BANGLADESH

The government on Tuesday rolled out Tk 350 million worth of incentives in seeds and fertiliser for 355,000 small and marginal farmers of 56 districts to promote Aush production.

Under the package, each farmer will get 8 kg of seed of Nerica – the New Rice For Africa, a high yielding variety – or 5 kg of Ufsi homegrown hybrid seeds and 36 kg fertiliser –16 kg of urea, 10 kg of Diammonium Phosphate and 10 kg of muriate of potash (MoP) for one bigha of land.

Agriculture minister Matia Chowdhury announced the incentives at a press briefing in Dhaka.

She said the government set a target to cultivate Aush paddy on nearly 48,966 hectares of land in 56 districts in the current financial year. The production target is at 2.5 million metric tonnes which was 2.33 metric tonnes last year.

The minister said the programme will also require around 1890 tonnes of seeds, 5685 tonnes urea and 7106 tonnes of non-urea fertilisers like DAP and MoP.

She was hopeful that the slew of incentives would help to raise additional Aush output by 120,000 tonnes.

The total area for Aush cultivation has been fixed at 1.15 million hectares during this year, which was 1.13 million hectares in 2011.

The government provided incentives worth Tk 349.3 million for the first time in 2011 which had helped an additional 100,000 tonnes of rice in the past year.

Agriculture secretary Manzur Hossain and high officials of Bangladesh Agricultural Development Corporation (BADC) and the Department of Agricultural Extension (DAE) were present at the briefing

Railway minister Suranjit Sengupta suspended his assistant personal secretary on Wednesday, a day after he was found moving in a car with unaccounted for Tk 7mn in cash.

Minister's personal secretary Akhtaruzzaman confirmed that a suspension order has already been issued to APS Omar Faruq.

Faruq has been put under suspension with effect from Wednesday morning.

Soon after recovery of money, the minister had blamed the driver for the whole incident. He had said that the driver tried to 'blackmail and hijack' Faruq while returning home with the cash.

Border Guards Bangladesh had found the money in the car carrying Faruq and general manager of Railway Division (East) Yusuf Ali Mridha at Zigatola in the wee hours of Tuesday. The only other person in the car was the driver.

However, they were released later and the law-enforcers remained tight-lipped on the incident.

Since the recovery, the minister, who took over the newly-created railways ministry barely five months back, has faced widespread criticism.

Newspapers reported that the money was taken as bribe for making appointment in the ministry.

Former vice president of Bangladesh Chhatra League's Janagirnagar University unit, Faruq hails from Sunamganj.

Telecom regulator BTRC has awarded three different types of licences to 78 companies to operate in Bangladesh.

Bangladesh Telecommunications Regulatory Commission chairman Zia Ahmed handed over the licences to the representatives of the firms at a programme at the commission's conference room on Thursday.

"The telecom operators have some call-sharing issues with the companies who just got the licences. We will sit with everyone and solve the issues," he said.

The operators, who are already in the business, have been opposing the government move to allow so many companies in the telecom sector saying 'this would upset the balance in the telecommunication market'.

BTRC sent letters to 82 firms on Mar 8 asking them to collect their licences after the post and telecommunications ministry finalised a list of 85 licence seekers. Of them, 78 companies paid the licence fees until Wednesday.

Cash-strapped Bangladesh will get about $1 billion in extended credit facility from IMF after swallowing a not-so-sweet reform prescription from the global lender.

The IMF executive board approved the three-year ECF of SDR 639.96 million (about $987 million) and it would immediately disburse $141 million, says a media statement of the IMF Thursday.

In an instant reaction the central bank governor Atiur Rahman described IMF's credit approval as a welcome development for Bangladesh.

"Other donors will now show positive attitude towards Bangladesh after IMF's credit approval. As a result, it will have a positive impact on foreign investment," Bangladesh Bank governor Atiur Rahman said.

"Using the loan, the balance of payment problem can be handled, which would advance Bangladesh in international credit rating, and promote country's image in the international arena."

Bangladesh has been negotiating with IMF for over a year to get the loan under the ECF arrangement to cope with the on-going balance of payments problem that stood at negative $978 million in Jul-Nov period of the current fiscal.

It was negative $584 million at the same period of the last fiscal.

Even after a series of power price hikes as prescribed by it, the IMF sounded far from happy over the pace of such action.

"Prolonged delays in adjusting fuel, electricity, and fertilizer prices and unanticipated increases in import-related costs could exert additional pressure on the fiscal and external positions," the IMF said.

The ECF arrangement is designed to helping efforts to "restore macroeconomic stability, strengthen the external position, and engender higher, more inclusive growth".

After the board's discussion of Bangladesh, Naoyuki Shinohara, Deputy Managing Director and acting Chair, said: "Macroeconomic pressures have intensified in Bangladesh since late 2010 due to a negative terms-of-trade shock, rising oil and infrastructure-related imports, and accommodative policies."

"During the programme period," the IMF statement said, "Bangladesh is committed to taking actions to create fiscal space, reinvigorate the financial sector, and catalyse additional resources, in order to boost social- and development-related spending, tackle power shortages and the infrastructure deficit, and stimulate export-oriented investment and job growth.

"Bangladesh will undertake reform programmes in four major areas to ensure macroeconomic stability, external viability, and sustained growth.

"The reform areas are fiscal policy, monetary and exchange rate policy, financial sector and trade and investment."

Bangladesh, according to the IMF, has been facing macroeconomic pressures over the past 18 months when balance of payments went into a deficit in the last fiscal and reserves declined significantly owing mainly to increased demand for oil imports.

The IMF projected that GDP growth is expected to slow to 5.5 percent in the current fiscal.

"Fiscal strains have emerged due to rising subsidy costs, mainly on account of higher fuel consumption while headline inflation, while moderating recently, remains at an elevated level, with nonfood inflation the main driver."

Growth rebound expected

The IMF projected that from the next fiscal, growth is likely to rebound, assuming stable domestic economic conditions; more effective resource usage, notably development partner support; and improved global economic conditions.

It, however, said the near- to medium-term outlook "hinges on timely progress on policy adjustments and structural reforms envisaged under the government's programme".

"Inflation is expected to decline to single digits by end 2012 through appropriately restrained fiscal and monetary policies and, over time, by a further easing of supply constraints."

"The overall BOP is projected to return to a surplus in FY13 through a combination of policy tightening measures, exchange rate flexibility, and more supportive global conditions.

"Reserves are programmed to rise, reaching nearly three months of import cover by FY15.

Risks

While the delays in "adjusting" the utility prices and "unanticipated increases in import costs" put pressure on the fiscal and external positions, the IMF sees better days ahead.

"Bangladesh's medium-term prospects are broadly favorable, but still subject to risks. Policy buffers are limited in the event of adverse real shocks, given heightened inflation and reserve losses," it said.

Adjustments and reforms also require strengthened implementation capacity, it added.

After the board's discussion of Bangladesh, Naoyuki Shinohara, Deputy Managing Director and acting Chair, said: "Macroeconomic pressures have intensified in Bangladesh since late 2010 due to a negative terms-of-trade shock, rising oil and infrastructure-related imports, and accommodative
policies."

He said more recently, a weakening in external demand and a surge in oil prices have further weakened Bangladesh's balance of payments and added to fiscal and inflationary pressures.

Bangladesh is focusing on policy adjustments and structural reforms aimed at restoring macroeconomic stability, strengthening the external position, and promoting higher, more inclusive growth.

"The authorities are committed to these objectives and stand ready to take additional measures, as appropriate, to ensure the success of the programme."

Bangladesh earlier took US$590 million under poverty reduction growth facility approved in 2003.