Dollar Crisis Becomes Acute

Plant risks to get shut down over dues, Dollar crisis hits companies of all hues.

Dollar crisis in the country has become acute. Recently, news report surfaced on the press divulged that the Chinese govt refused to sell coal to Payra Thermal Power Plant. The plant authority has not yet cleared the due payment of $293 million for earlier shipments¹. The current stock will run out in two weeks. Earlier Rampal Thermal Power Plant ran similar problems stemming from government’s strict regulation on dollar purchase. Later government intervention resumed its operations.

Adani group also placed a bill of $20 million before the Power Development Board for the electricity it generated in Jharkhand power plant.

Meanwhile, another news report says Biman Bangladesh Airlines,national flag carrier of Bangladesh,has yet to pay Taka 20 billion($186.91 million) to Bangladesh Petroleum Corporation(BPC) for the jet fuel it supplied².

Perhaps the worrying thing is the decline in export and remittance receipts. And $3 billion worth of export proceeds have not yet reached the local banks during the July-February period of current fiscal year^3.

This will indeed cause great pressure to dollar demand. In this backdrop, central bank has little option but to devalue the currency further. Value of Taka has long been artificially pegged at some rate that is not reflective of the market. In my observation two things hold back the ruling regime to let market determine the value of Taka: first, it fears market rate will increase the cost of development expenditure; second, deterioration of inflation that will raise the cost of sending money abroad.

An economist and former staff of IMF Ahsan H. Mansur argued that artificially pegged Taka presented a swollen estimate of GDP. Any adjustment will shrink that estimate. In an election year, govt is pretty much reluctant to do this as the stance will be politically costly.

Toxic political climate fuelled by anarchistic behavior also played a role in this crisis. It increases incidence of money laundering and capital flight.

In 2009,when AL assumed power , 1 US dollar fetched Tk 68.80. In 2014, Taka depreciated further to 77.72. In 2019,exchange rate became Taka 83.85/US dollar⁴. And now 1$ fetches Taka 107 officially and Taka 112 unofficially. Though such depreciation increased our competitiveness and our export earnings manifolds, illicit capital flight has also increased many times. And our budget deficit also gets widened. The fast decline in reserve(now $29 billion) also puts pressure on the exchange rate.

There are initiatives to trade in Yuan and Rupee. However the transaction will be in small amount and bigger impact of such transaction will take time.

There is no alternative to break the political stalemate and reach a reconciliation in a bid to send a positive signal to the market and investors that will ultimately restore the confidence and restrain the money flight. Look at Sri Lanka.Since there is no stalemate, Indian and Chinese investors flock there to invest. To improve drastically things at home when recession like scenario looms large in the West, there is no alternative to reconciliation and stability.

Notes And References

1. “Koila Sonkote Bondho Hotey Parry Payra Bidyut Kendro O(Coal Crisis May Shut Down Payra Power Plant)”,Mahfuz Mishu,Jamuna News,May 02,2023. For more watch https://m.youtube.com/watch?v=AjO0PeRlXIM&pp=ygVI4Kaq4Ka-4Kav4Ka84Kaw4Ka-IOCmpOCmvuCmqiDgpqzgpr_gpqbgp43gpq_gp4Hgp44g4KaV4KeH4Kao4KeN4Kam4KeN4Kaw
2. “Bimaner Bokeya DUI Hajar Koti Taka,Adaye Hard-line E Sorkar(Biman Yet To Pay Taka 20 Billion,Energy Ministry Is On Hardline)”,Orthosongbad,April 09,2023. For more read at https://tinyurl.com/bdf9v7y2
3. “More Strain on Reserves As Unrealized Export Proceeds Hit All-time High of $3 Billion “,Jebun Nesa Alo,The Business Standard, May 03,2023. For more read at https://www.tbsnews.net/economy/more-strain-reserves-unrealised-export-proceeds-hit-all-time-high-3b-625970
4. Bangladesh Economic Review 2019

Governance And Aviation

Unfortunate events in aviation
Exposes poor governance situation?

Civil aviation in recent months has been subject of news items for its sloppy management. News of a collision between two aircrafts inside a hangar at Shahjalal International Airport on April 11 went viral two weeks ago. A Boeing 777 was parked inside a hangar.As another 737 was steered towards that hangar it hit the parked 777 and both sustained slight damages¹. Images of damaged aircrafts caused much worries. Luckily,engineers of Biman Bangladesh Airlines repaired the damaged aircrafts and put them into operation pretty quickly. One even carried passengers to Saudi Arabia².

Earlier in March, two scanners inside Shahjalal International Airport had remained out of operation for two weeks costing vegetable exporters loss of millions of Taka. In 2020-21,Bangladesh exported vegetables worth more than Tk 10 billion³.

There is more. On November 30,last year a plane of Biman Bangladesh Airlines hit and killed cows while it was taking off at Cox's Bazar International Airport⁴.

These are the stories of clumsy management inside the airport. Deteriorating management in civil aviation perhaps manifests in too many unfortunate incidents. Though I did not work to find any link between civil aviation and governance,I attempted to see whether governance has any impact on combat aircraft inventory.

Back in April 2019,I wrote “Combat Aircraft Loss And Governance” to see how governance situation influences loss of BAF aircrafts⁵. Sharing it again:

Recently I have come across a very interesting stat posted on the social media page of a defense lover group. It is about the crash record of Bangladesh Air Force since Bangladesh came into being. With one or two minor omissions it includes all the crash data of BAF. BAF suffered 90 aircrafts loss in 48 years.Suddenly the idea of finding the link between governance and crash record came to my mind. Common perception is that under "representative regime" , there would be better governance in every sector and they would run smoothly. There would be better maintenance of aircrafts, better storage facility and better training.

BAF lost 11 aircrafts in 2013-2018, a period many described as "hybrid regime".Having a closer look at the breakdown of crash incidents reveals that crashes under a "representative government" (27) surpasses that(19) under a "non-representative government".

But I hold the common perception and did a statistical analysis. Though the result is a bit contradictory, it is interesting. The 48 years of Bangladesh is divided into 9 distinct periods. Depending on the nature of the government, the regime is dubbed as "representative" or "not representative". The representative regime, which is assigned to value 1, is assumed to come to power through free and fair poll. I did not decide the type of regime , rather its recognition by local and international bodies decided its type.

Since there are too many regime changes in the 70s, I termed 1972-80 as one distinct period. Then I counted the crash incidents took place in that period. BAF's worst moment came in 1991 when tidal wave rendered 40 fighter jets and 4 helicopters useless.Aircraft loss due to war or natural disaster however was not taken into consideration. For this reason, I ignored the 1971 trainer crash and loss of BAF 44 aircrafts in 1991 cyclone.

To test my conviction that "representative regime" has lower crash record, I ran a Poisson regression. For that, I first tried to find out the total number of combat aircrafts at BAF's disposal at the end of the respective period and proportion of crashed aircrafts to the total number of aircrafts in that period, which I called "fraction" here. Since it is difficult to get the exact number of BAF inventory, I took assistance of Wikipedia to get an approximate number of aircrafts in 2018 and then scaled down the total to glean information for earlier periods.Another thing to note is that I also took into consideration the aircrafts of Army Aviation Group but discarded the ones operated by the Navy while counting the total. Proportion of crashed aircraft to total aircrafts will give a better reading because loss of 1 aircraft from a total of 2 means a loss of 50%. Similarly, a loss of 1 aircraft from 20 means a 5% loss. Absolute number of loss could lead to misleading information. That is why I rest my trust on proportion, "the fraction" in this case.

While running the regression I dropped the observation for 1986-90, because no crash took place during that period. And exposure does not count any zero.

I first ran the regression with exposure( ) and then without the exposure( ) but including the variable that would normalize exposure.

The first run says combat aircraft crash under "representative regime" is 1.185 times larger than that of "non-representative regime". However, since it falls within the 95%confidence interval, I cannot reject the hypothesis that "representative regime" has lower crash records. The second run, without exposure, yields similar results. It is still 1.185 times larger and I cannot rule out that crash record under "representative regime" is lower. Due to the results from regression, I cannot draw a definitive conclusion between BAF aircraft crash and governance.

Notes And References:

1 “Collision Between Two Biman Planes At Shahjalal International Airport “,UNB,April 11,2022. For more read at https://www.unb.com.bd/m/category/Bangladesh/collision-between-two-biman-planes-at-shahjalal-intl-airport/90970

2 “Biman's Boeing 777 Flies To Saudi After Collision In Dhaka Airport Hangar”,The Financial Express,April 15,2022. For more read at https://thefinancialexpress.com.bd/national/bimans-boeing-777-flies-to-saudi-after-collision-in-dhaka-airport-hangar-1649991039

3 “Scanner Ochol : Noshto Hocchey Shobji'r Roptani Bazar(Scanner Out-Of-Work: Costing Loosing The Export Market)”,Abu Sayeem,News Bangla24.com,March27,2022. For more read at https://www.newsbangla24.com/news/185106/Scanner-obsolete-Vegetable-export-market-is-being-ruined

4 “Plane Hits Cows: Four Ansar Guards Suspended At Cox’s Bazar Airport”,UNB,December 01,2022. For more read at https://www.unb.com.bd/m/category/Bangladesh/plane-hits-cows-four-ansar-guards-suspended-at-coxs-bazar-airport/83351

5 “Combat Aircraft Loss And Governance”,Rezaul Hoque,https://hoquestake.blogspot.com,April 04,2019. For more read at https://hoquestake.blogspot.com/2019/04/combat-aircraft-loss-and-governance.html?m=1

La Semaine Dernière A Mes Yeux

(08 avril --- 15 avril)

Selon un reportage, Bangladesh a payé beaucoup pour donner deux vaccins à un ressortissant parmi les pays de Sud-Asie.

Selon un reportage, collision entre deux avions de Biman Bangladesh Airlines a causé dégâts à deux appareils.

Selon un reportage, le gouvernement a fait appel aux agriculteurs de moissonner le riz hivernal qui avait été cultivé dans 222.805 hectares de terrain de haor(lac transformé champ de riz en hiver) à Sunamganj avant de deux grand orages.

La Semaine Dernière A Mes Yeux

(15 novembre --- 22 novembre)

Selon un reportage, un gazoduc à l'intérieur dans un bâtiment a explosé, tuant 7 personnes et blessant plusieurs autres à Chattogram.

selon un reportage, Biman Bangladesh et Boeing ont encré un accord d'achat, qui vaut $585 million, pour acheter deux Dreamliners.

Selon un reportage, un Chinois a été tué par un coup d'arme blanche à la centrale charbonnière à Payra, Patuakhali.

Selon un reportage, une frappe aérienne en Libye a tué 7 personnes dont 1 Bangladais.
Selon un reportage, 3 dirigeants de Jana Sanghati Samiti ont été tués par balles à Rangamati.

Selon un reportage, des voleurs ont volé Tk 1 million depuis les GABs de Pubali Bank à Cumilla et à Chattogram. Police soupçonne qu'ils sont tous les étrangers.

Selon un reportage, l'Université de technologie de Bangladesh a annulé inscription de 26 étudiants pour avoir assisté dans la tuerie d'un étudiant.

Selon un reportage, un train a renversé à Kishorganj. Pour 5 heures le service de train y a été annulé.

La Semaine Dernière A Mes Yeux

(1 juillet --- 7 juillet)

Selon un reportage, un magistrat misogyne a fait assez de polémique dans la presse et le réseau social après il avait fait raide dans les marchés, boutiques et restaurants afin de protéger les droits de consommateurs. Il a mis deux boutiques de beauté à l’amende pour avoir gardé des produits qui ne portent pas la durée de validité. De plus , il a aussi pénalisé une boutique de vêtements , très connu dans la region por sa haute couture, pour avoir vendu un Panjabi à prix différent. Dans tous les cas, les amendes étaient exorbitantes. Toutes les boutiques sont opérées par femmes ou possèdent les femmes comme PDG.De plus, il a publié ses actions dans son compte de facebook et accordée interview à une télé. Un porteparole de la boutique s’est dit que c’était une erreur humaine.Quand une nouvelle de son déchargement est devenue virale, un ministre a dit que la décision avait été faite avant ses raides populaires et le gouvernement l’avait réinstallé.

Selon un reportage, un véhicule de police a percuté des ouvriers de confection en tuant 3 personnes.

Selon un reportage, police a appréhendé six ressortissants de l’Ukraine pour avoir fait un retrait clandestin des argents depuis GAB à Badda Dhaka. Ils ont employé un noveau modus operandi qui n’a pas envoyé un relevé d’identité bancaire au serveur de la banque. Un banque a déjà perdu millions de Taka à cause de ces escrocs. Mais elle ne l’a pas divulguée à la presse.

Selon un reportage, le chef de RAB s’est dit que 300 terroristes disparaissaient sans laisser trace après ils avaient été accordés la mise en liberté provisoire sous caution.

Selon un reportage, Une cour australienne a condamné une étudiante bangladaise et djihadiste à 42 ans de prison pour avoir tenté de tuer un Malais. Sa sœur a été aussi arêtée pour avoir attaqué des policiers bangladais pendant interpellation.

Selon un reportage, police américaine a déjoué une tentative terroriste à New York Times Square par un Américain , originaire du Bangladesh. Police l’a arêté et a fait un procès-verbal.

Selon un reportage, des maisons du groupe minoritaire ont été vandalisées à Sylhet . Un faux compte de Facebook a été utilisé pour avoir incité haine.

Selon un reportage , la foule a mis les véhicules de fonctionnaire à feu à rue de Dhaka- Tangail. Les embouteillages les ont mis en colère.

Selon un reportage, les douanes du Qatar a arrêté un pilote de Biman Bangladesh Airlines pour avoir échoué de montré son passeport. Il l’a laissé au Bangladesh. Il s’acheminait vers Finlande pour voler le vol de Premier ministre au Bangladesh.