What the papers say

What’s Exceeding Expectations?

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 20th May 2021.

This Week in the Bangladesh English News…

…National Identity cards and services will no longer be the responsibility of the Election Commission. Money “whitening” schemes will continue until there’s no more undisclosed money to disclose says an official. Meanwhile, some bank accounts have seen incredible growth. And sunflowers could transform the domestic edible oil market.

Financial Services

Cabinet members, in a meeting presided over by the prime minister, drafted an amendment concerning willful and/or habitual loan defaulters for the Banking Companies Act. “The definition in the previous law did not define habitual defaulters clearly. But the proposed act has highlighted the issue,” said Cabinet Secretary Khandker Anwarul Islam. The proposed amendment defines willful defaulters as including those who take out loans in the name of a non-existent company or transfer mortgageable assets prior to getting a loan. The central bank will oversee the process, and every bank will be required to have two committees for searching out these defaulters: one for identification and one for confirmation. In addition, it stipulates defaulters will be given a maximum of two months to repay their loans and specifies punishments for defaulting. Last year, defaulted loans accounted for nearly 8 percent of the amount in outstanding loans according to the Bangladesh Bank.

Total funds in accounts with more than Tk 1 crore (about $118,000 USD) grew 18 percent to Tk 364,466 crore year-on-year last year according to data from the central bank. In 2019 growth was 7 percent, and in 2018 growth was 13 percent. Moreover, last year’s growth in such high-value accounts by far outpaced growth in deposits in other accounts. Experts say the growth is due to the allowance for “whitening” black money, fewer opportunities to launder money abroad during the pandemic and a cap on investment in national saving certificates.

The finance minister said the government will continue the money whitening scheme. The minister said opportunities to legalise previously undisclosed money will remain as long as undisclosed money remains undisclosed, reported The Daily Star. Critics say the current scheme, which offers a flat tax rate of 10 percent, which may be less than that paid on legally earned assets, incentives corruption and earning through illegal means. In the current fiscal year, some 10,000 individuals have declared asset worth Tk 14,295, from which the National Board of Revenue (NBR) collected Tk 1,439 crore (almost $170 million) in taxes.

Former NBR Chairman Nasiruddin Ahmed, among the critics of the money whitening measures, published a broad analysis of Bangladesh’s tax system, titled “Political economy analysis of tax reforms”.

Business, Investments, Trade and Growth

Per capita income in the current fiscal year is $2,227, up 9 percent from $2,024 in 2019-2020, according to the planning minister. At a cabinet meeting, the minister also revealed that GDP has increased to Tk 30,11,100 crore from Tk 27,39,300 crore.

Responsibility for National Identity (NID) cards will shift from the executive branch Election Commission (EC) to the Security Services Division under the home ministry. The Prime Minister’s Office has given the directive via letters to the EC and home ministry. The EC developed the NID database with information on citizens above the age of 18, and currently provides related services, such as maintaining the database and issuing national identity cards. The Bangladesh Election Commission Officers Association protested the move: “It is logical that NID services are provided by the EC as the NID card is being prepared by taking inputs from the database of voter list,” they wrote in a memorandum. Last July, the home ministry reportedly sent a proposal suggesting the NID responsibility should be transferred to the ministry.

Many retail businesses are reporting that the Eid shopping season was a relative success after relaxed restrictions in the 15 days leading up to the Eid-ul-Fitr holiday. Aarong, with 21 outlets across the country, said that sales reached 70 percent of its pre-pandemic levels. Shaheen Ahmed, owner of Anjans, said, “I initially thought we wouldn’t be able to reach even 20 percent sales of normal times.” But Anjans’ sales were about half of its pre-pandemic levels. Khalid Mahmood Khan, co-founder of Kay Kraft, had expected sales would reach 40 percent of previous levels, but he said sales reached 70 percent of sales in 2019. Other businesses also reported unanticipated success in sales.

The Myanmar and India crises are causing buyers to shift work orders to Bangladesh, wrote journalist Refayet Ullah Mirdha. “Many leather and leather goods companies have shifted orders from Myanmar to Bangladesh because of the political uncertainty,” echoed Md Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh. Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said some work orders shifted from Myanmar, but they have had little impact because Myanmar’s export volume is small compared with Bangladesh’s. A spokesperson for H&M said they are monitoring the situation in Myanmar but have not taken any immediate action in regards to their presence in the country.

Farmers and Agriculture

The US Department of Agriculture (USDA) estimated that the Bangladesh Boro rice harvest may decline 2.5 percent year-on-year, in large part due to a heat wave in April. The USDA Foreign Agriculture Service has reported that while Boro rice farmers are confident of a bumper crop this season, the heat and other factors may prevent Bangladesh from reaching it’s target of 2.05 tonnes of grain this year, up from last year’s 1.96 tonnes. The Boro rice variety accounts for about 55 percent of annual rice production in Bangladesh.

Demand for lemons is high and lemon growers are doing well, according to industry insiders. Demand increased after March 2020 due to the belief that vitamin C can protect from illness, they say. At the peak, a 120 kilogramme bag sold for as much as Tk 5,000, up from the normal Tk 3,000.

This year sunflower has been cultivated on 15,403 hectares of land across the country, which is three times higher than the target, said Department of Agricultural Extension (DAE) Director Asaduzzaman. That’s with a target that is 87 percent higher year-on-year! Moreover, seed production is expected to be 5.6 times more than last year, while last year’s seed production was almost double that in 2018-2019. “We are encouraging people to grow the habit of consuming this oil,” said Asaduzzaman. Currently, Bangladesh meets about 90 percent of its demand for edible oil with imports.

Other News

Prothom Alo journalist Rozina Islam will be in court again Thursday with the commencement of the second day of her bail hearing. Islam is facing charges after she entered the secretariat on Monday, where, health ministry officials say, she stole and photographed sensitive government documents related to negotiations with several countries for purchasing Covid-19 vaccines, some of those including “non-disclosure agreements”. At the health ministry, Islam was reportedly confined for more than five hours during which she fell ill. She was eventually taken to a police station, and Shibbir Ahmed Osmani, a deputy secretary of the health services division, filed charges against her under the Official Secrets Act, 1923. Her family members and office say she is being framed in retaliation for her reporting on corruption in the health sector during the Covid-19 pandemic.