The New Nation - Internet Edition

Downtrend in nat’l economy: Local and international factors responsible

A human chain at city's Paltan area yesterday
demanding withdrawal of enhanced fuel price, bus fare and to
curb soaring price of essential items. Focus Bangla

Pulack Ghatack

Taming inflation and maintaining macroeconomic stability appear to be major challenges before the country as it entered into a new financial year Tuesday accompanying with grave economic and political uncertainties, analysts say.

Heavy borrowing from the banking system to cover the budget deficit of the fiscal year will be a major risk for the government which may lead the nation towards fiscal indiscipline.

The New Year dawned with a bad news for farmers, poor and middle-income groups due to escalated fuel prices, which is sure to provoke inflation further.

The Government said it had no other option but to increase oil prices, as the prices have been doubled in the international market in less than one year. But this has been fuelling anger of the people who are already overstretched by soaring prices of essentials.

While talking to The New Nation, senior economists Dr Quazi Kholiquzzaman Ahmad and Dr Atiur Rahman were at one in saying that taming inflation would be the main challenge before the government failing of which would increase the number of poor people.

They said the global surge of fuel oil prices and the resulting domestic hike could be catastrophic for millions in the country. It will plunge millions of people into poverty. Inflation will jump by many percentage point immediately.

According to a report of the Centre for Policy Dialogue (CPD) between January 2007 and March 2008, the gross income of poor people has decreased by 36.7 per cent, mainly due to price hike of food and inflationary pressure.

Fiscal 2007-08 was a bad year for the economy, which had suffered serious setbacks from the shocks of two successive floods and the cyclone Sidr as well as high global prices of fuels, food, capital machinery and raw materials.

The inflation rate soared over double digit across the year, with food inflation reaching a staggering 14.5 per cent in December.

With falling economic growth, the number of people below poverty line has been increasing. Most of the major economic indicators show signs of downtrend.

Both local and foreign investment has been declining since 2006-2007 due to failure in implementing the annual development programme (ADP) and political uncertainty.

The total investment in the last fiscal year was 24.2 per cent of the gross domestic product (GDP) which was 24.5 per cent in the preceding financial year. The investment was 24.7 per cent of the GDP in 2005-2006.

Public investment was only 5 per cent of the GDP in the last fiscal, while it was 5.5 per cent in 2006-2007.

Only 52.83 per cent of the development budget was utilised in the first 11 months of the last fiscal year which is the lowest in the past ten years. It has negative implications for employment creation.

Around Tk 14,000 crore of the already downsized ADP allocations was spent up to May. The Tk 26,500 crore ADP of 2007-08 fiscal was reduced by Tk 4,000 crore to Tk 22,500 crore.

Private investment in the last fiscal has been calculated to be 19.2 per cent of the GDP, while it was 19 per cent in the previous financial year.

However, figure of the first 10 months of financial year 2007-2008 of the capital machinery import, which is the indicator to ascertain the status of investment, shows that the import reduced by 10 per cent.

According to draft economic review of the finance ministry, the net foreign direct investment (FDI) in 2007-2008 would be US $604 million. It was US $760 million in the previous financial year.

Only a positive growth in remittance by the expatriates will not be able to cover trade deficit which is widening day by day.

When economic challenges before the government are mounting, the Government also has some political challenges to face, to materialise its reform agenda, said the experts.

If the Caretaker Government relinquishes in December, the second half of the fiscal year will be ruled by a political government, which will have to shoulder the economic risks and challenges.

The maximum task of the budget implementation will be assigned to a political party of which many front ranking leaders are in jail and who were not in anyway involved in the fiscal policymaking.

Dr Quazi Kholiquzzaman said the present uncertainty in the political arena may affect budget implementation.

Similar view was expressed by World Bank vice president Praful C Patel, when he said during his last visit in Dhaka, the present political crisis was a big challenge for Bangladesh.

Patel cautioned that Bangladesh's state of governance, investment climate and economic development would continue to be affected if the elections were not held in a manner acceptable to all concerned.

Wahiduddin Mahmud in his budget reaction said, "it is a situation of widespread food insecurity and an environment of political and economic uncertainty."

Delwar accuses govt of bias towards AL

Khondoker Delwar Hossain

Staff Reporter

BNP Secretary General Khondoker Delwar Hossain yesterday alleged that the Caretaker Government was filing cases against the party leaders to make them ineligible for contesting the election and added that many such cases were being readied.

Delwar's comment came a day after the Anticorruption Commission filed a case against BNP chairperson Khaleda Zia, her son Tarique Rahman and five others on charges of embezzling funds of Tk2.1 crore from Zia Orphanage Trust from 1991 to '96.

At a press briefing held in his NAM flat on Manik Mia Avenue in the city BNP general secretary rejected the case terming it "false, baseless and ill motivated." Delwar accused the Caretaker Government of applying double-standard in dealing with the two major political parties, the BNP and Awami League (AL).

On the Government's recent dialogue with the AL, Delwar said: "The CEC treated AL like its close relative during the electoral dialogue, and the CA seemed to have treated AL delegates in a similar fashion. I'm not criticising any of these, but why should they treat us as if we're their sworn enemies?"

Calling the Government's "unfriendly attitude" towards the BNP a breach of mandate, the disgruntled BNP leader said: "The Government is losing its neutrality."

Delwar said the Government was going beyond its mandate by holding the local government polls ahead of national elections.

The Caretaker Government wants to hold a stage-managed election only to create a rubber-stamp parliament, Delwar alleged.

Delwar reiterated that the four-party alliance was not participating in the local government polls. "We'll take steps against the traitors, who will submit nominations for the elections."

Delwar blamed the Government for forming a fresh medical board instead of sending Tarique abroad for better treatment.

Expressing his worries over the energy price hike and its impact on the domestic market, Delwar said, "The government should reverse its decision, or people's sufferings will be boundless."

BNP leaders Selima Rahman, Khairul Kabir Khokan, Prof Sohrab Uddin, Rizvi Ahmed, Kaysar Jamal, Mia Selim, Shirin Sultana, Khaleda's lawyers Barrister Nawshad Jamir and Simul Biswas, among others, were present.

5 killed in Narsingdi train accident

The wreckage of a car which was hit by a running
train at the Ghorasal rail crossing yesterday. Inset: one of
the victims. Banglar Chokh

Narsingdi Correspondent

At least five people were killed and another one was seriously injured when a train rammed into a private car at an unmanned level crossing in Ghorasal in Palash upazila yesterday afternoon.

The deceased were identified as Rokeya Begum, 60, her daughter Eti Begum, 15, her son's mother-in-law Roksana Begum, 70, Roksana's unidentified son, 32, and car driver Yunus Ali. They hailed from Sreenagar upazila in Munshiganj district.

The fatal accident occurred at about 1: 30pm when Dhaka-bound inter city train Mahanagar Express from Chittagong rammed into the car at the crossing, killing four car passengers of a family on the spot and injuring two others.

Seriously injured Rokeya Begum died on arrival at Palash Upazila Health Complex, while Roksana's injured daughter Asma Begum, 16, was sent to Dhaka Medical College Hospital in a critical condition.

They were going to visit the house of Rokeya's son Rezaul Miah at Palash Fertilizer Factory.

Police sent the bodies to Sadar Hospital morgue for autopsy. An unnatural death case has been filed by Bhairab Railway Police.

Rathajatra celebrated

Rathajatra, a religious function of the Hindu
community, was celebrated in the city. Banglar
Chokh

BSS, Dhaka

Members of the Hindu community across the country today celebrated one of their great religious festivals Rathajatra with due religious fervour and festivity.

Thousands of Hindu devotes gathered at select places and joined with full enthusiasm the ritual of pulling Chariots to celebrate the occasion. Old and young, male and female, boys and girls together joined the ritual amidst much fanfare.

The main Ratha Jatra programme in the capital was organised by International Society for Krishna Consciousness (ISKCON).

Special Assistant to the Chief Adviser on Fisheries and Livestock and vice president of Jatiya Hundu Kalyan Trust Manik Lal Samaddar inaugurated the Rathajatra at ISKCON temple at Swamibag.

Despite inclement weather, thousands of Hindu community members including females and children joined in pulling the raths (chariot) by long ropes through various city streets.

Many of the participants were seen attired in traditional Hindu costume and beat drums and played other musical instruments.

G8 to tackle inflation, but concrete action elusive

Reuters

G8 leaders aim to present a united front against global inflation, driven by soaring oil and food prices, at a summit in Japan next week, but solving the problem requires more than just a strong message from rich nations.

As record high oil prices threaten the global economy and food riots undermine political stability in some countries, the Group of Eight (G8) will try to draw up measures to balance the supply and demand of oil, officials from member countries said. It will also aim for closer cooperation with oil producers.

When leaders from the G8 -- the United States, Britain, Canada, France, Germany, Italy, Japan and Russia-gather at the July 7-9 summit in Hokkaido, northern Japan, they will discuss concerns that a weaker dollar is a factor behind high oil prices.

But with finance ministers and central bankers absent, they will probably make little headway. A German government source said while inflation was on the agenda, the G8 chiefs would not make interest rate recommendations to central banks.

"It is being questioned what kind of a message we will be able to send on rising oil prices," said Japan's point-man in pre-summit negotiations, Deputy Foreign Minister Masaharu Kohno.

He added that "there may not be a revolutionary panacea" for solving the problem of surging oil prices, which hit a record high of $145.85 on Thursday.

The German source agreed, saying G8 leaders were not in a position to reverse the trend of high prices. But the source believes a clear statement would help.

Analysts said a show of concern by the G8 would not be enough to ease global inflation, which took the centre stage just as the world economy was starting to recover from the credit crisis.

"The summit faces unprecedented challenges amid signs of stagflation, which had not been seen in 30 years," said Kyohei Morita, chief economist at Barclays Capital Japan.

"But there is a mismatch between the themes of the summit and who is participating, making it hard to actually implement any concrete and effective steps," he said. He noted that OPEC oil producers and Southeast Asian counterparts, whose trade restrictions helped push up commodity prices, would not be joining the G8 summit.

Fertiliser crisis likely: Low consumption target fixed

Shamim Jahangir

Farmers are likely to face fertiliser crisis in the current fiscal as the government has fixed low consumption target of different varieties of fertilisers against the actual demand, according to Agriculture Ministry sources.

The Government has fixed the distribution target of fertilisers at 42.90 lakh tonnes against the actual demand of 73.79 lakh tonnes, sources added.

With this target of distribution of fertiliser, the government plans to produce over 650 lakh tonnes of different varieties of crops in 2008-09 session.

Of the projected distribution of fertilisers, 28.50 lakh tonnes are urea fertiliser, 5 lakh tonnes TSP, 4 lakh tonnes MOP, 2 lakh tonnes DAP, 1 lakh tonnes SSP, 1.50 lakh tonnes NPKS, 1.50 lakh tonnes gypsum, 50,000 tonnes zincs sulphur, 20,000 tonnes ammonium sulphur and 20,000 tonnes magnesium sulphur.

The target of fertilisers distribution is less than 30.89 lakh tonnes of the actual demand, according to a survey conducted by the Ministry of Agriculture from March to April this year.

The officials of the Department of Agriculture Extension at upazila level conducted the 20-day survey to assess the fertilisers demand across the country.

The survey put the demand of urea fertiliser at 46.94 lakh metric tonnes, TSP at 11.45 lakh tonnes, MOP at 8.58 lakh tonnes, DAP at 2.26 lakh tonnes, SSP at .60 lakh tonnes, NPKS at 1.50 lakh tonnes, gypsum at 1.60 lakh tonnes, zincs sulphur at 50,000 tonnes.

Some officials of the Agriculture Ministry have expressed the apprehension that farmers will not get fertilisers according to their requirement even by making additional payment as their supply will be little compared to demand. Consequently, production of crops will be short of target, according to them.

The Ministry of Agriculture has fixed the consumption target of different varieties of fertilisers in accordance with the consumption ratio of last year. The farmers have used around 43 lakhs tonnes of fertilisers last year, sources said.

Director General of Department Agriculture Extension (DAE) M Shamsul Islam told the New Nation that they were motivating farmers to use Guti urea to reduce pressure on traditional urea.

The farmers in several districts have already adopted guti urea and our department is trying to motivate more farmers to use it, he added.

Besides, the government has taken steps to produce compost fertiliser through its VGF and other programmes, he further said.

"Distribution of fertiliser lower than the actual demand will adversely affect crops production this year," a high official of the Ministry of Agriculture said.

Fertiliser subsidy worth Tk 36.68 billion has been earmarked in the budget for the current fiscal.

The country's urea and MoP consumption has increased substantially since 2004 following cultivation of high yielding varieties and hybrid paddy on a wide scale, sources said.

The government has planned to import around 11 lakh tonnes of urea while the rest would be produced locally to meet the projected demand of 28.50 lakh tonnes this fiscal.

Pakistan beat Bangladesh

Sports Reporter

Pakistan outplayed Bangladesh by ten wickets in their Super Four clash of the Asia Cup at the National Stadium in Karachi, the port city of Pakistan on Friday.

Winning the toss Bangladesh decided to bat first but they were bundled out for 115 off 38.2 overs.

In reply, Pakistan sailed home in just 19.4 overs scoring 116 for the loss of none.

Salman Butt and Nasir Jamshed, the two openers guided Pakistan to victory against Bangladesh.

Salman Butt remained undefeated with a fine 56 facing 62 deliveries. He sent the ball nine times across the ropes.

Nasir Jamshed, his partner hit 52 (not out) playing 56 deliveries including five fours and two sixes. All Bangladesh bowlers failed to earn respect from Pakistani batsmen.

Earlier, Bangladesh lost their wickets in regular intervals.

Opener Tamim Iqbal tried to resist Pakistani bowling attack making the team's highest of 26. He hit three boundaries in his 41-ball knock.

Besides, four Bangladesh batsmen could reach the double-digit figures.

Pakistani bowlers totally dominated over Bangladesh batsmen.

Youngster Abdur Rauf was his team's most successful bowler in wrecking Bangladesh innings and finished his spell as 8-1-24-3.

Saeed Ajmal and Iftikhar Anjum chipped in with two wickets each giving away 19 and 20 runs respectively.

Besides, Shoaib Malik and Sohail Tanvir took one wicket each for 17 and 31 runs respectively.

Hasina’s treatment may not be over during her 8-week release period

Bdnews24.com, Dhaka

The medical treatment sought by Sheikh Hasina in the US may not be complete by the time her eight-week release period is over, her personal physician Prof Syed Modasser Ali said yesterday.

US doctors treating the former prime minister are quite sure that she is at risk of permanent hearing loss in her right ear, Prof Modasser said, briefing the press at Mujibunnesa Eye Hospital in Dhanmondi.

"Doctors have implanted a hearing aid in her right ear, which needs to be kept under observation," the doctor said.

The Awami League president is soon due to fly from Canada to London. "It will also become clearer after being on a plane if her hearing aid is working properly," he added.

Modasser also said doctors feared the damage to her left eye due to glaucoma was serious but they could not measure the extent of damage.

"The doctors fear serious damage to her left eye. But the problem with her right eye could be healed," ophthalmologist Modasser said.

He blamed her eye and ear damage on the failure of timely treatment. "These ailments have also led to problems with her heart," the doctor said.

Hasina can be healthy, with a good quality of life, if she continues with the type of treatment she is now receiving, he added.

"I have been in contact with Sheikh Hasina and her doctors regularly. Examination of her health may not be complete until the end of August, so her treatment will not be over within the eight-week period," her physician said.

Hasina may be able to come back home by the end of August, if she is not diagnosed with any other major problem, he told the press briefing.

Prof Modasser added that American doctors had so far not found any other complaints other than those identified by her Bangladeshi doctors.

Hasina reached Toronto on June 26. Her special assistant Hasan Mahmud told bdnews24.com by telephone on that day that her ear was in a worse condition than previously thought when she had her ear examined in Orlando, Florida.

The hearing aid implanted in her right ear was removed after it became inoperative. "She may need ear surgery and to remain under observation," the personal assistant had said.

Hasina left Dhaka on June 12 for the US after the government granted the detained former prime minister a temporary release order for eight weeks on medical grounds.

NBR terms budget pro- people

Chittagong Correspondent

Chairman of the National Board of Revenue (NBR) Mohammad Abdul Majid yesterday said that this year's budget has been prepared in the light of proposals from professional bodies and business forums.

He called upon all including the entrepreneurs for meaningful implementation of the budget.

The NBR Chairman was addressing a post-budget discussion with the leaders of Chittagong Chamber of Commerce and Industry (CCCI) at its auditorium yesterday.

President of Chittagong Chamber Saifuzzaman Chowdhury presided over the discussion while Vice President Mahbub Alam delivered the welcome speech.

"We must work together with utmost sincerity for reducing dependence on foreign loan which is given to us at high rate of interest and stiff terms," he said.

The NBR Chairman informed that the Government has actively been working on the mechanism to ensure transparency of the foreign Pre-shipment inspection companies.

He told the meeting that the foreign pre-shipment inspection (PSI) companies have been operating without supervision and selling false or half-true Clean Finding Reports (CFR) to the importers and exporters.

He noted that it is a difficult task to formulate budget in a developing country like ours accommodating the interests of all groups.

Recalling experience of 22-day pre-budget discussions, the NBR Chairman said, "We worked hard to design a people-friendly budget and we discussed with the representatives of different sectors all over the country before formal announcement of the budget."

He further said that the government is sincere enough to coordinate the policies and structures related to VAT (value added tax), income, tax and other issues.

He thanked the business leaders as the bulk of revenue had been earned from the Chittagong region in the last fiscal.

The Chamber President in his speech demanded reduction of import duty and called for fixing it at five percent.

What keeps investors at bay?

Mamunur Rashid

The Government has jailed over 200,000 people, including 100 leading businessmen, since January last year on charges of misuse of office and corruption, which caused a slide in Bangladesh's domestic and foreign investments.

Source said the Government in running an anti-corruption drive had inadvertently caused most of the businessman to go underground to avoid detention.

Due to the stagnation in businesses in the country the domestic and foreign investments also declined.

Source said the recent abnormal price hike may be attributed to the arrest of the businessmen.

The anti-graft drive was intended to capture activists of both leading political parties - the Awami League and the Bangladesh Nationalist Party - to maintain a stable political climate ahead of the national polls in December, analysts said.

Intelligence sources said many business leaders fearing incarceration were living incognito at home or have taken refuge abroad.

At least 100 leading businessmen are presently behind the bars, sources say.

Thousands of people, including opposition activists, have been arrested in the police crackdown and jailed in the country.

'About 50,000 people have been held since May 28 during the special law and order drive,' police said.

A high Government official also dismissed speculations that he was stepping down over alleged differences on tackling the threat from opposition groups.

He rejected claims by the opposition that the arrests were a bid to browbeat grassroots level political workers and local leaders into supporting pro-government outfits.

Source said while not commenting on the anti-graft drive, donor nations, including the US, Britain and the European Union have urged the Government to hold credible elections by the end of the year before domestic and foreign investors take flight.

Dacoit killed in encounter with RAB

Our correspondent, Feni

A notorious dacoit was killed in an encounter with the RAB at Madhupur area of Feni early Friday.

The deceased was identified as Nizamuddin alias Nizam Dacoit, 35, hailed from Chhagalniya upazila of the district.

RAB sources said a total of 23 cases including four murders was filed against Nizam at different police stations.

RAB members arrested Nizam from a house in Halisahar area of Chittagong on Wednesday.

The RAB went to Moddhya Madhupur area for recovering hidden arms in accordance with a confessional statement of Nizam at about 3.30am.

"As soon as the elite force reached the spot associates of Nizam opened fire on them, forcing the law-enforcers to fire back," says a

RAB account of the encounter.

At one stage Nizam was caught in the line of fire and died instantly while trying to flee. His associates, however, managed to flee the spot, sources said. RAB recovered three LGs, one gun and six rounds of cartridge from the spot.

Gold worth Tk26 lakh hauled, 3 held in city

Staff Reporter

The police yesterday morning recovered smuggled gold worth Tk 26 lakh and arrested three traders from Fulbaria Bus Stand area in the city.

The arrested were identified as Raju Ahmad, Abdul Baten and Zakir Hossain.

Source said the members of police team chased the three smugglers at Fulbaria and recovered a huge quantity of illegal goldchains.

Police said the arrested people returned from Singapore by Bangladesh Biman Airlines earlier on the day. The police chased the autorickshaw they were travelling in and caught them up at Fulbaria Bus Stand and recovered the smuggled gold.

Police said the 249 pieces of goldchains weighing one kilogram was worth Tk 26 lakh.

Sources also said high officials at the Zia International Airport were involved in the scam.

The Deputy Commissioner of Lalbagh Zone Khandakar Mohiuddin said a case was filed with Kotwali Police Station under Emergency Power Rules in connection with the haul.

Gold worth Tk26 lakh hauled, 3 held in city

Dacoit killed in encounter with RAB