Solar energy to mitigate the problem of power shortage

Solar home equipment

Bangladesh is populated by a huge 162 million people. The people are mostly rural based, poor and live their life doing cultivation and small businesses. Roughly 25 per cent people live in the urban areas. After 1990's, Bangladesh is experiencing a rapid growth in its economy. Industrialisation is mainly contributing to the economic growth by giving the pace in the wheel of development. Nevertheless, many problems encumber our economic development and the most acute one is power crisis. No less than 40 per cent of the total population is deprived of the blessings of electricity. The main consumers of electricity are residential places and industries. In the summer times like now the demand for electricity is the highest. Now-a-days total demand for electricity is about 6700 MW of which the government is capable of supplying roughly no more than 5000 MW against the soaring demand. Hence, we are undergoing an anticipated load shedding which also varies by duration in various neighbourhoods. It could be sour to hear but true that the government will not meet the full demand of residential houses by depriving the industries to retain the full swing of economic growth.

This is the high time to think about alternative energy production which could solve the problems. One of the options could be the solar energy which best fits with our country conditions as nature blessed us with relentless sunlight. More than one million households in off-grid areas use solar system but regrettably solar energy is not being used where it should be, in the megacities like Dhaka. People use diesel-based backup power in the apartments and commercial buildings at the time of power failures but the supply of diesel is limited in the world and its use adversely affect the environment, including air and sound pollution. Solar home system (SHS), on the other hand, is completely environment-friendly, reduce pressure on grid electricity, reduce load shedding and free up power to supply to the off-grid people. 

According to a report of April of this year, per unit price of electricity, for residential connections, ranges between Tk 3.05 and 7.90. Per unit price of electricity for small industries is Tk. 6.02. For lean periods, the rate is Tk. 5.11 per unit. For peak hours, it is Tk 7.33. For big industries, per unit price of electricity is Tk 5.90. The flat rate is Tk 5.16. During peak hours, it is Tk 8.08. According to the Power Development Board (PDB), per unit cost of electricity (on an average) is Tk 6.68. However, the cost for fuel-fired plants is Tk. 16. 

The government has to subsidise the power sector to supply electricity at a lower rate to the consumers. As a result, other sectors suffer fund crisis and the huge subsidy widens the budget deficit. If the government decreases the subsidy on electricity to develop other sectors; inflation soars on the ground of electricity price hike and it dwindles the purchasing power and swells the woes of the people. To meet the soaring demand the PDB operates some fuel-run power plants but it needs to spend Tk 200-240 million (Tk 20-24 crore), a day to produce power from the fuel-run plants. However, Tk 90 billion (Tk 9,000 crore) is needed to buy fuel, but the finance ministry is ready to pay only Tk 62 billion (Tk 6,200 crore) and due to this financial crisis, the PDB is not able to produce power to its capacity and there are frequent power cuts every day. 

High-rise buildings, both residential and commercial, are built in Dhaka city with no proper urban planning. Now-a-days building apartments by developers are very common. The landlords and developers in Dhaka are cash-rich and high-yield earner through house rent and flat sale respectively. The government should compel them to establish SHSs on rooftops to cover the maximum usage of power from solar systems. According to Dr A K Enamul Haque, Economics professor at the United International University, there is opportunity in Dhaka city alone to produce nearly 600 MW of electricity if all dwellers produce 10-20 per cent of their power consumption using solar systems.

Therefore, the builders and land developers should design the land area and buildings in a fashion that is environment-friendly and more prone to seizing the unhindered sunshine. Many developed and developing countries use solar system for meeting their demand of electricity. For instance, Gujarat in India has set up a Solar Park with 600 MW capacity. Approximately 8.0 million tonnes of carbon dioxide emissions will be reduced by the park annually.

The government has already taken some measures to popularise SHSs but the exposure is very low. What the government should do is to make a specific law on using SHS for power generation. 

This article was publishes on The Financial express, Views & Opinion, (Monday, May 28, 2012)

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Need for keeping a close watch over sustainability of public debt

  
 By Asif Reza Akash

"Blessed are the young, for they shall inherit the national debt" — Herbert Hoover

When a government spends more than it collects in taxes and other forms of revenue, it has a budget deficit. This deficit is financed by borrowing from the private sector. The accumulation of past borrowing is national/government/public debt. Generally, contents of public debt are: a) currency (when the central bank is a part of government), b) short-term debt (e.g. treasury bills), c) floating debt (e.g. provident fund, small savings etc.), d) special floating debt (e.g. issued securities to international organisations like International Monetary Fund (IMF), the World Bank (WB) etc., e) permanent/funded debt (maturity is usually between three and thirty years), f) external loans (obligations owed to foreigners- governments, institutions, firms or individuals). In general, however, the currency obligations of the government are usually excluded from the definition of the public debt and only the floating, funded, external and other obligations are included in it. 

The most popular source of taking debt is foreign aid. Most laymen think that aid is something that is non-repayable in nature. But the fact is, depending on the conditionalities, aid may be in the form of 1) hard loans, 2) soft loans, 3) grants, 4) tied aid and untied aid. The recipient country has to pay higher amount of interest (at the commercial rate) for hard loans, and nominal interest at the rate of two per cent or less with long repayments period in the case of  soft loans ordinarily received from international financing institutions. In the case of tied aid, procurement of goods and services from the donor country is obligatory, but in the case of untied aid, the recipient country is free to procure the goods and services from any country at a competitive price. All aid except grants adds to the debt burden of the recipient country and has to be repaid.

Whether public debt is a curse or a blessing is a very debatable issue in the field of macroeconomics. The first US secretary of treasury and economist Mr. Alexander Hamilton believed that "a national debt, if it is not excessive, will be to us a national blessing." While the fourth president of the USA Mr. James Madison argued that "a public debt is a public curse" .Whether public debt is a curse or a blessing but public borrowings have a profound effect on various dimensions of economy; distribution, capital accumulation, income and employment stability, and so forth. This way, public debt is both a source of problems and a tool of economic management in the hands of the authorities concerned. Simply, as long as the return on investments is higher than the cost of borrowings, public debt is beneficial until then. But most economists are critical of the external aid because of its adverse macroeconomic effect.

According to a research titled 'Analyzing Bangladesh's Debt Sustainability Using SimSIP Debt' by Bernhard G. Gunter and A. F. M. Ataur Rahman, Bangladesh's total public debt at the end of 1993, amounted to Tk 725 billion. Six years later, at the end of 1999, it just surpassed the Tk 1.0 trillion level; and at the end of 2006, Bangladesh's total public debt amounted to nearly Tk 2.0 trillion (about US$32 billion). The amount has still continued to increase. This increase in public debt levels has worried many observers inside and outside Bangladesh. Such trends seem to indicate that Bangladesh's debt is not sustainable. However, calculation of Bangladesh's public debt as per cent of its gross domestic product (GDP) provides a different picture; this ratio has actually decreased from 58 per cent in 1993 to less than 47 per cent in 2006. According to CIA world fact book, the data to Bangladesh's public debt as percentage of GDP were as followed:

Country	2004	2005	2006	2007	2008	2009	2010
Bangladesh	43	44.5	46.7	37.4	34.5	39.7	39.3

However, Bangladesh, forty years ago, was a country with abysmal poverty among the economic of the world. Henry Kissinger openly referred Bangladesh a,' a bottomless basket case'. But the living standard of its population has been improving and poverty has extensively been on the decline. Nevertheless, the amount of public debt does not always matter; rather, the sustainability of public debt matters. 

Bangladesh Economic Update, a report published by Unnayan Onneshan, a multi-disciplinary research centre based in Dhaka, revealed that the public debt issue was putting an upward pressure on real interest rate crowding private investment out. Public debt is also increasing the demand for debt servicing payments and reducing the government's capacity for public investment. The spending in the social sector has been the prime causality of this development. The per capita debt burden in fiscal year (FY) 2010-11 in Bangladesh increased 8.41 per cent than that of FY 2009-10, rising from $151 to $163. This is 22.99 per cent of Bangladesh's per capita GDP and it might increase to $171.83 in FY 2014-15, reflecting an increase by 5.42 per cent, the report said. Total debts of Bangladesh in FY 2010-11 stood at about $23,322 million, which was 22.21 per cent of its total GDP. Total domestic borrowing as percentage of GDP remained between 1.5% and 3.0% of GDP over the last ten years, according to the report. In FY 2010-11, total external debt of Bangladesh stood at $21,347.4 million which was 20.24 per cent of its GDP. The government may have to borrow Tk. 177.57 billion from domestic sources in FY 2014-15 and its outstanding external debt will then stand at $23.47 billion, according to figures reported by a national English daily in one of its recent issues.

Every year an increasing amount of our budgetary expenditure has to be spent on payments of interest on the outstanding amount of public borrowings on a cumulative basis and also on debt amortisation i.e. , repayment of the principal amount of such debts in phases. The overall debt service now involves annually more amount of more than what is spent on social security, safety net and welfare, out of the annual budgetary allocation. Furthermore, excessive borrowing from the banking sector, as has been witnessed in recent times, tends to crowd out the private sector, in terms of their access to bank credits. If this trend about government borrowing continues, this will also impact adversely its capacity to extend development spending. 

Against this backdrop, the government should try to keep a careful watch on the sustainability of the public debt. Every effort should be made by it to help avoid the recurring deficit budget on a larger scale and to allocate more fund - not squeeze it - for infrastructural development activities, with a simultaneous drive being made for strengthening its capacity to improve the implementation performance relating to the Annual Development Programme (ADP). Public-private partnership (PPP) should also be actively promoted. Unfortunately, the government has not been able to make progress, in real terms, about exploiting the potential for PPP programmes. Meanwhile, the tax collection authorities will need to make sustained efforts on a vigorous scale to raise the level of domestic revenue collection. Corruption should be curbed effectively. All political leaders and lawmakers must rise above their individual selfishness and well-being as well as narrow partisan interests.

This article was published on The Financial Express, Views & Analysis, (Sunday, January 22, 2012)

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Border killings: When would it stop?

By Asif Reza Akash

Bangladesh and India share an international border of about 5000 kilometres. Five Indian states adjoin 28 Bangladesh districts on the border. India has already fenced in about 70 per cent of the border, secured by BGB Border Guard Bangladesh (BGB) and Border Security Force (BSF) of India, with barbed wire. The major peacetime duties of both forces include preventing the trans-border smuggling, especially narcotics, fake coins and currency, explosives, human trafficking, illegal cross-border movement of people and prevention of other crimes.

It is a matter of tension that the indiscriminate and extrajudicial killings have increased significantly in the border, mostly by the BSF men who killed 1000 Bangladeshi citizens over the past decade (Source: Human Rights Watch), that is, one killing every four days over the period. Have any punishments been given to the culprits involved in these killings? The BSF insists that there are internal investigations, and are unwilling to reveal anything. This apparent impunity encourages the BSF members to continue the killing spree. Human Rights Watch defined it as 'Trigger-Happy Culture' of BSF. 

"The border force seems to be out of control, with orders to shoot any suspect," said Meenakshi Ganguly, South Asia director of Human Rights Watch. The organisation found numerous cases of indiscriminate use of force, arbitrary detention, torture, and killings by the security force, without adequate investigation or punishment. The investigation and report of HRW is based on over 100 interviews with victims, witnesses, human rights defenders, journalists, law-enforcement officials, BSF and BGB members. In many of the cases investigated by the Human Rights Watch, the victims were cattle rustlers - farmers or labourers hoping to support their meagre livelihood as couriers in the lucrative, but illegal cattle trade which is rampant at the Paschimbanga border. Reportedly, the illegal trade between the two countries amount to 3/4th of regular trade. 

The Indian satellite channel NDTV recently telecast a video where several BSF jawans (personnel) were seen severely beating up a Bangladeshi youth after stripping him naked for failing of pay them a bribe of Indian rupee 1000 (US$23). When everyone is singing the song of humanity, how are we turning a blind eye to these killings? The Bangladesh government is obliged to protect the lives of its citizens, even those who may be involved in illegal trade. It should demand of the Indian government to stop these killings. Unfortunately, comments of Bangladesh ministers and leaders of the ruling party are sometimes confusing. In the last official visit, Indian premier Dr Manmohon Singh assured that border killings would cease but actually it is not true. When nine Indian fishermen were apprehended by Sri Lankan navy inside Lankan territorial waters, India did not take it so easily. 

The Indian premier asserted that they would not take any action which will cause any harm to Bangladesh, but they are building 'Tipaimukh Dam' which, many quarters fear, may become a death trap for the people living in the north-eastern part of Bangladesh. India is poised to enjoy transit facilities through Bangladesh, but in turn giving us virtually nothing. Even, they are not willing to give us our legitimate share of water of the trans-boundary rivers. As the upper riparian country, India always takes the absolute advantage of the international rivers, but when China does the same with India they raise a hue and cry. 

We urge all Bangladeshis, including expatriates, and to the world community to raise their voice against these extrajudicial killings in the India-Bangladesh border. 

This article was published on The Financial Express, Editorial, (Saturday, February 12, 2012)

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State-owned 'TeleTalk' needs to be revamped

Bangladesh is now a land of about 165 million people. Since 1990s the country has been experiencing a rapid growth in its economy and business at a rate higher than any time in the past. The credit for this vibrant growth mainly goes to the readymade garments (RMG), remittances and export-oriented industries. The telecommunication sector has been playing a big role in the economy, especially following the introduction of cellular mobile phone service.

Bangladesh introduced cellular mobile phone service after India and Pakistan. In the huge mobile phone market in Bangladesh there are 6 operators: (i) Citycell (joint venture with SingTel Asia-Pacific Investment Limited), the first mobile communication company of Bangladesh, was set up in 1993 and it is the only CDMA network operator in the country; (ii) Grameenphone, popularly known as GP, a Norwegian company (stake of the Norwegian Telenor is 55.8 per cent; Grameen Telecom has 34.2 per cent share and public share is 10 per cent), came into Bangladesh in November 28, 1996; (iii) Robi (stake of Axiata Group Berhad is 70 per cent and that of NTT DoCoMo is 30 per cent), came in 1997; (iv) Banglalink, a subsidiary of Egypt-based Orascom Telecom, started in 2005; (v) TeleTalk, the only state-owned company, started operating on December 29, 2004; and (vi) Airtel (formerly Warid, stake of Bharti Airtel is 70 per cent and that of Warid Telecom 30 is per cent), launched commercial operations in 2007. 

According to Bangladesh Telecommunication Regulatory Commission (BTRC), the number of mobile phone subscribers in Bangladesh as of February 2009 was 45.21 million which reached 85.455 million at the end of December 2011. Considering the annual revenue and number of subscribers, GP is clearly the market leader followed by Banglalink, Robi, Airtel, Citycell and Tele Talk. So, it is crystal clear that the private-owned telecoms are dominating our market. The incentives both from the government and the private sectors have contributed to the growth of this industry. It is now one of the biggest sectors of Bangladesh. The vast market of telephone in populous Bangladesh has enticed many investors, both foreign and local, to invest in this sector. 

However, the state-owned TeleTalk remains a back bencher in the mobile phone business with only 1.218 million customers out of 85.455 million at the end of December, 2011. TeleTalk is the weakest competitor in the market with only a 1.43 per cent market penetration. When TeleTalk first came into operation it brought in a hope among the people. The mission statement of TeleTalk is "Desher Taka Deshey Rakhun" (Keep your money in your country) but ultimately it could not retain its customers' expectation with a weak network service in this highly competitive market. TeleTalk had 1.147 million subscribers as up to July, 2010 which shows the growth rate of subscribers is hardly increasing.

Strategically it is wise to keep the vital sectors like power, irrigation, telecommunication, energy, gas etc reserved for domestic investment. But for rapid economic expansion FDI was allowed in our telecom market. Now we are experiencing the outflow of return on FDI in the name of dividend and divisible profit from the telecom sector. The public company is not, however, capable of generating a vibrant profit by competing with its rivals. 

Russia's AFK Sistema and UAE-based telecom operator Etisalat showed interest to buy stakes in the state-run TeleTalk. Recently Vietnam's Viettel also wanted to invest $250 million in TeleTalk. However, nothing has happened as yet. 

TeleTalk should undertake a fish-bone analysis to detect its problems. But at first it should seek and attract investors so that there arises no liquidity crisis at the time of resuscitation. Then a huge development of network coverage is needed. By keeping the privilege of 3G in mind TeleTalk can make contract with modern engineering and technological companies of developed countries. A strong customer-based marketing strategy (advertising, sponsoring, strategic partnership, CSR etc.) should be formulated. A chain of customer service centres should be developed throughout the country with optimum number of smart and vivid customer care associates. The cost efficiency and effectiveness should be kept in mind. To do all this, a partial or complete change in management team and corporate strategy may be necessary. Corruption, inefficiency, mismanagement and political interference should be reduced to the minimum. 

Before creating expectation TeleTalk must develop ability to satisfy those expectations of the customers. If necessary, the brand name and logo might be changed. Eventually, if TeleTalk can give all the facilities that its rivals do and for once the customers are convinced that it is our phone, let us talk through this phone and contribute to the country by keeping the money in the country; then TeleTalk will patently become the market leader in country's telecommunication.

This article was published in The Financial Express, Views & opinions (Saturday, March 24, 2012)

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Hartal: An economic viewpoint

At school, it was taught that hartal is a Gujrati word but its popularity among political parties here virtually made it a native one. There are many ways by which people can protest against undesirable situations. In Bangladesh, hartal is the most favourite option for the political parties to fight the incumbent regimes. 

People here became familiar with hartals even before the emergence of this country as an independent entity. With the passage of time Bangladesh has grown economically and socially. Like most countries, trade, commerce and business constitute the backbone of its economy. Exports, especially, contributed immensely to the expansion of its economy over the last decades. However, the culture of hartals has considerably hindered this flow of economic growth. From a pure economic point of view, hartal is an act of outright insanity. It could be termed a self-destructive weapon and an occasion for destroying civilian property. Hartal compels every sphere of life to come to a standstill, makes the country unstable and brings in a hell of anarchy. The recent series of hartals obstructed business activities severely. It hampered every sector of the economy like export-import, transportation, banking, and caused havoc in the lives of the impoverished millions who have to earn their bread on a daily basis.

The upcoming national budget (2012-13) is expected to be of Tk 160 billion and export-import constitutes around 60 per cent of Bangladesh's present GDP of US$ 110 billion. Bangladesh captured nearly US$ 23 billion from exports in the fiscal 2010-2011. These are commendable indicators. Besides, because of the country's huge population and their dire need for survival, hundreds of thousands of crores of taka are circulated in the economy everyday through businesses. A hartal, needless to say, stalls all these activities, big or small, and more importantly, demoralises the drive of the people to go on. Because of the recent countrywide hartals and political turmoils, Moody's international has warned Bangladesh about the erosion of the county's image to potential and prospective foreign investors and a downgrading of credit rating. It mentioned in a report that political instability is detrimental to investor confidence, and is credit-negative. Attributing to the recent unrest it refers "if the political stability deters the foreign investment, or worsens the external payment position or the government's fiscal balance, the IMF credit may not be sufficient to buoy investor confidence."

    

Business today is an ever competitive phenomenon. A failure to retain international customers means that the customers are captured by the competitors. In RMG business our strongest competitor is China and it is very likely that our market could be occupied by them if the current situation persists for long time. The large business houses and industries might somehow cover up the losses caused by hartal but for new, small or medium enterprises it is deadly and many a time they cannot sustain the loss and may eventually get ruined.

Beyond crippling businesses, especially export-import and port operations, it is increasingly becoming a common activity of hartal at times to vandalise public property. Vandalism begins even from the previous evening of the hartal day. Setting public buses and private vehicles on fire is the most frequent of the scenes that people have to witness almost routinely. 

There are innumerable other hazards that one has to experience on a hartal day. During the recent hartalsm, the worst victims, among others, were the HSC examinees. It was indeed a horrendous task for the authorities to reschedule the dates for the examinations for a vast number of students throughout the country and also to coordinate with the examination centres. The awes of the students cannot be perceived by none other than themselves. 

Can we, under the circumstances, expect that good sense will prevail among our political parties to try to understand how dreadful a weapon this hartal is to the citizens, collectively as well as individually? It need not be reiterated that continuation of the hartal culture will give rise to anarchy in all spheres of society. Not that it has not already done so. 

This Article was published in The Financial Express, Editorial, (Monday, May 14, 2012)

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FTA with India may help reduce trade imbalance

A Free Trade Agreement (FTA) might offer a solution to the trade imbalance between Bangladesh and India. It can reduce the trade deficit of Bangladesh, can improve the living standards of Indians and can stop illegal trading writes Asif Reza Akash


From the caveman's era to the present day, men always traded among themselves for fulfilling their necessities. Before introducing the system of currency, man used 'barter trade' for exchanging necessary commodities and services. Nowadays, every country wants to lead its economy to a higher level to survive in this competitive world. From this point of view, bilateral trade is very significant. Bilateral trade receives more attention in the political arena. This is important because international relations pertain to relations among nations, so politicians and diplomats are naturally drawn to statistics measuring country to country economic transactions. In the recent time, trade deficit of Bangladesh with India is the most discussed issue. 

Both Bangladesh and India are important members of the SAARC and have long common historical and cultural bonds. As far as trade relation is concerned, India is the third-largest trading partner of Bangladesh just after the USA and Europe, while India's position is at the top for Bangladesh's imports from the world. Therefore, an analysis of current trade status between the two nations, obstacles and opportunities for mutual trade expansion is very critical for economic development of both the countries, especially of Bangladesh, as Bangladesh has been experiencing a large trade deficit with India since its Independence. The trade deficit has been increasing exponentially in the recent past. In the fiscal year (FY) 2010-2011, Bangladesh imported goods worth US $4570 million from India while its export to that country was just $512 million. 

A World Bank report titled "India and Bangladesh: Bilateral trade, potential free trade agreement" revealed that in 2004, India's officially recorded exports to Bangladesh were about $1.7 billion, but its imports from Bangladesh were just $78 million. Indian exports to Bangladesh grew very rapidly during the 1990s, and have continued to grow since 2000. By contrast, Bangladesh's exports to India-- almost zero in the early 90s, have stagnated at very low levels at well below $100 million annually. Since 1996-97, Indian exports to Bangladesh have been growing at 9.1 per cent annually, just slightly above the general rate of growth of its total merchandise exports (8.4 per cent), but India's imports from Bangladesh over the same period have grown on average at only 3.0 per cent annually compared to the average growth of its total imports of 9.2 per cent. Consequently, Bangladesh's bilateral trade deficit with India has been increasing rapidly, on average at about 9.5 per cent annually. For India, trade with Bangladesh is a very small part of its total trade-just over 1.0 per cent since the mid-1990s, and currently about 3.0 per cent of its total exports and a miniscule share (0.01 per cent) of its total imports, according to the WB report. Bangladesh's exports as a percentage of India's total imports are next to nothing. On the contrary, Bangladesh's imports as percentage of India's total exports have increased steadily. 

Bangladesh enjoys trade surplus with her major trading partners of Western Europe and North America but is in big deficit with her neighbour, India. In FY 2010-2011 (July-March) from the USA, Bangladesh imported commodities worth $374 million while export was worth $3776 million. The data from the Ministry of Commerce and Industry of India shows that India exported goods to Bangladesh via formal channel worth $2.43 billion and imported goods worth $254.66 million in FY 2009-10. It is believed that the informal channels also witnessed similar transactions. According to the World Bank, illegal trade between the two countries amounts to three-fourth of regular trade. Therefore, bilateral trade with India is very important not only for making a trade surplus, but also for a vibrant economy through mutual development and fortunately India's large size (both population and GDP) makes it a large export market while geographical proximity, profuse natural resources and diversified production structure make India a cheaper and convenient source of supply. But India has handicapped the entry of Bangladeshi products in India by setting many restrictions like tariff and non-tariff barriers. According to Dr Abul Bayes, economist and former vice chancellor of Jahangirnagar University, if India gives us duty-free entry of our products our export will raise to $1.0 billion. Previously, 480 Bangladeshi products were on India's negative list although all products are supposed to get duty-free access by 2016 under the South Asian Free Trade Area (SAFTA) agreement. With the deal on duty-free access of 46 Bangladeshi textile items to India, the negative list came down to 434. India had also increased the duty-free access to 10 million pieces of readymade garments (RMG) from Bangladesh every year.

 However, Bangladeshi businessmen often complain about the non-tariff barriers imposed by Indian authorities especially in matters of testing the standard. About the significance of this deal, former FBCCI president Annisul Huq says, "It is difficult to assess the benefit that the garment industry will accrue from this because we've heard that the Indian manufacturers are standing against this deal. Then there are the non-tariff barriers like testing and others. Problem of connectivity is also a kind of non-tariff barrier. So, accruing the benefit from this deal will not be possible if the non-tariff barriers are not lifted by India and if infrastructure is not developed by Bangladesh." He, however, says that with this deal it has been proved that demand for our garment products is growing in India.

 "We've an expanding market in India. So, we needed a good gesture from India, which we have got. I believe trade imbalance will also be reduced to some extent for this. But the appraisal of the full benefit is a matter of time and at the same time depends on how India will play its non-tariff barriers." Why there is a big trade deficit with India while Bangladesh is enjoying a trade surplus with countries like the USA and Germany? Prof Ayubur Rahman Bhuyan of the economics department identified the causes as the overvalued exchange rate (BDT vis-à-vis Indian Rupee); tariff and para-tariff barriers like countervailing duties (CD), anti-dumping duty (ADD), supplementary duty (SD), additional customs duty, luxury tax, surcharge etc; non-tariff barriers such as health and quality standards, permits and licences, obtaining Indian Standard Institute (ISI) certificate, health certificate, technical standards, labelling and marking provision etc; and failure of South Asian Preferential Trade Arrangement (SAPTA) to enhance trade and weak production structure. There are also some unexpected harassment like filing cases for alleged violation of rules regarding health, weights and measures, refusal kto grant SAPTA concessions, rejecting consignments on false pretext and overall disinclination to allow entry of Bangladeshi products to Indian market. Recently, the inter-state deal of exporting 46 RMG products to India is facing a strong protest from Indian businessmen even before implementation. 

In this circumstance, a Free Trade Agreement (FTA) might offer a solution to reduce the trade imbalance between Bangladesh and India. It can reduce the trade deficit of Bangladesh, can improve the living standards of Indians and can stop illegal trading. A good bilateral trade relation is very necessary for mutual development. India is considered as the fastest growing economy and also a rising power. Despite some ups and downs, Bangladesh and India has had a good relation since Independence. Now, we are hoping for a more stable inter-state relationship between the two nations.

This article was published in The Financial Express (October 15, 2011)

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Liveability of Dhaka

If Dhaka doesn’t receive proper attention now, after 20 or 30 years it will lose the quality to be even considered in the ranking. Many specialists of urban and regional planning expressed their concern that if the current situation of Dhaka continues for ten years, it will turn into an abandoned city, writes Asif Reza Akash

THE capital city of Bangladesh, Dhaka has a long history, dating back to 1606. It was first the capital of a province under the Mughal regime till 1717. It then became the capital of East Bengal and Assam in 1905, of East Pakistan in 1947, and finally of Bangladesh in 1971. The metropolitan area of Dhaka is 1,500 square kilometres and the area of Dhaka City Corporation is 360 square kilometres. The Bangladeshi capital, Dhaka, is thought to be the world’s fastest growing city. A BBC report in 2010 showed that it already has a population of 15 million, and an extra 400,000 people move there every year.

According to the latest global liveability survey from the Economist Intelligence Unit (August, 2011), Dhaka stands in the 139th place out of 140 cities. Australia’s second largest city, Melbourne, has been rated the best city in the world to live in, edging ahead of Canada’s Vancouver, and Harare of Zimbabwe is considered as the worst liveable city in the world. According to EIU, every city is assigned a rating of relative comfort for over 30 qualitative and quantitative factors across five broad categories: stability, healthcare, culture and environment, education, and infrastructure. Each factor in a city is rated as acceptable, tolerable, uncomfortable, undesirable or intolerable. For qualitative indicators, a rating is awarded based on the judgment of in-house analysts and in-city contributors. For quantitative indicators, a rating is calculated based on the relative performance of a number of external data points. The scores are then compiled and weighted to provide a score of 1-100, where 1 is considered intolerable and 100 is considered ideal. The liveability rating is provided both as an overall score and as a score for each category.

Under the category of stability the factors considered were prevalence of petty crime, prevalence of violent crime, threat of terror, threat of military conflict and threat of civil unrest or conflict. In case of healthcare the factors were availability of private healthcare, quality of private healthcare, availability of public healthcare, quality of public healthcare, availability of over-the-counter drugs, general healthcare indicators (adapted from World Bank). The influential factors under culture and environment were humidity/temperature rating (adapted from average weather conditions), discomfort of climate to travellers, level of corruption (adapted from transparency international), social or religious restrictions, level of censorship, sporting availability, cultural availability, food and drink, consumer goods and services. In case of education the indicators were availability of private education, quality of private education, public education indicators (adapted from World Bank). The indicators of infrastructure were quality of road network, quality of public transport, quality of international links, availability of good quality housing, quality of energy provision, quality of water provision, quality of telecommunications.

By considering those factors, the position of Dhaka in ranking is clear to everyone. Now it is high time to think about Dhaka. If Dhaka doesn’t receive proper attention now, after 20 or 30 years it will lose the quality to be even considered in the ranking. Many specialists of urban and regional planning expressed their concern that if the current situation of Dhaka continues for ten years, it will turn into an abandoned city. Now it is the time to list the problems of Dhaka, find out the roots of those problems through fish-bone analysis and solve those as early as possible.

Why was Dhaka placed in 139th position out of 140 cities? Most likely the first answer is an uncontrolled and huge population. This is the mother of all problems in Dhaka as well as in Bangladesh. This huge population creates a huge pressure in every sphere of life in Dhaka. High population density always makes a crisis in hospitals, education sectors, transportation systems and other aspects of life. PricewaterhouseCoopers UK Economic Outlook November 2009 revealed in a research that Dhaka is in the 9th position with a 13.5 million people in 2007 out of top 30 urban agglomerations by population and their projected ranking for Dhaka in 2025 is 4th place with a 22 million population.

The second problem might be centralisation in Dhaka. Most of the main offices of government and non government organisations are here. Best hospitals and educational institutions are also here. So, people are compelled to come to Dhaka to take the better opportunities and fulfil their needs and usually when they settle here once, they are reluctant to move out. Unplanned infrastructure and town planning has added a new extent to this problem. The poor road and transportation system has lowered the liveability in Dhaka. The city dwellers are plagued with time consuming and monotonous traffic jams.

Public safety and political stability is also very low. Hartal and other strikes are burning examples. The law and order situation is not stable. Every day murder, suicide, hijacking, carjacking and various crimes are happening. The condition of healthcare is sometimes indescribable. Public hospitals are always filled up and service is awful. The costs of private hospitals are often so expensive that average citizens can’t afford. Recent scandals regarding some private hospitals have questioned their services. Water scarcity and mismanagement, load shedding and energy deficit, land grabbing, river grabbing, disposal of waste have worsened the condition of Dhaka.

It is the appropriate time for taking necessary steps to make Dhaka liveable. The population should be controlled or it will slower the development. The main challenge for the government is decentralisation and to develop the roads, highways and overall transportation systems. The education and public health sectors should be decentralised properly and effectively. Utility services should be improved. Proper urban planning must be recognised. If the government and citizens show strict concern and seriousness about these issues then we might hope for a better Dhaka, a better tomorrow and a better ranking, indeed.

This article was published in The New age, Op-Ed (10/9/2011). 

Link: Livability of Dhaka by Asif Reza Akash

Vulnerable Bangladesh: Water insecurity

Now we get 39 per cent share of the Teesta water and we are demanding 50-50 splite, while Paschimbanga Chief Minister Mamata Banarjee wants to give us only 25 per cent. It is not only embarrassing but insulting writes Asif reza Akash

Considering its geographic, topographic, demographic and socio-economic characteristics Bangladesh is regarded as one of the most vulnerable countries in the world. The affects of climate change, sea level rise, enhanced monsoon precipitation, water crisis, power shortage, higher temperature are already impeding its development. Weighing the magnitude of the problems, water crisis and insecurity is the most important issue for the country now and is likely to remain in future. Bangladesh will face severe challenges in the coming decades, if it does not address this issue immediately. Bangladesh is called the land of rivers and canals. Most of the principal rivers, which originate in the Himalayan Mountains, flow into Bangladesh through other countries (India, China, Nepal, Tibet) and end up in the Bay of Bengal. As Bangladesh is surrounded by India on three sides, naturally there are some disputes about sharing of water of trans-boundary rivers. Although Bangladesh has 54 major trans-boundary rivers with India, there is only one 'ambiguous' water sharing treaty on the Ganges river signed on December 12, 1996, from which India has removed the guarantee and arbitration clause of minimum water. 

River water is a divine gift. Human life is completely dependent on water and access to the natural resource cannot be restricted. In Western Europe and North America, countries do not share the water rather they utilise it and take care of trans-boundary rivers on the basis of mutual agreements. But in the Sub-continent, there is hardly any amiable understanding reached with India in the 40 years after Independence of Bangladesh. Meanwhile, India is taking advantage of the situation and utilising a big share of the water in breach of laws on international rivers. As Bangladesh has many trans-boundary rivers with India and India is the upper riparian country it obviously has certain advantages. India has constructed about 35 water diversion projects on the upper Ganges to divert water to other places in India in the name of extending irrigation facility before the flow of water reaches Farakka in India. For this reason the downstream of River Padma carry less amount of water into Bangladesh, which is adversely affecting the agriculture sector. Recently, India has planned to construct several dams in major international rivers to divert water inland without any negotiation with Bangladesh. 

More recently the Indian government has drastically changed the flow of trans-boundary rivers by constructing embankments on Muhuri river in Tripura. Tipaimukh Dam is another threat to Bangladesh. The proposed Tipaimukh project on the trans-boundary Barak river in Manipur State of India will have adverse impact in the flow of Surma and Kushiara rivers, which are the principal source of the once mighty Meghna river. The consequence of Tipaimukh Dam will be so destructive that the Sylhet- Sunamganj area will turn arid and agriculture in the area will be seriously damaged. Former UN water expert and visiting faculty of BRAC University told a seminar that the water dispute with India is as old as the partition of the Sub-continent, and if India goes ahead with Tipaimukh project, the downstream of Meghna river will lose its water flow and the country will gradually turn into a desert amid acute water crisis. 

The Teesta water sharing issue has recently added a new dimension to the old dispute. During the dry season, especially from September to March, Bangladesh requires the Teesta water for irrigation. So, there is an urgent need for an agreement on Teesta water sharing with India, although, during the dry season, flow of the Teesta goes down to somewhere between 5,000 and 6,000 cusecs, while the demand for water by Bangladesh and India are 8,000 cusecs and 21,000 cusecs respectively. Now we get 39 per cent share of the Teesta water and we are demanding 50-50 splite, while Paschimbanga Chief Minister Mamata Banarjee wants to give us 25 per cent. It is not only embarrassing but insulting. According to water experts, the whole world is seriously concerned about conserving its water resources for water security, whereas, Bangladesh is destroying its surface and underground water, without thinking about its long term adverse impact. 

A recent report titled: "The Himalayan challenge: Water security in Emerging Asia" says, "A decrease in water supply by up to 22 per cent in next two decades, rise in sea level and increase in population might push Bangladesh to the risks of food insecurity, outbreak of water-borne diseases and loss of biodiversity. Water availability on per capita cubic metre basis is estimated to decline from 2150 at present to 1860 in 2030 in case of China, from 1730 to 1240 in case of India, from 7320 to 5700 in case of Bangladesh, and from 8500 to 5500 in case of Nepal." India should also consider the ground reality in Bangladesh. They expect to secure transit facilities from us giving us nothing in return. It is not a good idea. Only logical sharing of water and transparency in inter-state relations between Bangladesh and India will lead to mutual understanding. Who knows World War III may be fought over water in the coming century.

This article was published in The Financial Express, Views & Reviews (September 09, 2011) WebLink:Click Here