This is not for those India worshippers or Paki bashers but for the Bangladeshis who really care for Bangladesh. You may read from the links as well, one is a news item another is a discussion on a blog- please read the comments (interesting calculations given against the think tank's claim and calculations) -hope alochona allow this. Haque FIRST PAGE $1.0b Indian credit
Fresh conditions put project executing agencies in trouble
FHM Humayan Kabir
Government agencies will sit with the Indian EXIM Bank next week in Dhaka to remove complexities in the implementation of schemes taken under US$1.0 billion credit offered by the latter, officials said Tuesday.
Finance ministry officials said the project implementing agencies of the government will discuss terms and conditions with the Indian lender.
"The implementing agencies are facing trouble, especially in relation to procurement, as Bangladesh needs to spend 85 per cent on procurement from India for its billion dollar projects," a top finance ministry official told the FE.
In addition, Indian side has imposed some new conditions like inclusion of its supervising agencies to monitor the project works in Bangladesh, he said.
"We have arranged a meeting with the Indian lender next week to discuss terms and conditions of the projects under its $1.0 billion fund," M Musharraf Hossain Bhuiyan, secretary of the Economic Relations Division (ERD) told the FE.
"The project implementing agencies often request us for clarifications of the terms and condition of the project works. Now, they will have the opportunity to discuss with the Indian lender on those issues," he said.
The Indian government has committed to providing US$1.0 billion loan for Bangladesh to implement projects, which will facilitate transit and transshipment for the neighbour.
Bangladesh has, so far, undertaken 14 projects to implement under the Indian loan.
A Roads and Highways Department (RHD) official said: "For procuring goods, it is easy to comply with conditions for 85 per cent procurement from India under the credit deal. But when it comes to construction of road or any infrastructure it is difficult to follow the condition."
So, we need to clarify terms and condition during the upcoming meeting with the Indian lender," he said.
The official said: "The Indian government wants to supervise some projects through its own consultant. But, there is no provision for appointment of consultant. It has created complexities in execution."
If the project implementing agencies want to add any new component to the project design, it will require further approval of the government's highest project approval body -- ECNEC.
The ECNEC has already approved some projects including procurement of six dredgers at $71.69 million Indian credit, 10 broad-gauge locomotives for Bangladesh Railway at $ 31.55 million, 60 fuel-oil carrying tank wagons and two brake vans at $8.85 million, up-gradation of Sarail-Brahmnbaria-Sultanpur-Chinyar-Akhaura-Sonarbadi land-port road at $ 33.82 million, construction of Jurain rail-crossing overpass and Malibag rail-crossing flyover at $ 31.44 million cost. http://www.thefinancialexpress-bd.com/more.php?news_id=116518&date=2010-11-03 The number, not the name i 2 Votes
A few weeks ago, I struggled to understand the economic logic behind not charging Indian vessels for using our waterways. Since then, I've been doing some digging around. First, I talked with an international trade expert who used to work in the OECD. It turns out that there is no economic logic at all. However, there are some technical details pertaining to international trade laws and protocols — a subject well outside my area of expertise. So it's important to understand what we can and can't charge. But the second point is more important. I've been digging around for numbers. We were told earlier that transit will be associated with our growth rate rising from 6% to 8%. I've been trying, unsuccessfully, to understand where these numbers came from. It's the second issue — numbers — that's much more important. Can we have some discussion on this. The name The Finance Minister recently said: They will use our facilities to transport their goods. Our infrastructure will be used and that involves some costs for the government. So we'll have to take something; it may be called fee or anything. It appears that there is a bit of confusion in the public domain about fees and duties. A duty is a percentage charge on either volume (like sticks of cigarettes or litres of alcohol) or value (a dollar or taka amount). Duties cannot be charged on transit goods under WTO rules. A duty can be charged only if a container is opened in Bangladesh, regardless of final destination. But if an unopened container passes through Bangladesh (whether from Benapole to Akhaura, or from Chittagong to Dinajpur to Nepal, or from Chittagong to Burma to Kunming, China), then we can't charge duty. Thus, for example, if I take, say, 2 cartons of cigarette from Dhaka to Sydney via Singapore, Singapore won't charge me anything, but in Sydney I'd have
to pay a duty on one carton (one is duty free). However, a fixed transit fee can be charged for goods in transit. As far as I can tell, part of the fees the Indian vessels were being charged is perfectly compatible with the WTO rules — the 10,000 taka per container is a fixed charge regardless of the value or the volume of the container. However, the 1,000 taka per tonne may be breaching the rules. So, we can't charge duty, but we can charge a fee — that's pretty much as far as the debate about what will be charged (ie the name of the charge) goes. The number There is a far more serious debate, and the one we aren't having, about how much will be charged. Let's go through some numbers. According to media reports, Bangladesh collects 5 crore taka a year on transit fees on waterways. Let's put this number into perspective. In 2010, Bangladeshi economy is likely to be worth 730,000 crore taka.* Of course, this is just the fee for waterways. Nothing has been said about fees on road and rail transit, which will surely be larger. Sure. How much larger? Here is what Shahedul Anam Khan says in the rabid anti-Indian propaganda rag Daily Star: However, going by a study of a leading think tank in Bangladesh, the country is likely to make $2.3 billion net profit in 30 years by giving transit to the three countries. And that comes to less than $80 million annually. The figure is in marked contrast to what we have been given to believe so far. We had been told by our neighbour and also by our development partners that milk and honey would flow in Bangladesh if we allowed our neighbours the use of our territory for transit. That we would, to a very large extent, be able to balance the much skewed trade balance between Bangladesh and India. And now all that we might end up with is a sum of Tk.600 crore annually!! Right, 600 crore taka a year. Our government's tax take is way over ten hundred times that amount. But still, 600 crore taka is nothing to scoff at. And we shouldn't forget the second round effects of this money flowing through our economy. Okay, let's think through the second round effects. On the plus side, the government could spend 600 crore taka into productive things. The Indian vehicles passing through our territory will have drivers who will spend money, which will generate further private sector income. And the improvement in our infrastructure will also have spillover benefits. On the negative side, there will be more pollution, more congestion, dislocation caused by land acquisition to build roads, and political fallouts (imagine dozens of Rupganj like incidences). I have no idea what the final tally of these second round effects will be. But I do remember what was said back in December-January. Back then, BEI's Faruq Sobhan told the Economist that a transit could be associated with our growth rate going from 6% to 8%. Back then, CPD's Mustafizur Rahman echoed this in a number of talk shows and round tables. Now, 2% of 700,000 crore* taka is 14,000 crore* taka. If the government collects 600 crore taka directly, we are expected to see a net second round benefit of over twice as much. That's a multiplier of well over 20.* And never mind the permanent growth impact. I'd like to see the macroeconomic model whence these fantastic numbers pop out. We're being told take a lot of leaps of faith from the existing 5 crore taka to the 8% growth rate. Instead of debating whether we are charging a duty or a fee, let's expose these fantastic numbers. —- Update 12 Nov: It has been pointed out to me that many people might reade 'fantastic numbers' and think I am endorsing the claimed benefit of transit. I am not doing any such thing. Here is the dictionary meaning of the word fantastic: conceived or appearing as if conceived by an unrestrained imagination; odd and remarkable; bizarre; grotesque: fantastic rock formations; fantastic designs. I hope this clears up any confusion. Update 2: The orginal post had a mistake. I wrongly thought 1 billion = 10 crore. I have been advised that 1 billion = 100 crore. Needless to say, this strenghens the post's scepticism about the 2% growth acceleration case. I thank Idune (see the comments) below for pointing out the mistake. http://unheardvoice.net/blog/2010/11/12/6585/#more-6585
--- On Sun, 21/11/10, Wazed Khondkar <wkkhondkar@yahoo.co.uk> wrote:
From: Wazed Khondkar <wkkhondkar@yahoo.co.uk>
Subject: RE: [ALOCHONA] Bangladesh Fooled By Indian Tansit Deal--Says who?
To: alochona@yahoogroups.com
Date: Sunday, 21 November, 2010, 11:49 AM
| Mr. Anwar,
Thanks for your support on this matter. Here are my predictions of what will happened to BD's future if this transit deal is allowed to happened -
1. Within five years of opening the borders of BD to allow India to transport its goods/services to the rest of the world - most of the industries of BD will shut down or will be under foreign (Indian) ownership. This is the worst case scenario but thanks to the incompetence of our leaders and politicians this will become a reality.
2. The revenue that BD should earn from the transit deal will never be fully realised - most of the revenue will end up in the pockets of dishonest, criminal border security forces, politicians and members of the tax/inland revenue boards.
3. The Indian multinational companies will bribe the BD officials to keep their mouth shut so they can move their goods and services through BD without paying any tax/tariffs etc.
4. The transit deal will legitimise black market economy, cross-border terrorism and underworld criminals.
5. This deal will strengthen the grip of India on BD's economy and paralyse local industries.
If you think these predictions are inaccurate then consider this - in a perfect world all people of south Asia would live in peace and harmony and respect each others religion, culture - have common market economy so they can do business with each other in a fair level playing field. Unfortunately this is not a perfect world. Countries like India and BD have endemic corruption - just look at what has happened during Commonwealth Games in India - it has exposed the underbelly of Indian culture - corrupt, incompetent, racially divided.
In this backdrop one would think twice before signing a deal with India to open up its borders.
Salam.
--- On Sun, 21/11/10, Shafqat Anwar <anwarshafqat@hotmail.com> wrote:
From: Shafqat Anwar <anwarshafqat@hotmail.com>
Subject: RE: [ALOCHONA] Bangladesh Fooled By Indian Tansit Deal--Says who?
To: "Alochona Management" <alochona@yahoogroups.com>
Date: Sunday, 21 November, 2010, 5:43
Dear Alochoks,
I fully agree with Wazed Khondkar. Mr. Robin K's comments are totally unwarranted for and imbalanced. If he has to refute the views expressed on the ongoing/concluded transit deal then he should come up with well-reasoned/logical arguments in favour of the benefits of the transit arrangement which he has obviously avoided in this instance. This raises the question that whose interest he actually represents !
Shafqat Anwar
To: alochona@yahoogroups.com From: wkkhondkar@yahoo.co.uk Date: Sat, 20 Nov 2010 19:19:36 +0000 Subject: Re: [ALOCHONA] Bangladesh Fooled By Indian Tansit Deal--Says who? Dear Alochoks,
Mr. Robin Khondkar wrote the following regarding mine and Mr. Emanur Rahmans comment on this matter (please see below). I am sorry I did not know that Mr. Robin only write to alochona to win a Noble prize or some kind of recognition from the ruling elite of BD or am I being cynical like Mr. Robin? Some of us mere mortals only express their opinions and there are a lot of Bangladeshies at home and abroad would agree with our views. He is porbably a traitor (I hope not) and an opportunist politicians of BD but us mere mortals do not have a sinister plot like Mr. Robin. Mr. Robin is free to express his views any way he wishes but should not make personal attack just because other people do not agree with his views. Mr. Robin should highlight the good points about the transit deal. Please share this with the rest of us. You have to excuse my intelligenece but I can not see how the transit deal would be a good deal for BD. Salam --- In alochona@yahoogroups.com, Robin Khundkar <rkhundkar@...> wrote: > > And ofcourse you two wonderful Gents are the very embodiment of patriotism, love of country, the milk of human kindness. Frankly I am astounded that both of you have not been bronzed yet as national heroes. I must tell my traitorous sycophantic oppurtunistic friends what a wonderful oppurtunistic they are missing. The contract for your statues is worth millions. Just imagine....... > > > > > > From: Emanur Rahman <emanur@...> [Add to Address Book] > To: alochona@yahoogroups.com > Subject: Re: [ALOCHONA] Bangladesh Fooled By Indian Tansit Deal--Says who? > Date: Nov 10, 2010 11:19 PM > > We do not have a Bangladeshi administration. Therein lies the problem. We have traitors in power. All the evidence suggests the same. Its not even about party interests. I dare say many AL supporters and party members also recognise this but choose not to speak up because they are either traitors, opportunists, sycophants or just plain stupid. > > Emanur Rahman | m. +447734567561 | e. emanur@... > > > ---------------------------------------------------------- > > From: Wazed Khondkar <wkkhondkar@...> > Sender: alochona@yahoogroups.com > Date: Sun, 7 Nov 2010 20:31:45 +0000 (GMT) > To: < alochona@yahoogroups.com> > ReplyTo: alochona@yahoogroups.com > Subject: RE: [ALOCHONA] Bangladesh Fooled By Indian Tansit Deal--Says who? > > > Dear Alochoks, > > This is another interesting news about the transit route for India. So, India will save 70% of transport cost at the expense of Bangladesh. This means India will be able to export their goods at a much cheaper cost and be more competitive. So what will happened to industries in Bangladesh? > > What has India done so far for Bangladesh? What has happened to trade imbalance between Bangladesh and India? Why cannot Bangladesh sale its goods and services to India without any entry barriers? > > Certain groups of people with vested interest trying to hood wink the population of Bangladesh into thinking that a transit route for India is good for Bangladesh. This is indeed very bad news for Bangladesh. India can look after its interest but who is looking after Bangladesh's interest. Certainly not our politicians. > > This issue has such a national importance that it should be put forward to the public in a referendum รข€" let the people of Bangladesh decide whether it is good for them or not. This issue should not be decided by Mujib's daughter or Dictator's wife and sons but by the people of Bangladesh. > > I see some analogy between this issue and the European single currency - UK did not join the single currency the Euro. Had UK joined the single currency (which is dominated by Germany) it would have been a complete disaster for UK economy. > > Politicians in the UK put their national interest first whereas politicians in Bangladesh put their parties interest first. > > Salam > |
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about 1 week ago
Thanks for bringing the issue up. What you also need to tally is the loss of BD export due to transit. There is an informal trade of goods being sent from BD to NE Indian market (e.g. cosmetics, BD packaged foods,etc..) that can be significant. This opportunity is there because of high shipment cost from rest of India to NE. This shipment cost will be significantly reduced with BD transit.
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about 1 week ago
Acoording to CIA factbook Bangladesh GDP (in PPP) is
USD $241.1 billion (2009 est.)
https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
So Faruq Sobhan had essentially said Bangladesh will gain 33,600 crore taka (2% growth) annually by giving india transit.
2. Overburden and crowding cost on Bangladesh roads, bridges and rail systems.
3. Cost from increased smuggling of Indian goods and effects on Bangladesh industry.
4. Opportunity cost from smuggling and uneven competition from Indian products.
5. Cost from more easy transport of Indian drugs and narcotics.
6. Spread of AIDS from heavily infected Indian transport workers.
7. Cost from Increase human trafficking.
8. Added security costs and concern.
9. Strategic costs and implications.
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