   INDONESIAN RUPIAH: The Indonesian rupiah closed trading little changed Friday at 9,790/9,800 to the dollar compared to the previous week's 9,780/9,785.
   SINGAPORE DOLLAR: The dollar fell to 1.6605 Singapore dollars on Friday from 1.6865 dollars the previous week as the local currency gained on the back of the yuan's revaluation.
   SOUTH KOREAN WON: The won strengthened 14.20 won per dollar to 1,021.30 won to the greenback on Friday, compared with 1,042.20 won a week earlier, following the revaluation of the yuan. It was the largest margin of appreciation in five months.
   South Korean financial authorities on Friday stepped up.
   TAIWAN DOLLAR: The Taiwan dollar rose 0.92 per cent over the week to end at 31.648 against the greenback Friday. It finished at 31.942 a week ago.
   THAI BAHT: The baht lost against the US dollar over the holiday- shortened week because of speculation in dollars and Greenspan comments that the US economy was still strong, dealers said.
   The Thai unit closed on Thursday at 41.86-88 baht to one dollar compared to last week's close at 41.73-75.

Saifur asks bankers to create new entrepreneurs
Finance and Planning Minister M Saifur Rahman Sunday urged the bankers to be sincere in creating new entrepreneurs and encouraging them in investment. He was addressing a function of Sylhet Bank Officers Club as the chief guest. On the occasion of the 20th founding anniversary of the club, the function was organised at the club with M Harunur Rashid Chowdhury, chairman of Advisory Council of the Club and General Manager of Sylhet Branch of Bangladesh Bank, in the chair. Dildar Hossain Selim, MP, club president Shahud Ahmed, general secretary Syed Shoebur Rahman, and other executives and managers of different banks were present at the function. The minister asked the bankers to practise proper banking beside improvement of standard of banking services to establish accountability to the people.
— BSS

WB to help strengthen local govt
institutions
The World Bank has promised extensive help in strengthening the institutions of the local government and its infrastructure development. WB vice-chairman Praful C Patel made the pledge when elected local government representatives held talks with him Sunday. Held at the Local Government Engineering Department auditorium, the ceremony was presided over by local government, rural development and cooperatives minister Abdul Mannan Bhuiyan. The ceremony was attended by president of Pourasava Samity and chairman of Tongi pourasava advocate Ajmatullah, secretary general Shamim Al-Raji, president of Union Parishad (UP) Chairmen Samity Mir Enayet Hossain and secretary general Abul Harris Sikdar and some pourasava and UP chairmen. Also present were country director of the WB Christina I Wallich, director general of the Local Government Department Sharful Alam, chief engineer of the LGED Shahidul Hasan, chief engineer of the Public Health Engineering Department Khorshed Alam and other high officials. In the meeting the UP chairmen demanded increase in direct funding, solution of staff and transportation problems, development of roads, construction of UP complexes and coordination among the staff of different
offices.
— BDNEWS

3m GP subscribers to get access to
Teletalk
More than three million (30 lakh) subscribers of country’s leading GrameenPhone from now on will enjoy the connectivity facilities with cheapest government owned Teletalk, officials said Sunday. With the signing of inter-connectivity agreement between the premier mobile phone operator GrameenPhone Sunday, the 80,000 Teletalk subscribers have overcome the restrictions in connecting the mobile phones of other companies as the government owned company earlier signed similar agreements with two other major operators AKTEL and CITYCELL. Teletalk Managing Director M. Obaidullah and acting Managing Director of GrameenPhone Uogesh Malik signed the agreement on behalf of their respective companies. The agreement would be signed with the remaining operator-Banglalink is expected to be signed Monday, M. Obaidullah told.
— BDNEWS

Govt to undertake Tk 233cr project for DND area
The government plans to undertake a massive project to solve the perennial water logging problem in the Dhaka-Narayanganj-Demra (DND) project at a cost of TK 233 crore. The water resources ministry has already prepared the project and submitted it to the Prime Minister’s Office (PMO) for approval, sources said. The water resources ministry, in association with other service sectors, has also undertaken several other measures, including eviction of 1,254 illegal establishments and canal digging, to relieve the people from the untold sufferings inside the DND area. At a meeting held in the ministry Sunday, the water resources minister M Hafizuddin Ahmed said the eviction of 1,254 illegal establishments would stat from July 26. The meeting was attended, among others, by local lawmakers Salauddin Ahmed and Giasuddin Ahmed, acting secretary to the ministry Abdul Aziz. Besides, representatives from Rajdhani Unnayan Kartripakha (RAJUK), Water and Sewerage Authority (WASA), Dhaka Electricity Supplying Authority (DESA), Water Development Board (WDB) and other service sectors were also present at the meeting.
— BDNEWS

DSE closes down
Trading at Dhaka Stock Exchange closed lower Sunday with the losers dominating the gainers. The DSE All Share Price Index decreased by 9.6965 points or 0.7946 per cent to close at 1210.5499 points. A total of 156 issues traded on Saturday. Of them, 27 gained, 109 declined and 20 remained unchanged.
— New Age

CSE closes lower
The price index at Chittagong Stock Exchange closed lower Sunday with the losers dominating the gainers. The CSE All Share Price Index declined by 24.58 points or 1.11 per cent to close at 3080.70 points from 3115.28 points on Saturday. The CSE-30 Index also shed 18.66 points or 0.64 per cent to close at 2916.91 points from previous trading day’s 2935.56 points. Of the total 61 issues traded Sunday, 15 gained, 41 declined and five remained unchanged. Some 668,993 shares and debentures worth Tk 4.79 crore changed hands Sunday against 326,678 shares valued at Tk 3.61 crore on the previous trading day.
— UNB

Reverse repo
auction held
The reverse repo auction for commercial banks and financial institutions was held at the Bangladesh Bank on Sunday. One-bid of 1-day tenor amounting to Tk 100 crore and one bid of 7-day tenor amounting to Tk 52 crore were received and accepted, said a Bangladesh Bank release.The rates of interest against the accepted bids were 4.50 per cent per annum for 1-day tenor and 5.00 per cent per annum for 7-day tenor.
— UNB