To cut carbon emissions, Bangladesh has set an ambitious goal of generating more than 4,100 megawatts of electricity from renewable energy sources by 2030
Money transfers through illegal channels undercut remittance figures
Apparel rebound underpins export surge
New economic calculations see changes in growth and GDP
Asian Infrastructure Investment Bank loans $260 million for new bridge at Mymensingh
A weekly round up of articles about work, employment, social security, business and the economy. Here is the news for the week ending:
November 4th, 2021
This week’s round up comes from:
The Daily Star, The Business Standard and The Financial Express
This week in Bangladesh…
Bangladesh has set an ambitious goal of generating more than 4,100 megawatts of electricity from renewable sources by 2030
Solar power will account for half but hydro and wind are also in the mix of renewables
Under the most progressive scenario Bangladesh could cut its carbon emissions by 21.85 percent
But Bangladesh needs financing, technology, and capacity-building support to achieve its highest ambitions
This would require an additional investment from external sources of $176 billion
Prime Minister Sheikh Hasina called on the developed world to deliver on promises made to help developing countries meet the challenges of climate change
News in Bangladesh for the week ending November 4th, 2021
Education, Work, and Social Security
Money transfers through illegal channels undercut remittance figures
Remittances have apparently declined over the last quarter from July to September.
Surprisingly remittances increased during the pandemic. This may have been due to restrictions on illegal money transfer systems known as “hundi.”
Hundi often relies on individuals carrying undeclared cash across borders. But with the extreme travel restrictions under the pandemic, hundi was not easy to operate.
In addition, Bangladesh Bank introduced incentives for workers to send remittances through compliant channels.
The country now faces a number of challenges on maintaining formal remittance inflows.
First, illegal channels are now back in business.
Second, some retail banks have stopped the incentive scheme.
Third, it appears that lay-offs under the pandemic resulted in expatriate workers remitting the balance of their savings in a one-off transfer. This inflated remittance inflows during the pandemic.
Bangladesh Bank is now considering a stronger incentive schemes to counter these informal remittance channels.
But remittances will continue to rely on the underlying fundamentals of overseas employment.
Are jobs available in key geographic markets for workers from Bangladesh?
What will the post pandemic job market look like in the Middle East, Southeast Asia and other key markets?
Noted economist Debapriya Bhattacharya offers his insight into the fall in remittances here.
Business, Economy and Trade
Apparel rebound underpins export surge
Bangladesh shipped $4.72 billion in merchandise in October. This was 60 per cent more than the same month last year!
Clothing items normally account for 85 per cent of shipped exports from Bangladesh.
There are four reasons for the incredible recovery in the apparel sector:
First, business was won from competitors countries such as China, Vietnam, India and Myanmar.
Second, international buyers settled deferred payments in October. These payments had been held up during the business crisis under the pandemic.
Third, international buyers placed large orders in time for Christmas shopping in Europe and USA.
Fourth buyers paid higher prices due to increased cost of freight and raw materials.
New economic calculations see changes in growth and GDP
The Bangladesh Bureau of Statistics has adopted a new base year: 2015-2016. The former base year was 2005-2006.
This change is standard practice. The new calculations show a lower rate of economic growth for earlier years. But also now show a higher GDP.
In brief, adopting a new base year shows a more accurate picture of the economy and is normally done every 10 years.
Asian Infrastructure Investment Bank loans $260 million
The Roads and Highways Department will build a new bridge across the Brahmaputra at Mymensingh with the loan.
The Department will complete construction by June 2025.
The new bridge will reduce traffic congestion on the existing Shambhuganj Bridge – the Second China-Bangladesh friendship bridge.
The repayment period of the loan is 33.5 years including a five year grace period. The payable front end fee is 0.25% and the commitment fee is 0.25% per annum for any undisbursed amount.
Meanwhile tolls raised on big bridges
The Government has significantly raised to the tolls of the two largest bridges in Bangladesh.
Bangabandhu Bridge crosses the Jamuna River and forms a key East-West transport link. Bangabandhu Bridge is the longest bridge in Bangladesh.
The 1.52-km Muktarpur Bridge crosses the Daleshwari river linking Dhaka with Munshiganj.
With the money, the government wants to pay for the maintenance of the bridges and repay the loans it took to build them.
The toll rates of Bangabandhu Bridge were last raised in 2011. This is the first time the rates of Mukterpur Bridge have been increased since its completion in 2008.
Climate, Energy and Environment
From climate resilience to reduction of carbon emissions
Bangladesh is one of the most climate-vulnerable countries due to global warming and rising sea levels.
But Bangladesh contributes less than 1 per cent to global greenhouse gas emissions.
Even so, Bangladesh has set an ambitious goal of generating more than 4,100 megawatts of electricity from renewable energy sources by 2030
Solar power will account for half but hydro and wind will also contribute to the mix of renewables.
We recently highlighted the construction of a new utility scale solar power plant in Bangladesh.
Bangladesh has committed to these targets in its updated Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change ahead of COP26.
But Bangladesh needs financing, technology, and capacity-building support to achieve these ambitions.
So, how much financing is needed to cut carbon emissions?
This would require an additional investment from external sources of $176 billion.
The energy and transport sectors would absorb most of this investment: $168 billion.
But other sectors including agriculture and waste management could also contribute to reducing emissions with smaller investments.
Bangladesh Prime Minister speaks out
Bangladesh Prime Minister Sheikh Hasina is Chair of the Climate Vulnerable Forum (CVF).
Our climate emergency is global, yet it does not affect everyone equally. For the Climate Vulnerable Forum (CVF) — a group of 48 countries spanning four continents — climate change is quite simply an existential threat. This is not hyperbole.
Sheikh Hasina – Prime Minister of Bangladesh and Patrick Verkooijen – Chief Executive Officer of the Global Center on Adaptation
In a Newsweek article, “More Funding is Critical for the Most Vulnerable to Survive Climate Change” Sheikh Hasina called on the developed world to deliver on promises made to help developing countries meet the challenges of climate change.
Chief Executive Officer (CEO) of the Global Center on Adaptation Patrick Verkooijen co-wrote the article.
Covid Update
Asian Infrastructure Investment Bank will loan Bangladesh $500 million to buy vaccines
Vaccinations using Pfizer-BioNTech for 12 to 17 year olds start in Dhaka city
7 Covid-19 deaths, 256 new infections recorded in 24 hours to 8am on 3 November