The New Nation - Internet Edition

Policy to promote tourism

AS appeared recently in the media, the council of advisers of the interim government is likely to approve 'a tourism-friendly policy' with the expectation that it will usher in a new era for the tourism industry. The Bangladesh Parjatan Corporation (BPC) will be split into 'Bangladesh Tourism Board' and 'Bangladesh Tourism Department'. For this, a draft of Bangladesh Parjatan Ordinance-2008 has already been sent for vetting. The council of advisers is expected to approve the policy draft some time this month as the government has been working to move the tourism industry ahead on the basis of public-public partnership. The proposed tourism board, as prescribed in the draft, will be an autonomous body with the authority to take and implement decisions.

To ensure private partnership, according to the new provision, five directors out of 10, would come from the private sector. Under the new policy, an exclusive tourist zone would be set up like the export processing zone. Proper arrangements for entertaining the tourists, particularly foreign tourists, would have to be ensured consistent with traditional cultural values. Besides, the authorities are considering introduction of special tourist-police to ensure security of the tourists. Under the new policy, the tourism board could make any agreement on earning, selling and leasing movable and immovable property.

After approval of the said policy, the tourism department would work as a regulatory body besides looking into maintenance of set standards and doing registration. Civil aviation and tourism ministry besides other ministries like communications and cultural affairs will be involved in the expansion of tourism. A beach committee would be formed, according to the new policy, for modernisation and safety of country's beaches at Cox's Bazar and Kuakata apart from developing transport and accommodation as preferred by tourists.

Case for crop diversification

TRADITIONAL agriculture---centering mainly on the production of foodgrains -- has served a purpose, no doubt, in feeding the growing population of Bangladesh. But this singular emphasis on foodgrain production is also costing dearly the country in different ways. Monocropping of only foodgrains in the same land round the year causes loss of soil fertility. However, such fertility loss can be avoided if planting different crops at different times on the same land is practiced. Besides, the singular pursuit of foodgrain production leads to under-production of cash crops and increases import dependence of such products. From an exporter of spices, Bangladesh has turned into a net importer of the same as a result. Edible oil is imported. But once Bangladesh was self-sufficient in oilseeds production.

There are important crops --such as cotton and rubber-- the cultivation of which can substantially reduce import dependence. Experiments established that cotton of the finest quality can be produced in Bangladesh. The country's main export commodity at present is ready-made garment (RMG). But value-addition in the RMG sector at present is only about 35 per cent. But the same can climb to 70 per cent or above if only cotton in increased quantities is locally produced to be used for making yarn and fabric. In that case, foreign exchange earnings from the RMG sector will also rise substantially.

Expansion of rubber cultivation to the same end is also possible. Similarly, stepped up production of oilseeds and spices can lead to a substantial saving of foreign currency by reducing the import of these items. The cumulative effect of the wider and successful production of cash crops will translate into balance of payments support for the country by reducing imports and increasing export values.

In quest for organic money

Maswood Alam Khan

As a part of our village folklore in Vikrampur there is a tale about a pathological miser which says that the miser had always looked for chances to manage his meals for free at the expense of others and one day when the miser was pressed hard by his friends for hosting them a dinner he hoodwinked them by promising that "he would invite all his friends and relations on 'chollisha' of his grandfather e.g. 40 days after the death of his grandfather (a religious obligation) for a gluttonous and sumptuous feast"---knowing full well that his grandfather is still young, robust and healthy and is not going to die anytime soon.

The whole financial world is based on such false swearing through fake promissory notes---one such promissory note signed by the borrower that s/he will pay back loan on a future date and another promissory note in the form of currency issued by a central regulatory bank that the money the borrower is getting in paper currency carries genuine value. Both the promissory notes are in fact deceitful as has been proven by the latest falls of giant American banks and financial institutions.

Consumerism in America has made manufacturers blind and desperate to churn out commodities without weighing the buying capacity of the consumers to such an extent that a carpet manufacturer is ready to ship and lay carpets in your house asking not a single penny for you to pay now, if only you agree to pay the price without any interest exactly one year after you have received the carpet. By lending the carpet the manufacturer is ensuring sale of his overproduction and also saving expense on account of storage. Your house is his free storage for one piece of carpet for one year.

The same way bankers had lent money so recklessly that the value of a home to be mortgaged had to be overestimated artificially to justify financing and refinancing at exorbitant rates of interest offered by subprime banks and accepted by consumers who were blind only in fulfilling their delusory wishes of owning houses being oblivious of the cumulative debt burden to be shouldered in future.

American borrowers look at the monthly instalment of mortgage payments---not at the total loan amount---as the yardstick of their capacity to afford a commodity on bank loan. And to sell loans to such beguiling clients some banks---I should call them futurologists---even offered dubious solutions like 'reverse amortization', a repayment schedule that looks like a pyramid with its upside down, e.g. 'pay less now and gradually pay more and more as the value of your home will go up and your pay will rise in future'.

Now the whole world is watching an American drama with congressmen and senators debating how to stabilize their wobbling economy, the bankers sitting idle without lending any money even to their tested clients, some manufacturers turning into lenders of last resort for their customers with bankers' loan desks closed, the home owners keeping their fingers crossed in the expectation that the government's bailout plan with 700 billion dollar will keep the bankers away from their doorsteps, the taxpayers looking askance at the government's philanthropy for the bankers at default at the cost of their money paid in tax, and foreign buyers with their stronger currencies rushing madly to buy anything American as if "America is now on sale" with US Dollar plummeting in value in an unprecedented pace!

The main reason, I dare say, responsible for the present financial crisis in USA is the financial institutions' unregulated behaviour as gamblers, or to politely say as speculators---a behaviour that is infecting almost all the financial institutions of the world. The present American crisis may spark a major global catastrophe if the trend of 'blindly mortgaging tomorrow for enjoying today through promissory notes' is not thwarted---now that it has been proven time and again that market volatility is extremely unpredictable.

The root cause, I again dare say, responsible for the global unrest for escalating price of commodities is the culture of financial transactions only through 'promissory notes' and our gross departure from legal tender or money based on or convertible into gold or silver and our embracement of fiat money, especially paper currency, authorised by a government. The circulation of fiat money, whether it is US Dollar or Bangladeshi Taka, may have led to inflation resulting in price hike, whereas money redeemable in gold or other securities would have been less likely to devalue our money so greatly.

Murabitun, an Islamic sect, is spearheading a new movement to bring the bimetallic dinar and dirham back into play as the "world currency for all free people" on the ground that the value of the Islamic bimetallic currency has remained surprisingly stable in relation to basic consumable goods and the zakat has to be given in gold as Islamic Law does not permit the use of a 'promise of payment' (e.g. paper money) as a medium of exchange.

Yes, inflation would have been minimal if we had currencies made of gold or backed by gold. Gold was money and all bonds were also gold bonds until after the First World War when the convertibility to gold was first suspended and later terminated as the financial demands of the war led governments to print paper money in excess.

There was a time when people who were extra cautious used to buy assets such as real estate properties like homes and apartments with a view to protecting the value of their savings from inflation. But, now with value of homes fast falling in USA people getting panicky are looking for alternative tangible assets like gold or any other precious metal that should guarantee perpetuity of value of their savings.

In fact, whenever our so-called civilized people in an outbreak of commercial frenzy had distanced themselves from the natural way of living catastrophes befell them and then the same people in another outbreak of frenzy had to revert to their original style of living for maintaining equilibrium with the nature.

We were enamoured with high yields of genetically modified food (GMF) and considered GMF as the penicillin to fight food poverty. But, when we have realized that such inorganic foods are carcinogenic we are now crowding shops to buy anything organic.

The promissory notes had actually lost their intrinsic values since the time when government-controlled central banks snatched the notes' issuance authority from the goldsmiths. Before the advent of banking business goldsmiths, as safe-keepers of gold coins and other valuables of citizens, used to issue 'warehouse receipts' to the depositors that were ultimately used as negotiable instruments for financial transactions and that eventually had turned into paper currency which of course were convertible into gold on demand.

Bearers of paper currency drawn from banks assume, under a false notion, that they are carrying warehouse receipts that are redeemable into gold. Paper money, in other words the 'fake warehouse receipt', is like the pillow in a musical chair game. One caught with the warehouse receipt, like the one caught with the pillow on his/her lap, as the music stops playing will find that his receipt is a false promissory note as he would place it on the counter of the goldsmith for redemption.

A new era based on false promises has ushered in when financial institutions are behaving more like futurologists than financialists and players in the Wall Streets are exercising the rights of the shareholders from the Main Streets to play more like gamblers than the co-owners of the securitized companies.

It may not be possible, what Murabitun has been propagating, to reintroduce gold and silver coins as those precious metals, both mined and un-mined, are finite resources. It should also be borne in mind that of the whole amount of money in circulation only 3 to 5 percent are actual cash in the form of bank notes and coins and the rest is made up of freely floating electrons in the banks' computers.

Creating money is no more the central banks' monopoly. A commercial bank by giving loans also creates money on the basis of your 'promissory note to pay back loan'---an asset to a bank that may again be pawned to a different bank to borrow money in electrons to be visible only in computers. Money, mostly invisible, is getting created every time a commercial bank gives a loan to a customer.

Bankers can create economic booms and busts, make the stock market go up and down as they increase and decrease the money supply through monopoly of credit. You lose in investment as those who understand the secret transfer your investment money into their pockets. You lose, they win.

With a view to keeping our future currency stable and organic we have to devise a mechanism to introduce a uniform currency for all citizens of the world under supervision of a new World Body. A single world currency convertible to a variety of precious minerals may be defined in terms of a basket of all the major currencies---somewhat akin to Special Drawing Rights (SDR) used by International Monetary Fund for internal accounting purposes which is also used by some countries as a peg for their own currency.

Promises that 'the duck will lay gold eggs' have spawned players all over the world to stake the future of humanity, to promise that 'if I can't pay you back now, my grandson (yet to be born) will adjust the debt in future'. Time has arrived when financial markets have to deal in non-promissory tangible products right over the counter where my organic money will have to carry intrinsic value and when I will not be convinced if my friend promises that he will buy me a meal after death of his grandfather.

Forecasting peace in Palestine

Ramzy Baroud

President Bush sounded much less uncertain of his peace "vision" when he received Palestinian Authority's Mahmoud Abbas in Washington on Sept. 25. Certainly much has changed since the Nov. 2007 conference in Annapolis, Maryland, where Bush and his secretary of state Condoleezza Rice exhorted that a Palestinian state can only be created through moderate forces, thus designated Hamas and other Palestinian groups as enemies of peace. They marked the end of 2008 as the deadline for an agreement to create that state.

If the last 10 months were a lesson, it was that neither the Bush administration is ready to abandon its pro-Israel position - which has jeopardized any real chance at true peacemaking - nor is the Israeli government under Ehud Olmert ready or willing to advance the cause of peace. It also became obvious that Abbas is hopelessly ineffectual in exercising any pressure, or holding any leverage to determine the speed or direction of peace negotiations with Israel. This, once again, reinforces the belief that the re-launch of peace talks under American auspices was a strategic choice pertinent to isolating Hamas following its election victory in Jan. 2006, and its clash with Fateh in the summer of last year.

Palestinian negotiator Saeb Erakat reportedly conveyed Bush's pledge to Abbas, made "behind closed doors", according to AFP, "that if a Palestinian state does not come about during his presidency, it will happen in the near future, not more than a year." If true, this would be the first indication that the end of the 2008 deadline is being abandoned as unrealistic and unfeasible. But can a truly viable and just peace agreement be achieved "not more than a year" following Bush's departure?

There are no indications that a Barack Obama presidency with Joe Biden as vice president, or John McCain's along with Sarah Palin will make a measurable difference if compared to the 8-years of Bush-Cheney leadership. The marked difference between the latter and the formers, however, is that Bush disowned the peace process altogether in his early years in office. The next president is likely to avoid such a miscalculation.

Various factors contributed to Bush's reluctant return to his self-declared role as a peace broker. One was the death of PA Chairman Yasser Arafat, and another was the need to create distraction from the Iraq fiasco. Abbas was recreated to present the antithesis of Arafat and enjoy the legitimacy of a statesman. He was further bolstered following the political rise of Hamas, whose existence was presented as the only obstacle to the peace process.

But will Obama-Biden, or McCain-Palin approach the Middle East's toughest conflict differently, especially as Israel is itself being shaped by a seemingly major political reformation with the advent of Tzipi Livni as Israel's next prime minister?

Presuming that Livni's Kadima party victory on Sept. 18 will yield a stable government or coalition that would keep her at the helm, one finds it difficult to believe that any combination of future Israeli-US administrations will bring about a satisfactory peace agreement between Palestinians and Israelis. This is not an outcome of sheer pessimism or even empirical review of history, but simply because none of the names above has exhibited any promising signs of change.

Obama's grovelling to Israel at the recent American-Israeli Public Action Committee's conference and his increasingly hawkish foreign policy stances - consistent with the expectations of Israel and its friends - was meant to "assure" Israel and its backers that Obama's Muslim's middle name will not interfere with the "historic responsibility" every US administration is obliged to feel towards Israel. His devastating comments declaring Jerusalem as the "undivided capital of Israel" was a violation, not only of international law, but of the US's own foreign policy. Obama's choice of Senator Joe Biden, a devout "friend of Israel" - who tenaciously declared in an interview with Jewish-American cable network, Shalom TV, "I am a Zionist." - was meant as further pledge that his love for Israel is unmatched, undying.

Nonetheless, the Obama-Biden ticket is faced with real competition, a McCain-Palin line-up, who represent an ideal manifestation of everything that compels many Americans to stand for Israel, right or wrong: one is a hawkish militant, and the other is a religious extremist. It's this mix of militancy - McCain is willing to stay in Iraq as long as it takes, and bomb Iran at a whim - and religious zeal - Palin comprehends world affairs in biblical terms, and the Iraq war as a mission from God - that Israel and its Washington backers find particularly comforting; this mind-set guarantees unqualified support for Israel's occupation and war adventures in the ME, and ignites the passion, thus political and financial support, for Israel among a growing constituency of Christian Zionists.

Whomever will be chosen to dwell in the White House is likely to maintain the "special relationship" between his country and Israel. If they were to differ on any thing it would be on the type of symbolism that would accompany the tangible support. A McCain presidency is likely to infuse more religious characterizations of the US-Israeli rapport and continue to champion the Israeli cause separate from the UN and the EU. An Obama administration will likely emphasize the need to enlist the support of the international community, but only to maintain the existing regime of unconditional support for Israel, which often means the isolation and targeting of Israel's enemies.

A similar assertion can be made regarding Israel. Regardless of whether Livni managed to prevail over Israel's stormy politics and shaky coalitions, or Likud opposition leader Benjamin Netanyahu managed to snatch a win in possible general elections, the outcome is likely to remain the same as far as the peace process is concerned. Livni would likely maintain the charade of a peace process to no particular end: maintaining the illusion of peace making, but never a real peace. Netanyahu is likely to stall, delay and postpone his dealings with Palestinians, to please his more hawkish supporters; different approaches, same outcome.

Similarly, Livni will exploit the unconditional US support of Israel, and whatever agenda she will find suitable for her country's "security" needs. A worldly Livni with experience in foreign policy and international espionage is likely to present a better match with an Obama-Biden administration. Livni is an intelligent, shrewd, and calculating rightwing politician with reasonable foreign policy experience. She would certainly struggle to explain Israel's war and regime change doctrine - the original Bush Doctrine - to Palin who has repeatedly proved to be clueless in foreign policy matters, and much else.

There are no signs that change, true change, is coming, regardless of who wins the White House and regardless of who rules Israel. The fact remains that the relationship that governs the US-Israeli love affair is much more convoluted, deep-rooted, and institutionalized to be affected by the exit of one man and the advent of another.

Ramzy Baroud (www.ramzybaroud.net) is an author and editor of PalestineChronicle.com. His work has been published in many newspapers and journals worldwide. His latest book is The Second Palestinian Intifada: A Chronicle of a People's Struggle (Pluto Press, London).

Opinion: Metro system for Dhaka!

Saidur Rahman

The STP team has recommended a Metro System comprised of three Metro Lines at a total cost of U.S. $ 2..1 billion or Taka 14,500 crores. The total length of the Metro Lines is not known, but I guess it will be about 70 km. in length. If we consider that people will walk down to Metro Stations from a distance of 1 km. to avail the Metro service, then the area-coverage of Metro service will only be about 140 sq. km. But, the total area of Dhaka Metropolitan City (RAJUK area) is about 1530 sq. km. Hence, the area-coverage of Metro Service will be less than 10 percent of total area of Dhaka Metropolitan City.

The STP team has failed to recognize some major disadvantages of Metro system, such as, they are technically difficult and potentially unfeasible in a city prone to flooding. If the Metro system has to be safe for implementation and operation, then Dhaka City will have to be made completely flood-free for all time, which will be extremely difficult.

Metro construction requires costly excavation. Typical costs of Metro is about $ 50.0 million to 240.0 million per km. Additional costs are involved with other infrastructures, such as underground Metro stations. A Metro station costs about $ 150.0 million.

Operating costs of Metros are extremely high requiring very expensive electric rail cars. Metro systems require constant and huge supply of electricity which will be very difficult to be ensured in Dhaka City. Most Metro systems of the world have operating deficits which can often severe the budget of the country.

Worldwide experience is that, except in a few cases the fare of the Metro ride is subsidized, and in some cases very heavily subsidized. The experience shows that the various Build-Operate-Transfer (BOT) projects from the late 1990's are all in financial trouble and are nowhere achieving profitability.

In Sao Paulo Metro, the City Govt. pays a subsidy of $ 0.20 (25%) for each trip (total trips are 2.1 million per day). One of the more spectacular recent failures of a Metro and LRT was in Kuala Lumpur, Malaysia. In the system there were substantial subsidy in the fare . The result was a financial failure and the system was nationalized in late 2001. After only 3 years of operation the system accumulated debts of more than US. $ 1.4 billion leading to the biggest bankruptcy in Malaysian corporate history. The 20 km Metro in Singapore, built at a total cost of U.S. $ 2.9 billion, have an operational loss of US. $ 1.1 million per month in 2004.

The STP recommended Metro for Dhaka city, if it is built and operated, will have a minimum economic fare of Tk. 10..0 for the ride of 1 km. distance, which will be affordable only for a very small percentage of passengers. In order to make it affordable for middle-income group of people, at least 50 percent subsidy in the fare will be required. The STP has estimated that about 57,42,000 passenger trips will be carried daily by the Metro, and the average trip-lengths will be about 5 km. Hence, a subsidy of Tk. 143.55 million will have to be paid daily and the yearly subsidy will be about Tk. 5240 crores.

The construction of Metros is often agonizingly slow. The 20 km Metro in Singapore was under construction for nearly 8 years. The Blue Line Subway (21 km.) in Bangkok was under construction for about 7 years.

Flexibility to expand and adaptability to a changing situation is also a key requirement for any mass transit system. Dhaka is rapidly growing and the situation in the city is rapidly changing. But the expansion of the Metro system is very complex.

Per kilometer construction cost of Metro is about hundred times more than that of Bus Rapid Transit (BRT) system, and thus the Metro system is likely to cover only a very small portion of the city and would be of far less use if the private auto users are not diverted to the Metro service.

According to the STP estimate, the Dhaka Metropolitan Study Area will generate daily 7 crore travel-trips of which only 8% of the trips will be served by Metro service. With an investment of Tk. 14,500 crores, the Metro system will not be able to solve more than 10 percent of the transportation problems of Dhaka City.