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Pakistani textile exporters say they are looking to move their operations to Bangladesh and Sri Lanka, due to high manufacturing costs, despite gains from last year’s abolition of import quotas.
   The key industry has replaced worn-out equipment to face global competition after the 30-year quotas ended in January 2005. The quotas ensured developing countries had access to the key European Union and the US markets.
   But while their $5.5-billion investment over the past five years has given good returns, they say cost overruns at home threaten their hopes for the future.
   The issue is enormous for debt-burdened and poverty-stricken Pakistan, which relies on textiles for about 67 per cent of its total $13-billion exports or over 11 per cent of the gross domestic product.
   ‘A number of bedwear and home textiles manufacturers have been forced to relocate their factories to Bangladesh and Sri Lanka,’ said Bilal Mullah, chairman of Pakistan Readymade Garment Manufacturers Association.
   Hundreds of textile companies upgraded their equipment and operations to compete with giant rivals like China and India under the quota-less regime, but high costs—coupled with regulatory and bureaucratic hurdles—have rendered them uncompetitive, he said.
   ‘I am seriously looking at relocating my textile units to Bangladesh as the cost of manufacturing here is going beyond our control,’ said Shabbir Ahmed, one of Pakistan’s largest bedwear exporters, who spent $25 million on modernising his factories.
   Pakistani exports to the EU dropped 33 per cent in January-May 2005 compared to the same period last year, whereas Chinese exports climbed 57 per cent and India’s increased 28 per cent, he said.
   Ahmed said he led a delegation of the Pakistan Bedwear Exporters Association on a fact-finding mission to Bangladesh in December and was now conducting ‘feasibility studies’ on a possible move there.
   The government is sceptical of the business’s claims.
   ‘Pakistan’s textile industry has shown more than 17 per cent growth in exports during the first ten months of the quota-free environment,’ textiles minister Mushtaq Ali Cheema told the news agency.
   ‘Of this, garment exports have increased by 48 per cent, bedwear 14 per cent and other made ups by 78 per cent,’ he said referring to the trade statistics for January-November 2005.
   But the industry remains unconvinced. It says Bangladesh and Sri Lanka offer lucrative incentives to counter the cost of doing business in Pakistan, while skilled labour is also cheaper in these countries.
   ‘Bangladesh also enjoys the advantage of women working shoulder to shoulder with men, whereas in Pakistan women are restricted from working outside except some major cities like Karachi and Lahore,’ said Mullah of the Pakistan Readymade Garment Manufacturers Association.
   The businessmen are also annoyed by Pakistan’s many regulatory agencies, accusing them of exploiting their role instead of improving working conditions.
   Problems in accessing bigger markets like the EU and United States—which cumulatively import over 56 per cent of Pakistani textile products—have also caused problems.
   The EU recently reduced anti-dumping duty on Pakistani bed linen from about 13 per cent to 7.5 per cent, but would not give it generalised system of preference plus status, a special rebate which it offers to vulnerable countries.
   However Bangladesh, which was part of Pakistan until 1971, has GSP status.
   Minister Cheema said Islamabad was striving for a long term textile policy to ‘gain wider access to the international markets’. Plans to build ‘textile cities’ in urban hubs like Karachi and Lahore are also in hand, he added.

The Pakistani textile delegation Sunday asked for ensuring utility services with fixed price for a certain period for paving the way in investing in the textile sector of country.
   ‘Utility tariffs and labour wage are much lower here compared to Pakistan, but there must be the guarantee of supplying the utility services like gas, electricity and water at a fixed rate for us to consider investing in Bangladesh,’ M Zubair Motiwala, former chairman of the All Pakistan Textile Processing Mills Association and member of the visiting delegation told a seminar at a hotel in Dhaka.
   The seminar on ‘Strategic Cooperation in Textile Sector between Bangladesh and Pakistan’ was organised by the Bangladesh Textile Mills Association with its chairman MA Awal in the chair.
   Zubair said if the country increased utility services’ rate after some days, it would not be beneficial for the investors those who are interested to invest in Bangladesh.
   ‘There could be joint ventures in textile machinery and textile chemicals. We can also cooperate in human resource development field and capacity building of the sector,’ said Arshad Abdullah Vohra, chairman of the APTPMA and leader of the delegation.
   Referring to the demand gaps of yarn and fabrics to meet the domestic requirement, minister for textiles and jute Shahjahan Siraj, said a large number of mills is required to be built for meeting the demands in the coming years.
   The BTMA chairman, MA Awal, said Bangladesh offers favourable incentive packages for the foreign investors.

Assuring all government support, the prime minister, Khaleda Zia, Sunday asked private entrepreneurs from home and abroad to come forward to reap the advantage of an ever-expanding market potential of hotel business in the country.
   She made the call while inaugurating Radisson Water Garden Hotel Dhaka, a five-star hotel, on the Airport Road near cantonment railway station.
   Khaleda said Radisson Water Garden is a new entry into the list of 5-star hotels in Bangladesh and believed that the
   hotel would play an important role in catering to increasing numbers of foreign guests visiting Dhaka.
   She also believed that the hotel would make significant contribution to the country’s flourishing tourism sector and attracting local and foreign entrepreneurs and investors.
   The hotel will open to the public from February 11.
   The eight-storied hotel with 206 rooms, including five suites, situated on more than seven acres of land, is owned by Sena Hotel Development Limited and managed by Carlson Hotels Asia Pacific.
   SHDL was formed in 1995 by the joint-venture partners Bangladesh Army Welfare Trust and UK-based firm Associated Building Design Limited for building and operating hotels and other businesses in Bangladesh.
   Chief of Army Staff and the chairman of the board of directors of SHDL, Lt Gen Moeen U Ahmed, Paul Kirwin, president, Carlson Hotels Asia Pacific, and Army Adjutant General Maj Gen Md Matiur Rahman, vice-chairman of the board of directors of SHDL, also spoke at the inaugural function.

The Dhaka Chamber of Commerce and Industry has suggested that the government should establish a full-fledged department appointing a secretary to deal the WTO issues.
   ‘Establishment of a full fledged department and appointment of a dedicated secretary is required to deal with WTO issues efficiently,’ said the DCCI president, MA Momen, at a discussion on Sunday on the outcome of the sixth WTO ministerial in Hong Kong in December 2005.
   Former commerce minister Amir Khosru Mahmud Chowdhury, the permanent representative of Bangladesh to WTO forum in Geneva, Toufiq Ali, addressed the discussion attended by business leaders of different sectors.
   The DCCI president also demanded forming a committee of experts, for examining the WTO resolutions and their impacts on interests of Bangladesh’s international trade.
   Amir Khosru Mahmud Chowdhury, said private sectors need to develop capacities in their organisations to evaluate, analyse the impacts of rules of the WTO forums and to suggest the government on actions required for their respective fields.
   Remaining quite mum on achievement of the commerce ministry in dealings of the WTO issues, Khosru rather turned critical on private sectors’ incapability to face WTO issues.
   ‘No sectors developed capacities or came to examine or evaluate impacts of WTO rules on their businesses,’ he said.
   Khoshru said Bangladesh has no choice, but to increase its negotiation capacity to ensure that the country does not lose out in WTO trade talks.

India is billing its new jobs scheme that promises every rural family 100 days of work a year, as a landmark in its battle against poverty, but economists say it will face big hurdles.
   Chief among them are widespread corruption and the country’s poor track record in governance.
   There are also concerns that the programme, expected to cost at least $9 billion a year, will fuel India’s already hefty deficit.
   ‘One is not sure how much of the allocated funds will land up reaching the targeted segments,’ said Rajiv Malik, economist at JP Morgan in Singapore.
   ‘In terms of the past (anti-poverty schemes), there were a lot of fictitious names on rolls whereby the money simply disappeared,’ he told the news agency.
   The prime minister, Manmohan Singh, launched the plan last week in the dusty village of Bandlapally in the southern state of Andhra Pradesh, saying its aim was to remove ‘poverty from the face of our nation.’
   ‘This will be a landmark in our history,’ he said, calling the National Rural Employment Guarantee Act the biggest achievement of his 20-month-old government.
   Under the plan, one member of every rural household will get 100 days of work a year in such areas as water conservation, irrigation, flood prevention, road construction, forestry and wasteland development. If no work is available, they will receive unemployment payments.
   The scheme is initially being rolled out in one-third of India’s 600 districts across the country and is part of the Congress-led government’s bid to help the rural poor who helped it to a surprise electoral win in 2004.
   The scheme is to be fully operational in five years.
   The scheme’s key architect, Belgian-born economist Jean Dreze who teaches at Delhi School of Economics, said it was long overdue with India’s economy booming at eight per cent.
   ‘During the last 20 years or so, the so-called ‘middle class’—read the top five per cent of the income scale—has become rich beyond its wildest dreams,’ Dreze said.
   ‘It has literally transplanted itself to the first world without even applying for a visa. The time to share is long overdue,’ he said.
   But other economists say it may not be the best way to beat poverty.
   ‘I still think the best way to deal with poverty is higher growth as against having targeted schemes where there is a lot of wastage, pilferage and corruption that compromises effective gains,’ said Malik.

A project to assist small and medium-scale enterprises to apply information technology advances (Project 191) has been approved by the government and translated into reality, said an official from the VietNam Chamber of Commerce and Industry.
   According to Nguyen Van Thao, VCCI deputy general secretary, about 210 programmes to study and research IT application in SMEs and to provide them with IT consultancy and training will be carried out in 2006.
   VietNam now has about 2,00,000 SMEs and 2 million private businesses, representing 96 per cent of the total number of businesses nationwide and contributing 26 per cent to the GDP.
   The number of SMEs is expected to increase to 500,000 by 2010.
   Thao said that if all these enterprises learn to effectively use IT, it will greatly benefit the national economy, and that IT is really necessary for SMEs to increase their capacity for competition.

Until 2001, Nabisan Begum was a domestic maid, serving well-off villagers from dawn to dusk just for her meals and a few takas, puny for feeding her four kids.
   Days turned unbearable after her husband left her and the kids to wed another woman. ‘We almost starved in those miserable days. I needed to buy foods for my babies. But what could I do?’
   During her childhood, Nabisan occasionally helped her parents and others in making trays, baskets or mats using date leaves and bamboo.
   Did she ever think that childhood experience could be her livelihood someday?
   Necessity prompted her to try to bank on her inherited knowledge of arts and crafts. But where is the money to start with?
   Her hopes were about to fade out for want of the initial capital to buy bamboo or other materials to dozens of items for sale.
   ‘Those days I did not have the money to buy food, let alone capital for business,’ Nabisan recalled the sad memories that still haunt her.
   Incidentally, she met a representative of Rural Reconstruction Foundation, an NGO that gets fund from World Bank for income generating activities.
   Nasiban saw a beacon of hope as the NGO offered her a loan of Tk 1,500.
   She bought raw materials and spent for foods during the couple of weeks she stayed home, working day and night to make dozens of trays and baskets.
   She took her products to a wholesaler in Jessore town and sold those for Tk 3,500, good enough to inspire the poor rural woman to be self-employed.
   Since then, there was no looking back, no seeking mercy of others.
   The mother of four continued her small enterprise at her remote village home of Ghaskhali in Jessore.
   After five years, the divorcee has got her own way of living, a better house to live in. Her children are now school-going.
   Nasiban looked complacent, a little bit proud also, as she was telling the happy tales and struggle for existence at the micro-credit fair at the Sheraton Hotel in Dhaka, where she had never dreamt of entering. Along with scores of other micro-credit beneficiaries, she is there showcasing her hand-made products.
   Jannatul Ferdous, of village Harirampur in Kustia is much fortunate, as she got her husband Abdul Khalek as partner in production.
   Khalek, father of two, could not afford even simple living by his earning with stitching lungis in the village market.
   Jannat’s brother taught her and her husband how to make dolls.
   She got a loan of Tk 4000 from WAVE, a micro credit institutions having network in 12 districts.
   ‘He (husband) brings raw materials from the town, we both make dolls and he carries those to town to sell,’ said a happy Jannat, as her business gives good return now.
   Nasima of village Jagannathkathi of Kustia has the same story to tell. Clay-made pots and decorated show pieces helped her come out of poverty.
   Starting four years back with a Tk 8,000 loan from the Uddipan, Nasima and her husband Abdul Khalek, started their venture that now employs 16 people.
   An official of the Palli Karma Sahayak Foundation, organiser of the fair, claimed the two-day exhibition, which ended Sunday, was joined by 50 micro-credit institutions with beneficiaries showcasing an array of products, arts and crafts.

The finance and planning minister, M Saifur Rahman, left Dhaka for Hanoi Sunday to attend the Bangladesh-Vietnam joint economic commission meeting.
   The three-day JEC meeting begins in Hanoi from today.
   Officials said his visit would boost bilateral economic relation between the two Asian countries.
   Officials of the economic relations division said Bangladesh would seek Vietnam’s help to develop the country’s agriculture sector, where Vietnam has achieved amazing success with the help of modern technology.
   Dhaka will also urge Vietnam to import finished leather from Bangladesh, they added.
   The first JEC meeting is being held following last year’s visit of the prime minister, Khaleda Zia, to Hanoi.
   During her 3-day visit, she and the Vietnamese premier had agreed to increase two-way trade to $100 million by 2008.
   Proposal for direct air link between the two countries will also be discussed at the meeting. The countries have earlier signed an agreement in this regard, but no air link exists between the two nations.
   Saifur, during his visit, will also meet Vietnamese deputy prime minister and trade minister and visit Hanoi Trade Corporation, officials said.
   On his way back home, Saifur will also visit Malaysia, where he will inaugurate the Agrani Remittance House on Thursday. He is scheduled to return on February 11.

Business leaders at a seminar here Sunday emphasised the need for appropriate development of human resources in terms of quality, cost and delivery of products and services to boost the country’s exports.
   Maintenance of the best quality, best price cost and best delivery of products and services are the main factors to face the challenges of globalisation, said the business leaders from home and abroad.
   All these factors necessitated more emphasis on human resource development in the field of readymade garments, especially knitwear, to increase productivity in this sector, they told the seminar to be followed by a five-day training programme on ‘Maintenance and Adjustment of Industrial Sewing Machine’.
   Association for Overseas Technical Scholarship, Japan organised the seminar-cum-training programme in collaboration with Pegasus Sewing Machine Manufacturing Company, Japan, Pegasus Singapore and Pegasus Liaison Office in Dhaka.
   The Japan-Bangladesh Chamber of Commerce and Industry president, Matiur Rahman, attended the seminar as the chief guest while the Japan External Trade Organisation Representative in Dhaka, Sotaro Nishikawa, was the special guest.
   It was also addressed, among others, by Mikio Ujiie of AOTS New Delhi, K Kawata of Pegasus Japan and Imnul Islam Khan of Pegasus Bangladesh.
   Three Pegasus experts from Japan, Tonoda, Takeda and Inoue, are conducting the course, being participated by nearly 50 persons from different woven and knit industries of Dhaka and Narayanganj.
   Matiur Rahman said by turning the human resources into skilled workforce, Bangladesh can make a breakthrough in boosting exports in all sectors of the national economy. He called for arranging such training programmes for other sectors to transfer knowledge and technology from developed countries to Bangladesh.
   The JBCCI president expressed the hope that this sort of training course would play a vital role in all appropriate forums for developing human resources as well as technology transfer.
   Sotaro Nishikawa, in his speech, said though Bangladesh witnessed a slight 2.51 per cent decreasing trend in woven exports from January to October, 2005 during the quota free era, it observed 25.76 per cent steady growth in knitwear exports compared to that of the same period in 2004.
   The JETRO representative said the reason for this low impact might be that over the years Bangladesh has been able to position itself in the global apparel market as a reliable source of chief garments.
   But China, he said, cannot immediately cash in on the open market system because of the special safeguard clause that America has imposed on its export to US market.
   Imnul Islam Khan said despite phasing out of the MFA, the knit garments export grew by 24.73 percent to fetch US dollar 1459.83 million exceeding the target set for the first five months current fiscal year.

Attracted by China’s financial market and huge amount of personal savings, foreign investors will focus on city commercial banks in China for the next step, said Xie Ping, general manager of the Central Huijin Investment Company.
   Commenting on the current restructuring of city commercial banking sector, Xie said the restructuring can adopt such modes as the listing on the market, joint regrouping, merging and acquisition, and share
   holding with the principle of raising comprehensive competitiveness, and promoting stable development and internal management.
   He said that foreign investors intend to get involved in the city commercial banking sector so as to acquaint themselves with local market because the city commercial banks have the advantages in information and loyal clients.
   Although some city commercial banks intend to join hands with foreign investors, it will not be an easy thing for foreign investors to get involved in local city commercial banking sector, Xie said, adding that there would be restrictions for foreign investment in the city commercial banks, including restrictions on equity proportions.

Iran’s struggling economy is headed for the doldrums amid a worsening international crisis over its nuclear programme and despite the country’s lucrative oil revenues, analysts and businessmen say.
   Although the economy is state-dominated and largely kept afloat by crude sales, the regime had been pinning its hopes on a private sector boom to bring down soaring youth unemployment and add some badly-needed weight to the non-oil sector.
   But the weekend vote by International Atomic Energy Agency’s 35-nation board of governors to report Iran to the UN Security Council looks set to throw a spanner in the works.
   ‘Investors have to feel secure, and now there are worries about the nuclear case,’ explained a disheartened broker at Tehran’s stock exchange, which has already seen several years of strong growth wiped out by fears over the escalating tensions with the West.
   ‘For the past week, we’ve already seen a downward trend. The market has been in fear regarding the fate of our nuclear case. The case going to the UN Security Council will be a shock to the market,’ said the trader, who asked not to be named.
   Other, more traditional sectors for local investors are also coming to a grinding halt.
   Tehran housing agent Ali Rahimi said his customers were postponing deals and sitting on their cash, in stark contrast to recent years which have seen breakneck growth in construction and property buying.
   ‘Almost all of my customers who had last week planned to buy a house or land have postponed their deals because of nuclear issue,’ Rahimi said. ‘The big investors are looking to see what happens next. They are holding onto their money.’
   Inevitably, increasing capital outflow is emerging as a problem—and although no figures are available many wealthy Iranians do appear to be sending their cash to more inviting climates.
   Destinations for nervous Iranians’ cash are more stable environments such as the United Arab Emirates and its booming trade hub in Dubai, just across the Gulf and a comfy two-hour, $200 flight from Tehran.
   ‘The nuclear problems will definitely have a negative impact on the economy, especially investment,’ said Mehdi Sahraian, a university professor who also works as a business analyst and consultant. ‘Capital outflow and the halt in investment decisions have already been there for the past few weeks,’ he told the news agency.
   It was three weeks ago that Iran restarted sensitive uranium enrichment research, backing away from a ‘confidence-building’ freeze and lending more immediacy to fears the country’s hard-line rulers could acquire weapons of mass destruction.

India and Italy will sign an agreement to set up a research centre for developing new technologies to tap non-conventional energy sources.
   ‘We will sign an MoU with ministry of environment and forest for establishing a technology centre to design new technologies and identify projects to be developed by the two governments with the participation from private companies,’ Corrado Clini, director general of Department for Environmental Research and Development, Italy, has said.
   ‘We will be financing concrete and good projects,’ he said while addressing a seminar on clean development mechanism co-operation between Italy and India at Assocham.
   However, he declined to reveal the amount that will be financed by the Italy government.
   The agreement was likely to be signed by the end of this month, Clini said, adding the technology centre would come up in New Delhi during mid-2006.
   Under CDM, an industrialised country with a green house gas reduction target could invest in a project in a developing country without a target, and claim credit for the emission that the projects achieve.
   For industrialised countries, this greatly reduces the cost of meeting the reduction commitments that they agreed to under the Kyoto Protocol.
   Speaking at the seminar, special representative of the US department of state, Harlan L Watson, offered to help India achieve its rural electrification programmeme through offering technology for tapping non-conventional energy sources.

The Nepali people, presently having to face with load shedding in power supply all of a sudden, might continue to live in dark for many more years to come, as the country failed in the past to construct power projects in accordance with the increasing demand for power supply across the country.
   Power supply has been disrupted for three and a half hours once every week since January 1 this year, but just after three weeks the supply had to be increased to 17 hours every week.
   And if the dry season continues and no option available, this time the period of load shedding could double by the end of April, experts concerned warned.
   The demand for power increases by 10 per cent or around 60 mega watt every year but as attention was not given to the increasing demand, there is a deficit of around 70 to 170 mega watt power in the country.
   As there is no possibility of any new power projects immediately, the problem of load shedding is likely to worsen in the years ahead.
   The Nepal Electricity Authority system saw a deficit of 3,09,000 unit of electricity in December and January last year, which increased to 5,88,000 this year and by the end of April the deficit could climb to 8,90,000 unit, general manager Shambhu Prasad Upadhyaya said.
   Though the current power capacity of the country is 609 mega watt, the decline in the water level in rivers during the winter season makes the production capacity of the power houses go down by 60 per cent.
   Presently, only 470 mega watt of electricity is produced, thereby making load shedding inevitable, Upadhyaya said.
   The problem arose also because the demand for power increases during the winter season when power production is low, Upadhyaya said, adding, ‘The NEA has excess power during the rainy season as the production is as per the actual capacity.’
   Stating that attention was not given in the past to construct hydel projects, assistant minister for water resources Binod Kumar Shaha said talks are being held to purchase an additional 20 megawatt from India.

Chinese consumers spent some 190 billion yuan ($23.5 billion) during the week-long Lunar New Year holiday, up 15.5 per cent over the same period last year, the government announced Sunday.
   Food made up some 25 per cent of the retail sales in consumer items during the holiday that began on January 29 and officially ended Saturday, according to a survey made by the ministry of commerce.
   While consumer spending in Chinese cities rose dramatically, rural regions also witnessed brisk consumption as armies of migrant workers left their jobs in urban areas to return to festivities in local towns and villages, the survey, posted on the ministry website said.
   With banquets and feasting a traditional part of the holiday, more and more Chinese opted to dine outside the home as restaurant dining across the nation was up by 25 per cent over the same period last year, it said.
   While sales of tobacco, spirits and fruits were brisk, consumers also spent more on household electronics and health and sports items, it added.
   In China’s south-western metropolis of Chongqing, the sales of digital electronics and flat screen televisions were up by some 40 per cent over last year’s holiday, while overall sales in household electronics were up by 61 per cent, the ministry said.
   Health clubs also did a brisk business, while in northern China consumers flocked to ski areas to try out the winter sport that is increasing in popularity as living standards rise following 20 years of explosive economic growth, the ministry said.
   Sales of fireworks were also booming as a 12-year old ban on the pyrotechnics was lifted this year in several large cities, including Beijing and Chongqing.
   Despite the big rise in consumer spending, overall prices remained stable throughout the week, although pork prices were up by 5.0 per cent from a week earlier and vegetable prices rose by 2.1 per cent, it said.

Singapore and Malaysia remain committed to continue talks over building a new bridge linking the neighbours but stressed any agreement must be of mutual benefits, a report said Sunday.
   ‘We do not intend to gain... I think both sides must mutually benefit from the outcome of the discussions,’ Malaysian Foreign Minister Syed Hamid Albar was quoted as saying by the Sunday Times.
   ‘Overall, we have been discussing the subject in a very friendly and frank way and I think this is the type of atmospherics I would like to maintain,’ he said.
   Singapore Foreign Affairs Minister George Yeo, who held an informal meeting with his Malaysian counterpart late Saturday here, said the city-state would back the project if both sides stood to gain equally.
   ‘It costs a lot of money and if there’s a balance of benefits, then we’ll be happy to go along,’ Yeo said, adding it would cost Singapore more than 500 million Singapore dollars (306 million US) to build its half of the bridge.
   Malaysia has been lobbying for a new bridge to replace
   an 80-year-old causeway and caused a stir in late January by announcing it was going ahead with the project even though Singapore has not yet approved plans to build its half.

Diamond exports in Sierra Leone climbed to a record $141.9 million in 2005, the director of the government’s gold and diamond office said Saturday.
   ‘Export figures have been encouraging for the past three years,’ said Ndoloh Myers.
   The biggest mining company in the country, Koidu Holdings, which is 60 per cent held by the Swiss Steinmetz Diamond group, accounted for 20 per cent of the exports, he added.
   In 2004, the value of diamond exports rose to $126 million from 74 millio the year before, according to officials.
   Ten years of brutal civil war in the west African state marked by the hacking off of limbs and brutal rape of civilians was funded by the smuggling of so-called blood diamonds.
   Since the war was declared officially over in January 2002, Sierra Leone has been enrolled in the Kimberley process,
   which certifies that diamonds are conflict free and legally mined in war-scarred countries, which also includes Angola
   and the Democratic Republic of Congo.

The Board of Investment, the SouthAsia Enterprise Development Facility and FIAS, will jointly organise a two-day workshop on February 7 and 8 at the Dhaka Sheraton Hotel, said a press release.
   The workshop is being organised as part of the ongoing preparation for the proposed $150m World bank-led, multi-donor-funded Bangladesh Private Sector Development Support Project.
   SEDF and FIAS, with the assistance of the Government of Bangladesh, have conducted, as part of the design of the PSDSP, several studies on economic zones strategy and administrative barriers to investment, conducted.
   At the workshops, the findings of these studies will be presented to invitees, drawn from across the government and the private sector of Bangladesh, in an attempt to develop a comprehensive strategy for economic zones in Bangladesh.
   The programme manager of Investment Climate Assessments, SEDF, Craig Wilson said, ‘The first day, focusing on economic zones, the main questions will be: in order to achieve the desired levels of investment and economic growth, what will be the optimal mix of industrial estates, export processing zones, and special economic zones, and what will be the roles of both the government and private sector? The second day will review findings of reviews on half a dozen selected administrative barriers to investment. The workshops will ask whether there is a case for reform and, if so, what are the reform options’.
   The conference will be attended by cross-section of Government of Bangladesh officials, including the PSD Task Force and PSD Core Group, as well as representatives from the PSDSP Private Sector Consultative Group and civil society.

Hong Kong’s banking system performed steady in 2005 due to favourable economic
   environment, said the Hong Kong Monetary Authority, predicting a ‘fairly good’ prospect for 2006.
   Banking system of Hong Kong remained in ‘sound condition’ in last year, William Ryback, deputy chief executive of the monetary authority, told reporters.
   Over the past year, customer deposits grew by around 3 per cent, while domestic loans increased by around 9 per cent, said Ryback.
   He noted that the banking system recorded healthy growth in pre-tax operating profits, which was reflected through increases in both interest income and non- interest income, strong treasury gains, lower credit costs through reduction in bad debt charges and credit recoveries.
   As to the sector’s performance of this year, Ryback said the prospect was ‘fairly good’ due to continued ‘positive’ economic environment.
   However, challenges remain to Hong Kong’s banking system in this year for keen competition and uncertain interest rate environment, said Ryback.
   He predicted that the US interests rate would be lifted to a normal range from 4.5 to five per cent, noting that there’s no need for local banks to follow the increase for good capital liquidity.
   He said interest margins will be under pressure and the positive effects of provision write-backs will disappear, adding banks will experience cost pressure.
   A moderate increase in loan demand and steadily improvement of asset quality are also expected.

After decades of being stifled by strict foreign exchange controls, corporate India has gone on a shopping spree—snapping up companies everywhere from Britain to Korea.
   Still, the country has no home-based takeover tycoons to rival Kolkata-born ‘king of steel’ Laskshmi Mittal, whose Rotterdam-headquartered company Mittal Steel has mounted a $22.7 billion bid for rival Arcelor.
   But with India’s economy growing at a cracking eight per cent, the nation’s cash-flush firms are becoming global players, purchasing companies in all sectors from software to pharmaceuticals, information technology and energy.
   While many of the acquisitions are small, that’s seen as changing in coming years as Indian companies head increasingly abroad.
   ‘We’re really at an exciting time for Indian business,’ said Alan Rosling, executive director of Tata Sons, holding firm of tea-to-telecoms Tata group, India’s second largest conglomerate.
   ‘It’s not just the Indian government liberalising (the economy) — it’s the world globalising,’ he told the news agency.
   Firms in Indian hands include well-known British tea brands Tetley Tea and Typhoo Tea, the trucking unit of South Korea’s Daewoo Group and Bermuda-based bandwidth provider Flag Telecom whose underseas cables link the world.
   Last year, the value of India’s 118 purchases of foreign firms totalled 2.91 billion dollars, said Marti Subrahmanyam, finance professor at Stern School of Business at New York University. That’s around seven times the tally in 2001.
   India’s biggest deals in 2005 included the 313-million-dollar purchase by Matrix Laboratories of Belgium’s DocPharma, TV maker Videocon’s acquisition of the colour picture-tube business of France’s Thomson for 292 million and Tata Chemical’s 112-million-dollar takeover of British soda ash manufacturer Brunner Mond. Its products are used to make glass and detergents.
   While the amount is puny by world standards, analysts say India’s takeover hunger will rise as firms aim to attain critical mass to compete globally and to leverage their low-cost production base.
   ‘There’s a need for corporates in the developing world to restructure to deal with the compulsions of globalisation,’ Mustafa Hamdy, Vienna University of Technology management professor, told a recent Kolkata business forum.
   India’s burgeoning business process outsourcing (BPO) sector, in particular, is extremely keen on foreign purchases, eager to acquire niche skills swiftly in such areas as retail, insurance or health care.
   ‘We need acquisitions to acquire relevant scale, capability and to plug gaps in service operatings,’ said Alok Mitra, chief financial officer of Mphasis BFL, one of the busiest BPO overseas buyers.
   This foreign expansion flurry was impossible until recently. Indian firms were slow to hit the global acquisition trail because of tight government controls on exporting rupees as foreign reserves were too low.
   In 1991 reserves sank to less than a billion dollars, creating a financial crisis that forced India to open its economy to foreigners. Now, thanks to a rush of foreign investment, coffers are brimming at 140 billion dollars and exchange controls have eased.
   The nation’s deal-making, however, is still dwarfed by its giant Chinese neighbours who pay in the billions of dollars for acquisitions rather than in the millions like India. The average Indian purchase is 30 million dollars which means they do not often hit international headlines.

Proton’s new tie-up with Mitsubishi could give Malaysia’s troubled carmaker a new lease on life by helping it roll out new models, even if the alliance is looser than hoped for, analysts say.
   The deal signed Friday covers the development of new Proton cars, technology transfer and the mutual supply of auto parts. It also allows Mitsubishi to produce its own models in Proton plants.
   The pact revives a 1980s partnership between Malaysia’s state-run car maker and the Japanese auto giant, and comes after Proton failed to strike a deal with Germany’s Volkswagen.
   ‘I sense that Proton feels more comfortable with the Japanese than the Europeans,’ Chips Yap, web editor of Malaysian Motor Trader magazine, told the Edge financial weekly.
   ‘Indeed it was a one-way thing before, where Mitsubishi was teaching Proton how to build cars, but I think now Mitsubishi respects and acknowledges that its student has grown up and therefore regards it as an equal.’
   One analyst said the revived Mitsubishi-Proton ties would benefit the technologically-weak Malaysian carmaker despite it being less wide-ranging than the venture that had been eyed with Volkswagen. ‘It is better than not having a partner,’ the analyst, who asked not to be named, told AFP. ‘They don’t have much choice at this juncture so they’ll have to take whatever they can.’
   She said Proton, which has not come up with a new model for nearly a year, badly needs a foreign partner to help boost flagging sales.

Supporters of open sourcing for computers have been given a shot in the arm by news the French police is abandoning Microsoft’s Internet Explorer for the Mozilla Foundation’s browser Firefox.
   The gendarmerie’s 70,000 desktops were being converted to Firefox and its email client Thunderbird because of the navigator’s ‘reliability, security and inter-operability with other state services,’ said General Christian Brachet, IT director of the police force.
   The move should be complete by the end of the year, he said, as enthusiasts of open sourcing wrapped up an annual meeting in Paris at the Solution Linux 2006 exhibition.
   Firefox had been chosen because it was based on the W3C standard, an international norm for the Internet, and because it works equally well under Microsoft, Mac or Linux.
   Firefox has now taken over nearly 18 per cent of the French Internet browser market approaching the European average of 20 per cent, according to a survey carried out in January by XiTi Monitor, an Internet site quality management service.
   But it still has a way to go before matching the 38 per cent market penetration the Mozilla navigator has achieved in Finland.
   The French gendarmerie is also thinking ahead to a future when citizens could, for example, directly report a theft to the police via the Internet.
   ‘With Firefox as our default browser we are not imposing a specific browser on the citizen: he’ll be able to use any one as long as it respects the WC3 standard,’ Brachet told the monthly magazine Linux Pratique.
   The switch to an open source navigator follows the police department’s decision last year to migrate from Microsoft Office to OpenOffice for all of its desktops.
   OpenOffice is a collection of different applications, which can be downloaded free of charge, such as a word processor, a spreadsheet, a presentation programme similar to Microsoft Powerpoint, a vector graphics editor and a database programme similar to Microsoft Access. Many of the components are designed to mirror those available in Microsoft Office.
   By the end of 2005, all the gendarmerie’s computers had made the switch to OpenOffice 1.4 and by March should have moved to version 2.0.

The European Commission will urge 12 European states on Wednesday to finally open their borders to workers from the bloc’s ex-communist newcomer states as a way of boosting their economies.
   In the first of three reports on the transitional phase since the European Union’s ‘big bang’ enlargement of May 2004, the EU’s executive arm says that fears of an invasion by cheap ‘Polish plumbers’ were unfounded.
   ‘In spite of fears expressed on the occasion of the successive enlargements, free movement of workers has not led to disruption of national labour markets,’ the commission says in a draft of its report, obtained by AFP.
   Most of the 15 members of ‘Old Europe’—Britain, Ireland and Sweden aside—have kept their doors shut to potential labour from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia since 2004.
   The restrictions have included demands for work permits—which some countries limit with quotas—but do not apply to
   workers from Cyprus or Malta, which joined the bloc on the
   same day.
   The measures are supposed to be phased out over a seven-year period, with the first of the three phases due to end on April 30, as EU states are not allowed to discriminate against workers on the basis of nationality.
   In its report, the commission limits itself to counselling each of the EU member states that has kept the restrictions in place, but it quite clearly calls for the bloc’s labour borders to be opened.
   ‘Freedom of movement of workers is one of the basic freedoms under the European community treaty,’ the text reads. ‘The aim of the transitional measures is to allow them to prepare themselves to achieve this ultimate and irrevocable goal as soon as possible.’
   The 12 countries concerned will have until the end of April to decide whether to lift the restrictions, keep them in place for a few years or make them more flexible; for example, by limiting them to certain sectors.
   Austria and Germany, which border many of the new states, have already said they will not be changing policy now. Finland and Spain, on the other hand, appear ready to lift the restrictions.
   Others, like Belgium, France, Luxembourg and the Netherlands have not yet taken a clear public stance.
   In launching its call, the commission cites the example of Britain, Ireland and Sweden, and how fears of a flood of cheap labour never materialised.

An anti-mining crusade by Roman Catholic bishops has rekindled debate over how best to lift millions of Filipinos out of poverty by using the resources buried beneath their feet.
   In issuing a rejection of the resources industry last month, the country’s dominant religion called on the government to cancel all concessions and deny all applications, saying mining ‘destroys life’ and causes ‘evil effects’.
   Few expect President Gloria Arroyo to make such an abrupt about-face but the comments by the politically influential Catholic Bishops Conference of the Philippines may chill the investment climate.
   Obeying the edict ‘will essentially signal to all investors, local and foreign, not just in the mining industry, that making an investment in the Philippines is a bad one,’ warned Benjamin Philip Romualdez, head of the country’s Chamber of Mines.
   He said this would displace two million industry workers and steal food from the mouths of 10 million Filipinos.
   ‘The bishops’ statement on mining is absurd,’ said Manila-based business consultant Peter Wallace. ‘It sends all the wrong signals to investors. Those who were sitting on the fence will not be rushing in now.’
   The Philippines says it has the fifth richest natural endowment of mineral resources—third in gold, fourth in copper, fifth in nickel, and sixth in chromite deposits—with a combined value of at least 90 billion dollars.
   Just 1.4 per cent of the nine million hectares (22.2 million acres) — a third of Philippine territory—identified as potentially rich in mineral deposits is covered by mining rights, said Environment and Natural Resources Secretary Michael Defensor.
   Arroyo said in 2004 that with China’s massive demand for mineral products, mining had the potential to improve lives in the countryside that hosts the greatest number of the 40 per cent of Filipinos who live on less than two dollars a day.
   Reviving the moribund industry would lead to a ‘significant boost in jobs and productivity,’ she said.

The Netherlands is a welcome haven for multinational holding companies like steel giant Mittal, which nonetheless announced it might move to Luxembourg to help its takeover of Arcelor, experts say.
   ‘Mittal’s departure would not have any consequences for the Dutch treasury but it would affect the financial experts, accountants, lawyers and bankers that help manage its financial structures and which Mittal pays several million euros a year,’ the financial daily Het Financieele Dagblad wrote this week.
   Mittal, which is registered under Dutch law as its official headquarters is based in Rotterdam in the southwestern Netherlands, is run from London by Lakshmi Mittal while benefiting from Dutch tax arrangements for holding companies.
   The Dutch state allows for a participation-exemption, which means holding companies do not have to pay tax on profits earned from stakes in subsidiaries to avoid possible double taxation.
   Although this type of arrangement is not unique in Europe, the Dutch rules are considered relatively flexible and attractive according the French economic mission in the Netherlands.
   One French expert nonetheless acknowledged that the Netherlands is not a tax haven in the sense of ‘the Cayman Islands or other small, usually insular countries that encourage companies to do some creative accounting’.
   University of Amsterdam professor and advisor to the Amsterdam chamber of commerce Peter Tordoir said: ‘The Netherlands has a tradition of finding solutions to complex fiscal situations, that’s the principal reason for their popularity with companies that choose to base themselves here.’
   Many companies, including some that are considered economic showpieces for other European countries—like French telecom equipment maker Alcatel, European aerospace giant EADS, Italian fashion group Gucci and the French-Italian STMicroelectronics—are or have been officially based in the Netherlands at one time or another.

Although steel magnate Lakshmi Mittal is often painted as a ruthless job destroyer in western Europe, in the former communist east of the continent he is hailed as the saviour of a crumbling, outdated industry.
   During the last decade, Mittal has injected new life into archaic steel plants scattered across the former Soviet Union and its satellite states that would otherwise have been incapable of surviving in a market economy.
   Over the years Mittal has developed an effective formula for reviving ailing or moribund steel works: a quick injection of capital, the deployment of a team of loyal managers—most of Indian origin, like their boss—and above all the development of an effective sales force.
   Notions like marketing culture and customer satisfaction were alien to the Soviet bloc, deficiencies that are still causing problems for the region more than 15 years after the collapse of communism.

Samsung Group chief Lee Kun-Hee has expressed regret for a graft scandal involving him and the richest conglomerate in South Korea, ending a five-month overseas trip to return home.
   Lee, in a wheelchair with his right leg in a plaster cast, arrived at a Seoul airport late Saturday from Japan, YTN television new showed Sunday.
   ‘I’m sorry for causing troubles in the past year. I think I’m wholly responsible as an individual,’ Lee said upon his arrival. He looked healthy but said he had injured his leg in a tumble.
   The business tycoon had stayed abroad since he left South Korea in September when allegations snowballed that he and his group may have illegally funded politicians.

Trade between North Korea and China surged to a record high of nearly 1.6 billion dollars last year, South Korea’s trade agency said Sunday.
   Trade between the communist ruled neighbours jumped 14.8 per cent year-on-year to 1.58 billion dollars in 2005, the Seoul-based Korea International Trade Association said in a report.
   North Korea imported 1.08 billion dollars worth of goods, mostly crude and refined oil and corn, while exporting 50 million dollars worth, mostly coal and iron ore, to China, said the report carried by South Korea’s Yonhap news agency.
   It attributed the surge in trade to the traditional political relationship, fast growing economic ties and China’s continued investment in developing the North Korean mineral sector.
   China has long been North Korea’s largest trading partner. South Korea comes second, and its trade with North Korea rose 51.5 per cent year-on-year to 1.06 billion dollars in 2005, according to the report.

Zimbabwe is to unveil a new law this week that could help rejuvenate its once burgeoning mining sector by dispelling the uncertainty over ownership.
   The economically-ravaged country’s mining sector is currently reeling under a plethora of woes which have led to the closure of at least 13 mines in the past six years, according to the Chamber of Mines.
   An acute shortage of spare parts fuelled by a foreign exchange crunch, spiralling inflation, a free-falling currency, erratic power supplies and higher production costs have not helped the situation.
   Junior Mines Minister Tinos Rusere said the new mining bill would be tabled when parliament returns from the Christmas break next week.
   Despite its vast reserves of palladium, chrome, platinum and diamonds, Zimbabwe has seen its mining sector stagnate after President Robert Mugabe last year warned that the government would demand a 50 per cent stake in all mines.
   ‘We cannot recognise absolute ownership of our resources. No! That must be corrected,’ Mugabe said.
   Platinum giant Zimplats has put on hold a two-billion-dollar (1.6-billion-euro) expansion plan until the passing of the
   new law.

Asian currencies were mixed against the dollar over the week, with the US Federal Reserve's decision to hike interest rates boosting the US unit against the yen while failing to outweigh regional factors in trade against other currencies.
   JAPANESE YEN: The Japanese currency fetched 118.49-52 to the dollar late Friday, down from 116.26-29 to the dollar a week earlier. It hit 118.64 at one point on Thursday, its lowest level in Tokyo since December 14.
   As widely expected, the Fed raised its key funds rates on Tuesday for the 14th consecutive time to 4.50 per cent, helping the dollar stay on the front foot particularly against low- yielding currencies including the yen.
   AUSTRALIAN DOLLAR: The Australian dollar rose slightly against the greenback during the week, trading at 75.30 US cents late Friday.
   NEW ZEALAND DOLLAR: The New Zealand dollar ended the week at 68.92 US cents.
   CHINESE YUAN: Chinese markets were closed during the week for Lunar New Year holidays.
   HONG KONG DOLLAR:
   The US-pegged Hong Kong dollar traded at 7.757 on Friday.
   INDONESIAN RUPIAH:
   The rupiah closed Friday to end the week stronger at 9,305-9,315.
   PHILIPPINE PESO: The Philippine peso traded higher at 51.910 to the dollar on Friday.
   SINGAPORE DOLLAR: The dollar was at 1.6331 Singapore dollars on Friday.
   SOUTH KOREAN WON: The won closed at 970.30 won per dollar Friday.
   TAIWAN DOLLAR: The Taiwan dollar fell 0.34 per cent to close at 32.094 against the US dollar on Friday.
   THAI BAHT: The Thai unit closed Friday at 39.38-39.41 baht to one dollar compared to the previous week's close of 38.98-39.02.

SEC showcauses four cos
   The Securities and Exchange Commission has issued show cause cum hearing notice to the directors, managing director and company secretary of Dynamic Textile Industris Ltd,
   Asraf Textile Mills Ltd and Saleh Carpet Mills Ltd for non-holding of the annual general meeting in the year 2005 and to Khaza Mosaic Tiles avd Stone Industries Ltd for non-submission of audited accounts for the year ended June 30, 2005
   and for non-holding of the annual general meeting in the year 2005.
   
   Pragati Life’s debut
   Trading of shares of Pragati Life Insurance Ltd begins at the Dhaka Stock Exchange and the Chittagong Stock Exchange today through CDBL under ‘A’ category.
   
   Intech right share offer adopted
   Intech Online Ltd has informed that its shareholders have unanimously adopted the proposal of issuance of Right Shares of the company to raise the paid up capital in the extra-ordinary general meeting held on February 2.
   Another record date for entitlements of right shares will be announced within three working days after getting permission from the SEC.
   
   Half yearly loss
   At least five companies announced their half yearly loss as on December 31, 2005, Eagle Star reported net loss of Tk 1.51 crore with a negative earning per share of Tk 2.86.
   Tulip Dairy & Food reported net loss of Tk 34.6 lakh with a negative EPS of Tk 14.48.
   Rangamati Food reported net loss of Tk 8 lakh with a negative EPS of Tk 0.27.
   Source: DSE, CSE

Textile tech how
from Tuesday
A four-day textile and garments machinery show begins here on Tuesday to introduce local textile entrepreneurs with modern technologies in the sector. Bangladesh Textile Mills Association is organising the fair titled ‘The 3rd Dhaka International Textiles and Garments Machinery Exhibition-2006’ at Bangladesh-China Friendship Conference Centre, a BTMA communique said Sunday. It added that the countries are in the effort to innovate new approaches besides improving their technical capabilities to face the challenges of post-MFA era.
— UNB

Tk 882cr T-bill
bids settled
The Bangladesh Bank Sunday settled bids of treasury bills of different terms worth Tk 882.20 crore, a statement said. Bids worth Tk 874.20 crore, Tk 0.10 crore, Tk 0.10 crore, Tk 2.50 crore and Tk 5.50 crore were offered for treasury bills of 28-Day, 91-day, 182-day, 364-day and two-year terms. Of these, bids worth Tk 874.20 crore, Tk 2.50 crore and Tk 5.50 of the 28-day, 364-day and two-year bills were accepted respectively. The ranges of implicit yield of the accepted bids were 7.00-7.02 per cent, 7.75 per cent and 8.50 per cent per annum respectively.
— BDNews

Pakistan copper exports to
China up 136pc
China Custom Authority registered 136 per cent increase in import of copper from Pakistan during December to January, last year. The total value of copper, imported during the outgoing year was $85 million, whereas it amounted to $36 million during the corresponding period, a year ago. The import is almost double, showing a rapid raise in bilateral trade between the two countries in mineral sector. China will soon start importing a big quantity of zinc and lead from Pakistan on regular basis.
— AFP