UPDATE------------FEBRUARY 15, 2009 MONDAY
BANGLADESH NEWS
IT industry set to take off on global market
Bangladesh’s software and information technology-enabled services industry is set to take off with some companies entering the world market and a significant portion of the local market getting readied, industry people said.
Industry output, however, remained insignificant in two decades and entrepreneurs said businesses were earning the capability to cater to clients at home and abroad.
‘The industry has come to a take-off stage now,’ said Safquat Haider, a director of the Bangladesh Association of Software and Information Services.
He also referred to BASIS Softexpo 2010, which ended on Sunday, where several dozen Bangladeshi technology enterprises put on display the latest versions of their programs and IT enabled services.
Many local software houses are now successfully developing world-standard financial solutions and business applications, Safquat said. ‘There are not many such cases, but local companies have talented people to develop GIS and advanced ERP solutions and telecommunications software.’
Anisur Rahman Khan, senior marketing manager at the Leads Corporation, said a significant portion of the local market was getting readied and enterprises had also matured to offer world-standard solutions.
At least four local banks are running their core operation with solutions developed by the Leads Corporation, said Anisur, who has been in software marketing for more than decade and a half.
He said banking software developed in Bangladesh had a hard time fighting the software developed abroad, especially in India, although local solutions were cheaper, Anisur said. ‘Bankers now have understood that local solutions are dependable.’
Bangladesh’s software and ITES export amounted to only $33 million or Tk 230 core in 2009. The domestic software market was estimated worth less than Tk 500 crore. Local solutions account for less than a half of the market.
Mannujan Nargis, director at the Rave Systems, said internet telephony or IP solutions such as switching, billing, byte server operation and mobile VoIP dialers developed in Bangladesh were selling well on the world market.
She said her organization had a presence on the European market and dominance on the Middle-East market with several IP operation management solutions.
‘One of our solutions is fighting a solution of global majors like Fringe of Israel,’ said Nargis, who sees operation of her company’s office in Singapore.
Mashuk Rahman, managing director of the Skynet Digital Private Limited, told New Age about half a dozen Bangladeshi companies were catering to overseas clients of advanced image editing services.
Skynet’s image editing service called PixArt Studios employ 45 Bangladeshi digital artists who work with critical Photoshop tools for color correction, soft layer masking, and image etching and stitching.
‘It is just arty manipulations on photos which have tens of millions of dollar worth global market,’ Mashuk said. ‘India and the Philippines earn tens of millions of dollars by sourcing image editing services to clients abroad.’
Annisul Huq, president of the Federation of Bangladesh Chambers of Commerce and Industry, feels Bangladesh’s software industry was warming up to take off.
‘Many global importers are still unaware that software and solutions are developed in Bangladesh,’ Annisul said, adding that this is a major barrier for Bangladesh’s significant presence on the European market worth several billion dollars.
Annisul owns a software development house, employing some 80 engineers, which serves foreign clients with enterprise resource planning and solutions.
‘The government should spend on local software and the Intellectual Property Rights Act should be implemented,’ he said.
He also said the government should invite globally renowned software companies to set up production facilities in Bangladesh.
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STOCK MARKET
Buying spree pushes Dhaka Stocks further up
The general index of the Dhaka Stock Exchange shot up by 109.63 points to reach a new high of 5745.36 points at the week’s opening on Sunday on speculative buying of some issues.
The benchmark index was advanced by 1.94 per cent as shares of the Beximco Group, Grameenphone, AB Bank, Premier Bank and Navana CNG were traded heavily.
The total value of transaction on the day increased substantially to Tk 1,613 crore from the past week’s closing of Tk 1,408 crore.
The amount of the total transaction decreased in the past week following intervention by the Securities and Exchange Commission that tightened margin loan. The total turnover hit a record Tk 1,690 crore on the second day of February.
Sunday’s other turnover leaders included Titas Gas, Prime Bank, NBL, NCC Bank and City Bank and some other issues from the pharmaceutical and power sectors.
The GP gained 7.40 per cent at the close of the day when the United Insurance advanced by 12.49 per cent, AB Bank 5.89, Navana CNG 4.25, Premier Bank 4.02, Summit Power 2.86, NCCB 2.39 and NBL 1.59 per cent.
Some brokers said investors were buying shares high speculation about lucrative dividends from the companies.
A stock broker said some of the investors were also buying high-priced shares based on rumours that the prices of the shares would go up.
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SURVEY REPORT
Bangladesh emerging IT outsourcing destination
A leading global auditing and business advisory group has listed Bangladesh as one of the emerging Asian destinations for sourcing software, information technology-enabled services and business process outsourcing.
The Amsterdam-based KPMG in a survey report placed Bangladesh with Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam, along with India on the list of emerging Asian IT services suppliers.
The survey report, Asia-Oceania Vision 2020: Enabling IT leadership through collaboration was released on Friday.
The KPMG, which prepared the report in association with the Tokyo-based Asian-Oceania Computing Industry Organization, included Cambodia, Laos, Mongolia, Myanmar and Nepal in the list of potential suppliers.
The report said the Asia-Oceania would become the largest supplier of IT and business process outsourcing services to the world by 2020. The Asia-Oceania is set to account for 74.5 per cent of global IT services demand by 2020.
The report showed a comparison of age of people among 15 Asian countries to link prospect of IT services business.
It found that only 5.6 per cent of Bangladeshis are aged 65 and above. Such aging percentage is 5.6 in the Philippines, 6.5 in India, 13.8 in Thailand and 29.5 in Japan.
The report analyzed that countries like Bangladesh which have a good pool of young people, should stay in the list of Asia IT leaders.
The report said huge IT enthusiastic young people and rapid acceptance of IT services in Bangladesh were advantages for the country to be an IT service exporting country.
‘Our report looks at the current growth and future prospects for the IT industry in surveyed countries over the years and current trends influencing the industry have been examined,’ the KPMG said.
The report, however, warned that climate change, poverty and inequality, infrastructure deficits were bottlenecks to Bangladesh’s growth and these impediments should be tackled to become one the leading IT services sources.
The Denmark ambassador to Bangladesh, Einer H Jensen, observed Bangladesh’s IT industry had a ‘good start’ on the global outsourcing market in recent times. Some Danish companies are working with around 20 Bangladeshi companies to develop and outsource software and IT-enabled services.
‘It [Bangladesh] could be a preferred destination for outsourcing in the near future,’ he told New Age.
Citing a recent World Bank report, he said more than 8,000 Bangladeshi young software developers had found jobs in the industry in the past two years and nearly 1,000 of them were working in Denmark-Bangladesh IT joint ventures.
Industry sources said Bangladeshi IT industry had also developed business relation with clients in Japan and other parts in the world along.
Safquat Haider, a director of the Bangladesh Association of Software and Information Services, said the IT potentials of Bangladesh had increasingly been pointed out by industry monitors globally.
‘The IT industry is warming up for a breakthrough, as global clients are calling local companies increasingly and a significant local market is also being readied,’ said Haider, whose IT company, CIPROCO develops telecommunication, geographic information system and Enterprise resource planning solutions for clients at home and abroad.
-----------------------------------------------------
FOCUS
Consumer rights protection department starts work March 15
The department of consumer rights protection will start functioning from Mach 15 as it needs more time to prepare guidelines and logistics, acting secretary of commerce ministry Ghulam Hussain said on Sunday.
The department, which will deal with consumers related problems, was supposed to go on operation from January 1, 2010.
Last November, commerce minister Faruk Khan had told reporters that consumers might be able to lodge complaints through SMS, internet and letters with the new department.
The acting commerce secretary, however, said proposals for guidelines and logistics for the new body have just been submitted for approval.
The proposals were discussed by a 21-member consumer rights protection authority headed by the commerce minister at a meeting on the day.
The meeting decided to observe the international consumer protection day on March 15 with an elaborate programme including functioning of the department.
The department has been set up in line with the much talked about Consumer Protection Act which was passed in parliament last year. The 21-member national consumer rights protection council was also formed in the light of the law.
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WORLD ECONOMY
China’s economic rise has silver lining for Japan
China is on the verge of unseating Japan as the world’s number two economy, but student Shi Minfei is one reason why Beijing’s rapid growth is not all bad news for its deflation-hit neighbor.
With Japan’s consumers keeping a tight hold on their purse strings, leaving the country as reliant as ever on exports, Chinese tourists like Shi are a rare example of good news for the country’s long-suffering retailers.
The 20-year-old engineering student from Shanghai said she had splurged about 300,000 yen ($3,300) on clothing, bags, shoes and cosmetics during her visit to Japan.
‘I’m going mostly to shopping malls,’ Shi said as she hopped aboard a tour bus in downtown Tokyo, adding that the Japanese capital still has an edge over Shanghai when it comes to splashing cash.
Another visitor, a 42-year-old housewife from Beijing, said she had spent 2,00,000 yen on ‘Gundam’ combat robot toys for her 12-year-old son, out of a shopping budget for the trip of up to 5,00,000 yen.
It is a welcome boost for a Japanese economy that has suffered two decades of malaise after its stock market and real estate bubble burst in the early 1990s, ushering in years of deflation and sluggish economic growth.
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BANGLADESH SPECIAL
Japan pledges Tk 3,000 crore for 4 projects
Japan on Sunday pledged Tk 3,000 crore in loans for four projects in Bangladesh, including two new power plants with 350 megawatts of generation capacities.
Japanese charge d’Affairs Harumitsu Hida made the pledge for the 31st Japanese yen Loan Package to Bangladesh when he called on finance minister Abul Maal Abdul Muhith at the latter’s national economic council office.
The package amounts to 38,792 million yen (Tk 29,975 million, or $433 million equivalent).
The projects are Tk 7,028 million Chittagong city outer ring road project, Tk 1,706 million Bheramara combined cycle power plant development project, Tk 10,231 million rural electrification upgradation project and Tk 11,008 million south western Bangladesh rural development project.
The interest rate is only 0.01 per cent per annum and the repayment period is 40 years inclusive of 10-year grace period for the four loans.
The new loan package reflects Japan’s strong intention to support development, further prosperity and poverty reduction in Bangladesh.
In that context, the Japanese government hopes the Bangladesh Development Forum starting today would be in success providing good opportunities to explore concrete ways and means for development and poverty reduction in Bangladesh among government officials, development partners, NGOs and civil societies.
Commenting on these commitments, finance minister AMA Muhith said Japan made the pledge ahead of BDF 2010. ‘It’s good that we got the commitment from Japan government today, while other development partners made their commitments earlier.’
Chittagong City Outer Ring Road Project is unique as it would contribute a lot in uplift of the country through ensuring infrastructure development, he said adding the tender for this project would be invited next year.
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WORLD NEWS
German joblessness set to rise
The already high unemployment rate in Germany, Europe’s biggest economy, will rise further this year after the country suffered its worst post-war recession in 2009, a report said on Sunday.
Germany faces ‘several difficult months when we could see the jobless getting close to some four million,’ labour Minister Ursula von der Leyen told the Bild am Sonntag newspaper.
In January, the unadjusted unemployment rate — the reference for public debate — jumped to 8.6 per cent, with a total of 3.617 million unemployed, from 7.8 per cent in December, according to official figures.
Germany’s export-driven economy shrank five per cent last year in the fallout from the global slump but the government expects it to grow 1.4 per cent this year.
Analysts have said they expect the jobless problem to get worse given the tepid rebound anticipated for 2010.
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MIDDLE EAST ECONOMY
Zain considering Bharti’s bid
Kuwaiti telecommunications operator Zain said Sunday it was considering an offer for most of its Africa businesses, a day after local media reported a bid was on the table from India’s Bharti Airtel worth up to $10.7 billion.
Africa has become a key region for the Gulf mobile phone operator, known officially as Mobile Tele-
Communications Co and a sale of its businesses there would slash the number of countries where the company operates by more than half.
A deal would not be entirely unexpected, however. Zain has been hinting at plans to offload its African assets for months, saying in July it was putting its holdings on the continent under ‘strategic review.’
The company provided few details about the latest bid.
‘Zain has received an offer in relation to its operations in Africa excluding Morocco and Sudan. The Board of Directors of Zain will be discussing this proposal’ Sunday afternoon, the company said. ‘Further announcements will be made as appropriate.’
A Zain spokesman declined to comment further, citing confidentiality agreements. Word of a new offer comes less than two weeks after Zain’s chief executive, Saad al-Barrak, announced his resignation. He served as both managing director and deputy chairman, giving him considerable influence over the company’s direction since his appointment in 2002. No reason was given for his departure.
Al-Barrak was replaced as chief executive by Kuwait’s former communication, electricity and water minister, Nabil Bin Salama, last week. Sunday is his first day as CEO.
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ODDLY ENOUGH
Singapore rolls dice on first casino
Singapore opened the first of two casino resorts Sunday, part of a multi-billion US dollar bet to transform itself into a hot tourist destination and reduce the economy’s reliance on manufacturing.
The casino at Resorts World Sentosa welcomed its first punter — a middle aged Singaporean woman — at the auspicious time of 12:18pm (0418GMT) on the first day of the Chinese Lunar New Year.
Singapore, host to thousands of multinational corporations, is already a major travel draw because of its reputation for safety, cleanliness and efficiency, as well as man-made attractions such as top-end shopping malls.
However, it is a tiny island which lacks the white-sand beaches and breath-taking scenery found in neighboring countries like Indonesia and Malaysia and the government is continually searching for new ideas to create a buzz about the city-state.
In 2008 it made sporting history when it hosted the world’s first Formula One night race.
It has built the world’s biggest observation wheel, the Singapore flyer, and an arts venue and has given its prime Orchard Road shopping belt a makeover.
Now it plans a landscaped area called Gardens by the Bay near the Marina Barrage built in 2008.
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MIDDLE EAST
Saudi bank chief defends dollar as key reserve currency
The Saudi central bank chief on Sunday defended the US dollar’s role as the world’s main reserve currency and rejected calls for the International Monetary Fund’s SDR to be given reserve status.
But he said the euro is growing in importance and supported eventually diversifying reserve currencies.
‘The dollar is still preeminent in its role as a reserve currency,’ said Mohammed al-Jasser, the head of the Saudi Arabian Monetary Authority.
‘The dollar has not been meaningfully challenged since World War II,’ he said.
Jasser said the SDR — the IMF’s Special Drawing Rights — serves few of the functions necessary to be an acceptable global reserve currency, such as offering opportunities as an investment medium or being used in settling trade.
‘SDRs are not a currency,’ he said.
China, which has huge exposure to the crisis-weakened dollar in its trade and reserves, has called for an enhanced role for the SDR but Jasser said that ‘would take years.’
‘It is unrealistic that it could provide the solution,’ he said.
Saudi Arabia, the world’s second largest oil producer, is overwhelmingly dependent on dollar-denominated oil exports for state revenues.
The country holds nearly 400 billion dollars in foreign reserves, mostly dollar-denominated.
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ECONOMIC CRISIS
Greek crisis forces change in EU economy pact
EU officials on Saturday pledged a toughening of monetary policy in the wake of Greece’s economic crisis, raising the possibility of modifying the bloc’s stability pact.
The EU Energy Commissioner Guenther Oettinger said protecting the stability of the euro was crucial, and if member states refused to start cutting their deficits in 2011, European bodies should be given powers to intervene.
The lesson to draw from the Greek crisis was that members of the 27-nation bloc should pay more attention to public finances and develop new budget structures, Oettinger told Germany’s Welt am Sonntag newspaper.
‘EU states must start reducing their deficit in 2011. If they refuse, the stability pact must be changed to allow European authorities to intervene better in national policy. The stability of the euro must be guaranteed,’ he said.
‘It is not possible for public debt to explode and for growing debts to be paid by a small number of taxpayers.’
Jean-Claude Juncker, the chairman of the Eurogroup panel of finance ministers, said the group had failed to pay enough attention to the Greek crisis, calling it ‘quite a serious error’.
Juncker told the German daily Sueddeutsche Zeitung that ‘uncontrollable’ consequences would follow if Greece were to quit the eurozone, and pledged to keep Athens up to the mark in its efforts to reduce its yawning deficit.
Juncker, who is also Luxembourg’s prime minister, said the Eurogroup, the panel of finance ministers whose countries use the euro, would monitor ‘much more intensively and severely’ the performance of its members. He also warned ‘a monetary zone cannot last for long if the differences in performance of the various national economies get too great.’
If Greece were forced to abandon the single European currency, ‘the effects would be like an earthquake, uncontrollable’, he said, triggering an ‘extremely negative’ reaction from the markets.’
Bank of Italy Governor Mario Draghi warned Saturday that the return to economic growth remained fragile in the euro region.
The European Commission said Friday it was preparing new measures to boost coordination among eurozone member countries and supervise their economic policies in light of the Greek debt crisis.
A pledge Thursday by EU leaders to help Athens battle its debt failed to convince currency markets, with the euro falling to 1.3532 dollars, its lowest level in nearly nine months, on Friday in London.
While other eurozone members, notably Spain, Portugal and Ireland, are struggling under a debt mountain, most fears centre on Greece, which had a deficit of 12.7 per cent of output in 2009 and debt of 113 per cent.
New figures also showed economic growth in the 16-nation bloc had slowed to a meager 0.1 per cent in the fourth quarter of 2009, data agency Eurostat said.
The figures showed that recovery in Germany, Europe’s biggest economy, had stopped, the Italian economy went back into contraction, and in Greece recession deepened to shrink by 0.8 per cent.
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SHORT NEWS
Toyota finds no problem with electronics
Toyota Motor has submitted a letter to the US Congress denying there was a fault with the electronics in millions of vehicles it has recalled due to problems with the accelerator, reports said Sunday.
In its letter submitted to the US House Oversight and Government Reform Committee, which is investigating the Toyota recalls, the automaker said it ‘is convinced that there is no problem’ with the electronics in its vehicles, the Japanese dailies Yomiuri and Nikkei reported, without disclosing sources.
Toyota also referred to its plans to expand the number of vehicles equipped with computerized brake override systems designed to prevent unintended acceleration, stressing its drive to improve safety measures on its vehicles, the Yomiuri said.
The reports came as embattled Toyota president Akio Toyoda was reportedly prepared to testify at US congressional hearings if formally asked to do so, with the automaker facing intense pressure in the United States over the rash of recalls.
The Japanese giant has recalled millions of vehicles worldwide in past months due to problems linked to accelerator and brake functions, sullying the company’s safety reputation.
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Philippines looking to revive coffee industry
After watching its neighbors become global coffee heavyweights, the Philippines is taking tentative steps towards regaining its status as a formidable grower of the bean.
However, that era is a long way back for the Philippines, among the top five coffee exporters in the world in the 1880s after Spanish friars brought beans with them to their colonial outpost.
The Philippine Coffee Board, an industry group spearheading the revival attempt, knows the country cannot compete with the likes of current regional exporting giants Indonesia and Vietnam in volume.
So they are aiming for niche markets and targeting the fast-growing number of young Filipinos who crowd cafes across the country of 93 million people.
‘We have a lot of exotic coffees and that is the way to present our products,’ said Josefina Reyes, director of the board.
Coffee board co-chairwoman Pacita Juan said the Philippines had long had a thriving coffee-drinking culture with a populace that favored coffee over tea, and this was becoming stronger as society modernized.
‘People are drinking more coffee with the change in lifestyles. People are working 24-7 in call centers so there is more opportunity to drink coffee. Even hotels are serving better coffee instead of just instant coffee,’ she told the AFP.
The Coffee Board is promoting ‘Kape Isla,’ which loosely translates to ‘Island Coffee’ and is a trademark to distinguish specialty coffees grown in the Philippines.
It is also helping entrepreneurs set up small coffee shops across the country where they can offer their own regional blends.
In this way, they can compete with the global giants such as Starbucks, whose local outlets sell specialty coffees generally only from Africa and South America.
The gourmet coffee products that the Philippines are starting to offer include special ‘premium arabica’ blends and the strong ‘barako’ bean that is favored by Filipinos, Juan said.
Special varieties found only in isolated areas are also being developed, as is production of ‘civet coffee’ — made from beans eaten and excreted by civet cats.
The country had enjoyed a coffee growing boom in the 1980s when it benefited from special export quotas and prices set under the International Coffee Agreement.
‘Back then, a lot of people in coffee got rich. Everyone (in the industry) was buying refrigerators and television sets,’ recalled wholesale coffee buyer Antonio Mawak, based south of Manila.
But in 1989 the quota system collapsed and the Philippines found it unable to compete against cheaper coffee from countries such as Vietnam.
‘Then our farmers started cutting down their coffee trees and planting their farms with pineapple,’ Mawak said.
Although global prices have since improved, coffee plantations in the Philippines have shrunk — giving way to other crops or even to urbanization—and the country has been forced to rely on imports from mainly its neighbors.
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Serbia hopes to become China’s gateway to Europe
Following the same pattern applied in Asia and Africa, China is now seeking to expand its influence in the Balkans and Eastern Europe by cooperating on major infrastructure and energy projects.
Serbia is to be the site for China’s first multi-million euro (dollar) infrastructure project on the European continent after Belgrade and Beijing signed a preliminary contract to build a much needed bridge over the Danube in the capital.
With these investments and through a strategic partnership, signed last August when Serbian president Boris Tadic went to China — Serbia hopes to become China’s gateway to the Balkans and Europe.
‘The interest coincides in the fact that Serbia, with its specific geostrategic position and geographic location, is an ideal place for China to spread (business) from here to the (Balkans) region and Europe,’ Olivera Kiro of the Serbian Chamber of Commerce said.
‘As a part of China’s ‘go global’ strategy Europe has an important place and in that sense Serbia is a good choice’ to start with, Kiro told the AFP. Serbia, the largest country in the western Balkans, has free-trade agreements with the European Union, Russia, Belarus, Turkey, as well as with members of the European Free Trade Association.
‘Many Chinese enterprises are interested in coming here,’ Ren Yi, economic and commercial counsellor of China’s embassy in Belgrade, told the AFP.
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Economists urge Britain to cut deficit faster
Leading economists warned Sunday that Britain lacked a credible plan to cut its budget deficit, in a damaging attack on Prime Minister Gordon Brown’s government just months before a tough election fight.
In an open letter to The Sunday Times newspaper, a group of academics and policymakers said that whoever wins the forthcoming vote must cut the deficit faster than Brown’s finance minister, Alistair Darling, has so far envisaged.
‘In the absence of a credible plan, there is a risk that a loss of confidence in the UK’s economic policy framework will contribute to higher long-term interest rates and/or currency instability, which could undermine the recovery,’ the letter says.
‘In order to minimize this risk and support a sustainable recovery, the next government should set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report.’
Darling is set to announce his latest annual budget in March, just weeks before an election which must be held by early June and is widely expected to take place on May 6.
Britain exited its longest recession on record in the fourth quarter of 2009 with growth of just 0.1 per cent, and the economy is set to be a key electoral battleground between Brown’s Labour party and the opposition Conservatives. Sunday’s letter, although bipartisan, appears to support Conservative proposals to cut spending faster than Labour.
The letter said the timing of cuts should be ‘sensitive to developments in the economy’ and mindful of harming the most vulnerable, but it said the aim should be to start reducing spending in the 2010-2011 fiscal year.
Among the letter’s signatories are Kenneth Rogoff, a former chief economist at the International Monetary Fund; Howard Davies, director of the London School of Economics and former head of the Financial Services Authority; and Roger Bootle, former chief economist at HSBC.
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BANGLADESH NEWS
IT industry set to take off on global market
Bangladesh’s software and information technology-enabled services industry is set to take off with some companies entering the world market and a significant portion of the local market getting readied, industry people said.
Industry output, however, remained insignificant in two decades and entrepreneurs said businesses were earning the capability to cater to clients at home and abroad.
‘The industry has come to a take-off stage now,’ said Safquat Haider, a director of the Bangladesh Association of Software and Information Services.
He also referred to BASIS Softexpo 2010, which ended on Sunday, where several dozen Bangladeshi technology enterprises put on display the latest versions of their programs and IT enabled services.
Many local software houses are now successfully developing world-standard financial solutions and business applications, Safquat said. ‘There are not many such cases, but local companies have talented people to develop GIS and advanced ERP solutions and telecommunications software.’
Anisur Rahman Khan, senior marketing manager at the Leads Corporation, said a significant portion of the local market was getting readied and enterprises had also matured to offer world-standard solutions.
At least four local banks are running their core operation with solutions developed by the Leads Corporation, said Anisur, who has been in software marketing for more than decade and a half.
He said banking software developed in Bangladesh had a hard time fighting the software developed abroad, especially in India, although local solutions were cheaper, Anisur said. ‘Bankers now have understood that local solutions are dependable.’
Bangladesh’s software and ITES export amounted to only $33 million or Tk 230 core in 2009. The domestic software market was estimated worth less than Tk 500 crore. Local solutions account for less than a half of the market.
Mannujan Nargis, director at the Rave Systems, said internet telephony or IP solutions such as switching, billing, byte server operation and mobile VoIP dialers developed in Bangladesh were selling well on the world market.
She said her organization had a presence on the European market and dominance on the Middle-East market with several IP operation management solutions.
‘One of our solutions is fighting a solution of global majors like Fringe of Israel,’ said Nargis, who sees operation of her company’s office in Singapore.
Mashuk Rahman, managing director of the Skynet Digital Private Limited, told New Age about half a dozen Bangladeshi companies were catering to overseas clients of advanced image editing services.
Skynet’s image editing service called PixArt Studios employ 45 Bangladeshi digital artists who work with critical Photoshop tools for color correction, soft layer masking, and image etching and stitching.
‘It is just arty manipulations on photos which have tens of millions of dollar worth global market,’ Mashuk said. ‘India and the Philippines earn tens of millions of dollars by sourcing image editing services to clients abroad.’
Annisul Huq, president of the Federation of Bangladesh Chambers of Commerce and Industry, feels Bangladesh’s software industry was warming up to take off.
‘Many global importers are still unaware that software and solutions are developed in Bangladesh,’ Annisul said, adding that this is a major barrier for Bangladesh’s significant presence on the European market worth several billion dollars.
Annisul owns a software development house, employing some 80 engineers, which serves foreign clients with enterprise resource planning and solutions.
‘The government should spend on local software and the Intellectual Property Rights Act should be implemented,’ he said.
He also said the government should invite globally renowned software companies to set up production facilities in Bangladesh.
-----------------------------------------------------
STOCK MARKET
Buying spree pushes Dhaka Stocks further up
The general index of the Dhaka Stock Exchange shot up by 109.63 points to reach a new high of 5745.36 points at the week’s opening on Sunday on speculative buying of some issues.
The benchmark index was advanced by 1.94 per cent as shares of the Beximco Group, Grameenphone, AB Bank, Premier Bank and Navana CNG were traded heavily.
The total value of transaction on the day increased substantially to Tk 1,613 crore from the past week’s closing of Tk 1,408 crore.
The amount of the total transaction decreased in the past week following intervention by the Securities and Exchange Commission that tightened margin loan. The total turnover hit a record Tk 1,690 crore on the second day of February.
Sunday’s other turnover leaders included Titas Gas, Prime Bank, NBL, NCC Bank and City Bank and some other issues from the pharmaceutical and power sectors.
The GP gained 7.40 per cent at the close of the day when the United Insurance advanced by 12.49 per cent, AB Bank 5.89, Navana CNG 4.25, Premier Bank 4.02, Summit Power 2.86, NCCB 2.39 and NBL 1.59 per cent.
Some brokers said investors were buying shares high speculation about lucrative dividends from the companies.
A stock broker said some of the investors were also buying high-priced shares based on rumours that the prices of the shares would go up.
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SURVEY REPORT
Bangladesh emerging IT outsourcing destination
A leading global auditing and business advisory group has listed Bangladesh as one of the emerging Asian destinations for sourcing software, information technology-enabled services and business process outsourcing.
The Amsterdam-based KPMG in a survey report placed Bangladesh with Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam, along with India on the list of emerging Asian IT services suppliers.
The survey report, Asia-Oceania Vision 2020: Enabling IT leadership through collaboration was released on Friday.
The KPMG, which prepared the report in association with the Tokyo-based Asian-Oceania Computing Industry Organization, included Cambodia, Laos, Mongolia, Myanmar and Nepal in the list of potential suppliers.
The report said the Asia-Oceania would become the largest supplier of IT and business process outsourcing services to the world by 2020. The Asia-Oceania is set to account for 74.5 per cent of global IT services demand by 2020.
The report showed a comparison of age of people among 15 Asian countries to link prospect of IT services business.
It found that only 5.6 per cent of Bangladeshis are aged 65 and above. Such aging percentage is 5.6 in the Philippines, 6.5 in India, 13.8 in Thailand and 29.5 in Japan.
The report analyzed that countries like Bangladesh which have a good pool of young people, should stay in the list of Asia IT leaders.
The report said huge IT enthusiastic young people and rapid acceptance of IT services in Bangladesh were advantages for the country to be an IT service exporting country.
‘Our report looks at the current growth and future prospects for the IT industry in surveyed countries over the years and current trends influencing the industry have been examined,’ the KPMG said.
The report, however, warned that climate change, poverty and inequality, infrastructure deficits were bottlenecks to Bangladesh’s growth and these impediments should be tackled to become one the leading IT services sources.
The Denmark ambassador to Bangladesh, Einer H Jensen, observed Bangladesh’s IT industry had a ‘good start’ on the global outsourcing market in recent times. Some Danish companies are working with around 20 Bangladeshi companies to develop and outsource software and IT-enabled services.
‘It [Bangladesh] could be a preferred destination for outsourcing in the near future,’ he told New Age.
Citing a recent World Bank report, he said more than 8,000 Bangladeshi young software developers had found jobs in the industry in the past two years and nearly 1,000 of them were working in Denmark-Bangladesh IT joint ventures.
Industry sources said Bangladeshi IT industry had also developed business relation with clients in Japan and other parts in the world along.
Safquat Haider, a director of the Bangladesh Association of Software and Information Services, said the IT potentials of Bangladesh had increasingly been pointed out by industry monitors globally.
‘The IT industry is warming up for a breakthrough, as global clients are calling local companies increasingly and a significant local market is also being readied,’ said Haider, whose IT company, CIPROCO develops telecommunication, geographic information system and Enterprise resource planning solutions for clients at home and abroad.
-----------------------------------------------------
FOCUS
Consumer rights protection department starts work March 15
The department of consumer rights protection will start functioning from Mach 15 as it needs more time to prepare guidelines and logistics, acting secretary of commerce ministry Ghulam Hussain said on Sunday.
The department, which will deal with consumers related problems, was supposed to go on operation from January 1, 2010.
Last November, commerce minister Faruk Khan had told reporters that consumers might be able to lodge complaints through SMS, internet and letters with the new department.
The acting commerce secretary, however, said proposals for guidelines and logistics for the new body have just been submitted for approval.
The proposals were discussed by a 21-member consumer rights protection authority headed by the commerce minister at a meeting on the day.
The meeting decided to observe the international consumer protection day on March 15 with an elaborate programme including functioning of the department.
The department has been set up in line with the much talked about Consumer Protection Act which was passed in parliament last year. The 21-member national consumer rights protection council was also formed in the light of the law.
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WORLD ECONOMY
China’s economic rise has silver lining for Japan
China is on the verge of unseating Japan as the world’s number two economy, but student Shi Minfei is one reason why Beijing’s rapid growth is not all bad news for its deflation-hit neighbor.
With Japan’s consumers keeping a tight hold on their purse strings, leaving the country as reliant as ever on exports, Chinese tourists like Shi are a rare example of good news for the country’s long-suffering retailers.
The 20-year-old engineering student from Shanghai said she had splurged about 300,000 yen ($3,300) on clothing, bags, shoes and cosmetics during her visit to Japan.
‘I’m going mostly to shopping malls,’ Shi said as she hopped aboard a tour bus in downtown Tokyo, adding that the Japanese capital still has an edge over Shanghai when it comes to splashing cash.
Another visitor, a 42-year-old housewife from Beijing, said she had spent 2,00,000 yen on ‘Gundam’ combat robot toys for her 12-year-old son, out of a shopping budget for the trip of up to 5,00,000 yen.
It is a welcome boost for a Japanese economy that has suffered two decades of malaise after its stock market and real estate bubble burst in the early 1990s, ushering in years of deflation and sluggish economic growth.
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BANGLADESH SPECIAL
Japan pledges Tk 3,000 crore for 4 projects
Japan on Sunday pledged Tk 3,000 crore in loans for four projects in Bangladesh, including two new power plants with 350 megawatts of generation capacities.
Japanese charge d’Affairs Harumitsu Hida made the pledge for the 31st Japanese yen Loan Package to Bangladesh when he called on finance minister Abul Maal Abdul Muhith at the latter’s national economic council office.
The package amounts to 38,792 million yen (Tk 29,975 million, or $433 million equivalent).
The projects are Tk 7,028 million Chittagong city outer ring road project, Tk 1,706 million Bheramara combined cycle power plant development project, Tk 10,231 million rural electrification upgradation project and Tk 11,008 million south western Bangladesh rural development project.
The interest rate is only 0.01 per cent per annum and the repayment period is 40 years inclusive of 10-year grace period for the four loans.
The new loan package reflects Japan’s strong intention to support development, further prosperity and poverty reduction in Bangladesh.
In that context, the Japanese government hopes the Bangladesh Development Forum starting today would be in success providing good opportunities to explore concrete ways and means for development and poverty reduction in Bangladesh among government officials, development partners, NGOs and civil societies.
Commenting on these commitments, finance minister AMA Muhith said Japan made the pledge ahead of BDF 2010. ‘It’s good that we got the commitment from Japan government today, while other development partners made their commitments earlier.’
Chittagong City Outer Ring Road Project is unique as it would contribute a lot in uplift of the country through ensuring infrastructure development, he said adding the tender for this project would be invited next year.
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WORLD NEWS
German joblessness set to rise
The already high unemployment rate in Germany, Europe’s biggest economy, will rise further this year after the country suffered its worst post-war recession in 2009, a report said on Sunday.
Germany faces ‘several difficult months when we could see the jobless getting close to some four million,’ labour Minister Ursula von der Leyen told the Bild am Sonntag newspaper.
In January, the unadjusted unemployment rate — the reference for public debate — jumped to 8.6 per cent, with a total of 3.617 million unemployed, from 7.8 per cent in December, according to official figures.
Germany’s export-driven economy shrank five per cent last year in the fallout from the global slump but the government expects it to grow 1.4 per cent this year.
Analysts have said they expect the jobless problem to get worse given the tepid rebound anticipated for 2010.
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MIDDLE EAST ECONOMY
Zain considering Bharti’s bid
Kuwaiti telecommunications operator Zain said Sunday it was considering an offer for most of its Africa businesses, a day after local media reported a bid was on the table from India’s Bharti Airtel worth up to $10.7 billion.
Africa has become a key region for the Gulf mobile phone operator, known officially as Mobile Tele-
Communications Co and a sale of its businesses there would slash the number of countries where the company operates by more than half.
A deal would not be entirely unexpected, however. Zain has been hinting at plans to offload its African assets for months, saying in July it was putting its holdings on the continent under ‘strategic review.’
The company provided few details about the latest bid.
‘Zain has received an offer in relation to its operations in Africa excluding Morocco and Sudan. The Board of Directors of Zain will be discussing this proposal’ Sunday afternoon, the company said. ‘Further announcements will be made as appropriate.’
A Zain spokesman declined to comment further, citing confidentiality agreements. Word of a new offer comes less than two weeks after Zain’s chief executive, Saad al-Barrak, announced his resignation. He served as both managing director and deputy chairman, giving him considerable influence over the company’s direction since his appointment in 2002. No reason was given for his departure.
Al-Barrak was replaced as chief executive by Kuwait’s former communication, electricity and water minister, Nabil Bin Salama, last week. Sunday is his first day as CEO.
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ODDLY ENOUGH
Singapore rolls dice on first casino
Singapore opened the first of two casino resorts Sunday, part of a multi-billion US dollar bet to transform itself into a hot tourist destination and reduce the economy’s reliance on manufacturing.
The casino at Resorts World Sentosa welcomed its first punter — a middle aged Singaporean woman — at the auspicious time of 12:18pm (0418GMT) on the first day of the Chinese Lunar New Year.
Singapore, host to thousands of multinational corporations, is already a major travel draw because of its reputation for safety, cleanliness and efficiency, as well as man-made attractions such as top-end shopping malls.
However, it is a tiny island which lacks the white-sand beaches and breath-taking scenery found in neighboring countries like Indonesia and Malaysia and the government is continually searching for new ideas to create a buzz about the city-state.
In 2008 it made sporting history when it hosted the world’s first Formula One night race.
It has built the world’s biggest observation wheel, the Singapore flyer, and an arts venue and has given its prime Orchard Road shopping belt a makeover.
Now it plans a landscaped area called Gardens by the Bay near the Marina Barrage built in 2008.
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MIDDLE EAST
Saudi bank chief defends dollar as key reserve currency
The Saudi central bank chief on Sunday defended the US dollar’s role as the world’s main reserve currency and rejected calls for the International Monetary Fund’s SDR to be given reserve status.
But he said the euro is growing in importance and supported eventually diversifying reserve currencies.
‘The dollar is still preeminent in its role as a reserve currency,’ said Mohammed al-Jasser, the head of the Saudi Arabian Monetary Authority.
‘The dollar has not been meaningfully challenged since World War II,’ he said.
Jasser said the SDR — the IMF’s Special Drawing Rights — serves few of the functions necessary to be an acceptable global reserve currency, such as offering opportunities as an investment medium or being used in settling trade.
‘SDRs are not a currency,’ he said.
China, which has huge exposure to the crisis-weakened dollar in its trade and reserves, has called for an enhanced role for the SDR but Jasser said that ‘would take years.’
‘It is unrealistic that it could provide the solution,’ he said.
Saudi Arabia, the world’s second largest oil producer, is overwhelmingly dependent on dollar-denominated oil exports for state revenues.
The country holds nearly 400 billion dollars in foreign reserves, mostly dollar-denominated.
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ECONOMIC CRISIS
Greek crisis forces change in EU economy pact
EU officials on Saturday pledged a toughening of monetary policy in the wake of Greece’s economic crisis, raising the possibility of modifying the bloc’s stability pact.
The EU Energy Commissioner Guenther Oettinger said protecting the stability of the euro was crucial, and if member states refused to start cutting their deficits in 2011, European bodies should be given powers to intervene.
The lesson to draw from the Greek crisis was that members of the 27-nation bloc should pay more attention to public finances and develop new budget structures, Oettinger told Germany’s Welt am Sonntag newspaper.
‘EU states must start reducing their deficit in 2011. If they refuse, the stability pact must be changed to allow European authorities to intervene better in national policy. The stability of the euro must be guaranteed,’ he said.
‘It is not possible for public debt to explode and for growing debts to be paid by a small number of taxpayers.’
Jean-Claude Juncker, the chairman of the Eurogroup panel of finance ministers, said the group had failed to pay enough attention to the Greek crisis, calling it ‘quite a serious error’.
Juncker told the German daily Sueddeutsche Zeitung that ‘uncontrollable’ consequences would follow if Greece were to quit the eurozone, and pledged to keep Athens up to the mark in its efforts to reduce its yawning deficit.
Juncker, who is also Luxembourg’s prime minister, said the Eurogroup, the panel of finance ministers whose countries use the euro, would monitor ‘much more intensively and severely’ the performance of its members. He also warned ‘a monetary zone cannot last for long if the differences in performance of the various national economies get too great.’
If Greece were forced to abandon the single European currency, ‘the effects would be like an earthquake, uncontrollable’, he said, triggering an ‘extremely negative’ reaction from the markets.’
Bank of Italy Governor Mario Draghi warned Saturday that the return to economic growth remained fragile in the euro region.
The European Commission said Friday it was preparing new measures to boost coordination among eurozone member countries and supervise their economic policies in light of the Greek debt crisis.
A pledge Thursday by EU leaders to help Athens battle its debt failed to convince currency markets, with the euro falling to 1.3532 dollars, its lowest level in nearly nine months, on Friday in London.
While other eurozone members, notably Spain, Portugal and Ireland, are struggling under a debt mountain, most fears centre on Greece, which had a deficit of 12.7 per cent of output in 2009 and debt of 113 per cent.
New figures also showed economic growth in the 16-nation bloc had slowed to a meager 0.1 per cent in the fourth quarter of 2009, data agency Eurostat said.
The figures showed that recovery in Germany, Europe’s biggest economy, had stopped, the Italian economy went back into contraction, and in Greece recession deepened to shrink by 0.8 per cent.
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SHORT NEWS
Toyota finds no problem with electronics
Toyota Motor has submitted a letter to the US Congress denying there was a fault with the electronics in millions of vehicles it has recalled due to problems with the accelerator, reports said Sunday.
In its letter submitted to the US House Oversight and Government Reform Committee, which is investigating the Toyota recalls, the automaker said it ‘is convinced that there is no problem’ with the electronics in its vehicles, the Japanese dailies Yomiuri and Nikkei reported, without disclosing sources.
Toyota also referred to its plans to expand the number of vehicles equipped with computerized brake override systems designed to prevent unintended acceleration, stressing its drive to improve safety measures on its vehicles, the Yomiuri said.
The reports came as embattled Toyota president Akio Toyoda was reportedly prepared to testify at US congressional hearings if formally asked to do so, with the automaker facing intense pressure in the United States over the rash of recalls.
The Japanese giant has recalled millions of vehicles worldwide in past months due to problems linked to accelerator and brake functions, sullying the company’s safety reputation.
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Philippines looking to revive coffee industry
After watching its neighbors become global coffee heavyweights, the Philippines is taking tentative steps towards regaining its status as a formidable grower of the bean.
However, that era is a long way back for the Philippines, among the top five coffee exporters in the world in the 1880s after Spanish friars brought beans with them to their colonial outpost.
The Philippine Coffee Board, an industry group spearheading the revival attempt, knows the country cannot compete with the likes of current regional exporting giants Indonesia and Vietnam in volume.
So they are aiming for niche markets and targeting the fast-growing number of young Filipinos who crowd cafes across the country of 93 million people.
‘We have a lot of exotic coffees and that is the way to present our products,’ said Josefina Reyes, director of the board.
Coffee board co-chairwoman Pacita Juan said the Philippines had long had a thriving coffee-drinking culture with a populace that favored coffee over tea, and this was becoming stronger as society modernized.
‘People are drinking more coffee with the change in lifestyles. People are working 24-7 in call centers so there is more opportunity to drink coffee. Even hotels are serving better coffee instead of just instant coffee,’ she told the AFP.
The Coffee Board is promoting ‘Kape Isla,’ which loosely translates to ‘Island Coffee’ and is a trademark to distinguish specialty coffees grown in the Philippines.
It is also helping entrepreneurs set up small coffee shops across the country where they can offer their own regional blends.
In this way, they can compete with the global giants such as Starbucks, whose local outlets sell specialty coffees generally only from Africa and South America.
The gourmet coffee products that the Philippines are starting to offer include special ‘premium arabica’ blends and the strong ‘barako’ bean that is favored by Filipinos, Juan said.
Special varieties found only in isolated areas are also being developed, as is production of ‘civet coffee’ — made from beans eaten and excreted by civet cats.
The country had enjoyed a coffee growing boom in the 1980s when it benefited from special export quotas and prices set under the International Coffee Agreement.
‘Back then, a lot of people in coffee got rich. Everyone (in the industry) was buying refrigerators and television sets,’ recalled wholesale coffee buyer Antonio Mawak, based south of Manila.
But in 1989 the quota system collapsed and the Philippines found it unable to compete against cheaper coffee from countries such as Vietnam.
‘Then our farmers started cutting down their coffee trees and planting their farms with pineapple,’ Mawak said.
Although global prices have since improved, coffee plantations in the Philippines have shrunk — giving way to other crops or even to urbanization—and the country has been forced to rely on imports from mainly its neighbors.
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Serbia hopes to become China’s gateway to Europe
Following the same pattern applied in Asia and Africa, China is now seeking to expand its influence in the Balkans and Eastern Europe by cooperating on major infrastructure and energy projects.
Serbia is to be the site for China’s first multi-million euro (dollar) infrastructure project on the European continent after Belgrade and Beijing signed a preliminary contract to build a much needed bridge over the Danube in the capital.
With these investments and through a strategic partnership, signed last August when Serbian president Boris Tadic went to China — Serbia hopes to become China’s gateway to the Balkans and Europe.
‘The interest coincides in the fact that Serbia, with its specific geostrategic position and geographic location, is an ideal place for China to spread (business) from here to the (Balkans) region and Europe,’ Olivera Kiro of the Serbian Chamber of Commerce said.
‘As a part of China’s ‘go global’ strategy Europe has an important place and in that sense Serbia is a good choice’ to start with, Kiro told the AFP. Serbia, the largest country in the western Balkans, has free-trade agreements with the European Union, Russia, Belarus, Turkey, as well as with members of the European Free Trade Association.
‘Many Chinese enterprises are interested in coming here,’ Ren Yi, economic and commercial counsellor of China’s embassy in Belgrade, told the AFP.
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Economists urge Britain to cut deficit faster
Leading economists warned Sunday that Britain lacked a credible plan to cut its budget deficit, in a damaging attack on Prime Minister Gordon Brown’s government just months before a tough election fight.
In an open letter to The Sunday Times newspaper, a group of academics and policymakers said that whoever wins the forthcoming vote must cut the deficit faster than Brown’s finance minister, Alistair Darling, has so far envisaged.
‘In the absence of a credible plan, there is a risk that a loss of confidence in the UK’s economic policy framework will contribute to higher long-term interest rates and/or currency instability, which could undermine the recovery,’ the letter says.
‘In order to minimize this risk and support a sustainable recovery, the next government should set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report.’
Darling is set to announce his latest annual budget in March, just weeks before an election which must be held by early June and is widely expected to take place on May 6.
Britain exited its longest recession on record in the fourth quarter of 2009 with growth of just 0.1 per cent, and the economy is set to be a key electoral battleground between Brown’s Labour party and the opposition Conservatives. Sunday’s letter, although bipartisan, appears to support Conservative proposals to cut spending faster than Labour.
The letter said the timing of cuts should be ‘sensitive to developments in the economy’ and mindful of harming the most vulnerable, but it said the aim should be to start reducing spending in the 2010-2011 fiscal year.
Among the letter’s signatories are Kenneth Rogoff, a former chief economist at the International Monetary Fund; Howard Davies, director of the London School of Economics and former head of the Financial Services Authority; and Roger Bootle, former chief economist at HSBC.
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