Get ready for gradual end of LDC-specific support: Tipu Munshi.
Bangladesh should start preparing for the gradual withdrawal of international supports as the country is set to graduate from the group of least developed countries, Commerce Minister Tipu Munshi said yesterday. The country should move towards signing of free trade agreements (FTAs) or preferential trade agreements (PTAs) to cope with the post-graduation scenario, he said. He was addressing a virtual workshop on “Effective Partnership with the Private Sector for Sustainable Graduation”. The Support to Sustainable Graduation Project of the Economic Relations Division (ERD) organized the event.
The graduation is likely to create new dynamics in international trade and businesses due to the loss of LDC-specific supports, speakers said. “Likewise, we would be able to adjust very well with the upcoming dynamics,” said Finance Minister AHM Mustafa Kamal. The minister called on the private sector to enhance research and development capacity to cope with the upcoming Fourth Industrial Revolution and the LDC graduation. ERD Secretary Fatima Yasmin said the government would prepare a smooth transition strategy in consultation with the stakeholders, including the private sector to grab the opportunities and cope with the challenges of graduation. Abdur Rouf Talukder, senior secretary of the finance division, emphasised intensifying skills development programme to increase the productivity of the workforce. He called for necessary improvement of the education system, providing special incentives to explore new export markets, extending support to start-ups, and improvement of the country’s position in the Ease of Doing Business ranking.
Loans to weak sectors face significant pressure: Moody’s.
Non-performing loans may increase in coming quarters as recovery from pandemic remains slow. Loans to the vulnerable sectors in Bangladesh such as garment, textile, cement and tanneries will face significant pressure as they are yet to see expected recovery from the shock of the coronavirus pandemic, Moody’s said. “The true asset quality of loans will emerge across all sectors, and we expect significant pressure in loans to vulnerable sectors such as readymade garment and textile,” said the global credit rating agency in an analysis.
Between July and January, the first seven months of the fiscal year, the shipment of garment declined 3.44 per cent year-on-year to $18.40 billion as Bangladesh’s key export destinations have been struggling to contain the impacts of the pandemic for more than a year, data from the Export Promotion Bureau showed. Of the earnings from the apparel export, $9.98 billion came from the knitwear shipment, which was up 3.84 per cent. The export of woven items declined 10.85 per cent to $8.41 billion.
“We also expect loans in sectors such as cement manufacturing and tanneries to contribute to asset-quality stress because they have yet to recover from the economic slowdown,” Moody’s said. The analysis said non-performing loans would increase in the coming quarters because of the expiration of credit moratorium period and weakening of the repayment capacity of borrowers as a result of the coronavirus shock. NPLs stood at Tk 94,440 crore as of September, the latest for which data is available. This is down 1.74 per cent from three months earlier and 18.73 per cent year-on-year.
Steel exports jump 83pc.
Bangladesh’s steel export, mainly semi-finished casting products, leaped 82.91 per cent year-on-year during the July-January period of the ongoing fiscal, interestingly coinciding with the ongoing pandemic-induced economic slowdown. Of the export, $10 million worth of goods went to China. Bangladesh’s steel mills primarily import scrap metal to produce the intermediate casting products which need further processing to be turned into finished goods. The industry deals with ferrous waste and scrap, re-melted ingots and products made from such metal of all shapes and sizes such as angles, rods, plates and pipes.
The export destinations are mainly the United Arab Emirates, India, Malaysia, Japan, Thailand, Pakistan and Myanmar. “The export increased due to a leading steel maker exporting around 45,000 tonnes of billet during the pandemic which showed a big jump in steel export,” said Manwar Hossain, president of Bangladesh Steel Mills Owners Association. The leading steel makers tried to bring in cash instead of making a profit by selling at less than the production cost as the situation was not favourable during that time, he said. Shahriar Jahan Rahat, deputy managing director of Kabir Steel Re-Rolling Mills Group said the sector was dependent on importing the raw materials. Rahat said Bangladesh’s annual consumption had risen by 15 per cent to 20 per cent between 2017 and 2019 whereas earlier it was increasing by some 10 per cent.
There are about 40 active manufacturers with a combined capacity to produce nine million tonnes of steel a year. Of them, Abul Khair Steel, GPH Steel, BSRM and KSRM meet more than half of the annual demand of eight million tonnes.
NRB Bank gets new MD
NRB Bank has recently witnessed the appointment of a new managing director (MD) and chief executive officer (CEO). The appointee, Mamoon Mahmood Shah, joined the bank as an additional managing director in 2019, according to a statement. He started his banking career as a probationary officer of IFIC Bank. Shah also worked at EBL, HSBC, Standard Chartered and ANZ Grindlays. He held the position of MD and CEO at ICB Islamic Bank, National Finance and GSP Finance. Shah attained a postgraduate degree in accounting from the University of Dhaka.