Main Page «
Front Page «
Metro «
Business «
International «
Sports «
National «
Editorial «
Home «
Timeout «
Letters «

Archive «
Launch Supplement «
Special Supplements «

I was in the States few weeks back and talking to a schoolmate, who teaches Economics at a top-rated university. He seemed to be quite happy with former central bank governor and a World Bank economist running the show in the interim government, with another capital market watchdog and development economist running the affairs in the ministry of finance. He was further intrigued by the fact that even the law adviser was the chief guest in an economic association training session and made a lengthy speech about ADP utilisation and undesirable wastages. He was treating this as a South Asia fever with Dr Manmohan Singh, Montek Singh Ahluwalia or P Chidambaram in India or Shawkat Aziz, Shalman Shah or Omar Ayub Khan in Pakistan. But at the last – the million dollar question came up – all said and done regarding punishing people for use of public office for personal or vested interest, all-out attack against corruption, election commission reforms, how this is going to impact the business and economic growth. Not my fellow friend only, by this time various questions have been raised in public minds on the state of our economy. In FY06, we had achieved GDP growth of 6.7% and in the beginning of this year everyone was projecting 7% growth in FY07. However, the political turmoil during the end of previous year and subsequent political changes may have slowed the economy a little bit. The Economist Intelligence Unit (EIU) is estimating that the GDP growth for the fiscal year 2007 to be at 6.1%, while the World Bank and Asian Development Bank expect this to be little higher. The central bank has been pursuing contractionary monetary policy to control unnecessary credit growth and contain inflation, inflation being most sensitive area for any regime, including the interim one. This may also have taken a toll on the growth rate. The question remains that, given this uncertainty, looking forward how do we expect the economy to perform. To get a satisfactory answer for that, we need to examine some critical statistics.
   Bangladesh’s export for the period of July 06 to January 07 reached USD 7.04 billion (21% increase over the corresponding period in previous year). The increase was mainly driven by 19% increase in woven and 26% in knitwear Garments. Current run rate would make export in FY07 USD 12.06 billion, which was USD 10.5 billion in FY06. Import payments during July-Jan, 2006-07 increased by 22% to USD 9.79 billion compared to USD 8.02 billion during July-Jan, 2005-06. Current run rate would take import payment in FY07 to USD 16.78 billion, which was USD 14.75 billion in FY06 (13.78% increase). However, there has been reduction in opening new L/Cs in January and February. New L/Cs opened during December, January and February is USD 1.57 billion, USD 1.16 billion and USD 1.14 billion respectively.
   Remittance from NRBs during the period of July 06 to Mar 07 was USD 4.36 billion, which was 25.52% higher than previous year’s corresponding period (USD 3.47 billion). Country’s balance of payment was surplus of USD 360 million during July, 06-Jan 07 that was USD 11 MM deficit during July, 05- Jan 06. In last 12 months, BDT has appreciated by more than 4% against USD. The country’s foreign exchange reserve currently stood at USD 4.3 billion which provides cover for 3 months’ gross import.
   12-month annual average inflation in Jan 07 was 6.72% against that of 6.77% in Dec 06. The rate of inflation on point-to-point basis also decreased to 5.94% in January 2007 from 6.13% of December 2006.
   Tax revenue during July, 06- Jan 07 was BDT 216 billion which is 27% lower than the target. Annual target is BDT 410 billion and the current run rate would be BDT 324 billion. Tax revenue during previous year was BDT 339 billion. However, the government is considering revising the revenue collection target by about 20%. It is indeed imperative that the National Board of Revenue (NBR) should expand its tax net, along with ensuring that tax are reported and collected properly. It is sad to hear that several big entrepreneurs of the country pay taxes which are relatively negligible and lower than many salaried people who live on their fixed income. Quality of tax is also important, meaning sustainable sources have to be created and monitored through a relationship/ partnership process. Slowdown of import will affect import duty collection and lack of consumer spending will affect VAT/other taxes collection. The government has to gear up the process through appropriate incentive to engage people who matter without giving up transparency or allowing control lapse.
   Total budget (deficit) financing of the government during July- January 2006-07 stood at BDT 87.24 billion against BDT 66.70 billion during July- Jan 2005-06. Of this deficit, foreign financing stood at BDT 10.04 billion during July, 06-Jan, and 07 against BDT 33.26 billion during July-Jan 2005-06. Domestic financing during July-Jan 2006-07 was at BDT 77.20 billion against BDT 33.43 billion during July- Jan 2005-06.
   Borrowing from the banks during July-Jan 2006-07 was BDT 55.03 billion, which was BDT 17.84 billion during previous year corresponding period. For the whole year 2005-06 the figure was BDT 56.67 billion. Total Foreign Aid for the period of July- Jan, 07 were USD 445MM, which was USD 790 MM previous year corresponding period. Net Foreign Aid (excluding loan repayments) for the same period is USD 145 MM that was USD 507 MM previous year corresponding period.
   The above information shows that, our external sector is performing exceptionally well with exports and remittances growing steadily. Because of these solid performances with the prudent containment of import, we are now having a positive balance of payment. The foreign exchange reserve is also looking pretty robust. The inflation is looking relatively stable. However, the recent fuel price hike may increase the price level a bit further. There have been calls from the donors to continue further the contractionary monetary policies to curb inflation. I would think that we might have to be a bit cautious about that. With our reserves growing steadily, exports and remittances performing strongly, we should be able to encourage more imports (specially capital machinery) to accelerate economic growth. We have to accept the fact that an economy with above 6% growth rate can accommodate a little bit more inflation. Statistics from Pakistan and Sri Lanka will support this. However, the major concern would be the financing government’s deficit. With tax revenue well behind target, lower customs duty and lower level of aid inflow, the government is borrowing more from the banking sector to cover for its deficit, though the present team at MoF, is trying their best to contain, though without much success and for reasons beyond their control.
   For the government, setting the right strategic directions through the upcoming budget will be vital to ensure engagement of rural areas and people in the development process, development of real sector, increasing inclusion of the informal economic activities into the transparent national accounting process, reassuring comfort for business people and attracting foreign direct investment. It is important to bring confidence among the SME entrepreneurs in the suburb and rural areas while most of them do not have appropriate books of accounts and audit/tax papers. On top of this, these people are oftentimes the village/community leaders in their respective localities. They are also engaged in local government and the implementation process of Annual Development Programme (ADP) allocations. In view of the fact that distribution and implementation channels are currently affected at such micro-level, successful implementation of ADP remains a challenge. Collection of tax may be one challenge, spending the same for the right cause and without leakage remains a bigger challenge. Reduction of poverty through steady spending of ADP and simultaneously helping the poor become independent is the key to enhance the government’s ability to divert ADP into more productive sectors of the economy.
   The power sector, as already felt by the interim machinery, has to receive high focus in the next budget considering the gravity of the prevailing situation. Power rationing cannot be a long-term solution; we need implementation of large-capacity plants to address the issue. We must unveil the potential of this sector to foreign direct investors and operators. We have lost enough time resulting into increased cost of equipment, currency devaluation, and higher expected tariff rates by bidders who obviously want to make sure they are adequately compensated for the risk taken.
   The reforms of the state-owned banks are taking place, though the pace could have been faster. The next area to aggressively focus on, is the capital market. We need to identify why top-tier corporates are not listing, eliminate bottleneck and offer direct incentives. Incentives for issue managers/capital market operators to hand hold corporates through the corporate governance and transparency process, and generate market appetites within these corporates is of utmost importance. An overall capacity building framework has to be in place – not only for SEC professionals but also for micro-level operators who actually interacts with the clients, so that they can excel.
   In the final analysis, considering the successes achieved by the present interim government, overall expectation of the people has grown only bigger. The next budget should take into account the realistic picture of the present state of the economy and then propose the measures through the upcoming budget for sustainable development – not to talk about growth only, to favourably touch upon the living standards of the rural poor and purchasing power of middle-class, above all, pave the way for a respectable and knowledge-based nation in future.
   The writer is a banker

Gradually, Central Park began to change its look as more people poured in when the sun was overhead. The shades under trees and the wooden benches were taken over by tidily dressed men and women. They were mostly young in age and alert, in contrast to the elderly people who had been sitting or lolling about in a laid-back manner. Some of the newcomers opened paper or plastic bags that they carried and started eating while holding in one hand a magazine or a paper to read, lowering their heads. It was lunch time, he realised and seeing people eat he felt hungry. Almost at the same time a savoury smell wafted from nearby, whetting his appetite. He looked around and saw a small covered stall on wheels where a motley crowd had gathered in a queue. It was colourfully decorated and had something written on all sides in big red letters. The smell came from the kiosk on wheels and it was of food. It was not a familiar smell but food’s presence was unmistakable, particularly for a hungry stomach. He got up from the wooden bench, rolling the Hobo News in one hand and started walking nearer to the smell.
   As he came near the stall and face to face with the smell he saw men, women and children eating a medium-size longish bread with both hands, colouring their lips in red liquids of the same colour, coming out like drool. He looked at the written words on top of the stall and reading it recoiled in disgust. A feeling of nausea over-took him all on a sudden and he looked at the people in front with disbelief and shock. The words read: ‘Hot dog, sizzling in your hand’. It was a rude jolt and hit him on the near like a brick. He knew Chinese and Koreans ate dog meat, but no one told him that Americans also used it for food and ate in public, too. He left the place in a hurry and walked back towards his hotel, deciding to have lunch there at leisure. Along the way, somewhere between Broadway and Hotel Martinique, he saw a restaurant named Horn and Hardast with people sitting at tables and eating busily. It did not look like an expensive place and the customers were mostly ordinary looking, judged by their dress. Most probably they had come from nearby offices and were under pressure for time. They ate mechanically and not with a relish or pause. The waitresses were all Negroes and behind the counter there was only one person, a Negro man in a long white cap and in white apron. Behind him in a glass showcase were different food items on display. They were mostly dry, like sandwiches. He entered the restaurant and looking at the glass showcase pointed to a sandwich. The Negro in white opened his mouth revealing white teeth and said with a lispy voice, ‘in a minute and over there’. He pointed to a open space near the wall where only hands of people at work could be seen. The colour of the hands was black and white, like the waiter behind the counter and the waitresses. He took his place in the queue and soon the sandwich that he chose was delivered from behind the open space in the wall. The person who delivered was invisible which reminded him of Ralph Elison’s The Invisible Man. Ralph Elison was a Negro and wrote about them. He had read one of his story in an anthology that he found in USIS library in Dacca.
   For drink he wanted to have Coca Cola but the waiter did not serve it. It was available in a vending machine in the corner of the restaurant. He went near the machine and saw names of hot and cold drinks with push buttons below them. There was a slot where ten cent (dime) coin was to be inserted. But there was no glass to drink from. He looked around and saw a waste paper basket full of paper glasses (lily cups). He picked up one and saw it was used. The others were no better, he found out soon. He was at a loss and did not know what to do. A woman came to the machine and inserted ten cents in the slot. She had no glass in her hand. There was a whirring sound and a paper cup came out from inside the machine and took its position upright in a snug looking spot. The liquid fell in a gush and stopped before reaching the brim of the cup. The woman picked up her drink and went to a table to have her lunch. Very simple, when known but puzzling to a stranger, he told himself. He was glad that he did not ask anyone about cup or glass, making a fool of himself.
   Later, he would know that hot dog did not have dog meat; it was just a name. Similarly, hamburger did not use ham but was made of beef. He would discover the peculiarities that comprised aspects of daily life in America, gradually and each experience would be etched in his memory. America to a stranger was like a new landscape throwing up surprise spectacles, one after another, making each day thrilling. When he become familiar with most aspects of daily life in relation to the life that he lived as a visitor, the thrill and excitement would diminish. The novelty that greeted a newcomer in America was as much in the daily language used as in what the Americans did in the course of twenty-four hours. In the days when not much was known about American life in far-away and sleepy little cities like Dacca, arriving with ignorance was the beginning of an adventure that unfolded with excitement and never-ending expectations for more. Americans, as hosts, were happy to have stranger who were keen to know about them and their society. Every nation feels proud of its heritage and achievements and America had more than its due share in this respect. Today that relationship has changed because the visitor arrives with full knowledge and detail information about the country, including prejudices. As familiarity is said to breed contempt, knowledge makes one less inquisitive, engendering a degree of conceit.
   Horn and Hardat was a busy place, being near the entertainment, shopping and office districts (district, that is what Americans call an area). Men and women were entering in a hurry and after eating left the place at the same speed. Except footfalls and occasional clatter of plates, there was no sound. The only words were between the customers and the waiter behind the counter. It could be a clinic, instead of being a restaurant, he thought. He watched the pedestrians outside, moving like a quick flow and yet remaining the same, in shape and colour. No one paused except near the traffic lights when the red colour and the warning words ‘Don’t walk’ flashed at regular intervals. Sunlight fell straight from the noon sky, spreading a patina of yellow on the narrow strip of asphalt covered by moving cars, yellow cabs and delivery vans. Shop-fronts and facades of buildings lit up, as if with a smile, as shadows of the morning were replaced by sunshine. Manhattan appeared like a huge sundial, with sunlight moving in angles at different hours of the day. He could spend some more time observing the ‘moveable feast’ that is Manhattan but the waitress threw enquiring glances at him which said he had to move on to make room for newcomers. Horn and Hardat was not Central Park; it was not for rest and relaxation. It was a re-fuelling station and he was not the only one requiring that at that hour. Even if he had all the time in the world he could not linger there indefinitely to watch the world go by.
   He came out of the restaurant feeling the touch of the September air and inhaling the smell of petrol, tobacco and perfumed sweat. It was pleasantly cool, the beginning of autumn, ‘Fall’ in American lingo. He had spent one dollar for lunch and did not have to give any tips as it was self-service. Four dollars were still in his packet which should be enough to take a yellow cab from the hotel to the City Terminal and from there by bus to Newark airport, he calculated mentally. Evelyn Schayer had told Newark was in New Jersey and the airport there was used for domestic flights. He had listened to her absent-mindedly, all the time thinking with apprehension about the shrunken human head. Was she going to show to him, after all? He dreaded the prospect and looked around the room cluttered with souvenirs and curios collected from all over the world. That was in the morning and it was noon now, he is on his own doing New York on a shoe-string budget and having value for his money. He had avoided hot dog and shrunken head and felt confident about what the future held for him. He had started the first day in America in good stride, doing the needful and not so needful and saving enough to fend for expenses for the rest of the day.
   The schedule given to him showed that his flight from Newark was at six o’clock in the evening. If he left hotel around four it should be enough to reach the airport in time. That meant he had another two and a half hours time in hand. Looking at the map drawn by Evelyn Schayer he saw ‘Times Square’ written not far from Broadway. She had mentioned it to be a landmark in Manhattan but did not explain what made it so. He started walking in the direction of the landmark feeling light in spirit and curious to explore. Each step that he took was a gain in confidence, an addition to his American experience. Manhattan was a good place to start in and learn about America.
   Times Square, if the small patch of space that he saw before him was really that, was a disappointment. It was undistinguished in every respect. The size was small like a backyard kitchen garden, the railings surrounding its oddly triangular shape were old and rusted. Inside, a few flimsy-looking trees stood with forlorn look, unkempt bushes grew haphazardly, grass covering was intermittent and looked pallid. There was a statue standing in the middle on a pedestal which could be of bronze but had become green through oxidation. Pigeons had a field day sprinkling the statue with their white droppings. He went inside the small park of Tames Square and stood before what looked like a much harassed statue. At the base was written: Father Duffy. The few words written below informed that he was a priest who had gone to Cuba. After all those years he remembers only this much, which does not say anything about the reason why Father Duffy stood in Times Squares (and he is still standing there, though in an open concrete-covered space) in such splendid isolation (not to speak of humiliation by pigeons). Looking up, he saw the Times building (after the eponymous newspaper) that gave the square its name. On top of the tall slender building was the big neon advertisement of Canada Dry. At day time the neon was naturally not on and the frame of the advertisement looked like a huge skeleton of a pre-historic animal.
   He was looking around when a figure materialised from under one of the trees. A man in bedraggled dress and unruly beards sidled up to him with an outstretched hand saying, ‘got a dime? Dime? He wondered what that could mean and shook his head vigorously, saying no, not so much as an answer but to avoid the man in dirty stinking cloths. The man kept on saying ‘got a dime, man.’ He sensed trouble and beat a hasty retreat from the place. Both Father Duffy and the wretched-looking man appeared incongruous in the neat surrounding of skyscrapers draped with American flags in front. But they were part of the larger scene, he felt intuitively. His next destination was hotel Martinique; he had enough of sight-seeing for a day, he felt.
   When he came out of the hotel with his suitcase the street in front had changed. It was chock-a-block with cars and they moved at snail’s peace. He had heard of traffic jam but had not seen one with his own eyes. It was now staring him in the face, sending the pulse racing. How was he going to find a yellow cab in the midst of this immense chaos and how would he reach the airport in time? The Negro doorman of the hotel stopped a cab for him and opening its door kept looking at him expectantly. No, he could not give him any tips, he had only four dollars in notes (bill, as the Americans say). Soon the cars behind him started hooting and the doorman shut the door of the cab with a bang, which jolted both him and the cab driver. The cab driver was also a Negro but he did not look pleased and said something under his breath. The cab started to move and it was worse than crawling. Every time some progress was made and movement took place the red light of traffic stopped the flow of cars. As the cab waited, the figure in the meter kept clicking upward, making him nervous. When the mater read one a half dollar at 37th and Broadway, he felt panicky. He would have to go to 42nd Street West Side for the bus terminal which must be at some distance still, he thought. He started perspiring, thinking with dread the catastrophe that was awaiting. How would he make the payment for the cab and have enough left for the bus ride. With baited breath he looked at the street numbers that stood lazily by the traffic with no hurry to slip behind. At 39th Street, the meter read one dollar and ninety cents. At 40th Street the fare was two dollars and forty cents. When he thought that disaster had struck, the cab reached 42nd Street with the meter reading two dollars sixty cents. He could not believe his eyes. He was going to make it with four dollars without any faux pas, he felt certain. His heart leapt in joy. There was someone up there who loved him.

Codes of conduct

Ban on use of religions in electioneering has been proposed in the draft of polls codes of conduct. This is a healthy sign. The participation of political parties whose political ideologies are based on religions should also be banned in the election. Political parties whose names carry reference to religions should be excluded from the race, otherwise they will manipulate religious sentiments of the mass population for political purposes.
   MH Khan
   On e-mail

---