The New Nation - Internet Edition

Japan faces uncertainty from financial crisis

AFP, Tokyo

Japan will likely avoid a deep slump from the global credit crisis but faces 'considerable uncertainty' and downside risks to growth, a top central bank official said Monday. The possibility of a dive on the back of the Wall Street crisis 'is rather small,' Bank of Japan deputy governor Kiyohiko Nishi-mura told a news conference. But 'the outlook for economic activity is accompanied by considerable uncertainty and various risk factors could influence the outlook,' he said. The central bank 'is attentive to downside risks to economic growth,' he added. Despite being relatively insulated from the US-born subprime crisis, Japan's export-driven economy is teetering on recession due to a cooling global economy and tepid domestic spending. Nishimura lauded recent investments by Japanese banks that have embarked on a buying spree of US banks, which have crumbled due to massive mortgage-related losses and failure to secure funds.

'Each financial institution in Japan is trying to improve its earnings and in doing that they are looking for the most appropriate way to utilise their resources,' Nishimura said. 'So in that sense it is desirable.'

Poor bracing for 'Monga' season

BUSINESS REPORT

The annual "monga" season of deprivation has arrived in Kurigram, as well as six other northern areas, including Nilphamari, Lalmonirhat, Gaibandha, Rangpur, Panchagarh and Thakurgaon--some of the 64 districts.

During the monga season - which generally begins at the end of September--there are no crops to be harvested and very little work, so many farmers rush to the cities to become temporary rickshaw pullers or day labourers in an effort to pay off loans and earn much-needed cash to take back to their families.

However, many return even poorer than before, while others do not come back at all, running away from the hunger that awaits them at home.

Flood-generated famine

Each year, tens of thousands of people from hundreds of villages along the banks of the Teesta, Dudhkumar, Dhorla and Brahmaputra rivers in Bangladesh's northern region face monga. Natural disasters such as flooding, riverbank erosion and drought exacerbate this annual occurrence, leaving scores vulnerable to hunger and disease, while at the same time fuelling poverty levels.

Because of recent monsoon flooding, thousands of poor families lost their incomes and livelihoods, and the prolonged effect has reduced food security in the area.

Many farmers place all their financial assets into securing tools, seeds and fertiliser for the rice harvest, only to lose it all in the floods, becoming paupers overnight.

In case of an "aman" crop (60 percent of Bangladesh's rice yield) failure due to floods in July-August means food insecurity intensifies in September-October until the "boro" crop (40 percent) can be harvested in November-December.

Women and minorities suffer most

"The immediate impact of monga is on employment, then on household incomes, then on food security, and finally on nutrition levels," a senior official of the Ministry of Agriculture, said.

Women and female-headed households fare the worst, he said, partly because there is already a greater likelihood of them being malnourished and partly because of discrimination.

"When there is an oversupply of day-labour, employers tend to hire men rather than women," he said.

The impact on local indigenous minorities is also severe.

"Relief materials and other safety net assistance are distributed first among those who have the power. We receive only the trickles," said Dwijen Sharma, president of Panchbibi Upajila Adibashi (indigenous people) Multipurpose Development Organisation (PUAMDO), an indigenous people's rights organisation in Joyporhat District.

Monga in the "chars"

Monga manifests most viciously among the "chars" or river islands, where some 600,000 of the poorest people live.

They flood in July as the rainwater from the Himalayas rushes southwards, reappearing only in November. Most of the displaced live along the river banks until the rains stop and the rivers begin to recede.

According to relief agencies, residents of the chars and displaced landless farm labourers along river embankments are more vulnerable to chronic poverty than most.

The floods displace them in July-August before the monga sets in from September through early November.

For them, alternative income sources are even more scarce than on the mainland.

There are no brickfields, only a handful of paddy-processing facilities, very limited construction and road works, no rickshaws and little scope for business activities.

According to a 2006 survey of 425,000 families in the monga zone by Palli Karma Shahayak Foundation Palli Karma Shahayak Foundation, an NGO, and the country's Institute of Microfinance, about 20 percent had no choice but to sell their assets and property to feed their families, while 40 percent had to migrate to other places for jobs.

Emirates celebrates as 10,000th cabin crew graduates

It was a momentous day at the Emirates Aviation College in Dubai on Thursday as the 10,000th cabin crew graduated from the international airline's intensive training course.

Mohana Chonayah, the 10,000th graduate, arrived in Dubai six weeks ago from her native Malaysia, where she was recruited after impressing Emirates recruitment officers during the careful selection process.

She was one of the 61 new cabin crew at last week's graduation ceremony who has spent the last six weeks undergoing intensive training and assessment at the world-class Emirates Aviation College in Dubai. The graduates trained in state-of-the art facilities, including emergency training simulators and full-scale aircraft mock-ups, along with medical training accredited by the Royal College of Surgeons in Edinburgh to ensure that Emirates' passengers benefit from being in the best qualified hands in the industry.

"I am so proud to be the 10,000th person to fly for Emirates," said Mohana, who is due to receive her first roster in the coming days. "I am really excited to find out what cities I will be going in my first month. My batchmates and I have all worked so hard throughout our training and we can't wait to put everything we learned into practice." Mohana was joined on stage by the first, 500th and 1,000th Emirates cabin crew, all of whom are still flying with the multi-award winning international carrier.

Senior Flight Purser Khalid Al Alem, from Jordan, joined Emirates in September 1985, a month before its first flight even departed Dubai International Airport for the two destinations it served back then, Karachi and Mumbai.

Today Emirates serves more than 100 destinations on six continents with a fleet comprising 111 passenger planes and 10 freighters.

"There were 78 cabin crew in our first batch," Khalid reminisced. "Things were completely different 23 years ago. We started with two leased aircraft while today we operate the most sophisticated, advanced machines in the world.

"When we started, Emirates was our baby. Today I look back and am so proud to have grown with it. One of the most rewarding aspects of my job is when I see new crew applying skills that I have passed onto them."

In February 1994 Anna Guilas became the 500th cabin crew to join the growing airline. Today she is a Purser who has travelled the world in the course of her work, overseeing the entire cabin operations on each flight.

"What I love most about what I do," she said, "is that no two days at work are ever the same. I spend the whole month going to different places, meeting new people, learning about different cultures.

"Every day is a new experience. Every flight is full of surprises that you have to use the knowledge you have gained to deal with." Cabin crew 1,000, Nassera Benoumeur, was recruited 12 years ago in London while on holiday from Spain.

"I was visiting my friend who was cabin crew for another airline," remembered Nassera, "when I saw the ad. My friend had heard what a great airline Emirates was and encouraged me to go for it. So I did and I got the job."

And she has never looked back. Today Nassera splits her time between working as a Purser on the Airbus A380 and as a Safety Instructor training cockpit crew and cabin crew from Emirates and other airlines at the Emirates Training College.

"I love my career," she enthused. "There are so many challenges involved with being part of an airline growing as fast as Emirates. We are a world-class airline, but we have worked so hard to achieve this."

Emirates Divisional Senior Vice President - Service Delivery Terry Daly paid tribute to the 10,000-strong team of Emirates cabin crew, "Our cabin crew occupy a special place in the Emirates family: they are the public image of our great airline. It is their grace and professionalism that helps to keep customers coming back to fly Emirates."

He added that within five years, Emirates forecasted the number of cabin crew to tip 18,000. "Given our current aircraft order, we will eventually need more than 20,000 crew."

Global cabin crew recruitment drives, particularly in areas on the Emirates passenger route network, have resulted in a truly multi-cultural talent base of more than 120 different nationalities.

SoEs owe four state-owned banks Tk 1,512 crore

BUSINESS REPORT

The classified loans amount of state-owned enterprises to four state-run commercial banks stood at around Tk 1512 crore till August 31, 2008, up by about Tk 220 crore from its figure in three months back, sources in the banking sector said.

The SoEs owe the highest amount of Tk 819.68 crore to Sonali Bank, followed by Tk 428.10 crore to Rupali Bank, Tk 247.51 crore to Agrani Bank and Tk 15.88 crore to Janata Bank in August, 2008, according to the latest figures compiled by the Bangladesh Bank.

The public sector entities owed Tk 1292 crore to the four state-owned lenders up to May 31st, 2008. Of the amount, the SoEs owed the highest amount of Tk 602.24 crore to Sonali Bank, followed by Tk 429.28 crore to Rupali Bank, Tk 248.57 crore to Agrani Bank and Tk 10.94 crore to Janata Bank, according to the figures compiled by the Bangladesh Bank.

Providing guarantee from the finance ministry in issuing loans to the financially ailing state-owned enterprises is a main cause for stockpiling of huge bad loans in the state-owned banks, bankers observed.

'Sometimes, we become compelled to issue loans to state-owned enterprises, which suffer from shortage in their working capital or cash to pay salaries to their employees,' a chief executive officer of a state-owned bank told The New Nation.

'While providing loans to the SoEs, on many occasions the matter of feasibility of return of the loans had to forgo due to the status of the enterprises,' he added.

An executive of Sonali Bank said the finance ministry on many occasions gave guarantee for re-payment of the loan money in favour of the SoEs.

As per the latest figure, Bangladesh Jute Mills Corporation alone accounted for about Tk 902.79 crore or 60 per cent of the total classified loans amount followed by Bangladesh Textile Mills Corporation for Tk 235.99 crore, Bangladesh Chemical Industries Corporation for Tk 89.87 crore, Bangladesh Agriculture Development Corporation for Tk 21.27 crore, Bangladesh Shipping Corporation for Tk 8.33 crore, BFFWT for Tk 12.09 crore and BTB for Tk 10.90 crore.

The boards of directors of three corporatised banks - Sonali, Janata and Agrani - are expected to take serious steps in lending to SoEs, considering their unsatisfactory performance as clients, sources said.

'We will raise the issue to the finance ministry to solve the problems immediately,' the chairman of a corporatised state-bank told The New Nation.

'We are ready to disburse agriculture loans among farmers on lower interest rates, but we can no longer afford to lend money to the SoEs to increase our bad debt burden more.'

ADB to jump-start massive infrastructure projects

BUSINESS REPORT

Bangladesh will mobilize massive private sector funds to invest in infrastructure projects with the help of a $165 million loan facility to be funded by the Asian Development Bank (ADB).

The Public-Private Infrastructure Development Facility will catalyze private sector investments of up to $600 million to finance 15 to 20 projects, mostly in energy, adding at least 900 megawatts of power generation capacity in Bangladesh and providing electricity to about 100,000 more households through the renewable energy program.

ADB is providing $82 million to help finance large infrastructure projects worth more than $30 million each; $50 million to assist small and medium-sized energy projects with a total project cost size of not more than $30 million each; and $33 million to promote renewable energy.

A $500,000 technical assistance grant will also be provided for training and support.

The country's public investments in the infrastructure sector have remained stagnant in recent years, accounting for only 6% to 7% of the gross domestic product. At present, only 60% of urban households and 22% of rural households have electricity connections.

"The facility will improve the infrastructure sector in Bangladesh through increased private sector participation, thereby promoting economic growth and reducing poverty," said Peter Marro, Senior Investment Specialist at ADB's South Asia Department.

He added that private sector participation can potentially speed up the pace of infrastructure development, expand access, and deliver efficient services.

The Public-Private Infrastructure Development Facility is an integral part of ADB's sector strategy and complements ADB's parallel initiatives in governance, capital markets development, and promotion of public-private partnerships.

It will be managed by state-owned Infrastructure Development Co. Ltd. (IDCOL), which will provide financing of up to 40% of each project and a loan repayment period of up to 20 years. Private investors are required to inject at least 20% equity in the projects they invest in.

Aside from energy, IDCOL's project pipeline includes small transportation and water projects. The Islamic Development Bank is currently processing a parallel financing facility of up to $18 million for IDCOL's solar energy program.

SDC in search for undergraduate talent in fashion & textile design

BUSINESS REPORT

Following the success of the recent global student design competition, the Society of Dyers and Colourists (SDC) is now launching the search for undergraduate talent in fashion and textile design.

Entries will be invited for the SDC Colour Design Award 2009 from students following a recognised fashion/textile undergraduate course, with regional heats to be held around the world early next year.

The competition is open to entries from the following countries: Australia, Bangladesh, China, Hong Kong, India, New Zealand, Pakistan, South Africa, Sri Lanka, the United Kingdom and the United States.

Each SDC region/affiliate around the globe, together with the AATCC in the United States, will organise its own competition based on a universal brief.

Each country finalist will then be invited to go forward to the grand final which will be held in Goa, India in June 2009.

The grand final will coincide with the SDC international conference on 25-26 June in India and, to tie with the theme of the conference, the brief also incorporates an aspect of sustainable thinking within the original design and/or final design application.

The main criteria for entries, as previously, will be to demonstrate the creative, imaginative and original use of colour in either fashion or textiles.

Deadlines for submission will be dependent on specific regional/country criteria, with judging generally taking place within the first quarter of 2009.

All regional winners will be informed by the end of April 2009 and, along with the regional prize allocation, the finalist from each country will also receive payment towards travelling expenses and accommodation in India.

The global winner will receive the SDC Colour Design Award 2009, with a cash prize of £1000, plus the Veronica Bell Trophy. The winning college will also receive a prize.

A full design competition brief is available from the Society with a list of regional contacts to whom enquiries regarding country-specific briefs should be sent.

Alternatively, the competition briefs and various related document can be downloaded from the SDC website.

Two lakh tourists throng Cox's Bazar

Our Correspondent, Cox's Bazar

Beach resort town Cox's Bazar is expected to be hosting at least two lakh local tourists in the first two weeks of this month in the context of two biggest religious festivals--Eid-ul-Fitr and Durga Puja.

Hospitality industry people said accommodations in almost all the 110 residential hotels and motels and 50 guesthouses were booked in advance, and festival tourists already started pouring in.

District administration and law enforcing agencies have taken up measures to ensure safety of travellers, mostly coming with families.

Abul Kasem Sikder, general secretary of Cox's Bazar Hotel-Motel Owners' Association, said they estimated that the beach town was expected to see more than two lakh tourist arrivals. Almost all the hotels, motels and guesthouses have already been booked from October 1 to 12, he informed.

Deputy commissioner Manjur Alam Bhuiyan on Monday chaired a meeting that discussed the law and order situation of the town, sea beach and other tourist sites like Himchhari, Chokoria safari park, Moheskhali and St. Martin's islands and Teknaf.

District commanding officer Lt. Col. Mostahidur Rahman, additional superintendent of police Imam Hossein, senior administration officials Arifur Rahman and Omar Farook, Bangladesh Parjatan Corporation official Sujit Barua and Hotel Seagull managing director Masum Iqbal were among those who attended the meeting.

Storm may hit Indian aviation, if steps not taken: IATA

PTI, New Delhi

Warning that some Indian airlines could fold up if structural changes were not carried out immediately, the IATA has asked the government to take speedy steps to enable the industry weather the 'perfect storm' of high costs and falling demand.

'India is among the most expensive places on the planet to buy aviation turbine fuel from. In August, it was 58 per cent more expensive to buy fuel in Mumbai for domestic flights than in Singapore,' International Air Transport Association director general and CEO Giovanni Bisignani told PTI in an interview in New Delhi.

Observing that the Indian aviation industry was passing through a 'fragile and delicate moment,' he said some airlines could go bust in the coming few months if "structural changes are not carried out expeditiously.'

As many as 25 carriers worldwide have folded up operations in the past several months due to huge losses, the latest being Italian national carrier Alitalia, leading to over 100,000 jobs in the aviation sector being lost.

He projected a cumulative loss of $1.5 billion for Indian carriers this year, second largest after that in the US.

ECB loans €120b in 38-day tender

AFP, Frankfurt

The European Central Bank said Monday it had loaned eurozone banks 120 billion euros ($172b) in a special 38-day operation aimed at soothing extremely tense interbank money markets.

The ECB had said earlier in a statement that 'the special term refinancing operation will be renewed at least until beyond the end of the year,' amid increased pressure at the end of the third quarter.

'The ECB will continue to steer liquidity towards balanced conditions' in an attempt to bring interbank interest rates in line with the bank's own minimum rate, it added.

Commercial banks usually lend and borrow cash on interbank money markets but these have almost completely dried up since the US market for high-risk, or subprime, mortgages collapsed more than a year ago.

The ECB and other major central banks have thus been pumping hundreds of billions of dollars, euros, pounds and other currencies in the form of loans into such markets.

On Monday, the ECB also rolled over one-day dollar loans to eurozone banks, renewing that operation for a total amount of 30 billion dollars (€20.8b).

The dollars were obtained from the US Federal Reserve through a reciprocal currency agreement known as a swap, and allow eurozone banks to obtain the US currency directly from the ECB.

Initially, the one-day loans were for 40 billion dollars, but the ECB reduced that amount last week, while extending other dollar loans to a period of one week.

'Injections of dollar liquidity by the ECB, Bank of England and Swiss National Bank have highlighted the sizeable dollar exposures among European banks,' Citibank analysts wrote on Monday.

Foreign investors eject $540m from Pak stock market

ANN, Karachi

Foreign investors have ejected $540 million from the Pakistani stock market in only three months from July to September amid prolonged political uncertainty, burgeoning insecurity in the tribal belt of the country coupled with global and local economic slowdown. So far this month, foreign investors have withdrawn $96 million, reflecting an increase of $68 million versus $28 million outflow witnessed in a month earlier. While inflow during September was recorded at $82 million. A major outflow of portfolio investment was recorded from the investors of the US, the UK, Switzerland, Singapore, Hong Kong and Australia.

Pakistani market has been facing turmoil for the last four months that led the market to shed around 40 per cent. In this period, many small investors have been washed out from the stock market while others are facing back to back decline despite the freeze on shares prices. Those closely watching the ebb and flow of Pakistani market linked the huge capital flight to deteriorating law and order situation, economic weaknesses, like dwindling forex reserves, devaluation of rupee against US dollar coupled with the unprecedented financial turmoil in the US, which sent shock waves to all other leading capital markets of the globe.

Analysts also held the view that the imposition of floor on the market had sent a negative signal to foreign investors and those still trapped in the market were waiting for lifting of floor from the market to make an exit. Analysts said that as long as the tension remained in the tribal belt, which was being linked with the suicide bombings in the mega cities of the country, the foreign investments would continue to wobble and may witness further downgrading.

Analysts said that Moody's verdict had also dealt a severe blow to the confidence of foreign investors and local investors as well.

The steep decline in the stock market and economic meltdown has severely hit the confidence of foreign investors, analysts added.