Increase In Incentives For Remitters

Falling value of Taka against the dollar Brings more remittances from blue collar. Letting market fix the exchange rate Withers away chances to speculate.

Finance Minister in a press conference stated that govt would give taka 5 for 1 USD sent by the migrant Bangladeshi workers. He almost doubled the incentives for remitters. This is indeed contrary to the contractionary monetary policy the Central Bank is pursuing right now. Earlier he also defended his 9-6(9% on lending rate and 6% on deposit rate) interest rate policy,which was widely criticized for not containing the inflation.

Despite the failure of earlier taka 2.5 /USD cash incentives, many are wondering what it will really add to the economy. What is interesting while Bank and exchange houses are lacking USD,street vendors are offering USD at a higher rate. It seems like a black market for cinema ticket! A certain quarter is making some quick bucks. Profiteering activity is in full swing amid a crisis! Back in September 15 this year,I penned a piece titled “Is MPS Working?”¹. Sharing parts of it again:

During the Bakri Eid festival, a record amount of remittances come to Bangladesh. Many banks reported that. However, this Bakri Eid witnessed fewer animal sacrifices this year as cattle prices were beyond many people’s reach. Amount of Haseel(fee collected from sold animal by the makeshift market authority) was also lower. That means households did not spend all the money sent by the dear ones from abroad. They may be lying in the banks. And govt also paid cash incentives to those remittances. Are those bank accounts belong to true individuals? Trouble ridden banks have limited scope for raising their revenue. Opportunistic motive may play a role here to grab the benefits of cash incentives for remitters. Similarly, we have noticed exporters do not feel encouraged to bring the export proceeds at home. The result is huge differences between the stat produced by EPB and that by Bangladesh Bank. But they enjoyed special benefits and incentives while processing the export orders. True export earnings should be the earnings brought to home. And incentives should only be given to this amount.

We have already witnessed that USA surpassed UAE and other countries and became one of the top three remittance sources. US visa restrictions facilitated the transfers. Experts and press speculated that certain quarters took advantage of the discrepancy between the official and market rates and made a fortune out of this.

Cash incentives on remittances only aggravate the ongoing profiteering problem instead of solving it.In another piece titled “Let The Market Decide The Exchange Rate” ²back in June,I spelled out how this profiteering unfolds.Sharing parts of it again:

In addition, setting the exchange rate at multiple levels also encourage money laundering. Remember that there is unprecedented hike in policy rates in occidental countries. In particular, USA surpassed all of them. So dollar deposits earn more than other currency deposits. So investment, clandestine money flow end up in America. This partly explains 94% reduction in the deposits held by Bangladeshis in Swiss banks. When Canada,UK toughened their immigration policy ,Bangladeshi deposits in Swiss banks swelled. By not allowing Taka to depreciate further and not raising the policy rate enough,we are making it easier for the wealthy to invest in these countries. Many of our exporters and importers have partners abroad. Through them they can put their money into these foreign currency deposits or cut some sort of currency swap agreements to take advantage of the arbitrage opportunity if domestic exchange rate is not favorable enough. If they see interest rate will rise in future and Taka will depreciate more, then they will prefer to bring the export proceeds later to gain more. That is why the best remedy is to trust the market and let it fix the rate. This will wither away all the speculative motive. However, the current decision of the central bank has introduced friction into market, which in the end helps the currency speculator.

Notes And References

1. "Is MPS Working?", Rezaul Hoque,September 15,2023,https://hoquestake.blogspot.com.Here is the link : https://hoquestake.blogspot.com/2023/09/is-mps-working.html?m=1
2. " Let The Market Decide The Exchange Rate",Rezaul Hoque,June 30,2023,https://hoquestake.blogspot.com.Here is the link: https://hoquestake.blogspot.com/2023/06/let-market-decide-exchange-rate.html?m=1

La Semaine Dernière A Mes Yeux

(17 décembre --- 23 décembre)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
17	Pain tchapati,Œuf poché,Chou-fleur	Riz,Chou,Purée de pomme de terre,Soupe aux lentilles,Poisson paradis filamenté	Pain tchapati(fait par moi),Soupe aux lentilles,Chou	Dattes
18	Pain tchapati(fait par moi),Dattes,Chou	Riz,Soupe aux lentilles, Purée de haricot et pomme de terre,Poisson paradis filamenté	Riz,Soupe aux lentilles, Purée de haricot et pomme de terre	Œuf dur
19	Pain tchapati(fait par moi),Dattes,Omelette	Riz,Tête de chèvre dans soupe aux poi chiches,Chou,Chou-fleur	Pain tchapati,Tête de chèvre dans soupe aux pois chiches	---
20	Pain tchapati(fait par moi),Dattes,Choueochuch-fleur	Riz,Soupe aux haricots vigna mungo, Purée pomme de terre,Poisson ruhi,Feuilles de moutarde, Feuilles d'Amarante tige	Pain tchapati(fait par moi),Soupe aux haricots vigna mungo et chou-fleur	Dattes
21	Pain tchapati(fait par moi),Omelette	Riz,Soupe aux lentilles, Purée de haricot et pomme de terre,Poisson Ruhi,Pois chiches	Pain tchapati(fait par moi),Soupe aux lentilles et pois chiches, Chou	Dattes
22	Pain tchapati,Chou	Riz,Soupe aux lentilles,Purée de pomme de terre,Poisson gobie	Pain tchapati (fait par moi),Soupe aux lentilles,	Lait,Dattes,Nouilles chow mein
23	Pain tchapati,Omelette	Riz,Soupe aux lentilles,Poisson Labeo Bata	Riz,Soupe aux lentilles, Poisson Labeo Bata	---

Goodbye Mr Muhith

Former finance minister breathed his last.
Could it mark a shift from the past?
Treatment to our former politician
Seldom hints we are a civilized one.

An illustrious bureaucrat and former finance minister AMA Muhith breathed his last recently. He held the portfolio of Finance for a very long time and had the opportunity to present 12 budgets before the Parliament.

He had wished to continue in this role for few more years but the ruling regime had someone else in their mind in that capacity. He was of sturdy build at that ripe old age,as strong as a Turk. During time of his departure, he had not manifested any age-related complications. However, COVID worsened his health conditions and he gave in to COVID complications, as reported by the press.

If his natural death is true(doubt will be justified few lines later),he will be the first Finance Minister of Peoples Republic of Bangladesh who met a natural end since Bangladesh came into being.

Fate of our former finance ministers offers some indication how turbulent and violent Bangladesh politics is. I wrote a piece about it on my site https://rezaulhoque.wordpress.com back in 2018¹. Bangladesh’s first finance minister Tajuddin Ahmed was shot dead in prison along with other political leaders by renegade soldiers in 1975. Poster boy of liberalization of Bangladesh economy M Saifur Rahman died in a tragic road accident in 2009. He lost the grace of a major party after he had accompanied then World Bank president to then Prime Minister to complain about her elder son's interference in a project. Another finance minister Shah AMS Kibria was succumbed to injuries of a grenade attack in Sylhet in 2005. He secured an IMF loan and played a role in leading the country to food sufficiency. Mr Muhith also survived a road accident ¹.

A common thread that can be traced among the dead finance ministers is that they were all committed to economic reforms and held democratic values.

Among the living ones, very few held that position for a significant period except Mr Abul Maal Abdul Muhith. Mr Wahidul Huq went back to his academic profession. Mr Syeduzzaman is founding director of a private bank and a trustee board member of a local NGO. Though Mr Muhith is subject of intense criticism, he is also an avid reformer. Many try to single him out for the dilapidated condition of the economy. He is just tip of the iceberg of economic mismanagement where many actors remain invisible from public eye. Despite some crucial wrong decisions, it is not reasonable to put all the blame squarely on him for bringing the financial sector on the verge of collapse ¹.

He garnered lots of attention when he called Hal-Mark Group’s embezzlement of public banks’ Tk 40 billion “a peanut”. He was criticized left and right. But I think he was echoing the words he heard in inner circles of power corridor which often remain hidden to public. A sensible bureaucrat like him could not make any such slip of tongue.

As he had been posted in Economic Relations Department of Ministry of Finance, he maintained correspondence with various multilateral organizations. Later he also held key positions in those organizations. He knew well where to focus on development issues. When he was economic advisor to Ershad government, he formalized the microfinance operations in Bangladesh by formulating the Grameen Bank Ordinance,as Prof Yunus wrote in an obituary piece ².

In a country like ours where narrative making machinery is capable enough to turn day into night ,Muhith's inclination towards reform would often antagonize such machinery. And it did not even spare him. Like others, he was misconstrued and unjustly criticized.

Last year , I read Jung Chang's “Wild Swan: The Daughters of China”, memoir of a daughter of a dissident communist apparatchik in China. The book is replete with anecdotes and incidents took place during Cultural Revolution that claimed millions of innocent lives. There has been remarkable resemblance to what has been going on in Bangladesh, where Maoism is still strong and shaped other political activities and state organs ³.

Treatment to our former politicians and leaders seldom hints we are a civilized race. Fate of our former finance ministers particularly manifests the undercurrent of savagery that flows deep under our politics. If Mr Muhith passed away naturally, then it would mark a paradigm shift in the way we treat our former finance ministers.

Notes And References:

1“Fate Of Our Former Finance Ministers”,Rezaul Hoque,https://rezaulhoque.wordpress.com,October 12,2018. For more read at https://rezaulhoque.wordpress.com/2018/10/12/fate-of-our-former-finance-ministers/

2”Days With Muhith Bhai Were Unforgettable”,Dr Yunus,Daily Star ,May 01,2022. For more read at https://online.thedailystar.net/news/bangladesh/news/days-muhith-bhai-was-jubilant-full-pride-dr-yunus-3016381

3 “A Colleague Deserves Better -II”,Rezaul Hoque,https://hoquestake.blogspot.com,November 27,2021. For more read at https://hoquestake.blogspot.com/2021/11/a-colleague-deserves-better-ii.html?m=1

La Semaine Dernière A Mes Yeux

(29 avril---06mai)

Selon un reportage, un garçon est mort après il était tombé depuis un roller-coaster à Shyampur.

Selon un reportage, prix d’huile à cuire grimpe après Indonésie a interdit exportations d'huile de palmier.

Selon un reportage, ancien ministre des Finances AMA Muhit a décédé.

LNG Blunder

Disagreement between PetroBangla and ministry
Unravels the flaws in LNG policy.
Energy deals offer clue of corruption,
Eschewing that questions docu's true intention.

Recent news reports reveal some problems within government's LNG policy. It has not been a long time that Bangladesh embarked on LNG age. Two years ago Bangladesh received its first LNG supply after completing appropriate infrastructure. Recently Ministry of Finance asked PetroBangla to send its unused Tk 40 billion to the government as part of a new policy. PetroBangla declined. Instead, it demanded Tk10.94 billion to finance the operations of two floating storage units , operated by Exelerate and Summit, citing volatile nature of the LNG market. Government refused to pay the sum.

Last week government inked a deal with Vitol Asia, a subsidiary of Dutch Vitol. According to a news report, the company has been blacklisted in several countries. On many occasions, the company was found to win government contract through unfair means. It is not yet known how the company bagged the contract of supplying two cargoes of LNG from the spot market. Earlier government had signed several contracts for long term LNG supply. Qatar's Ras Laffan Liquefied Natural Gas Company is one of them. It pledged to supply between 1.8 and 2.5 MTPA of natural gas for 15 years.The deal was signed in September 2017.

LNG is a cheap mean for power generation. As demand for LNG is rising , government has opted for LNG import to produce electricity, to produce fertilizer and industrial good. Stat furnished by PetroBangla reveals that demand for natural gas is projected to be 3463 MMCFD in 2021 and 3554 MMCFD in 2025 (Source: Bangladesh Economic Review 2019). A large part of this demand will go for power generation. A news report claims power generation using natural gas costs Tk 4 per unit. Meanwhile, power generation using diesel costs Tk 22 per unit. Cheaper electricity means lower production cost, more concentration on product quality and grabbing more market share. In 2013-14, 337.4 billion cubic foot of natural gas was used in power generation. In 2017-18, it rose to 398.6 billion cubic foot (Source: BER 2019).

Growing importance of LNG led the government to build LNG infrastructure. Two floating storage and regasification units were installed in Moheskhali. One of them operated by a company having close ties with a ruling party leader. Seeking money for their operations clearly aroused suspicions. In Bangladesh such business and operations are not scam free.

By the same token, there is little reason to believe that just concluded deal with Vitol Asia is not free of any murky affair. It is interesting to see the reaction of the Finance minister when Vitol's past was brought to his attention. He played ignorant about wrongdoings of Vitol Asia in other countries and kept insisting that the deal was struck in a fair and transparent manner.

The September 2017 deal RasGas made with Bangladesh took place at a time when the government lacked international recognition due to its opposition-boycotted election,heavily criticized at home and abroad. The nittty-gritty of the deal is also not known to public. How was the pricing of LNG gas fixed?Such deal could contain ample ammunition of corruption that could draw a widespread media attention. Access to those critical information is kept within the party cronies and government officials. The controversial 2018 general election shed some light. BBC World was more outspoken and open in revealing election irregularities like stuffed ballot-box at the beginning of election day at a polling center in Chattogram and severe beating of a reporter in Shewrapara in Dhaka. Reelection did take place in Chattogram polling center but no action taken against the men who beaten the reporter. Al Jazeera did report on election fraud but it was not as open as its British counterpart.

This kind of energy deal is the allegation weapon that has the potential to disturb a government and the information is readily available to Al Jazeera. Is it because that the deal happened between government-to-government and it could harm the reputation of both governments , so better remained silent?

Focusing on settling down of personal scores that only establishes the credible threat protagonists face at home hardly unsettles any ruling regime.

Our opaque energy and power deals offer many hints of corruption, as no saint involved in such deals.

It is hard to believe that government did not reckon with need of sudden demand of fund to purchase LNG when the LNG plan was conceived. Projection was there, contract was there. And it is neither believable that a public corporation lying on Tk 40 billion of excess fund suddenly needs fund to finance the operations of two floating storage units. Making deals with companies with less transparent business only puts question marks on gov't intention. Responsibility lies with the concerned section of the government to douse the suspicion of unfair means.

La Semaine Dernière A Mes Yeux

(23 juillet --- 28 juillet )

Selon un reportage, le ministre des Finances a divulgué identité de 300 sociétés défaillantes au parlement.

Selon un reportage, l’autorité de Payra Power Plant à Barishal a imposé restriction sur le service des ouvriers locaux. Cependant, l’autorité a affirmé qu’il solderait arriéré des ouvriers. Police a arrêté 12 ouvriers bangladais pour la mort de l’ouvrier chinois pendant une escarmouche.

Selon un reportage, le ministre des Affaires Étrangères des États-Unis a placé Bangladesh parmi les pays où le traffic des hommes sont endémique. Pour la troisième fois consécutive Bangladesh a été resté dans le même groupe. Dans son rapport "Trafficking In Persons", State Department , le gouvernement bangladais n’a pas pris le pas d’empêcher le traffic des hommes.

Selon un reportage, gouvernement a annulé les intérêts sur les crédits des banques publiques pour 2018, coûtant le gouvernement Tk 11,92 milliards.

Selon un reportage, un train s’est écarté de chemin de fer à Moulvibazaar en tuant 1 personne et blessé plus de cent personnes.

Selon un reportage, une fille ,victime d’attaque incendiaire par ses proches, a succombé à ses brûlures à l’hôpital.

Selon un reportage, environ 4.500 bijoutiers ont rendu légal 12.000 Kilo d’or, de diamant et d’argent clandestin en payant Tk 1350 million d’impôt en trios jours de la fête de bijou.

Selon un reportage, un homme a été massacré devant sa femme à Barishal. La tuerie a bouleversé le pays. Le tueur a harcelé beaucoup de fois sa femme.Police a arrêté 4 coupables pour la tuerie.

Selon un reportage, la société véhicule partage , Pathao, a licencié 300 salariés dans un jours à cause de manque de fond.

Selon un reportage, police a arrêté un Nigérian qui possèdait Crystal Meth.

Selon un reportage, les argents clandestins dans les comptes de banque suisse, opéré par Bangladais, ont augmenté par 29 percent dans un an. La Banque central de Suisse dans un rapport “Banks In Switzerland-2018” a divulgué l'info.

La Semaine Dernière A Mes Yeux

(7 juillet ---- 14 juillet)

Selon un reportage, les voleurs ukrainiens ont ciblé 5 autres GABs à Dhaka. Ils on utilisé le malware pour prendre contrôle de GAB. Police bangladaise a arrêté 15 Ukrainiens pour avoir volé Tk 1,6 millions depuis les GABs.

Selon un reportage, le ministère des affaires étrangères a appelé les ambassadeurs de Lebanon et de l’Iran au Bangladesh. Ils ont été accusés de corruption.

Selon un reportage, un dirigeant du bureau de l'anti-corruption a été accusé dávoir pris pot de vin depuis un policier corrompu. Le bureau l’a licencié et arrêté pour interpellation. TIB a critiqué le gouvernement pour ne pas avoir appréhendé le policier corrompu.

Selon un reportage, la mauvaise créance des banques bangladaises a franchi le seuil de Tk 1 trillion en provoquant la Banque centrale de tenir une réunion avec PDGs des banques troublées dont 4 banques publiques et 3 privées.

Selon un reportage, le ministre des Finances s’est inscrit dans l’hôpital à la veille de placer son premier budget au parlement. Ce n’est pas grave. Le ministre est tombé malade pendant son discours au parlement. Le Premier ministre a fini son discours budgétaire. Il était aussi absent dans la conférence de presse.

Selon un reportage, un des groupes persécutés au Bangladesh, les Biharis, ont manifesté contre harcèlement de Police et demandé justice pour l’assaut incendiaire qui a laissé 9 morts dans le camp de Kalshi en 2014. Ils se disent que Police n’appréhende jamais les aggresseurs , dont les fidèles du parti en exercicice et un deputé . Cependant, Police a récemment préparé un procès-verbal en accusant des Biharis comme coupables.

Selon un reportage, une fille indigène a été mis à feu par un de ses proches à Narasingdi. Depuis longtemps, il l’a harcelée.

Selon un reportage, 64 Bangladais qui se trouvent dans un bateau au large de Tunisie ont dit à la Croix Rouge qu’ils n’avaient aucun envie de revenir au Bangladesh. Ils sont tous lourdement endettés et désrent d’aller en Europe.

Selon un reportage, Police a trouvé cadavre d’un conducteur de service véhicule-partage Uber à Uttara.