Bank Focus Writing

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Habib Adnan
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Habib Adnan
1. Bangladesh : Towards a Middle Income Country
Opportunities and Challenges
Bangladesh is now accredited as one of the next 11 emerging economies. Since the 1980s, the
country has averaged 5%–6% annual gross domestic product growth. Its per capita income is now
1466 us dollar and foreign investment is nearly $2.23 billion. Women participation in labour force
has increased to 41%, literacy rate to 63% while school dropout rate has reduced to 20.4%. There are
now 143 schemes of social safety net. Poverty rate is also on the decline.
This growth was accompanied by a significant decline in poverty, an increase in employment,
greater access to health and education, and improved basic infrastructure. As a result, the once poor
country is now considered middle income.
The next goal is to reach upper­middle­income country status by 2021. This ambitious initiative will
require annual GDP growth of 7.5%–8% and will entail overcoming significant obstacles and
seizing on new opportunities brought about by changing global circumstances.
It means our country is experiencing economic boom. Six ongoing mega projects testify such claim.
First of all, with a cost of $2.9 to $3.7 billion, Padma bridge is expected to open before the end of
2018 Secondly, Metro Rail Project (rail route from Uttara to Bangladesh bank) will smoothen the
communication system within the capital. Thirdly, Ruppur Nuclear Power Plant will bring about
some huge changes in the national power productivity. Moreover projects like Rampal Power
Project, Paira Deep Sea Port and Matarbari Coal Power Plant will definitely change our economic
condition for better.
Bangladesh is also a leading global exporter of ready­made garment products. McKinsey recently
predicted that apparel exports could gross $36 billion by 2020. Goldman Sachs highlighted
Bangladesh as one of the next 11 emerging economies and JP Morgan identified it as a ‘Frontier
Five’ regarding the booming economy. Moreover relations with India and China have opened
avenues of cooperation due to the landmark visits of our prime minister to both these countries.
Relationships with Nepal and Bhutan have considerably been improved.
The government has tackled the chronic power and energy scarcity taking different short, mid and
long­term plants. Now Bangladesh can generate 14980 megawatts power. The telecom sector, with
nearly 100 million cell phone subscribers, has attracted FDI. Now the number of internet subscribers
are 6.36 crore. Apart from these achievements, Bangladesh has also taken a leading role in the UN
peacekeeping missions to enhance peace, promote dialogue and encourage cooperation. Bangladesh
has become a brand name in UN peacekeeping as a top contributor participating in more than 51
missions involving 1,21,407 peacekeepers since 1988. Bangladesh is also the birthplace of
microcredit, pioneered by the Nobel Peace Prize recipient, Professor Muhammad Yunus – the
founder of Grameen Bank. The Bank’s approach has been replicated in more than 100 countries.
About 10 million Bangladeshis are now working overseas in 155 countries. The reserve of the
country has reached 31.7 billion dollars, according to the data provided by Bangladesh Bank in the
last month, because of their remittance. However Bangladesh has some challenges as well. The
political scene during the last few decades has been full of bitterness, animosity and violence. There
is little energy left for giving constructive views on the national issues in the parliament. We should
not forget that democracy consists of free media, rule of law, transparency of all government

Habib Adnan
decisions, accountability of the government to the mass people and independent judiciary. Peaceful
co­existence, tolerance and mutual respect are the basic elements of democracy. And these are also
essential for ensuring a booming economy. Meanwhile the widening disparity between rich and poor
within the country is shattering the dream of the mass people. According to Bangladesh Economic
Association, 50 percent people are landless, while 6.2 percent families own 40 percent of the total
land in the country. It is also mentionable that corruption has been widespread in the country.
Combating corruption is necessary for stimulating economic growth and social development. Under
such circumstances a few steps may help us to get rid of these problems. Firstly, the government will
have to ensure a stable political situation. Secondly, experts have opined that information and
communications technology (ICT) will be a crucial sector for economic development in Bangladesh.
So Bangladesh has to focus on service sector through information and communications technolog.

Thirdly, remittance earning may increase if the government could send more skilled and trained
workers abroad. In that case the overseas employment ministry needs to be more active in
encouraging vocational training.
Finally, Bangladesh must create adequate jobs for its unemployed population to defeat poverty. Over
2 million labour forces join Bangladesh job market every year. New job opportunities should be
created for them so that they can also contribute to the economy. In the meantime government will
have to encourage local and foreign investments.

Habib Adnan
2. Banking sector for sustainable growth
Bangladesh's financial sector is dominated by the banking sector. The dominance of the banking
sector makes the financial sector vulnerable on the one hand, but highlights the crucial importance of
the sector in resource mobilisation and economic growth, on the other. The role of the banking
sector in accelerating growth is contingent upon the soundness and depth of the sector. In
Bangladesh the banking sector has travelled through a journey where the sector has experienced
several ups and downs. Reforms measures have been undertaken in an attempt to improve upon the
structural constraints of the sector. Such measures have been driven by objectives such as:
*increasing the capital adequacy of banks,
▪ streamlining guidelines for rescheduling of various types of loans,
▪ tightening provisions for non­performing loans,
▪ strengthening disclosure requirements and
▪ improving accounting system.
At present, key performance indicators of commercial banks in the country reflect the poor health of
banks. Most banks have not been able to show significant improvements on indictors such as :
▪ capital to risk weighted asset,
▪ non­performing loans,
▪ expenditure­income ratio
▪ return on asset,
▪ return on equity, liquid asset and excess liquidity despite several measures taken by the central
bank.

Since large financial irregularities in Sonali and BASIC banks, monitoring and inspection of
Bangladesh Bank have increased. The central bank has also appointed observers in 14 banks and
financial institutions, both state­owned and private to check further deterioration of these banks and
supervise closely to improve their governance.
♦Profitability, measured by return on asset and return on equity, has been negative for the
state­owned banks (SCBs).
♦For private commercial banks, though these indicators are positive, but very low.
♦In case of non­performing loans (NPL) similar performance is observed.
♦Though the share of NPL to total loans in SCBs has slightly declined in 2016 from 2015 the rate is
still as high as 21.82%. On the other hand, NPL in private commercial banks (PCBs) and foreign
commercial banks (FCBs) have increased. Because of high NPL, state­owned banks have to make
larger provisions. The government has to inject capital into these banks to keep them going. Clearly,
implementation of BASEL III requirements that call for capital adequacy ratio to be raised to 12.5%
of their risk­weighted assets by 2019 will be challenging for the SCBs. As of 2016 capital adequacy
ratio of SCBs was only 6.2%. The advance­deposit ratio has been little over 70% in November 2016
even though banks are allowed to lend up to 80% of their total deposit.
The incidences as hallmark group,Bangladesh bank heist have affected the effectiveness of various
measures taken to improve the governance of the banking sector. Flexible measures, including loan
rescheduling policy favouring powerful people and lack of punishment for fraudulence in banks
have worsened the situation.

Habib Adnan
♦In view of this there is a need for setting up a commission for the financial sector. The commission
will scrutinise the overall performance of the sector, assess the need of customers and the economy,
identify the current problems and emerging challenges and suggest concrete recommendations for
prudential banking to be implemented in the short to medium terms. Recently, there has been some
discussion at the policy level as regards setting up a 'Financial Sector Commission' for the
improvement of the sector. The broad terms of reference of the commission should be to critically
assess the problems and weaknesses of the banking industry in order to find whether there is any
disconnect between demand of the growing economy and the realities of a back dated financial
system that is failing to meet the emerging need. On the basis of a comprehensive scrutiny, the
commission will prepare guidelines and make recommendations as regards automation, risk
management, internal control, the role of various players in banks and other financial institutions. In
1998, a Commission on Banking and in 2002, a Banking Reform Committee were formed to make
recommendations for the improvement of the performance of banks. The banking sector has
achieved considerable success due to the reforms in the 1990s, 2000s and afterwards. However, the
sector will have to prepare for the next generation of global regulatory framework and meet
emerging clients' needs.

Habib Adnan
3. Prospects and challenges of Blue Economy in Bangladesh
The concept of Blue Economy has opened a new horizon for economic development of the coastal countries
through utilizing sea and marine resources at national and international level. The concept has become a
buzzword for sustainable development particularly in drafting the post­2015 development goals. Estimates
suggest some 30 million Bangladeshi directly depend on oceanic economic activities like fisheries and
commercial transportation. Coastal and Island developing countries have remained at the forefront of this
Blue Economy advocacy, recognizing that the oceans have a major role to play in humanity's future.

Blue Economy conceptualizes oceans as 'Development Spaces' Where spatial planning integrates
conservation, sustainable use, oil and mineral wealth extraction, bio­prospecting, sustainable energy
production and marine transport. Bangladesh's economy is sea borne to a good extent and with $130 billion
GDP the country's economy stands the 44th. Sovereign rights have been established on more than 118,000
sq km of maritime territory, 200 nautical miles (NM) of exclusive economic zone, and 354 NM of
continental shelf after positive verdicts in international courts. In the same way , the verdict with India
declared on 7 July 2014 also allowed Bangladesh's sovereign rights on all the living and mineral resources
of the Continental Shelf extending up to 354 nautical miles.
Fundamental principles of Blue Economy:

1. Optimizing the benefits received from the development of their marine environments eg fishery
agreements, bio prospecting, oil and mineral extraction.

2. Promoting national equity, including gender equality, and in particular the generation of inclusive growth
and decent jobs for all.

3. Having their concerns and interests properly reflected in the development of seas beyond national
jurisdiction, including the refinement of international governance mechanisms and their concerns as States
proximate to seabed development.

Bay of Bengal partnership:

The Bay of Bengal is the largest bay in the world that forms the north­eastern part of the Indian Ocean. The
foreign minister gave an idea of the collaboration that could take place and said "it must be based on certain
universal principles of engagement­mutual trust, respect, mutual benefits, and equitable sharing of benefits."

The role of marine resources are :

• poverty alleviation,
• acquiring autarky in food productions,
• protecting environmental balance,
• facing adverse impacts of climate change and
• other economic possibilities are unlimited. But with the potentialities and possibilities the challenges also
accompany. The following may be the challenges:
▪ Ensuring the sovereignty over the total coastal area.
▪ Maintaining the security over the economic area.
▪ Establishing marine friendly infrastructure for marine tourist.
▪ Protecting the area from the international smugglers and fish pirates.

Habib Adnan
▪ Maintaining investment friendly environment in the awarded area.
▪ Sustainable use of biodiversity.
▪ Maintaining marine and coastal ecosystems.
▪ Preserving mangrove and sea grass.
▪ Addressing climate change and managing carbon emission.
▪ Maintaining sea level rise and change in ecosystem and temperatures, from coral bleaching.
▪ Addressing ocean acidification and blue carbon.
▪ Keeping the sea area free from pollution and marine debris. And
▪ The growing human population, intensification of agriculture.

▪ Potentialities of Blue Economy in Bangladesh:

o Food security:
One billion people in developing countries depend on seafood for their primary source of protein.
Bangladesh can have it now.
o Fisheries:
Globally 350 million jobs are linked to marine fisheries, with 90 per cent of fishers living in developing
countries. The value of fish traded by developing countries is estimated at $25 billion, making it their largest
single trade item.
o Marine and coastal tourism:
Marine and coastal tourism is of key importance to many developing countries. Despite the global economic
crisis international tourism continued to grow. International tourist arrivals increased by 4 per cent despite
the global economic crisis and constituted 9 per cent of Global GDP (direct, indirect and induced impact).

o Harvesting power generation:

Researchers have recently completed the first ocean tests of a system that uses a so called artificial muscle to
generate power from the motion of a buoy riding up and down on the waves.
o Energy from waves:
A new device being developed by the UK­based Checkmate SeaEnergy could help tap an important portion
of this wave power. The device is a long, water­filled rubber tube closed at both ends. It will be capable of
generating one megawatt of power at about 12 cents (BDT 9.30) a kilowatt­hour, which is competitive with
electricity costs from other wave­power technologies.
o Shipping and port facilities:
Eighty per cent of global trade by volume, and over 70 per cent by value, is carried by sea and handled by
ports worldwide. For developing countries these percentages are typically higher. World seaborne trade
grew by 4 per cent in 2010 despite the economic recession.
o Biotechnology:
The global market for marine biotechnology products and processes is currently estimated at $2.8 billion by
2017.
o Submarine mining & exploration of oil and gas:
The world is gearing up for the exploration and exploitation of mineral deposits on and beneath the
seafloor.The primary assessment indicates few trillion gas in a few zones available within our premises.
o Port tax or levy:
At present, around 600 ships arrive in Bangladesh per year and anchor in the ports of Chittagong and
Mongla. With this new opening of Blue Economy, obviously, a huge number of ships will anchor in the
ports of Bangladesh, and earning from this sector is likely to increase tremendously.

Steps to be taken

Habib Adnan
♦The prime minister said steps have been taken to strengthen Bangladesh Navy and Coast Guards to resist
illegal use of animal and mineral resources in the exclusive economic zone as well as to keep international
sea line open and safeguard the free movement of commercial ships.
♦Coordination agency is to be established. Bangladesh Navy must be able to coordinate with other maritime
forces, which include coast guards and other government agencies charged with sovereignty, security, law
enforcement and constabulary functions at sea.
♦Given the current global and regional security environment comprehensive maritime security is required. It
includes Bangladesh ports, shipping, fishing, off­shore oil and gas facilities and shipping lanes in
Bangladesh water.
♦ Maritime space belonging to Bangladesh has to be secured from military and non­military threats.
♦Besides national efforts, regional or global cooperation is also necessary to ensure maritime security, in
particular against transnational non­maritime security, in particular against transnational non­military threats.

Blue economy is a relatively new jargon in Bangladesh but very common in global economy even in
Indonesia. This is a hope and means of development in the near future. Experts opine that Bangladesh can
rise to a middle income country by using this Blue Economy concept

Habib Adnan
4. Digital Bangladesh:achievement and trends
Digital Bangladesh is one of the nation's dreams, and so special emphasis is given on the application of
digital technologies to realise Vision 2021, which we commonly call Digital Bangladesh. By 2021, after 50
years of independence, our goal is to be a middle­income country with peace, prosperity and dignity. The
government of Bangladesh implemented a large number of projects relating to digital technologies and a
number of these are already underway. National ICT Policy­2009 was developed with a view to achieve
middle­income status of the nation by 2021 and developed status by 2041.
The World Bank classifies economies as low­income, middle­income and high­income groups. The Per
Capita Gross National Income (GNI) is the basis of the classification.
Low­income and middle­income countries are referred to as developing countries. Per Capita GNI is the
dollar value of a country's income in a year, divided by its population. As of July 1, 2014, low­income
economies are defined (in 2013) as those with GNI per capita of USD 1,045 or less (World Bank Atlas
Method) and middle­income economies with a GNI per capita above USD 1,045 (but less than USD 12,746).
(According to this classification of the Word Bank, Bangladesh should be very close to the middle­income
group now and our target should be the upper middle­income group by 2021.)
According to the National ICT Policy­2009, short­term, mid­term and long­term plans consisting of 306
action plans have been identified for the realisation of Vision 2021. Digital Bangladesh is an issue regarding
which there is no conflict or difference of opinion between the government and the people – all are working
hand­in­hand for its realisation.

Achievements
The slogan of “Digital Bangladesh” of the Government of Bangladesh has special significance for national
development. Digital Bangladesh with Vision 2021 is a big impetus for the use of digital technology in the
country. In spite of several bottlenecks and limitations, works are in progress for the realisation of Digital
Bangladesh. Several projects for digitalisation have been completed and a big number of projects are under
progress. The nation now, with over 12 crore mobile subscribers and 4.3 crore Internet subscribers, enjoys
the fruits of digitisation in numerous areas of activities. The ultimate objective is to make more and more
services available at the doorsteps of the people with increased digitalisation where possible.
A few examples of available digital services are: registration for admission to academic institutions,
publication of results of examinations, registration for jobs abroad, registration of pilgrimage, collection of
official forms, online submission of tax returns, online tendering, etc. Online banking systems have sped up
the financial activities of the country. SMS services for lodging complaints to police stations, online bill
payments for utility services, instant communication with persons working abroad, and e­passports are some
more examples.

Telemedicine services, videoconferencing for the treatment of diseases, and video conferencing for
administrative activities are examples of e­services available to rural Bangladesh. Setting up of nearly five
thousand Union Information Service Canters is a great boost for Digital Bangladesh, especially for rural
areas. Turning eight thousand village post offices and approximately five hundred upazila post offices into
e­centers and the introduction of mobile money order and postal cash cards are significant achievements in
the recent past. Union Information Centers, District Information Cells, National Information Cell are also
revolutionary additions.
There are many more developments in the line. Deputy Commissioner Offices in districts and UNO offices
in upazilas provide a large number of e­services to rural clients. Direct digital services eliminate middlemen
and save both time and money. Without such online services, our cities and towns would have turned into
difficult places to live in.

Habib Adnan
ICT Trends
A noteworthy trend in ICT is that numerous devices with new and updated technologies are rapidly
replacing older devices. New technologies for the near future include 3D printing, thumb printing, increased
smartphone storage, expanded use of IPv6, broadband services for consumers, cloud computing, quantum
computing, real­time speech transaction, nano­computers, wearable devices and networks, cyber security,
smart cities, Internet of Things (IoT), etc. New trends, techniques and devices will massively involve online
activities affecting our lifestyle. IoT interconnects all sensors and smart objects to interconnect in such a way
as to make them intelligent, programmable and capable of interacting with humans.

More and more smart machines and processes will be required for decision­making in business,
administration and education, and they will impact our lifestyle and the jobs of decision­makers
significantly. All types of jobs, including business and administration, will be more and more digitised. We
in Bangladesh will be forced to use and adapt new technologies and will require expertise in new
technologies like cloud computing, 3D printing, Big Data, gaming, animation, outsourcing, etc.

Internet services require radical improvement in terms of speed. Starting from e­commerce, the internet is
used for numerous applications and a higher speed for internet services is of great significance for rapid
economic growth. Most nations of the world now give special emphasis on the improvement of Internet
speeds. Average internet speed of users is above 10 Mbps in many countries (South Korea: 25.3 Mbps,
Hong Kong: 16.03 Mbps, Japan: 15 Mbps).
It is encouraging that the ICT Division of the Ministry of Posts, Telecommunications and
Information Technology has undertaken all­out efforts for the development of ICT human resources
through countrywide training. Some examples of these trainings include Learning and Earning, Training for
Mobile Apps, Leveraging ICT for Growth, Employment and Governance Project, and ITES Foundation
Skills Training. Special emphasis is given to ICT education up to high school. Also, the ICT policy is being
updated to face new trends. Ambitious projects like development of the National ICT Infrastructure for
Bangladesh Government (Info Sarkar), National Data Centre and IT Parks will bring about radical
improvements in e­services, e­governance and software development in the country.

Actions to be Taken

Bangladesh has an impressive track record of growth and development and aspires to achieve
middle­income status by its 50th birthday. The country needs faster growth which depends on increased
investments, development of human capital and enhanced productivity. We have mentionable progress in
ICT considering our previous condition. But keeping in mind our current rank and status in comparison
with other nations and the rapid development of ICT, the journey ahead for Digital Bangladesh will not be
smooth.
Each new technology requires new skills and training. Human capital is a key factor to develop and adapt
innovative ideas and technologies. Quality ICT education as well as ICT­based education from the primary
to tertiary level, along with the orientation of general mass in ICT should receive top priority.
Elimination of the digital divide between rural and urban areas and between Bangladesh and other nations is
essential in order to be at par with middle­income nations. A peaceful political environment is essential for
intellectual, social, cultural and economic development. Time and time again, the nation's dream for Vision
2021 and Digital Bangladesh has been shattered by the turbulent political situation. The country dearly
needs a tranquil political environment for the development of all sectors, including ICT, and for the
realisation of Vision 2021 and Digital Bangladesh.

Habib Adnan
5. Banking Sector and Economic Growth
(Strength and weakness policy and recommendations)

Bangladesh's financial sector is dominated by the banking sector. The dominance of the banking sector
makes the financial sector vulnerable on the one hand, but highlights the crucial importance of the sector in
resource mobilisation and economic growth, on the other. The role of the banking sector in accelerating
growth is contingent upon the soundness and depth of the sector. Banking sector growth due to:

♦increasing the capital adequacy of banks,

♦ streamlining guidelines for rescheduling of various types of loans,
♦ tightening provisions for non­performing loans,
♦strengthening disclosure requirements and
♦improving accounting system.

These have undoubtedly improved the soundness of the sector over the years. However, the
performance of the banking sector in the recent past has not been satisfactory. At present, key performance
indicators of commercial banks in the country reflect the poor health of banks. Most banks have not been
able to show significant improvements on indictors such as:

♦ capital to risk weighted asset,

♦non­performing loans,
♦ expenditure­income ratio,
♦return on asset,
♦ return on equity,

♦ liquid asset and

♦ excess liquidity despite several measures taken by the central bank.

Since large financial irregularities in Sonali and BASIC banks, monitoring and inspection of Bangladesh
Bank have increased.
♦ The central bank has also appointed observers in 14 banks and financial institutions, both state­owned and
private to check further deterioration of these banks and supervise closely to improve their governance.
♦Profitability, measured by return on asset and return on equity, has been negative for the state­owned banks
(SCBs).
♦For private commercial banks, though these indicators are positive, but very low. In case of
non­performing loans (NPL) similar performance is observed.
♦Though the share of NPL to total loans in SCBs has slightly declined in September 2015 from June 2014,
the rate is still as high as 21.82%. On the other hand, NPL in private commercial banks (PCBs) and foreign
commercial banks (FCBs) have increased. Because of high NPL, state­owned banks have to make larger
provisions.

♦The government has to inject capital into these banks to keep them going. Clearly, implementation of
BASEL III requirements that call for capital adequacy ratio to be raised to 12.5% of their risk­weighted
assets by 2019 will be challenging for the SCBs. As of September 2015, capital adequacy ratio of SCBs was
only 6.2%.

Habib Adnan
Lower profits in SCBs are mainly due to :

♦bad assets, inefficiency and political interference.

♦In case of PCBs, stricter compliance requirements by the central bank and low appetite for credit by the
private sector due to sluggish business environment are the major reasons for lower profits.
.♦The advance­deposit ratio has been little over 70% in November 2015 even though banks are allowed to
lend up to 80% of their total deposit. Despite these Concerned authorities have been slow to take action
against the identified people for embezzlement of money from banks.
♦ The Hallmark group has not returned any money to the bank till now.
♦More frustrating is that bank authorities do not even expect to get back the misappropriated money.
♦ Flexible measures, including loan
♦ rescheduling policy favouring powerful people and
♦ lack of punishment for fraudulence in banks have worsened the situation.
In view of this there is a need for setting up a commission for the financial sector.
♦The commission will scrutinise the overall performance of the sector,
♦assess the need of customers and the economy,
♦identify the current problems and emerging challenges and
♦suggest concrete recommendations for prudential banking to be implemented in the short to medium terms.
Recently, there has been some discussion at the policy level as regards setting up a 'Financial Sector
Commission' for the improvement of the sector. . The broad terms of reference of the commission should be
to critically assess the problems and weaknesses of the banking industry in order to find whether there is any
disconnect between demand of the growing economy and the realities of a back dated financial system that
is failing to meet the emerging need. On the basis of a comprehensive scrutiny, the commission will prepare
guidelines and make recommendations as regards automation, risk management, internal control, the role of
various players in banks and other financial institutions. In 1998, a Commission on Banking and in 2002, a
Banking Reform Committee were formed to make recommendations for the improvement of the
performance of banks. The banking sector has achieved considerable success due to the reforms in the
1990s, 2000s and afterwards.

Habib Adnan
6.Financial Inclusion
BANGLADESH has made a broad social commitment for inclusive, equitable and environmentally
sustainable socioeconomic growth 'leaving no­one behind', as espoused in the new sustainable development
goals. The government has accordingly led pro actively with the country's progress in sustainable
development, with policy thrusts on massive digitisation to support financial inclusion and inclusive growth,
alongside mitigation and adaptation response to climate change threats.

Despite having world economic shock in the recent past, Bangladesh has maintained a stable performance
on macroeconomic indicators by registering a growth rate of more than 6 percent for the last few years.
Bangladesh has targeted the new trajectory of 7 percent plus growth from the current fiscal year. Major
macroeconomic indicators such as inflation, exports, remittances and fiscal position remained benign over
the last decade. Along with sound macroeconomic fundamentals, performance on the social indicators has
been quite commendable, particularly in:

* poverty alleviation,
* education,
*income and gender equality,
*adaptation to climate change,
*reduction of infant and maternal mortality
*and women's empowerment. With steady economic and social performance, Bangladesh has proudly
joined the (lower) middle income group. The country is proceeding steadfastly to attain the upper­middle
income status in the coming decade or so. With all these policies in mind, to reap the benefit of a digitised
economy, Bangladesh has introduced:
*developed and implemented broad­based networking,
*Union Information
*and Service Centre, Enterprise Resource Planning,
*Open Data Initiatives,
* Enterprise Data Warehouse,
*highly interactive website for government entities, e­tendering, e­education, e­learning and various apps to
provide optimum opportunities to citizens. Bangladesh Bank, the country's central bank, is supporting the
government's efforts with its own initiatives by promoting financial inclusion and environmentally
sustainable financing. In recent years, the core banking solution for the central bank and commercial banks,
Credit Information Bureau's online services, electronic fund transfer, cheque imaging and truncation based
automated clearing, and national payment switch for interoperability of all plastic card­based services have
been set up. Mobile financial services have become the key tool of financial inclusion initiatives. Moreover,
in most cases, money is being channelled from urban to rural areas, helping the rural economy. After
shaping up all these retail channels, Bangladesh has recently launched real­time gross settlement or RTGS
for high value payment. Under the present system, high­value interbank payments are done on the same day.
But under RTGS, interbank high­value claims and obligations will be settled instantly.
The cumulative outcome of these steps is quick service and skill development in the financial sector, which
has now been into a single thread. Moreover, transparency in the financial transaction has also been
increasing steadily. A new dimension has also been added to the supervisory framework to combat
corruption. All these concerted efforts to digitise the country have ensured rapid, transparent, decentralised
and qualitative customer services.

For the last few years, Bangladesh has been trying to ensure sustainable growth through alleviating poverty

Habib Adnan
by reaching out to a large number of people at the bottom of the pyramid using different development tools.
In connection to these broad objectives, Bangladesh Bank has adopted diverse initiatives to accelerate the
pace of financial inclusion through formulating and implementing inclusive policy measures. Bangladesh
Bank has issued different circulars regarding the opening of no­frills accounts for underserved segments
such as farmers, freedom fighters, government subsidy­holders, city corporation cleaners, garment workers,
physically challenged people, small life insurance holders, natural disaster affected people, students and
street children after completing simplified KYC formalities, agent banking, and disbursement of loans under
refinance schemes.

To keep pace with those visions, need­based regulations have been formulated for agriculture, SME,
sustainable banking and other environment friendly and productive sectors.

The unique opportunity of opening no­frills bank accounts is actively serving as a channel to disburse safety
net programmes funds or other allowances from government, collect utility bills, provide salaries, collect
remittances, make payments on behalf of customers, and disburse adequate credit including easy agricultural
loans from refinancing schemes. These accounts also encourage the users to enter the legal financial system
and develop a habit of saving.

In Bangladesh a great many of the "newly­banked" are women, low­income families, rural people and
members of marginalised groups such as religious and ethnic minorities. Bangladesh, however, has become
a role model for financial inclusion, thanks to the regulatory moves by its central bank for guiding the banks,
both private and public, in embracing financial innovative inclusive products even during the challenging
time of global financial crisis.

♦Ten­taka (12 cents) bank accounts for millions of farmers and social safety net beneficiaries,
♦ bank­led mobile banking, school banking, SME loans for women entrepreneurs and
green banking are some of the inclusive financial products

Habib Adnan
7. Climate Change and Bangladesh
Climate change, already set in Bangladesh, is expected to wreak havoc on the country in the not­too­distant
future. Bangladesh is projected to be 0.5 to 0.20 C warmer than today by the year 2030. The mean summer
temperature then will be 27.50 C and it will be relatively higher during the monsoon than during summer,
experts say. Winter is the driest season. At the time the mean winter rainfall will amount to about 64mm with
a variability of around 53 per cent. By 2030, the best estimate projection is for monsoon rainfall to increase
by 10 to 15 per cent and winter rainfall by 5 to 10 per cent.
Experts of the Met Office have already recorded a rise in average temperature in Bangladesh in the
September­October period. The average temperature this year has been 1.0 to 2.0 degrees higher than the
normal of 31.5 degrees Celsius during this period. This coincides with the rise in global temperature by 2.0
degrees Celsius in the last 136 years. More disturbing is the fact that an ample amount of rainfall, recorded
at 9,094 mm, throughout September was thought to have brought the mercury down. On September 11, the
highest maximum temperature of 35.3 degrees Celsius was recorded in Chuadanga district. The trend
continued even in early October, with the average temperature remaining higher than the normal
temperature.

At stake will be food security in Bangladesh if climate change strikes Bangladesh with full ferocity due to
changing temperatures, behaviour of rainfall and flow of winds. The country is one of the most densely
populated nations on earth. It has more people to feed than geographically massive Russia. That is exactly
why environmentalists and experts have called for integrating natural resource management, conservation,
and climate change into national planning and budgeting to ensure sustainable development in Bangladesh.
They also underscored the need for improving environmental governance alongside launching sensitisation
campaign among policymakers and mass people so that best practices and success stories can be replicated
and scaled up across the country.

But where is the finance required to face the climate change challenges? Will Bangladesh seek loans from
the global lenders like the World Bank or the Asian Development Bank or other lenders? Or will Bangladesh
use its already reputed diplomatic clout to get generous grants to finance different projects to mitigate and
adapt to climate change? The government has reportedly invested more than $10 billion to make the country
less vulnerable to natural disasters. It has started taking measures to dredge major rivers, increase green belts
in coastal areas and fortify embankments to cope with the rising sea level, building emergency cyclone
shelters, and developing world class community­based early warning system which have significantly
reduced loss of life and livelihoods and property damages caused by extreme weather events.

To supplement its national programmes, Bangladesh has successfully aligned its development partners to
address the climate change challenge and established an innovative financing mechanism 'Bangladesh
Climate Change Resilience Fund' (BBCRF). But then Bangladesh needs to increase its transparency and
proper use of foreign grants. This was once highlighted by Saber Hossain Chowdhury, chairman of all­party
parliamentary group on climate change.

Transparency and accountability in spending climate funds would help the country attract foreign funds in
the future for combating the problem of climate change, said Saber. An audit of the funds spent so far is also
required to ascertain the value of money and prevention of resource waste in various ways including
corruption, he said while speaking at a discussion. It is now time for Bangladesh to move forward with
suitable mechanisms to realise foreign climate fund as there has been no progress in receiving grant from
donors to address climate change impacts.

Habib Adnan
A study by the TIB has urged the government and the authorities concerned to immediately address
governance challenges in climate finance aimed at reducing risks of corruption at different stages of project
formulation, selection and implementation and fund disbursement. The study was titled 'Climate Finance in
Bangladesh: Governance Challenges and Way Forward'. This report was prepared on the basis of findings
generated through monitoring of fund flow, tracking of projects one from Bangladesh Climate Change Trust
Fund (BCCTF) and another BCCRF. It also identified governance challenges in the approvals of projects
submitted by NGOs. The study revealed a number of irregularities, nepotism and incidents of
corruption at different stages of project formulation, NGO selection and implementation. In fact,
Bangladesh has to put its house in order before approaching industrialised countries for grants to finance
projects to minimise fallout of climate change.

These are the following:

• There must be the highest disclosure of projects related information,

• Inclusion of affected people at every stage of project formulation and implementation
• Establishment of a complaint mechanism and quick disposal of such complaints.
• For NGO implemented projects, there should be a watchdog body like an integrated national platform in
addition to existing selection and approval committee,
• Full freedom to Palli Karma Shahayok Foundation (PKSF) in selecting NGOs, on the basis of their
competency, quick disposal of funds,
• Zero political pressure, and
• Exemplary punishment in case of any corrupt practice.

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8.Advantage and Disadvantage of FDI
Bangladesh offers generous opportunities for private investment under its liberalised Industrial Policy and
export­oriented, private sector­led growth strategy. All but four sectors, i.e. (i) arms and ammunition and
other defense equipment and machinery, (ii) forest plantation and mechanised extraction within the bounds
of reserved forests, (iii) production of nuclear energy, and (iv) security printing and mining, are open for
private investment in Bangladesh.
The FDI strengthens ties with developed countries that may yield cost advantages in the form of advanced
technology transfers and resulting positive externalities. These reasons also increase the effort of Bangladesh
in trying to make the country an attractive destination for FDI which in itself has several advantages. The
result has validated a reinforced incentive to educate and train the population to make Bangladesh’s labour
force more competitive through higher national education expenditure.
As a result, potential investors from local and foreign countries have grown substantially in sectors like
manufacturing, telecommunication, energy and gas sectors in addition to other sectors or sub­sectors being
very promising for potential private investment.
The FDI is capital provided by foreign investor, either directly or through other related enterprises, where the
foreign investor is directly involved in the management of the enterprise. When a country has a situation of
low cost of production and stable political situation that country is generally the best choice for FDI. Until
the 1980s, most developing countries viewed FDI with great weariness as it has also some bad sides
because it exploits the cheap labour of our country. Popular belief was that we have a huge amount of active
and strong manpower. That’s why they come to our country in the name of FDI but in return they actually
exploit us. Besides, they use our natural resources recklessly. So, our natural resources like gas and other
things are going to be exhausted. They earn a lot of profit every year and take away to their country but they
do not reinvest it in our country. Another most important thing is influencing power in government decision.
Since they are giant companies, they have a powerful influential capacity in government decision. So there is
a possibility of
losing the sovereignty of the country.
Actually, disadvantage is a matter of fact. If there is proper government control over the company, it
becomes advantages most of the times. In recent years, however FDI restrictions have been significantly
reduced. Most countries offer incentives to attract FDI, such as tax concessions, tax holidays, accelerated
depreciation on plants and machinery, export subsidies and import entitlements etc. As a developing
country, Bangladesh needs FDI for its ongoing development process. So, special zones have been set up and
lucrative incentive packages have been provided to attract FDI. Export from any country give up a boost in
any country for which it can meet up its import expenses.
Moreover, there are a lot of advantages of FDI such as huge numbers of unemployed people are employed
and their standard of living is increased due to the increase of income level of people. Their purchasing
power is increased and the business cycle moves at a good speed. Other sides like roads, communication
system, transportation facilities, and education are also improved at a greater speed. Competition is
increased in the local market with the local companies. That’s why price of the product starts to fall. The
GDP is increased due to increased production in the economy as we can use our unutilized resources by FDI.
Bangladesh is not self­sufficient in energy sector. There is already growing interest among international oil
companies in contracts for exploration in this field. The gas sector has by now drawn large amounts of
foreign investment. It has to be assumed that FDI is increasingly becoming a significant source for financing
domestic investment in Bangladesh.

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 (i) Geographic location of the country is ideal for global trades with very convenient access to international
sea and air routes.
(ii) Bangladesh is endowed with abundant supply of natural gas, water and its soil is very fertile.
(iii) Bangladesh has a hard working and generally intelligent population of approximately 170 million.
There is an abundant supply of disciplined, easily trainable, and low­cost workforce suitable for any
labour­intensive industry.
(iv) Bangladesh is a liberal democracy and mostly a one race and one religion country. The population of
this country irrespective of race or religion have been living in total harmony and understanding for
thousands of years.
(v) Although Bengali is the official language, but English is generally used as second language. Majority of
even moderately educated population can read, write and speak in English.
(vi) Because of low per capita income of around US$1400, present domestic consumption is not significant.
However, it should always be considered that there exists a middle class with some purchasing power. As
economic growth picks up, the purchasing power will also grow substantially. And in a country of 170
million people, even a small middle class may constitute a significant market.
(vii) Most Bangladeshi products enjoy complete duty and quota free access to EU, Japan, Australia and most
of the developed countries.

Habib Adnan
9. Default Loan
The total value of defaulted loans rose by almost one­fifth last year.

Defaulted loans rose to Tk74,303 crore in 2017 from Tk62,172 crore in 2016– a year­on­year rise of
Tk12,131 crore or 19.5%. As a proportion of the total outstanding loans, defaulted loans accounted
for 9.31% in 2017 and 9.23% in 2016.

According to the latest report of Bangladesh Bank, as of December last year, the commercial banks
disbursed Tk798,195 crore as loans. Of the amount, default loans amounted to Tk74,303 crore or
9.31%.

According to Finance Minister, “A total of 91 banks and financial institutions gave Tk 6,0 6, 503
crore loan to 8,791 individuals and organisations,”

Of them, the number of loan defaulters is 1,956, At least Tk 10 crore was given to each 8791
individual or organisation in the last 10 years. Top Loan defaulters are: Hall Mark Fashion Limited,
Monno Fabrics Ltd, Keya Yarn Mills, Bismillah Towels, Wall­Mart Fashion Ltd, One Denim Mills
Ltd, Al­Amin Bread and Biscuits Ltd, Biswas Textile Ltd, Meghna Vegetable Oil Industries Ltd, One
Spinning Mills, Asian Food Trading and Company, Moon Knitwear, Quantum Power Systems Ltd,
Azad Trading, North South Spinning Mills Ltd and Dandy Dying.

10. Default Loan: Cause and Effect

Billions of taka in unrecovered bank loans accumulate in the hands of a small number of
businessmen. Their political clout prevents the banks, even the central bank, from taking action
against them. If things continue in this manner, Bangladesh is bound to face a severe recession,
similar to the financial crash faced by the US a few years ago.

Bangladesh’s banking sector is in dire straits. Any progress that had been 6in
the two decades following the financial reforms of the early nineties, has dwindled to near nil. The
central Bangladesh Bank authorities are often powerless in face of political influence, rendering the
banking sector fragile. For example, even though the scams of the state­run Sonali Bank and BASIC
Bank had been exposed in the banking sector and the media, there was inordinate delay in
Bangladesh Bank’s action due to political intervention. Such interference in the banking system has
led to a steady rise in default loans and capital deficit.
There is a general perception that the central bank is unable to probe into these irregularities due to
political intervention.
The central bank’s policies are also being blamed for concealing the true picture of the banking
sector. It prevents proper investigations into the loan frauds and other irregularities of the
government and private banks.
Bangladesh Bank issued a special circular in 2015, allowing loans from Taka 500 crore to Taka 1000
crore to be rescheduled for repayment over a 12­year period with just a 1 or 2 percent down
payment. This was a discriminatory step which simply rewarded the dishonest borrowers.
Meanwhile default loans are on a steady rise due to the persistent failure of repayment and this is
having a negative impact on deposit and interest rates. Even five years ago, interest on deposits was

Habib Adnan
around 12 percent. It has now come down to 5 percent, which is even less than inflation rate. As a
result, value of depositor’s money are decreasing in real term. Retired persons who depend on bank
interest for their income are in difficulty, while the defaulters live lives of luxury.
The agricultural credit banks were set up for the development of the farm sector. But these banks
made little impact on the rural economy. Taking advantage of their inefficiency and corruption, the
NGOs have occupied a prominent position in the rural areas. The role of banks and financial
institutions is shirking in the rural areas.
The impact of loan default and writing off of loans falls on the depositors. Currently the average rate
of interest of SME loans is 14 per cent. This rate is not helpful in generating employment. Small
agricultural farms are not developing due to high interest rate. Bangladesh Bank has adopted
various policies, such as, loan re­scheduling facility, introduction of CIB report, waiver of interest
etc. to get rid of this excessive volume of NPL
Some recommendations:
(i) To ensure that the bank credit is used for the purpose it has been sanctioned for,
(ii) to keep a close watch in the borrower's activity and particularly to see if the project has been
started in time,
(iii) to evaluate the performance of the unit in terms of production sales, profit etc, and also to see if
the borrower is in line with the original plan,
(iv) to appreciate the management capability
(v) to get information relating to external factors like economic situation, government policies
(vi) The risk classification/grading system shall be exercised based on sector specific policy, which
will guide the bank how much risk banks are taking on their shoulder.
(vii) The loan documentation plays a major role for safeguarding the bank interest. Bank should be
certain policy in regards to loan documentation.
(viii) To work out syndicated financing for large loans facility and to diminish the detrimental
antagonism among banks in Bangladesh;
(ix) Bangladesh Bank should increase the supervisory power and monitoring functions to control the
banks that engage in malpractice;
(x) Bankers should apply the human skill, diligence, prudence while delivering credit.
(xi) To increase the ethical standards of the bank officials from all bends to create the credit
environment trustworthy and vibrant;,
(xii) To increase the explicit techniques to differentiate the intractable defaulters from
the indisputable ones.

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11. Qatar Crisis
Qatar has had differences with other Arab governments on a number of issues: it broadcasts Al
Jazeera; it is accused of maintaining good relations with Iran; and it has supported the Muslim
Brotherhood in the past. Qatar is a close ally of the United States, hosting the largest American base
in the Middle East, Al Udeid Air Base.
The countries withdrawing diplomatic relations accuse Qatar of supporting terrorism, of interfering
with their internal affairs and of maintaining relations with Iran. Qatar denies allegations that it
supported terrorism, and pointed out that it has been contributing to the U.S.­led fight against ISIL.
The countries have also stressed the measures are in response to Qatar’s violation of an agreement in
2014 to not undermine the “interests, security and stability” of other Gulf Cooperation
Council (GCC) countries.
Issues of contention
Qatar maintains relatively good relations with Iran. In 2006, Qatar was the only UN Security
Council member to vote against United Nations Security Council Resolution 1696, which was
calling on Iran to halt its nuclear enrichment program (which for Saudi Arabia is a very serious issue
of national security).[30] Qatar and Iran share ownership of the South Pars/North Dome
Gas­Condensate field,[31] by far the world's largest natural gas field, with
significant geostrategic influence.[32] In April 2017, after a 12­year freeze, Qatar lifted a
self­imposed ban on developing the gas field with Iran,[33] which would require cooperation
between the two countries Saudi Arabia withdrew its ambassador to Doha from 2002 to 2008 to try to
pressure Qatar to curb its individualistic tendencies. This approach broadly failed.
The crisis has turned into a proxy battle between partners and adversaries of Iran[39] and UAE
politicians claim that "Qatar invests billions of dollars in the U.S. and Europe and then recycles the
profits to support Hamas, the Muslim Brotherhood and groups linked to al Qaeda. Qatar hosts the
American military base from which the U.S. directs its regional war against extremism, yet it also
owns media networks responsible for inciting many of the same extremists"
Qatar also used its contacts to help negotiate peaceful exchanges of hostages for the safe evacuation
of civilians from areas affected by the Syrian Civil War. However, Qatar also sent its forces to fight
against alleged Iranian­backed militias in the current Yemeni Civil War and has supported rebels
fighting the Iranian­allied government of Bashar al­Assad in the Syrian Civil War. According
to Al­Jazeera, the August 2013 Rabaa massacre of more than 1,100 Muslim Brotherhood supporters
in Cairo.
Qwatar has supported the Muslim Brotherhood in the past. Saudi Arabia and other Gulf monarchies
see the Muslim Brotherhood as a threat, as it ideologically opposes hereditary rule. The government
of Egypt has long viewed the Muslim Brotherhood as "enemy number one". In 2011, during
the Arab Spring, Qatar supported the Egyptian protesters agitating for change, as well as the Muslim
Brotherhood. By contrast, Saudi Arabia supported Hosni Mubarak and currently supports Abdel
Fattah el­Sisi
Qatar has been accused of sponsoring terrorism. Some countries have faulted Qatar for funding
rebel groups in Syria, including al­Qaeda's affiliate in Syria, the al­Nusra Front Qatar has hosted
officials from the Afghan Taliban and Hamas. Qatar defends this move by saying it is trying to act as
an intermediary in regional conflicts.
The Qatari al­Jazeera is a media organization owned by the Emir of Qatar. It is the most popular
network in the Middle East, and its news network has criticized foreign governments involved in the
dispute and been accused of supporting Qatari interests. As well, it is Islamist and has been criticized
for that as well. The Saudi­led coalition against Qatar has demanded that al­Jazeera be shut down. In

Habib Adnan
2002, Saudi Arabia removed their ambassador from Qatar over Al Jazeera's alleged critical stance
towards Saudi Arabia. Diplomatic relations were re­established in 2008, after assurances that Al
Jazeera would limit its coverage of Saudi Arabia. In March 2014, Bahrain, Saudi Arabia, and the
United Arab Emirates removed their ambassadors from Qatar, citing interference with their internal
affairs, but the situations were eventually defused after Qatar forced Brotherhood members to leave
the country eight months later.
Impact on Qatar
Food
Nearly 80 percent of Qatar's food requirements come from Gulf Arab neighbors, with only 1 percent
being produced domestically and even imports from outside the Gulf states usually crossing the now
closed land border with Saudi Arabia. Immediately after the cutting of relations, local reports
indicated residents swarmed grocery stores in hopes of stockpiling food. Many food delivery trucks
were idled along the Saudi­Qatari border. On 8 June 2017 Qatari Foreign Minister
Sheikh Mohammed bin Abdulrahman al­Thanisaid, "We're not worried about a food shortage, we're
fine. We can live forever like this, we are well prepared." Qatar has been in talks with both Turkey
and Iran to secure supply of water and food. On 11 June 2017 Iran sent four cargo planes with fruit
and vegetables and promised to continue the supply. Turkey has pledged food and water supplies to
go along with their troop deployment at their Turkish military base in Qatar.
Air travel
Large airlines based in these countries, including Emirates, suspended flight service to Qatar. Gulf
Air,EgyptAir, FlyDubai, Air Arabia, Saudi Arabian Airlines, Etihad Airways and Royal Air
Maroc suspended their flights to and from Qatar.Bahrain,Egypt, Saudi Arabia, and the United Arab
Emirates are also banning overflights by aircraft registered in Qatar (A7). Instead Qatar has rerouted
flights to Africa and Europe via Iran. Qatar Airways in response also suspended their flight
operations to Saudi Arabia, the UAE, Egypt, and Bahrain.
Shipping
The United Arab Emirates banned Qatar­flagged ships from calling at Fujairah. It also banned
vessels from Qatar from the port and vessels at the port from sailing directly to Qatar. Similar
restrictions were put in place at Jebel Ali. Bahrain, Egypt and Saudi Arabia also banned
Qatar­flagged ships from their ports.
Media ban
Hamad Saif al­Shamsi, the Attorney­General of the United Arab Emiratesannounced on 7 June that
publishing expressions of sympathy towards Qatar through social media, or any type of written,
visual or verbal form is considered illegal under UAE's Federal Penal Code and the Federal law on
Combating Information Technology Crimes. Violators of this offense face between 3 to 15 years
imprisonment, a fine of up to 500,000 emirati dirhams($136,000) or both.Bahrain also issued a
similar statement with penaltyup to 5 years imprisonment and a fine. Saudi Arabia, Egypt, Bahrain,
and the UAE all blocked access to Qatari news agencies, including one of the most popular Arab
news outlets, Qatar­based Al Jazeera.
Finances
Qatar's stock market dropped 7.3% on the first day of the crisis, and reached a 9.7% drop by 8 June.
As per S&P Global Ratings, banks in Qatar are strong enough to survive pull out of all Gulf country
deposits.
Energy
Qatar is a global leader in liquefied natural gas production. Despite the severing of ties, Qatari
natural gas continues to flow to the UAE and Oman through Abu Dhabi based Dolphin
Energy's pipeline. The pipeline meets about 30­40 percent of UAE's energy needs. Shipping

Habib Adnan
constraints from the crisis have also rerouted multiple shipments of oil and gas to and from the Gulf,
which has caused reverberations in many local energy markets. On 8 June 2017 United Kingdom,
with nearly a third of all imported gas arriving from Qatar, gas futures spiked nearly 4 percent. A
secondary effect of the dispute has been on worldwide supplies of helium, which is often extracted
from natural gas. Qatar is the world's second largest supplier of helium (the U.S. ranks first). On June
22, 2017, Saudi Arabia, the United Arab Emirates (UAE), Egypt and Bahrain issued Qatar a list of
13 demands through Kuwait, which is acting as a mediator, that Qatar should agree in full within 10
days, which expired on July 2, 2017. According to reports on June 23, these demands included:
♦Close Al­Jazeera and its affiliate stations and close other news outlets that Qatar funds, directly and
indirectly, including Arabi21, Rassd, Al­Araby Al­Jadeed and Middle East Eye.
♦Close the Turkish military base in Qatar, and terminate the Turkish military presence and any joint
military cooperation with Turkey inside Qatar.
♦Reduce diplomatic relations with Iran. Only trade and commerce with Iran that complies with US
and international sanctions will be permitted.
♦Expel any members of the Islamic Revolutionary Guard Corps (IRGC) and cut off military and
intelligence cooperation with Iran.
♦Surrender all designated terrorists in Qatar, and stop all means of funding for individuals, groups or
organisations that have been designated as terrorists
♦End interference in the four countries' domestic and foreign affairs and having contact with their
political opposition
♦Stop granting citizenship to wanted nationals from Saudi Arabia, the United Arab Emirates, Egypt
and Bahrain.
♦Revoke Qatari citizenship for existing nationals where such citizenship violates those countries'
laws.
♦Payment of reparations for years of alleged wrongs Monitoring for 10 years itself with the other
Gulf and Arab countries militarily, politically, socially and economically, as well as on economic
matters, in line with an agreement reached with Saudi Arabia. in 2014. On 5 July, Egypt, Saudi
Arabia, United Arab Emirates and Bahrain foreign ministers met in Cairo after receiving response
from Qatar to their list of demands. The meeting aimed to resolve the dispute ended in a stalemate
when Saudi foreign minister Adel al­Jubeir said that political and economic boycott will
remain on Qatar until it changes its policies.[233] Also on the same day, the Saudi­led bloc
said it no longer insisting it to comply with its 13 specific demands they tabled last month.
Instead, it asked Qatar to accept six broad principles, which includes commitments to combat
terrorism, extremism, to end acts of provocation, and incitement. But, by 30 July, the 13
demands were reinstated.

Habib Adnan
12. Qatar Crisis and impact on Bangaldesh
The Qatar­Gulf conflict is no longer an “in­house” issue. Countries around the world are marking
out their positions.
Bangladesh hasn’t announced an official stance on the crisis but the tensions have rocked the South
Asian state. Bangladesh heavily depends on remittances from its four million expats all over the Gulf
region; about 300,000 are currently in Qatar and around 3 million in Saudi Arabia. Currently, 29
percent of Bangladeshi remittances come from Saudi Arabia, but a major opportunity has been
created in Qatar’s labor market due to the 2022 FIFA World Cup. The mega event demands massive
amounts of construction work, which is being done by migrants from different nations, including
Bangladesh. Qatar said that the embargo has had no impact on the daily life of residents, but some
Bangladeshi expats say otherwise. Food price are rising and availability is not guaranteed. Some
Bangladeshi workers have also said that their authorities told them to return home, as their jobs are
now uncertain.
Transit between Qatar and Bangladesh is more difficult now. As a result of the air embargo, Saudi
Arabian Airlines, Emirates, Etihad, Air Arabia, Fly Dubai and Gulf Air suspended all their
flights from Dhaka to Doha for an indefinite period. However, Qatar Airlines and Biman Bangladesh
Airlines flights between Dhaka­Doha continue. Bangladesh has historically kept good relations with
Qatar and Saudi Arabia. Qatar has good reserve of natural gas and it had a contract to supply LNG to
Bangladesh. Doha also has very good diplomatic tie with Dhaka, which has previously built
schools, orphanages, and training centers in Bangladesh. In May, Qatar’s prime minister sent an
invitation for the Bangladesh prime minister to visit Doha and expressed interest in helping solve the
Rohingya issue.
On the other hand, Saudi Arabia has long had significant relation with Bangladesh. Bangladesh sent
solders to Saudi Arabia during the first Gulf War.
issues when formulating its response – laborers abroad, economic cooperation, and fuel imports
from the Middle East.

Habib Adnan
13. Rohingya Crisis
Renewed violence, including reported rape, murder, and arson in 2016 and 2017, has displaced
significant Rohingya communities in western Myanmar. Their plight has been compounded by
meager responses from many of Myanmar’s neighbors, which have been slow to accommodate the
surge of refugees.
Who are the Rohingya?
The Rohingya are an ethnic Muslim minority who practice a Sufi­inflected variation of Sunni Islam.
A majority of the estimated one million Rohingya in Myanmar reside in Rakhine State, where they
account for nearly a third of the population. They differ from Myanmar’s dominant Buddhist groups
ethnically, linguistically, and religiously. The Rohingya trace their origins in the region to the
fifteenth century, when thousands of Muslims came to the former Arakan Kingdom. Many others
arrived during the nineteenth and early twentieth centuries, when Rakhine was governed by colonial
rule as part of British India. Since independence in 1948, successive governments in Burma,
renamed Myanmar in 1989, have refuted the Rohingya’s historical claims and denied the group
recognition as one of the country’s 135 ethnic groups. The Rohingya are largely considered illegal
immigrants from Bangladesh, even though many trace their roots in Myanmar back centuries.
Neither the central government nor Rakhine’s dominant ethnic Buddhist group, known as the
Rakhine, recognize the label “Rohingya,” a self­identifying term that surfaced in the 1950s, which
experts say provides the group with a collective political identity. Though the etymological root of
the word is disputed, the most widely accepted theory is that Rohang derives from the word
“Arakan” in the Rohingya dialect and ga or gya means “from.” By identifying as Rohingya, the
ethnic Muslim group asserts its ties to land that was once under the control of the Arakan Kingdom,
according to Chris Lewa, director of the Arakan Project, a Thailand­based advocacy group.

What is the legal status of the Rohingya?

The government refuses to grant the Rohingya citizenship, and as a result the vast majority of the
group’s members have no legal documentation, effectively making them stateless. Myanmar’s 1948
citizenship law was already exclusionary, and the military junta, which seized power in 1962,
introduced a law twenty years later stripping the Rohingya of access to full citizenship. Until
recently, the Rohingya had been able to register as temporary residents with identification cards,
known as white cards, that the junta began issuing to many Muslims, both Rohingya and
non­Rohingya, in the 1990s. The white cards conferred limited rights but were not recognized as
proof of citizenship. Still, Lewa says that they did provide some recognition of temporary stay for
the Rohingya in Myanmar.
In 2014 the government held a UN­backed national census, its first in thirty years. The Muslim
minority group was initially permitted to identify as Rohingya, but after Buddhist nationalists
threatened to boycott the census, the government decided the Rohingya could only register if they
identified as Bengali instead.

Why are the Rohingya fleeing Myanmar?

The Myanmar government has effectively institutionalized discrimination against the ethnic group
through restrictions on marriage, family planning, employment, education, religious choice, and
freedom of movement. For example, Rohingya couples in the northern towns of Maungdaw and
Buthidaung are only allowed to have two children . Rohingya must also seek permission to marry,

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which may require them to bribe authorities and provide photographs of the bride without a
headscarf and the groom with a clean­shaven face, practices that conflict with Muslim customs. To
move to a new home or travel outside their townships, Rohingya must gain government approval.
Moreover, Rakhine State is Myanmar’s least developed state, with a poverty rate of 78 percent,
compared to the 37.5 percent national average, according to World Bank estimates. Widespread
poverty, poor infrastructure, and a lack of employment opportunities in Rakhine have exacerbated
the cleavage between Buddhists and Muslim Rohingya. This tension is deepened by religious
differences that have at times erupted into conflict

What’s caused the exodus in recent years?

Violence broke out in 2012, when Rohingya men were accused of raping and killing a Buddhist
woman. Buddhist nationalists responded by burning Rohingya homes, killingmore than 280 people
and displacing tens of thousands. Human Rights Watch characterized the anti­Rohingya violence as
“crimes against humanity” carried out as part of a “campaign of ethnic cleansing.”
Most displaced Rohingya have been forced to take shelter in squalid refugee camps. Others have
turned to smugglers, paying for transport out of Myanmar. “The fact that thousands of
Rohingya prefer a dangerous boat journeythey may not survive to staying in Myanmar speaks
volumes about the conditions they face there,” said Amnesty International’s Kate Schuetze in 2015.
A series of attacks on security posts along the Myanmar­Bangladesh border in October 2016
triggered another outbreak of ethnic violence in Rakhine. Local authorities blamed Rohingya
militants for the attacks, prompting an inflow of military and police forces to hunt for those
responsible and tighten security. Amid the security lockdown, tens of thousands of Rohingya were
forced from their homes, many fleeing to Bangladesh. Reports in November indicated that the
security presence was also preventing the entry of much­needed international aid, including food
and medical care.
Clashes in Rakhine broke out again in August 2017 after a militant group known as the Arakan
Rohingya Salvation Army (ARSA) claimed responsibility for coordinated attacks on police and
army posts in which more than one hundred people died. The government declared ARSA a terrorist
organization following the attacks. Fighting between the military and insurgents sent thousands of
Rohingya to the country’s border with Bangladesh as government troops opened fire on civilians.
More than 120,000 Rohingya have left Myanmar as a result. The leader of ARSA said in an
interview that the attacks were carried out to “defend our civilian population” but that the militants’
longer term goal is the peaceful coexistence of Muslim Rohingya and Buddhist Rakhine.

Where are the Rohingya migrating?

Bangladesh: Many Rohingya have sought refuge in nearby Bangladesh, which hosts more than
thirty­three thousand registered refugees. Some two hundred thousand to five hundred thousand
unregistered Rohingya refugees are also believed to live in the country, according to UN High
Commissioner for Refugees estimates. Conditions in most of the country’s refugee camps are dire,
driving many Rohingya there to risk a perilous voyage across the Bay of Bengal to Southeast Asia.
In January 2017, Myanmar agreed to begin talks with Bangladesh on refugees, yet border posts in
Bangladesh have forcibly returned Rohingya following violence in August. Malaysia: As of June
2016, more than 90 percent of Malaysia’s 150,700 registered refugees were from Myanmar,
including tens of thousands of Rohingya, according to the United Nations. Rohingya who have

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arrived safely in Malaysia have no legal status and are unable to work, leaving their families cut off
from access to education and health care.
Thailand: Thailand is a hub for regional human smuggling and serves as a common transit point for
Rohingya. Migrants often arrive there by boat from Bangladesh or Myanmar before continuing on
foot to Malaysia or by boat to Indonesia or Malaysia. The military­led Thai government has cracked
down on smuggling rings after the discovery of mass graves in alleged camps where gangs held
hostages. Dozens of people, including a general, provincial officials, and police, were found guilty in
2017 of the deaths of trafficked Rohingya. But some experts say punishing traffickers only disrupts
the networks, but does not dismantle them.Indonesia: The Rohingya have also sought refuge in
Indonesia, although the number of refugees from Myanmar there remains relatively modest. During
the spring 2015 migration surge, Indonesia’s military chief expressed concerns that easing
immigration restrictions would spark an influx of people. Amid international pressure, Indonesia
admitted one thousand Rohingya and provided them with emergency assistance and protection.

Aung San Suu Kyi, Myanmar’s de facto leader, has denied that ethnic cleansing is taking place and
dismissed international criticism of her handling of the crisis, accusing critics of fueling resentment
between Buddhists and Muslims in the country. In September 2017, the Nobel Peace Prize laureate
said her government had “already started defending all the people in Rakhine in the best way
possible.”

How is the region responding?

Protesters have at times gathered in cities in India, Thailand, Indonesia, and Bangladesh to condemn
the killing and persecution of Rohingya. But governments in Southeast Asia lack established legal
frameworks to protect refugees’ rights, and the ten members of the Association of Southeast Asian
Nations (ASEAN) have not coordinated a response to the deepening crisis.
How have others responded?
In December 2016, U.S. President Barack Obama lifted sanctions against Myanmar, saying that the
country had made strides in improving human rights. The move came amid a crackdown on
Rohingya and was criticized by some as premature. Annan’s advisory commission published its
findings in late August 2017, after a year of investigation. It recommended that Myanmar lift
restrictions on movement and citizenship. “Tensions remain high and they risk becoming worse.
Violence will not bring lasting solutions to the acute problems that afflict the Rakhine State,” Annan
said. In September 2017, UN Secretary­General Antonio Guterres urged authorities in Myanmar to
end the violence in Rakhine for fear that the situation could destabilize the region
What is the Arakan Rohingya Salvation Army?
The Arakan Rohingya Salvation Army (ARSA), formerly known as the al­Yaqeen Faith
Movement, released a statement under its new name in March 2017, saying it was obligated to
"defend, salvage and protect [the] Rohingya community".The group said it would do so "with our
best capacities as we have the legitimate right under international law to defend ourselves in line
with the principle of self defence". The group is considered a "terrorist" organisation by the
Myanmar government.
The group has claimed responsibility for an attackon police posts and an army base in Rakhine State.
According to the government nearly 400 people were killed, the majority of whom were members of
the ARSA. Rights groups, however, say hundreds of civilians have been killed by security forces.
On September 9, the group declared a month­long unilateral ceasefire in Rakhine to enable aid
groups to address the humanitarian crisis in the area. According to the International Crisis group, the
ARSA has ties to Rohingya living in Saudi Arabia. The Myanmar government formally categorised
the group as a "terrorist" organisation on August 25

Habib Adnan
14. Women Empowerment In BD
Women face barrier earlier in

1.Access to health services

2. Economic opportunity

3. Political participation

4. Control of finance

The World Economic Forum recently ranked Bangladesh first in gender equality among South Asia
nations for the second consecutive year. The Forum’s “Gender Gap Index of 2017” highlights
Bangladesh’s success in four key areas: education, economic participation, health, and political
empowerment. While no country has eliminated the gender gap completely, Bangladesh has had a
steady climb in the rankings, rising 23 places over the preceding year to No. 49 in the world. The
only female Muslim leader among the Organization of Islamic Cooperation member countries,
Bangladesh’s Prime Minister Sheikh Hasina, serves as a role model for women in the subcontinent.

Actions initiated by the Bangladesh government:

In recent years, Bangladesh has invested heavily in education at all levels. Primary education is
compulsory and free of charge for everyone.

** Overall enrollment in primary school rose from 60.5 percent in 1990 to 98.7 percent in 2016.

** Girls receive stipends and scholarships for schooling until the 12th grade. Even textbooks are free.

*** the female­to­male high school enrollment ratio is now 53 percent to 47 percent, a dramatic
increase from 35 percent to 65 percent prior to 2009.

***Over the last decade marriage rates for girls under 15 dropped by more than 35 percent, and
Bangladesh plans to eradicate the practice entirely by 2021.

***Banks and non­bank institutions distributed $860 million to 57,722 women entrepreneurs
between 2010 and 2013. Female entrepreneurs are also entitled to $361 in Small and Medium
Enterprise (SME) loans without having to offer collateral. In 2016, 11,000 women received more
than $1.2 million in such micro loans.

**Three million Bangladeshi women are employed in the lucrative ready­made garment sector,
Bangladesh’s largest export. Working conditions in the garment sector have significantly
improved.Once known as the ‘T­shirt maker of the world,’ Bangladesh now produces high­end
apparel for upscale European stores. With these important changes in the Bangladesh’s factories,
women have risen through the ranks and become workforce leaders.

In rural Bangladesh, innovations in aquaculture – a fancy word for fish farming – have turned women
into the economic heads of households.

**Forty­three percent of rural women contribute to fisheries­related activities. And women now
make up more than 60 percent of the fish farmers in Bangladesh.

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***Bangladesh has also expanded its social safety net for women and markedly improved maternal
and fetal health.

***Women get four to six months of paid maternity leave

***Bangladesh has established allowances for divorced and destitute women as well as women with
disabilities. It has also increased the punishments for human trafficking, domestic violence, and other
forms of violence against women.

***According to the World Economic Forum, Bangladesh now ranks seventh in the world in the
political empowerment of women. Women hold 50 seats in Bangladesh’s National Parliament and
12,000 local political offices. Of course, the prime minister is also a woman and so are the opposition
leader, the speaker and the deputy leader.

***Bangladesh’s economy is now roaring. Between 2009 and 2017, Bangladesh’s annual Gross
Domestic Product (GDP) rose from $100 billion to more than $250 billion, a 150 percent increase.
Moreover, the Bangladesh economy grew 7.28 percent in the past fiscal year. Bangladesh is now
reaping the benefits of empowering women.

For women in Bangladesh, the future looks brighter than ever. Women are better educated, safer, and
more economically prosperous than their mothers. Today, women are accepted and valued not only
as wives and help­mates, but also as farmers, parliamentarians, and entrepreneurs.

Habib Adnan
15. Bangladesh : Becoming Deeveloping Country
On March 16, 2018, for the second time in the history of independent Bangladesh, the country was
adorned with a crown for its achievements in development. The first time was in 2015 when it
upgraded itself to the World Bank's “lower middle income” category by increasing its Gross National
Income. By becoming eligible for graduation from LDC, Bangladesh has taken its status to a new
height. The LDC category was introduced by the United Nations in 1971 when there were 25 LDCs.
In 2018, the number has increased to 47. So far, only five countries were able to graduate from the
LDC group, including Botswana, Cape Verde, Maldives, Samoa and Equatorial Guinea. Bangladesh
is the only country that met all three criteria for graduation including GNI per capita, Human Assets
Index, and Economic Vulnerability Index.

The three criteria are Gross National Income (GNI) per capita, Human Assets Index (HAI) and
Economic Vulnerability Index (EVI).

According to the UN's graduation threshold, the GNI per capita of a country has to be $1,230 or
above. Bangladesh's GNI per capita is now $1,272.

In terms of the HAI, a country must have a score of 66 or above. Bangladesh's score is now 72.8 ­­
well above the threshold. The HAI is an indicator of nutrition, health, adult literacy and secondary
school enrolment rate.

In the economic vulnerability index (EVI), a country's score has to be 32 or below. Bangladesh's
score is 25 in the EVI, an indicator of natural and trade­related shocks.

The CDP will review Bangladesh's progress in 2021, and the country's official graduation from the
LDC category will take place after a three­year transition period.

If the country maintains its position in all the three categories for the next six years, it will eventually
graduate from the LDC bloc.

This graduation will bring a lot of opportunities for Bangladesh and quite a few challenges as well.
There will be benefits but there will be costs to pay also. Overcoming these challenges is critical for a
smooth graduation process.

Advantages:

***The new status will help in branding Bangladesh.

***Investors will be interested to invest in the country given its strength in certain areas such as the
size of its Gross Domestic Product (GDP), exports and population compared to other L

*** Bangladesh will have more opportunities for taking commercial loans from the international
market at a competitive interest rate. Such branding will help it to mobilise resources from the global
market through sovereign bond.

**** The private sector will also have the opportunity to generate capital from the global financial
market.

Disadvantage:

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*** the cost of development finance and higher debt servicing liabilities due to the cessation of
access to concessional finance for LDCs.

***As a lower­middle­income country, Bangladesh is no more eligible for low interest loans.
***After graduation, Bangladesh has to go for blended finance that includes loans from the
development institutions and other sources with a high interest rate and shorter repayment period.

***upon graduation from the LDC bracket, Bangladesh is likely to lose about $2.7 billion in export
earnings every year. This is because exports will be subjected to 6.7 per cent additional tariff as
preferential duty benefits from different countries and trading partners will no longer be available.

*** Due to the graduation, Bangladesh will lose about 8 percent of its total exports because of the
imposition of additional tariff on its exports by 6.7 percent without a preferential treatment. A Centre
for Policy Dialogue (CPD) study reveals that the loss will be equivalent to USD 2.7 billion.

***upon graduation, products made in Bangladesh will become more expensive to buyers and
consumers in key export markets. In this context, it may be recalled that according to the United
Nations Conference on Trade and Development (UNCTAD), Bangladesh's exports may decline by
5.5 per cent to 7.5 per cent due to preference erosion and exports becoming costlier.

***As per the WB criteria, if a country's per capita income remains above $1,400 for three
consecutive years, the rate of interest would surge to about 2 per cent from 0.75 per cent — a facility
that Bangladesh currently enjoys like all other LDCs.

Habib Adnan
16. How to take opportunities and face the challenges of
moving from LDC?
After graduation in 2024, there will be a grace period of another 3 years when Bangladesh can enjoy
all LDC­specific benefits. So there are approximately 10 years for the country to prepare itself to start
the new journey. Bangladesh needs to prepare for a smooth graduation by taking into account a few
issues.

***the overall capability of the economy has to be improved. This should be achieved through
diversification of the economy, technological upgradation, training and skill development of human
resources, and institutional strengthening.

****In order to attract foreign investment, the economy has to go through structural changes, achieve
resource efficiency, and improve productivity.

*** This is the age of artificial intelligence and robotics. Bangladesh has to gear up to face the
challenges of the Fourth Industrial Revolution.

***The labour force displaced due to technological upgradation should be able to find themselves
engaged in self­employment through micro, small and medium enterprises.

***Bangladesh must improve its export competitiveness and diversify both markets and products for
export.

***Besides, Bangladesh has to play a proactive role at the regional and sub­regional initiatives, such
as Bangladesh, Bhutan, India, Nepal (BBIN), Bangladesh, China, India and Myanmar (BCIM), and
Bay of Bengal Initiative for Multi­Sectoral Technical and Economic Cooperation (BIMSTEC), for
more meaningful partnerships.

At the same time, it should remain active at the World Trade Organization to realise any potential
benefit.

***In the post­graduation period, the country will still be eligible for Generalised System of
Preferences or “GSP Plus” benefits for market access. In order to access this, countries usually have
to comply with stringent conditions such as improved work conditions, higher poverty alleviation
efforts, women's empowerment and reduction of carbon emission.

***Govt. should put emphasis on domestic resource mobilisation

***improve road, power, and port facilities to make up the impact of preference erosion in export
markets.

*** Risks like high poverty and inequality, low human capital and weak economic governances have
to be tackled effectively and be minimised to a reasonable level,

Habib Adnan
17. The Padma Multipurpose Bridge
Background and the Bridge

The Padma Bridge is 6.15 km long, and it stands as the 25th longest road bridge in the world. The
bridge is a multipurpose road­rail bridge across the world’s third largest river, Padma, connecting
Louhajong, Munshiganj to Shariatpur and Madaripur which will link the South­West of the country,
to Northern and Eastern regions. The main bridge will be located over the Padma River in the
north­south direction starting at Mawa on the Dhaka side under Lauhajong Upazilla and ending at
Janjira on the other side of the river under Shariatpur district. Almost 21 districts will be served by
this bridge. Its influence area will broadly cover some major spectrums which include: I) 6 km north
of Riverbank in Mawa side, II) 4 km south of riverbank of Janjira side, III)15km upstream( west), IV)
7 km downstream (east)

The proposed bridge is the largest infrastructure project ever undertaken in the country. It is a
multipurpose fixed crossing over the Padma River with provisions for a rail line, gas pipeline,
fibre­optic cable, and power transmission lines. The two­level steel truss bridge will carry a four­lane
highway on the upper level and a single track railway on a lower level. The bridge lies on the
Dhaka­Kolkata (India) link and will form an integral part of the Asian Highway and Euro­Asian
Railway network systems. Once the bridge is built, travel time between the southern districts and
Dhaka will be cut by 100 km, benefiting not only the relatively undeveloped southwestern region, but
the country as a whole. The project consists of a double­deck, steel­truss bridge with a four­lane,
divided highway on the top deck and a single track rail on the bottom deck. The bridge will have two
toll plazas and a 12­km­long, four­lane approach road on the southern side with service areas for
construction management and tourism in the post­construction phase.

Strong Political Determination

Bridge is not a construction but it is a concept, the concept of crossing over large spans of land or
huge masses of water, and to connect two far­off points, eventually reducing the distance between
them. The bridge provides passage over the obstacle of small caverns, a valley, hill, road, body of
water, or other physical obstacle. Designs of bridges vary depending on the nature of the terrain and
the function of the bridge and where it is constructed. For Bangladesh’s people, the Padma Bridge
was once the long­drawn­out dream, because countless strictures and various stumbling blocks
appeared before us to shatter the dream. But it is cheerfully encouraging to see that it has now
become obvious like day­light. It is the most challenging as well as a landmark development
initiative in the history of Bangladesh as it was one of the election­manifesto pledges of the current
government. A strong political determination to the pledge and relentless effort from the part of the
government is now being translated this dream project into reality.

Aureate of the Padma Multi­Purpose Bridge

By looking, in turn, at trade, investment, and aid, the aureate of the Padma Multi­Purpose Bridge in
Bangladesh provides a picture on how we can capitalise on intensifying ties to foster economic
diversification and development and examine the potential role that emerging economies of
Bangladesh can play in order to encourage country’s regional integration. It has witnessed a major
shift in the country’s development efforts. The rise of Bangladesh’s trade is not a trivial
happenstance, considering the speed and intensity with which it occurred, and it’s potential to
permanently alter the dynamics of the country’s trade.The key concern is the deceleration of growth,

Habib Adnan
which will disproportionately affect the poor. It is critically important to preserve the foundations of
growth erected through steady policy reforms and improvements in the investment climate; and this
will allow the country to resume growth after any crisis. To achieve this goal, it is critical to sustain
adequate levels of investment, especially in infrastructure. But that alone will not be enough if
Bangladesh is to be able to restore a level of growth sufficient to lower the levels of poverty. New
and additional resources must be unlocked. The country must be part of the global response to such a
crisis.

Support Social Safety Nets To Protect The Poor…

The whole community will benefit economically after implementation of this gigantic bridge through
multiplier effects on local goods, services and labour markets, although this will be mediated by the
political, economic and social context. Changes in social networks will positively affect the most
vulnerable and least powerful people in a community through greater inclusion once the bridge has
become a reality including through an increased ability to make social contributions and increasing
their entitlement sets and livelihood choices.

Far­Reaching Socio­Economic Impacts

The benefits such as savings in vehicle operating costs and travel time savings accruing from the
opening of Padma Bridge, in general, as the direct benefit or direct impact, which will be enjoyed by
the direct users of Padma Bridge. On the other hand, impacts such as the increase in production and
income based on the improvement of accessibility resulting from the direct benefits above are as
indirect impacts or induced impacts. Although the Southwest Region is the area benefiting the most
in the country, the impacts of Padma Bridge will spread over the whole country through the induced
effects by its construction. These are multiplier effects of the huge amount of investment in Padma
Bridge. These impacts will result in additional demand or output of production in related economic
sectors, generation of additional factor income (Value Added) and creation of new job opportunities.
These kinds of impacts are generated from the demand of input necessary during the construction of
Padma Bridge and attributable not only to the Southwest Region but also to the whole country of
Bangladesh. It should be noted, however, that the same type and the same volume of impacts will be
possible by projects other than Padma Bridge if the same scale of investment is executed. In addition
to the above impacts, induced economic impacts after opening of Padma Bridge are more important
because they are induced by using the Padma Bridge itself for daily economic activities and depend
heavily on the function of Padma Bridge to integrate the Southwest Region with other areas of the
country. This is particularly the case with the Central Region in which Dhaka is located. Induced or
indirect impacts of this kind are estimated by specifying such a sector (transport sector, in this case)
that the demands of the sector are expected to increase immediately after opening of Padma Bridge.
Initial increase of demand in that sector will stimulate production demands in other related sectors
and result in an increase of output, factor income, and creation of new additional job opportunities as
well.

The Padma Bridge and associated facilities are of great importance for the development of
Bangladesh and is expected to play the following important roles:

a. To integrate central and southwest regions of Bangladesh, reducing to 3­4 hours the driving time
from Dhaka to the major cities in southwest region;

b. To contribute to the development of a regional economy in the southwest region of the country by

Habib Adnan
improving transport accessibility to the region and at the same time, through the promotion of
regional economic development, contribute to poverty reduction in the region;

c. To support substantial roles for socio­economic development of the northeastern parts of South
Asia, encompassing neighbouring countries. It will contribute to the formation of the route of the
Asian Highway and its completion will be expected to improve bilateral trade and increase of tourists
between Bangladesh and India.

d. Future traffic volume crossing the Padma Bridge is forecast by dividing normal traffic, diverted
traffic, and induced traffic, respectively. The future traffic volume is estimated to be 41,550
vehicles/day in 2025.

The Padma Bridge will generate remarkable impacts for the whole country of Bangladesh and
contribute to the economic development of the Southwest Region. It is situated at the best location to
form an international transport network, Asian Highway. If a railway provision on the bridge is
effectively connected with the existing railway network, it can contribute to the formation of a
multi­modal international transport network for the Eastern Region of India.

The construction of Padma Bridge is viable from the macro­economic perspective. It will contribute
to the development of the regional economy and to a reduction in poverty. At the same time, the
contribution of the bridge has great significance in terms of developing the international transport
corridor. Therefore, this should be an urgent project to be implemented at the earliest opportunity.
Taking the importance of international transport corridor into consideration, the Padma Bridge shall
have four lanes in both directions to meet the Asian Highway Standard and a necessary space along
the median for future railway provision.

The bridge is expected to transform the country’s economically depressed southwest zone by
connecting it to the capital city of Dhaka and other relatively developed regions. At least 30 million
people, almost one­fifth of the country’s total population, will directly benefit from the bridge.

Industrial Development to Be Accelerated

“The social, economic, and industrial underdevelopment of the southwest zone – which encompasses
Bangladesh’s second major port, Mongla, its third major city, Khulna, and the inland port at
Benapole bordering India – is due in part to difficult access across the Padma River to the rest of the
country. The bridge is expected to have a profound impact on the 30 million­plus people living in the
southwest and accelerate economic growth in the country as a whole. At the same time, it is expected
to raise Bangladesh’s GDP by 1.2%, pushing it over 7% and thus, enabling it to become a
middle­income country in line with the international standards, with over $1,000 per capita income
by 2020.”

Gateway between Dhaka and South­Western Districts

The under­construction Padma Bridge, due to be opened to traffic by the end of 2018 to serve as
gateway between the capital city Dhaka and 21 South­Western districts, is changing people’s mindset
with hopes for rapid and vast socio­economic developments. Economists predict once the bridge
becomes operational, it is expected to push growth of the country’s gross domestic product (GDP) up

Habib Adnan
by 1.2 per cent and create employment opportunities for 10 million people. The Padma Multipurpose
Bridge will transform the lives of nearly 30 million people living in the country’s southwest region,
promoting industrial and commercial activities and increasing economic and employment
opportunities, according to various studies and reviews on the major economic impact of the bridge
project. At least 30 million people, almost one­fifth of the country’s total population, will directly
benefit from the bridge. With the bridge, capital inflow will increase, promoting industrial and
commercial activity and increasing economic and employment opportunities for the local population.
The people of the region would have better access to health­care facilities available in Dhaka while
easier communication would help to expand better education and training facilities, ensuring the
availability of the quality workers required for sustainable economic growth. According to a research
calculation: “Over the 31 years following completion of the bridge, overall benefits to road users
from these two sources are projected to be Tk. 1.3 trillion (Tk.130,000 crore).”

Habib Adnan
18. Trade War USA­ China: Global impact
The trade war that erupted Friday between the U.S. and China carries a major risk of escalation that
could

» weaken investment,

»depress spending,

» unsettle financial markets and

» slow the global economy.

The United States is due to impose 25% tariffs on $34 billion of goods it imports from China on
Friday. Tariffs on an extra $16 billion may come later.

Beijing has said it will retaliate in equal measure. US President Donald Trump has threatened to
impose tariffs on an additional $200 billion if China retaliates, and then an extra $200 billion upon
further ripostes.

China imported $130 billion of US goods last year, while the United States purchased goods worth
$506 billion from China, according to US data

Global merchandise exports rose 11 per cent in 2017 to $17.2 trillion, according to the World Trade
Organization.

US tariffs on Chinese exports will apply to engines and motors, construction and farming machinery,
electrical, transportation and telecom equipment and precision instruments.

Counter tariffs by China will hit US agricultural commodities, autos and aquatic products. Soybeans
are the country’s biggest import from the United States by value.

These initial tariffs are unlikely to inflict serious harm to the world’s two biggest economies.

Expert has calculated that they would pare growth in both countries by no more than 0.2 percent
through 2020.

The direct impact is limited

Ballpark estimates from economists show that every $100 billion of imports affected by tariffs chip
away around 0.5 per cent of global trade, wiping off 0.1 percentage points of GDP growth. The direct
impact on China’s economic growth in 2018 is estimated at 0.1­0.3 percentage points while the drag
on its export growth is expected to be 1.0 percentage point. The effect on the United States will be
less.

Global inflation should rise by 0.1­0.3 percentage points, not accounting for currency volatiliti

Morgan Stanley estimates that world trade could be seriously disrupted as two­thirds of goods traded
are linked to global value chains.

The Peterson Institute for International Economics shows that almost two­thirds of US imports from
China come from companies with foreign capital, another avenue through which US tariffs targeted
at China have an impact beyond its borders. Based on foreign investment flows, the capital is likely
to have come mostly from the United States, Japan and South Korea.

Some analysts such as Singapore­based DBS say the US economy could suffer more than China’s, as
US levies could affect American firms with investments in the country and Washington is also

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involved in other trade conflicts.

Uncertainty about trade could make banks wary of their exposure to affected industries and hurt the
price and flow of credit. It could also make businesses reluctant to invest. Any tariff pass­through to
consumers could affect domestic demand and consumer confidence. Higher volatility in financial
markets hurts all of the above.

A model by Pictet Asset Management reckons a 10 per cent tariff on US trade fully passed on to
consumers could tip the global economy into stagflation and knock 2.5 per cent off corporate
earnings globally.

Who is most exposed?

A DBS analysis shows that South Korea, Malaysia, Taiwan and Singapore are the economies most at
risk in Asia based on trade openness and exposure to supply chains.

South Korea could see a drag of 0.4 per cent on growth in 2018, Malaysia and Taiwan lose 0.6 per
cent, and Singapore 0.8 per cent. And the impact would be roughly double in 2019.

OECD data ­ which breaks down the value­added embodied in Chinese exports by its source country
­ shows Taiwan as the most exposed country in Asia with more than 8.0 per cent of GDP, followed
by Malaysia at 6.0 per cent, South Korea, Hong Kong and Singapore at 4­5 per cent, Philippines,
Thailand and Vietnam at around 3.0 per cent and Australia, Japan and Indonesia at around 2.0 per
cent.

There are other variations to consider. For instance, the United States and China are Hong Kong’s
major economic partners, but its economy is dominated by services, which are not subject to tariffs.
An economy such as Vietnam’s, reliant on manufacturing, could feel more pain.

»The direct effects will be amplified as business confidence drops and

»investment decisions are delayed.

China’s currency, the yuan, has dropped 3.5 percent against the dollar over the past month, giving
Chinese companies a price edge over their U.S. competition.

No one wins in a trade war.

Habib Adnan
19. Corporate Governance in Banking Sector
BANGLADESH Bank is committed to establishing good governance practices in banks and financial
institutions besides fulfilling its core objectives like employment maximisation and price stability in
the country.

Corporate governance is such a precondition that affects the financial soundness indicators of each
institution. The quality of governance can affect the financial soundness indicators of banks such as
asset quality and capital adequacy ratio.Corporate governance failure can happen when one or more
banks are devoid of transparency, accountability and oversight of their own managerial practices.

Moreover, when corporate governance structure is ambiguous and not very well developed, the
ultimate accountability to the stakeholders can remain with the regulators. Sometimes, the amount of
non­performing loan (NPL) can rise due to deterioration of industry­wide moral hazard

In recent times, the structure and style of corporate governance have changed overall. If we look at
corporate governance structures across the globe, we may find that families constitute majority of the
market capitalisation in most of the countries. With family ownership, rational succession plans are
difficult to implement as family members may not be qualified to assume managerial responsibilities,
or they may not be interested in carrying on family business.

it is the most significant problem of corporate governance in Bangladesh. Although our policies do
not support this, it can happen sometimes indirectly due to opaqueness in the policies itself. This kind
of structure may hinder the good governance practices since the exposures of connected persons can
serve their personal benefits.

The second most problem of corporate governance is the lack of knowledge about monitoring new
products, or insufficient attention to their risk characteristics. Moreover, the promotion policy in
commercial banks (for example performance in line with deposit collection targets, etc) may not be
coordinated with, or may even contradict with broader objectives of the bank. In regard to
accountability and transparency, accounting standards and disclosures are very important.

A market for corporate control can play an important monitoring role, as poorly managed companies
can become merger/acquisition targets. In Bangladesh, there seems to be no market for corporate
control, as merger/acquisition of either publicly­traded or privately­held companies is rare. Moreover,
independent directors do not act as an advocate for minority shareholders or as a source of innovative
ideas as they are thought to be. It is assumed that due to a lack of shareholders' activities, corporate
governance cannot be firmly established.

There is also a lack of independence of auditors which is linked with "lemon problem" ­­ a problem
of information asymmetry.

In addition, due to managers' appetite to take excessive risks to earn more profits/incentives, banks'
health can be deteriorated further. This can be solved by introducing “employee stock option plan”,
or by introducing multi­year remuneration programmes, where compensation over the years is tied to
long­term outcomes, not the short­term ones only.

It has been observed that board members and senior management, who may be appointed by the
government, may not have full discretion to carry out their responsibilities properly. Domination of
the board by the chief executive officer is a common problem, but there is also “reverse domination”

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­­ individual board members interfering in specific decisions of senior management or even lower
levels of management. There is also the problem of irreconcilable conflict between the board
chairman (or individual board members) and the CEO that is not addressed adequately so far. It not
only could deteriorate corporate governance of the bank but also could signpost unhealthy example
to other banks.

Bangladesh Bank has been pursuing the best corporate governance framework for the banking
system. The first principle suggested by the Basel Committee on Banking Supervision on corporate
governance focuses on the board's overall responsibilities. The second principle is about the board's
qualifications and compositions. Initial and ongoing training of board members in their duties and
responsibilities is very important, but in some banks it may be difficult to sustain that kind of training
because of time constraints and reluctance of certain board members to attend.

The principle no. 4, 5, 6 and 8 focus on senior management, governance of group structures, . The
bank authorities should be strict in scrutinising applications for loans, assessing qualifications of the
applicants before approving any loan.

The corrupt bank directors and officials should be brought to justice for approving clandestine loans
and misappropriating funds. The loan defaulters should be punished as well.

The Artha Rin Adalat Ain (Money Loan Court Act) needs to be amended to empower the banks to
sell the mortgaged property of the defaulter clients to realise the loan.

Besides, steps should be taken to expedite the disposal of the cases filed over loan defaulting. At the
same time, the entrepreneurs and companies that pay back the loans properly should get more loans
at lower interests

In summary, Bangladesh Bank has been trying to establish good corporate governance standards in
the banking system but the efficacy of these mechanisms will depend on the overall attitude of the
stakeholders.

Habib Adnan
20. Liquidity Crisis in Banking Sector
The economy grew by 6.3 percent on average for more than a decade. The growth rate was over 7
percent in the last two fiscal years.

Bangladesh's gross national income (GNI) per capita now stands at $1752, well above the
$1,242­mark, a prerequisite for becoming a lower­middle income country from a least developed one

But suddenly, this smoothly­run economy was hit by a serious liquidity crisis a couple of months
back.

In banking parlance, liquidity is a financial institution's capacity to meet its obligations as they fall
due without incurring losses. Liquidity risk is a risk to an institution's earnings, capital and reputation
arising from its inability (real or perceived) to meet its contractual obligations in a timely manner
without incurring unacceptable losses when they are due.

In general, a bank is said to be liquid if it is able to provide money to its customers trying to
withdraw. On the contrary, a bank is said to be 'illiquid' if the customers try to withdraw more money
from the bank than it can accommodate. All the scheduled banks have to manage liquidity from two
perspectives. The first one is to address regulatory requirement like Cash Reserve Ratio (CRR) while
the second one is to meet the contractual obligations to fulfill the demand from the depositors.

Banks have to keep sufficient cash in vault for meeting depositors' obligations. But practically, they
do not keep all its deposits mobilised in cash for immediate withdrawal (through the counter or
through ATMs). From regulatory perspective, banks are allowed to extend loan up to 85 per cent and
90 per cent of their deposits mobilised for conventional and Islamic banks (as well as Islamic window
of conventional banks) respectively and therefore, 15 per cent and 10 per cent of deposits are left
with them. Therefore, it is evident that a small amount of cash stocked in vault and ATMs is kept by
the banks.

When a bank fails to satisfy deposit withdrawal of its customers, the situation can only deteriorate. In
a worst case scenario, the depositors, out of fear, rush towards the bank and start to withdraw as much
as possible, leading the bank to a complete failure in meeting its obligations. This worst case situation
is known as 'Bank Run'.

This has resulted in spillover effects on non­bank financial institutions (NBFIs) and capital markets.
Most of the 34 NBFIs, which rely mostly on banks for funds, are in a liquidity crisis they never faced
before.

Capital markets have been in free fall since Bangladesh Bank came up with a new monetary policy
on January 29. The benchmark index of Dhaka Stock Exchange fell 2.21 percent ­­ the highest in
more than four years.

For example, a person took a home loan of Tk 50 lakh from a bank with 9 percent interest for 15
years. His equal monthly instalment (EMI) was Tk 50,713. But the bank concerned raised the interest
rate to 10 percent recently and his EMI went up by over Tk 3,000. Similarly, EMIs for personal and
auto loans also increased in recent days.

Habib Adnan
The rate hike will also badly hurt businesses that took industrial term loans at single digit interest
rates in the last two years.

“Unreasonable hike in interest rates will hamper the economic growth and push inflation up

Talking to this newspaper, Pubali Bank Managing Director Abdul Halim Chowdhury said the overall
consumption will decline due to the rise in interest rates.

Lower interest rates made borrowing cheaper, and this encouraged spending and investment, leading
to higher domestic demand and economic growth. All this helped the economy grow by over 7
percent for the last two consecutive years.

But a sudden liquidity crisis that began two months ago has reversed the situation.

Now most of the 40 private commercial banks, which have crossed the loan­deposit ratio (LDR)
limit, are chasing after deposits to bring down the ratio within 85 percent as they cannot recover loans
overnight.

An 85­percent LDR limit means a bank can give a loan of Tk 85 against a deposit of Tk 100.

The central bank last month moved to reduce the LDR further to 83.5 percent by June which will
intensify competition among banks to get deposits and eventually make those costlier.

Banks offered 5­7 percent interest on fixed deposits for the last three years. But this rate has gone up
to 8­9 percent in recent days due to the liquidity crisis.

Besides, a bank has to spend another 2 percent on average in establishment expenses, meaning the
total cost will be around 11 percent.

Habib Adnan
21. Special Economic Zone
Special Economic Zones (SEZs) are geographically delineated 'enclaves' in which regulations and
practices related to business and trade differ from the rest of the country and therefore all the units
therein enjoy special privileges.

SEZs can generate both static and dynamic benefits. Static benefits include employment creation,
export growth and rise in government revenues; whereas dynamic benefits include economic
diversification, innovation and transfer of technology through foreign direct investment (FDI), and
skills upgrading

The basic idea of SEZs emerges from the fact that, while it might be very difficult to dramatically
improve infrastructure and business environment of the overall economy 'overnight', SEZs can be
built in a much shorter time, and they can work as efficient enclaves to solve these problems. With
these aforementioned objectives in consideration, Bangladesh Economic Zones Authority (BEZA)
was instituted by the government in November 2010, based on the Bangladesh Economic Zones Act,
2010, with the aim of establishing 100 SEZs across the country by 2030 and 47 of them, including
government and private EZs, are under processing or in the implementation stage.

The objectives of Economic Zones can be explained as:

A. Generation of additional economic activity;

B. Promotion of exports of goods and services;

C. Diversification of export destination­wise and product­wise;

D. Promotion of investment from domestic and foreign sources;

E. Creation of employment opportunities;

F. Development of infrastructure facilities and logistic services;

G. Technology transfer;

Weak infrastructure and poor business environment are critical problems for Bangladesh in attracting
both domestic investment and FDI. According to the 2017 Doing Business index of the World Bank,
Bangladesh ranks 176th among 190 countries. In terms of sub­components of the Doing Business
index, Bangladesh's worst performances are observed in the areas of 'enforcing contracts', 'getting
electricity' and 'registering property' with rankings of 189th, 187th and 185th respectively.

There is no denying that rapid and sustained economic growth is very important for the Bangladesh
economy on its way to becoming a middle income country. The importance of SEZs, aimed at
propelling both domestic investment and FDI for rapid and sustained economic growth in
Bangladesh, can't be undermined. However, to make the SEZ initiatives successful, several issues
need to be addressed carefully.

Habib Adnan
First, SEZs have to deliver what they promise. The standards of infrastructure and business
environment within SEZs have to be up to the global standard.

Second, while SEZs are aimed at creating 'efficient' enclaves, improvements in the business
environment and infrastructure of the overall economy can't be overlooked. If there are vast
differences in the quality of infrastructure and business environment between SEZs and rest of the
economy, then excessive and continued external support would be needed for the survival of SEZs,
which can have large financial implications.

Third, the SEZs would need to be connected to 'efficient' sea and land ports. Otherwise, many of the
benefits of the SEZs would be lost. Therefore, port infrastructure and its efficiency would need to be
improved substantially.

Fourth, SEZs in Bangladesh should aim for facilitating economic and export diversification leading
to progressive structural transformation of the economy.

Fifth, the whole issue of the management of SEZs is very important. The gravity of institutional
aspects for the well­functioning of SEZs can't be underestimated.

Sixth, the government has invited Japan, China and India to set up SEZs, and these countries have
also shown their interests in doing so. If properly materialised, these SEZs will have the potentials of
receiving substantial FDIs from these countries.

Finally, there is a need for strong commitment from the political elite in Bangladesh for necessary
economic and institutional reforms towards realising the bright prospects of SEZs. In this context,
political stability and avoidance of economic policy reversal can ensure the success of the SEZs.

Habib Adnan
22. Challenges and Limitation of Budget 2018­19
There are no significant changes in the fiscal measures. So, it will be difficult for the government to
implement such a huge budget

 GDP growth target of 7.8 percent is also an unrealistic expectation. In order to achieve the
growth, the investment to GDP ratio will have to be risen by 4 percentage points to 35 percent. It
is absolutely impossible to improve the investment by 4 percentage points in a year.

 The budget will not be implemented due to unrealistic tax goal .tax collection will have to be
raised by 40 percent to implement the new budget. But there is no reform in the tax system .

 The main challenge for the budget will be to increase the private sector investment, which has
remained stagnant for a few years, affecting job creation negatively.

 No measure has been taken to create employment opportunities for the educated segment
Different measures are needed to be taken to implement this type of budget.

 The budget lacks special measures which could boost revenue collection, increase expenditure,
bring reforms to narrow deficit and to keep the situation stable ahead of elections.

 The budget has maintained all the positive and negative tendencies of the past. “There is no
structural and policy change and there is no surprise.

 Pressure is building up in the external trade. This deficit is widening while prices of oil, food
grains and fertiliser are rising globally.

 If the consistency in exports and remittance is not maintained, it will affect the exchange rate, the
rate of interest and inflation. But there was no plan in the budget to maintain the consistency,

 The biggest issue in the financial sector is the promise to introduce a uniform value­added tax
after a year. But there is no plan related to its preparation.

 The banking sector is facing a huge crisis, but there is nothing about it in the budget.

 The higher revenue generation target as well as the expenditure target will not be achieved as
they are still confined to the same old structures and thoughts and the status quo.

 The income tax ceiling of Tk 2.5 lakh for individuals should be raised to protect the real income
of the people because their income has eroded because of inflation. But it was not changed.
Rather, the government has increased the perquisite benefit for the rich from Tk 4.75 lakh to Tk
5.50 lakh.

 The private sector investment remained stagnant for a few years, some measures have been
taken in the new budget to accelerate the investment

 the budget has not increased the tax rate or brought more people under the tax net. As a result, it
will be challenging to finance the budget. Inflation will be another challenge and there was no
measure in the budget to manage it.

Habib Adnan
23. Single Digit Interest Rate
BAB decided to cut the interest rate on lending to 9% and that on deposits to 6% from the existing
levels. The move came weeks after the government showered private banks with a raft of privileges,
including one percentage point cut in cash reserve ratio (CRR) and 2.5 percentage points reduction in
corporate tax, which drew criticism from different quarters.

The decision to cut down interest rates will likely discourage clients from depositing money in the
banks and intensify the liquidity crisis.

But businessmen say the move will boost investment.

The Association of Banks (BAB) decided to bring down the interest rate on lending to 9% and that on
deposits to 6% from the existing levels. The new interest rates will go into effect from July 1.

Currently, private banks are lending at between 14% and 15%, while the average interest rate for
deposits is between 9 and 10%.

Advantage::

In a statement, the BAB said it took the decision under the direction of Prime Minister Sheikh Hasina
to create an industry­friendly environment, new entrepreneurs, generate employment, and to
accelerate trade.

Bringing the lending rate down to a single digit is a good and timely decision for the country’s
private sector investors. This will help increase investment,

This will help Bangladesh gain the investment needed for the expansion of existing businesses as
well as for new enterprises

Employment generation will be boosted

The expected outcome of the decision is that private sector investors will get loans at low rates and
this will increase private sector investment

Disadvantage::

It will worsen the liquidity crisis

Many insurance and leasing companies offer deposit rates of more than 12 percent. So bank may lose
deposit with a only 6% Interest rate.

“It will make people reluctant to deposit money. Many may withdraw their money and invest in other
sectors

It was just a voluntary announcement ... there is no monitoring and enforcement mechanism

Banks will not be able to implement the decisions because they did not devise any mechanism on
how the rate will be brought down to 9 percent.

The banks will not manage to remain profitable if the spread is down to 3 percent without addressing
the problem of non­performing loans.

Habib Adnan
It will be tough to implement the initiative unless the government and non­government entities agree
on the new deposit rate,

The banks’ deposit growth has declined to some extent, adding that slashing interest rates could
trigger more liquidity crisis, which in turn could jeopardize the plan to reduce the lending rate

Declining deposit

The rate of deposit in the banking sector has been declining. The central bank data show that
depositors have withdrawn nearly a thousand crore taka between December last year and March,
2018.

The total deposit in December last year was Tk9,26,179 crore. At the end of March this year, the
amount stood at Tk9,25,279 crore.

Bank officials say the continued disbursement of loans and a decline deposit has led to liquidity
crises in the banking sector.

Bangladesh Bank data show that more than 100 million account holders deposit money in 57 banks.
The bank directors are mainly conducting their business with the money of these depositors.

According to the central bank, the bank directors had invested only Tk46,124 crore in the sector until
September last year, while they withdrew Tk1,43,707 crore as loan from the banks during the same
period.

Habib Adnan
24. ICT Sector of Bangladesh
In the last 3 years Bangladesh has seen a tremendous growth in the information technology (ICT)
sector. It has a market of 160 million+ people, where consumer spending is around USD 130 billion+
growing at 6% annually. After Telco’s launched 3G services in 2013, internet penetration in
Bangladesh grew by 22% by the end of 2014. Of the 66.8 million active Internet subscribers (BTRC
Sept 2016), nearly 96% are on mobile and 10 million use smartphones. With growing Internet
connectivity, availability of cheaper smartphones, and rapid rise in social networking (23 million +
Facebook users), we have seen increased emergence of digital savvy consumers.

Here are 3 main reasons for growth in ICT sector

1. Gov’t policy and awareness

In last 3 years the Government of Bangladesh has played a major role in promoting the ICT sector as
the next growth engine for Bangladesh.Some of the key milestones of a2i have been the following:

• 8.5 mil students learning from multimedia content developed by 100,000 teachers

• 105 Digital Talking text books for all visually disabled students

• 103 innovations incubated through Service Innovation Fund

• $28.15 mil earnings for Digital Center Entrepreneurs

The ICT ministry played a phenomenal role in creating awareness and programs to transform ideas
into reality through programs like Digital World, ICT Expo, National Hackathon, Connecting Startup
Bangladesh etc.

Recent policy by the govt. has been very helpful in creating attractiveness of the ICT sector. Here are
several key incentives:

a. 100% foreign ownership of companies allowed

b. Small­cap exchange to be implemented to allow easier raising/ listing on capital markets

c. Software park which facilitated high speed Internet connection trade facility similar to Export
Processing Zones (EPZ)

2. BASIS policy and advocacy

The software association of Bangladesh, popularly known as BASIS brought focus on startup
activities in Bangladesh. Shameem Ashan ex­president of BASIS demonstrated tremendous
leadership. They initiated well known program like BASIS Soft Expo, BASIS Student Forum, BASIS
e­commerce alliance etc. to create awareness about startups and facility the growth of this sector.
BASIS also helped shaped policy frame work for the ICT sector and few of the policies are outlined
below:

Habib Adnan
a. 7 year tax holiday for registered IT companies

b. Private equity and venture capital policy frame work implemented as of July 2015

c. Vat for e­commerce reduced to NIL

3. Private sector movement at the heart

a. Startups – There has been significant increase of new startup and founders joining the space
which was not seen in the past. It is not limited to first time entrepreneur only, but people with
professional work experience taking risk to join the startup life. A recent study by Light Castle
Partners (LCP) identified top 3 sectors where startups are currently working now: e­commerce, tech
and impact businesses.

b. Telcos­ Have played one of the major stakeholder as they built the Infrastructure investment in 3G
that practically jump started the internet enabled businesses in Bangladesh. Local private device
suppliers played the second biggest role in bringing the smart phone prices down locally
manufacturing them. Last year 3 major telcos either started an accelerator program or sponsored one
to promote digital business in Bangladesh such as Grameenphone Accelerator which provided access
to deal flow.

c. Investment – We have few local angel investors who provides seed funding, however their
numbers are very limited with a deal size below US$50,000. However there are larger financial
institutions that have invested across various range. Few of the venture capital and private equity
companies who are currently working in Bangladesh are : Fenox Ventures, IPE capital, BD Venture
Limited, Aviskar, DEFTA Partners, Innotech Corporation, Bangladesh Venture Capital, Razor
Capital, 500 startups, Segnel Ventures, IMJ Ventures, Mind Initiative, Brummer & Partners,
Princestreet, Osiris Group VIPB, IFC etc. A recent study by Light Castle Partners (LCP) identified
preferred sectors by investors are MFS (83%), Health Tech (67%) and C2C Commerce (50%). Few of
the local startup that recently got fund are listed below to our best knowledge­ , GObd, PayWell,
Priyo.com, Solaric, SureCash, Styleline, Direct Fresh, AjkerDeal, Eshosikhi, Pathao, Bagdoom,
Sheba, BPCL, Brian Station, Studio 71, Smart Compare, Light Castle Partners, Magnito Digital,
Doctorola .

d. Ecosystem Builders – The startup ecosystem originally started in 2013 with main advocates being
Startup Dhaka also know as SD Asia, Team Engine, Hub Dhaka, EMK Center, Better Stories, Preneur
Lab etc. Most these companies are involved in mentoring, coaching and accelerator program which
help startup develop their business to next stage.

Challenges

Every ecosystem will have challenges and it is important to be aware of them that could hamper
growth.

Trust

The Trust with the consumers are the most important factor for growth in the ecosystem. If
consumers do not feel comfortable conducting commerce online, it will slow the growth. This is why
it is important to establish Consumer protection program and policies that cover refund, fraudulent
activity and consumer data. There needs to be reporting mechanisms and actions taken so that
consumer feels protected. There will be huge amounts of data being generated and there is needs to

Habib Adnan
stricter data protection laws in place where penalties in place so that one cannot easily give consumer
data to anyone.

Bureaucracy Procedures

We need to create companies in 1 day and also make it easy to close down companies. Startups now
face tough task of incorporation, getting trade license, VAT registration, bank account due to the
number of steps. It is also very tough for a startup to rent a commercial property in order to get Trade
license and other necessary paperwork’s to open the company.

Competition

We do believe that everyone needs to operate with the same rules. In the startup world, it is best to let
the customers choose the winner. This will enable to strive and carry the industry to drive better
results and improve standards of the businesses to keep up. Consumers will also adopt technology
startups at a faster rate through experience better quality. Though the word of caution is for
international companies who spend outside of the country due to mother brand having global
spending contracts. A local company face restrictions especially when sending money abroad for
advertisements where as foreign companies can spend from their foreign company accounts which is
faster and easier to deploy.

@Recommendations

We are proposing few suggestions that we earlier shared with stake holders as we believe it may help
accelerate the growth of the eco­system.

Tax Incentives

Raising capital is not easy, from the seed round to different fund raising rounds until exit or IPO. The
market hasn’t matured to attract mainstream international investors, as deal flow is still limited and
growing. Although alternative vehicle policies are being created to attract mainstream investors, we
need to grow our local angel investor scene with policy incentives by giving tax credits. We propose
Tax incentives to encourage investors to risk their money in startups. Since access to startup funding
is an issue, tax incentive to encourage people with considerable risk appetite can be a good
alternative for the local market. This will help to fund more early/seed stages startups to increase deal
flow for the entire ecosystem.

Matching Govt Grant For Fund Raised by Startups

Singapore government has launched initiative like Business Angels Scheme (BAS), which matches
any investment up to SG$2 million (US$1.32 million) that a startup raises from a business angel
investor through its investment arm SPRING SEEDS Capital Pte Ltd. Bangladesh government has
similar grant for technology companies called Innovation Fund, which is really not promoted among
the community. This fund could be easily be used to match with fund raised by local startups to
provide financial backing that the startups require so desperately.

Habib Adnan
Regional Connectivity

India, Singapore, Vietnam, Malaysia, Thailand, Indonesia and Philippines have a growing startup
community. Privately a lot of local startups are connecting regionally, but from government level we
need to connect as well. These markets have policy frameworks that we can use and best practices
that we can implement. We need to bridge the stakeholders from the regional startup community for
idea sharing to better support the eco­system. The government can also provide subsidies to
participate in the regional tech events to the startups.

Contribution From Most Important Stakeholders

The Telcos, Payment providers, logistics, Service companies and Government (ICT Ministry) should
support local startups in next 5 years to get decent valuation. The 5 parties are integral parts in the
making the machine move in the right direction. The telcos need to make the data service cheaper,
payment providers need to make online payment secured and seamless, logistics services need to be
reliable and designed to support cash on delivery system, which is a dominant payment solution in
South East Asia, service companies need to start solving real problems that is affecting the bottom of
the pyramid, and ICT ministry needs to work with all the parties so that real change can happen.

Habib Adnan
25. Bangabandhu Satellite­1
On May 12, Bangladesh’s space age has dawned with the successful launch of Bangabandhu­1
satellite by SpaceX into orbit.

Getting these satellites into space is no cakework as it requires a complex procedure including a
number of test runs and favorable weather conditions.

The communications satellite rode into space on top of Block 5 Falcon 9 rocket that took off for its
debut flight from NASA’s launchpad 39A at Kennedy Space Center at Cape Canaveral at 2:14am on
Saturday Bangladesh time.

The Bangabandhu Satellite­1 mission is the first to use Falcon 9 Block 5, the final substantial upgrade
to SpaceX’s Falcon 9 launch vehicle, which delivered the satellite to a geostationary transfer orbit.
The launch complex 39­A at the space centre is the historic one used to launch Apollo 11 to its
mission to the Moon.

»The satellite travelled 22,000 miles above Earth into the space, where it will provide
telecommunications coverage for Bangladesh and surrounding areas. It will take nearly a month to
bring the satellite under complete control of three ground stations in the US, Italy and South Korea.

»Once it is completely operational, the control will be transferred to the ground station in Bangladesh
– which will take another month. The Bangabandhu satellite’s ground station has been built in
Gazipur’s Joydebpur. A backup station has also been built in Rangamati’s Betbunia.

Habib Adnan
»Bangabandhu­1 carries 26 Ku­band transponders and 14 C­band transponders, and is designed to
operate for at least 15 years in geostationary orbit. In addition to Bangladesh, the satellite’s coverage
includes India, Nepal, Bhutan, Sri Lanka, the Philippines, Indonesia and several central Asian
countries.

A NEW ERA FOR BANGLADESH

Bangladesh, the world’s 44th largest economy in nominal term has entered the elite space club of 57
nations with the launch of Bangabandhu­1. It is the latest in a growing number of nations to “put their
flag in space” by launching a national satellite. Other recent entrants include Belarus, Laos and
Algeria. It comes only two months after Bangladesh met the eligibility requirements for “Developing
Country” status by the United Nations on March 17, 2018.

»The satellite will be a great addition to our Information Technology heralding our entry into the
Satellite Club of the world

»The Bangabandhu Satellite­1 will certainly bring revolutionary changes in our broadcast and
telecommunications sector.

Patriotism and international prestige were especially prominent motivations for Bangladesh. The
satellite Bangabandhu­1 is named after Bangabandhu Sheikh Mujibur Rahman, the assassinated
founder of Bangladesh.

But Bangladesh’s satellite exists for more than just the sake of having a satellite. The country plans to
use Bangabandhu­1 to further the digitization of the nation with e­learning television programs and
other services to reduce its domestic digital divide.

»BTRC estimates Bangabandhu­1 will save the country around $14 million currently spent leasing
capacity from foreign operators.

»The government is also expecting to earn Tk 2.5 to 3 billion annually from the satellite and start
making profit in six to seven years’ time. The profit, however, seems not be the main purpose to be
served by the satellite.

»Other than providing internet to rural communities, it will offer the potential to improve agriculture
and disaster planning, and ensure national security, which the government thinks should not be
measured in financial terms.

»It has given birth to interest in space science and satellite technology. Cashing on it, one day we will
be able to launch satellite with our own technology.

Habib Adnan
26. Climate Change: Effect and Preventive
measures
Bangladesh is located at the tail end of the fragile delta formed by the Ganges, Brahmaputra, and
Meghna Rivers and more exposed to tropical cyclones than any other country. It also experiences
about two­fifths of the world’s storm surges every year.

With a per capita gross domestic product, or GDP, of about $1752, the economic losses in
Bangladesh over the past 40 years were at an estimated $12 billion, depressing GDP annually by 0.5
to 1 percent. Especially devastating storms that come along every few years have an outsized impact
– such as the 2007 cyclone Sidr, which wrought an estimated $1.7 billion in damages, or about 2.6
percent of the GDP on top of $1.1 billion losses due to monsoon flooding in the previous 12 months.
In May 2009, 3.9 million Bangladeshis directly suffered from the impact of Cyclone Aila, which
caused an estimated $270 million in asset damage. The Multipurpose Disaster Shelter Project
(MDSP) will benefit nearly 14 million coastal people who are more vulnerable to natural disasters.

Two­thirds of the country is less than five meters above sea level, and floods increasingly inundate
homes, destroy farm production, close businesses, and shut down public infrastructure. Erosion leads
to an annual loss of about 10,000 hectares of land and weakens natural coastal defenses and aquatic
ecosystems.

Fresh water has become scarcer in in Bangladesh’s drought­prone northwest and in southwest coastal
areas where about 2.5 million profoundly poor residents regularly suffer from shortages of drinking
water and water for irrigation. Further, their coastal aquatic ecosystems have been severely
compromised.

Salt water intrusion from sea level rise in low­lying plains has intensified the risk of food insecurity,
the disappearance of employment opportunities for agricultural workers, and the spread of
water­related diseases.

The Emergency Cyclone Recovery and Restoration Project (ECRRP) supports the Government of
Bangladesh (GoB) efforts to facilitate recovery from the damage to livelihoods and infrastructure
caused by Cyclone Sidr and to build long­term preparedness through strengthened disaster risk
reduction and management.

Addressing climate change is a national priority. Bangladesh is recognized internationally for its
cutting­edge achievements in addressing climate change. Bangladesh has invested more than $10
billion in climate change actions – enhancing the capacity of communities to increase their resilience,
increasing the capacity of government agencies to respond to emergencies, strengthening river
embankments and coastal polders (low­lying tracts of lands vulnerable to flooding), building
emergency cyclone shelters and resilient homes, adapting rural households’ farming systems,
reducing saline water intrusion, especially in areas dependent upon agriculture, and implementing
early warning and emergency management systems.

Bank financing has also enabled research on the impact of climate­sensitive diseases and the

Habib Adnan
dynamics of urban flooding in the Dhaka area. The World Bank, International Finance Corporation
and the 2030 Water Resources Group have also collaborated on an investment strategy for the
Bangladesh Delta Plan 2100, a long­term investment program to spur adaptive management of the
Bangladesh Delta.

27. Green Economy

The identification of 'green economy' as a significant opportunity to define a new global economic
paradigm has taken place.

The United Nations Environment Programme, launched green economy initiative in late 2008. The
green economy initiative is one of the nine United Nations based Joint Crisis Initiatives launched by
its Chief Executive Board in early 2009.

A green economy can be described as one that is low carbon, resource efficient and socially
inclusive. It can take advantage of new growth trajectories designed to be more socially inclusive, as
well as responsive.

As defined by the United Nations Environment Programme: 'Green economy is one that results in
improved human well­being and social equity while significantly reducing environmental risks and
ecological scarcities. In a green economy, growth in income and employment is driven by public and
private investments that reduce carbon emissions and pollution, enhance energy and resource
efficiency, and prevent the loss of biodiversity and ecosystem services.

There are fifteen fundamental principles of green economy which have been compiled by
Stakeholder Forum in collaboration with Bioregional and the Earth Charter Initiative, such as,

1.Equitable Distribution of Wealth;

2. Economic Equity and Fairness;

3. Intergenerational Equity;

4. Precautionary Approach;

4. Right to Development;

5. Internationalization of Externalities;

6. International Cooperation;

7. International Liability;

8.Information, Participation and Accountability;

9. Sustainable Consumption and Production;

10. Strategic, Co­ordinated and Integrated Planning to Deliver Sustainable Development;

Habib Adnan
11. Just Transition;

12. Redefining Well­being;

13. Gender Equality;

14. Safeguarding Biodiversity and

15. Preventing Pollution of Any Part of the Environment.

Environmental Degradation and need for Green Economy in Bangladesh

Evidence suggests that environmental degradation and climate change related risks and
vulnerabilities have intensified in Bangladesh. Loss of forest land,

 the degradation of land,

 sea and river water pollution,

 indiscriminate filling of water bodies for land acquisition,

 unsustainable use of ground water and fishery resources in ponds, lakes and rivers,

 and unsustainable ways of shrimp farming have collectively taken a huge toll on the degradation
of the eco­system and consequent loss of bio­diversity.

A global ranking of per capita forest cover prepared by NationaMaster.com for 2005 puts Bangladesh
at the near bottom of the list of countries compared (186 out of 192). Bangladesh is one of the lowest
ranked countries in the global Environmental Performance Index prepared by the Yale Centre for
Environmental Law and Policy: in the 2016 report it ranks 173 out of 180 countries.

At the macro­level, indicative projections show that the combined effects of moderate climate change
could cause an average GDP growth loss of about 1.3 percent per year between FY2017 and
FY2041. Environmental degradation lowers growth by reducing the capital stock as well as by
lowering the productivity of capital. Any slowdown in growth will have negative consequences for
the growth of employment and the progress with absolute poverty reduction in both forms: extreme
and moderate. Accordingly, Bangladesh will also fail to achieve its target to eliminate extreme
poverty by FY2031.

»Benefits of Green Economy:

Green economy mainly focuses on the sustainable development and social equity. Adaption of green
economy brings several benefits for a country.

1) New growth:

Going green means new possibilities for sustainable economic growth. This growth is different from
traditional economic growth which in turn brings new technology and innovative minds to design the
technology, meaning new jobs, and new businesses to create. New jobs will be created in various
sectors to support the new businesses. Green energy, organic agriculture, eco­friendly textiles, green
building.

Habib Adnan
2) Efficiency makes financial sense:

Going green translates into efficient, streamlined practices. Much of the problem with conventional
agricultural, manufacturing, and even office space practices stems from inefficiency and waste.
Energy is wasted, paper is wasted, materials are wasted, and Buildings are not energy­efficiency.
Again, Expensive chemicals are used, even when natural methods are more practical. Also,
Conventional farming methods are unsustainable over the long­term. Green solutions save businesses
so much money; it is only a matter of being aware of more practical, efficient methods and the
development of eco­friendly methods. Here are two examples of eco and cost­efficient changes.

* Hemp fibers are more sustainable and less expensive to grow than cotton.

* Making workspaces green, with energy­efficient light bulbs, solar lighting and heating options,
using recycled office supplies and recycling office supplies, cut costs and waste.

3) The green society:

Green economy will bring a green society as well. A green society will indirectly improve the
economy as well. Sustainability and efficiency are the products of eco living. The product of
conventional living is stagnancy. Awareness of how practical and cost­effective these changes are is
the first step in the great transformation to a greener society.

4) Green economy and sustainable development:

Moving towards a Green Economy is an important driver in the promotion of sustainable

development. Green Economy can be considered as the path for the transition towards sustainable
development.

5) Green economy and poverty eradication:

By increasing attention to the resources that are used by poor to earn their livelihood, the shift
towards a green economy is aimed at boosting employment in low­income areas. The green economy
also promotes the development of basic services and infrastructure as a means of alleviating poverty
and improving overall quality of life (i.e. access to energy through renewable energy technology).

» Requirements for transition to green economy:

The transition to a green economy requires a workforce with the right skills. This includes not only
skills in the low carbon and environmental goods and services sector, but also those needed to help
all businesses use natural resources efficiently and sustainably and to be resilient to climate change.

These five elements of change can be implemented in all economic sectors: the primary sector which
transform natural resources into primary products and includes agriculture, forestry, fishing, and all
mining and quarrying industries; the secondary sector which takes the output of the primary sector
and manufactures finished goods; and the tertiary sector that provides information and services. For
all sectors, the aim is to establish­­to the extent possible­­closed or semi­closed nutrient and energy
cycles and at least, minimize waste and boost recycling.

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For products and services, transition includes:

1. Environmentally friendly and enhancing products and services

2. Renewable energy products and services

3. Clean transportation and fuels

4. Green buildings

For products processes, transition includes

1. Energy efficient manufacturing, distribution, and construction

2. Reduction of energy, materials, and water consumption through high efficiency strategies

3. Switch from carbon to non­carbon components.

Transition of green economy in essence does some reforms of the economic policies of a country.
The reforms include the followings:

National reforms:

a) Abolition of perverse subsidies, taxes and incentives;

b) Rationalization of land use and urban policies;

c) Introduction of integrated resources and water management;

d) Improvement and implementation of environmental legislation;

e) Appropriate implementation of the stimulus packages.

International political architecture:

a) Trade regimes promoting the flow of environmental goods and services;

b) International support to the countries that incorporate the

Green economy in Bangladesh would be the most potential tool for economic development and
employment generation for eliminating persistent poverty through environmentally benign activities.

Habib Adnan
28. 17th Ammendments
The Jatiya Sangsad on July 08 passed the Constitution (Seventeenth Amendment) Bill, 2018
increasing the term of the women members elected from reserved seats of parliament for 25 years
from the existing 10 years from the first session of the 11th parliament.

If the amendment was not brought, the next parliament would have no women in reserved seats. The
bill was placed in the parliament on April 10 and it was sent to the respective Parliamentary Standing
Committee for further scrutiny.

of Bangladesh passed the bill in division votes by 298:0 after running some two hours discussion
ignoring opposition lawmakers’ amendment motions for taking further public opinions.

Seeking its immediate passage, law, justice and parliament affairs minister Anisul Huq placed the bill
before the house with speaker Shirin Sharmin Chaudhury in the chair. After the division vote, the
speaker announced the result amid thumping of desks by the lawmakers.

Main opposition Jatiya Party MPs — Kazi Firoz Rashid, Fakhrul Imam, Abdul Munim Chowdhury,
Rawshan Ara Mannan, Selim Uddin, Nurul Islam Omar and independent MP Rustam Ali Farazi
proposed the house for taking further public opinions.

Moving the bill, the law minister said people along with the lawmakers have a support on the bill.
‘So, there is no need to take further public opinions on the bill,’ he said.

According to the Article 65 (3) of the constitution, 50 seats would be reserved exclusively for women
in parliament for 10 years from the first meeting of parliament after the one that passed the 14th
constitutional amendment in 2004.

According to the constitution, parliament shall consist of 300 members to be elected directly, and 50
reserved seats for women to be allotted to parties based on their proportional representation in the
House. There are 50 reserved seats in the parliament at present. But the existing 10­year tenure of the
reserved seats is going to end on January 24, 2019. On January 29 this year, the Cabinet Division
decided to extend the tenure of women MPs by another 25 years, to 2044. According to the draft bill,
the 25­year period of the reserved seats will be counted from the first day of the 11th parliament. In
2004, the eighth parliament extended the tenure of the reserved seats by another 10 years through a
constitutional amendment and it became effective in the ninth parliament, which sat on January 25,
2009. The eighth parliament increased the number of reserved seats from 30 to 45 while the ninth
parliament enhanced it to 50.

The fifteenth amendment to the constitution, which scrapped the much­talked caretaker government
system, was passed on June 30 in 2011 by division vote.

The sixteenth amendment to the constitution restored parliament’s authority to impeach the judges of
the Supreme Court in case of misconduct or incapacity.

But the SC on July 3, 2017 rejected the government’s appeal against the High Court verdict that had
declared the 16th amendment to the constitution illegal.

Habib Adnan
29. Agent Banking in Bangladesh
Agent banking offers limited banking and financial services to the underserved population by
engaging representatives under a valid agency agreement. It is the owner of an outlet who conducts
banking transactions on behalf of a bank.

Bangladesh Bank is issuing this guidelines as per authority conferred to it by Article 7A(e)

of Bangladesh Bank Order, 1972, Section 45 of Bank Company Act, 1991 and Section 4 of

Bangladesh Payment and Settlement Systems Regulations, 2009.

The following services will be covered under Agent Banking:

I. Collection of small value cash deposits and cash withdrawals (ceiling should be

determined by BB from time to time );

II. Inward foreign remittance disbursement;

III. Facilitating small value loan disbursement and recovery of loans, installments;

IV. Facilitating utility bill payment ;

V. Cash payment under social safety net programme of the Government ;

VI. Facilitating fund transfer(ceiling should be determined by BB from time to time);

VII. Balance inquiry;

VIII. Collection and processing of forms/documents in relation to account opening,

loan application, credit and debit card application from public;,

IX. Post sanction monitoring of loans and advances and follow up of loan recovery.

X. Receiving of clearing cheque.

XI. Other functions like collection of insurance premium including micro‐ insurance

etc

Although the central bank issued an agent banking guideline in 2013, the first banks started
full­fledged agent operations in 2016. The business took off almost immediately, with 544,536
accounts opened with deposits of Tk380.68 crore opened between October and December that year.

By the end of March this year, the number of agent banking accounts stood at 1,468,797 with
deposits of Tk1,634.36 crore, according to the latest estimate of Bangladesh Bank.

Comparable quarterly figure for remittance sent through mobile banking was not available but
migrant workers sent home Tk 8.12 crore in December using mobile banking.

The total money transacted via agent banking stood at Tk 380.68 crore in December last year.

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It started off with 10 banks and now 16 commercial banks run agent operations ­ Dutch­Bangla Bank
Limited (DBBL), Bank Asia, Al­Arafah Islami Bank, Social Islami Bank Limited, Modhumoti Bank
Ltd, Mutual Trust Bank Limited, NRB Commercial Bank, Standard Bank Ltd, Agrani Bank Ltd,
Midland Bank, First Security Islami Bank, The City Bank, Islami Bank Bangladesh Ltd, The Premier
Bank Ltd, United Commercial Bank Limited, and AB Bank Limited. Meanwhile, Trust Bank, South
Bangla Agriculture and Commerce Bank, Brac Bank Ltd, and NRB Bank have secured licenses from
the central bank to operate agent banking, but they are yet to launch the service.

Secret behind the growth

Agent banking has been able to get such popularity mainly for its simplicity to the clients and
cost­effectiveness for the banks.

According to a research paper titled, “Alternative delivery channel: Opportunities and challenges of
the new banking environment” by Bangladesh Institute of Bank Management (BIBM), agent banking
has become popular because of its benefits for both the banks and clients, while the country’s
economy is also being benefited through financial inclusion.

the banks have been able to increase customer volume, improve financial appearance, lower
operating costs, expansion of business, increase deposit collection, improve banks’ branding and
widen their spreads.

Agent banking has facilitated customers by providing full­fledged banking services at their doorsteps
in the remote area, and it has made convenient and easy for channeling remittance.

The agent banking outlets are now not only limited to services like cash deposits, cash withdrawal
remittance payment only, the banks have started giving out small loans through the outlets.

As of March 31, this year, six banks have disbursed Tk122.25 crore in credit through their agent
banking outlets.

Challenges

Though substantial progress has been made in the area of agent banking in terms of the number of
agents, account­holders and deposits, there are a number of challenges confronting the growth of this
new tool of banking.

The BIBM research paper identified seven challenges for banks.

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The challenges are:

 selection and monitoring of agents,

 cheque book issue and clearing cheque,

 limited transaction time,

 power failure,

 cash carrying or management risk,

 physical and cyber security,

 and settlement of complaints.

Another research paper by BIBM titled “Agent Banking: Effectiveness in Financial Inclusion,” says
product lending is still absent in the agent banking outlets.

Central bank data says agent banking is concentrated in two banks, with DBBL and Bank Asia
covering more than 86% of agent banking accounts.

By the end of March 2018, a total of 884,680 accounts were opened through DBBL and 380,936
accounts through Bank Asia.

Habib Adnan
30. Global Trade War and Impact
A trade war is when a nation imposes tariffs or quotas on imports and foreign countries retaliate with
similar forms of trade protectionism. As it escalates, a trade war reduces international trade.

A trade war starts when a nation attempts to protect a domestic industry and create jobs. In the short
run, it may work. But in the long run, a trade war costs jobs and depresses economic growth for all
countries involved. It also triggers inflation when tariffs increase the prices of imported goods.

A global trade war is increasingly turning from talk to reality as U.S. President Donald Trump’s
administration prepares to impose tariffs on $34 billion of Chinese imports and Beijing vows to
retaliate.

This may prove to be only the opening salvo as Trump is also considering slapping a 10 percent tariff
on an additional $200 billion of Chinese imports, and even more if Beijing hits back. He’s already
imposed tariffs on the steel exports of some countries and is eyeing a 20 percent levy on car
shipments from the European Union

It would be especially bad for the global economy because it would come right as oil prices and
interest rates are both rising globally.

Donald Trump's proposed trade war could cost the global economy $800 billion, or 4% of global
trade.

If US President Trump follows through on his threats to stage a trade war against his former allies in
Europe, China, and other countries, it could reduce world trade by 4% and wipe away 0.4 percentage
points of global GDP (about $800 billion), according to Oxford Economics.

HSBC said Trump's decision to reimpose trade sanctions on Iran led to a rise in the price of oil by
$10 per barrel.A separate Oxford Economics report estimated that new tariff threats would kill
100,000 American jobs in 2019 and shave off 0.1 percentage points off US GDP.

Currently imposed tariffs only total about $60 billion (or 0.3%) of world trade. But all the upcoming
proposed and threatened tariffs bring the total to $800 billion (4%).

How It Affects You

A trade war would raise prices for imported products right away. Costs would rise by the same
amount as the imposed tariff. It would give a competitive advantage to domestic producers of that
product. Their prices would be lower by comparison. As a result, they would receive more orders
from local customers. As their businesses grew, they would add jobs.

On the flip side, domestic manufacturers that rely on imported raw materials or parts would see
higher costs. It would cut into their profitability. They would either have to raise prices, slash jobs, or
both.

The Alliance of Automobile Manufacturers warned that even U.S.­produced steel will cost more once
cheap foreign imports are eliminated. The move is "threatening the industry’s global competitiveness
and raising vehicle costs for our customers."

Many U.S. industries were affected soon after Trump announced the tariffs. Mid­Continent Nail in

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Missouri announced layoffs because steel prices are now too high for them to remain
profitable.. Harley­Davidson announced it wouldmove some production abroad to avoid retaliatory
EU tariffs. The Maine lobsterindustry will suffer from Chinese retaliatory tariffs on U.S.
seafood. California cheese makers are already seeing their markets in China and Mexico disappear
due to retaliatory tariffs. Wisconsin auto parts manufacturers and the U.S. bourbon industry are other
industries being punished.

Foreign tariffs on U.S. exports will make them more expensive. U.S. exporters may have to cut costs
and lay off workers to remain competitively priced. If they fail, they may cuts costs further or even
go out of business.

In the long term, trade wars slow economic growth. They create more layoffs, not fewer, as foreign
countries retaliate. The 12 million U.S. workers who owe their jobs to exports could get laid off.

Consultant Oxford Economics predictedthe trade war could cost the global economy $800 billion in
reduced trade. That could slow growth by 0.4 percent. It's occurring at the same time that oil prices
and interest rates are rising.

Over time, trade wars weaken the protected domestic industry. Without foreign competition,
companies within the industry don't need to innovate. Eventually, the local product would decline in
quality compared to foreign­made goods.

Trump's Trade War

On March 8, 2018, President Trump announced a 25 percent tariff on steel imports and a 10
percent tariff on aluminum. Trump said, "Trade wars are good, and easy to win." But the markets
disagreed. Stock markets around the world tumbled in fear of a trade war between the world's three
largest economies.

The U.S. Congress is the only body authorized to impose tariffs. But Trump used a special power
granted by Congress in 1962. It allows a president to curb imports that threaten national security. The
Commerce Department reported that dependence on imported metals threatens the U.S. ability to
make weapons. The Aerospace Industry Council said Trump's tariffs would raise costs for the
military and exporters.

Eight countries have filed formal complaints with the World Trade Organization. Many of these
countries, like Canada, India, and the EU, are allies. They say Trump cannot justify the tariffs on the
basis of national security. The other five complainants are Mexico, Norway, Switzerland, China, and
Russia.

America is the world's largest steel importer. Trump believes the tariffs would protect the 147,000
workers in the U.S. steel and aluminum industries. But they could hurt the 6.5 million workers in U.S.
industries that import steel. A trade war will raise costs for steel users, like automakers. They'll pass
those costs onto consumers.

The tariff is in effect against China, Japan, and Russia. Japan's trade minister said, "I believe there is
absolutely no impact on America's national security from imports of steel and aluminum from Japan,
which is an allied nation."

On March 26, 2018, Trump exempted South Korea from the steel tariff. The U.S. ally is the third

Habib Adnan
largest foreign supplier of steel. In return, South Korea agreed to amend the 2012 bilateral trade
agreement. The United States will keep its 25 percent tariff on pickup trucks for an additional 20
years. Under the original agreement, the tariffs would have expired in 2021. South Korea agreed to
double its import quota for U.S. cars. Argentina, Australia, and Brazil were also exempted. The
United States has a trade surplus with Australia.

At first, Trump said Canada and Mexico would be exempt until the his administration renegotated the
North American Free Trade Agreement. Canada is the largest source of U.S. steel imports. Mexico is
the fourth largest.

Trump initially delayed the tariff against the European Union until June 1, 2018. He wanted the U.S.
ally to cut its 10 percent tariff on U.S. autos. He also asked the EU to set quotas on its steel exports.

But on May 31, 2018, Trump announced the tariff would be imposed on Canada, Mexico, and the
EU. The U.S. Aluminum Association said the move will disrupt "supply chains that more than 97
percent of U.S. aluminum industry jobs rely upon.”

On June 21, Germany proposed an endto the EU's 10 percent tax on U.S. auto imports. In return,
Trump must forget about imposing a 25 percent border tax on European auto imports.On June 22,
the EU imposed tariffs on $3.2 billion of American products. It targeted imports like bourbon,
motorcycles, and orange juice that will impact Trump’s political base. Both moves follow the April
21, 2018, EU upgrade of its trade agreement with Mexico. Once signed, it will remove tariffs from
almost all trade between the two areas.

Mexico will also impose tariffs on imports from the United States. It will target industries in areas that
supported Trump. These include flat steel, lamps, and pork products.

After the June 11, 2018, G7 meeting, Canadian Prime Minister Justin Trudeau said Canada would
retaliate with tariffs.

The head of the U.S. Chamber of Commerce said Trump's trade war could cost 2.6 million U.S. jobs.
He included the effects of Trump dumping NAFTA.

Habib Adnan
31. U.S. Trade War with China
On January 22, 2018, President Trump imposed tariffs and quotas on imported Chinese solar panels
and washing machines. China is a world leader in solar equipment manufacturing. The World Trade
Organization ruled that the United States didn't have a case in levying the tariff.

On March 8, 2018, Trump asked China to develop a plan to reduce the $375 billion U.S. trade
deficit by $100 billion. China is amenable to the idea. Part of China's economic reform plan is to
reduce its reliance on exports. But it cautions there isn't much it can do, since the deficit is fueled by
high U.S. demand for low­cost Chinese goods.

On March 22, 2018, the Trump administration upped the ante. It announced it would levy tariffs on
$60 billion of imports from China. The administration also said it would limit U.S. technology
transfers to Chinese companies. China requires foreign companies who want to sell products in China
to share their trade secrets with Chinese companies. China responded by announcing tariffs on $3
billion in U.S. fruit, pork, recycled aluminum, and steel pipes.

On March 26, 2018, the Trump administration began quietly negotiating with Chinese trade officials.
The administration focused on three requests. It would like China to reduce its tariffs on U.S.
automobiles. It wants China to import more U.S. semiconductors. American companies also want
greater access to China’s financial sector.

On April 3, 2018, the Trump administration announced 25 percent tariffs on $50 billion in Chinese
imported electronics, aerospace, and machinery. China retaliated hours later. It announced 25 percent
tariffs on $50 billion of U.S. exports to China. These also won't go into effect immediately. China's
tariffs strategically targeted 106 products. China also penalized two other U.S. exports: sorghum and
Boeing airplanes. It targeted industries located in states that supported Trump in the 2016 election.

Shortly afterward, China canceled all U.S. soybean import contracts. China imports $12 billion in
U.S. soybeans. China needs soybeans to feed pigs, its primary meat staple. But China can replace
U.S. beans with those from Brazil. U.S. farmers sell one­half of their crop to China. If that market
disappears, it will hurt the United States more than China. In July 2018, soybean prices hit a 10­year
low as analysts predicted oversupply.

On April 6, 2018, Trump said he might impose tariffs on $100 billion more of Chinese imports. It
would cover just one­third of U.S. imports from China. If China retaliates, that would impose tariffs
on all U.S. exports to China.

On April 10, 2018, China announced that trade negotiations had broken down. The United States
demanded that China stop subsidizing the 10 industries prioritized in its "Made in China 2025"
plan. These include robotics, aerospace, and software. China also plans to be the world's primary
artificial intelligence center by 2030. Later that day, Chinese President Xi Jinping announced he
would reduce tariffs on imported vehicles. Although it allowed Trump to save face, it wouldn't affect
trade very much.

Most automakers find it is cheaper to build in China, regardless of tariffs. Other promises, such as
reducing restrictions on foreign direct investment, are not new.

On May 4, 2018, the Trump administration presented China with five demands. It asked China to:

Habib Adnan
 End subsidies to tech companies.

 Stop stealing U.S. intellectual property.

 Cut tariffs on U.S. goods by 2020.

 Open China to more U.S. investment.

 Reduce the trade deficit by $200 billion by 2020.

China is unlikely to comply with the first two demands. They are at odds with China's goal of
becoming a tech leader. On the other hand, China does want to reduce its trade deficit.
China's economic reform plan is to become less reliant on exports. On May 10, China agreed to
import more U.S. products.

On May 15, China agreed to remove tariffs on U.S. pork imports. It will also allow Qualcomm to
acquire NXP. In exchange, the United States will remove tariffs on Chinese telecom company ZTE.

This agreement supports a mercantilistphilosophy. It promotes specific industries that are important
for the leaders' political purposes. Pork growers tend to vote Republican, which is why China
targeted their exports. The telecom industry is part of China's growth strategy, which is one reason
why Trump imposed tariffs. The other is that the company violated U.S. sanctions against Iran and
North Korea. On June 12, the Senate blocked Trump's deal.

Many countries see Trump's removal of tariffs on ZTE as a weakness they could exploit. They will
redouble efforts to find exceptions to Trump's tariffs. Many European countries want to avoid U.S.
sanctions on Iran. They may threaten tariffs on U.S. imports as a bargaining tool.

On May 29, the Trump administration said it would announce by June 15 a final list of products to
receive tariffs. It will first target $50 billion in imports from China. By June 30, it would announce
investment restrictions on Chinese acquisition of U.S. technology.

On July 6, Trump's tariffs went into effect for $34 billion of Chinese imports. China levied a 40
percent tariff on U.S. autos. It could threaten the exports of American­made cars that employ
thousands of works in the South. Tesla announced it will build a factory in Shanghai to avoid the
tariff.

China will also levy tariffs on U.S. agricultural exports. Midwest farmers could be stuck with excess
produce and livestock.

On July 10, 2018, the Trump administration announced it will impose 10 percent tariffs on another
$200 billion of Chinese imports. They won't go into effect until after public hearings scheduled for
August 20­23. The tariffs will raise prices on an variety of consumer goods, including fish, luggage,
tires, handbags, furniture, apparel, and mattresses. If China retaliates, Trump will add tariffs until all
$500 billion of Chinese imports are affected.

Habib Adnan
Causes of U.S. Trade War with China
U.S. politicians have long threatened a trade war with America's largest trading partner in
goods. A trade deficit occurs when exports are less than imports.

In 2017, the United States exported $130 billion to China. The three largest export categories are
aircraft at $16 billion; soybeans, $12 billion; and automobiles, $11 billion. U.S. imports from China
were $506 billion. Most of it is electronics, clothing, and machinery. But a lot of the imports are from
U.S. manufacturers that send raw materials to China for low­cost assembly. Once shipped back to the
United States, they are considered imports. As a result, tariffs hurt U.S. corporations as well as
foreign ones.

China is the world's No.1 exporter. Its comparative advantage is that it can produce consumer goods
for lower costs than other countries can. China has a lower standard of living, which allows its
companies to pay lower wages. American companies can't compete with China's low costs, so it loses
U.S. manufacturing jobs. Americans, of course, want these goods for the lowest prices. Most are not
willing to pay more for "Made in America."

Habib Adnan
32. Present Rohingya Situation
The humanitarian crisis caused by escalating violence in Myanmar’s Rakhine State is causing
suffering on a catastrophic scale. As of 24 May, there are an estimated 905,000 refugees in Cox’s
Bazar. Not only has the pace of arrivals since 25 August made this the fastest growing refugee crisis
in the world, the concentration of refugees in Cox’s Bazar is now amongst the densest in the world

Seven months have passed since the signing of a deal between Bangladesh and Myanmar, but the
repatriation of Rohingyas still remains uncertain.

Prime Minister Sheikh Hasina said she does not know how long the Rohingays will stay in
Bangladesh. "But we're trying our best...," she said.

Hasina mentioned that the government is preparing an island to relocate the Rohingyas from Cox's
Bazar. "This is to ensure their better living."

She said the August­September is the flooding season in Bangladesh while October­November is a
cyclone time. "Keeping that in mind, we've prepared the shelter in the island. There'll be cyclone
shelters in that island."

The UN Secretary General and the President of the World Bank visited Cox’s Bazar, joined by the
UN High Commissioner for Refugees and the Executive Director of UNFPA on 2 July. They met
with Government officials, refugees and members of the humanitarian community. The delegation
was visibly struck by the scale of and challenges facing the refugee population. This visit marked
notable progressfor the humanitarian and development nexus in the response. The World Bank’s
announcement of a USD 50 million grant to a health project—the first in a series that could total as
much as USD 480 million—invited innovative financing and coordination.

UN Secretary General Antonio Guterres and World Bank President Jim Yong Kim called on the
world to support Bangladesh’s Rohingya refugee camps, where IOM, the UN Migration Agency, and
UN partner agencies urgently need new funding to sustain aid.

The Government of Bangladesh and UNHCR launched a joint verification exercise at the end of
June, to consolidate a unified database for identity management, documentation, provision of
protection and assistance, population statistics and ultimately solutions. The exercise will enhance the
accuracy of data on Rohingya refugees in Bangladesh, helping the Government and aid agencies
better understand needs, plan assistance and avoid service duplication.

As of 1 July 2018, 34,032 refugees have been relocated into newly developed sites, including
relocations for risk mitigation and infrastructure development as well as new arrivals; 26,280 of these
were due to landslide and flood risks. 450 household plots are available for relocation by 14 July,
which would accommodate around 2,050 individuals.

As before, safe space for temporary evacuations is urgently needed. Another topline gap is the need
for more land for sustainable relocation sites; severely congested conditions in the camps have
far­reaching negative consequences. Sizable funding gaps continue to limit humanitarian capacity.

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Extent of destruction
Human Rights Watch say most damage occurred in Maungdaw Township, between 25 August and
25 September 2017 ­ with many villages destroyed after 5 September, when Myanmar's de facto
leader, Aung San Suu Kyi, said security force operations had ended.

What is the scale of the crisis?

The UN says the Rohingya's situation is the "world's fastest growing refugee crisis".

Before August, there were already around 307,500 Rohingya refugees living in camps, makeshift
settlements and with host communities, according to the UNHCR. A further 687,000 are estimated to
have arrived since August 2017.

Most Rohingya refugees reaching Bangladesh ­ men, women and children with barely any
belongings ­ have sought shelter in these areas, setting up camp wherever possible in the difficult
terrain and with little access to aid, safe drinking water, food, shelter or healthcare.

The largest refugee camp is Kutupalong but limited space means spontaneous settlements have
sprung up in the surrounding countryside and nearby Balukhali as refugees keep arriving.

While numbers in the Kutupalong refugee camp have reduced from a high of 22,241 to 13,900, the
number living in makeshift or spontaneous settlements outside the camp has climbed from 99,495 to
more than 604,000.

Most other refugee sites have also continued to expanded ­ as of mid­April 2018, there were 781,000
refugees living in nine camps and settlements.

There are also around 117, 000 people staying outside the camps in host communities.

What is being done by the international community?

The need for aid is overwhelming. With the monsoon season approaching, work has begun to
re­locate some refugees from the camps most at risk of flooding or landslides and in other sites, work
has been taking place to improve drainage channels and strengthen shelters.

About 70% of the one million refugees are now receiving food aid, according to the Inter Sector
Coordination Group report from mid­April 2018.Almost 100,000 people have been treated for
malnutritionLarge­scale vaccination programmes have been launched to try to minimise the risk of
disease. By mid­January 2018 , 315,000 children under 15 years of age had received a five­in­one
vaccination, including cover for diptheria, tetanus and whooping cough.47,639 temporary emergency
latrines have been built Bangladesh military

There has been widespread condemnation of the Myanmar government's actions but talk of sanctions
has been more muted:

The UN Security Council appealed to Myanmar to stop the violence but no sanctions have been
imposedThe UN's human rights chief Zeid Ra'ad al­Hussein has said an act of genocide against
Rohingya Muslims by state forces in Myanmar cannot be ruled outThe US urged Myanmar's troops

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to"respect the rule of law , stop the violence and end the displacement of civilians from all
communities"

China says the international community "should support the efforts of Myanmar in safeguarding the
stability of its national development"Bangladesh plans to build more shelters in the Cox's Bazaar area
but also wants to limit their travel to allocated areasMyanmar urged displaced people to find refuge in
temporary camps set up in Rakhine state.

In November Bangladesh signed a deal with Myanmar to return hundreds of thousands of Rohingya
refugees, but few details have been released

The UK has pledged £59m in aid to support those fleeing to Bangladesh. UK Prime Minister Theresa
May also said the military action in Rakhine had to stop. The UK has suspended training courses for
the Myanmar military

Habib Adnan
33. Trump ­ Kim Meeting
Donald Trump and Kim Jong­un have become the first sitting leaders of their countries to meet,
shaking hands before a summit at the Capella hotel in Singapore .This historic moment happened in
12 June, 2018.

"I feel really great, we're about to have a great discussion," Trump said. "I think it will be
tremendously successful, and it's my honor and we will have a terrific relationship. I have no doubt."

Kim then gave a few words.

"It has not been easy to come to this point. For us the past has been holding us back, and old practices
and prejudices have been covering our eyes and ears, but we have been able to overcome everything
to arrive here today," Kim said

Trump and Kim's started their summit with a personal meeting, joined only by two translators. It
lasted 38 minutes.

Both Mr. Trump and Kim are expected to largely focus their discussion on Tuesday around the
denuclearization of the Korean Peninsula. Pompeo told reporters on Monday that the U.S. is prepared
to offer "different, unique" security assurances to North Korea.

The two leaders then strolled through the Capella Hotel. "Excellent relationship," Trump said from
the balcony.

The summit, which lasted one day, touched on a number of themes. In a joint statement, President
Trump and Chairman Kim specified the key points.

— The two countries' commitment to establishing new relations in order to maintain peace. The US
pledged "security guarantees" to the North and Mr Kim recommitted to "complete denuclearisation".

— Joint efforts to build a lasting and stable peace regime on the Korean Peninsula.

— Reaffirming the April 27, 2018 Panmunjom Declaration, North Korea commits to work toward
complete denuclearisation.

— Their commitment to recovering POW/MIA remains, including the immediate repatriation of

those already identified.

In exchange for Mr Kim handing over his nukes, Mr Trump has committed to providing security for
America's old enemy.

Trump suggests U.S. will cease military exercises with South Korea for now

Mr. Trump said sanctions will remain in place until the nukes are gone. The sanctions will go away
"once we can be sure the nukes are no longer a factor," he said.

Trump says human rights were "discussed" but only "briefly"

Trump says Kim told him North Korea is destroying a testing site

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The office of the US press secretary referred to the meeting as an epochal event of "great significance
in overcoming decades of tensions and hostilities between the two countries and for the opening up
of a new future".

The countries are set to hold follow­up negotiations, led by Secretary of State Mike Pompeo, and a
relevant high­level North Korean official, at the earliest possible date in order to implement the
outcomes of the summit.

34. Mega Project of Bangladesh

Recently, two facts drew our attention in the context of our overall national economic
development—the first one is that our growth rate is now well over 7 percent and is one of the
highest in the world at present. The second one is that Bangladesh has fulfilled all the conditions to
come out of LDC status. And these developments are happening even without the contribution of the
so called mega projects. Mega project has been a much hyped phrase for the last few years. This is so
because the people of Bangladesh are seeing the present government undertaking different
development projects that cost large amounts of money.

A few examples of such projects are The Padma Multipurpose Bridge (Tk 30,000 cr.), Rooppur
Nuclear Power Plant (Tk 101,000 cr.), Karnaphuli Tunnel (Tk 5600 cr.), Matarbari Power Plant (Tk
50,000 cr.), Rampal Power Station (Tk 16,000 cr.), Payra Power Plant (Tk 16,000 cr.), Dhaka Metro
Rail Project (Tk 22,000 cr.), Payra Deep Sea Port (Tk 160,000 cr.) etc. Another notable project is the
Bangabandhu Satellite­1 (Tk 2000 cr.). It may be observed that most of the projects mentioned above
fall into either the development of the energy sector or the transportation sector. Of these, only the
Padma Bridge is being fully funded by the Bangladesh Government. For all of the remaining
projects, the government is relying mostly on foreign aid or loan. Japan, Russia, China and India are
the primary sources of funds for the projects.

These mega projects will definitely contribute in becoming a developing country by 2021 and
developed country by 2041. Despite several challenges like; financial constraint and lack of
technological know­how, works of few of these mega projects are already ongoing. The others are on
the table for implementation. If these projects are completed within the set timeframe, the economy
as well as life in Bangladesh will be elevated to the next level immediately.

Padma Bridge project might be the most courageous project of PM Hasina as in the face of a
corruption allegation by the World Bank, she proceeded with the project with nation's own funding
and the project is progressing fast as is expected to be completed by 2018. It will connect the large
population of the southern districts to the capital and will rejuvenate the economy of those districts
having huge impact on national economy as well. The Padma Bridge Rail Link Project will connect
the Padma Bridge with Faridpur through Zajira point by December 2018 and will connect with
Dhaka by 2022.

The Metro Rail project is a great initiative of the government to solicit the traffic congestion in
Dhaka City. On March 27, 2016, the government signed a contract with Japanese Tokyo
Construction Company to develop the Metro Rail depot. The project is hugely funded by Japan. Once
completed, the Metro rail project would allow 60,000 passengers to travel per hour and will definitely

Habib Adnan
reduce the traffic jam in Dhaka city.

The 2400 megawatt Rooppur Nuclear Power Plant is ongoing with USD 12.65 billion Russian
funding as a deal was signed in December, 2015.The government expects the operation to start from
2022. This power plant will be first of its kind in Bangladesh to enormously solicit the power
deficiency.

Another drastic project of the Bangladeshi government is the Liquefied Natural Gas (LNG)
terminal. Petrobangla signed a contract with a US based company for this project requiring an
investment of USD 500 million. Additional investment will be made to import LNG from Qatar.
Though opposed by many for high cost, it will diversify the country's primary energy sources and
will ensure that the gas­based industries and installations do not face a sudden lack of resources in the
near future.

Despite huge protests, the government proceeded with Rampal coal­based power plant, a 1320MW
power project sponsored by the Bangladesh­India Friendship Power Company (BIFPCL). Bharat
Heavy Electricals Ltd (BHEL) was given the construction contract at an estimated cost of USD 1.68
billion. It is expected to come into operation in December, 2018.

Matarbari coal­fire power project is another such project with 1200MW production capacity to be
built near Maheshkhali with expected completion in 2022. The project is a costly one with USD 4.6
billion investment as it will come with its own deep sea port to facilitate coal import.

Alongside the Bay of Bengal, we do not have any deep sea port and that is a huge hassle for the large
vessel to load or unload the cargo. This is inducing huge inefficiency in port operations and Paira
Deep sea port is about to solve that. The port is expected to be fully in operation in 2023.

The Dhaka­Chittagong Elevated Express Highway will enable the citizens of both the cities to
travel from Dhaka to Chittagong and vice versa within two hours. The vehicles will run 120km per
hour without any blockade. This will highly increase the business relation between the two cities
which will contribute to the national economy.

Moreover, Bangladesh government has taken an initiative to establish around 100 Special Economic
Zones (SEZs) and Economic Zones (EZs) all over the country. The Bangladesh Economic Zone
Authority has already leased a total of 76 land units of economic zones out of 100 and started work to
establish around 100 economic zones over the next 14 years. This initiative of the government will
generate about 10 million jobs and USD 40 billion worth of exports.

Bangladesh government is investing highly in Hi­Tech Parks to turn the country into
hardware­software exporter. Bangabandhu Hi­Tech City (BHTC) is the first full­fledged special
economic zone for IT and hi­tech industry in Bangladesh. Government is working with a target to
earn USD 5 billion annually and create 1 million jobs by 2021 in IT sector. A total of 12 IT Parks will
be established in 12 different districts to achieve the target.

Along with the above mentioned projects, Dhaka­Chittagong Express Railway, Dhaka­Cox's Bazar
Railway Link, Dhaka Elevated Expressway and some other projects are going to be extremely
important. We can also expect some projects on utilization of sea resources to be taken soon.

The current government has taken a strong challenge to change the landscape of the country as they
are really pushing the country forward. But few challenges are on the way for proper implementation.

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With so many mega projects on hand, the lives of people are expected to change in Bangladesh very
soon. The whole country will be connected to the capital, Dhaka will be a better place to live with
control of traffic congestion; the economy will advance, people will have better internet connectivity
throughout the country and the dream of Digital Bangladesh will come true. All these can happen in
the next few years only if corruption can be eradicated.

The government of Sheikh Hasina has courageously taken so many mega projects which no other
government could have dared. We hope all of these projects come to reality. If that happens, we need
not worry about becoming a developing country anymore; rather we can chase the dream of
becoming South Asian superpower. We hope Bangladeshi people enjoy the benefit of this brave run.

35. Metro Rail

Dhaka, the capital of Bangladesh is one of the most highly populated and traffic congested cities in
the world with an ever increasing population of over 14 million. With continued economic growth
and development, unbearable traffic congestion all around the city has become a grim reality for its
inhabitants. The congestion and pollution problems are rapidly growing due to rapid urbanization. In
the absence of a dependable and adequate public transport system, most of the roads remain occupied
by vehicles with very little capacity.

The urgency to mitigate the mass transportation problems in Dhaka prompted the Bangladesh
Government to seek expansion and modernization of the city’s Mass transit mode. In 1998,
Bangladesh Government created the Dhaka Transport Coordination Authority.

Under the Road Transport and Highways Division of the Ministry of Road Transport and Bridges, the
Dhaka Mass Rapid Transit Development Project (DMRTDP) was taken up by the Government. In
June 2013, Dhaka Mass Transit Company Limited (DMTC) was established by the Government to
implement the Metro Rail Lines across the city.

MRT LINE­6 is being implemented to make life easier, for everyone in Dhaka. It will run all the way
from Uttara to Motijheel, covering the distance of 18.9 kilometers, with 16 stations along the way.
The stations are Uttara North, Uttara Center, Uttara South, Pallabi, Mirpur­11, Mirpur­10, Kazipara,
Shewrapara, Agargaon, Bijoy Sarani, Farmgate, Karwan Bazar, Shahbagh, Dhaka University,
Bangladesh Secretariat and Motijheel. The approximate travel time will be a little over half an hour.
To maintain and use MRT line­6 properly, an international standard Rolling Stock will be deployed.
There will be 24 sets of Trains each set consisting of 6 cars initially, with a plan for expanding to 8
cars per set in the future. In order to ensure safety for the passengers, Platform Screen Doors (PSD)
will be installed on all stations. The Metro Rail coaches will be equipped with modern features like
information display, well organized seating arrangement, Air­conditioning with Wheelchair
accessibility on both ends of the Train. During Peak hours the trains will run every 4 minutes 30
seconds in 2021, and every 3 minutes 45 seconds in 2026. In 2021 an estimated 5 lakh people will
commute by MRT Line­6 every day. The Viaduct of the MRT line­6 will be generally 10.4m high. In
order to reduce vibration and noise, Floating Slab Track (FLS), Continuous Welded Rails (CWR) and
Noise Barrier wall will be installed wherever necessary.

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Metro rail fact sheet

 Dhaka Metro Rail Project total cost of Tk 22,000 crore

 Officially known as the Mass Rapid Transit (MRT) Line­6, metro rail service is expected to open
half of its 20.10 kilometres by the end of 2019

 Once completed, the service would carry 60,000 passengers/hour

 20km Metro Rail route will be constructed from Uttara to Bangladesh Bank having 16 stops

 The project will save of Tk 200 billion/ year, equivalent to 1.5% gross domestic production
(GDP) and 17% of the total tax revenue

 It will significantly reduce travel time from one end to the other to 36 minutes from at least two
hours

 The Japan government through Jica will provide Tk 16,600 crores of the total project cost of Tk
22,000 crore ($2.5 billion) as loan at 0.01% interest rate. The rest will have to be managed by the
government

 Nippon Koei Ltd of Japan is leading the consortium of consultants with partners Nippon Koei
India Ltd, Delhi Metro Rail Corporation Ltd, Mott MacDonald Ltd India, Mott MacDonald Ltd
UK and Development Design Consultants Ltd Bangladesh

 The consortium has prepared metro's detailed design, supervised construction work and helped
manage Dhaka Mass Rapid Transit Development Project, the official name of the metro scheme,
with Dhaka Transport Coordination Authority (DTCA) as its implementing agency

 The metro rail will have 16 stations at Uttara, Mirpur, Rokeya Sarani, Khamarbari, Farmgate,
Sonargaon Hotel, Shahbagh, Doel Chattar and on Topkhana Road.

 The 12km track of the first part stretches from north Uttara to Agargaon.

 According to Japan International Cooperation Agency (Jica), 14 trains would operate every three
minutes and carry 60,000 passengers every hour in both directions.

 The estimated time to travel the 20km distance, from north end of Uttara to Motijheel, is 35
minutes. The trains would have six cars each, all air conditioned.

 The government has allocated Tk 3,425.83 crore for the project in 2018 fiscal year, which is
about 64 percent of the amount it was supposed to foot.

 The second phase, which will be from Agargaon to Motijheel, will be complete by December
2020. The service will start with six trains and once the second phase is completed 24 trains will
be sent out. The trains will be from Mitsubishi.

 The metro rail will have noise barriers and vibration­free tracks and thus be
environment­friendly. the cars would be made of stainless steel and aluminium alloy,

 The project is being implemented by government­owned Dhaka Mass Transit Company Ltd
while Dhaka Transport Coordination Authority is supervising.

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Project timeline

 In December 2012, the Executive Committee on National Economic Council approves the Metro
Rail scheme.

 In February 2013, Jica signs the loan agreement with Bangladesh.

 On November 19, 2013, Md Aftabuddin Talukder, executive director of DTCA and Yoshiko
Tsunoda, chairman of Nippon Koei Ltd, sign the consultancy deal in Dhaka.

 The $2.7b metro rail project got a shot in the arm upon receiving Japanese funding in February
2014.

 Road Transport and Bridge Minister Obaidul Quader placed the Metro Rail Bill 2014 on
November 30, 2014 at the parliament in a bid to provide fast and improved public transportation
in Dhaka and ease traffic congestion in the capital.

 The first tender for pre­qualification to procure 24 locomotives, 144 coaches and equipment for
the depot was floated early January 2015.

 On March 27, 2015, the government signed a contract with Japanese Tokyu Construction
Company to develop the Metro Rail depot.

 Prime Minister Sheikh Hasina on June 26, 2016 inaugurated the construction work on the
much­hyped first­ever metro rail service in the capital. Through the inauguration of the
construction work, a formal commencement of ground development for a depot began today. The
depot is the foremost component to be in place for building the metro rail service system, as
metro trains will be launched on the elevated lines from the depot.

 The prime minister inaugurated the construction work from Bangabandhu International
Conference Centre in the capital.

 The project has been delayed by at least six months because of the terrorist attack in Gulshan in
July 2016 that claimed the lives of seven Japanese nationals involved with the project.

 Authorities of Dhaka's maiden metro rail project on May 3, 2017, signed three contracts with two
companies for the civil construction work at the Uttara depot and building elevated rail viaducts
from north Uttara to Agargaon. According to one of the contracts signed, a joint venture of
Italian­Thai Development Public Company and Sinohydro Corporation is going to do the Tk
1,595 crore civil constructions at the metro rail depot,

 The metro authorities signed the other two contracts (package­3 and ­4) with Ital­Thai. The
contracts worth Tk 4,230 crore were for the construction of 10km­long elevated viaducts and
nine stations between north Uttara to Agargaon.

 The authorities gave the work order to the contractors on August 1, 2017.

 Road Transport and Bridges Minister Obaidul Quader on August 2, 2017 inaugurated
construction of the first part of the elevated railway (viaduct) and nine stations of the country's
much talked­about maiden metro rail in the capital. This is the visible beginning of physical

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 construction of the elevated rail tracks and stations

 On September 13, 2017, three more agreements with Chinese and Thai firms on the country's
first­ever metro rail project were signed. Dhaka Mass Transit Company Limited (DMTCL), a
state­owned enterprise founded to implement the metro rail lines across the Dhaka city, signed
the separate contract packages (CPs) including CP­2, CP­3 and CP­4 worth over Tk 58.26 billion
($719 million) with the firms, Italian­Thai Development Public Company Limited, a
Thailand­based construction firm, and Chinese state­owned Sinohydro Corporation Limited.

 On April 30, 2018, Dhaka Mass Transit Company Ltd today signed contracts with two
joint­venture companies for package­5 and package­6 of MRT Line­6 known as Metro Rail.
Dhaka Mass Transit Company signed contract for Package­5 with Takken Corporation, Abdul
Monem Ltd and Abenikko JV for Tk 1,855 crore. And for Tk 2,332 crore, it inked a deal with
Sumitomo Mitsui Construction Co Ltd JV Package­6

Habib Adnan
36. Moheshkhali Floating LNG Terminal
PROJECT TYPE

Floating LNG terminal

LOCATION

Moheshkhali Island, Bay of Bengal, Bangladesh

CAPACITY

500MMscf/d

Moheshkhali floating LNG terminal will be the first facility of its kind in Bangladesh. The project
secured financing for start of construction in July 2017.

The Moheshkhali terminal will be located in the southern part of the Bangladesh, offshore the
Moheshkhali Island. Moheshkhali floating liquefied natural gas (LNG) terminal is being developed
offshore the Moheshkhali Island in the Bay of Bengal, Bangladesh.

It will be the country’s first LNG import terminal and is expected to help secure the future provision
of energy in the country. The terminal will cost an estimated $179.5m and feature a base­load
capacity of 500 million standard cubic feet of gas a day (MMscf/d).

The project will be jointly developed by Excelerate Energy and Petrobangla on a build, own and
operate basis.

Construction on the project is scheduled to commence in the final quarter of 2017 and be completed
by mid­2018.

Moheshkhali floating LNG terminal purpose

Bangladesh is heavily dependent on natural gas to its energy requirements due to limited hydro and
wind resources, as well as a lack of available land for the development of solar projects.

The country has been experiencing severe shortage of energy resources for many years, with demand
exceeding five billion cubic metres a year. These shortages are having a noticeable effect on its
energy, water and transport sectors.

Additionally, the existing natural gas reserves are forecast to exhaust by 2031, despite being
estimated to comprise more than 15 trillion cubic feet.

Bangladesh is expected to face an energy crisis should no new fields be discovered by that period.

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Petrobangla proposed the construction of the new terminal to address this shortage and enable the
importation of natural gas into the country.

The proposal was initially made in 2010, though finding a company willing to implement the project
took approximately six years.

Details of Bangladesh’s first LNG import terminal

Moheshkhali floating LNG terminal will include a floating storage and regasification unit (FSRU), a
subsea buoy system and a subsea pipeline, which will connect the terminal to an onshore pipeline
system.

The FSRU will have a storage capacity of 138,000m³ of LNG and a regasification capacity of
500Mscf/d.

The terminal’s offshore subsea buoy system will be used for mooring and will also serve as a conduit
to transfer natural gas onshore.

All the necessary geotechnical and geophysical studies for the terminal’s construction have been
completed and confirmed the site’s viability.

Financing for the Moheshkhali terminal

International Finance Corporation (IFC) is acting as the lead arranger for the project’s financing,
which was closed in July 2017.

The organisation arranged a debt financing package of $125.7m, including a $32.8m loan from its
own account.

The remaining loan is being provided by a group of banks including CDC Group, Development Bank
of Germany (DEG), Japan International Cooperation Agency (JICA) and the Dutch­led
Entrepreneurial Development Bank (FMO).

Excelerate Energy and IFC had previously signed an equity agreement for the project.

IFC has contributed approximately $10.8m in equity under the agreement, while Excelerate
contributed a total of $43.1m.

Contractors involved

Excelerate Energy has been awarded the engineering, procurement and construction (EPC) contract
on a build, own and operate basis.

The company will manage the terminal for 15 years, with Petrobangla taking ownership after this
period.

The EPC contract includes the provision of FSRU technology, port service vessels and facility
management services.

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"Moheshkhali floating LNG terminal will include a floating storage and regasification unit (FSRU), a
subsea buoy system and a subsea pipeline."

Excelerate Energy contracted MacGregor to supply the mooringand gas transfer system for the
FSRU. Svitzer has been subcontracted by Excelerate Energy for a 15­year period to provide marine
support services.

The company will use five vessels for the project, including three under­construction Robert Allen
RAstar 3200 Ocean Going Terminal tugs, one 36m Crew Boat and the MSV Svitzer Foxtrot.

Benefits of Moheshkhali LNG terminal

The new terminal will enable Petrobangla to import LNG from international gas markets and increase
natural gas supply in Bangladesh by approximately 20%.

It will also diversify Bangladesh’s sources of natural gas and provide the country with access to clean
energy.

Additionally, the development is expected to provide sufficient natural gas to support power
generation of up to 3,000MW, which is essential to promote power reliability, industrial development
and the creation of jobs in the country.

37. Use of Technology in Banking Sector of Bangladesh

Today, information and communication technology has become the heart of banking sector and
banking industry is at the heart of every robust economy. Electronic banking system has become the
main technology driven revolution in conducting financial transactions. Technology has already
enabled most of the banks in Bangladesh to introduce innovative products to their customers in the
form of ATM/POST facility, Mobile/Tele banking, Web banking, ‘Anytime’ and ‘Anywhere’
banking, etc. Customers of banks have felt the positive impact of technological solutions
implemented by banks. Banks play a vital role in developing the economic and social conditions of a
country. The major share of the profit of banks generally comes from spread. But the profitability of
banks is under tremendous pressure because of continuous shrinking of spread. It becomes important
for banks to reduce the cost per transaction for increasing spread that in turns will increase the
profitability of banks. Use of technology in banks reduces the cost. The basic difference between
online banking and traditional banking is that, in traditional banking the customer has to visit the
branch for the basic banking needs viz. withdrawal or deposit of cash, transfer of funds, statement of
accounts etc.

ICT Infrastructure of Banks

According to the Bangladesh Bank (BB) guideline, commercial banks are categorized as Category­1
and Category­2. Category­1 means Centralized ICT Operation for managing core business
application solution through Data Center (DC) with backup assets for continuation of critical services
including Disaster Recovery Site (DRS)/Secondary Data Center to which all other offices, branches
and booths are connected through WAN with 24/7 attended operation. Category­2 means

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Decentralized ICT operation for managing distributed business application solution hosted at DC or
operational offices/branches with backup assets for continuation of critical services connected
through WAN or having standalone operations.

Branch Automation

Despite the fact that the SOCBs are large in terms of shares in assets and number of branches, they
could cover only around 72.3 per cent of their branches under computerization while the PCBs and
FCBs brought 99.5 and 100 per cent of their branches, respectively, under computerization.

IT Investment and Sector­wise IT Budget

In tune with the global trends, Bangladeshi banks have been investing heavily in technology
infrastructure, solutions and manpower. Possibly, the key purpose of such high investments in IT is to
achieve increased productivity, efficiency, profitability and competitive advantage through improved
internal and external transaction flow, better access to clients and markets and enhanced reach and
quality of products and services. Total investment for IT operations in the banking sector up to 2015
was estimated at Tk. 25,007 crore since 1968 (considering the installation of computer at Agrani
Bank in 1968 which was the first installation of computer in the banking sector of Bangladesh). And
in 2015, approximately Tk. 1138 crore was invested on IT processes in the banking segment,
excluding central bank In 2015, it is seen that a major portion of the IT budget was used to procure
hardware and it was 41.9% of total budget. Second highest budget went to software sector. However,
budget for security, training and audit was very poor in last five years. The rest of the budget went to
power management, vehicles purchase, stationary procurement and decoration purpose.

Penetration of Computer (PC) and E­mail ID

Number of computers and official E­mail account per hundred employees are two important
parameters to understand the automation status of a bank. At the end of 2015, it is seen that about
86% of the bank employees have working terminal (PCs) whereas approximately 77% of the
employees (perhaps most of the non­officers have no e­mail id which is not unusual) have official
e­mail addresses. Currently we have about 1.73 lac employees in the banking sector and total number
of 1,46,253 PCs and 6700 Servers are being used in this sector.

Corporate Intranet System and Internal Communication

Some of the banks have their in­house developed system having a revolutionary impact in
implementing the paper­free communication inside the bank. An internal web portal that holds
features like circulars, messaging, news, instant notices, employee profiles, on­line leave processing,
on­line requisition, on­line cheque requisition, MIS reports from CBS data and many more.

Human Resource in IT Department

Today ‘IT Department’ is the most important department in any bank which was hardly found a
decade ago. This departments works like a power­hose of a bank. Most of the IT departments are
headed by DMD equivalent executives. Approximately, 3500 IT professionals has been working in
those departments.

Core Banking Software (CBS)

Using the CBS Systems, banks are providing real­time online banking services to its customers. It has

Habib Adnan
also the capability to provide centralized MIS and ad hoc reports. Moreover, it is also helping to
ensure seamless flow of information in a secured manner at all levels of the management. In today’s
highly volatile and competitive business environment, a centralized robust CBS that can
accommodate all the electronic delivery channels is a must for survival in the race of competition.

Data Communication Infrastructure

Reliability of data communication link is a matter of the utmost importance for smooth operation of
online banking. Optical fiber transmission system is more reliable compared to other transmission
links. A decade ago it was a dream to get an optical fiber connectivity in Bangladesh. But, recent
development of the optical­fiber network of the country have brought huge opportunities for banks to
run online banking activities easily. Following table shows that banks are now trying to give more
priority to use optical fiber link compared to other links to ensure stable online data services.
Moreover, around 94% banks use dual links for online branch, ATMs or ADCs.

Internet Banking

Bangladeshi customers are now able to do banking from any place of the globe at any time by using
Internet technology.

ATM Banking

Point of Sale Terminal (POST)

Besides expanding the ATM networks, the banks are also giving emphasis on increasing their POST
network covering the major outlets for ease of purchase for the customers. Many banks have installed
POS terminals in major shops, hotels, sale centre, etc., all over the country. POST allows all types of
debit card and credit cards for making transactions.

Mobile Financial Services (Mobile Banking)

Mobile banking is a term used for performing banking activities via a mobile device such as a mobile
phone. The developments in mobile phone density in Bangladesh, with 132 million subscribers,
present a unique opportunity to leverage the mobile platform to meet the objectives and challenges of
financial inclusion.

Banks are already carrying out activities such as disbursement of inward remittances, financial
transactions through agent/ bank branch/ ATM/ mobile operator outlet, payments of business
organizations (such as utility bills) by individuals, payment of individuals by business organization
(such as salary distribution) payment of individuals by Government (such as old­age allowance,
freedom fighter allowance, etc.), payments of Government by individuals (such as tax payments),
individual to individual transactions (from one registered mobile account to another registered mobile
account) and other transactions such as microfinance, overdraft facilities, insurance premiums, etc.

Agent Banking

Bangladesh Automated Clearing House (BACH)

The Bangladesh Automated Clearing House (BACH) started automated cheque clearing from 07
October 2010 by replacing the ancient manual clearing system with automation, which allows

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inter­bank cheques and similar type instruments to be settled instantly.

Bangladesh Electronic Funds Transfer Network (BEFTN)

The commencement of the Bangladesh Electronic Funds Transfer Network (BEFTN) added a new
milestone in the country’s payment and settlement system. BEFTN is the paperless electronic
exchange that ensures transfer of funds from one account to another, either within a single institution
or across multiple institutions through computer­based systems.

RTGS

Bangladesh Bank is committed to provide a safe, efficient, inclusive and authorized payment and
settlement system for the country. The introduction of the Real Time Gross Settlement (RTGS)
system is another milestone of the country’s financial sector development. RTGS is a central
processing and settlement facility system which was launched on 29th October 2015.

Online MIS in Banks

A separate MIS department can ensure precise, timely and accurate generation of MIS report.
Generation of MIS report from various departments and sending it to the management at right time is
a challenging job. For this reason, a separate MIS department gives benefit to an organization
especially if the organization is very large.

Call Center

Giving importance to customer satisfaction and easy access to banking services, 48% banks have
established its high tech contact Centre. IVR, integrated with CBS and Card system that enables
customers to do banking by any phone system as well as consultation with Call Centre agents (Phone
banker).

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