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17.03.2013

Trade deficit down in current fiscal

The country’s net trade deficit has come down by 29 percent in the first seven months of the current 2012-13 financial year, compared with the corresponding period of the previous financial year.

According to the Bangladesh Bank statistics published Thursday, trade deficit in the first seven months of the current financial year stands at $4.34 billion, compared to $6.14 billion during the same period in the 2011-12 fiscal.

Decrease in imports perhaps led to the fall in the trade deficit, officials say.

A total of over $14.9 billion was earned in revenues from exports which is 8.28 percent higher than the last fiscal, and over $19.24 billion was spent on imports (3.34 percent lower than last year) in the first seven months of the current financial year, the Bangladesh Bank date suggested.

However, deficit in the service sector at over $2.64 billion is higher during this period compared to over $1.85 billion the same time last fiscal.

A little over $1.01 billion foreign currency net earning was recorded in this sector during the period, while nearly $4 billion was spent.

The service sector mainly includes tourism, insurance and financial trading.

Meanwhile, the condition of the running account has also improved in these seven months of the current fiscal.

Over $820 million is surplus in the running account against $1.30 billion during the same time last year.

Foreign direct investment (FDI) also increased during the period, with $870 million coming into the country. Last fiscal, it was $780 million.

The improvement in the trade balance has also made a positive impact on the foreign current exchange and reserve.

One US dollar was traded for Tk 81.82 until June last year, but after January this year a dollar was traded for Tk 79.20.

Also, at the end of January there were enough reserves to spend on imports in the next four months.




17.03.2013
Malaysia offers $2.3bn fund to bridge Padma

 

Malaysian Prime Minister’s Special Envoy to India and South Asia S Samy Vellu disclosed the offer at a press conference in Dhaka.

He said they had submitted the proposal to the Prime Minister earlier this year and were awaiting her green light.

Samy Vellu said his country would complete the mega-project in four years if the Bangladesh government agreed to the proposal.

The investment offer for the 6.15-kilometer multipurpose road-rail bridge, the largest ever infrastructure in Bangladesh, came at a time when the government is poised to build it on its own.

The envoy said they would take back the total return in 26 years on the toll collected from the bridge that would connect 19 south and southern districts with Dhaka and the eastern region and is expected to increase the GDP by 1.2 percent.

The toll charge will be fixed by the Bangladesh government, he said, according to the jointly signed minutes of the terms that were agreed upon during a discussion in Feb in Dhaka.

He said in the first five years they would not share the revenue and would take 70 percent of the net revenue in the next 21 years.

The Malaysian envoy said his country agreed to pay tax to Bangladesh on the net profit as per the local rules.

Based on their estimation he said, the net revenue collected would be $7.4 billion, of which they would get an estimated $5.2 billion.

The envoy said they entered into the project to assist Bangladesh government to complete the bridge.

“It is to help Bangladesh progress,” he said and added that it will ensure better housing for people of Bangladesh, apart from establishing shipping connection and new township.

The special envoy said the initiative will help strengthen cooperation between the two Muslims countries.

The Malaysian government, he said, was now hoping for the Bangladesh government to make its decision shortly to enable both countries to execute a government-to-government memorandum of agreement.

Early this year, Malaysian Prime Minister Najib Tun Razak had also expressed Malaysia's desire and commitment to implement the project in an official letter to Sheikh Hasina.

Both Malaysia and Bangladesh signed a government-to-government memorandum of understanding (MoU) on April 10 last year for Malaysia to form a consortium to implement the project.

Meanwhile, Finance Minister Abul Maal Abdul Muhith announced that they would build the bridge on their own after it withrew the request for the World Bank’s pledged $1.2 billion credit following more than a year of impasse over suspected corruption charges.

The minister in Parliament on Mar 5 said that the government would soon make public the schedule and yearly estimation for implementation of the project.

He also announced that the India’s $200 million grants under the $1billion line of credit would be injected to their ‘self-funded’ project.

“Such financing could also come from Malaysia in future,” he had told Parliament apparently to keep the doors open for foreign support.

Replying to a question, the Malaysian envoy on Friday said they have no problem if the government went ahead on its own.

“It (the project progress) will be finished here then,” he said.

In the latest plan, the government estimated the overall cost of the mega project at over Tk 220 billion.

Though the government is seriously thinking of alternatives to the World Bank funding to build the dream bridge, it is yet to make public its funding plans.