What the papers say

Credit for the Unbanked

A weekly round up of articles about employment, the labour market, skills training and workforce development. This week’s round up is drawn from The Daily Star. Here is the news for the week ending 4th February 2021.

The government has approved a loan package to benefit unbanked farmers and small business owners. Photo by Manzur Alam on Unsplash.

This Week in the Bangladesh English News…

…There’s a new stimulus package and new loan repayment terms. The government delayed the directive for schools to open. People express frustration and promises over bicycle lanes in the crowded capital city. And what will the military coup in Myanmar mean for the Rohingya in Bangladesh?

Education and Labour Market

Despite announcing last week that schools should be ready to open as soon as 4 February, the government has postponed opening schools until 14 February at the earliest. 

Financial Services

The Bangladesh Bank introduced extended repayment terms for loans with tenures of more than one year, to be given at the discretion of bankers. Borrowers can request bankers extend the repayment period of two years or 50 percent of the loan term. Last year, the central bank allowed a moratorium on loan payments, but the bank has opted not to extend the pause on payments into 2021. As a result, borrowers are back on the hook to make payments on their loans, albeit now in smaller installments. A central bank official said about 70 percent of outstanding loans are “term loans” with tenures of more than one year.

Microbusinesses, cottage industries, and small farmers, often without the necessary documents to take loans from banks, will get access to credit through a 1,500 crore stimulus package targeted for their benefit. The money will be dispersed through a number of “semi-government” foundations like the SME Foundation, BSCIC and Bangladesh NGO Foundation.

The monthly cash transfers to safety net beneficiaries should increase, argued Planning Minister MA Mannan. Beneficiaries receive Tk 500 to 700, but the minister said he supports an increase to Tk 1000 (about $12 USD). In the latest and eighth Five-Year Plan, Mannan said a larger allocation for safety net programmes has been proposed. Also speaking with the minister at a virtual event, Nazneen Ahmed, senior research fellow of Bangladesh Institute of Development Studies, said the current top six safety net programmes are government employee pensions, savings certificate interest assistance (social security part), rural infrastructure development, secondary and higher secondary stipends, the food-friendly programme, and honorarium for Freedom Fighters.

Business, Investments, Trade and Growth

Bangladesh’s LDC graduation will likely lead to some financial losses, predicts the planning ministry. The ministry’s newly-published study says the biggest losses will result from the loss of duty-free market access to the largest destination for Bangladesh exports, the European Union, and other non-EU markets. In FY31, the study predicts a loss of $13 billion in exports. Secondly, the study points to expected losses in foreign grants, possibly $700 million annually. Additionally, the loss of concessional foreign loans will increase debt servicing costs, says the study. “Policy actions will be necessary to counter these projected losses.”

The South Asian thin, fried flatbread known as “poppadom” has export potential – the Export Promotion Bureau (EPB) of Bangladesh has tried to replicate the export-business success of India, which manages to export some $2 million of the thin flatbread to 131 markets every year. In 2012, the EPB ran a three-year quality and hygiene training programme with about 500 people in Dinajpur, Bangladesh where a reported 70,000 people are already in the business of rolling pieces of poppadom for Tk 25 per 100 pieces. Despite the training programme, the area businesses have not been successful in exporting their product.

A year and some months after the first bicycle lane opened in Dhaka, cyclists and city planners are expressing dismay. “We’re disappointed that they aren’t serving their purpose,” said cyclist Rafiq Zaman about the two bike lanes in the capital city. Zaman called for linked lanes: “two bike lanes lead to nowhere”. Meanwhile, the current lanes are often occupied by illegal parking and vendors. The Dhaka North City Corporation says they have conducted some drives to clear the lanes, but it is difficult to keep violators from returning. Moreover, the mayor has said the city has considered the feedback: “From now on, wherever we find space we will construct bicycle lanes.”

In the Transparency International Corruption Perceptions Index 2020, Bangladesh scored 26 out of 100, ranking 146th out of 158 positions. The country’s score by this measure of public sector corruption has remained unchanged since 2012 according to Transparency International’s website. Bhutan scored the highest in South Asia, with a score of 68 in the 24th position. In the South Asian region, Bhutan was followed by India, Sri Lanka, Pakistan, Nepal, Bangladesh and Afghanistan.

In addition, the Economist Group released the Democracy Index 2020, ranking Bangladesh 76th, four spots higher than last year. The government is classified as a “hybrid regime”.

Other News

Will the Rohingya people be repatriated or resettled? A virtual meeting on Thursday to discuss repatriation, with China mediating, was uncertain as Bangladesh did not yet have contact with the new government in Myanmar, but Foreign Minister AK Abdul Momen said that plans to repatriate Rohingya people would continue: “The agreement on Rohingya repatriation was signed with the Myanmar state, and it doesn’t matter who is in power, the agreement must be followed.” Meanwhile, this week some 7,000 Rohingya people joined several thousand Rohingya already relocated from Cox’s Bazar to Bhasan Char, a small island to the south of Bangladesh. The Daily Star reported arrivals were happy to leave the camps. The United Nations and rights groups have objected to the relocation because they say the island is prone to flooding.

Al Jazeera released an investigatory documentary “All the Prime Minister’s Men”. The criminal allegations from the documentary stirred responses: the army and top ministers said the allegations were false, and the Daily Star criticized the scope of the conclusion implied by the name of the film.