The New Nation - Internet Edition

Reclaiming rivers around Dhaka

THE rivers around Dhaka city are dying posing a threat to the surrounding environment. A media report gives a horrifying picture of the pollution of all the rivers that surround the capital. People who founded the city 400 years ago were prudent enough to understand the economic and environmental importance of the rivers and their strategic significance. But now the same rivers that served as the arteries of the region for thousands of years are being neglected and destroyed.

Dhaka has a unique geographical location with four rivers encircling it from all sides. These rivers played a significant role in the development of Dhaka as an affluent city. Forming water routes navigable round the year, the rivers facilitated trade and commerce and the growth of industries. Land grabbers have now occupied significant parts of all the riverbeds reducing those into narrow streams of water. The rivers have greatly lost navigability. Due to dumping of wastes and industrial effluents, the water of the rivers has become so poisonous that aquatic organisms cannot survive there during the dry season.

More than 10 million inhabitants of Dhaka City depend mostly on ground water. Due to massive extraction of water, the water table is going down alarmingly. Yet water supply in the city is insufficient. Dhaka will have to depend on surface water to make up for the shortfall. And the nearby rivers will be the best and the cheapest sources. So, the rivers must be cleaned from pollution and recovered from illegal occupation. Mass awareness about the need to reclaim and restore the rivers must be created without any further delay. Rivers that have so far been treated as dumping grounds for all types of waste should be cleaned and protected for the best interests of the residents of the metropolis.

Banks should cut lending rates

THE spread between lending and deposit interest rates of the private commercial banks (PCBs) is high in Bangladesh. The existing gap is more than 6 per cent, which is reportedly higher than that in neighbouring countries. The high lending rates retard investment and industrial development of the country. The spread needs to be narrowed for the sake of the national economy. The business community has demanded bringing down the difference through reduction of interest rates on loans for the productive sectors.

The central bank has long been pressing the PCBs to reduce the same. Responding to the directive of the central bank, the private commercial banks announced in early March cut in lending rates by one percent. The time limit for the promised cut will expire by the end of the current month. While a few banks have already acted on the promise, some others are expected to follow them. But most of the PCBs are yet to take act on to this end. Against this backdrop of slow progress, Bangladesh Bank on Tuesday warned the private commercial banks of stern action if they fail to action their commitment.

Banks are financial institutions not meant for making profit only. They should play very important roles in the development of the economy. By disbursing loans at reasonable interest rates, banks can help create favourable conditions for investment and industrial development. High lending interest rates retard growth of commerce and industry. If the growth of the economy does not flourish the banks would also not flourish in the long run.

Save the poor from tax burden

N Islam

Sky high rise of prices of essential items in Bangladesh has now reached a level that is beyond the capacity of the average poor people. Various taxes imposed on essential items are only the major factors for price being high. Increase in the one with population explosion with reduced production is one of the important factors leading to high price of essential items. Tax on essential items is reflected on the increase of price which cost the poor the visible burden giving birth to corruption and various malpractices.

Vast majority of population with static income can hardly manage food in adequate quantities and suffer from various deficiencies and malnutrition leading to reduced production and increased burden of diseases.

Under the circumstances prevailing in the country situation is gradually deteriorating due to price high of essential items, implementation of Tobacco Control Act-2005 though sounds formidable cannot be effectively implemented because of various corrupt practices.

Interestingly enough, high prices do not affect the most hazardous commodity tobacco which causes 5 million deaths per year globally and is likely to double in the next two decades. Smuggling of cigarettes is sold cheaper in the market. Advertisement induces the susceptible people to smoke.

Younger generation falls victim of deadly habit through alluring advertisements: Unfortunately, it is the younger generation who falls victim of this deadly habit through alluring advertisements of the tobacco company spending billions of dollars. Education of the people, specially the young, may keep them off from cigarette for some time but today or tomorrow they succumb and they take the first cigarette in hand either by peer pressure or for curiosity or demonstrative manliness with a cigarette in hand.

Tobacco taxation: effective means of tackling tobacco: Various measures have been adopted from time to time to control tobacco epidemic. But the most effective means of tackling tobacco is now proved to be taxation. When the country is preparing budget it is time to unearth the truth behind the revenue earned from tobacco industry. The revenue received from tobacco industry is regular and substantial. This at first sight is an attractive, apparently significant and a praiseworthy contribution to the government exchequer. But cost of tobacco-related diseases and economic burden is more costly than the revenue contributed by the tobacco companies.

Tobacco taxation increases government revenue and protects the poor from poisonous habit: Extensive research has been carried out in many countries of the world regarding the taxation on tobacco and its impact. Increasing taxation increases the government revenue. What is more important is that it does not decrease tobacco consumption especially among the young people and the poor. It has been found that a 10 percent increase in the price of cigarette produces a decrease in the quantity consumed by about 4.2 percent and large majority of this response represents individual's decision not to smoke. For the teenagers 10 percent increase in the price of cigarettes will cause decrease of consumption by 14 percent.

Situation in the neighbouring countries: The neighbouring countries like Singapore, Thailand, Hong Kong have imposed tobacco taxation increasing 100 to 200 percent. This results in increase in revenue and decrease in tobacco habit among the poor as they cannot afford to bear the cost of tobacco. In March 1991 the Hong Kong government announced a tax increase by 200 percent. Soon after the announcement by the Finance Secretary which was supported by as many as 70 international organisations including ADHUNIK and the government had to yield to the lobbying of the tobacco industry and the proposal of 200 percent increase was reduced to 100 percent. Experience world-wide shows that tobacco taxation compels the poor people to give up smoking as they cannot afford expensive cigarette. The poorer class, are therefore, compelled to give up smoking. They have to choose food for children in place of tobacco for themselves. Love for children and the family is certainly stronger than the love for tobacco. One is eternal and the other one is avoidable. That is why they choose the latter and give up smoking. Happily for children and the family leaving aside personal disabilities and pre-mature death.

No unemployment due to prohibition of tobacco products: One vital question arises if the shrinkage of the industry will lead to unemployment. Bangladesh Agricultural Council asserts that this should never happen as the tobacco growers have nothing to do. Chili, potato, garlic and cotton cultivation appears to be more profitable than tobacco. All these crops could be successfully grown without altering the present major cropping pattern.

Tobacco is currently grown on about 47,192 hectares of land. Bangladesh is not yet able to produce enough food in the land available. It goes without saying that it cannot sacrifice the productivity of food item at the altar of tobacco. The land now available for tobacco production must be utilised for the production of food items and not for poisonous substance like tobacco. Question may arise whether tobacco growing land can be utilised for other essential items in the country. Research by Bangladesh Agricultural Research Council (BARC) has shown that prohibition of tobacco farming shall not produce any problem for unemployment. Because in place of tobacco the alternative farming for many other essential items which are needed for the country. For example items like cotton, water-melon, potato, onion; chilies and garlic can be easily grown as alternative farming.

And all these are needed for the country. It is not a matter of pride that we have to import cotton for national consumption while these can be grown in sufficient amount in Bangladesh. Tobacco production not only meets Bangladesh's domestic requirements but has good export potential. From the analysis of the agro-ecological computerized database at the Bangladesh Agricultural Research Council, a wide variety of crops have been found to be potentially suitable for the land currently under tobacco cultivation.

Alternative farming: removes doubt of unemployment and increase food production:

In fact, these crops are grown to some extent in soils and climate conditions similar to those of the tobacco growing belt. Tobacco growers therefore have nothing to lose. It is now widely known that Bangladesh faces shortage of food because of the increase in population. Curiously enough despite this shortage of agri-land, tobacco is grown in vast majority of land as shown above. There is no justification in replacing food production by a poison like tobacco which is occupying more and more land with the expansion of tobacco field. Rather, alternative farming can removes doubt of unemployment and increase food production.

Tobacco taxation: weapon for increasing revenue: When tobacco taxation has been found to be an effective weapon for increasing the revenue and protecting the innocent victims in many countries of the world both in the East and the West, there is no reason to doubt that the same should not happen in Bangladesh. Alternative farming shall not only remove the doubt of creating unemployment but will also add to the food products which the county needs for home consumption and export. We have no time to waste. This will allow hundreds and thousands of our people die of disease related to tobacco. In addition, in the meantime many will take up the habit and ultimately fall prey to the poison in the prime of their life.

Enough evidences have been cited in this communication which should dispel the misconception about loss of revenue and problem of unemployment with increase of tobacco taxation. Several countries have shown the way. If Hong Kong a neighbouring country can increase tobacco tax to great extent, why not Bangladesh? The government is for the people and the industry's profit is at the expense of human lives. No one can disagree that the tobacco industries sell poison for profit. It is time to think whether we should allow this to go unchallenged. Our aim must be a tobacco-free society. It cannot be achieved in a day or even a decade. The action has begun and it must be speeded up.

Tobacco company's tree plantation is an eye-wash with poison behind. The company can misguide the government because of its love for cash revenue which the company pays to them and at times in advance. This is an immediate gain which cannot be accepted as truth and factual. On other hand, giving up smoking or not to smoke at all is scientifically proved and leaves no scope for tobacco companies to misguide the government through deposit of cash money as revenue.

Alternative farming removes the possibility of unemployment and consequent hesitation. On the other hand, utilisation of the land for essential food items removes food deficiency which is one of the essential needs of the country. Taxation, therefore, should be considered as easy, effective and scientific means of tackling tobacco habit in the country. We urge upon the government to give serious thoughts to this problem with scientific outlook and thus save the poor from tax burden and impose tax on tobacco to earn revenue.

(The writer is a National Professor, Founder VC, USTC & Founder President, ADHUNIK (The National Anti-Tobacco Organisation)

How EU can leverage the Olympics row to its advantage

M N Hebbar

AS THE Olympics hopefuls go through their paces and train rigorously for their hour of glory at Beijing - just four months away - governments around the world have been grappling with the unexpected fallout

- demonstrations by Tibetan protesters against human rights abuses, cultural genocide and political repression in Tibet, and attacks on the Olympic torch as its flame seared through their cities, leaving the host countries deeply embarrassed.

"In hindsight", moaned the IOC boss, "maybe the games should not have been awarded to China". That it was a blatantly political move remains undisputed. Tibetan protests and rioting in the Tibetan capital, Lhasa, as well as worldwide demonstrations by supporters have galvanised critics of Beijing's regime and threatened to overshadow the Olympics, an object of massive national pride for China. Hubris might still waylay the event.

The inglorious runs of the Olympics torch relay in London, Paris, San Francisco, Delhi and Nagano have left the Chinese government flustered and furious. Expectedly, its leaders have reacted harshly, only causing worldwide dismay and disgust at Beijing's methods of dealing with its nearly botched opportunity to shine as the newly emblazoned star on the global stage.

What has the European Union got to do with the Olympics and China's shenanigans, one might ask. Actually, quite a lot, it would seem.

Here's why. It is an opportune moment to exercise some careful diplomacy if it is done right. Europe's political leaders have usually shied away from confrontation with China, preferring dialogue instead, to tackle growing China-linked problems.

Now the largest ever trade mission of the European Commission is on its way to China at a time when trade and sports might seem distant relations. More to the point, Trade Commissioner Peter Mandelson has refrained from joining the chorus of "let's rub China's nose in the ground" as the rest of Europe is prone to do.

On the contrary, Mandelson has pleased his hosts in Beijing by delivering an eloquent speech before the visit to make an impassioned plea in telling countries not to humiliate China by boycotting the Olympics and calling threats to do so a "political gimmick". Some of EU's heavyweights will not be present at the opening of the games. German chancellor Angela Merkel has already declined to attend. Britain's prime minister Gordon Brown and French president Nicolas Sarkozy are a no-no. Several other EU leaders are hesitant.

Mandelson certainly has a point here but before the Chinese drool over this unexpected reasonableness from Brussels, he has added a caveat. He expects China to come forward with precise and rapid concessions on its trade tariffs, as part of the Doha round of trade talks. It also needs to do more to show its total commitment within international laws and institutions such as the World Trade Organisation (WTO). Curbing of greenhouse gases is another priority.

Problems with China are several. To start with, there is the rapidly growing two-way trade between the EU and China, expanding by over 20 per cent annually, and swinging sharply in China's favour. Furthermore, the problem is compounded by the fact that China quietly ignores gentle hints to abide by commitments it made when it joined the WTO in 2001. Accusations are about state subsidies and a failure to guard against the theft of intellectual property. And there are reports from the EU Chamber of Commerce in China that foreign companies face a threat of unequal treatment by newly empowered Chinese regulators.

Mandelson has been repeatedly making the argument that if the Doha Round is not concluded during the present US presidency, chances are that it will never happen. Despite seeming progress in the flurry of talks, its survival is highly improbable if they are extended into the next US presidency. Indeed, Mandelson has predicted that the Doha Round will not survive this extension, having already seen seven faltering years passing from one negotiating team to another, like a barely smouldering Olympic torch. Extinction is near at hand.

And more Mandarin will be heard when a team of European commissioners, led by Jose Manuel Barroso, the Commission president, descends on Beijing shortly to create a new EU-China "high level mechanism" to iron out the many sources of friction in the trading relationship. Such a body might help in militating against the rising China-bashing chorus among Europe's manufacturers, frustrated by the inaction of the EU in redressing their grievances. Pointedly, the European Parliament voted last week to urge European leaders to boycott the Olympics opening.

A reality check reveals that China's behaviour after joining the World Trade Organisation in 2001 has not lived up to its commitments, including slashing many of its tariffs and putting into place legal protection for foreign companies entering its markets. In fact, China's initial euphoria at joining the club has been followed by a steady decline in its reforms, causing huge frustration in Europe, and the US.

All of this has only given rise to the cynical view that Beijing was untrustworthy and intent only on self-aggrandisement at any cost. And this has not been helped by the fact that the EU itself seldom functions as a single bloc, especially on many China-centric issues.

Opinion is divided among European citizens on whether China represents an economic threat or an opportunity. While countries such as Germany and Sweden thrive on the export of capital goods to China, others in southern Europe complain vociferously that their traditional exports such as shoes and textiles are being decimated by China. In eastern Europe, businesses built on relatively cheap labour fear China greatly.

Despite the argument of economics, it must be realised that it would be politically impossible for Brussels to seem inactive on China without further damaging the cause of free trade. Mandelson's testing of the new opening is a move in the right direction on the board of Chinese checkers. He can leverage the Olympics goodwill for long-term EU advantages.

China would do almost anything - short of seeming to have capitulated - towards maintaining its dignity and the record of a successful Olympics host. Its already bruised image may take some more battering before the games begin. But it would be in the interests of both China and the EU to let wiser counsel prevail. Mandelson can return from Beijing with genuine Chinese concessions if the EU can reciprocate by shedding its protectionist instincts.

(M N Hebbar is a Berlin based writer)