NRB Voice Newsletter Issue 2 - Bangladesh Enterprise Institute

February 2010VOICELeveraging the Power of the Bangladeshi Diaspora ISSUE 2www.NRBvoice.org

N O N - R E S I D E N TB A N G L A D E S H INRBVOICEForewordby Ifty Islam and Farooq SubahnFebruary 2010CONTENTSForeword• Foreword• Events UpdateA run-through of upcoming and past events• Industry SpecificOverview: Power Sector• Diaspora Feature ArticleDiaspora Knowledge Networks: VanishingDoubts and Increasing Evidence, by Jean-Baptisete Meyer and Jean-Paul Wattiaux• NRB ProfileBrief profile of a successful NRB• Bangladeshi News• Economic• Stock Market• Sector238122122Welcome to the second issue of the NRB Voice, a bi-monthly newsletter that enables NRBsto stay in touch with the economic and social climate in Bangladesh and learn about thecountry’s opportunities. The past few months have been very exciting and busy withseveral events held in the UK and Bangladesh. We have been encouraged by the level ofsupport and enthusiasm of NRBs in this Diaspora project, as well as the increased interestfrom NRBs in Bangladesh.We are also pleased to announce the launch of the NRB Voice website, www.nrbvoice.org.The purpose of the website is to serve as an online, dynamic platform to educate NRBs andothers on Bangladeshi opportunities and the significant issues affecting the country, aswell as to enable website users to contribute their thoughts and ideas to the virtuallyconnected, global NRB community. The website will also assist in the development ofDiaspora Knowledge Networks (DKNs) that see greater skills transfers from NRBs in hostcountries back to Bangladesh.There are several components of the website that users of all kinds can utilize. One uniqueaspect of the website is the specific focus on the Bangladesh economy, investmentopportunities, and major industry sectors. We include profiles of a variety of sectors, fromclimate change and infrastructure to technology and tourism. Users of the site will alsohave access to extensive resources on Bangladesh and Diaspora research. Other sectionsof the website include general information on Bangladesh’s history and population, anevents page summarizing past and upcoming events, and a page linked to previous issuesof the NRB Voice Newsletter.The website is in a continuing process of enhancement with several new features in thepipeline. We plan to include a blog, career section, and frequently updated news page.We will also create LinkedIn, Twitter and Facebook accounts to expand the NRB onlinecommunity and allow NRBs to easily stay up-to-date on our activities.We hope that NRBs of all professions and regions find the NRB Voice website a useful andinteractive platform. Among others: Entrepreneurs will find ample information on the stateof the economy and opportunities in various businesses; Academics will find usefulresources on Bangladeshi Diaspora and how it can best be leveraged; Professionals andstudents can find job or volunteer positions to enhance and enrich their careers;Practitioners will learn how their field works in Bangladesh and how to contribute in amyriad of ways. We look forward to any feedback at nrbvoice@gmail.com.Ifty Islam, Managing Partner, Asian Tiger Capital PartnersFarooq Sobhan, President, Bangladesh Enterprise InstituteFarzana Hoque, Senior Associate, Asian Tiger Capital PartnersNRB Voice Issue 2 | www.NRBvoice.org 2 NRB

NRB EventsUpdatePast EventsNovember 5, 2009BEI Conference Room, DhakaRoundtable meeting with the European BangladeshFederation of Commerce and IndustryThe Bangladesh Enterprise Institute (BEI) and AsianTiger Capital Partners (AT Capital) hosted a meetingwith the European Bangladesh Federation (EBF) and aselect group of business leaders from Bangladesh onNovember 5, 2009.Mr. Farooq Sobhan, President, BEI, made welcomeremarks and introduced the participants. In his speechhe highlighted the need for:• Skills development through training of theBangladeshi workforce in technical andspecialized areas;• Increasing proficiency for Bangladeshimigrants in other European languages;• Matching demand in Europe and othercountries to supply from Bangladesh, e.g.providing skilled plumbers to Europe etc.; and• Ease of access to European markets for theeconomic development of Bangladesh.He was optimistic towards the future of Bangladeshand proposed that Europe invest further in thecountry’s opportunities.MD. Minhaz Zia, Partner, AT Capital, made a briefpresentation on investment opportunities inBangladesh. Some of his points include the following:• Despite the global crisis, Bangladesh has beenperforming quite well with an economicgrowth of 6%. Bangladesh, being a denselypopulated country with a large urbanpopulation, has prospects for investment in theeducation and health sectors.• Bangladesh, because of its strategic location,e.g. neighboring China and India, also hastremendous prospects in terms of its existingmarket and potential market. Bangladesh alsohas the highest GDP in the region in terms ofPurchasing Power Parity (PPP) .• Labor cost of Bangladesh is at 22 cents perhour, half of the rate in India, making it anattractive destination to invest in.• Bangladesh is one of the leading countries inagriculture and has the highest export in theregion.• One of the challenges mentioned was thepower supply shortage, which can beovercome through the exploitation of naturalcoal reserves in Bangladesh.Mr. Zia ended his presentation with the note that thereare many rising companies in Bangladesh that areopen to foreign equity where FDI may be effectivelyutilized.NRB Voice Issue 2 | www.NRBvoice.org 3 NRB

Mr. Salahuddin Kasem Khan, M.D, A.K KHANGROUP, President of BMCCI, identified the RMGsector and the huge scope for investment into logisticsin Bangladesh.He also mentioned that current Bangladesh Bankregulations limit investment into the shipbuildingsector. The delegation called for new reforms inBangladesh Bank regulations to facilitate furtherforeign investment into Bangladesh from Europe.Dr. Sanawar Chowdhury, Executive Director, EBF,mentioned that Bangladesh has the potential tobecome more attractive to tourists and that the sectorneeds significant support from the Government ininfrastructure development. He also stressed the needfor Bangladeshis who wish to work in Europe to beproficient in other languages.Capt. A.T.K.M. Kamal, GM, Operations High SpeedGroup, raised questions regarding the cancellation ofagreements from Dutch companies for investment inthe shipbuilding sector. He mentioned that otherinvestors from Germany and the Netherlands areinvesting in the shipbuilding sector, and there aremore opportunities left to be explored.European Delegates felt that the image of Bangladeshabroad is perceived negatively due to the news onpolitical unrest. The political turbulence and instabilityof the country makes it a safety concern for foreigners.Investors fear coming to Bangladesh, and as a resultthe country loses potential growth that it would entailthrough foreign involvement.Mr. Fred Oldenhuizing, Joint President, EuropeanBangladesh Federation (EBF), also mentioned thatsome investment plans had to be cancelled because ofthe global credit crisis, as some banks were fearful ofextending new loans.Ms. Selima Ahmad, President, BWCCI, Mr. ASMMainuddin Monem, DMD, Abdul Monem Limited,also expressed hope for further investment intoBangladesh for the Shipbuilding, Dredging, PaperManufacturing and Human Resource Developmentsectors. They welcomed the European delegates toengage in business with them in Bangladesh.Mr. Farooq Sobhan concluded the meetingsuggesting that Bangladesh is a very promising nationwith various rising sectors. Foreign countries shouldconsider investing here to help efficiently exploitresources that would lead to a beneficial relationshipfor both countries. The meeting adjourned with apositive outlook and further prospects for investmentand development in Bangladesh.November 12, 2009BEI Conference Room, DhakaRoundtable meeting on the Establishment of anEffective Bangladeshi Diaspora Network for EconomicTransformation of BangladeshThe Bangladesh Enterprise Institute (BEI) and AsianTiger Capital Partners (AT Capital) hosted aroundtable meeting on November 12, 2009 with aselect group of high officials representing theGovernment of Bangladesh, business leaders, andother development organizations. Dr. S.A Samad,Executive Director, Board of Investment, was presentas the Chief Guest, and H.E. Mr. Stephen Evans, HighCommissioner, British High Commission, was thespecial guest at the occasion. Around forty fiveparticipants representing the British BangladeshChambers of Commerce (BBCC), the private sectors,development partners, academics, and others werepresent at the roundtable.NRB Voice Issue 2 | www.NRBvoice.org 4 NRB

Mr. Farooq Sobhan, President, BEI, made thewelcome remarks and introduced the participants. Inhis speech he highlighted the need for:• Focusing on specific areas to promote theinvestment climate in Bangladesh;• Promoting and stimulating networks andconnections, especially amongst the youngergeneration;• Contributing to causes and maintainingcorporate-social responsibility throughphilanthropy; and• Strengthening ties through partnership withDiaspora networks.formulate a credible interface and institutionthat will serve as a platform for NRBs.• NRBs need to be more engaged in policydiscussions on Bangladesh to highlight outsideopinions and concerns in a constructivemanner.• Need to rebrand Bangladesh effectively so thatNRBs can use this as a resource and improvethe investment climate of Bangladesh.• There are many young NRBs that areinterested in Bangladesh but lack theopportunity and resources to act on it.Programs/seminars should be hosted toinvolve these people in order to form a jointcollaboration to enable their involvement.H.E. Mr. Stephen Evans, British High Commissioner,said “the Diaspora should be encouraged to allocatefunds for investment in Bangladesh and this could bethrough other fund managers. Tapping into the talentpool of young NRBs with diverse educations andinterests and into investment will generate wealth,employment and add value.”Mr. Ifty Islam, Managing Partner, AT Capital, made abrief presentation on the importance of theBangladeshi Diaspora towards the economicdevelopment of Bangladesh.Some key aspects he addressed were:He made the following points:• There are a lot of untapped opportunities thatcan be brought to light through the help of themillions of NRBs abroad.• Lack of information is a significant barrier inthe process of reuniting NRBs with their homecountry; therefore it is necessary to createDiaspora knowledge programs.• Due to the lack of an institutional platform andhome country constituency, it is essential to• Remittance inflow to the home country has hada huge impact on the economic development.Bangladesh receives 10 times more foreigncurrency inflow through remittances thanthrough aid.• It is important to encourage the Diaspora toallocate funds in an efficient way for thecountry.• NRBs do not just contribute to developmentthrough funds, but through ideas as well.• Need to tap into the talent pool of theDiaspora, especially the younger generation.• Open up further opportunities to enable NRBinvestors to weigh risk, generate production,and manage businesses from outside ofBangladesh.• In order to drive economic growth, we needprojects that are viable, generate high returns,increase employment, and add value to thecountry.NRB Voice Issue 2 | www.NRBvoice.org 5 NRB

Mr. Shahagir Bakth Faruk, Chairman, BangladeshBritish Chamber of Commerce and Industry (BBCC),said that he was inspired by the programme organizedin September by BEI and AT Capital in the UK. Hestressed the need and role of the High Commissionand missions abroad to promote the image ofBangladesh, which is tarnished by bad publicity andmedia.He suggested improving the reputation of Bangladeshand enlightening these NRBs about the positiveaspects of the country. He also recommendedorganizing an annual mela, or NRB events, inBangladesh to celebrate the success of Diasporaabroad.Dr. S. A. Samad, Executive Chairman, Board ofInvestment (BOI), was present as the Chief Guest atthe event. Dr. Samad said that the BangladeshGovernment is committed to improving the investmentclimate of the country and to facilitating informationflow to NRBs.He pointed out that focus needs to be on investments,trade and social responsibility. The youngergeneration needs to participate in this mission todevelop the investment climate of Bangladesh. Hesuggested creating a secretariat which will serve as alinkage between the home and host countries, keeprecords of investors, and provide help for the NRBs.He stressed the need for establishing a SpecialEconomic Zone in Sylhet to promote furtherinvestment into Bangladesh.Mr. Iqbal Ahmed OBE, North West RegionalPresident, BBCC, conveyed his concern about youngNRBs who are detached from their roots and viewBangladesh in a negative light.He also stated that the government has decided toestablish a Special Economic Zone (SEZ) in Sylhet andsuggested that a study needs to be conducted toidentify the particular area. Some key points hehighlighted include the following:• Bangladesh’s recent growth experiences havebeen mostly a result of investments from theprivate sector, including local entrepreneurs,NRBs, and foreign investors. About 81% of thetotal investment (gross fixed capital formation)is made by the private sector.• NRB remittances now stand at nearly 62% oftotal export earnings and have been growingat double the pace of exports in recent years.• However, the immense potential to capitalizeon NRB investments, both in terms ofknowledge and capital, has remained largelyuntapped. Our neighbors - India, China,Pakistan and Sri Lanka, and also othercountries such as Israel, are vivid examples ofthose who have benefited from their capableand innovative Diaspora.NRB Voice Issue 2 | www.NRBvoice.org 6 NRB

• In addition to traditional sectors, NRBs haveundertaken successful projects in new thrustareas including outsourcing, tourism, themeparks, real estate, aviation, power,infrastructure, and investment banking.• However, the immense potential to capitalizeon NRB investments, both in terms ofknowledge and capital, has remained largelyuntapped.• To engage NRBs with Bangladesh, thegovernment has undertaken a number ofinitiatives.• Government initiatives include theestablishment of a specialized Ministry forExpatriate Welfare. In addition, an NRB Cellhas been created at the Board of Investment(BOI) to provide information, services, andfacilitation to NRBs.intensive and technology-driven sectors forinvestment.• The Government Economic Zones policyhighlights that NRBs as individuals, groups andbusiness organizations can solely or jointlyestablish private economic zones. Such a zonemaster plan may include an Export ProcessingArea (EPA), Domestic Processing Area (DPA),Commercial Area (CA) and Non-ProcessingArea (NPA). Each area will enjoy specificbenefits and incentives as declared by thegovernment from time to time.January 19, 2010British Bangladesh Chamber of CommerceLondonIfty Islam, Managing Partner, AT Capital, made apresentation on energy investment opportunities atthe British Bangladesh Chamber of Commerce(BBCC). This was a follow-on event to the Governmentof Bangladesh energy and power sector road show onDecember 15 in London, at which over 30 NRBsparticipated.• The government has engaged NRBs throughthe first NRB-Conference in Dhaka in 2007, aswell as roadshows, seminars, conferences andexhibitions.• Private sector initiatives include the setting upof specialized NRB branches by banks, privateequity/investment firms, networkingorganizations, etc.• Investment Facilitating Initiatives: NRBinvestments are treated as either foreigndirect investments (FDI) or local investments,as desired by the respective NRBs. Theyreceive all priorities of citizens, as well asprivileges of foreign investors. The BOI NRBCell has been working to develop a detailedwork plan to facilitate and encourage NRBinvestors to a much greater extent.Upcoming EventsFebruary - March 2010Formal Launching Ceremony of the Diaspora WebsiteThe Diaspora website will be launched tentatively inthe next couple of months. A wide range ofstakeholders, including representatives from bilateral,multilateral, and government agencies, as well as fromthink tanks, academic institutions, the media andprivate sector, will be invited to the launchingceremony.• Apart from the traditional investment sectorssuch as textiles, clothing, and leather goods,NRBs can consider innovative, capitalNRB Voice Issue 2 | www.NRBvoice.org 7 NRB

IndustrySpecificOverview• Electricity consumption in Bangladesh is lowcompared to other developing nations - per capitaconsumption of electricity in the country is 183 KWh,while India has a per capita usage of 480 KWh.250020001500Per Capita Usage (KWh per year)In this section of the NRB Voice Newsletter,we take a closer look at one sector of theBangladesh economy. A brief overview isgiven, as well as credible investmentopportunities. This month, we will beexamining the power sector.Power SectorAn Overview10005000Bangladesh India Thailand Pakistan Sri Lanka Nepal• Natural gas, the widely used indigenous nonrenewableenergy source, accounts for approximately88% of the power generation in Bangladesh.• Bangladesh is undergoing a severe power crisis -current available generation capacity is only 4,000MW compared to peak period demand of 5,500 MW.• Research shows that during the past 6 years, demandfor electricity has been rising by 8% annually, but theactual generation capacity has been increasing byonly about 6%, widening the supply and demanddeficit.Supply Demand Curve• However, with stalled exploration activities, thereare concerns over the depletion of gas reserves.According to Petrobangla statistics, if the country'sproven reserves of 8.4 TCF gas starts depleting from2012, by 2015 the country will require new reserves tomeet growing demand. OIC’s are currently exploringnew reserves both onshore and offshore.• Five good quality, low sulphur coal deposits withproven reserves of more than 2.5bn metric tons,probably at 3.3 bn metric tons, have been discovered.The government is currently finalising its coal policy.Given that gas supply is scarce, we assume that 5,000MW of new power plant capacity could be developedusing domestic coal that can generate power for 66 to90 years. Coal fired power plants offer largeinvestment opportunities in Bangladesh, as there isNRB Voice Issue 2 | www.NRBvoice.org 8 NRB

great potential to utilize the untapped coal in thecountry.• The government is now encouraging private sectorpower generation and is trying to make use of privateand foreign capital. Many lucrative fiscal incentiveshave been offered, including tax exemption for 15years.• The private sector contributes around 25% of thecountry’s electricity in terms of installed capacity,while in 1998 the public sector was solely responsiblefor power generation.• In FY 2006, the public sector accounted for 64% ofelectricity generation despite having an installedcapacity of 75%, while the private sector’scontribution was 36%, underlining the betterefficiency of the private sector.• At present, major Independent Power Producers inthe market include Pendekar Energy of Malaysia,Summit Power Co. Ltd., Westmont Power and UnitedGroup.• On the basis of the Power Sector Master Plan (PSMP)capacity additions, the state-run Bangladesh PowerDevelopment Board (BPDB) has prepared a 3-yearroad map. The Road Map covered capacity additionthrough 2013, in which one 500MW coal plant wasenvisaged to be added in 2013. Total capacity additionwas planned to be 7,020MW.• In September 2009, the BPDB invited tenders for theinstallation of eight Rental Power Projects with totalinstalled capacity of 530 MW on a fast-track basis.• In September 2009, the government invited tendersfor the construction of 10 government fundedpeaking power plants totaling 830MW capacity (HFOfired Engines Generating sets & Dual Fuel GT) on aTurnkey basis.Major reasons for the currentpower crisisBangladesh has been suffering from a severe, ongoingpower crisis. The following factors are responsible forthe current situation.• Many power plants are idle due to the gas shortage(natural gas contributes to 88% of total generation).Despite all the optimistic projections from expertsabout Bangladesh sitting on a vast reservoir of gas, itcould be argued that previous governments did nottake proper initiatives to develop new fields.Petrobangla offered its offshore bidding round inMarch this year, while the previous auction was in1997.• Another factor is the lack of political andenvironmental consensus to tap Bangladesh's coalresources for power generation.• A lack of transparency in power generationprocurement and tendering in the past was a majorproblem. In 2007, the 450 MW Sirajgonj power plant,along with seven rental power plants and ten smallpower plants, were re-tendered. The 100 MW Sylhetpower plant was first tendered in 2002, and its fourthtender was received in July 2007. The delays in theevaluation process of the tender were also a reason forexcessive delay in the power plants becomingoperational.• High system loss is another challenge for the powersector. However, the situation is improving as it is nowaround 19% versus 28.5% in 2001. The inefficienttransmission and distribution system of state ownedcompanies is the main factor behind this high systemloss. A reduction of 1 % system loss can save around45 MW of power, which can at least reduce thefrequency of black-outs.• Last year, the government invited tenders for the450MW Bibiyana gas fired power plant on a Build OwnOperate (BOO) basis. So far, four companies havebeen pre-qualified for this project.• In January 2010, a tender for the 450MW Meghnaghat- 2 power plant was floated.312927252321191715Figure 9: System Loss (%)NRB Voice Issue 2 | www.NRBvoice.org 9 NRB

• Lack of proper planning, forecasting of demand andimplementation planning are major problems in thepower sector. A big power plant needs around 3 yearsto begin operations, including the tendering process.So, the planning division should have a strategic planfor the next 15 years to ensure uninterrupted powersupply. Furthermore, regular monitoring of theimplementation plan should be enacted.• Bangladesh cannot generate power from its owndomestic fuel forever. Many countries, such as Japanand Singapore, do not have any significant oil, gas orother natural resources, but they are not facing apower crisis like Bangladesh. The government shouldhave a clear strategy of importing the oil/coal/gas thatthey need, coupled with an efficient large-scalegeneration. In addition, the government should focuson establishing more crude oil refinery plants toreduce the imported fuel cost to some extent.Fiscal incentives for foreigninvestorsFiscal incentives to encourage private investment:The private power companies shall be exemptfrom corporate income tax for a period of 15years.The companies will be allowed to import plantand equipment and spare parts for up to amaximum of ten percent (10%) of the originalvalue of total plant and equipment within aperiod of twelve (12) years of CommercialOperation, without payment of customs duties,VAT (Value Added Tax) and any othersurcharges, as well as import permit feeexcept for indigenously produced equipmentmanufactured according to internationalstandards.Repatriation of equity along with dividendswill be allowed freely.Exemption from income tax in Bangladesh forforeign investors.Power generation has been declared as anindustry and the companies are eligible for allother concessions which are available toindustrial projects.Private investors may raise local and foreignfinance in accordance with regulationsapplicable to industrial projects as defined bythe Board of Investment (BOI).Other Facilities and Incentives: Tax exemption on royalties, technical knowhowand technical assistance fees, andfacilities for their repatriation. Tax exemption on interest on foreign loans. Tax exemption on capital gains from transfer ofshares by the investing company. Avoidance of double taxation in case of foreigninvestors on the basis of bilateral agreements. Exemption of income tax for up to three yearsfor the expatriate personnel employed underthe approved industry. Remittance of up to 50% of salary of theforeigners employed in Bangladesh andfacilities for repatriation of their savings andretirement benefits at the time of their return. No restrictions on issuance of work permits toproject related foreign nationals andemployees. Facilities for repatriation of invested capital,profits and dividends. Provision of transfer of shares held by foreignshareholders to local shareholders/ investors. TAKA, the national currency, would beconvertible for international payments incurrent account. Re-investment of remittable dividend to betreated as new foreign investment.Power SectorInvestment Opportunities• In the short run (3 years) the energy investments willrequire• USD 0.5bn in GoB budgetary support andfunding from internal cash generation of BPDBand PGCB,• USD 1.0bn in new funding support fromdonors and• USD 2.0bn in “new” private sector investment• Over the next 5 years it is estimated that USD 5.9bn ofinvestment will be required to meet the GoBgeneration plan.• Independent Power Producers (IPP) can be a veryprofitable investment for both local and foreigninvestors.• Small Power Plants (SPP) provide a significantopportunity with lower capital investment.• Rental power plants are very profitable for short terminvestments. Typically, the contract period is for 3NRB Voice Issue 2 | www.NRBvoice.org 10 NRB

years, but can be extended depending on the demandafter the contract ends. In a rental power plant, thepower generator company can use second handengines, and the time period for installing the powerplant is shorter than a regular plant.• There are opportunities in replacing the oldgovernment owned power plants in Bangladesh. Thecountry has three power plant units that are more than40 years old, five units that are 35 to 39 years old,three units 30 to 34 years old, seven units 25 to 29years old and 11 units that are 20 to 24 years old.• The government allows merchant power plants forbulk consumers where anyone can generate powerand sell it to consumers without attending anytendering process. In this type of power plant, thegovernment will not ensurefuel supply, powerpurchase, land lease or any other agreements with theprivate companies. After identifying prospectivedemand in a particular area, the investor can set up apower plant and start selling power to localconsumers.• Bangladesh is planning to install a nuclear powerplant by 2015, with a generation capacity between700MW to 1,000MW to meet the country's mountingelectricity demand. The total investment required insetting up a nuclear plant is anywhere between USD1.0bn to USD 1.5bn, according to sources from theBangladesh Atomic Energy Commission (BAEC).Bangladesh has already taken steps to ensure nuclearsafety, and has promised to provide assistance to theInternational Atomic Energy Association (IAEA) insetting up nuclear power plants.NRB Voice Issue 2 | www.NRBvoice.org11 NRB

DiasporaKnowledgeNetworks:Vanishing Doubts andIncreasing EvidenceInternational Journal on MulticulturalSocieties (IJMS): Vol. 8, No. 1, 2006JEAN-BAPTISTE MEYER AND JEAN-PAULWATTIAUXInstitut de Recherche pour leDéveloppement, MontpellierParmar 2002; Stone and Mawell 2004). Apart from theirwide diversity, this explains the difficulty in finding adefinite substantive. The DKN considered here allshare a common objective: to contribute to thedevelopment of their members’ place of origin,through their skills input. The internet is used for this,although with varying intensity according to theactivities of the networks.Diaspora knowledge networks have deeply changedthe way in which highly skilled mobility is looked at.They have conceptually subverted the traditional“brain drain” migration outflow into a “brain gain”skills circulation by converting the loss of humanresources into a remote although accessible asset ofexpanded networks (Meyer et al. 2001). This shiftedthe traditional emphasis on embedded knowledge ofpotential returnees in a human capital approach(return option) to a connectionist approach wheresocial capital, including technical and institutionallinks, is crucial (diaspora option; Meyer 2001).Consequently, in the need for an accurate descriptionof these original associations, sociological observationhas initially prevailed upon economic analysis ofexpected developmental effects.http://unesdoc.unesco.org/images/0014/001490/149086e.pdfDuring the last decade of the twentieth century,groups of highly skilled expatriates originating fromdeveloping countries and scattered in the OECDcountries emerged and started to make connectionsamong themselves and with their motherlands. Thesegroups and their links definitely correspond to adiaspora scheme – although original – and thus havereceived different related labels: intellectual diasporanetworks (Brown 2002); scientific diasporas (Barré etal. 2003); technological and scientific diasporas(Turner et al. 2003); scientific, technological andeconomic diasporas (Connan 2004); knowledgenetworks abroad (Kuznetsov 2005) and finally,diaspora knowledge networks (DKN), recently in anew project run by the International Committee forSocial Science Information and Documentation (ICSSD)for UNESCO (Turner 2005).Diaspora knowledge networks represent a subset ofthe numerous international knowledge networks thathave long existed in the S&T sphere and that havemultiplied and expanded in the last twenty years(Crawford et al. 1993; Elzinga and Landstrom 1996;Doubts and scepticism recently arose due to thenovelty of the DKN phenomenon and the lack ofhistorical perspective to assess experience andresults. The critiques essentially bear on two aspects:the consistency and the efficiency of the networks.More precisely, their sustainability is severelyquestioned, as well as their real impact ondevelopments in countries of origin. This challenge tothe DKN approach emanates mainly from economicperspectives (Lowell and Gerova 2004 for the former,and Lucas 2004 for the latter). They deserve greatconsideration as they shed new light on the researchobject and they stimulate rigorous answers, which isthe present purpose. The scientific confrontation oftheir arguments is best realised through an explicitdemonstration of the coherence between the evidencecollected, the methods used, the results obtained andthe theory developed. Such work has not yet beendone in a systematic manner and it is highly useful atthis stage, for the development of research tools abouttransnational networks in general.As a new social object and research area, DKN indeedrequires new tools, methodology and concepts toexplore both theoretical and empirical issues. Thispaper addresses the critiques and shows the researchNRB Voice Issue 2 | www.NRBvoice.org 12 NRB

process on DKN. Systematically searching through theinternet has been a major part of the researchexercise, especially during recent years. Consideringthe increasing importance of this medium as a sourceof information for scientific purposes as well as forcommon knowledge, it is worth describing therigorous methods used and the robust resultsproduced. Such a detailed description is beyond thepresent remit and can be found in a special report forUNESCO (Meyer 2006). This paper refers the reader tothat study’s main findings, through three sections: first,a historical perspective on the evidence for DKN;second, a presentation of the debate that followed theinitial “discovery” of such networks and a refutation ofsome of the critiques born from the elusive characterof this new social and research object; third, some ofthese particular features are highlighted givingindications for policy orientations.1. Diaspora Knowledge Networks: How Did theyCome to Light?In 1992, the Science, Technology and Development(STD) research team at the French Institut deRecherche pour le Développement (IRD) was in theprocess of launching a new programme on theinternational migrations of scientists, when it heard ofan original experience from the Colombiancommunity. The Caldas network of scientists andengineers abroad (Red Caldas – Red Colombiana deCientificos e Ingenieros en el Exterior) had been setup the previous year with the aim of mobilizing,gathering and reconnecting expatriates with themother country and with its brand new national systemof science and technology. This initiative representeda unique opportunity to access evidence on a highlyskilled expatriate community and to study an originalresponse to the so-called “brain drain”. It in fact wentfar beyond the research team’s expectations andbecame an exploratory study of a burgeoning form ofsocialization in the context of globalization coming upwith the regime of a knowledge-intensive socioeconomy.from 1998 onwards was followed by SANSA (SouthAfrican Network of Skills Abroad) 1 in association withthe University of Cape Town in South Africa. Theresearch work followed a detailed protocol whichseemed appropriate considering the configuration ofthe object of study and the geographical dispersion ofthe research team in Austria, Colombia, France,Mexico and the United States (Meyer et al. 1995;Meyer et al. 1997):a six-page questionnaire survey of 500 Caldasnetwork members on their professional andassociative activities, migrant trajectories andmodes of communication;dozens of interviews of participants (membersabroad, Colombian scientists and policymakersat home, etc. …);participant observations of six “nodes” (localassociations of members) in Paris, WashingtonDC and New York, Mexico City, Paris andVienna;biographical studies (life histories) of a fewmembers, with a deeper analysis of thesurvey’s data;statistical and textual analysis of electroniccommunication through the R-Caldas mailinglist.Four of these five methodological items wereconventional instruments in sociological andanthropological field studies familiar to multiculturalsocieties’ investigation: survey, interview, participantobservation, biographical approach. The fifth wasrather new, using software of co-word analysis(leximappe) for the mapping of meanings and thevisualisation of clusters of semantic relations, tohighlight socio-cognitive convergences or dispersionwithin the diaspora (Granes and Meyer 2000).1.1. Empirical studies in the late 1990sThe Caldas network study was led by the STD teamalong with the Universidad Nacional de Colombia, andFor both the Colombian and the South African casestudies, the tools were thus a mix of traditional andnew techniques, although even the former were oftenused in a new way. The internet was used intensively,for an online questionnaire or for simultaneouscoverage of various actors by several researchers inNRB Voice Issue 2 | www.NRBvoice.org 13 NRB

different places at the same time. Survey andparticipant observations were in this way dissociatedfrom their local and physical support. This definitelymultiplied the materials to work with, which fittedperfectly with the decentralised nature of thediasporic objects under study. But it also raised newchallenges: control of survey respondents in theanonymous cyberspace or harmonising subjectivebiases in plural observation contexts, for example.Such challenges were addressed in an adaptivemanner, checking the origin of responses throughdata consistency and neutralising interpretativedivergences through continuous communicationwithin the research team, as well as systematicdescription of the enunciation context, of both actorand researcher, interviewee and interviewer.Red Caldas and SANSA were isolated case studies thatbrought a harvest of useful information. However, thescope of such studies remained limited by theempirical dimension of the research work. It wasempirical in two ways: the need to gather evidence inorder to understand the new phenomenon, and thenon-systematic character of this work. The networkshad indeed been discovered by random and theresearch techniques adapted to the circumstances.The results they produced were descriptive ofsituations at the micro (actors) and meso (networks)levels. However relevant they might be, theexplanations given for diasporic processes could notbe separated from idiosyncratic roots and particularfeatures. The challenge of generalization remained.The policy implications of the results obtained wouldquickly require that this generalization process occur.1.2. Scientific results and policy impactRed Caldas and SANSA proved the feasibility of adiaspora option, i.e. the real existence of off-shoreextensive human resources that could be mobilised bythe country of origin. Some of the activities in whichthese contributions have been observed during thesecase studies, as well as in other instances, aresummarised below:Exchange of scientific, technical, administrative orpolitical information (contribution to the creationof the new Colombian National S&T system in theearly 1990s, by prominent expatriates);NRB Voice Issue 2 | www.NRBvoice.org 14 NRBSpecialist knowledge transfer (waste managementprocedures from the École PolytechniqueFédérale de Lausanne-Switzerland, with theUniversidad del Valle, Cali-Colombia); “Scientific or technological diplomacy” orpromoting the home country in the R&D andbusiness community of the host country (SouthAfrican medical research in England, Indian ITentrepreneurs in Silicon Valley);Joint projects, partly on a virtual basis (distantworking, simulations);Training: attending home-country sessions andmeeting/mentoring students abroad (a featureshared by most networks of this type); Enterprise creation (including multinationalsubsidiaries) to assist the possible return ofexpatriates on a part-time or permanent basis(Chinese high-tech firms with returnees in scienceparks); Ad hoc consultations, for example onresearch/development projects (peer review, jobrecruitment, technology assessment).Each network showed the obvious attractiveness of thediaspora scheme to expatriates. The Colombiannetwork drew over 800 members from 25 countries atits peak and the South African one almost 2,500 from65. Although this was but a fraction (between 10 percent and 25 per cent) of the total highly skilledpopulation that had migrated at some stage, thereconnection message sounded appealing to amajority of those actually receiving it. 2 In terms ofacademic diplomas and socio-professional insertions,they revealed a higher profile than their counterpartswithin Colombia and South Africa. Clearly, this wasless due to the so-called “selective migration” process(migration picking up “the best and the brightest”)frequently assumed in an elitist vision, than to superiorabilities developed through mobility, a viewcorresponding to a more constructivist approach. Theevidence of surveys and biographical data indeedshowed that the highest qualifications acquired bythese expatriates, or the skills they exerted asprofessionals, were linked to their learningtrajectories, in educational as well as labor activities,

partly and often mainly within the host country (Meyer2001).Conceiving the expatriate individual’s abilities as aresult of migration rather than a reason for it led to adifferent theoretical framework than under the braindrain paradigm. Skills were obviously built throughassociations involving many elements of host countriesand operational within their own specific contexts.Socio-professional networks enrooted these skills andtheir carriers in particular settings, groups,institutions, technical systems and organizationalprocedures through which they made sense andreached productive efficiency. As individualsaccumulating constructive associations, theexpatriates were themselves heterogeneous networksthat the DKN totalized, in a typical actor-networktheoretical configuration (Callon 1986).Contrary to the conventional view and according tostatistical information from both research projects,these people showed stability rather than volatilityand a deep integration into a definite host countryinstead of a frequent re-emigration pattern.The Colombian and South African networks have hadan erratic life for their respective fifteen and eightyears, and they both recently went through a type ofevaluation process (Chaparro et al. 2004; NRF 2005).The reports point to various difficulties but also to thepersistence of their activities. In the late 1990s, withinthe context of great pressure on highly qualifiedresources worldwide, DKN such as these appeared asa very promising solution, a potentially win-winsituation for knowledge-intensive as well asdeveloping economies. The search for other examplesthen became crucial in order to assess the extent ofthe initiatives, to compare their conditions ofrealisation and to appraise the possibilities of usingthem or of creating new ones. This search required animportant methodological investment that deserves tobe described, for it is a step along the way in whichsociological knowledge may be drawn from newsources about transnational communities, beyond adefinite contribution to a scientific description of DKN.2. Systematic Enquiry: Surfing and Fishing in HighWatersInterestingly enough, the immersion into the hostcountry community has not contradicted a renewedidentification with the country of origin through theDKN. The call for participation by both the Caldas andthe SANSA networks has often caught people who hadcut off collective links with Colombia and South Africa,respectively. The networks’ knowledge anddevelopment projects brought them back into thenational sphere. Their identification is therefore moreproactive, turned to the future, than retrospective andbased on memory. They may move equally in twouniverses, like amphibians, but they respect thisdouble allegiance and do not erase borders, atequidistance between communautarism (maintenanceof separate communities) and cultural alienation.Across frontiers, they weave professional andassociative ties but they keep the reference to thecommon origin as a pivotal centre. These featuresdistinguish the DKN from purely transnationalcommunities (Vertovec 1999; Portes 1999) and bringthem closer to the diaspora criteria (Cohen 1997) eventhough their scope is limited to professional,knowledge-based activities.Four censuses of highly skilled diaspora networkshave been made in the attempt to grasp the magnitudeof the phenomenon, beyond isolated case studies.41 expatriate networks of “developed” and“developing” countries were identified on theoccasion of the June 1999 UNESCO World ScienceConference (Meyer and Brown 1999);106 networks referring exclusively to developingcountries, in a 2002 state of the art analysis ofscientific diasporas by a panel of internationalexperts, published in September 2003 (Barré et al.2003),61 expatriate networks of “developed” and“developing” countries, in a report prepared forthe World Bank (Lowell and Gerova 2004) inSeptember 2004;NRB Voice Issue 2 | www.NRBvoice.org 15 NRB

finally, 158 networks referring exclusively todeveloping countries, in 2005, with resultspresented in this paper, Section 3 and Appendix 1.2.2. A method based on socio-technical assumptionsAs Caldas, SANSA and a few other case studies hadshown, the internet was a major if not the only“universal” medium through which such networkscould become visible to the general public. There wasno other common space to be explored and the searchnaturally turned to this one, quickly showing the limitsof traditional search engines and techniques, evenwhen exploited in a systematic manner. Societal linkshad to be added to automatic search in a socio-techniccombination, to significantly increase the productivityof the exploration.How to find these websites that are not to be found byquerying web search engines individually? Theanswer lay in defining an alternative strategy that doesrely primarily on human competence and knowledge,instead of search engines. Four techniques/methodswere used:1) To surf the Web in an alternating movement,visiting diasporic association websites, from whichwere found “links” web pages, where newdiasporic association website addresses werediscovered, and so on.2.1. The limits of cruising in cyberspace with searchengines 42) Having exhausted the links, websites that werecited in the literature, or given by the expert panelof the 2002–2003 state of the art, were explored.Today, there are about 10 billion internet pages.Finding relevant network websites among such floodsof information is like navigating in an ocean todiscover new islands, without much indication ofproximity and localization.For the initial systematic search, in 1999, theexploration relied upon repeated queries with anumber of keywords deduced from the case studies(Caldas and SANSA) that had given some clues. Suchterms as “expatriate”, “knowledge”, “abroad” and soon were then used extensively and applied to variouscountry names. After weeks of enquiries with pre-Google search engines, the harvest of forty-onenetworks was collected. Although this resultmaterialized a number of intuitions that the isolatedcase studies had provided before, the “natural”method used so far also showed its limits. The analysisindeed pointed at two specific difficulties: thetremendously diverse vocabulary of network namesand the technical limits and biases of the searchengines.3) Google or Copernic queries with a combination ofspecific keywords, which were selected not somuch with the aim of finding many networks butfor picking up at least one diasporic association.For example, such keywords as “physician”,“association”, “host country”, “origin country”could bring up the name of the association ofphysicians from a given origin and working in agiven country – as it appeared that physicianswere more likely than other professionals toconstitute diasporic professional associations.4) Some Usenet forums named after the scheme“country.soc.culture” are a classic meeting pointfor expatriates trying to speak with compatriots,and the relation of the diaspora with the origincountry are commonly a matter of discussion.Google offers the archives of these forums, wherea few website addresses have been discovered,which by any other means would have remainedunknown.In other words, sociological assumptions were madeand effective links used (professional corporations,ethnic communities and the like) to serve as structuralaxes in a heuristic process. In an incremental manner,as the list of websites discovered expanded and thevocabulary enriched, and while geographical holesappeared more clearly, the focus of the searchimproved and each exploration became moreefficient, especially for the 2005 enquiries, the resultsof which are presented in the next section.NRB Voice Issue 2 | www.NRBvoice.org 16 NRB

another but is roughly ten years on average, judgingby their reported history. Some are old associationsthat decided to go on air (set up a website) and othersare just pure and fresh emanations from the internet.More than half of DKN identified in 1999 (and relevantin the following lists) are still active today even if andwhen they reported difficulties (see Section 1.1 on theevaluation processes of Caldas and SANSA). Thesepercentages are not far from those of the Lowell–Gerova study but the interpretation naturally differsconsidering the modest size of their sample,compared to the one here. There is no slow erosion ofa small stock of DKN, but rather a lively forest ofsometimes precarious, sometimes durable,organisms. In any case, this normal mortality rateshould be considered in the light of the correspondinghigh-tech background. For example, in the UnitedStates, on average, three out of five new businessstart-ups fail within their first five years. No one would,however, infer from this figure that investing intechnological innovation is a mistake … Nonetheless,the question of the viability of the networks shouldcertainly be examined through comparative analysisof failures and success stories, in order to understandtheir conditions of realization. The list in Appendix 1offers a large sample for such sociological andhistorical enquiries.During the 2003 state-of-the-art analysis of scientificdiasporas, a few networks with limited scope werefound with a purpose definitely corresponding to theDKN characteristics included in Appendix 1 (origin adeveloping country, explicit development goals,highly skilled members, knowledge transfer andcirculation) but without any website address or visibleinternet presence (Barré et al. 2003). The expertspointing them out happened to know about theirexistence by other means (personal knowledge,familiarity with specific diasporas). This tends toreinforce the hypothesis that a number of additionalnetworks may still be found and that the list providedso far is not exhaustive.There is a converging set of comments on use of theinternet by the DKN at this stage, emphasising the factthat their use of information and communicationstechnology has so far been limited compared withtheir potential in terms of interactive and effectivedistributed collective practice (Teferra 2003; Turner etal. 2003; Chaparro et al. 2004). Therefore, the DKNICSSD/UNESCO project aiming at new developmentsin this area opens a field of useful insights andperspectives (Turner 2005).3.2.3. A definite reliance on the internet4. PerspectivesAs explained in Section 2, all 158 identified DKN havean internet window, as their existence has beenessentially pinpointed through this medium. Even the15 Lowell–Gerova items counted in the total of 173networks mentioned above (see Section 3.2.1) are allinternet-based. There is no more convincing proof ofthis medium’s importance. For some of these networks(12 of them, classified “type A” in Appendix 1) theirvery existence is on the internet, as they are pools ofhuman resources mainly linked by the websiteartefact. The more general networks (38, classified“type B” in Appendix 1) are large associations forwhich only a part of their activities are explicitlyturned towards knowledge and development issueswith the country of origin. The specialised networks(48, classified “type C” in Appendix 1) focus on suchactions, often in a very similar fashion to the Caldas orSANSA networks.Evidence, when gathered in a systematic mannerthrough the internet, convincingly shows that there is ahigh and increasing number of diaspora knowledgenetworks. It also proves that a majority of them are stillalive after some years of operation. This result gives aclear indication for policy as well as for furtherresearch.DKN are substantial, consistent, initiatives ofinternational cooperation, which states andintergovernmental agencies, as well as NGOs, maynow consider seriously, beyond initial doubts abouttheir existence and stability.The content of the activities developed by thesenumerous networks is beyond the scope of this paper.A wide field of investigation thus remains open, as thefew case studies so far have only scratched the surfaceNRB Voice Issue 2 | www.NRBvoice.org 19 NRB

of a deep and diverse sample. It is time to expand ourknowledge about the conditions, representations,socialisation processes, modes of organisation anddevelopmental impacts that DKN have (or not) throughthese activities. Recent Asian case studies do providepositive evidence on these aspects (Meyer 2006). Thefindings presented do not prejudge the long-termviability of the networks and the intensity of theiractivities. But they do confirm their potential andprovide precise materials to work on, both forcooperation as well as for research projects.their soft and progressive replacement bycosmopolitan citizenship (Beck 2006). This is wheregovernance – facilitation of civil society initiatives –makes great sense: expatriate associations ofscientists’ and engineers’ contributions can definitelybe enhanced by public support and promotion.By way of conclusion, it is important to return to theindividuals constituting these networks and to thepotential development they represent. Case studies,especially on Africa, show that these highly skilledprofessionals identify themselves to their homecountry, much less because of the past than for thefuture and less because of an abstract memory than forspecific development purposes. They feel that theirhigher cognitive, technical and social capacities maycollectively be made available to their country and theexpatriation situation exacerbates such feelings.Motivated by a contribution to the future throughknowledge activities, these expatriates forge adiasporic identity in a projective rather thanretrospective manner. Their common origin becomesmore metaphorical than geographical, as can be seenwith some networks whose members refer to theregional/cultural proximities cutting across nationalborders. African networks, for example, often exhibita neo-pan-African approach, less ideologically orinstitutionally oriented than during decolonisationtimes and based rather on technical and pragmaticperspectives.The diaspora must therefore not be perceived as areaction to communautarism but rather as a creation ofidentity on a larger, inclusive, base. As a LatinAmerican scientist in New York stated: “in Manhattan,as a Colombian expatriate researcher and member ofthe Colombian Caldas network, we used to organiseAIDS prevention campaigns in Spanish for all thelatinos in the area.” The linguistic communityassociated with the expatriate situation constitutes anopportunity for an identity expansion, in constructionaround a common project of contribution to thedevelopment of the place of origin and its population.This energy may appropriately be used by traditionalnation-states for their own development as well as forNRB Voice Issue 2 | www.NRBvoice.org 20 NRB

NRB ProfileFeature of a Prominent NRBAn interview by Purple Magazine, apublication of Media Arts & Technology Ltd.,Dhaka, Bangladeshhttp://www.purpleonline.net/Mesba Ahmedcelebration around London. Away from football,Ahmed helps many charities and organisations. Forexample, he was the founding president of Nidon PurWelfare Association and a governor of the ArkAcademy School, among numerous other charitableactivities.For his outstanding contributions to society, Ahmedreceived a number of high profile awards. In 2004, hewas the winner of the inaugural Westminster LocalLeadership Award, and in 2005 he received the GG2Leadership Diversity Award. He was nominated for anOutstanding Achievement Award at the Sony AsiaTelevision Sports Personality Awards in 2007, andLondon Tigers was nominated for Best CommunityOrganisation UK in the 2008 Channel S Awards.Now that’s a mouthful! But you would never guess byhis modest and playful demeanor. Ahmed is veryinterested in sharing his best practices with theBangladeshi football platform. “I am very excited tosee Bangladeshi football’s recent rejuvenation and thepotential of the game to attract sponsors. Finance isobviously not a problem.” He has initiated theinteraction of youth groups with professional clubs, forexample different groups playing with Chelsea andthe like, reaping great benefits in grooming futurefootball stars in his own team.Mesba Ahmed completed his education in England.He initially worked for Allied Dunbar as a FinancialConsultant and then moved on to work for theMarylebone Bangladesh Society and Age ConcernWestminster. Currently, he is the Chief Executive ofLondon Tiger, a UK Bangladesh Football team.Ahmed’s real passion in life is football, and it’s not justan excuse for him to play at work! He has played atmany levels, including semi-professional. His love ofthe game encouraged him to become one of thefounders of the London Tigers in 1986, and it hasgrown immensely since its inception.He believes in Bangladesh also. There should begrassroots linkages with the big teams, leading up tomatches for scholarships, which can change the face ofBangladesh football. “Every football club inBangladesh should host 4 to 5 under teams,” saysAhmed.Also, governing bodies need to establish morecoaches. “What happens to all the retired players? Wedon’t want to hear from them how good the game isfrom the comfort of their living rooms. We need to seethem training future stars!”London Tigers now boasts teams of all ages, andincludes cricket, badminton and basketball teams. Theorganisation has won numerous awards and is widelyrecognised as a beacon of success by many localauthorities, sports governing bodies, and politicians.Since 1994, Ahmed has been the manager for the UKBangladesh Football Team, which participates in theannual Inner City World Cup. They were runners-up inboth 1998 and 2004 and won the tournament in 2001.This achievement culminated in an open-top busNRB Voice Issue 2 | www.NRBvoice.org 21 NRB

EconomicGovernment mulls cut in savings tools interestratesThe Financial Express, Tuesday January 12, 2010NewsPPP policy may be finalised this monthBoI sends draft guideline to cabinet divisionThe Financial Express, Friday January 15, 2010The government is likely to finalise its Public-PrivatePartnership (PPP) policy within this month as the Boardof Investment (BoI) sought approval of the cabinetregarding its draft guideline last week, officials said.BOI has already devised the policy titled "BangladeshPublic Private Partnership Policy and Guideline 2009."The government started to frame the PPP policy earlythis year in order to upgrade the country's ailinginfrastructure, especially transport and energysectors. Officials said that depending on the type ofprojects under PPP, the government would provideequity or loans to private investors to ensure theirparticipation.The government is actively considering a cut ininterest rates of saving instruments in a bid to balanceit with the rates of commercial banks. The InternalResources Division (IRD) of the Finance Ministry isconducting a study to harmonize the interest rates andthe resultant impacts on the economy and revenueearnings. The government has brought down bankinterest rates to 9.0% while savings instruments areoffering 12% for investors. The move came after thegovernment noticed that investors were divertingtheir funds from the banks to the saving instruments,which might cause liquidity crisis in banks. Thegovernment's borrowing from saving instruments hasincreased by 313.21% in the first six months of thecurrent fiscal year, while it dropped by 22% frombanking system.Dhaka allows New Delhi transit trade through Ctg,Mongla portsIndia grants transshipment facility to Nepal, BhutanThe Financial Express, Wednesday January 13, 2010Bangladesh eventually agreed to allow the use ofMongla and Chittagong seaports for movement ofNRB Voice Issue 2 | www.NRBvoice.org 22 NRB

goods to and from India on both road and rail routes ina swap for transshipment of commodity consignmentsfrom Bhutan and Nepal through Bangladesh's frontier.The highly significant deals were carried in a jointcommunique issued in the Indian capital.Over 2 dozen SoEs set to hit the stock market:MuhithShares of some to be offloaded in six monthsThe Financial Express, Thursday January 14, 2010The government is going to offload shares of 26 stateownedenterprises (SoEs) to increase depth of themarket, said finance minister AMA Muhith on January13. However, he did not specify how much money thegovernment was going to get by selling the shares.SoEs in power, energy, industry, bridge,communication, telecom and health sectors will beoffloaded. The minister said that the book-buildingmethod is well accepted, and it is expected that theSoEs will be offloaded through this method. Thecompanies need to undergo reassessment before theirshare-floating, and they will do this within six months,he added.Overall exports drop in July-NovThe Daily Star, Tuesday January 12, 2010The overall exports of merchandises from Bangladeshdeclined 6.96% in the July-November period of thecurrent fiscal year compared with the same period ofthe previous year, according to the provisional data ofthe Export Promotion Bureau (EPB). In November suchexports declined 7.7% to USD 1.2bn from USD1.3bn inthe same time a year earlier. The overall exportedtarget was fixed at USD 17.60bn for fiscal year 2009-10against the actual export performance at USD 15.57bnin FY 2008-09.Imports record rise by 20% in DecemberThe Financial Express, Monday January 11, 2010The country's overall imports recorded a rise by over20% in December over the previous month of lastcalendar year, officials said on Sunday. The settlementof letters of credit (LCs) for imports, generally knownas actual imports, rose to USD 2.071bn in December2009 from USD 1.717bn in November of last year.Overall imports have increased to meet the growingdemand of essential items including fertiliser andpetroleum products during the ongoing Borocultivation season. On the other hand, opening of freshLCs against imports, generally known as importorders, fell by nearly 16% to USD 1.979bn during theperiod over the previous month of the current year.6% ADP cut likelyMost ministries fail to meet their implementation targetThe Daily Star, Tuesday January 12, 2010The government might slash the Annual DevelopmentProgramme (ADP) by 6% or BDT 20bn (USD 288mn) asmost ministries have failed to spend their budgetallocations. In the current fiscal year, the governmenttook up an ambitious ADP of BDT 30.5bn (USD439.8mn). Now it will come down to BDT 28.5bn (USD411mn). According to preliminary information of theplanning ministry, during the six months from July toDecember only 28% of the ADP allocation has beenspent. Of the total ADP, 10 large ministries received76% of the allocation.BB to propel investment, put inflation on leashMonetary policy announced, GDP growth projected at5.5-6%The Daily Star, Wednesday January 20, 2010Bangladesh Bank (BB) on January 19 announced asupportive monetary policy for the second half of thecurrent fiscal year, aiming to increase investment inthe productive sector but control inflation. To reachthe two goals, the central bank has taken a strategy todrastically cut credit to the government but supportthe private sector for productive purposes. Accordingto the Monetary Policy Statement, the governmentcredit growth will be reduced in June 2010 to 13.80%,down about 9.44%, compared to June 2009. Publicsector credit growth was 23.24% in June 2009.Thegrowth of credit to the private sector in June 2010 willbe increased to 16.70% by pushing it up by 2.08%points compared to June 2009. Private sector creditgrowth was 14.62% in June 2009. The monetary policysaid that given the current trends in internal andexternal prices, both food and non-food inflation inBangladesh looks set to continue over the comingmonths on a fluctuating trend, with some upward bias.The monetary policy said that though export growthwas negative in the beginning of the fiscal year, it isexpected to regain enough momentum in the comingmonths for fiscal year 2009-10 export growth to be inthe double digits, as in fiscal year 2008-09.Rush for savings tools forces government todownsize bank borrowingThe Financial Express, Sunday January 17, 2010The government has downsized its bank borrowingtarget for the current fiscal year to BDT 97.08bn (USD1.4bn), or about 43%, in view of its higher borrowingfrom non-banking sources, including savingsinstruments. Of the revised target, BDT 47.48bn (USD684.6mn) has already been borrowed from bankingsources during the first six months of the fiscal year.The remaining BDT 49.60bn (USD 715.2mn) will beNRB Voice Issue 2 | www.NRBvoice.org 23 NRB

orrowed from January-June of the current fiscal year.The government in its budget document for thecurrent 2009-2010 fiscal year had estimated its bankborrowing at BDT 167.55bn (USD 2.4bn) and non-bankborrowing at BDT 38bn (USD 548mn) to finance thebudget deficit.Sugar refiners demand subsidy to keep marketprice stableThe Financial Express, Saturday January 16, 2010The country's sugar refiners urged the government toprovide them with a subsidy to keep the price of thecommodity stable in the local market, as theinternational market price of sugar continues to rise.Currently, finished sugar is being sold at USD 730 pertonne in the London market. The sugar price has beenrising for the last several months in the internationalmarket mainly due to a production shortfall in majorsugarcane growing countries including Brazil andIndia.Rice price on rise despite big stockThe Daily Star, Friday January 08, 2010The price of rice rose by 5% to 18% during theprevious month in spite of the 11.5 lakh metric tonnesof the grain in government stocks and projected Amanproduction of 13mn tonnes. Agronomists say the pricehike is basically driven by high international prices,especially as India and Philippines faced productionshortfall in droughts and typhoons, respectively, latelast year. India lost 15mn metric tonnes of productionwhile the Philippines imported 2.5mn metric tonnes ofrice last year.increased to 19.5% or USD51.51 from 12.84% orUSD33.89.Government yet to sign WB aid revision dealAid flow, project implementation affectedThe Financial Express, Sunday January 10, 2010The World Bank's aid deal revision proposals, held upfor nearly two months, have affected aid flow andproject implementation as the lender asked thegovernment to suspend local procurement beforeamendment of agreements. The Washington-basedlender in late November, 2009 sent a proposal to theEconomic Relations Division (ERD) for revising thedeals of 26 projects worth nearly USD 2.5bn due to itsreservations regarding some provisions of therecently amended public procurement act (PPA).StockMarketNewsIndian countervailing duty hits Bangladesh RMGexportsThe Financial Express, Saturday January 09, 2010Bangladesh’s readymade garment exporters havebeen counting an additional duty to enter the Indianmarket, as the latter has imposed a countervailingduty on subsidized export items of other countries.Apparel items imported from Bangladesh are beingsubjected to a countervailing duty on the basis of MRP(maximum retail price) instead of ad-valorem. Initiallytwo RMG products---cotton and blended or othernatural or man-made fiber fabrics---will fall under theincreased tariff measures. Duty on cotton garmentsimported from Bangladesh will increase to 11.8% orUSD 21.52 from 8.46% or USD 15.43 per piece due totariff changes in the recent budget. Taxes on blendedand other natural or man-made fibre fabrics alsoDSE turnover sets new recordThe Daily Star, Monday January 11, 2010The single-day turnover on the premier boursereached a new high of BDT 13.25bn on January 10,backed by price rallies in the power sector shares thatwere riding on the prime minister's visit to India and aprobable deal on electricity imports. The rally in thepower sector shares also pushed up the benchmarkindex, the DSE General Index, to a new high of4,730.74 points, which rose by 8.64 points, or 0.18%.Pre-IPO placement provision to goThe Financial Express, Wednesday January 13, 2010The government is taking steps to do away withprivate placement as underwriters are obliged to buyunsold shares, said finance minister AMA Muhith inparliament (JS) on January 12. There will be astandardized face value for future companies that wantNRB Voice Issue 2 | www.NRBvoice.org 24 NRB

to float shares on the market, he said. Shares of stateownedcompanies will be offloaded through directlisting and bond market will be made effective, headded.SEC designs new system for refund warrantThe Daily Star, Wednesday January 20, 2010The stock market regulator has rearranged the refundwarrant system for unsuccessful IPO applicants. Goingforward, they can receive refund warrant moneyeither through bank accounts or by cheque. TheSecurities and Exchange Commission has decided toput in place the same system to distribute cashdividends paid by listed companies. Prior to the newrules, the refund warrant money had been distributedthrough online banking.SEC pores over 'flawed indexing' infoThe Daily Star, Wednesday January 13, 2010Two bourses followed apparently flawed computationsfor Grameenphone shares in November, despite clearinstructions from the market regulator to follow astandard indexing method. The bourses were meant tofollow the instructions from September of last year.The Securities and Exchange Commission (SEC) is yetto describe the bourses' calculations as a violation oflaw, but has said computations were far from "reliableand verifiable."The Dhaka Stock Exchange follows IASCOrecommendedguidelines in index counting, while theChittagong Stock Exchange follows the Laspeyresindex calculation method. On November 16, 2009, thetrading debut day of Grameenphone, the benchmarkindex of DSE skyrocketed by more than 764 points, asthe DSE counted the index from the first day, based onthe face value of each Grameenphone share at BDT 10(US 1.45 cents). On the other hand, CSE calculated theindex on a five-day weighted average price ofGrameenphone shares, which also did not give anaccurate picture in the index.However, the distortion was acute in the case ofGrameenphone, because of its size. Even though thesame methods were followed in the previous cases,the distortions were not reflected because of the smallcapital sizes. The SEC has now ordered the twoexchanges to start counting the index from the secondday of a company's trade, based on the first day'sclosing price.The parliamentary standing committee on financerecommended an early listing of the threesubsidiaries of the Investment Corporation ofBangladesh (ICB). The subsidiaries are ICB CapitalManagement Limited, ICB Asset ManagementCompany Limited, and ICB Securities TradingCompany Limited. The minister said that thesubsidiaries’ performance is satisfactory and can bebrought to the capital market.SIBL's share face value downThe Financial Express, Sunday January 24, 2010The shareholders of Social Islami Bank Limited (SIBL)have approved a proposal for split of face value of itsshares from BDT 100.00 to BDT 10.00. The approvalcame recently at the sixth extra-ordinary generalmeeting (EGM) of the bank.S Alam Steels, Aftab Auto get SEC nod to issuepreference sharesThe Financial Express, Wednesday January 13, 2010Two companies, S Alam Cold Rolled Steels and AftabAutomobiles, got the nod of the Securities andExchange Commission (SEC) to issue 5.33mn and18mn preference shares respectively. S Alam willissue the 5.33mn preference shares with 6% interimdividends as per the decision of the company taken inits EGM on December 12. Each share will have a facevalue of BDT 100. The preference shares will beconverted into ordinary shares and will remainlocked-in for one year from the date of issuance. AftabAutomobiles will issue 18mn preference shares with5% interim dividends. Each share will have a facevalue of BDT 100.SectorNewsAgriculture and FoodBDT 680mn (USD 9.86mn) BKB loans for Cox'sBazar farmersThe Daily Star, Thursday, January 21, 2010JS body for early listing of ICB subsidiariesThe Financial Express, Wednesday January 13, 2010Bangladesh Krishi Bank (BKB) will disburse BDT680mn (USD 9.86mn) crore in farm loans in Cox's BazarNRB Voice Issue 2 | www.NRBvoice.org 25 NRB

in the current fiscal year. The loans will be distributedthrough 19 branches of the bank in the district. Thetarget of BKB is to stand by every farmer of the countryas a farmer friendly bank. Farmers can open accountsin the bank by depositing BDT 10 (US 14 cents) only.Jessore sees bumper jute seed productionThursday, January 14, 2010Bangladesh Agriculture Development Corporation(BADC) achieved bumper jute seed productionthrough its contractual growers in three districts ingreater Jessore in 2009. The corporation's jute seeddivision usually supplies quality seeds to contractualfarmers and purchases new seeds from them after theharvest. Later, BADC refines the collected seeds andsells those among the growers in packets aftercertification. This year the seeds were produced onaround 907 acres of land in the Jessore zone, whichcomprises Jessore, Jhenidah and Magura districts. Ofthe total land, 387 acres were used in Jessore, 495acres in Jhenidah and 25 acres in Magura districts. Atotal of 4,212 kilograms of jute seed were distributedamong 1,761 farmers.Aviation and TourismPlan to celebrate a month in 2010 as a "TourismMonth" and 2011 as "Tourism Year” at the time ofWorld Cup CricketThe Daily Star, Friday January 22, 2010Civil Aviation and Tourism Minister GM Quader saidthat the government is planning to celebrate onemonth in 2010 as a "Tourism Month" while "TourismYear" would be observed in 2011 at the time of WorldCup Cricket. He also said the government has takenvarious measurers including setting up exclusivetourist zones and the appointment of tourist police toattract more tourists in the country. "The cabinet inprinciple approved the draft of Bangladesh TourismProtected Area and Special Tourist Zone Act, 2009," hesaid.Master Plan to develop Cox's Bazar, Kuakata astourist spots of global standardsThe Daily Star, Monday January 11, 2010Minister for Civil Aviation and Tourism GM Qader onJanuary 10 said the government is preparing twoseparate master plans for Cox's Bazar and Kuakata todevelop them as highly attractive tourist spots ofglobal standards. Qader said this wile presiding overan inter-ministerial meeting to review the progress ofpreparing master plans. He asked the authoritiesconcerned to quickly formulate the plans.He said the government has decided to set up theCox's Bazar Development Authority and upgradeKuakata into a municipality as part of its plan torefurbish the locations with all tourist facilities. Theminister requested the authorities that care should betaken in preparing the plans to add newinfrastructures and other facilities to locations withoutdisturbing the natural beauty and local resources.They should add more natural beauty in those areas,promote good communication networks, hotels,restaurants and other entertainment facilities andsports outlets, including venues for internationalcricket. Modern shopping malls and securityarrangements should be at the centre of such plans, hesaid, adding that the government is giving top priorityto the development of tourism.New five-star hotel to brighten Cox's Bazar imageThe Daily Star, Monday January 18, 2010A local entrepreneur is going to build a five-star hotelbased on an international timesharing concept inCox's Bazar at a cost of around BDT 1.5bn. The hotel --Sea Pearl Beach and Spa -- is being built at Inani,some 20 kilometers away from Cox's Bazar, and isexpected to start commercial operations in February2012. Land development has started in over eightacres.The hotel has already been affiliated with IntervalInternational, an operating segment of Interval LeisureGroup Inc, listed on NASDAQ as IILG, a leading globalThrough the act, a legal framework for raising plannedprovider of membership and leisure services inand coordinated tourist facilities is being preparedhospitality and the vacation industry. The hotel willunder public and private initiatives, he said. "A megaconsist of 200 rooms for residential accommodationplan has also been taken for the development ofincluding 150 timeshare rooms and suites. It will havedifferent tourist spots across the country includingfacilities such as a spa, bar, barbecue, water sports,Cox's Bazar and Kuakata sea beaches to attractswimming pool, children amusement, restaurant,increased number of tourists," he added.coffee shop, lobby, gymnasium, indoor-outdoorgames, air-conditioned shuttle bus for pick-up anddrop services and sightseeing.NRB Voice Issue 2 | www.NRBvoice.org 26 NRB

The hotel will bring revolution in Bangladesh's tourismand hospitality industry in terms of earning foreigncurrency and building the image of the country,” saidSunit Banerji, an international expert in hospitality andleisure management, who is providing consultancy forthe project.New int'l airport to be constructed outside Dhaka:QuaderThe Financial Express, Friday January 22, 2010A new international airport will be constructed outsidethe city to reduce the pressure on the Zia InternationalAirport, minister for Civil Aviation and TourismGhulam Mohammad Quader informed the House onJanuary 21. Responding to a query from treasurybench member Manzur Quader Qureishi, the ministersaid a committee has been formed initially to carry outa feasibility study on the new airport.Replying to ruling party Lawmaker Maruf Saqlain, hesaid the government was considering resumption ofBiman or other private airlines flight on the Dhaka-Sayedpur route for the convenience of people of thenorthern region. Answering to a supplementary raisedby Awami League (AL) Lawmaker Mir Shakhawat AliBadsha, the minister said the government has takensteps to complete the work of under-constructionKhulna airport.Singapore team finds Biman's operationsatisfactoryThe Financial Express, Saturday January 23, 2010A three-member audit team of the Civil AviationAuthority of Singapore (CAAS) came to audit thenational flag carrier of Bangladesh to see Biman'sonboard safety measures, inside source of Biman toldthe FE. Regarding the CAAS audit outcome, the officialclaimed that the visiting team had expressed theirsatisfaction with Biman's flight safety, engineering andmaintenance facilities.New player to fly the skiesThe Daily Star, Sunday January 17, 2010One of the country's oldest conglomerates, HabibGroup, plans to venture into the aviation business, agrowing market in Bangladesh. The group has 21manufacturing and service sector concerns, rangingfrom apparels, power, steel and paper to fertilisers. Ithas already formed an entity -- HG Aviation Ltd -- aspart of its plan to form an airline, Regent Airways,insiders said. The new airline eyes launching domesticflights by March, the first quarter of 2010.BankingCommittee to plan out for Expatriates WelfareBankThe Financial Express, Monday January 11, 2010A three-member committee led by the ExpatriatesWelfare Secretary Ilias Ahmed has been assigned todesign modalities for the Expatriates Welfare Bank.The committee has been asked to submitrecommendations in a month. The committee willrecommend whether the proposed bank would bescheduled or specialised, and see whether thebanking sector is saturated or if there is scope for anynew scheduled bank to operate. The committee willalso assess whether non-resident Bangladeshis (NRBs)could fully own the bank. In the case of ownership byNRBs, they would have to apply to the central bankand bring all capital in foreign currency from abroad.BB asks banks to be cautious while investing inreal estateThe Financial Express, Wednesday January 20, 2010The central bank in the latest inclusive half yearlymonetary policy has advised commercial banks andnon-banking financial institutions (NBFIs) to becautious while investing in the real estate sector. TheBangladesh Bank governor said that the growingworkers' remittance inflows are strongly fuellingdemand and creating bubble-like price pressures inthe real estate markets.Banking goes aggressiveCredit-deposit ratio crosses100%The Daily Star, Sunday January 10, 2010Banks' credit-deposit ratio continued to remain over100% until the first four months of this fiscal year,much higher than Bangladesh Bank's norm of 82%. Theratio was above 100% in the first 11 months of lastfiscal year, with 98.69% in June. The trend indicateshigher utilization of loan-assets from deposits despitea sluggish investment demand amid the global crisisin 2009. As of June 30, 2009, the loan book of thebanking industry showed that trade financing aloneaccounts over 35% of the total loans to the privatesector, followed by industry (except working capital)21.59% and working capital 17%. Construction,transport, communication and housing are other majorsectors that went for bank borrowing.NRB Voice Issue 2 | www.NRBvoice.org 27 NRB

BB to help banks comply with Basel-II frameworkIt gets down to guideline reviewThe Financial Express, Wednesday January 13, 2010The Bangladesh Bank (BB) has started reviewing theguidelines on risk-based capital adequacy for banksto help all commercial banks comply with the Basel-IIframework. The central bank has taken the moveagainst the backdrop of only 22 commercial banksbeing able to comply with the minimum capitalrequired (MCR) under Basel-II framework out of 48banks, BB officials said. The MCR has been set to 10per cent with the risk-weighted assets of the banks orBDT 4.0bn of total capital, which is higher than wouldbe treated as MCR of the banks under the Basel-IIaccord. The Association of Bankers, Bangladesh (ABB)has recommended to the central bank to bring downthe MCR to 9.0 per cent from the existing 10 per centin terms of the risk-weighted assets of the banks.Bangladesh is now following Basel-II for the banks'capital adequacy requirement. Risk-based capitalratio was 8.0 per cent when it was first adopted in1996. Later in 2002, the ratio was increased to 9.0 percent.State banks to get more leewayThe Daily Star, Friday January 22, 2010The central bank plans to ease some terms andconditions for state-owned banks on credit growth andoperating costs, letting them compete with theirprivate peers with vigor. Bangladesh Bank plans togive more autonomy to the boards of four state-runbanks to transform state banks into public limitedcompanies.CBC, AB Bank end month-long term transactionusing DIBORThe Financial Express, Wednesday January 13, 2010Bangladesh Bank has officially launched Dhaka Inter-Bank Offered Rate (DIBOR) in Bangladesh Marketrecently. This came to success with able assistancefrom Bangladesh Foreign Exchange Dealers'Association (BAFEDA).Commercial Bank of Ceylon (CBC) and AB BankLimited initiated a month-long transaction based onthe newly launched DIBOR Benchmark. The particulartransaction has a unique feature of re-pricing thetransaction in every week based on the publishedDIBOR of that period. Both the banks agreed thattaking this step forward would help to create a morevibrant financial market in the country. Market expertsare very optimistic that the official launch of DIBORwill encourage banks to quote two ways ontransactions, thereby improving liquidity in themarket.AB Bank goes for equity financingThe Daily Star, Sunday January 17, 2010AB Bank has entered equity financing, as it haspurchased preference shares of a power generationcompany and a telecom transmission serviceprovider. With the purchase of the preference shares,it is the first private sector bank that has gone forequity financing. The bank has recently bought BDT100mn (USD 1.45mn) worth of preference shares inEverest Power Generation Company Ltd andFiber@Home. The two companies will have to go forinitial public offering (IPO) after three years in linewith the agreements signed with the bank.SCBs won't be allowed to float shares nowMerge and survive, Muhith advises banksThe Financial Express, Monday January 11, 2010Banks in the country should consider mergers tobecome strong, or else it would be difficult for them tosurvive under stiff competition in the future, saidfinance minister AMA Muhith on January 10. "They cansurvive in 2010, but in 2015 when the financial sectorwill be opened, it will be difficult for them to survive,"he said at a press briefing after meeting with theofficials of Bangladesh Bank and three state-ownedcommercial banks (SCBs).The finance minister rejected outright the idea offloating shares of SCBs on the capital market now astheir financial barometers are not strong. The countrydoes not have a merger culture as the business is lessNRB Voice Issue 2 | www.NRBvoice.org 28 NRB

mature, but it is popular in other countries, theminister said.EnergyAll set for Singapore, New York road showsThe Financial Express, Friday January 22, 2010Some 170 reputed international companies will takepart in Bangladesh road shows in Singapore and NewYork next week to weigh up opportunities forinvestment in the country's nascent power and energysectors, officials said. The government will put on offerseveral large power plants with the capacity ofgenerating 4,000 megawatts of electricity and aliquefied natural gas (LNG) terminal producing 3.5mntonnes per year.Rolls Royce, Enpower Corporation, Globeleq, AES,Vopak LNG, GCM Resources, Watson Gough, SBMOffshore, Mij International, Brummer & Partners, CDCGroup, Seamark Group, EIC, RJI Capital, Centrax,Societe General and BNP Paribas are among theforeign firms that plan to take part in the London roadshow.India to help build power plantsOfficials discuss grid inter-connection, coal-firedplants for Ctg, KhulnaThe Daily Star, Wednesday January 13, 2010On January 12 India offered assistance forBangladesh's power sector that includes plans to buildcoal-fired power plants in Chittagong and Khulna. Theoffer was made during the first meeting of the JointSteering Committee for Cooperation in the PowerSector in New Delhi. It was agreed that construction ofthe power plants would be undertaken as a jointventure with Bangladesh Power Development Board.India and Bangladesh's state-run power producersagreed to cooperate on the following projects:a) The preparation of a feasibility report for two coalfiredpower plants at Khulna and Chittagong -approximately 1320 MW each. NTPC will be offered todevelop one of these projects in a joint venture withBPDB.b) NTPC will have the opportunity to carry outtechnical assessment for BPDB's old thermal powerstations for efficiency improvement, renovation andmodernisation.c) NTPC will provide training to power professionalsfrom BPDB for their development. BPDP may firstconsider using the existing training modules of NTPCand assign some of their professionals fordevelopment. A long-term plan will be preparedsimultaneously by NTPC for BPDB to utilize NTPCtraining facilities through tailor-made programmes tobe organized by NTPC in India and Bangladesh.d) To immediately start cooperation between the twocompanies, NTPC suggested taking up the O&M ofPower Stations in Bangladesh on nomination, on a costplusbasis. It was agreed that a Joint Technical Teamwill be formed within a week, with equalrepresentation from NTPC and BPDP.Country has potential to generate 350mw morelow-cost hydropowerThe Financial Express, Thursday January 21, 2010The country has the potentials to generate more than350 megawatts of low-cost hydropower by setting upnew plants, especially in the southern region, a seniorofficial of the state-owned Power Development Board(PDB) told the FE.New power plants could be built on the banks of therivers Sangu, Matamuhuri and Mohamaya to generate100mw, 100mw and 50mw electricity respectively, headded. Two units could be built at the Karnafuli hydropowerstation at Kaptai having the capacity of 50 mweach.InfrastructureESCAP to make plan for Asian connectivityRail, road networks, energy cooperationThe Daily Star, Wednesday January 20, 2010The Economic and Social Commission for Asia and thePacific (ESCAP) has been requested by theAssociation of Southeast Asian Nations (ASEAN) toprepare the necessary programme for establishingroad and railway connectivity among the Asiancountries. ESCAP Executive Secretary Noeleen Heyzerapprised President Zillur Rahman of this latestinitiative when she paid a courtesy call on him atBangabhaban on January 19. President Zillur Rahmanappreciated the ESCAP for selecting Dhaka as itsvenue for the High-level Asia-Pacific Policy Dialogueon the Brussels Programme of Action for the LeastDeveloped Countries and for giving the opportunity toBangladesh to jointly host this important meeting.NRB Voice Issue 2 | www.NRBvoice.org 29 NRB

On socioeconomic impacts of inter-regionalconnectivity, Heyzer said "The connectivity wouldfacilitate the transporting of goods and services in thisregion." The UN agency is also working to build anenergy-cooperation network in this region, she said.India for fast rail upgrade for BangladeshThe Daily Star, Wednesday January 13, 2010On January 12, New Delhi assured Dhaka of speedyimplementation of rail infrastructure upgrade projectsin Bangladesh. All rail projects would be expedited asper the agreement with Bangladesh, Indian RailwayMinister Mamata Banerjee told reporters after meetingPrime Minister Sheikh Hasina in New Delhi.A railway link between Rohanpur and Singhabad tofacilitate transit traffic from Bangladesh to Nepalthrough India and making Akhoura-Agartala lineoperational were finalized on January 12. Indianrailway would help Bangladesh build railinfrastructure that is expected to allow train servicesfrom Kolkata to Tripura, she said.PM to visit China soonDeals likely on road, rail links, portsThe Daily Star, Tuesday January 19, 2010Prime Minister Sheikh Hasina will visit China soon tosign deals on road and rail links between Kunmingand Chittagong, and the use of two seaports. "Theagreement on the use of Chittagong and Mongla portswill be signed with China like India, Nepal andBhutan," Awami League General Secretary SyedAshraful Islam told journalists at the party chief'spolitical office in Dhanmondi.All highways to be made 4-laneCommunications minister informs NationalParliamentThe Financial Express, Tuesday January 12, 2010The government has planned to upgrade all thehighways to four-lanes in phases with an estimatedexpenditure of BDT 250.0bn in efforts to developcommunication networks across the country,Communications Minister Syed Abul Hossain told theHouse on January 11. The minister also said fourhundred wide-body buses will be purchased to plythe capital to reduce traffic jams.InsuranceInsurance turnover exceeds BDT 60bn (USD868.31mn)The Daily Star, Monday January 11, 2010Insurance companies performed well in 2009, beatingback the impact of the global recession. Turnoverfrom insurance business surpassed BDT 60bn (USD868.31mn) in 2009 with life insurance alone having arecord of BDT 50bn (USD 723.59mn). The growth rateof insurance stood at 20 percent to 25 percent, said anofficial of Bangladesh Insurance Association (BIA).Business turnover of general insurance covered theremaining volume of business and its growth rate isestimated at 15 percent to 20 percent, he added.USD 2.0mn (BDT 138.2mn) micro-insurance projectlaunchedThe Financial Express, Tuesday January 12, 2010Palli Karma-Sahayak Foundation (PKSF), AsianDevelopment Bank (ADB) and the Government ofBangladesh have recently signed a letter of agreement(LoA) for a USD 2.0mn (BDT 138.2mn) project titled'Developing Inclusive Insurance Sector,' said a pressrelease. Jointly developed by PKSF, the Governmentof Bangladesh, the Government of Japan and ADB asan inclusive micro-insurance initiative, the project isexpected to benefit about 20,000 poor households.The project will reach out to the poor and vulnerablein rural households, particularly women, by enablingthem to seek protection from common risks, whichthreaten their daily lives through affordable insurancecoverage. PKSF will implement the project to befinanced by a USD 2.0mn (BDT 138.2mn) grant fromthe Government of Japan through the Japan Fund forPoverty Reduction (JFPR).ManpowerManpower export to top job destinationsBAIRA demands govt's diplomatic effortsThe Financial Express, Tuesday January 19, 2010Leaders of Bangladeshi recruiting agents on January18 urged the government to launch diplomatic effortsto raise manpower exports to the country's top four jobdestinations for skilled and non-skilled workers,namely Saudi Arabia, Kuwait, Malaysia and Iraq."Bangladesh can export 0.8-1.0 million (8-10 lakh)NRB Voice Issue 2 | www.NRBvoice.org 30 NRB

manpower in 2010 if restrictions on export to thosecountries go," the Bangladesh Association ofInternational Recruiting Agencies (BAIRA) PresidentGolam Mustafa said at a press conference in the city.Libya keen to recruit docs, nurses, workers - SaysministerThe Daily Star, Sunday January 17, 2010Libya has expressed interest in recruiting a largenumber of doctors, nurses and workers fromBangladesh. Labour and Employment and ExpatriateWelfare and Overseas Employment MinisterMosharraf Hossain said to journalists on his returnfrom Libya at Zia International Airport on January 16.The Libyan government will set up five vocationaltraining centres in their country to increase skilledmanpower, and trainers from Bangladesh will beappointed for imparting training in the centres, saidthe minister. Bangladesh and Libya have signed aMemorandum of Understanding (MoU) in thisconnection, he added.PharmaceuticalsSquare Pharma expands production unitThe daily Star, Tuesday, January 12, 2010The earth-breaking ceremony of SquarePharmaceuticals Limited Unit 3 took place on January10, 2010 to meet the increasing demands of theindustry. The new unit was established near theSquare Pharmaceuticals' Plant at Kaliakoir in Gazipur.acres. The current plant, whose area is 35 acres,produces general products, Cephalosporin, Insulin,and SVPO etc. Square Pharmaceuticals Limited isdoing business in local and international markets.Shipbuilding & PortsShip-breaking policy soon: BaruaThe Daily Star, Sunday January 17, 2010The government will soon make a policy for theshipping-breaking industry to ensure environmentfriendlygrowth of the troubled sector. IndustriesMinister Dilip Barua said this on January 16 whileinaugurating a two-day workshop titled 'ChemicalHazards, Safety and Environment' at MokarramHossain Khandaker science building auditorium atDhaka University. As planned in the proposed policy,all ship-breaking industries will be brought under alegal framework and control.Seaports to be developed for use by India, Nepal,Bhutan: PMThe Financial Express, Sunday January 17, 2010Prime Minister Sheikh Hasina told media personnel onJanuary 16 that Bangladesh would soon take initiativesto prepare and develop the Chittagong and Monglasea-ports and also its road and other relatedinfrastructures "for movement of goods to, and from,India through road and rail," report agencies. Largeinvestments will be required for the purpose and alsoto make the same facilities available to Nepal andBhutan at both sea-ports of Bangladesh, she added.The first phase construction will be finished inDecember 2012. The second phase will start in January2014 and be finished by June 2016. The companyhopes that the unit will start production from the firstquarter of 2013. The estimated cost of the unit 3 will beBDT 5.14bn (USD 74.5mn). Total project area is 16Chittagong port looks to partner with Malaysia'sPenangThe Financial Express, Wednesday January 20 2010The Chittagong port looks to build a strategicpartnership with the Malaysian Penang port as thegovernment moves to modernize the country's maingateway by sea, Shipping Minister Shahjahan Khansaid on January 19. He said Bangladesh was keen tomake Malaysia's Penang its sister port to foster tradeand economic relations between the two countries andalso share expertise on how to operate the port in amore efficient way.NRB Voice Issue 2 | www.NRBvoice.org 31 NRB

Telecom & ITBTRC to sharpen watch on telecom transparencyThe Daily Star, Sunday, January 17, 2010The telecom regulator has moved to check howmobile and land phone operators abide by rules inpaying it revenue. All operators are supposed to paythe Bangladesh Tele-communication RegulatoryCommission at least 5.5% of the revenue they earn.BTRC is going for an advertisement this month tochoose a firm to audit the financial and other serviceorientedactivities in the telecom sector. However,besides landline operators, four out of the six mobileoperators now publish their financial status everythree months, as these foreign companies are listed onbourses. The local telecom sector has so farcontributed BDT 200bn (USD 2.9bn) against its BDT300bn (USD 4.35bn) crore investment by the end of2009.Airtel to carve out own brand in BangladeshThe Daily Star, Monday, January 18, 2010Bharti Airtel is set to introduce its own brand inBangladesh, targeting the youth and rural populationin the six-operator mobile market. The brand will benamed Airtel. The company, which has alreadyacquired a 70% stake in Abu Dhabi Group's WaridTelecom, plans to localize its branding in Bangladesh,considering the cultural proximity. Earlier, BhartiAirtel said it would inject BDT 20.7bn (USD 300mn) ininitial investment to take over a 70% stake in Warid.As per the deal, the transition is going to becompleted in the next three months. Warid will issuenew shares at a nominal price to hand 70% of its staketo Airtel. Airtel also will bear all of Warid's debt tolocal banks and other organizations.China agrees to offer BDT 14.6bn (USD 211mn) forTeletalk upgradeThe Daily Star, Friday, January 15, 2010China has agreed to provide BDT 14.6bn (USD 211mn)as a soft loan to state-run mobile operator Teletalk todevelop its upcoming 3G (third generation) networks.The Chinese government will provide the loanthrough China Exim Bank at a 2% interest rate in thenext two years, and the loan repayment time might be20 years in line with discussions. However, under thepossible agreement, Teletalk will have to import allequipment for its 3G-expansion project from Chinaoriginatedvendors, while CMEC will have theauthority to select the vendors. BTRC is now workingto prepare the final guideline for 3G spectrums. The3G-spectrum auction is expected to take place by Junethis year.Govt moves to open VoIPThe Daily Star, Tuesday, January 19, 2010The government has decided in principle to issuemore VoIP licenses for handling international calls totrigger a price war and bring illegal VoIP operatorsunder a legal framework. As per an amended policy,illegal VoIP (voice over internet protocol) operatorswill get a chance to make their business legal byrouting calls through legal exchanges. Earlier,international calls through VoIP were completelyprohibited under the International Long DistanceTelecommunications Service Policy. Currently, illegalVoIP operators on an average charge 1.75 cent perminute for an international call whereas legal callhandlers charge 3 cents. Around 60 million minutes ofinternational calls are made to and from Bangladesh aday. In Bangladesh, VoIP has become a lucrativebusiness as the technology offers international calls atcharges much lower than that of the legal calls.Hundreds of people have been engaged in thisbusiness.TextilesBangladesh's garment export gets a boostThe Financial Express, Friday, January 15, 2010The garment industry of Bangladesh has bouncedback after a lull period caused by order cuts orcancellations by some top US and European buyers inthe wake of the global financial crisis. A massivediversion of orders from China, the world's largestapparel producer, has also contributed to this effect.In the first quarter of the fiscal year, garmentshipments grew by a record 45% to USD 3.4bn, withover 90% of the exports going to the US and Europe.The people in the West are switching to cheaper itemsand their Bangladesh manufacturers, not the Chinese,who can supply the items at a price they now want.Bangladesh specializes in low-end clothing. Thegarment industry accounts for about 80% ofBangladesh exports and employs more than 40% of itsindustrial workforce.NRB Voice Issue 2 | www.NRBvoice.org 32 NRB

ContactInformationBangladesh Enterprise InstituteHouse 20, Road 5Gulshan - 1, Dhaka 1212BangladeshTel: +(88 02) 989 2662/3Farooq SobhanPresidentRashedur RahmanSenior Research Associaterashed@bei-bd.orgAsian Tiger Capital PartnersIfty IslamManaging PartnerFarzana HoqueSenior Associatefarzana.hoque@at-capital.comNRB Voice Issue 2 | www.NRBvoice.org 33 NRB