The New Nation - Internet Edition

THE great occasion of holy Hajj has once again come before the world community with its message of universal brotherhood. Hajj is the greatest religious pilgrimage of the Muslims of the world. This year more than 25 lakh Muslim devotees have gathered in the holy city of Makkah in Saudi Arabia to perform hajj. The hajj is one of the five pillars of Islam. For performing this religious duty devotees undertake pilgrimage to the holy city of Makkah. Performance of hajj has been made compulsory for those Muslims who have the ability to bear the expenses of pilgrimage to Makkah and performance of other sites. But it is optional for poor people who are not in a position to undertake the pilgrimage.

Though mainly a religious performance, hajj has a great social value. Devotees from all the continents of the globe irrespective of their differences of race, religion, colour, language and culture gather in Makkah to perform this religious duty. All the devotees clothed in white robes say prayer together. There is no discrimination between the rulers and the ruled, between the white and the black. It symbolises universal brotherhood of the Muslims and mankind. Muslims make no difference among men of different social status while saying prayers. This message of equality among men strengthens the spirit of universal brotherhood through the hajj. Sacrificing animals is an integral part of hajj. It is actually a symbol of freeing oneself from all worldly evils and commission of sins. It teaches devotees to refrain from injustice, corruption and all forms of crime and lead them to the attainment of spiritual emancipation.

The modern world has attained phenomenal material advancement. Information and communication technology has virtually turned the world into a global village. But morally and ethically the achievement is marred by a number of factors. In the absence of worldwide unity and fraternity, the world is still raged by poverty, hunger and injustice, ethnic and gender inequity and torn by all sorts of disputes, especially by the so-called clash of civilisations. Modern civilisation of late has brought back the old memories of religious hatred and racial discrimination. Hajj teaches the devotees the spirit of building a human society based on justice and equality and free from all kinds of corruption, exploitation and wrongdoings. These lessons and the spirit of hajj are expected to help build a world based on human dignity and equality. Let the eternal message of self-purification, unity, equality, justice and universal brotherhood of mankind help end the present dangerous trend of hatred that is threatening the globe with destruction. Let the moral, ethical and spiritual bonds of the holy hajj bind all the people of the world together.

IT is for a simple universal realisation that has dawned that the smaller the role of the government in the economy, the better the prospect for efficient use of scarce resources which ought to be every economist's goal. Following this principle, Bangladesh has been striving to achieve private sector-led economic growth for over three decades. This has led to the transformation of its economy remarkably. The state sector has considerably shrunk and the economy has added substantial sinews to it and diversified under the private sector. Nonetheless, it is acutely felt by private sector entrepreneurs in different fields that they could achieve a great deal more if only they were better supported in their endeavours by official policies and facilities in place.

The Asian Development Bank (ADB) issued a statement some time ago about properly aiding the private sector. The ADB identified poor power supply as the single-most important infrastructure constraint to private sector development. Power is the basic requirement for industries. But the gap between the demand for power and its availability has been widening alarmingly in the country with negative consequences for the latter. Many industrial investments are on stream but these could hit snags after going into operation if new generation capacities are not added. The rate of new industrial investments would be also surely adversely affected by the dwindling power supply. All government plans to increase power generation must be speedily completed. The private sector has been allowed to generate power on a limited basis. But generation of power in the private sector remains on hold for government not extending assurances about the sale of this power. This uncertainty must be overcome at the soonest to increase private sector involvement in power generation. The availability of the other main source of energy, natural gas, must also increase. There are also other infrastructural bottlenecks of significance such as inadequacy of roads and telecommunications. The establishment of these in greater number can be supportive to private investment. Expansion of ports, their modernisation and improvement of their handling capacities are badly needed.

Private initiative is encouraged when government policies are seen as favourable over the long term. Withdrawal of tax breaks, high rate of interests on borrowings, skewed tariffs that favour imported products over their local substitutes, high rate of corporate taxes and other fiscal and monetary policies that do not assure potential investors about long-term dependability on them for the viability of the enterprises they wish to build, come as disincentives to entrepreneurship. Thus, it needs to be a singular aim of the government to create and sustain a policy environment that can truly keep the private sector interested and going on the path of entrepreneurship.

Dr. Salehuddin Ahmed, Governor, Bangladesh Bank

At the outset, I thank ICMAB for arranging the workshop on "Emerging Changes in the Financial Sector of Bangladesh". The subject is very close to my heart and also to all the stakeholders working for the development of the country. One has to agree that no economy can grow and improve the living standards of its population in the absence of a well functioning and efficient financial sector. Improvement of the financial sector can create a conducive environment to enable the poor and disadvantaged to get the benefits of accelerated growth.

The financial sector of Bangladesh is composed of Bangladesh Bank (BB, the central bank), scheduled banks (or, deposit money banks, DMBs), non-bank financial institutions (NBFIs), insurance companies, micro-finance institutions (MFIs), credit rating agencies and stock exchanges. Direct regulatory and supervisory responsibility over DMBs and NBFIs rest with BB.

As in many other developing countries, implementation of Basel II is a challenging issue for banking sector of Bangladesh. Compliance of Base Core Principles (BCPs) requires providing a solid foundation for the eventual implementation of the New Accord. Recently BB has also carried out a self assessment of the extent of Compliance of BCPs. The findings show that it is now a largely compliant of Basel principles.

Since the New Accord requires substantial prior risk management practices in the banking sector, BB issued five separate guidelines on five core risk areas in banking in 2003. It provides a basic foundation for smooth implementation of the New Accord. The risk areas include credit risk, asset and liability/balance sheet risk, foreign exchange risk, internal control and compliance risk and money laundering risk. Since the Accord is complex and may affect different banks in varying degrees, careful and compatible strategies need to be developed. This deserves inclusion of market participants in the decision making process.

A fair representation of financial position of a bank is required by its stakeholders for making their economic decisions. This is significantly influenced by the accounting standard. In line with international norms, Bangladesh Bank introduced international accounting standards (lAS-30) in the banking sector of Bangladesh in 2000. This requirement has brought transparency in the affairs of bank balance sheet by disclosing many sensitive issues such as volume of bad debts, amount of bad debt provisions, shortfall in provision, earning per share, cash flow position, banking risks including contingencies and future losses, maturity mismatch of asset and liabilities, credit facilities allowed to the bank directors. In order to bring more disclosure in the financial statements of banking companies, BB is continuously updating this requirement from time to time in line with International Accounting and Reporting Standards.

On the above backdrop the role of the professional accountants more particularly the management accountants as member of the bank management team has become very prominent. The Management Accountants with their trained mind of accounting, finance, commerce, regulatory framework with analytical ability can better serve the banks in order to assist the management in discharging its obligations to the stakeholders, regulators and above all the society.

In the age of globalisation and trade liberalisation accountants play a vital role in financial discipline and transparency and thereby managing organisational, productivity and profitability of the organisations both in public and private sector. It is not only the cost and management accounts of the company but the total human resource pool of the organisation specially in the strategic level that makes the difference between doing things effectively and efficiently.

Corporate Performance Management provides visibility into how well a company is maintaining its strategic focus. Key performance indicators allow a company to see in what areas it is executing well, and what areas require improvement.

As we know that corporate performance management is the area of business intelligence involved with monitoring and managing an organisation's performance, according to key performance indicators such as revenue, return on investment, overhead, and operational costs. For online businesses, corporate performance includes additional factors such as page views, server load, network traffic and transactions per second. Corporate performance is also known as business performance management or enterprise performance management.

Under the current context the risk in banking has increased significantly due to change of the status of the banks from deposit collector and investors to a large service provider. Application of high tech information technology, complex business transactions like securitisation, derivatives, various swaps, etc creating substantial risk for the banking institutions. In order to address those and similar innovative transactions, the banking community needs the services of techno-human resources. I personally believe that the accountants are the right professionals to handle the above transactions comfortably.

The Cost and Management Accountants (CMAs) are the future oriented visionary professionals, the integral part of the management teams. The expectations of the society to the CMAs are more. I hope the professional Cost and Management Accountants will play their appropriate role for public interest by the demand of time.

It is indeed a great pleasure to know that the Institute of Cost and Management Accountants of Bangladesh (ICMAB) is giving award to some financial institutions of the country for their best corporate performance for the first time.

Of course this initiative will encourage the banks and financial institutions to increase their performance to the international level.

I congratulate the winners of the award and would like to take the opportunity to express my sincere and heartfelt thanks to ICMAB for arranging such a timely event of Awarding Best Corporate Performance Award.

The strategies that have been initiated and the reform programmes that have been undertaken in the financial sector of Bangladesh, with support and help from all concerned would not only help the economy to grow at a faster rate but also pave the way for Bangladesh to become a member of the "middle income group country" by the end of the next decade.

(Speech of Dr. Salehuddin Ahmed, Governor, Bangladesh Bank at the workshop on 'Emerging Changes in the Financial Sector of Bangladesh' on the 15th Dec'07arranged by the Institute of Cost and Management Accountants of Bangladesh (ICMAB)

Md. Masum Billah

Climate change leading to environmental hazards has become a growing concern across the globe. The developing countries are the worst sufferers of environmental hazards. Though developed countries are poised to a comparatively better situation in this regard, indirectly they are also affected by these evils. Sometimes the direct wrath of nature shows its fury even to the United States of America in the form of hurricane 'catrina'. Many European countries see their warmest winter and forest fire in Australia and in some other cold countries clearly manifest the dangerous turning of global climate threatening to grasp the whole humanity. So, the industrially developed countries don't have complacence to sit idle over the issue. Already caused damage to the poor countries need to be minimized with the direct help and cooperation of the industrially developed countries. This serious concern first practically sensitized the poor and developed countries in 1992 which led them to have a conference in Rio de Janeiro. Different climate initiatives such as the US-led 'big emitters' process the G8 and the Asia-Pacific Partnership for Clean Development and Climate, many environmental campaigners, the recent Asia- Pacific Economic Co-operation forum in Sydney which saw more that 20 nations agree to voluntary targets clearly show the global concern as well as consciousness of environmental pollution.

In line with these initiatives delegates from nearly 190 countries gathered for two weeks in Bali to discuss this global issue. A principal objective is to agree a 'Bali roadmap' a process leading to a successor agreement to the Kyoto Protocol, whose targets for reducing greenhouse gas emissions expire 2012.Two-week meeting is officially described as the Thirteenth Conference of the Parties to the UN Framework Convention on Climate Change and the Third Meeting of the Parties to the Kyoto Protocol. In plain language , that makes it the thirteenth summit of countries signed up to the UN convention which dates from the Rio de Janeiro Earth Summit of 1992 and the third meeting of countries inside the Kyoto Protocol since that came into force in February 2005. The UN convention commits the global community to 'avoiding dangerous climate change' while the protocol sets binding targets on greenhouse gas emissions for industrialized nations.

For a variety of reasons the actual cuts produced by 2012 will be much smaller. Many Kyoto countries are set to miss their targets by a long way. The European Union is heading efforts to secure a new set of targets that would reduce emissions from developed nation by 25-40% by 2020. Many countries richer and poorer, including the US, Canada and India, are not prepared to accept binding numerical emissions targets at this stage. The Bali roadmap is expected to launch negotiations that will conclude by 2009 with the establishment of an agreement that governs the climate change issue after 2012 when the Kyoto protocol will be phased out. The first option envisages 'A dialogue without prejudice to any future negotiations that shall complete its work in 2009 and report to the conference of parties at its fifteenth session which will be held in Copenhagen. All discussions focus on what is called 'Agenda focus item 4, titled Report of the co-facilitators of the dialogue on long term cooperative action to address climate change by enhancing implementation of the Convention. There was a formation of a close group of parties called Friends of the Chair' numbering forty.

UN Climate chief Yvo de Boer warned that deadlock between USA and European Union over emissions cuts threatened to derail talks aimed at launching negotiations for a new global warming pact . Washington has refused to accept language in a draft document suggesting that industrialized nations consider cutting emission by 25% to 40% by 2020 during upcoming negotiations for a successor to the Kyoto Protocol. UN. He says, " I'm very concerned about the pace of thins as a two week climate conference entered its final stretch. If we don't get working on the future, then the whole house of cards fails to pieces. My assessment is that is it not clearly crafted. We will have to wait and see where this goes." In the conference developing countries wanted to give the message that the industrially developed countries are mainly responsible for global warming and other natural calmatives related issues. Necessarily they must play the key role to minimize it as it is absolutely impossible to fully bring under control. In order to minimize it, the developed countries must finance the poor countries as it is a matter which concerns the whole humanity. Now the question arises how the developed countries will utilize and give the money to the poor nations. A clear cut way should have been finalized in the conference but it did not take place actually.

The devastation inflicted by recent Sidr in the coastal belt of Bangladesh must have given food for thought to the Bali Conference participants to raise the consciousness of all nations contributing to global warming. It has caused unlimited damage not only to Bangladesh but also to a vast majority of people belonging to many countries directly and indirectly as the rich nations who are diplomatically tied with us and our developing partners cannot sit idle in the this situation. They have to respond to our immediate needs leaving other areas unattended at least for the time being. Indirectly it means that it concerns all. The unprecedented level of humanitarian gestures to help our Sidr battered people proves the truth of this concern. Building more cyclone shelters along the coastal belt and planting more trees at the cost of extra budget incur extra expenditure for us involving our developing partners as well. Sidr and cyclone are the direct effect of while greenhouse gas emissions which claim the first priority to be discussed and implemented in the greater interest of the present population and the posterity.

(The writer works as a specialist in the BRAC Education Programme, PACE and regularly writes on various national and international issues.)