The High Court on Thursday directed the labour and employments ministry secretary to submit a report by August 6 on progress in putting in place fire safe and structural integrity measures at apparel factories in accordance with the National Tripartite Plan of Action. A bench of Justice Mirza Hussain Haider and Justice AKM Zahirul Haque issued the directive after hearing a petition from rights groups—Ain O Salish Kendra and Bangladesh Legal Aid Services Trust. The petition stated that the action plan was adopted by the government, the employees and workers at a tripartite meeting jointly organized by the labour ministry and the International Labour Organization. It said that the action plan was adopted after hundreds of workers were killed in devastating factory fires at Tazreen Fashions in November 2012 and the Smart Export Garment in January 2013 and the Rana Plaza disaster in April 2013. It said that the tripartite action plan required taking comprehensive actions to prevent further loss of life, limbs and property in factory fires and other accidents. The action plan required taking six short and medium term steps to improve structural integrity of apparel factories and other measures to prevent recurrence of disastrous accidents, said the petitioners. The bench also asked the labour ministry secretary to explain by August 6 why he would not be held responsible for the Rana Plaza disaster which killed 1,129 people, mostly female apparel workers and left 2,000 others maimed. The secretary was also asked to explain why he would not be punished for the disaster. The court posted the next hearing on the suo moto rule it had issued on April 30, 2013 for August 10. The rule had asked 26 other government and private functionaries to explain why they would not be held responsible for the Rana Plaza disaster and punished for their negligence. Lawyer Tanim Hussain Shawon appeared for the petitioners.

Japan’s nearly US$1.2 billion worth of soft loan for five development projects is facing delay despite Bangladesh government’s aggressive effort for confirming the assistance, officials said Wednesday. Insiders said gloomy business and political environments and increased dependence on a certain bilateral donor country are cited as major reasons behind the delays. The loans are arranged under the Tokyo-assured 36th development aid package. “Deal on the nearly $1.2 billion assured loan was scheduled to be signed with JICA (Japan International Cooperation Agency) by March this year. Political impasse and government’s increased dependency on a Japanese rival country are the key reasons for the delay,” said a senior government official. The Japanese donor agency, to mention, had completed negotiations with the Bangladesh government nearly six months back and assured confirming the loan by March this year. “Bangladesh has requested repeatedly JICA’s Dhaka office to finalise the 36th ODA (Official Development Assistance) package as soon as possible. But the Japanese side is neither giving a schedule for signing nor informing any reasons behind the delay,” said a Ministry of Finance (MoF) official. “We are in trouble with the Japanese loan as we have so far failed to get any confirmed date from the JICA,” he told the FE, requesting anonymity. Another MoF official said a JICA mission is expected to visit Dhaka within next 2.0-3.0 days. During that time, the issue of the pending aid-package deal will be raised. A special economic zone (SEZ) exclusively for Japanese investment is the priority one among the five infrastructure-development projects Japan has chosen in Bangladesh under the 36th ODA package. Government officials said the main objective of the proposed Japanese financial support is to develop an exclusive SEZ in Chittagong to bring in investment from the world’s third-largest economy. The four other projects in the package are: Dhaka-Chittagong national power grid strengthening; western Bangladesh bridge improvement; maternal, neonatal and child health care; and local government improvement. A top government official delves deep to specify some dampers on the Japanese mood, which include government’s bonhomie with China in matters of cooperation — apparently as Tokyo was in a sort of cold war with Beijing over the South China Sea. “The government has recently ignored some of Japan’s financing proposals for some development projects. But the government has accepted the Chinese financing proposals on the same projects. This incident may irk Japan,” he says. Meanwhile, a mission from the JICA visited Dhaka in September last year to work out detailed financing plan for the five proposed projects. The MoF official said: “We are desperately waiting for the loan-signing ceremony. Since Japan is our best bilateral development partner, we are eagerly waiting for their positive decision.” He also cites problem on the political front as another cause of concern holding back the investment clearance. “This is a reality that the latest political deadlock had delayed the loan signing further. The three months of political deadlock between January and March affected not only the Japanese assistance but also other external cooperation,” he said. Analysts are of the opinion that a breakthrough in the political standoff over poll issues could unleash a spree in investment and economic activity in the country that holds high potential in various sectors.

Falling trend of the country’s overall imports continued in May due to lower prices of essential commodities including fuel oil in the global market, officials said on Thursday. Opening of letters of credit (LCs) against imports, generally known as import orders, decreased by 9.56 per cent to US$ 3.47 billion in May 2015 from $ 3.84 billion in the same month of the previous calendar year. On the other hand, the settlement of LCs, generally known as actual imports, dropped by 6.29 per cent to $ 3.05 billion during the period under review from $ 3.26 billion in the corresponding period in the previous year. “The imports, in value terms, maintained a declining trend during the period under review mainly due to lower prices of petroleum products on the global market,” a senior official of Bangladesh Bank (BB) told the FE. But the import increased in May last over the previous month of this calendar year, the central banker explained. The actual import of fuel oils dropped by 46.57 per cent to $ 250.47 million in May last from $ 468.78 million in the same month of the last calendar year, the BB data showed. The BB official also said import of different essential items, including scrap vessels and capital machinery decreased during the period under review. However, actual import of back-to-back import for readymade garment (RMG) products increased in May last compared to the same month of the previous year, he added. “Overall imports normally decrease in the months of April and May before the national budget,” the central banker observed.

Despite offering lucrative incentives, Bangladesh has failed to prove itself as an attractive investment destination. The volume of FDI (Foreign Direct Investment) has also remained low compared to those of the neighbouring countries. Financial analysts and businesspeople at a seminar expressed on Thursday the view identifying lack of policy consistency, underdeveloped infrastructure, lack of power and energy, scarcity of land, lack of good governance and deteriorating law and order situation as some major problems hindering foreign investment in the country.”The government should settle the issue of KEPZ (Korean Export Processing Zone) immediately. It is tarnishing our image home and abroad and giving wrong signals,” said Bangladesh Economic Association (BEA) General Secretary Dr Jamaluddin Ahmed while addressing the seminar on “FDI and another Major Determinant of GDP: A Relationship Analysis” at the Board of Investment (BoI) office on Thursday. Jamal, also a former president of the Institute of Chartered Accountants of Bangladesh (ICAB), pointed out that a large amount of foreign investment is waiting but the country fails to attract the same mainly due to policy constraints accompanied by bureaucratic bottlenecks. “You are good theoretically, but in reality it is quite difficult to invest in your country,” said Jamal quoting some foreign buyers whom he had encountered recently at an international seminar. To attract more FDI into the country, he said, the government should put in place incentive packages with wide-ranging investment-friendly support measures. The prevailing incentives, together with market-oriented reforms, significant socio-economic achievements and highly favourable demography, can make the country one of the attractive investment destinations. BoI executive chairman Dr SA Samad, who moderated the programme, pointed out that the government had undertaken a number of reform programmes including automation of some supportive services to facilitate investors for getting more quality, fast and coordinated services. Bangladesh, according to him, has made significant achievements in many areas of social indicators including education and health, but many challenges still remain because certain other elements for a strong capital base are missing. “How the capital base will be formed where more than 70 per cent of budget is spent for consumption and only 30 per cent is spent for development which is also poorly planned and implemented more disappointingly,” said the BoI chief. The BoI executive chairman also agreed with Dr Jamal relating to policy inconsistency and also urged all concerned to create pressure on government to resolve the KEPZ problem as early as possible. According to sources, some influential people have allegedly grabbed a portion of KEPZ in Chittagong, halting the development work of the zone. The incident has created tension in the country’s largest private EPZ. The seminar held at the BoI conference room was addressed, among others, by Bangladesh Overseas Employment and Services Ltd (BOESL) Managing Director Md Abdul Hannan, Notre Dame University Economics Department Chairman Md Azizur Rahman, BoI Executive Members Nabhash Chandra Mandal and Salma Nasreen, DCCI Vice President Shoaib Choudhury and MCCI Trade and Investment Facilitation Cell Deputy Chief Abdur Rahman. BoI Deputy Director Sonjoy Chakraborty presented the keynote paper on the subject as part of his doctoral dissertation. Sonjoy in his paper focused on various aspects of FDI, especially on its technical analysis, trend, growth and other variables like export, import, remittance etc. Speakers at the seminar also stressed the need for investing the hard-earned remittances of Non-Resident Bangladeshis (NRBs) in productive sectors to give a boost to the economy. “Remittances are being used for consumption and purchasing lands, which are not productive,” said the BOESL Managing Director. He stressed the need for making the remittance earners literate about the productive use of their hard-earned money. They also emphasised the need for access to education to create a workforce with skills and knowledge needed for a healthy investment climate. Because of the skill-based knowledge and language efficiency, workers from India, Sri Lanka and the Philippines are earning much higher wages than those from Bangladesh, they pointed out. According to the recent UNCTAD (United Nations Conference on Trade and Development) report, the inflows of FDI in Bangladesh fell in 2014, in five years, by 4.5 per cent to US$ 1.5 billion despite a relative political calm. The UNCTAD in its report described it as a sign of slowing growth in the country’s equity investment. The BoI chief, even on Thursday, didn’t agree with the findings and put up an alternative estimate that claims a rather rise in gross FDI inflows. According to the BoI estimation, Bangladesh’s gross FDI stood at $ 2.58 billion.

When most girls are rushing for foreign fashion wears, the picture is quite different in case of males. From lungi to jeans, T-shirt to punjabi and cap to shoes, local brands and designs almost are dominating men’s fashion choice, said sector insiders. Apparel brands like Cats’ Eye,  Aarong, Monsoon Rain, Yellow, Key Kraft, Plus Point, Ecstasy, Rex, Anjan’s, O2, Bangla’r Mela, Grameen, Shada Kalo, Silver Rain, Freeland, Infiniti, Westecs, Artisti, Gentle Park, shoe brands like Apex, Bay, and other local brands and non-brand shops have captured the maximum share of sales during festivals like Eid.      The industries are now eyeing windfall profits on the occasion of the upcoming Eid-ul-Fitr. Clothing brands in Bangladesh are drawing  consumers’ attention as they continue to offer fashion-rich items conforming to native tastes. The affordable price range of the clothes has also been a key factor for the local brands’ growing popularity, especially among the youth. Md Arman Ali, manager of Plus Point at Elephant Road, a popular local brand, said they stepped into the market to bring a  change in people’s fashion tastes. “We usually focus on serving the middle-income generation of people with fashion-rich local clothes,” he said. “Boys have been attracted most by our efforts while girls nominally,” he said. “Yes, girls buy dresses from Plus Point, but not for them but for their friends, brothers or husbands,” he said. He said they have experienced 15-20 per cent sales growth on an average since 2003, the year of its inception. However, he informed the FE that this year they have launched cotton-made slim-fit printed shirts, T-shirts, long, short and semi-fit punjabi, gabardine pants, male and female fatuas. Price ranges between Tk500 and Tk2500.   He said sales have increased and they are expecting it would cross last year’s sales volume. Shohag Parvez, executive officer (sales and distribution) at Cat’s Eye, a pioneer in the men’s fashion industry in the country said his company had almost maintained over ten per cent growth since 1993. “We have expanded our products to T-shirts of many forms, formal and informal shirts, pants, jackets, waist-belt, punjabis, shoes and so on,” he said. He said his company mainly focuses on men’s fashion and the demand for products usually increases ten times during Eid festivals. “We are expecting good business this year through our 22 outlets in Dhaka, Chittagong and Sylhet as the political condition is calm. However, brands like Aarong, Key Kraft, Anjan’s, Banglar Mela, Grameen, Shada Kalo, and some other brands attract both males and females. Director of Banglar Mela Emdadul Hoque said popularity of local brands has gradually been increasing. He said both males and females are now rushing for local branded products.   Men’s punjabi, shirts, fatua, women’s saree, shalwar kamiz, kuti, tops and baby dresses by the local brands have been attracting a broad range of customers. “Designers will have to feel the pulse of the consumers who are virtually now cosmopolitan in this era of internet,” he added.   Vice president of Fashion Udyog, the association of local apparel brands, Shaheen Ahmed said there are 4,500 fashion houses in the country now which was 2,000 five years back. He said the local brands have gradually been capturing the major market share. But, the recent increase in value added tax (VAT) has come as a big blow for the medium and small-scale traders, he said. Bangladesh Dokan Malik Samity president SA Kader Kiron said clothing and footwear sales account for nearly Tk250 billion during Eid-ul-Fitr of which men’s share is about 35 per cent. “And this section mainly depends on local products, which is very positive for the domestic economy,” he said.

The government plans to set up eight new Economic Zones in six   districts trying to attract domestic and foreign investment, Bangladesh Economic Zone Authority (BEZA) sources said. They said three of the EZs would be set up by the private sector and the rest by the government. Paban Chowdhury, Executive Chairman of BEZA, said, “The new Economic Zones, approved by primary selection committee, will require   final approval by the BEZA board of directors.””Some more zones are waiting for the approval of primary selection committee,” he said without elaborating.”The main objective of setting up Economic Zones is to allow industries to come up in a planned way so that they face no scarcity of land but the environment remains free from pollution,” he noted.According to sources, the eight economic zones will be located at Dohar in Dhaka (316 acres), Chunarughat in Habiganj (511 acre), Jajira (CHECK THIS NAME) (525 acres), Gosairhat in Shariatpur (265 acrex), Teknaf in Cox’s Bazar (750 acres), two at Sonargoan in Narayangonj(80 and 245 acres) and Rampal in Bagerhat (300 acres).Sonargaon and Rampal EZs will be established under private sector. Both foreign and local investors are showing interest to set up Economic Zone and the government is taking necessary steps in this regard, another BEZA sources said. Earlier, the governing body headed by the Prime Minister Sheikh Hasina approved a total of 22 sites. Five of them were selected in 2012 while the rest in February last.Of the 22, three came from private sector — AK Khan Private Economic Zone in Narsingdi and Abdul Monem Private Economic Zone and Garment Shilpa Park in Munshiganj.Finance Minister AMA Muhith in his budget speech on June 4 said that the government has plan to establish 100 Economic Zones across the country in next 15 years to raise export earnings by $40 billion and create employment for some 10 million people.  The BEZA has so far approved the proposals for 22 economic zones, with construction set to begin at Mongla, Anwara, Mirsorai in Chittagong, Moulvibazar and Cox’s Bazar. Investors in these industrial sites will be able to manufacture goods to cater to both the domestic and foreign markets.National Board of Revenue (NBR) says investors in the Economic Zones will get a full tax waiver on incomes in the first three years, after which the benefits will progressively decline.For instance, investors will get 80 per cent tax waiver in the fourth year of commercial production, with the tax breaks declining by 10 per cent each year to touch at 20 per cent in the 10th year, said the official. The tax benefit will be phased out in the 11th year.  Apart from the benefits, the companies will also get tax exemptions on declared dividends from the beginning of commercial operation.Foreign technicians appointed to the factories inside economic zones will get a 50 per cent tax waiver on their incomes in the first three years of their arrival in Bangladesh.

An apparel factory at Dhaka Export Processing Zone remained closed for the second consecutive day on Wednesday following workers’ protests for unpaid overtime bills. Workers of the factory, FCI Ltd, said that they went to the factory in the morning and found it shut. The management suspended the production at the factory on Tuesday as five people were injured during protests staged by the workers pressing for immediate payment of the unpaid overtime bills. The workers alleged that the management forced them to work overtime for two hours and a half but made no payment, violating the factory rules. None of the management was available for comments despite repeated attempts.

The challenges our RMG industry faces as we approach 2018 when the current covenant expires are enormous, and the mood of the supportive, but fickle-minded buyers and multinational community might turn sour with another major industrial accident or disruptive labour unrest. As recent experience shows, time is not on our side and urgent and critical additional measures need to be carried through to reach the target of $50 billion export in the face of shifting alliances and global market forces. Others, including some of the international participants voiced their concern that Bangladesh appears to have got a bad press. Areas where further progress was needed are labour organisation in EPZ, negative publicity regarding harassment of NGOs and labour unions, and lack of data and transparency on factory inspections. This, in a nutshell, was the conclusion at the two-day international conference held at Harvard University on June 6-7, 2015 which was attended by over 200 participants from Bangladesh government, BGMEA and BKMEA, international organisations, and Bangladeshi experts from the US academic and private sector. For the second year, the Bangladesh Development Conference focused on the Bangladesh textiles industry and is a continuation of the efforts of the organisers to shed light on the progress of the Bangladesh garments industry and discuss the challenges it faces. The theme of this year’s conference was “Transformation Challenges and Opportunities for Bangladesh Garment Industry” and was organised jointly by Harvard University South Asia Institute, Harvard University Center for the Environment, and International Sustainable Development Institute (ISDI), Inc. In his presentation on “Best Practices in Industrial Relations for Sustainable Growth”, the Labour Secretary Mikail Shipar gave a quick overview of the progress made by Bangladesh in labour relations, workers’ safety, and compensation to victims of Rana Plaza disaster. Nazma Akter, President of Sommilito Garments Shromik Federation strongly voiced her concern about some of the hurdles that labour leaders face as they attempt to increase the number of unions in the RMG sector. Some of the more interesting conversations during this conference occurred along the following threads:
1. How to estimate the total number of factories that are operating in the shadow market unregulated by the government?
2. After the year 2018, when the current agreements on safety and remediation run out, will the country be able to monitor the RMG sector and continue the progress towards safe workplace and fair wages?
3. Can Bangladesh stay competitive as the cost of the reforms and retrofitting mount?
4. Will the world be willing to support the Bangladesh garment industry if the price offered goes up with a surcharge for “Greener RMG”?
The discussions on these questions were informative and led to some clear directions. John Smith, Adviser and International Coordinator Textiles and Garments, UNIDO, voiced the sentiment – which was supported by official, and garments industry, representatives – that Bangladesh must avoid another industrial accident similar to the Rana Plaza collapse since that might mortally wound the economy. There was also a consensus that the current practice of subcontracting must be better managed and the small and medium sized factories brought under regulatory supervision, particularly in view of the fact that there was currently a lack of data on many factories in the lowest tier out of 6,800 which are now operating under the radar. Various suggestions were also offered to better monitor the Utilisation Declaration to improve compliance of SME’s. Dr. David Weil, Professor of Boston University and Administrator of the Wage and Hour Division of the US Department of Labour in his keynote speech discussed the challenges he faces in his role as an enforcer of minimum wage laws in the USA. He stressed the need for unannounced audit visits and the obstacles that staff shortage pose in this task. Steven Greenhouse, a news correspondent for The New York Times, revealed that while he was doing a report on Bangladesh labour practices, he was threatened by some industrial leaders with lawsuits. He voiced the need for strong labour representation to keep workers safe, and declared that no amount of government inspection in isolation is sufficient to ensure compliance. He also voiced the need to protect workers and “whistle blowers” against retaliation. At the Conference, a document circulated by International Labour Rights Forum based on a report by a delegation visiting Dhaka on the second anniversary of the Rana Plaza disaster, identified some gaps in the administration of the Rana Plaza Trust Fund, support for surviving family members, and implementation of the various measures adopted in the wake of the disaster in 2013. In contrast, Sanchita Saxena, a researcher at University of California, Berkeley, and author of a comparative study on garment industries in Bangladesh, Sri Lanka, and Cambodia, offered a more optimistic point of view on Bangladesh RMG. Her optimistic outlook was based on the active role played by women in leading the change dynamics in Bangladesh. Her book, Made in Bangladesh, Cambodia, and Sri Lanka, takes to task the misconceptions prevalent in the Western media on the practices and conditions prevalent in the Bangladesh garments sector. Saxena is of the opinion that “it is important to recognise the improvements thus far” and to recognise that “manipulation of trading regime has created and continues to create both incentives and disincentives for the various stakeholders in this industry.”

The country’s leading apparel makers have welcomed the decision of the government on lowering the source tax on exports to 0.60 percent from the earlier proposed 1 percent. President of Exporters Association of Bangladesh (EAB) Abdus Salam Murshedy told daily sun that lowering source tax on exports will help strengthen the private sector’s capacity. Murshedy also observed that the reduced rate of 10 percent duty on RMG sector should be extended by 5 years till June 30th 2019 and providing special stimulus for all the Eurozone exporters for saving them from the impact of abnormal devaluation of Euro price. “Otherwise, the export sector, the main driving force of the economy will lose competitiveness in the world market and buyers will opt for buying from other neighbouring countries. This will result in closure of many factories and the overall export growth will come down drastically”, Murshedy added. He thanked Prime Minister Sheikh Hasina and Finance Minister AMA Muhith for lowering source tax. Vice President of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Shahidullah Azim Tuesday told daily sun that the government’s move is certainly welcoming and there was no alternative to doing this for the survival of the RMG sector. Vice President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Md. Hatem told that lowering source tax was a demand of time considering the hurdles that the sector faces like infrastructure, high bank rate, political instability. Md Hatem said more than 80 percent of export earning comes from the RMG sector, and so naturally this sector should be considered above all.   Meanwhile, the parliament on Monday passed the Finance Bill (2015-16) after reducing source tax on exports to 0.60 percent.