1 | P a g e

National News 26 lakh youths jobless

Finance minister: Uniform VAT rate will remain at 15%

15% uniform VAT wont affect prices of essentials: Muhith

Wealth surcharge to go up

Govt to forfeit Tk 10,000cr for rise in turnover ceilings: NBR

Investment in NSCs surpass Tk 42,000cr in 10 months

Big budget, slim execution capacity fail to deliver

GDP-centric dev fails to spur job creation, pvt investment: CPD

Government to set plan to allow trade union at EPZs

Regulatory body likely for universal pension coverage

Offshore banking units NPLs rise fourfold in first quarter

Grocery prices triple as month of fasting begins

AC market hots up as mercury climbs

Mastercard, MTB, Banglalink launch prepaid card

Robi posts Tk 171cr loss in first quarter

: -

International News US economy slowed less than expected in Q1

Car wars: Trump-Germany salvo raises EU-US trade fears

China considers tighter controls on yuan currency

Pakistan hikes development budget by 40pc

IMF sets tough new Ukraine loan demands

Modis generics-only drugs plan worries Indian pharma sector

DSEX 5,413.82 1.13 Gold (Ounce) $1,2570.1 Dollar 79.80 (Buy) 81.30 (Sell) REPO Rate (24/05/2017)

3.20%

CSCX 10,158.58 19.66 Oil (Barrel) $49.87 Euro 88.71 (Buy) 93.53 (Sell) REPO Rate (23/04/2017)

3.07%

Source: DSE and CSE Source: Yahoo Finance Source: One Bank Limited Source: Bangladesh Bank (W AV)

2 | P a g e

National News 26 lakh youths jobless

Mazhar Hossain stopped counting the number of copies of his curriculum vitae submitted seeking jobs since he

completed his master's degree five years ago.

The 32-year-old from Satkhira took several recruitment tests. In a number of cases, he made it through to viva but

that was it. He is still unemployed.

"I'm really frustrated. It seems you either need good connections or some backing to get a job. Otherwise, you will

remain unemployed like me for years," said Mazhar who passed from a reputed institution in Jessore.

His story is shared by thousands others as the latest survey of the government has found 26 lakh unemployed people

in the country.

The unemployment rate has slightly changed from 4.3 percent in 2013 to 4.2 percent last year though the

government created massive job opportunities over the period. The report on the survey conducted between July

2015 and June 2016 will be released today.

According to the Quarterly Labour Force Survey Bangladesh 2015-16 done by the Bangladesh Bureau of Statistics,

rural areas have 18.2 lakh unemployed people, more than double the number of those, 7.7 lakh, in urban areas.

The urban-rural population ratio is 30:70 in Bangladesh.

The BBS says it has followed the international standard definition of unemployment while conducting the survey on

various aspects of people's economic activity.

As defined by the International Labour Organisation, people who are out of work, want a job, have actively sought

work in the previous four weeks and are available to start work within the next fortnight come under unemployed

category.

Prof ATM Nurul Amin, chairman of the economics and social sciences department at Brac University, said the

unemployed population should be higher than what was found in the survey.

The definition should be set considering local context, he said, adding that in Bangladesh people who are

underemployed meaning they work less than 40 hours a week or earn less than the income required to meet basic

needs or those who work at a lower tier compared to their skills and expertise should be considered unemployed.

Unlike many western economies where people get state benefits for periods of unemployment, people in

Bangladesh are not entitled to such thing, Prof Nurul said.

There are huge cases of underemployment here.

The private sector creates more employment opportunities than the public sector in the country, but the investment

in the private sector has been stalled for quite a long time, one of the major reasons behind the high unemployment

rate, the Brac University teacher said.

According to the survey, unemployed male and female are equal in number -- 13 lakh. The number of female

unemployed population was higher three years ago.

An estimated 6.21 crore people aged 15 or above are now in the labour force, up from 6.07 crore population

estimated in 2013.

3 | P a g e

Some 5.95 crore were found employed in 2015-16 survey, up from 5.81 crore in 2013. It means 14 lakh people

entered the job market during the period.

An estimated 18 lakh of those having jobs of less than 40 hours a week were found looking for new or additional

jobs. The latest survey also found 86.2 percent of the total employed population aged 15 or above in informal

employment.

Between 2016 and 2013, non-agriculture sectors like industry, trade and other services absorbed a higher number of

people than the farming sector. As a result, the proportion of jobs in the agriculture sector declined to 42.7 percent

in 2016 from 45.1 percent in 2013.

Source: http://www.thedailystar.net/frontpage/26-lakh-youths-jobless-1411804

Finance minister: Uniform VAT rate will remain at 15%

'The VAT rate will remain at 15%, and it will not be reduced'

Finance Minister AMA Muhith has said the uniform VAT rate will remain unchanged at 15% in the next fiscal year.

The VAT rate will remain at 15%, and it will not be reduced, he told reporters in his office on Saturday.

He added: The rate has been in effect since the beginning. We could have reduced it by 1-2%. But, what is point in

doing so?

Increasing national budget from Tk95,000 crore to Tk400,000 crore is one the vital achievements of the government,

he said, adding that budget for the next fiscal year would be around Tk500,000 crore.

The minister, however, declined to specify the amount, reports the Bangla Tribune.

Human resources sector has been given importance in the budget. And, allocation for this sector will increase

accordingly, Muhith added.

Source: http://www.dhakatribune.com/business/economy/2017/05/28/finance-minister-uniform-vat-rate-will-

remain-15/

15% uniform VAT wont affect prices of essentials: Muhith

Reiterating his determination to keep 15 percent unified value-added tax (VAT) in the next fiscal, Finance Minister

AMA Muhith today claimed that the uniform VAT will not affect the price of essentials.

The 15 percent uniform VAT will not affect the price of essentials as many necessary items will be kept out of the

purview of it, he said while talking to reporters at his secretariat office in Dhaka.

The VAT [15 percent uniform VAT] rate couldnt be slashed. Problems will arise if it comes down, Muhith said.

Muhith backtracked on his position this afternoon of keeping 15 percent uniform VAT in the next fiscal, a day before

he said that the government was considering reduction of the rate to 12 percent.

On May 25, the finance minister said the government was exploring other ways to make up for the revenue loss as a

result of a cut in the uniform VAT rate under the new law.

The law prescribes a uniform 15 percent VAT rate for most goods and services, and the government now considers

reducing the rate to 12 percent amid opposition.

http://www.thedailystar.net/frontpage/26-lakh-youths-jobless-1411804http://www.dhakatribune.com/business/economy/2017/05/28/finance-minister-uniform-vat-rate-will-remain-15/http://www.dhakatribune.com/business/economy/2017/05/28/finance-minister-uniform-vat-rate-will-remain-15/

4 | P a g e

Source: http://www.thedailystar.net/business/15-percent-uniform-vat-will-stay-next-fiscal-says-finance-minister-

muhith-1411726

Wealth surcharge to go up

Rich people will have to pay more to the government exchequer after Finance Minister AMA Muhith hinted of an

increase in surcharge on wealth next fiscal year.

Some changes will be brought in the different slabs of surcharge by increasing the rate, he told reporters at his

secretariat office in Dhaka yesterday.

At present, a 10 percent surcharge is applicable on net wealth between Tk 2.25 crore and Tk 5 crore, and 15 percent

on wealth between Tk 5 crore and Tk 10 crore.

For wealth between Tk 10 crore and Tk 15 crore, the surcharge is 20 percent, for Tk 15 crore and Tk 20 crore is 25

percent, and 30 percent on net wealth exceeding Tk 20 crore.

The middle-class though will get some relief as the individual tax-free ceiling will be raised slightly from existing Tk 2.5

lakh. But the threshold will be fixed permanently.

Those who currently pay tax will not come under further pressure in the new budget, Muhith said.

The corporate tax will be kept almost unchanged save for one sector, he said, without naming the sector and the

direction of the change.

The interest rate on saving instruments will be cut as the current rate of over 11 percent is absurd in comparison to

the market rate of 7 percent, the minister said. Like every year the state banks will get allocation in the new budget

for recapitalisation. I will give more allocation to two or three banks that are performing well.

The default loan rate has come down substantially but it is still quite high, he said, while blaming corruption by

borrowers and management for the higher default loan.

Muhith expects domestic investment to increase in the new fiscal year amid political stability.

Source: http://www.thedailystar.net/business/wealth-surcharge-go-1411954

Govt to forfeit Tk 10,000cr for rise in turnover ceilings: NBR

The government will lose up to Tk 10,000 crore for raising the VAT-free turnover limit and the highest threshold for

turnover tax for businesses, according to an estimate of the National Board of Revenue.

The increase in threshold and withdrawal of restriction of items to avail the benefit of turnover tax will cause the loss,

said Jahangir Hossain, member of VAT Policy of the NBR, at a roundtable on the new VAT law yesterday.

Bangla daily Prothom Alo and the NBR jointly organised the event at the newspaper's office in Dhaka.

The estimate took into account the increase in VAT-free turnover ceiling to Tk 36 lakh from Tk 30 lakh and the highest

threshold for turnover tax to Tk 1.5 crore from Tk 80 lakh.

The government also stands to lose Tk 8,000 crore for a one-percentage point cut in the uniform VAT rate from 15

percent as envisaged in the new law, which has left businesses and consumers anxious of a rise in the price level

because of the end of multiple rates.

http://www.thedailystar.net/business/15-percent-uniform-vat-will-stay-next-fiscal-says-finance-minister-muhith-1411726http://www.thedailystar.net/business/15-percent-uniform-vat-will-stay-next-fiscal-says-finance-minister-muhith-1411726http://www.thedailystar.net/business/wealth-surcharge-go-1411954

5 | P a g e

The NBR however maintains that prices will not increase after the new law becomes effective from July 1 as businesses

will get rebate, which is difficult to get now.

Domestic industries will also get protection under the new law, Hossain said, allaying the fears of small- and medium-

sized enterprises and local industries, which are anticipating an erosion of competitiveness to imports.

Initially, the list of items for supplementary duty at the import stage was supposed to be condensed substantially

under the new law, with only high-end products retained.

But now, it has been decided that the list will be the same as that under the VAT Act 1991, Hossain said. There is no

reason for businessmen to be worried. The level of protection that you enjoy now will not reduce.

The government, at the prescription of the International Monetary Fund, framed the new law to boost revenue

collection from domestic trade and economic activities by increasing compliance and curbing evasion.

Introduced in 1991, VAT is now the biggest source of revenue for the government, followed by the income tax and

import duty.

Hossain, noting the general concerns of price hike, said many products including essential commodities, basic

education, healthcare and lifesaving drugs will remain exempt from VAT so that the poor and low-income people are

not affected.

Save for rod, the prices of products and services will not rise for the application of the uniform VAT rate, he said.

But, there are some businesses that wait for any excuse to increase prices. Vigilance should be there so that the

unscrupulous traders cannot take the benefit, he added.

In theory, inflation should not rise, said Sheikh Fazle Fahim, first vice-president of the Federation of Bangladesh

Chambers of Commerce and Industry. But where is the check and balance that consumer will not be charged higher?

Fahim said the government does not have enough capacity to protect the rights of consumers.

Citing a recent raid at a factory, he said such foray should not take place if the NBR wants to play the role of a facilitator.

The imposition of the uniform VAT on rod from the current reduced rate will affect the construction and the real estate

sector, which has been seeing sluggish demand, he added.

The increase in the prices of rod will not only affect home builders but also the economy as a whole, said Liakat Ali

Bhuiyan, vice-president of the Real Estate & Housing Association of Bangladesh.

About the NBR's claim of easy rebate, he presented the case of house painters, who work informally and do not issue

receipts. It will be difficult for home builders to claim rebates, he added.

Towfiqul Islam Khan, research fellow of the Centre for Policy Dialogue, said ensuring the issuance of receipts will be

very important for proper implementation of the law.

He suggested the NBR run awareness campaigns so that consumers can identify the receipts they are given to be

genuine.

Consumers are afraid that the prices of gas, electricity and petroleum would rise because of the implementation of

the new law, said Ghulam Rahman, president of the Consumers Association of Bangladesh.

Housing is one basic rights of a human and the hike in the price of rod will curtail the access to home ownership for a

large number of low- and middle-income people, he added.

The raising of VAT-free turnover threshold and the ceiling for turnover will affect small and medium firms, said Ahsan

H Mansur, executive director of the Policy Research Institute. None will be interested in buying from them as sourcing

from these firms will not ensure buyers' credit.

6 | P a g e

He criticised the plan to maintain the existing SD product list to protect local industries. High levels of protection do

not induce growth.

Mansur suggested reduction of import duty on raw materials of rod to keep the prices lower.

The cost of doing business is high in Bangladesh, and one of the reasons is tax, said Syed Nasim Manzur, former

president of the Metropolitan Chamber of Commerce and Industry.

He said the tax and revenue policy should be predictable and framed for the long-term so that investors can plan

properly.

The practice of collecting advance income tax must be stopped, he said. How can you collect tax until there is

income?

Source: http://www.thedailystar.net/business/govt-forfeit-tk-10000cr-rise-turnover-ceilings-nbr-1410940

Investment in NSCs surpass Tk 42,000cr in 10 months

The net investment in the national savings certificates and bonds surpassed Tk 42,000 crore in the first 10 months of

this fiscal year as a section of people continued to invest heavily in the NSCs to enjoy high returns from the tools.

Net investment in the savings tools in July-April period of FY 2016-17 increased by 58.93 per cent to Tk 42,098.20

crore compared with that of Tk 26,487.72 crore posted in the same period a fiscal year ago, according to the latest

data of the Directorate of National Savings.

DNS and Bangladesh Bank officials said people had been maintaining a huge investment in the NSCs for the last two

years as returns from the tools were very high compared to the other rates prevailing in the market.

The net sales of the tools sharply broke the yearly record within the first nine months (July-March) of FY17 hitting Tk

37,648.41 crore against the previous record of Tk 33,688.60 crore that was registered in FY16.

The government is yet to cut the rate of interest on the tools to meet the interest of politicians and bureaucrats, the

officials said.

Underprivileged people have no capability to purchase such high-worth instruments, according to them.

The high returns on the savings tools are pushing up the governments interest liability which has already created a

difficult situation to implement the deficit financing of the fiscal budget, they said.

The banks are now offering hardly 7 per cent interest rate on their deposit products, whereas the rates for the NSCs

are between 11.04 per cent and 11.76 per cent.

In the budget for FY17, the government aimed to borrow Tk 19,610 crore from the NSCs and Tk Tk 38,938 crore from

the banking system.

The government borrowing from the NSC was more than double in the July-April period while the banks got a refund

of Tk 25,785.55 crore in the first nine months of FY17 from the government against their previous lending.

The government will face pressure in paying interests to the clients who invested in the NSCs in recent years, the

officials said.

Amid huge criticism from different corners, finance minister AMA Muhith on May 21 hinted to cut the rate of

interest on the savings tools.

Required measures may be taken in the next budget session, he said after a meeting with the leaders of Dhaka

Chamber of Commerce and Industry at his secretariat office. The next budget session of parliament will start on June

1.

This high difference in rates between NSCs and bank products is not sustainable, Muhith told reporters.

The DNS data showed that the monthly net investment in savings tools also increased to Tk 4,449.78 crore in April

2017 from Tk 3,299.46 crore in the same month of 2016.

Due to the rush for the NSCs, the finance ministry has been forced to stop all auctions for treasury bills and bonds for

banks this month as the government has decided not to borrow much from the banking sector.

The government was also forced to postpone the auction in March due to the same reason.

http://www.thedailystar.net/business/govt-forfeit-tk-10000cr-rise-turnover-ceilings-nbr-1410940

7 | P a g e

Source: http://www.newagebd.net/article/16464/investment-in-nscs-surpass-tk-42000cr-in-10-months

Big budget, slim execution capacity fail to deliver

Economists pointed out Saturday a paradox of big fiscal budget and government's limited execution capacity that

eventually fails to deliver every year.

At a pre-budget discussion meeting they questioned the logic behind presenting a large-sized budget in parliament

once again few days hereafter.

The speakers made a strong plea that the government should privatise state-owned banks and stop subsidising

banks to keep them functioning.

The discussion was organised by Policy Research Institute (PRI) and a private TV channel at the PRI office in the city.

"Budget could not be implemented in the country, so every year a larger budget is placed at the parliament. We

have to increase our implementation capacity," former adviser of caretaker government Dr Akbar Ali Khan said at

the meet. Dr Khan said the projects taken up in the budget should go through scrutiny to ascertain whether those

actually have necessity.

He said the prime minister and the finance minister formulate budget in the country. People do not have

participation in the process. Most of the budget discussions are about praises and criticisms of leaders and political

parties.

He said government can't run banks. State-owned banks should have been privatised two decades ago. But the

government is not doing so because the politicians and influential people are misusing public funds from the state-

owned banks.

Another former adviser of caretaker government, Dr Mirza AB Azizul Islam, questioned the necessity of taking up

such a bulky budget.

"The situation of real-sector economy is not good in the country," he said, explaining the factors.

"Export earning and remittance earning are witnessing slow growth. Though revenue earning is increasing, but the

size of income tax is decreasing. Raw-material import is slowing down but capital-machinery import getting a rise,"

the economist said.

Executive Director of the Institute of Microfinance Mustafa K Mujeri said the government is saying it achieved 7.2

per cent GDP growth, but other indicators are not matching the government claim.

Chairman of the Policy Research Institute Dr. Zaidi Sattar observed that the investment situation in the country is not

good.

"There has been a current-account surplus in 12 years of last 15 years, this is not good sign; the investment situation

is not good," he said.

Former chairman of the Tariff Commission Mozibur Rahman welcomed government move to waive tax on SME

sector.

http://www.newagebd.net/article/16464/investment-in-nscs-surpass-tk-42000cr-in-10-months

8 | P a g e

But, he said, the SMEs have to be connected with global value chain.

Former commerce secretary Suhail Ahmed Chowdhury said there should be multiple tiers of VAT in the country to

earn more revenues.

PRI Executive Director Dr Ahsan H Mansur moderated the discussion while former PRI member Ali Ahmed and

former NBR Chairman Abdul Majid also spoke.

Source: http://www.thefinancialexpress-bd.com/2017/05/27/71831/Big-budget,-slim-execution-capacity-fail-to-

deliver

GDP-centric dev fails to spur job creation, pvt investment: CPD

The Centre for Policy Dialogue on Saturday observed that the current growth-driven development in the country

could not generate sufficient employment and failed to achieve the expected breakthrough in private investment.

At a press briefing, the independent research organisation also said that the countrys banking sector with piled up

non-performing loans and lack of good governance had become a growing malignancy for the economy and was

circulating polluted blood to the other sectors of the economy.

The banking sector can cripple a flourishing economy instead of contributing if the current trend of mammoth bad

loans, inefficient management and lack of governance continue, it said.

The CPD arranged the briefing at the BRAC Centre INN in Dhaka to disseminate its third reading on state of the

Bangladesh economy in the fiscal year 2016-2017 which was prepared under the Independent Review of Bangladesh

Development programme of the organisation.

The think tank also said that the government should lower the rate of value-added tax to 12 per cent from the 15 per

cent stipulated in the new VAT law which is scheduled to come into force from July 1 this year.

The CPD observed that the measurement of development based on only the gross domestic product growth without

data related to employment generation, structural transformation in the economy and benefits to marginalised

people caused by the growth was very partial and incomplete.

The think-tank, however, said that the governments estimated GDP growth rate at 7.24 per cent for the current

fiscal year 2016-2017 might need a downward revision by the end of the fiscal year after getting complete data on

sectoral performance as the Bangladesh Bureau of Statistics estimated the growth based on the performance of the

sectors in the first few months of the fiscal year.

The estimation also has not considered the loss of boro output of 16 lakh tonnes caused by recent floods in hoar

areas while the projection has been prepared with an assumption of full implementation of the original budget, it

said.

Employment generation, human resource development, balanced distribution of benefits and inclusive

development are more important in the discussion of economic development than the GDP growth figure, said

Debapriya Bhattacharya, distinguished fellow of the CPD.

Our assumption is that jobs are not being created matching with the GDP growth, he said, adding that

entrepreneurs were investing in capital intensive technology which was boosting production, not employment.

Debapriya said that private investment was not getting a breakthrough despite efforts over the years.

The incremental investment in the economy has come from the government investment, not from the private

sector, he said, adding that the same situation prevailed in the area of consumption.

He identified three signals capital flight, businesses intention to invest abroad and an increase of consumption on

luxury for not increasing the share of private investment in the economy.

The amount of capital siphoned off from the country is now four-times higher than foreign assistance. The trend of

money laundering rises when the national elections are approaching, said Debapriya.

He said Bangladeshi entrepreneurs were now considering even an African country as more attractive than

Bangladesh for investment.

http://www.thefinancialexpress-bd.com/2017/05/27/71831/Big-budget,-slim-execution-capacity-fail-to-deliverhttp://www.thefinancialexpress-bd.com/2017/05/27/71831/Big-budget,-slim-execution-capacity-fail-to-deliver

9 | P a g e

Businesses want to export capital from a country which suffers from investment scarcity, which is an alarming

signal, he said.

He also said that a silent cancer was growing in the banking sector and demanded formation of a commission to

diagnose the health of the banking sector and propose remedy for overcoming the situation.

CPD distinguished fellow Mustafizur Rahman expressed concern over the higher cost of development project and

urged the government to examine the reasons for the high cost of project implementation.

He said that the government should address the issue through bringing discipline to the annual development

programme implementation.

CPD executive director Fahmida Khatun demanded a specific role of Bangladesh Bank for smooth and orderly

transition in Islami Bank Bangladesh Limited which has recently undergone major shake-up.

The private sector bank was in good health in terms of major indicators, but the situation is now worsening, she said.

She said, When the largest borrower becomes the owner of the bank, it becomes a matter of concern for good

governance.

Like in state-owned commercial banks, there is a lack of good governance in the private sector banks, she said,

adding that the sector was now circulating polluted blood to the other sectors of the economy.

CPD research fellow Towfiqul Islam Khan presented the keynote paper on the state of the Bangladesh economy.

He said that the cost of production in almost all sectors in the next fiscal year 2017-2018 might experience an

upward trend following implementation of the new VAT law, possible depreciation of the exchange rate, rise in rice

price, and another round of upward adjustment of the tariffs for electricity and gas.

Source: http://www.newagebd.net/article/16461/gdp-centric-dev-fails-to-spur-job-creation-pvt-investment-cpd

PPP remodelling underway as major projects stall

All but one of the projects under public-private partnership failed to progress despite operation of the PPP office for

eight years, prompting moves for remodelling its modus operandi.

As of now, 44 such projects involving US$14 billion in private investment have been approved by the cabinet

committee, according to government documents.

Analysts believe government attempts so far for accelerating the model have failed to gain momentum as the

government is not taking risk as in the power projects.

They said the government should take risks initially by providing guarantees on the profitability of investment made

in this field for longer terms.

However, the PPP Authority said the projects were not seeing the light mainly for lack of 'financial close' by the

private winning parties.

They said many such projects usually run up to 35 years before the private parties give those up to the government

at the end of build-own-transfer (BOT) tenure.

Usually, the private builders seek funds from foreign sources, including the Asian Development Bank, the IFC and

such other international organisations.

Only one small PPP project on dialysis for kidney patients came out successful in eight years of operation of the PPP

office since 2008-09.

People familiar with the PPP promotion told the FE that a new policy is in the final stages of framing to enhance

http://www.newagebd.net/article/16461/gdp-centric-dev-fails-to-spur-job-creation-pvt-investment-cpd

10 | P a g e

government-to-government cooperation under the flagship development model.

The policy now awaits the nod from the prime minister office. The PPP Authority formed under the PPP Act 2015 is

under the PMO.

The policy is believed to attract overseas investors and foreign government agencies to invest in such projects in

Bangladesh.

They hoped another guideline on national-priority projects would also give a boost to the PPP development model.

Economists and analysts say the government was successful in branding its power plants in attracting local and

foreign investors. But in the cases of the PPP, the government didn't take such steps.

"Government must share risks with the PPP projects, we like it or not," said Dr Ahsan H Mansur, executive director at

the Policy Research Institute of Bangladesh.

He said guarantees on profit must be ensured otherwise the investors will not come here.

Dr Mansur feels the country lacks expertise in properly exercising the financial affairs applied for the private entities.

"There is not bond market to take funds on long terms."

Under the PPP model, government agencies are committed to providing lands and with existing structures. Private

parties develop the project with their own funds or through loans, equity supports or grants.

The government in major infrastructural projects provide viability-gap fund up to 30 per cent where returns from

investment will be much lower than the size of the investment.

The government has given its commitment for Dhaka Elevated Expressway and Dhaka bypass four-lane projects but

not yet disbursed a single penny as such fund release is conditional.

People at the PPP Authority said they want to complete a project within 24 months but many bidders seek time on

different grounds.

They said government agencies again cause problems when they see expected returns on investments.

"There are many instances where the government agencies created problem by raising land prices high, which leaves

the private parties in frustration to proceed," said Md Abul Bashar, a director at the PPP Authority.

Many private entities on the other hand feel shy to invest when they see low 'internal rate of return', a key indicator

for investment.

If the IRR becomes low, say 10 per cent, the private parties feel discouraged from making investment as there are

more opportunities to derive much by investing such amount of money.

Filing cases by the aggrieved bidders also delays the execution of the process.

"We've readied all documents for Upal Motel in Cox's Bazar but it got delayed at least six months following court's

orders," Mr Bashar told the FE.

The government wants to develop an international-standard tourism complex at the existing motel in the Upal

11 | P a g e

Compound in Cox's Bazar through public-private partnership (PPP) initiative.

"The verdict came in favour of the government, but we lost at least six months," he said.

The PPP Authority is in the final stages of formulating another provision called national-priority-project guidelines

meant for speeding up projects.

A high-powered committee will be formed under the guidelines and there will be a short-cut and one-stop

mechanism for a priority project.

However, 15 of the projects are under development which means they are under studies whether viable or not.

Eight remained under tendering.

Agreements with the relevant government agencies were signed only on six projects. They are three blocks in hi-tech

park in Gazipur, Mongla port project, Mongla Economic Zone, and Mirersarai Economic Zone in Chittagong.

There is no development on the remaining 15, though approved by the cabinet committee on economic affairs.

However, the government has taken a number of measures to facilitate the PPP activities.

Last year, it issued a 'procurement guideline for PPP projects 2016' providing for unsolicited proposals meant for

speeding up the projects.

The government formed PPP Authority in 2015 through converting the previously PPP Office to empower it further.

A financial organization named Bangladesh Infrastructure Finance Fund Limited was also established to mobilize

funds for PPP projects.

Earlier, the government had amended the private-sector infrastructure guidelines under the name of policy and

strategy for public-private partnership 2010 to encourage PPP investment in the country as the model is widely

popular across the globe.

Source: http://www.thefinancialexpress-bd.com/2017/05/27/71740/PPP-remodelling-underway-as-major-projects-

stall

Government to set plan to allow trade union at EPZs

Currently, workers at EPZs enjoy trade union facilities under the Workers Welfare Association in line with the

Bangladesh EPZ Act, but compact partners want trade unions in line with Bangladesh Labour Act

The government will hold an inter-ministerial meeting on Sunday to devise a time-bound action plan to address the

issues relating to labour rights as demanded by Sustainability Compact partners.

Commerce Minister Tofail Ahmed will preside over the meeting to be held at his ministry.

Law Minister Anisul Huq, Local Government, Rural Development and Cooperatives Minister Khandker Mosharraf

Hossain, State Minister for Labour and Employment Md Mujibul Haque and Dr Gowher Rizvi International Affairs

adviser to Prime Minister Sheikh Hasina will join the meeting.

The meeting will discuss the trade union issue at Export Processing Zones (EPZ) and workers rights, especially in the

countrys apparel industry.

http://www.thefinancialexpress-bd.com/2017/05/27/71740/PPP-remodelling-underway-as-major-projects-stallhttp://www.thefinancialexpress-bd.com/2017/05/27/71740/PPP-remodelling-underway-as-major-projects-stall

12 | P a g e

Currently, workers at EPZs enjoy trade union facilities under the Workers Welfare Association in line with the

Bangladesh EPZ Act, but compact partners want trade unions in line with Bangladesh Labour Act.

Sustainability Compact partners urged Bangladesh to set a deadline for completion of the process to allow trade

union at EPZs. They made the call at the third follow-up meeting of compact partners held on April 28 in Dhaka.

The meeting talked on the sustainability compact and amendment to EPZ Act to allow trade union outside EPZ,

Mikail Shipar, senior secretary to the Ministry of Labour and Employment, told the Dhaka Tribune.

Since the compact partners sought a time frame to ensure trade union in EPZs, the ministry is working on how to

make it possible, seeking anonymity, a highly credible source at the Ministry of Commerce, told the Dhaka Tribune.

He also said the issue would be settled as soon as possible

since it would be placed at the next meeting of International Labour Conference to be held in June in Geneva.

The meeting would also discuss special paragraph of International Labour Organisation Convention relating to

workers rights.

In its latest report, the ILO Committee of Experts (CEACR) expressed its concerns with regard to the most recent

serious allegations of acts of violence and harassment against trade unions.

Source: http://www.dhakatribune.com/business/2017/05/26/government-set-plan-allow-trade-union-epzs/

Regulatory body likely for universal pension coverage

The government is planning to establish a separate regulatory body for managing and expanding pension coverage in

the country.

The decision follows its plan to bring all citizens under the universal pension scheme, the finance ministry sources

said this week.

Once fully implemented, all retirees, both from public and private sectors as well as formal and informal sectors,

would be eligible for old-age pension on their retirement.

The finance division is currently preparing a concept paper in this regard in the light of which a project would be

initiated by the first quarter of next year for implementing the universal pension scheme.

The World Bank (WB) has already shown its interest in funding the project, sources said.

"We think, it is essential to establish a separate regulatory body for taking up this huge undertaking", said a high

official of the finance division speaking on condition of anonymity.

"Under this regulatory body, there will be a trust body as well as a central record-keeping agency which will manage

and validate a huge amount of pension data that needs to be dealt with", the official said.

"In addition, there will be a point at every upazila of the country for providing this pension-related service up to the

grassroots level", he added.

This will be a contributory pension scheme under which the beneficiaries will also be eligible for annuity at the time

of their retirement, sources informed.

Currently, only two million government employees in Bangladesh are entitled to pension on retirement.

http://www.dhakatribune.com/business/2017/05/26/government-set-plan-allow-trade-union-epzs/

13 | P a g e

In addition, poor people with virtually no means of support in their old age are also provided with a cash allowance

of Tk. 500 per month.

About three million people across the country are currently enlisted under the Old Age Allowance Scheme.

However, the rest of the senior citizens, who even regularly paid their income tax during their active life, are not

entitled to any pension after retirement.

In this context, there have been growing calls in recent times from various quarters for introducing the universal

pension scheme in the country.

The proposal of introducing the pension coverage for all elderly members of the population has also been made in

the 'National Social Security Strategy' that was formulated recently.

In this context, the finance ministry, in recent times, initiated the process of introducing universal pension scheme

for the citizens.

Experts also said the universal pension scheme will also become important given that the country is likely to witness

a gradual aging of its population in the coming decades.

They also observed that the creation of such a universal pension scheme would also help boost investment in the

financial sector.

However, concerned officials admitted that the pension scheme would be a very lengthy process given the large

number of people that have to be brought under this initiative.

"It would take at least five years to create necessary infrastructure for the scheme while it would take almost ten

years to bring all citizens under this universal pension scheme", the finance division official said.

Source: http://www.thefinancialexpress-bd.com/2017/05/26/71739/Regulatory-body-likely-for-universal-pension-

coverage

Offshore banking units NPLs rise fourfold in first quarter

The amount of classified loans of offshore banking units (OBUs) of different banks swelled more than four times or

Tk 3.08 billion in the first quarter (Q1) of the current calendar year.

The volume of non-performing loans (NPLs) that were offered in terms of foreign currencies rose to Tk 4.10 billion

during the January-March period of this year from Tk 1.01 billion in the preceding quarter, according to the central

banks latest statistics.

In Q1 of this year, the figure of classified loans was earlier stated at Tk 11.90 billion as a leading private commercial

bank (PCB) wrongly reported NPL of Tk 7.81 billion in their OBU operations.

Later on, the PCB had sought apology from the Bangladesh Bank (BB)'s department concerned and requested to

drop the figure from the BB's report, according to a senior BB official.

"There is no scope to drop the figure right now because the report has already been sent to different departments of

http://www.thefinancialexpress-bd.com/2017/05/26/71739/Regulatory-body-likely-for-universal-pension-coveragehttp://www.thefinancialexpress-bd.com/2017/05/26/71739/Regulatory-body-likely-for-universal-pension-coverage

14 | P a g e

the central bank as well as the government," the central banker explained.

He also said it will be corrected in the next quarter report on classified loan and provisioning of the OBUs.

"The OBU's classified loans jumped during the period under review because a substantial amount foreign currency

loan of a first generation PCB entered troubled credit territory," the BB official said while explaining the rising trend

in NPLs with OBUs.

The share of classified loans on total outstanding also rose to 0.98 per cent during the period under review from 0.26

per cent three months ago.

The NPLs cover substandard, doubtful and bad/loss of total outstanding credits which reached Tk 419.72 billion as of

March 31 from Tk 393.30 billion in the final quarter of last calendar year. It was Tk 311.77 billion as of September 30,

2016.

The OBUs are allowed to provide foreign currency loans to their customers.

It also allowed carrying on transactions in specified foreign currencies. The suggested currencies are US dollar, British

pound, Canadian dollar, Deutsche mark, Japanese yen, Swiss franc, the Netherlands guilder, French franc, Swedish

kroner and Singaporean dollar.

Talking to the FE, another BB official said the central bank is not empowered fully to monitor and supervise the OBU

operations closely due to legal constraint.

As part of persuasion, the central bank now asks the banks which have OBU operations to keep provision on such

loans and collects information on assets and liabilities of each OBU on weekly basis for assessing their financial risks,

if any, especially with transactions in terms of foreign currencies.

Currently, 35 commercial banks out of 57 are running their OBUs across the country as per a directive issued by the

Banking Control Department of BB on December 17, 1985.

Under the directive, the OBUs have been allowed exemption from the purview of certain provisions of the Banking

Companies Ordinance 1962 as per the government notification.

Besides, the OBUs will also be considered for exemption from Article 36(1) of the Bangladesh Bank Order 1972 on

such terms and for such period as may be deemed fit by the government.

It means the OBUs are exempt from maintaining CRR (cash reserve requirement), SLR (statutory liquidity ratio) with

the central bank of Bangladesh against their liabilities.

The OBUs are free to accept deposits from outside Bangladesh and borrow from abroad. They are also free to make

advances/investments abroad and also make permissible transactions with industries in the export processing zones

(EPZs).

"There will not be any restriction on the physical location of the OBUs. These may be located both in the EPZs or any

other convenient location outside-even existing branches of banks may be allowed to operate such units through a

completely separate counter," the governing bank had said in the directive.

Meanwhile, the central bank had started preparations to bring the functions of OBUs under regular monitoring by

amending the existing provisions on operation and establishment of the OBUs operations in Bangladesh.

15 | P a g e

The BB's latest moves-meant for averting any bubble-came against the backdrop of a rising trend in loans and

advances provided by the OBUs in recent years.

As part of the moves, the central bank has already sought cancellation of the SRO (statutory regulatory order)

relating to OBU operations in Bangladesh from the Law Ministry.

"We'll issue a fresh directive aiming to mitigate the risk of OBU operations in Bangladesh through strengthening

monitoring and supervision after cancellation of the SRO," the BB official said while replying to a query.

Talking to the FE, a senior official of a leading private commercial bank said the demand for foreign-currency loans

from OBUs has been on a gradual increase after the opening up of private-sector credits allowing entrepreneurs to

borrow from overseas sources.

"The OBUs are now playing a significant role in the credit market in Bangladesh following the higher demand for

foreign loans, mainly due to lower interest rates on such lending," the senior banker explained.

He also said the central bank should issue a policy in this connection immediately and conduct audit to each OBU to

assess their actual financial position.

The central bank is working since 2015 to issue the directive to monitoring and supervise the OBU operations

properly.

Source: http://www.thefinancialexpress-bd.com/2017/05/26/71644/Offshore-banking-NPLs-rise-sharply

Grocery prices triple as month of fasting begins

Mutton was sold at prices of Tk750-800 a kg against the fixed rate of Tk725. Beef was traded at Tk500-520 a kg on

Saturday, whereas the city corporations fixed rate is Tk475 a kg

Prices of various essential commodities, especially vegetables, have risen precipitously in the capitals markets ahead

of Ramadan despite government efforts to regulate prices.

Visiting the different kitchen markets of the capital including Kawranbazar, Mohammadpur, Sukrabad, Kolabagan and

Hatirpul on Saturday, this reporter saw that prices of essentials had almost doubled or even tripled in some cases.

Even though the Trading Corporation of Bangladesh(TCB) had fixed the prices of many of the commodities, wholesalers

and retailers appeared to be ignoring the charts displayed in the markets.

Prices of aubergine, green chili, cucumber, tomato, bitter gourd, potato, green papaya, pointed gourd, ladies finger,

garlic, chickpea, coriander leaf, meat, mutton, fish, sugar, rice, pulses, date and puffed rice have been hiked

significantly.

Commerce Minister Tofail Ahmed had earlier warned of stern action against those who will try to manipulate the

supply and prices of commodities during the month of holy Ramadan.

Prices of green chili were Tk80-130 per kg, aubergine Tk80-100, cucumber Tk60-100, Jhinga Tk60-80, coriander leaf Tk

220-260, potato Tk20-30, Tomato Tk40-60, lentil Tk90-100, Rui fish Tk350-380, date Tk120-700, puffed rice Tk65-100,

coarse rice Tk48-56, sugar Tk70-80 and lemon Tk 5-6.50 apiece in these markets.

Mutton was sold at prices of Tk750-800 a kg against the fixed rate of Tk725. Beef was traded at Tk500-520 a kg on

Saturday, whereas the city corporations fixed rate is Tk475 a kg.

http://www.thefinancialexpress-bd.com/2017/05/26/71644/Offshore-banking-NPLs-rise-sharply

16 | P a g e

Bitter gourd was sold for Tk80-100, pointed gourd Tk40-60, green papaya Tk40-55 and pulse for Tk80-130 in the

chicken markets of the city on Saturday.

Last week, the price of green chili was Tk30-40 per kg, aubergine Tk30-40, cucumber Tk25-35, Jhinga Tk35, coriander

leaves Tk180-200, lemon Tk12-16 per haali (four pieces) Potato Tk.20-25, Tomato Tk25-35, lentil Tk70-80, fish Rui a kg

Tk200-230, date Tk 80-580 and puffed rice Tk55-60, rice coarse Tk 42-45 and sugar Tk65-70 in the markets.

Tamanna Begum, who came to get groceries at Karwan Bazar, said: We have to buy these daily essential commodities.

We have no alternative. Monitoring the markets is the governments job. We want the government to be active so

that traders cannot hike prices. The price hike is an immense burden for poor people.

Ahmed Jamil, a vegetable trader of Hatirpul kitchen market, said: How can we follow the Dhaka South City

Corporation chart? We bought aubergine for Tk70 a kg from the wholesale market in Kawranbazar but the DSCC wants

the retail price to be Tk65. This is absurd.

Also, we get massive pre-orders for different products from restaurants ahead of Ramadan but there is a shortage in

the market. Thats why prices have increased.

Retailers blamed the soaring prices of vegetables on a supply shortage.

Traders are making excessive profits in the name of a supply crunch, Jamil said.

Source: http://www.dhakatribune.com/business/economy/2017/05/28/grocery-prices-triple-month-fasting-begins/

AC market hots up as mercury climbs

Kamrul Islam Sharif, a private job holder who lives in Mohammadpur, bought two air-conditioners by lending money

from a friend, as the scorching summer heat has become unbearable this week.

I was not prepared to spend Tk 1.35 lakh at the moment, but the unrelenting heat forced me to borrow some money

to buy two air conditioners -- one of the ACs has a one-tonne capacity and the other has a 1.5 tonne capacity, said

Sharif on Monday.

He also saw a crowd of people buying air conditioners at the store he went to.

My next festival bonus will not be enough to pay back the money in full. It will take a few more months to payback,

added Sharif.

As the heat wave reaches new heights across the country, the sale of air conditioners and air coolers has seen a sharp

rise among the city dwellers. In the last two years, traders have seen a boom in the sale of air conditioners during the

hot summer months.

Air-conditioners are no longer a luxury product and as prices have also come down over the years, even the middle

class people can afford it for some comfort, said SM Darajul Islam, category sales officer of Transcom Electronics.

Sales have increased at least 15 percent from last year, while prices of air conditioners have dropped 10 percent,

added Islam.

Transcom Electronics sells five leading brands of air-conditioners and they have good sales all year round for their

corporate customers.

However, traders target the home-use customers in April and May, when 80 percent of cooling appliances are usually

sold, said industry insiders.

Most shops fulfilled their sales target last week, when the temperature became extreme.

http://www.dhakatribune.com/business/economy/2017/05/28/grocery-prices-triple-month-fasting-begins/

17 | P a g e

Bangabandhu National Stadium Market, the biggest marketplace for electronic appliances in Dhaka, is now buzzing

with buyers looking at air-conditioners and other cooling appliances.

The summer heat has become unbearable and we cannot sleep at night, Sanjamul Kadir, a shopper at the

Bangabandhu Stadium Market in Gulistan.

He came all the way from the city's Sukrabad area to buy a 1.5-tonne air-conditioner for his bedroom.

According to estimates, around three lakh pieces of air conditioners are sold every year, while most are global brands

like Singer, Sony-Rangs, LG-Butterfly, General and Gree.

Buyers are mostly looking for 1.5-tonne to 2-tonne air conditioners, said a trader at Bangabandhu Stadium Market.

Currently, people are able to buy an air-conditioner starting from Tk 30,000 to more than Tk 1 lakh.

Md Mahabubul Wahid, general manager of marketing at Pran-RFL Group that assembles the Vision brand of air-

conditioners, said a supply of electricity is the main challenge to the sale of this product.

They receive a good response in Dhaka and Chittagong, but people in other towns are suffering from load shedding,

he said. That is why they prefer rechargeable fans, he added.

The price of air coolers is much cheaper than air conditioners, but customers feel cheated later when an air cooler

does not provide relief from the heat, he said.

Targeting the summer months, companies are also offering zero-interest, six to twelve months instalment schemes,

along with cash-back offers, special discounts and gifts.

This year, Singer Bangladesh is offering zero-interest for six-months out of a 15 instalment scheme, by depositing only

Tk 10,000.

Singer is selling air conditioners at a price range of Tk 39,990 to Tk 69,990. Local electronics brand Walton has set a

target to achieve 57 percent sales growth for air conditioners this year.

Source: http://www.thedailystar.net/business/ac-market-hots-mercury-climbs-1410952

Mastercard, MTB, Banglalink launch prepaid card

Mastercard, Mutual Trust Bank and Banglalink jointly launched a prepaid cardEasy Payment Cardas part of an

effort to provide the unbanked people with banking services.

MA Mannan, state minister for finance and planning, launched the card at a programme at Sonargaon Hotel in Dhaka

on Wednesday.

The holders of the card will get exclusive benefits, including privileges at over 1,700 merchant outlets nationwide,

vouchers worth Tk 1,500 and discounts at three of the country's top e-commerce sites and free internet data.

Furthermore, cardholders can enjoy the security and convenience that comes with Mastercard and MTB's extensive

network of POS and ATM acceptance locations across the country, Mastercard said in a statement.

Eligible Banglalink customers can register for this card free of cost at any MTB branch across the country, according to

the statement.

Shahjahan Mahmood, chairman of Bangladesh Telecommunication Regulatory Commission; Anis A Khan, CEO of

Mutual Trust Bank; Erik Aas, Banglalink CEO, and Syed Mohammad Kamal, country manager of Mastercard Bangladesh,

were also present among others.

http://www.thedailystar.net/business/ac-market-hots-mercury-climbs-1410952

18 | P a g e

Banglalink thrives to become a digital leader with the ambition to create value beyond connectivity and equipping

customers to pay digitally will give them a true financial freedom, save their time and will ultimately uplift their life

standards, Erik Aas said at the event.

Source: http://www.thedailystar.net/business/mastercard-mtb-banglalink-launch-prepaid-card-1411915

Robi posts Tk 171cr loss in first quarter

Newly-merged mobile phone operator Robi posted a net loss of Tk 171.10 crore in the January-March quarter as a

consequence of merger-related expenses.

The operator had made a net profit of Tk 39.70 crore during the same quarter in 2016, before its merger with Airtel in

November.

Robi had been a profitable venture in recent years. The operator, however, lost Tk 389 crore in 2016 as it paid merger

fees and spectrum charges and financed nationwide network modernisation work.

The second largest operator yesterday published its financial results for the quarter.

It said the high taxation regime coupled with heavy investment demands is putting tremendous strain on the

company's cost structure, discouraging sustained investment.

Robi's revenue grew 30.71 percent year-on-year to Tk 1,546.90 crore in the January-March quarter, with incomes from

data sales contributing 83 percent to the growth, according to its financial report. During the first quarter we

continued to bring the most innovative and affordable product offers to the market, said Mahtab Uddin Ahmed, chief

executive officer of Robi, in a statement.

We started this year with an expectation to provide the widest mobile network coverage and superior mobile services

experience to our subscribers, he said, adding that the operator has successfully completed network integration in

12 regions covering 50 percent of Airtel's subscribers.

Robi added 24 lakh new customers in the quarter to take its total subscriber base to 3.62 crore, grabbing a 27.5 percent

market share.

The operator invested Tk 410 crore as capital expenditure in the first quarter to expand and improve the network.

Robi has network coverage in all 64 districts through its more than 12,000 sites, of which over 7,900 are 3G sites.

Although the network integration work is going on smoothly, the absence of tech-neutrality facility is making it difficult

to ensure expected service quality, said the company.

In the first three months of the year, Robi contributed Tk 680 crore to the exchequer.

Source: http://www.thedailystar.net/business/robi-posts-tk-171cr-loss-first-quarter-1410934

: -

-

() , -

http://www.thedailystar.net/business/mastercard-mtb-banglalink-launch-prepaid-card-1411915http://www.thedailystar.net/business/robi-posts-tk-171cr-loss-first-quarter-1410934

19 | P a g e

()

- ,

() ,

,

-

,

() () ,

() ,

, , ,

Source: http://bonikbarta.net/bangla/news/2017-05-28/118762/

()

,

http://bonikbarta.net/bangla/news/2017-05-28/118762/http://www.arthosuchak.com/archives/343568/%e0%a6%87%e0%a6%89%e0%a6%b0%e0%a7%8b%e0%a6%aa%e0%a7%87-%e0%a6%b8%e0%a6%ac%e0%a6%9c%e0%a6%bf-%e0%a6%b0%e0%a6%aa%e0%a7%8d%e0%a6%a4%e0%a6%be%e0%a6%a8%e0%a6%bf-%e0%a6%a8%e0%a6%bf%e0%a6%b7%e0%a6%bf/

20 | P a g e

, -

,

, -

Source: http://www.arthosuchak.com/archives/343568

International News US economy slowed less than expected in Q1

The US economy slowed less than initially thought in the first quarter, but softening business investment and moderate

consumer spending are clouding expectations of a sharp acceleration in the second quarter.

Gross domestic product increased at a 1.2 percent annual rate instead of the 0.7 percent pace reported last month,

the Commerce Department said on Friday in its second GDP estimate for the first three months of the year.

That was the worst performance in a year and followed a 2.1 percent growth rate in the fourth quarter.

"Economic indicators so far aren't entirely convincing on a second-quarter bounce in activity and show a US economy

struggling to surprise on the upside," said Scott Anderson, chief economist at Bank of the West in San Francisco.

The first-quarter weakness is a blow to President Donald Trump's ambitious goal to sharply boost economic growth.

During the 2016 presidential campaign Trump had vowed to lift annual GDP growth to 4 percent, though

administration officials now see 3 percent as more realistic.

Trump has proposed a range of measures to spur faster growth, including corporate and individual tax cuts. But

analysts are skeptical that fiscal stimulus, if it materializes, will fire up the economy given weak productivity and labor

shortages in some areas.

"If the economy is going to grow at 3 percent for as long as the eye can see, businesses better spend lots of money on

capital goods. That is not happening," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland,

Pennsylvania.

The economy's sluggishness, however, is probably not a true reflection of its health, as first-quarter GDP tends to

underperform because of difficulties with the calculation of data that the government is working to resolve.

The government raised its initial estimate of consumer spending growth for the first quarter, but said inventory

investment was far smaller than previously reported. The trade deficit also was a bit smaller than estimated last

month.

Economists had expected that GDP growth would be revised up to a 0.9 percent rate. Despite the tepid growth, the

Federal Reserve is expected to raise interest rates next month.

http://www.arthosuchak.com/archives/343568

21 | P a g e

The dollar was trading slightly higher against a basket of currencies on Friday, while US stocks were flat after six straight

days of gains. Prices for longer-dated US government bonds rose.

Though the economy appears to have regained some speed early in the second quarter, hopes of a sharp rebound

have been tempered by weak business spending, a modest increase in retail sales last month, a widening of the goods

trade deficit and decreases in inventory investment.

In a second report on Friday, the Commerce Department said non-defense capital goods orders excluding aircraft, a

closely watched proxy for business spending plans, were unchanged in April for a second straight month.

Shipments of these so-called core capital goods dipped 0.1 percent after rising 0.2 percent in March. Core capital goods

shipments are used to calculate equipment spending in the government's gross domestic product measurement.

Second-quarter GDP growth estimates range between a rate of 2.0 percent and 3.7 percent rate.

"It looks instead that many companies may be delaying their equipment purchases for now to see if they get a better

tax deal later on down the road," said Chris Rupkey, chief economist at MUFG Union Bank in New York.

The GDP report also showed an acceleration in business spending equipment was not as fast as previously estimated.

Spending on equipment rose at a 7.2 percent rate in the first quarter rather than the 9.1 percent reported last month.

Growth in consumer spending, which accounts for more than two-thirds of US economic activity, rose at a 0.6 percent

rate instead of the previously reported 0.3 percent pace. That was still the slowest pace since the fourth quarter of

2009 and followed the fourth quarter's robust 3.5 percent growth rate.

With consumer sentiment hovering at lofty levels, consumer spending could pick up. But there are worries that surging

household debt could cut into spending as monthly repayments squeeze paychecks.

Businesses accumulated inventories at a rate of $4.3 billion in the last quarter, rather than the $10.3 billion reported

last month. Inventory investment increased at a $49.6 billion rate in the October-December period.

Inventories subtracted 1.07 percentage point from GDP growth instead of the previously estimated 0.93 percentage

point.

The government also reported that corporate profits after tax with inventory valuation and capital consumption

adjustments fell at an annual rate of 2.5 percent in the first quarter, hurt by legal settlements, after rising at a 2.3

percent pace in the previous three months.

Penalties imposed by the government on the US subsidiaries of Credit Suisse and Deutsche Bank related to the sale of

mortgage-backed securities reduced financial corporate profits by $5.6 billion in the first quarter.

In addition, a fine levied on the US subsidiary of Volkswagen related to violations of US environmental regulations cut

$4.3 billion from non-financial corporate profits.

Source: http://www.thedailystar.net/business/us-economy-slowed-less-expected-q1-1411951

Car wars: Trump-Germany salvo raises EU-US trade fears

US President Donald Trump has launched a salvo against German car exports to the United States, officials confirmed

Friday, in the latest sign of simmering transatlantic trade tensions.

Speaking after German media reported the US president as having described the Germans as "bad, very bad",

European Commission president Jean-Claude Juncker tried to play down the latest spat to erupt since Trump came to

power pursuing a protectionist agenda.

http://www.thedailystar.net/business/us-economy-slowed-less-expected-q1-1411951

22 | P a g e

Suggesting the comment attributed to Trump had been mistranslated, Juncker confirmed that Trump had raised

Germany's large trade surplus with the US in the automobile sector during trade talks in Brussels on Thursday.

"I don't want to comment but I have to," said the head of the EU executive, who is in overall charge of the giant

economic bloc's trading relationship with the rest of the world.

"It is not true the president was aggressive in his approach. This a translation problem," he said in Italy at a G7 summit

attended by Trump, German Chancellor Angela Merkel and other leaders.

"He did not say the Germans were behaving bad. He said we have a problem. It was not aggressive."

Trump's economic advisor Gary Cohn also insisted the exchanges had been amicable but that an important issue for

the new administration had been put on the table.

"He said they're very bad on trade but he doesn't have a problem with Germany," Cohn told reporters, saying Trump

had highlighted his father's German heritage. "He (Trump) said: 'I don't have a problem with Germany, I have a

problem with German trade'," Cohn insisted.

According to the German media reports Trump had complained bitterly about the likes of Volkswagen, BMW and

Mercedes selling millions of vehicles to the US and vowed to stop it.

Whatever the exact truth, the issue did not prevent Trump and Merkel enjoying a light-hearted moment together at

the start of the G7 summit, when they were seen laughing in the company of Britain's Theresa May and EU president

Donald Tusk.

Source: http://www.thedailystar.net/business/car-wars-trump-germany-salvo-raises-eu-us-trade-fears-1411888

China considers tighter controls on yuan currency

China said Friday it is considering a change to its mechanism for managing its currency to buffer it against market

forces, in an apparent step back from liberalisation pledges.

The potential new system would introduce a "counter-cyclical factor" to China's current system of allowing the yuan

to trade within a government-set band, according to a statement on the website of the Foreign Exchange Trade

System, an agency under the People's Bank of China.

The statement did not explain how the mechanism would work but said it would take into account the country's

economic "fundamentals" as a counter to market forces.

"The goal is to properly hedge" against fluctuations based on market sentiment and "to ease the potential herd effect,"

it said, adding that the current system was vulnerable to "irrational expectations". China only allows the yuan to rise

or fall two percent on either side of rate fixed daily.

The band has been in place for more than a decade, gradually widened over the years, and authorities have taken

steps to make it more market-based, earning plaudits for China and helping the yuan gain greater world recognition.

Last October, it joined the dollar, pound, yen and euro in the IMF's "special drawing rights" reserve currency basket.

But since last year, the yuan has plummeted to its lowest levels against the dollar in several years as the greenback

spiked and Chinese investors and businesses moved huge sums of money offshore.

The move "sounds like an increased role for the fixing to be nudged away from where markets would set it," Sean

Callow, a senior currency strategist at Westpac Banking Corp. in Sydney, told Bloomberg News.

"The authorities' actions give the impression that they are more worried about yuan stability than declared in their

public statements."

http://www.thedailystar.net/business/car-wars-trump-germany-salvo-raises-eu-us-trade-fears-1411888

23 | P a g e

China has pledged to allow market forces to play a bigger role in its capital markets. But besides a slowing economy,

authorities are currently grappling with mounting debt that this week earned China its first credit rating downgrade in

nearly three decades, from Moody's.

Having greater control over the currency could help authorities maintain yuan stability during the debt-reduction

campaign.

Source: http://www.thedailystar.net/business/china-considers-tighter-controls-yuan-currency-1411942

Pakistan hikes development budget by 40pc

Pakistan on Friday announced a 40 percent increase in its development budget over the next financial year as the

government continues to invest in infrastructure projects.

Speaking to parliament, Finance Minister Ishaq Dar said the Public Sector Development Program would have its

funding increased from 715 billion rupees ($6.8 billion) to 1,001 billion rupees for 2017-18.

The government also announced an 11 percent hike in total expenditure over the next year, as positive financial

indicators and an improving security situation attract more investors to the country.

"The estimate for the total expenditure in the year 2017-18 is 4,753 billion rupees, which is 11.7 per cent more than

the previous year's expenditures of 4,256 billion rupees," Dar said.

The defence budget has been increased from 841 billion rupees to 920 billion rupees.

On Thursday, the government said its economy expanded almost 5.3 per cent, its largest increase in a decade.

The rise follows a construction boom linked to a $50-billion Chinese investment plan to upgrade transport and power

infrastructure.

Confidence in Pakistan is growing, with the International Monetary Fund saying in October that the country had

emerged from crisis and stabilised its economy after completing a bailout programme.

Pakistan's credit rating has also improved, though foreign investment remains poor compared to its South Asian

neighbours.

Economists believe the country will need to register sustained growth of six to eight percent over several years to

make a significant dent in poverty and provide enough jobs for its youth.

Source: http://www.thedailystar.net/business/pakistan-hikes-development-budget-40pc-1411933

IMF sets tough new Ukraine loan demands

The International Monetary Fund said on Friday it will only release a new tranche payment to Ukraine once parliament

approves a long-stalled pension system overhaul and land privatisation legislation.

The IMF said after completing its latest mission to the war-torn country that Ukraine's economy was continuing to

recover from a dire recession and was on course to expand by more than two percent of gross domestic product this

year.

Ukraine is using a $17.5-billion (15.6-billion-euro) IMF lifeline to recover from crises sparked by a Russian-backed war

in the separatist industrial east that began in April 2014 and has claimed more than 10,000 lives.

http://www.thedailystar.net/business/china-considers-tighter-controls-yuan-currency-1411942http://www.thedailystar.net/business/pakistan-hikes-development-budget-40pc-1411933

24 | P a g e

The loss of industries in the war zone and flight of foreign investors saw the former Soviet republic's economy shrink

by 17 percent in 2014-2015.

But the IMF now expects Ukraine to achieve sustainable growth by cutting the expense of a pension system that

accounts for nine percent of gross domestic product and supports about one third of the population.

It also wants land sales approved by a parliament in which the government holds only a slim ruling majority and where

opposition to the proposal is strong.

The IMF said its "discussions focused on the pending pension and land reform and on measures to speed up the

privatisation process". "Securing parliamentary approval of these draft laws will be needed to pave the way for the

completion of the fourth review," it said in a statement.

Ukraine has so far received only $1 billion of the $4.5 billion it hopes to see from the IMF this year.

A spokesman for the global lending body told AFP that the size of the next tranche payment would be determined by

the IMF's Executive Board after the legislation in question is passed into law.

Overall, Ukraine has received $8.3 billion from the IMF since the package was approved in February 2015.

Prime Minister Volodymyr Groysman has prepared a pension overhaul plan that will undergo further reviews before

being submitted to parliament.

Senior officials had said they do not intend to tackle the land privatisation issue until 2018.

London-based emerging markets economist Timothy Ash said opposition forces in parliament led by former premier

Yulia Tymoshenko could use the land reform issue as a pretext for trying to oust the government.

Source: http://www.thedailystar.net/business/imf-sets-tough-new-ukraine-loan-demands-1411870

Modis generics-only drugs plan worries Indian pharma sector

Indias plan to bring in a law to ensure doctors prescribe medicines only by their generic names risks proliferating the

sale of substandard drugs in a country where regulation is already lax, doctors and pharmaceutical executives say.

Prime minister Narendra Modi said last month that the government was looking at such a law to improve

affordability of medicines in the country of 1.2 billion people, where the majority live on less than $2 a day.

The government has not given any details or timeframe for the planned legislation but some in the industry fear that

hasty execution could harm, not help, public health.

Large drugmakers in India such as Cipla and Sun Pharmaceutical Industries that mostly sell generic drugs under their

own brand name, or branded generics, compete with much smaller garage manufacturers, many of which operate

with scant quality checks.

It is a fiercely competitive, high-volume market, dominated by the big players like Cipla, who employ armies of

salesmen to sell their drugs. Some doctors

say they tend to prescribe branded generics to patients because they are confident of their quality.

While the government wants to make cheaper non-branded drugs available to consumers, pharmaceutical

executives said any law would have to stipulate that the drugs consumers get from pharmacists meet certain quality

standards.

I think the quality aspect is very important for the government to address ... to make sure that all companies in India

are on the same quality footing, said Ciplas CEO Umang Vohra.

There is no national data comparing the quality of branded generics, versus unbranded ones. But small studies have

shown that unbranded drugs, typically procured by the government for the public health system, have quality issues.

A report by the countrys federal auditor in 2012 showed that 31 per cent of drugs procured by the government for

the Armed Forces Medical Stores were substandard in 2010-11, up from about 15 per cent in 2006-07.

http://www.thedailystar.net/business/imf-sets-tough-new-ukraine-loan-demands-1411870

25 | P a g e

Results of the governments largest-ever national survey to test drug quality showed this year that roughly 10 per

cent of the drugs in the government supply chain were not of standard quality, versus 3 per cent of drugs available

at pharmacies, which are usually branded generics.

Generics are fine, but there has to be a proper rigorous mechanism to enforce quality, like the U.S., and unless India

evolves on that it will be disastrous, said Nilesh Gupta, managing director of Lupin, Indias No 3 drugmaker by sales.

Substandard medicines range from drugs that dont work at all to those that dont work as expected, thereby

contributing to antimicrobial resistance - a major global health problem.

The idea is very good, but the government needs to ensure the availability of good quality generics, said Vijay

Panikar, a Mumbai-based diabetologist.

Indian drugmakers manufacturing standards, including those of big companies such as Sun Pharma, have been

found to have fallen short of international standards in recent years. An industry official said last week that it will be

at least five years before Indian manufacturing and data reliability meet the standards of the United States, Indias

biggest drugs export market.

Its a work in progress ... I think the bigger companies understand the problem and are working to fix it, said Gupta

of Lupin.

Health experts warn of a series of problems with the implementation of a generics-only rule. For example, half the

Indian market is made up of combination drugs, and it would be impractical to ask doctors to prescribe a series of

chemical names, said S Srinivasan, a doctor and member of the Peoples Health Movement, a New Delhi-based NGO.

Doctors opposed to the planned new rule warn it would put too much power in the hands of the chemists.

Today if I write a generic, the chemist will decide which drug to give, and he will obviously give the one in which he

has the biggest margin, without caring about quality, Panikar said.

Source: http://www.newagebd.net/article/16408/modis-generics-only-drugs-plan-worries-indian-pharma-sector

http://www.newagebd.net/article/16408/modis-generics-only-drugs-plan-worries-indian-pharma-sector