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Books on Bangladesh
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Update No: 014 - (22/02/07)
NOBEL LAUREATE ENTERS POLITICS
Bangladesh's Nobel Peace Prize winner Muhammad Yunus has taken most
politicians by surprise by launching his own political party, the Nagarik Shakti
(citizens' power) group. With this move, Yunus is all set to enter the foray of
politics. His party will contest 300 constituencies in the next parliamentary
elections, for which no date has yet been set. Yunus sparked an outpouring of
joy and national pride among Bangladeshis from all walks of life last year when
he was awarded the Peace Prize for a micro-finance scheme that earned him the
nickname "banker to the poor." However, this new political trump card
has evoked mixed reactions. Those who are optimistic see Yunus a genuine leader
who brings with him the promise of eradicating corruption and uplifting the
conditions of the poor. Yet, there are those within political circles with years
of experience who seem extremely sceptical of Yunus's decision to join politics.
For instance, Sheikh Hasina, chief of the Awami League (therefore a big
potential loser from a new party), and a former prime minister herself, has
already expressed her displeasure over Yunus joining politics. According to her,
"newcomers in politics are dangerous elements and are to be viewed with
suspicion and they often do more harm to the nation than good." Sheikh
Hasina's remarks mark an extreme position as it displays how closed the
democratic process in Bangladesh is. Its political parties are a byword
internationally for their corruption and ineptness. Successively the monolithic
government and opposition parties have badly misgoverned this nation. But even
well educated individuals in Bangladesh are willing to boycott Yunus's programs.
While it is true that Yunus does not appear armed with years of political
experience, however, given the alternatives facing the public, Yunus would be a
good choice and as his record indicates, he seems to have a genuine cause. While
Bangladesh may strive to be a democracy, it must begin by allowing individuals
freedom to enter politics.
INDIA-BANGLADESH TRADE RELATIONS
India plans to remove tariff and non-tariff barriers from Bangladeshi goods
and import two million pieces of ready-made garments duty free as a friendly
gesture to its eastern neighbour. India will also remove restrictions from the
import of cosmetics from Bangladesh and make the Sealdah-Joydevpur passenger
train service operational to strengthen communications. These agreements were
reached as part of India's External Affairs Minister Pranab Mukherjee's visit to
Dhaka to invite Bangladesh to the 14th South Asian Association for Regional
Cooperation (SAARC) Summit in New Delhi on April 3-4. His Bangladeshi
counterpart, Foreign Affairs Adviser Iftekhar Ahmed Chowdhury, told the media
that India had already declared withdrawal of non-tariff barriers to trade and
would issue a notification to this effect. It will be beneficial for all SAARC
countries." He said Bangladesh and India had 'agreed to jointly combat
terrorism, which today poses the most grave challenge to both the societies and
threatens rapid economic development of the nations.' This was the first
ministerial visit from India since recent political developments in Bangladesh
-- with the ninth general elections cancelled and a national emergency imposed
last month.
ECONOMY
The Bangladesh Bank (BB), the country's central bank, on Monday relaxed
single borrower exposure limits allowing 'AAA' rated multilateral development
banks (MDBs) to offer guarantees against borrowing. "In cases of credit
facilities provided against government guarantee and 'AAA' rated multilateral
development banks (MDBs) guarantee, the ... restrictions (single borrower
exposure limit) shall not be applicable," Earlier, the government used to
be the only guarantor in such cases. The central bank took the measure to
improve the quality of credit culture as well as ensuring large loan amounts for
real entrepreneurs, the officials add.
A delegation of industrialists in Bangladesh has asked for a reduction of duties
on industrial raw materials to sustain industrial growth. Bangladesh's import
regime is characterized by relatively high tariffs which raise the cost of
production by increasing the price of imported inputs above world prices. This
is why the readymade garment industry had to be kept outside of this import
tariff scheme through the system of bonded warehouses that allows them to import
all inputs needed for garment exports duty free. But domestic industry which is
not geared to the export market has no such advantage and must bear the
tariff-inclusive cost of imported inputs. To compensate for this, domestic
industry has been shielded from foreign competition by high tariffs on most
consumer products that are produced in the country. The sooner domestic
producers can thrive without reliance on tariff protection, the better for
consumers who happen to be the predominant stakeholder in the marketplace. The
same is true for the government. Import taxes distort incentives in the domestic
market. With port and customs inefficiency, they distort even more. So, the
government should end its reliance for revenue on import taxes and shift more
towards reliance on domestic taxes, like income and corporate taxes and VAT
which might be more advantageous for the economy as a whole. Over-reliance on
import taxes for revenue makes it difficult for government to reduce tariffs
faster than they would like in order to promote trade and become more integrated
with the global economy. (Source: The Financial Express).
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