The New Nation - Internet Edition

Flat construction thru partnership

THE present government, according to newspaper reports, has 'revived' a move approved in 1999 for constructing flats and apartments in partnership with private entrepreneurs on abandoned government lands in Dhaka and elsewhere in the country. This is meant for providing housing facilities to government employees. The housing and public works ministry has already prepared a draft guideline for construction of flats and apartments through such partnership. The guideline, styled the 'Partnership-basis flat construction on government lands guidelines 2008', is expected to be placed before the council of advisers shortly for its seal of approval afresh though the original proposal was approved earlier by the then Awami League government. An inter-ministerial meeting attended by the officials representing the law and finance ministries and the planning division, along with others concerned, finalised the draft last month.

The government's share of the apartments to be constructed by private companies will be allotted to the aspirants among the public servants on hire-purchase basis, according to the guideline framed by the officials. The government officials will be given the apartments on permanent lease of 99 years as usual as per government provisions being followed by Rajdhani Unnayan Kartripakhya (RAJUK) and the housing ministry in allotting houses and plots. Before finalisation, the draft was sent to concerned ministries for scrutiny. The law ministry reportedly said that the guidelines did not essentially require its vetting since they are not treated as legal documents and the executive ministry could decide on the issue, adding that the case-to-case contracts in future could be vetted by the law ministry to avoid complications, if any.

The proposed construction projects will be prepared separately for different abandoned government plots in the capital city initially and elsewhere in the country, if required. After getting the council of advisers' approval of the guideline, the partnership projects would be examined by a steering committee comprising officials from concerned ministries to be led by the housing and works secretary for implementation, according to the media reports. Official sources have been quoted as saying the government would have no monetary involvement in the partnership construction projects save its abandoned lands in the capital. Government appointed real estate development companies would have to get the buildings' designs approved by the directorate of architecture. Using the abandoned government lands in the capital would be wise for such housing purposes. The construction of the controversial NAM flats in different important places including the Manik Mia Avenue, just in front of the majestic Sangsad Bhaban, by then government was not befitting at all for maintaining the serenity of the surrounding environment. Planned use of the available spaces in the city is required for decent living. However, the use of such spaces should be in keeping with the latest master plan which awaits detailed area planning for implementation.

Bank forgery must stop

REPORTS on withdrawal of money from banks by unidentified persons appear in the press from time to time. Even the breakage of lockers used by listed clients of different banks and the looting of valuables including ornaments have been reported. That being so, people at large and the account-holders of different banks in the country, have started wondering about the security of their deposits. Some robbers and fake account-holders have started withdrawing money from different accounts in bank branches in the capital city and other locations including district towns adopting fraudulent methods. Officials of banks and security guards usually work for security of the money and other assets of account holders. Those having accounts usually rely on supportive actions of officials to update the information on the amount of money in their accounts.

A gang of forgers have been identified and arrested by the Rapid Action Battalion from Ghunshi and Kakrail villages under the district of Madaripur. Under custody they have reportedly admitted that lots of money have been withdrawn by them over the past eight years from accounts of people with some bank branches. They have withdrawn over ten crore Taka from different branches of the Uttara Bank, the Sonali Bank, the Pubali Bank, the Islami Bank and the National Credit and Commerce Bank during the period. They were nabbed with Taka three lakh in their possession on Wednesday.

The gang of robbers will be handed over to the law-enforcing agencies for taking necessary legal action. Neither the law enforcing agencies nor the officials of banks could question the gangsters at the time of withdrawal of money from different accounts. They might have forged the signatures of account-holders or operated with the help of some bank employees. That being so, the nabbed gang members may give more information on the process of forgery prevailing in the banking sector.

The practice of forgery and illegal transfer of money from bank accounts have to be stopped by all means. The success of the RAB in nabbing the gang of forgers of bank documents has to be projected before the people. Dispassionate quarters and relevant official agencies have to react effectively for ensuring the security of bank accounts of people. When the investigation is completed, the accused and their collaborators should be brought to justice. The security of bank deposit has to be ensured with all actions that might be necessary by officials of banks and members of the law enforcing agencies.

Recession waxing and waning before looming

Maswood Alam Khan

Analysts in the capital markets talk in esoteric and ambiguous terminologies when the market is volatile. They carefully watch their tongues so that their words describing the volatility don't fright the investors. Phrases like 'stock crash' and numerals like '1929' they fear to utter as the word 'crash' may cause shareholders stampede and the number '1929' may remind people about the 'Year 1929' causing panic among consumers and investors. It was, as everybody knows, on 29 October, 1929 when $ 30 billion (ten times more than the annual budget of the then US federal government, far more than the US had spent in all of World War-I) had just evaporated into smoke from the US capital market due to stock crash.

Investors before buying shares judge the company's health profile not only by their audited income statements and periodical financial reports; they also read fellow citizens' mass behavior and decipher economic messages hidden behind each political event. Investors in USA even shadow the Chairman of the Federal Reserve for a clue---how he talks, how he smiles, how was his facial expression after his attending a vital meeting, what brand of coffee he prefers etc.---to forecast their shares' price that may fluctuate on Federal Reserve's decision on interest rates. But, problem arises when investors get panicked and a domino effect of a panic makes economic theories and Federal Reserve's interventions all futile, leaving the market to play on a theorem known as 'chaos theory' based on chaotic market behavior.

Last Monday US crude oil was sold at $ 88.92 a barrel---a drop of 10 percent price in a matter of 18 days. MSCI's main world stock index (a benchmark gauge of stock markets globally) was down 2.9 percent. The pan-European FTSEurofirst 300 was down 5.8 percent. Nikkei average (Japan's benchmark) was down by 3.9 percent. Gold was sold at $ 868.60 per troy ounce compared to $ 881.90 on Friday and $ 914 last week. Other commodities, such as precious metals, also plunged. Many indexes around the world were more than 20 percent below their recent cycle peaks. So was on Monday the picture of USA, the biggest consumer of the world in the backdrop of the possibility of an impending US recession in the wake of a downturn in property market that has exposed banks to billions of dollars of losses and caused a generalized tightening of credit to business and consumers. The word Monday, however, brought back to the losers a chilly evocation of Black Monday of October 28, 1929.

On Wednesday US Federal Reserve slashed the short-term interest rate by three-quarters of a percentage point with a view to keeping plummeting stock markets around the globe from threatening the international economy. The Dow Jones industrial average was down 218.91 points, or 1.83 percent, at 11,752.28. The Standard & Poor's 500 Index was down 28.31 points, or 2.16 percent, at 1,282.19. The Nasdaq Composite Index was down 72.36 points, or 3.16 percent, at 2,219.91. After initially falling nearly 450 points on Wednesday morning, the Dow Jones Industrial Average was down 157 points or about 1.3 percent---relatively a minimal decline compared to 9.3 percent fall in the Japanese stock market. Lesser fall of the US market was attributed by market observers to the Fed's emergency rate cut. Speculators, such as hedge funds, are becoming nervous. The global equity market weakness is prompting currency investors to liquidate their risky positions and demands for safe-haven government bonds are rising.

Such falls sometimes signal to general investors that it is time to buy. To consumers like us downward prices of commodities and services also sound good. But the descending trend, if continued for a few weeks more, will send an ominous signal to an economist: people would soon stop buying goods and services and start selling whatever they assume may further depreciate in value in near future, the first symptoms of a recession.

A slide into recession initially may herald sweet news for traders on gold as they know Federal Reserve in their attempt to thwart recession would go for aggressive cutting of interest rates that would weaken the dollar---making dollar-priced gold more attractive as a safer investment. With increased demand for gold as safe-haven its price is also due to go up. But, surprisingly the price is now falling. Maybe, investors are downloading their gold reserves en masse to buy stocks in the bearish markets on the expectation that much more aggressive slashes of interest rates in coming days would turn the markets bullish for stocks to yield a return higher than that from gold. But, if stocks fall precipitously for long their bridge of dream while crossing the river of fate will be burnt in the midway, a telltale signature that recession is knocking just around the corner.

Fear of recession in USA must chill blood of millions of Bangladeshis whose mere survival hinges on $3 billion worth of readymade garments exported to USA every year. Bangladesh is already struggling in competition with giants like China and India to hold on her export share in USA. A slash in export of RMG to USA in the wake of recession will wreck havoc on our employment and foreign currency earnings at a time when our people are already suffocating with unending price hike of daily necessities.

With US economy contracting US customers would be outsourcing for cheaper goods and services in third world countries like India, Pakistan, Vietnam and Bangladesh. Vietnam is now in an advantageous situation as their export-oriented industries---which are specially insulated against any extraneous or political disturbances---are producing goods and services at cheaper price than in any other country in our subcontinent.

Bangladesh, as an emergency measure to fall back on, should weigh up alternative products and jobs which are essential but expensive inside USA, should RMG exports to USA plummet. IT sector is one such area where Bangladesh, like India, may make a dent in US market. Indian software and services exports to USA jumped 33 percent to 31.4 billion dollars in March 2007 and may hit 60 billion dollars by 2010.

During tidal cycles sea water rises up and up and stops during high tide at a point called slack water. The tide then reverses direction and sea water falls down and down and stops during ebb tide at a point also called slack water. Tides visit us in semidiurnal pattern---two high tides and two low tides each day.

Likewise a nation's economy also follows a somewhat regular pattern of expansion and contraction. The economy will typically expand steadily for six to ten years and then enter a recession for six months to two years. The point where the recession begins is known as a 'peak', and the point where it ends is known as a 'trough'. Following the trough, the economy expands again toward another peak. Economists call the period of time between two peaks a 'business cycle'.

Anything of any kind may spark recession. Recession may, for instance, be kicked off by over-production---a situation in which the supply exceeds the nation's ability to consume. Confidence level of millions of consumers and producers plays another vital role in a recession. When consumers do not feel confident about the economy they buy less stuff. In response to decreased demand, producers lay off people and decrease consumption of raw materials. Unemployed workers have less money to spend, so demand decreases further. Employed workers fear they will lose their jobs, so they spend less money. Investors fear the value of stocks will decrease, so they are less willing to invest in new companies. The whole economy is thus trapped in a vicious quagmire.

History has proven that an economy will not keep expanding indefinitely---eventually it will contract for a while. With economy contracting thousands of different elements move in a downward spiral with snowballing effects. For a plethora of reasons an economy may slow down and if such a slowdown continues for a prolonged period, say for six months, economists consider the limbo a recession that visits every nation in a periodic order the way sea waves splash the sea beaches in a rhythmic order of high and low tides.

If the recession lasts long enough, and is particularly severe, it is known as depression the way rising sea water engulfing inlands for a period of time is known as flood.

When a recession grips a nation the government, especially in a free market economy, cannot single-handedly control the sliding economy. The course of a nation's recession is controlled by the actions of everybody living in the country. Anything influenced by millions of people is beyond the control of one person or a group. Nevertheless, the government tries to restore public confidence by taking some fiscal and monetary measures. Tax cuts, increased public spending, unemployment insurance etc. are few of the fiscal measures and allowing commercial banks to reduce their reserve ratio with the central bank, lowering the discount rates etc. are few of the monetary measures that may elevate public confidence in the economy and help ease the recession.

Investors all over the world are now watching the Wall Street with some trepidation and are reassured neither with Fed's slashing of the short-term interest rate by three-quarters of a percentage point nor with a package of $ 150 billion in tax cuts and other fiscal stimuli President George W. Bush has proposed as fears are deepening that a possible recession in the United States would have knock-on effects for other economies.

A key question pundits and economists of late are asking: "If America sneezes, does the world still catch a cold?" The answer is probably "No, not that much." The emerging countries in Asia and the Middle East weathered many fowl economic storms in the recent past, thanks to their huge reserves and steady GDP growth compared to many western countries. Some of the state-backed investment funds of Asia and the Middle East had recently even helped recapitalize a number of struggling banks in western countries.

In the end, time has proven that attitudes and economic factors ultimately shift, and every recession is a temporary phenomenon. Eventually, things turn around and an upward spiral is reestablished the way flood water recedes and lands resurface for life to restart with renewed vigor. Hope, with recession stalking the western hemisphere 1929 will not knock at all the doors of the whole globe!

The dangers of living in a state of denial

Pervez Hoodbhoy

A CACOPHONY of protests in Pakistan greeted a recent statement by the head of the International Atomic Energy Agency, Mohammad ElBaradei. "I fear that chaos, or an extremist regime, could take root in that country, which has 30 to 40 warheads," he said. He also expressed fear that "nuclear weapons could fall into the hands of extremist groups in Pakistan or Afghanistan".

But in Pakistan, few worry. The Strategic Plans Division, which is the Pakistani agency responsible for handling nuclear weapons, exudes confidence that it can safely protect the country's "crown jewels". The SPD is a key beneficiary of the recently disclosed secret $100 million grant by the Bush administration, the purpose of which is to make Pakistan's nuclear weapons safer.

This money has been put to use. Indeed, ever since September 11, 2001, there has been a regular traffic of Pakistani military officers to and from the United States for coaching in nuclear safety techniques. While multiple layers of secrecy make it hard to judge success, the improvement in the SPD's public relations is palpable. PowerPoint presentations, guided tours of military headquarters and calculated expressions of openness have impressed foreign visitors.

Senator Joseph Lieberman, chairman of a Homeland Security and governmental affairs committee, left reassured. After a briefing by the SPD's chief, Lieutenant-General Khalid Kidwai, Lieberman declared in a Press conference, "Yes, he did allay my fears," and promised to carry that message back to Congress.

So, is ElBaradei needlessly alarmed? Of the two diametrically opposed opinions, which deserves greater credence?

The two men are looking at different things. Lieberman was impressed by how well Pakistani nuclear handlers have been tutored in the United States. ElBaradei, on the other hand, expressed a broader concern. He presumably reasoned that safety procedures and their associated technologies are only as safe as the men who use them.

This is the crux of the problem. Pakistan has become steadily more radicalised as the influence of Islamists increases in its culture and society. The deliberate nurturing of jihadism by the state has, over 30 years, produced extremism inside parts of the military and Intelligence. Today, some parts are at war with other parts.

This chilling truth is now manifest. A score of suicide attacks in the last few weeks, some bearing a clear insider signature, have rocked an increasingly demoralised military and Intelligence establishment. For example, an unmarked bus of the Inter Services Intelligence agency was collecting employees for work early in the morning in Rawalpindi when it was boarded by a suicide bomber who killed 25 when he blew himself up. The ISI had not recovered from this shock when, just weeks later, another bus was blown up as it entered the service's closely guarded secret headquarters.

Elite commandos of the Special Services Group have fared no better. Here, the suicide bomber was an army man. Still more recently, a group of six Pakistani militants, reportedly brainwashed by clerics linked to Al Qaeda, was arrested in December for plotting suicide attacks against military targets. Their leader was revealed to be a former army major, Ahsan-ul-Haq, who had masterminded the November 1 suicide attack on a Pakistan Air Force bus that killed nine people and wounded 40 others in the city of Sargodha, where nuclear weapons are said to be stored.

Fearful of more attacks, military officers have begun the transition to a new, surprisingly modest lifestyle. They have given up wearing uniforms except on duty, move in civilian cars accompanied by guards in plain clothes, and no longer flout their rank in public.

As the rift within widens, many questions pose themselves. Can collusion between different field-level nuclear commanders - each responsible for different parts of the weapon - result in the hijacking of one complete weapon? Could jihadist outsiders develop links with sympathetic custodial insiders?

Many vexing questions concern the weapons laboratories and production units. Given the sloppy work culture, it is hard to imagine that accurate records have been maintained over a quarter century of fissile-material production. So, can one be certain that small, but significant, quantities of highly enriched uranium have not made their way out? More ominously, religious fervour in these places has grown enormously over the last 30 years.

Nevertheless, we Pakistanis live in a state of denial. Even as suicide bombings escalate, criticism of religious extremists remains taboo. The overwhelming majority still attributes recent terrorist events - such as the assassination of Benazir Bhutto - to the Musharraf government. But these delusions will eventually shatter. At some point we will surely see that ElBaradei's warning makes sense.