The World Bank on Thursday questioned the effectiveness of the proposed budgetary provision to legalise undisclosed money in view of records, cautioning that the controversial move would create conflicts with the country’s anti-money laundering law and its commitment to international treaties on good governance.
   The laws and treaties signed by Dhaka that would be conflicting with the budgetary provision include the country’s anti-money laundering act, anti-terrorism act and the UN convention on anti-corruption, according to the lending agency.
   ‘There is no disagreement on the issue that any move to allow legalisation of black money is immoral and unethical,’ Zahid Hossain, a senior economist of the bank, presenting the bank’s assessment of the proposed budget for 2009-2010.
   The World Bank predicted that low implementation capacity of the government machinery might jeopardise the budgetary objectives of revenue earning and higher spending in line with the ruling party’s electoral pledges.
   The government’s projected external assistance of nearly $2 billion to meet the deficit in the proposed budget is unlikely to be flown into the country, it said adding that the targeted deficit at 5 per cent might crowd out private lending and trigger inflation.
   Zahid Hossain said while certain budgetary measures would protect some domestic industries, the protection would hurt the consumers at a time when inflation might rise abnormally high again.
   Describing the budget expansionary, innovative and protectionist, he pointed out that the projected budget deficit at 5 per cent would not be proved right at the end of the fiscal despite the necessity to increase public investment.
    ‘Low implementation capacity could jeopardise the intentions [to increase productive assets and protecting the vulnerable],’ Zahid noted although he lauded some budgetary targets.
   Appreciating the government’s development philosophy focussed on macroeconomic stability and fiscal sustainability, the bank’s outgoing country director, Xian Zhu, observed that ‘the most salient feature of the budget is the public-private partnership.
   He also emphasised the importance of strengthening implementation capacity of the annual dev elopement programme and said, ‘Strengthening accountability and transparency in the procurement process, selection of process, determination of project costs, bidding process and evaluating the quality of the projects would lead to faster and effective ADP implementation.’
   Dwelling on the move to amend public procurement rules, Zahid termed them one of the best rules in the region and said the government try to raise capacity of project directors and improve project management instead of changing important requite for quality implementation of the projects.
   Asked about the provision to legalise undisclosed money, the economist said almost 50 per cent of the untaxed money amounting to Tk 18,000 crore legalised in since 1976 had been brought to the mainstream economy only in the past two years due mainly to fear factor. ‘We see no reasons to be optimistic,’ he added.

Bangladesh Bank governor Dr Atiur Rahman Thursday said the investors are regaining confidence with the removal of fear factors that emerged out of the global recession.
   ‘The fear factors have gone by now. It will help build investors’ confidence and investment will take place gradually,’ he told reporters, after inaugurating an electronic remittance and payment system at Hotel Sheraton in the city.
    ‘We’ll have to have political stability to give investors the confidence,’ said the governor, replying to a question whether the central bank is contemplating any measure to stimulate investment from the huge idle money and foreign exchange reserve.
   Earlier, addressing the inaugural function of the easy-to-remit ‘Eldorado’ system, he expressed satisfaction over the growing trend of remittance inflow despite the global recession.
   The country’s foreign exchange reserve has already crossed $7 billion amid strong remittance, moderate exports and slowed down imports.
    ‘There was much apprehension that remittance might be shaken due to the global recession but the situation is much, much opposite of such apprehension,’ Dr Atiur said.
   He estimated that the foreign remittance would cross beyond the level of $9.5 billion during the current fiscal year as expatriate Bangladeshis are now sending money through formal channels.
    ‘The unified private platform of commercial banks will facilitate services at a reduced cost and reduce the tendency to use informal channel to boost remittance,’ he said, adding that it would also help the government in its anti-money laundering drive.
   The governor said the country needs to stimulate investment and domestic production to meet increased domestic demand due to increased remittance.
   He said the government has announced a huge budget to spur investment and called upon the private commercial banks to help stimulate investment from their side apart from the government.
   Dr Atiur also asked the banks to invest in sectors like agriculture and renewable energy as well as in effluent treatment plant.
   The Eldorado system is a web-based platform that facilitates the participating banks to provide one-stop remittance service to their clients.
   BRAC Bank, Bank Asia, Al-Arafah Islami Bank, Exim Bank and Dhaka Bank have already joined the platform as a step towards making it a universal platform of all banks in Bangladesh.

Standard Chartered, a British bank focused on emerging markets, said Thursday that it enjoyed record revenues and profits during the first five months of 2009.
   ‘Standard Chartered has continued to deliver another strong performance in the first five months of the year, with record levels of income and profit,’ chief executive Peter Sands said in a trading update.
   ‘Although there are tentative signs of improving economic conditions in some of our markets, equally there are signs of continuing stress,’ he said without giving specific figures.
   ‘It is still too early to forecast a sustained recovery and we therefore remain cautious on the outlook,’ he added. After the update, Standard Chartered’s share price was unchanged at 1,195 pence in late morning trade on London’s FTSE 100 index, which was down 0.27 per centt.
   In March, the bank announced a 20-per centt jump in 2008 net profit to 3.41 billion dollars (2.69 billion euros), leaving it well-placed to face the global economic slowdown.
   The vast majority of Standard Chartered’s business is in Asia, Africa and the Middle East.

The thousands of victims scammed by Wall Street fraudster Bernard Madoff include some of the world’s top banks, richest business people and most celebrated stars.
   Among those identified by investigators and news reports as victims, or who have revealed they were swindled, are:
   Individuals
   Veteran cable talk show host Larry King, DreamWorks Animation chief executive Jeffrey Katzenberg, Hollywood actor Kevin Bacon, Spanish director Pedro Almodovar, Hollywood actor John Malkovich, Spain’s richest woman, businesswoman Alicia Koplowitz, real estate mogul Mort Zuckerman, owner of the New York Daily News and US News & World Report, US Senator Frank Lautenberg, Fred Wilpon and Saul Katz, respectively owner and co-owner of the New York Mets baseball team.
   Charities
   Oscar winning filmmaker Steven Spielberg’s charitable foundation and the Elie Wiesel Foundation for Humanity.
   Institutional investors
   Britain’s Man Group investment fund, Royal Bank of Scotland, HSBC banking, France’s BNP-Paribas, Netherland’s Fortis Bank, the EIM hedge fund run by Arpad Busson, billionaire boyfriend of Hollywood actress Uma Thurman, Spain’s Banco Santander, Luxalpha fund, a Luxembourg UBS bank fund that handled some of French billionaire L’Oreal owner Liliane Bettencourt’s assets.

The country’s export earnings during July 2008 to April 09 totalled $1,282 crore against $1,137 crore of the same period of the last fiscal year, marking a rise by $145 crore or 12.76 per cent.
   The earnings from export of woven items in ten months of this fiscal totalled at $490.20 crore, against $418.05 crore of previous fiscal, according to data of the Export Promotion Bureau.
   On the other hand, export earnings from knitwear garments in the period stood at $523.10 crore, against $439.20 crore during the same period last fiscal, marking a rise by 19.8 per cent.
   Earnings from exports of woven garments, terry towels, handicrafts, computer services, chemical fertiliser, medicine, shoes, vegetable, melamine, tobacco, home textiles, textile fabrics marked rise during the period, while that for exports of raw jute, tea, jute goods, electronics, leather, frozen foods, ceramic products, petroleum by-product, bicycle, marked fall.
   The export price index during July 08 to April 09 marked a rise by 0.42 per cent and the export index in volume rose by 14.47 per cent.
   Bangladesh Economic Association president Dr Kholiquzzaman Ahmed said despite global recession, the export earnings of Bangladesh maintained upward trends as the low- earning people across the globe.
   The number of low-earning people across the globe has increased and for that the sale of readymade garments from Bangladesh has not reduced, he added.
   Since the country’s banking sector is not linked with those across the globe, the banks of the country could continue loans to RMG sector industries as per their requirements and needs; he said adding that considering all these, the exports of the country maintained momentum.
   According to EPB, country’s export fell in October, December and April, but during rest seven months, earnings from exports rose.
   The target of export earnings during the current fiscal was $1,630 crore, and the country has to earn $388 crore in the month of May and June, 2009 to fulfil the target.
   The export earnings from European Union nations accounted for 51 per cent of the country’s total receipts during the seven- month period, while that from the United States was 30 per cent, Canada 4 per cent and Japan 2 per cent.
   The US topped the list of single country importers of Bangladeshi goods by importing goods which is 26.64 per cent of total export of Bangladesh, while it was 14.33 per cent in Germany and 9.45 per cent in the United Kingdom.

AB Bank recently signed an agreement with AgreeYa Solutions Bangladesh Ltd, in partnership with Infrasoft Technologies Ltd, India, for internet banking solution recently in Dhaka, a news release said.
   President and managing director AB Bank Kaiser A Chowdhury and co-founder and managing partner AgreeYa Solutions, US Ajau Kaul signed the agreement on behalf of their respective organisations.
   Senior executives from both the organisations were present on the occasion.
   After the implementation of internet banking solution, AB Bank will be able to provide its clients with services like bills payment, inter-account and inter-bank fund transferring, standing instructions, ad-hoc payment instructions, ATM or debit cards, request for bank guarantee and request for letter of credit through internet.

Bangladesh team won the Bronze award in the regional HSBC Young Entrepreneur Awards 2008-2009. Their business case was about solving the imminent water crisis of megacity Dhaka by harvesting rainwater, and providing clean, drinkable water for everyday use in domestic and commercial structures, a HSBC press release said.
   The HSBC Young Entrepreneur Awards aims to encourage undergraduate students to develop innovative and commercially viable business plans. Since the first awards in Hong Kong in 2000, the programme has been launched in Bangladesh, Brunei, Malaysia, the Philippines and Thailand.
   This year, more than 2,400 full-time university students from six Asian countries and territories formed 902 teams and took part in local competitions. The gold award team from each area made a formal business plan presentations to judges at HSBC’s Asia-Pacific headquarters in Hong Kong yesterday in the regional final.
   Sandy Flockhart, Chief Executive officer of The Hongkong and shanghai Banking corporation Limited, said: ‘The HSBC Yong Entrepreneur Awards programme demonstrates our ongoing commitment to education and our investment in nurturing future leaders in the region. Since its inception, the programme has attracted more than 16,000 students comprising some 6,300 teams around Asia. In addition to promoting entrepreneurship, the competition provides students the opportunity to acquire practical business knowledge such as business planning and presentation skills.”
   After yesterday’s regional competition, the Gold, Silver, Bronze and Eco-business innovation award winner from the participating countries and territories embarked on a four-day study tour in Hong Kong. There are entrepreneurship workshops, seminars and visits to leading companies in Hong Kong, including Cathay Pacific Airways, Hong Kong Exchanges and Clearing Limited and the Ocean Park so students can learn about the diversified business developments in Hong Kong from different perspectives.

Mercantile Insurance Company re-elected Abdul Haque chairman of the company at its 13th annual general meeting held in Dhaka on Tuesday.
   A sponsor director of the company, Abdul Haque was elected its chairman for six consecutive years from 2001 to 2007, a news release said.
   He was a member of the National Council for Industrial Development. An immediate past president of The Dhaka Stock Exchange, he is currently a director of the DSE board of management.
   Abdul Haque is the founder chairman of Shyamol Bangla Media Limited and also the chairman of Royal Green Securities, Royal Green Products and Diganta Prokaushali.

Mutual Trust Bank recently participated in a four-day Financial Literacy Programme on SME arranged by the South Asia Enterprise Development Facility at the Hotel Agrabad in Chittagong.
   A three-member team from MTB headed by its senior assistant vice president (SME) Mohammad Iqbal attended the programme, a news release said.
   MTB displayed its SME products and supplied information regarding SME finance to the customers.
   Iqbal delivered a speech in the inaugural session highlighting the products, network and bank’s policy support to promote the SME sector for sustainable development of the economy.
   SEDF arranged training for SME entrepreneurs and SME fair in the programme, the release said.

Bata Shoe Company (Bangladesh) Limited announced 220 per cent cash dividend comprising 105 per cent final dividend and 115 per cent interim dividend for the year 2008.
   The board of directors of the company declared the dividend at its 37th annual general meeting held at Dhamrai on the outskirts of Dhaka on Thursday, a news release said.
   Company chairman Fernando Garcia Restrepo presided over the meeting while directors and share holders were present.
   The company reported a net profit Tk 449.52 million in 2008 and also approved audited accounts for the same year.

Developing countries have joined UN officials in calling for more money and a greater role in regulating the world economy in the wake of the worst global financial crisis since the Great Depression, which has taken a disproportionate toll on poor nations.
   At Wednesday’s opening of a three-day UN financial summit, country after country laid blame for the crisis on financial liberalisation and deregulation in the United States and other rich nations and said it was time to reform the world financial system under the auspices of the United Nations.
    ‘The reforms based on the belief in the efficiency of the market and the diminution of government did not work,’ said Bangladesh’s foreign minister Dipu Moni. ‘Reforms are needed to enhance productivity and capacity to cope with risks.’
   Nobel Economics Laureate Joseph Stiglitz, who headed a Commission of Experts on Financial and Monetary Reform that developed recommendations for the conference, said that ‘as globalisation has proceeded we haven’t created global financial institutions.’
   He called for the creation of a Global Economic Coordination Council to deal with the fallout wrought by the crisis that began in 2008, although the council is not mentioned in the 15-page draft final document agreed upon by rich and poor nations prior to the conference.
   Instead, the draft calls for the International Monetary Fund, the World Bank and other lending institutions to be flexible in imposing conditions on developing countries so they can take action to deal with the economic crisis, including adopting stimulus packages. The draft also calls for measures to avoid a new debt crisis and new approaches to restructuring debt.
    ‘It needs to be an inclusive process of decision. Not the G-8, not the G-20, but the G-192,’ Stiglitz said referring to the Group of Eight major industrialised nations, the Group of 20 key economic powers, and the UN’s 192 member nations.
   He also argued that funds used to aid developing nations must come in the form of grants, rather than loans, ‘because we don’t want to end up with another debt crisis further along.’
   The draft document calls for donors and financial institutions to consider ‘grants and concessional loans as the preferred modalities of their financial support instruments to ensure debt sustainability.’
   The Group of 20 key countries that account for over 80 per cent of the global economy agreed at a summit in April on a substantial package of financial support of $1.1 trillion, with $50 billion targeted for low income countries.

Global banks are past the worst of their crisis over their securities activities, a top rating agency said Thursday referring indirectly to such toxic assets as subprime mortgages.
   The assessment should underpin the credit ratings of affected banks, the credit rating agency Standard & Poor’s said, but improvement in their securities-related businesses would be gradual.
   And it noted that in a separate area of banking activity, losses from bad loans were now rising.
    ‘Our belief that these issuers’ securities-related businesses have bottomed out should help to relieve downward pressure on their ratings,’ S&P credit analyst Scott Sprinzen said.
   But he warned: ‘However, we anticipate that, in some cases, escalating credit losses will more than offset any benefits from improving securities-related results.’
   The agency said that although US banks in almost every major market were feeling the ‘severe effects’ of weak economic activity ‘and their own mounting credit losses,’ it held that ‘global banks’ securities-related businesses have already seen the worst.’
   The economic downturn had hit banks’ securities business first and on several fronts.
    ‘Among the problem areas were asset-backed securities, collateralized debt obligations, residential mortgaged-backed securities, and monoline-related and leveraged finance positions.’
   The results of global banks had also been cut back by a ‘drastic’ slowing of activity from the middle of 2007 and which had accelerated until late in 2008.
    ‘However, we now think that fourth-quarter 2008 likely marked the trough for these banks’ trading operations and that first-quarter 2009 has seen the bottom of their investment banking, asset management, and wealth management businesses.’

Airlines need to tackle a dramatic plunge in revenues in the industry’s ‘worst’ crisis ever, IATA said Thursday as international air travel continued to drop in May partly due to swine flu.
   Despite signs that the slump in passenger traffic since late last year may be tailing off, the International Air Transport Association said there was still significant excess capacity in the airline industry.
    ‘We may have hit bottom but we are a long way from recovery,’ IATA Director General Giovanni Bisignani said in a statement.
   Passenger traffic fell 9.3 per cent last month following a year-on-year decline of 3.1 per cent in April, a month traditionally buoyed by holiday travel over the Easter period.
   Swine flu probably depressed air travel by about one per cent globally in May, the first full month to feel the impact of the pandemic, IATA said.
   However, the decline in air passenger traffic slowed in April and May compared to March, indicating ‘that a floor may now have been reached.’
   Nonetheless, average passenger loads per flight continued to decline as the industry failed to cut capacity as quickly as demand slumped, while air freight fell by 17.5 per cent in May.
    ‘Capacity is not aligned with demand. Passenger load factors dropped 3.3 per centage points over the last 12 months. The impact on revenue is dramatic,’ said Bisignani.
    ‘After a 20 per cent fall in international passenger revenue in the first quarter, we estimate that the drop accelerated to as much as minus 30 per cent in May. This crisis is the worst we have ever seen.
    ‘Airlines are in survival mode. Cutting costs and conserving cash are the priorities,’ the IATA chief added.
   The biggest slumps in the airline industry’s history until now were sparked by the September 11, 2001 attacks in the United States and the outbreak of the respiratory disease SARS in 2003, principally in Asia.
   Earlier this month, Bisignani doubled his estimate of total airline losses for 2009 to about nine billion dollars, on top of the 10.4 billion dollars lost last year, despite a forecast decline in the industry’s fuel bill.
   The region experiencing the most trouble remained the Asia-Pacific market, where international passenger traffic fell 14.3 per cent in May due to the weak economic climate ‘and the impact of influenza A(H1N1) on the region with the most vivid memories of the SARS crisis,’ IATA said.
   Carriers in Mexico, where the swine flu outbreak emerged, suffered a 40 per cent drop in demand last month. That helped depress cross border air travel in Latin America by 9.2 per cent.
   In North America, international travel fell 10.9 per cent as Latin American routes suffered from the swine flu scare and transoceanic routes were dented by the recession.
   Long haul flights also suffered in Europe, where major airlines lost market share to low cost carriers and IATA members reported a 9.4 per cent decline in passenger demand in May.

British energy giant BP on Thursday named Carl-Henric Svanberg, current chief executive of Swedish telecoms giant Ericsson, as the group’s new chairman from 2010.
    ‘BP is a recognised world leader in the energy sector and it’s a great privilege to be invited to lead its board,’ Svanberg said in a statement announcing his appointment.
    ‘Following such a distinguished predecessor is quite a challenge but I’m hugely excited about joining the energy industry which is so much at the heart of the global economy. I look forward to it with relish.’
   BP chief executive Tony Hayward paid tribute to Peter Sutherland, who will step down as the group’s chairman after 12 years. He added that Svanberg, 57, was chosen because of his character and good track record.
    ‘Peter Sutherland has been an outstanding chairman, guiding the company through one of the most successful periods in its history. He will be a hard act to follow,’ Hayward said.
    ‘But I am sure Carl-Henric will be a worthy successor. He is a businessman of international stature who is recognised for his transformation of Ericsson.
    ‘Our shared views on many aspects of global business give me great confidence that we will work very effectively together on the next phase of BP’s progress.’
   In reaction to the news, BP’s share price gained 0.13 percent to 478.45 pence in morning trade on London’s FTSE 100 index of leading companies, which was 0.17 percent lower.
    ‘The announcement of Carl-Henric Svanberg as chairman of BP should be well received by the markets,’ said ETX Capital trader Manoj Ladwa.
   Svanberg had ‘a good track record at Ericsson, reviving the fortunes of a struggling giant,’ Ladwa noted, adding that he was ‘a safe hand on the tiller as BP navigates some very stormy waters and rebuilds its operational strength.’
   In April, BP posted a 62-percent slide in first-quarter net profits to 2.387 billion dollars (1.834 billion euros), as the price of crude oil halved in line with a global economic slump.
   The company has slashed more than 5,000 jobs as it seeks to cut costs and improve its profitability.
   In Stockholm on Thursday, Ericsson’s share price had fallen 0.78 percent to 76 kronor at mid-day as investors fretted about the loss the group’s chief executive. The overall Swedish market was down 1.04 percent.
   Ericsson later said it had appointed vice president Hans Vestberg to replace Svanberg. Vestberg, 44, is currently Ericsson’s chief financial officer and vice president, and has in recent years been seen as Svanberg’s possible successor.
   A graduate of Uppsala University in 1991, Vestberg joined Ericsson later that same year and has held various managerial positions in China, Sweden, Chile, Brazil, the US and Mexico.
   He was named financial director in 2007.

Swedish telecoms group Ericsson appointed vice president Hans Vestberg as new chief executive on Thursday to take over when Carl-Henric Svanberg leaves to become chairman of British energy group BP, it said.
   Vestberg, 44, is currently Ericsson’s chief financial officer and vice president, and has in recent years been seen as Svanberg’s possible successor. He will take over the helm of Ericsson on January 1, 2010.
   A graduate of Uppsala University in 1991, Vestberg joined Ericsson later that same year and has held various managerial positions in China, Sweden, Chile, Brazil, the United States and Mexico.
   He was named financial director in 2007.
   Svanberg, 57, will step down at the end of 2009 after a seven-year stint as chief executive and chairman of joint venture Sony Ericsson. He will become BP chairman on January 1, 2010.
   The Ericsson share price was down slightly on the Stockholm stock exchange on Thursday, shedding 0.78 per centt to 76 kronor in midday trading in an overall market down by 1.04 per cent.

Samsung Electronics set up a new branch office in Dhaka on Wednesday.
   The Samsung Bangladesh office will be under the purview of the Samsung South West Asia Regional Headquarters located at New Delhi, India, a news release said.
   Commerce minister Faruk Khan, science and ICT minister Yeafesh Osman, Bangladesh Computer Samity president Mostafa Zabbar, ambassador of the Republic of Korea to Bangladesh Suk Bam Park, Samsung South West Asia HQ president and CEO Jung Su Shin and Samsung Bangladesh country manager KH Lee were present among others.

Bangladesh General Insurance Company announced 18 per cent stock dividend.
   The company declared the dividend at its 24th annual general meeting held at the Eskaton Ladies Club in Dhaka on Thursday.
   BGIC chairman Towhid Samad presided over the AGM attended by managing director and chief executive officer AK Azizul Huq Chaudhuri, additional managing director and company secretary Ahmed Saifuddin Chowdhury directors and shareholders.
   At the meeting, four directors from the sponsor shareholders and two directors from the public subscription shareholders were re-elected as directors unanimously.