The New Nation - Internet Edition

World economic crisis: Fate of 2m RMG workers in Bangladesh hangs in balance, Says ICCB in editorial of its news bulletin

BUSINESS REPORTER

The "financial Tsunami" originating in the United States has plunged the world economy into its worst crisis since the great depression of the 1930s. What started as a sub prime mortgage crisis in the USA has now gone global and engulfed the G-7 countries and more.

Stocks and shares in the US dropped dramatically on 10th October and have been subjected to wild fluctuations since then. The crisis has created a downward spiral of loss of confidence and trust on the free market system. While there will be considerable analysis of the reasons for the financial meltdown, inadequate regulation and poor supervision of the banks and investment firms by the watchdog is undeniable.

With the intensification of the financial crisis, world leaders struggled to come up with immediate measures to overcome it.

The US Congress approved a US$ 700 billion package to help cash starved firms; in addition, more than US$ 130 billion was injected in the giant insurance company, AIG. The total commitment of the European countries is estimated to amount to more than Euro 1,400 billion. In addition, other monetary and fiscal measures have been undertaken.

No one really knows whether these measures will work. Far less is known of the mechanism through which the stimulus package will affect the financial sector. Confidence once shaken is difficult to restore. Money being given by Governments to banks is being used to build their reserves, and not for extending credit to the borrowers as was envisaged by the Governments.

The impact of the financial meltdown on the real economy is already visible. Manufacturers are cutting down production in response to lowered demand from the consumers. In the process, jobs are being eliminated. Smaller firms that have relied on the banking sector for funds are suddenly finding their source of credit has dried up. Normally, they would negotiate with the larger firms for mergers; however, this will not be possible in the absence of credit. Many will file for bankruptcy. International trade will be seriously affected.

The IMF expects global growth of 3% in 2009, relying on reasonably robust expansion in emerging economies; the rich-world economies are expected to grow by only 0.5%. These estimates will need to be revised to conform to actual developments: on 24th October, it was announced that the UK economy had contracted by 0.5 %, which was much more than predicted.

The International Labor Organization has warned that the number of unemployed could rise from 190 million in 2007 to 210 million in late 2009. The number living on less than a dollar a day could rise by some 40 million -- and those at two dollars a day by more than 100 million. This is a vivid illustration of how the crisis on Wall Street will impact on the real economy, and create massive job losses.

It will require significant coordinated policy actions among the advanced and emerging market economies to quickly recover from this economic and financial disaster. Clearly, the world needs a long term strategy for streamlining world financial governance, including accountability and transparency in order to restore the confidence on free market mechanisms. People are demanding a new global financial architecture with proper representation of developing country interests.

How will the financial turmoil affect the Bangladesh economy? The Bangladesh financial sector had little exposure to the sub-prime mortgage securities, and may emerge unscathed. It is in the real economy that the greatest impact is likely to be felt.

Our economy depends critically on exports and inward remittances from our workers abroad. Trade will clearly be affected, but the extent of the impact is difficult to quantify at this stage. More than two million are directly employed in the RMG export-oriented industries, while more than 15 million in the backward linkage industries: their fate hangs in the balance. How will the crisis affect our expatriate workers? That is also uncertain, and will depend on the economic condition in the destination countries. While the external drama is yet to unfold, some clear policy measures are to be recommended at this stage.

The newly elected government will inherit a more challenging set of tasks than any of its predecessors in decades.

Bangladeshi co to set up water treatment plant at Adamjee EPZ Spend $1.13 million

BUSINESS REPORT

Messrs Sigma Engineers Ltd is going to set up a water treatment plant at Adamjee EPZ.

A decision has been taken at the BEPZA Board of Governors meeting that operating of water treatment plant will be allowed as a service-oriented industry in public-private partnership model.

This 100 per cent local financed service oriented company will invest US$ 1.13 million in setting up their plant and will produce 10950 lakh gallon treated water annually. Messrs Sigma Engineers limited is installing this water treatment plant in 500 sq meter of allotted land within the zone.

An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and the Messrs Sigma Engineers Limited in BEPZA Complex, Dhaka on October 30 last.

Prasanta Bhushan Barua, Member (Investment Promotion) of BEPZA and Engr SA Reza, Chairman of Messrs Sigma Engineers Limited signed and exchanged the agreement on behalf of their respective organizations.

Brig General Jamil Ahmed Khan, Executive Chairman of BEPZA and other officials from respective organisations were present on the occasion.

Libyan minister visits Square's Dhaka plant

Square Pharmaceuticals Ltd hosted the visit of a high-powered government delegation from Libya at its state-of-the-art manufacturing facilities at Kaliakoir, Gazipur on October 30 last.

The visit was graced by Engineer Maa'touq Mohammed Maa'touq, Minister for Manpower, Training and Employment.

The Ambassador of Libya to Bangladesh also accompanied the team.

The visiting team consisted of a host of Libyan and local government officials.

Square commenced exporting its world-class pharmaceutical products to Libya from 2005, being the first Bangladeshi company to enter into this oil rich country after having a thorough and rigorous inspection of its manufacturing facilities by the Drug Quality Control Administration, the National Centre for Food and Drug Control, Libya.

Libya has become now a regular market for Square and is showing increased growth and profitability over the years.

The visitors were briefed on Square's domestic and international marketing operations followed by a full guided tour of the manufacturing facilities.

They were oriented with Square's adoption and adherence of the latest manufacturing and quality control processes in the making of its world-class products.

The Libyan Minister was very appreciative of the world-class pharmaceutical facility and offered their help to see Square Pharmaceuticals in a strong position in Libya.

Forum for Nuclear Cooperation in Asia workshop begins at BAEC

The inaugural ceremony of a three-day-long (02-04 November 2008) FNCA Workshop and Seminar on Human Resources Development (HRD) for Nuclear Power Project (NPP) jointly organized by MEXT, Japan and Bangladesh Atomic Energy Commission (BAEC) began on November 2 at Dr Anwar Hossain auditorium of BAEC, Agargaon, Sher-e-Bangla Nagar Dhaka.

Special Assistant to the Chief Adviser Manik Lal Samaddar, Ministry of Science and ICT was present as the chief guest while SM Wahid-uz-Zaman, Secretary as special guest.

The function was presided over by Professor Dr A.M.M. Shafiullah, Vice-Chancellor of Bangladesh University of Engineering and Technology (BUET).

It was attended, among others, by Dr Shafiqul Islam Bhuiyan, Chairman of BAEC, Dr Farid Uddin Ahmed, Member (Physical Science) and Dr Firoza Akhter, Director, International Affairs Division.

The function was also attended by BAEC scientists, engineers, doctors and professionals from different universities and organizations of the country.

The Chief Adviser's Special Assistant Manik Lal Samaddar and in his inaugural speech said though Bangladesh is a resource constraint country, it has given emphasis on the development of science and technology, specially nuclear science and technology.

Referring to the need of electricity of the country, he mentioned that an ADP project titled "Accomplishment of necessary activities of 1000 MWe Nuclear Power Plant at Rooppur" has been approved by the government.

He expressed his deep satisfaction and thanks to the Ministry of Education, Culture, Sports, Science and Technology (MEXT) for organizing of such an international event in Bangladesh.

He hoped that FNCA would be more fruitful for all member states of the region and certainly for Bangladesh.

The function was addressed among others by SM Wahid-uz-Zaman, Secretary, MOSICT, Takashi Tadokoro, Special Staff, International Nuclear and Fusion Energy Affairs Division, Research and Development Bureau, Japan Ministry of Education, Culture, Sports, Science and Technology (MEXT), Dr Sueo Machi, FNCA Coordinator and Adviser to MEXT of Japan on World Trend and Challenges of Nuclear Energy, Dr Jun Sugimoto, FNCA, Project Leader of Japan on Nuclear Human Resources Development Activities in Japan and its Role in Asia, Dr Vu Dang Ninh, FNCA Project Leader of Vietnam on Role of International Cooperation in Human Resources Development, Dr Shafiqul Islam Bhuiyan, Chairman of BAEC on Implementation of Rooppur Nuclear Power Programme: Options, Opportunities and Challenges.

Presidential address was delivered by Prof Dr A.M.M. Shafiullah while welcome address and vote of thanks were given by Dr Farid Uddin Ahmed and Dr Firoza Akhter respectively.

Representatives from ten FNCA member states, such as Australia, Bangladesh, China, Indonesia, Malaysia, Thailand, South Korea, the Philippines, Vietnam and Japan are attending the workshop.

The purpose of this workshop and the seminar is to discuss the Human Resources Development (HRD) for Nuclear Technology specially for Nuclear Power Programme in Bangladesh. The workshop will also discuss on Asian Nuclear Training and Education Programmes and its progress and future implementation plan.

Seven branch managers' conference of ICB held

BUSINESS REPORT

The 16th Conference of the Managers of the seven branches of ICB was held on October 29 last at its Head Office at Rajuk Avenue in the city with Md Ziaul Haque Khondker, Managing Director of the Investment Corporation of Bangladesh (ICB) in the chair.

The conference was attended by MA Motalib Chowdhury, General Manager, Operations and Ms Dina Ahsan, General Manager, Administration, CEOs of the ICB Subsidiary Companies and other concerned senior officials and branch managers. Ms Monowara Begum, Deputy General Manager and Md Rafique Ullah, Assistant General Manager, Branch Affairs Department acted as coordinator of the meeting.

In the conference, operational activities and performance of ICB branches up to September, 2008 for the current fiscal year (2008-09) were reviewed. It was noted that performances of the branches in the first three months were satisfactory.

The Managing Director instructed the heads of branches to take necessary steps for achieving target of the current fiscal year.

He directed the branch managers to take necessary steps so that the rules and regulations promulgated by the SEC are to be followed strictly.

In the meeting, there was also discussion on the present position of the subsidiary companies.

It was observed that the performance of the subsidiaries in the first three months of the current fiscal year was satisfactory. Some important decisions were taken for providing improved and efficient service to the customers.

The Managing Director laid special emphasis on maintaining professional outlook and expertise so that ICB and subsidiary companies continue to play pivotal role in the capital market of Bangladesh in the backdrop of competitive environment.

Lakshmi Mittal loses $50-bn in five months

PTI, London

After braving the global financial crisis for months, the creaks are getting wider in the market value of steel empire created by the world's richest Indian Lakshmi Mittal, with about USD 50 billion knocked off from the net worth of Non-Resident Indian (N.R.I.) business tycoon himself.

While the U.S. and European markets started their downslide way back in August-September last year, ArcelorMittal, the world's largest steelmaker, continued to gain value till about five months ago and its share price scaled a life-time high of 104.77 dollars on June 5 at the U.S. bourses. However, the valuation has now dipped to below the one- fourth of its record high level and the company's shares, which are listed at N.Y.S.E. as well as on some European bourses, are currently trading near 25 dollars level. During these five months, the company's market capitalisation has also plummeted to 37.3 billion dollars, from a high of over 150 billion dollars. Accordingly, the net worth of Lakshmi Mittal, who along with his family members hold a 43.02 percent equity, has also dipped to just about 16 billion dollars from as high as about 66 billion dollars on June 5. According to the company's latest shareholding data, the Mittal family owns 623.285 million shares of the company, while the remaining holding is in the form of public holding and treasury shares.

The value of non-promoter shares has also plunged sharply from about 85 billion dollars to about 20 billion dollars and some analysts expect that Mittal and the company's top management team could have to brave queries from shareholders on this front when they meet next week after announcement of the company's third quarter results on November 5. ArcelorMittal's share price has lost over three-fourth of its value from its high in early June, amid concerns that the company was cutting down its production in wake of prevailing crisis in the global markets.

There has been reports that ArcelorMittal was cutting production by as much as 15 percent from the previous year's levels because of weakening demand.

The sharp plunge in ArcelorMittal's valuation and the consequent impact on Mittal's net worth could also affect the London-based N.R.I. steel tycoon's rank in the annual list of richest Indians compiled by U.S. business magazine Forbes, which is expected to release its latest ranking later this month. In last year's list, published on November 15, 2007, Mittal was ranked as the richest Indian with a wealth size of 51 billion dollars-which was nearly double of the previous year figure. Later in March this year, Forbes ranked Mittal as the fourth richest person across the world in its annual list of the world's richest billionaires, with a net worth of 45 billion dollars. In September, the U.S. magazine conferred Mittal with the third Forbes Lifetime Achievement Award, which honours heroes of entrepreneurial capitalism and free enterprise. Born in Rajasthan in India, Mittal founded Mittal Steel Company (formerly L.N.M. Group) in 1976. It later acquired numerous steel companies around the world, including the International Steel Group in the U.S., to become the world's largest steel producer following merger with Arcelor in 2006. In 2007, it had revenues of 105.2 billion dollars and crude steel production of 116 million tonnes, representing 10 per cent of total world steel output.

ArcelorMittal, which has over 3,20,000 employees in more than 60 countries, is listed in New York, Amsterdam, Paris, Brussels, Luxembourg and also on the Spanish bourses of Barcelona, Bilbao, Madrid and Valencia.

2 lakh could be employed if govt help the co-operative

In co-operative sector 2 lakh people could be beneficiary by employed by govt 's help. Now more than two crore people are beneficiary in this sector. So govt should take step to develop this sector. Co-operative leaders express their opinion on the occassion of National Co-operative Day at the National Press Club on Thursday organised by Dhaka Central Multipurpose Co-operative Federation Ltd.

LG Win in Winter offers' first winner Mrs Nasrin

BUSINESS REPORT

LG-Butterfly's holy Eid ul Azha win in winter offer's first winner is Mrs. Nasrin from Sheorapara, Dhaka.

She bought a microwave oven priced about nineteen thousand taka from Butterfly Rokeya Swaroni show-room and after scratching the scratch card got that microwave oven 100% free.

This morning the Chairman & Managing Director of the company M A Mannan formally handing over the microwave oven to the winner at the head office of Butterfly Marketing Ltd at Motijheel. Director of the company (Finance) Syed Asaduzzaman and Director of Marketing and Sales Mustafizur Rahman Sazid were also present.

It is worth mentioning that LG-Butterfly has arranged scratch cards for this win in winter offer to the buyers for purchasing any products priced at least Tk 7,900. After scratching the cards, the buyers will get 100%, 75%, 50% and 25% discounts as well as various amount of discounts. Cash purchasers will get more 2% extra discount.

Business Genius Hunt-2008 begins next week

Business Genius Hunt-2008, a talent hunt contest aimed at undergraduate-level business students from both the public and private universities across the country, is going to start next week for the first time in Bangladesh.

Student Enabling Project - STEP in association with EventPro, an event management firm, will organize the program which is the first of its kind in the country. An agreement in this regard was signed between the two organizations in capital Sunday.

Under the deal, EventPro will act as the exclusive event promoter of this six-round STEP-organised program. EventPro chief operating officer (COO) Syed Jawhar Saadat and STEP chief executive officer (CEO) Abdullah M Taher inked the deal on behalf of their respective organizations. Other officials from both the organizations were also present.

Grameenphone organises Children's Art Competition

BUSINESS REPORT

The final of 'Jadur Tulite Lagao Tak,' an art competition arranged by Grameenphone for the children of its channel partners, was held on October 30 at the Winter Garden of Dhaka Sheraton Hotel. The participants of this competition first had to face the competition at the regional levels. Children, 5 to 12 years of age, competed in two groups. Three winners in each group in nine regions, i.e. total 54 artists took part in the final.

The champion, first runner-up and second runner-up in group A were Khatune Jannat (Mim), Navvid Anzum Rad and Ramisa Fariha and in group B were Tamanna Tahsin, Anika Noshin and Md Sakib Chowdhury. The competition was full of fun and entertainment besides just being a contest. Prominent artist Rafiqun Nabi and Sayed Abul Barak Alvi took the role of the judges and also gave the young artists a lot of inspiration. Laszlo Barta, Director Sales distributed the prizes among the winners.