July - September 2013

A Quarterly Newsletter of ICC Bangladesh Volume 16 > Issue 63

BaliBali Ministerial:Ministerial: TradeTrade facilitationfacilitation undeniableundeniable forfor revampingrevamping worldworld economyeconomy Editor’s Note Bali Ministerial : will there be any deal at last? The WTO 9th Biannual Ministerial Conference is taking place in Bali on 3-6 December. The race to agree on a deal at the Bali Conference is not only an opportunity to slash the cost of shipping goods around the world, it also represents what many experts see as the last chance to restore confidence in the WTO’s ability to reform global trade rules.

The Executive Board If there is no deal in Bali, the risk for the WTO is that major trading powers, which are already spending much more energy on bilateral deals than on the push for a global agreement, would give up for good. Some experts say that these could foster the growth President of rival trading blocs and deepen divisions, the opposite of what the WTO was meant to Mahbubur Rahman achieve.

For the past 60 years, trade has been a driver of growth and employment. This engine of Vice Presidents the world economy is threatened by the stalemate in multilateral trade negotiations. The Latifur Rahman increase in trade and investment restrictions fueled by the global economic downturn is Rokia Afzal Rahman damaging the business climate and prospects for recovery, precisely when global trade and investment liberalization could provide a debt-free and much-needed boost to world Members economic growth. A. K. Azad Trade facilitation is a series of measures whereby countries reduce red tape and simplify A. S. M. Quasem customs and other procedures for handling goods at borders. An agreement on trade Aftab ul Islam facilitation should significantly reduce costs, speed up and streamline administrative and Kutubuddin Ahmed other official procedures as well as create a more transparent, predictable and efficient Mahbub Jamil environment for cross-border trade. A WTO Trade Facilitation Agreement would, thus, Mahbubul Alam add significant momentum to these initiatives, leading to even greater reductions in trade costs. Prof. Mamun Rashid Md. Shafiul Islam (Mohiuddin) Several hundred business leaders and trade experts at the ICC World Trade Agenda Muhammad A. (Rumee) Ali Summit held in Doha on 22 April this year, considered a set of recommendations finalized Muhammad Hatem by ICC on behalf of global business for WTO Member Countries to salvage parts of on- R. Maksud Khan going Doha trade negotiations that could heighten global GDP by US$960 billion. Barrister Rafique-ul Huq It was observed that by simplifying customs procedures – through trade facilitation Sheikh Kabir Hossain measures – alone, member countries would deliver global job gains of 21 million, with Syed Ershad Ahmed developing countries gaining more than 18 million jobs and developed countries increasing Syed Manzur Elahi their workforce by three million. It is estimated that the payoff from liberalizing trade in services could generate world trade gains of US$1.1 trillion, which would translate into Waliur Rahman Bhuiyan, OBE global employment gains of nine million jobs.

ICC is committed to a strong and effective WTO, one whose members collectively National Secretariat negotiate the lowering of trade barriers and the strengthening of global trade rules. ICC’s World Trade Agenda initiative includes a longer-term proposal that governments should Secretary General begin discussions towards a multilateral framework on investment. With more than 3,000 Ataur Rahman agreements on investment already in place, it is time to move towards a single multilateral framework to facilitate cross-border investment, which will encourage to economic growth Contents and job creation. The five recommendations developed under ICC initiative could achieve tangible outcomes ICC Bangladesh News 03 by the end of 2013, to harvest gains from the WTO’s Doha Development Round. These Bangladesh Economy 12 are: conclude a trade facilitation agreement, implement duty-free and quota-free market Regional News 25 access for exports from least-developed countries, phase out agricultural export subsidies, ICC HQs News 29 renounce food export restrictions and expand trade in IT products and encourage growth WTO News 37 of e-commerce worldwide. News Bulletin

In Memoriam

Dr. M. Zahir (1939-2013)

Eminent jurist and constitutional expert Dr. Muhammad Zahir passed away on July 11 at the age of 74 in Bangkok, Thailand. His M. Zahir & Company joined ICC Bangladesh as a Member in January, 1999. Dr. Zahir has always been actively participating and supporting ICC Bangladesh in carrying out various activities. He even attended the last Annual Council Meeting of ICC Bangladesh held on 11 May, 2013 despite his ill health. ICC Bangladesh recalls with gratitude his contribution in formulation of various laws and setting up legal institutions, in particular in the establishment of the Bangladesh International Arbitration Centre (BIAC) - The Institution for Alternative Dispute Resolution and in finalizing its rules. Dr. Zahir, a renowned corporate and constitutional lawyer, obtained his BA (Hons) and MA in English literature and LLB at Dhaka University. Dr. Zahir started his career as an advocate of the then Dhaka High Court in 1962. He passed his English Bar Examination in 1963 and took LLM from the University of London in 1964. He was called to the English Bar at Lincoln’s Inn in 1965 and obtained his PhD in Company Law at the University of London in 1966. After practicing for several years in Dhaka, he joined the Australian Government Attorney General’s Department. He returned to Bangladesh in 1975 and enrolled as a senior advocate in 1978. Dr. Zahir was well known both within Bangladesh and abroad as a jurist and for his expertise in constitution formulation & interpretation, corporate and securities laws as reflected in his exhaustive and important analytical publication: Company and Securities Laws. He has published authoritative works on legal practices that serve as reference to lawyers across the country. He received the coveted Padatik award in 2009. In January, 2000 Dr. Zahir was elected by the ICC World Council as a Member of the International Court of Arbitration at the International Chamber of Commerce in Paris for a three year term. Besides running his highly respected legal practice, he always defeated his opponents on the tennis courts on a regular basis. An avid tennis player since 1963, he has been the reigning Doubles Champion of Dhaka Club for the last two years. Dr. Zahir was also involved with charitable institutions, including the Ahsania Mission. He took keen interest in sports, particularly tennis and music. He is survived by his wife, only son, daughter-in-law, three grandchildren, an elder sister, a brother and a host of admirers, friends and colleagues. In his demise ICC family lost great friend and well wisher. May Allah rest his soul in eternal peace. July-September 2013 2 News Bulletin

ICC Bangladesh News Banking scams are growing faster than Central Bank’s actions said ICCB Vice-President Latifur Rahman In order to prevent the banking are always better and useful”, Mr. The workshop will also cover ICC’s scam, Bangladesh Bank must be Latifur Rahman mentioned. URBPO, the first-ever Uniform given full autonomy for monitoring Rules for Bank Payment Obligations the activities of state-owned banks as It may be mentioned that the Banking (BPOs), a 21st century standard is done in case of private commercial Commission of ICC, Paris has in supply chain finance that banks, observed ICC Bangladesh revised the International Standard governs Bank Payment Obligations Vice-President Latifur Rahman. Banking Practice ( ISBP) which has transactions worldwide. BPOs Their should not be any interference become effective from July 2013. The enable banks to mitigate the risks of the Banking Division of the new ISBP 2013 is the most up to date, associated with international trade Ministry of Finance in the operating comprehensive guide to handling and to the benefit of both buyers and of the state-owned banks for the examining trade documents under sellers. They enable flexible financing betterment of the banking sector as documentary credits. An invaluable propositions across the supply chain, well as businesses and economy of source of practical information from pre-shipment to post-shipment. the country, said Latifur Rahman for trade finance professionals and BPO benefits include: Mitigating in his inaugural address at the ICC Workshop on New ISBP 2013 and URBPO held in Dhaka on August 24.

ICCB Vice-President also observed that the recent scam is nothing but a straight cheating by some so called companies in connivance with a group of bank officials and influential group. Bangladesh Bank is taking measures to prevent the scams, but incidents are growing faster than actions, he said.

Companies engaged in international trade are facing growing threat from fraud and forgery. Besides, the recent ICCB Vice President Latifur Rahman (2nd from left) inaugurated the ICC Workshop on New ISBP 2013 and scam in some of our state-owned URBPO held in Dhaka . Workshop resource persons Vincent O’Brien (extreme left) & Digby Bennett (2nd from Right) and ICCB Secretary General Ataur Rahman (right) were also present. banks have shaken entire banking sector. Thus, the commercial banks are taking extra precautionary academics. This revised edition risks in international trade for buyers measures in opening of LCs, may of ISBP provides readers with the and sellers alike; Speed; reliability; be due to which we observe lesser latest ICC approved guidelines for convenience; Reduced costs and import in the recent past. If this all parties to documentary credits, improved accuracy; Enhanced risk trend continues, the much needed Latifur Rahman informed the management; Assurance of payment; development of our industrial base workshop. Access to flexible financing; Securing will be in jeopardy, Latifur Rahman the supply chain. ISBP 2013 details how to apply added. banking practices under UCP600 to The Workshop was conducted “To face these challenges concerned various trade documents (invoices, by two internationally acclaimed officers and authorities must have transport documents, bills of lading, professionals: Mr. Vincent O’Brien adequate knowledge about the trade certificates of origin…) and features and Mr. Digby Bennett. Mr. O’Brien finance practices. ICC Bangladesh the documents, which were not is a highly experienced practitioner often gets information on fraud covered in previous editions like : of International Trade Finance activities both from local exporters/ Packing list, Weight list, Beneficiary and a member of the ICC Banking importers/institutions and also from certificate, Non-negotiable seaCommission Executive Committee the counterparties. We observe that in waybills, Analysis, Inspection, Health, and Chair of the ICC Banking most cases remedies/resolutions are Phytosanitary, Quantity and Quality Commission, Market Intelligence difficult while preventive measures certificates, Mr. Rahman added. Group. Mr. Digby Bennett has many July-September 2013 3 News Bulletin ICC Bangladesh News

years of experience in Trade Finance Finance and the standardization that Bangladesh Secretary General Ataur automation working with leading is taking place worldwide. Rahman. A total of 166 participants banks worldwide. He has been active from banks, financial institutions in educating Trade professionals in The inaugural session was also the latest emerging trends around addressed by Mr. Vincent O’Brien, and export oriented industries electronic Matching, Supply Chain Mr. Digby Bennett and ICC attended the workshop. ICCB Workshop on New ISBP 2013 and URBPO in Chittagong The second ICC Workshop on the workshop will take full advantage The inaugural session was also New ISBP 2013 and URBPO was of the experience of the two very addressed by Mr. Vincent O’Brien, held in Chittagong on August 25. Mr. Mahbubul Alam, President, Chittagong Chamber of Commerce and Industry (CCCI) inauguration this workshop. In his inaugural address CCCI President said that UCP 600 provides a global standard set of practices for letters of credit. Anyone engaged in international trade, whether selling goods, buying goods or providing financing, needs to familiarize with the UCP 600. The New ISBP is the revised guideline for following UCP 600.

While the UCP is designed for use CCCI President Mahbubul Alam delivering his inaugural address at the ICC Workshop on New ISBP 2013 and URBPO held in Chittagong. Workshop resource persons Vincent O’Brien (2nd from left), Digby Bennett (extreme with commercial letters of credit, it is left) and ICCB Secretary General Ataur Rahman (right) were also present. often used for standby letters of credit, a reliable type of bank guarantee. The well acclaimed resource persons who Mr. Digby Bennett and ICC most important principles of letters would be conducting the workshop. Bangladesh Secretary General Ataur of credit set down in the UCP are He thanked ICC Bangladesh for Rahman. A total of 49 participants the independent principles that the organizing workshops on such from banks, financial institutions banks deal with documents and not important topics. Vincent O’Brien goods, Mahbubul Alam added. He and Digby Bennett conducted the and export oriented industries hoped that the participants attending workshop. attended the workshop. ICC Workshops on UCP 600 and Incoterms 2010 for HSBC clients ICC Bangladesh organized trade HSBC in Chittagong and Dhaka Executive Committee, conducted the workshops on globally accredited on August 26 and 27 respectively. workshops, which were arranged by a trade standards–UCP 600 and Mr. Vincent O’Brien, chair of bank for the first time in Bangladesh. Incoterms 2010– for the clients of the ICC Banking Commission The International Standard Banking Practice (ISBP), the professionals’ reference book to best banking practices for international L/C documents subject to UCP600, has already played a significant role in reducing international discrepancies for documentary credits and is regularly consulted by a wide range of banking, logistics, insurance, legal and corporate professionals and academics worldwide said ICCB

ICC Bangladesh President Mahbubur Rahman (4th from Left) inaugurated the Trade Workshop on UCP 600 and President Mahbubur Rahman at the Incoterms 2010 held in Dhaka. Bangladesh Bank Executive Director Md. Ahsan Ullah (3rd from left), HSBC Head inauguration of the trade workshop of Corporate Banking Md. Mahbub-ur Rahman (2nd from left), Workshop resource person Vincent O’Brien (2nd from right), ICCB Secretary General Ataur Rahman (extreme right) and Syed Javed Noor of HSBC (extreme left) on UCP 600 and Incoterms 2010 are also seen. held in Dhaka on August 27. The July-September 2013 4 News Bulletin ICC Bangladesh News new ISBP 2013 is the most up to date, The Incoterms rules or International such workshops for the commercial comprehensive guide to handling and Commercial Terms are a series of officials of the clients of HSBC. He examining trade documents under pre-defined commercial terms that observed that such workshops will documentary credits, Mahbubur are widely used in international help the importers and exporters in Rahman added.

International Commercial Terms, known as “Incoterms”, are internationally accepted rules used in commerce that deal with the costs, risks and responsibilities of both buyers and sellers when shipping goods internationally. It is crucial to understand the new Incoterms in order to accurately negotiate or quote sales contracts in order to avoid any complicacy that may arise at the CCCI President Mahbubul Almm (3rd from left) inaugurated the Trade Workshop on UCP 600 and Incoterms time of submitting L/C to banks for 2010 held in Chittagong. Workshop Resource Persons Vincent O’Brien (extreme left), Digby Bennett (extreme right), ICCB Secretary General (3rd from right) and HSBC Executives Muhammad Shohiduzzaman (2nd from reimbursement, mentioned ICCB right) & Naushad Ekramullah (2nd from left) were also present. President. commercial transactions or getting clarifications from the experts It has always been our endeavour to procurement processes. Both the so that they can ensure having proper impart training and make available global trade standards are published documentations for submissions to latest know-how to the users involved and standardized by ICC. the banks. President of Chittagong in international trade finance, so Chamber of Commerce Mahbubul that there is clearer understanding As the leading international trade Alam inaugurated the Workshop and application of the provisions bank, HSBC believes in facilitating held on 26 August in Chittagong. of L/Cs in trade transactions”, said knowledge on international trade The inaugural sessions were also ICCB President. for banks trade partners and valued addressed by Mr. Vincent O’ Brien customers, said Md Mahbub-ur- The Uniform Customs and Practice Rahman, corporate banking head of and ICC Bangladesh Secretary for Documentary Credits (UCP) is a HSBC Bangladesh. General Ataur Rahman. A total set of rules on the issuance and use of of 186 officials of various HSBC letters of credit. The UCP is utilized Executive Director of Bangladesh clients attended the workshops. by bankers and commercial parties Bank Md Ahsan Ullah thanked In Chittagong 68 officials from 26 in more than 175 countries around ICC Bangladesh and HSBC for companies and in Dhaka 108 officials the world in trade finance. taking the initiatives in organizing from 68 companies attended. Imposition of GPT by Canada would not affect Bangladesh: Canadian Envoy Bangladesh as a Least Developed Mahbubur Rahman, BGMEA if it is signed, it will open up more Country (LDC) would not be affected President Md Atiqul Islam and Chief opportunities for both the countries. following imposition of general Executive Officer of the BFTI Dr M preferential tariff (GPT) by Canada, Mozibur Rahman took part in the Bangladeshi entrepreneurs need said Canadian High Commissioner discussion. to develop products and markets, to Bangladesh Heather Crudden at both new and existing, and the a seminar on ‘Bangladesh Canada Canada would take steps to ensure government needs to develop policy Trade and Economic Relations’ that the benefits of the LDC Tariff and institutional environment (LDCT) are not reduced by the jointly organized by the Bangladesh that can support in this regard, she changes to the GPT said Ms Cruden Foreign Trade Institute (BFTI) added. She said though Bangladesh and explained that the LDCT rules of and the Bangladesh Garment has made strong progress in various Manufacturers and Exporters origin requirements will be amended so that apparel producers will areas, the current political instability Association (BGMEA) held in is causing some companies to Dhaka on August 31. continue to benefit from duty-free access to Canada while using textile question whether they should Commerce Minister G.M. Quader, inputs from current GPT countries diversify their risks and move out M.P. spoke at the function as the chief like China and India. She said an of Bangladesh. “This could be very guest while Commerce Secretary air agreement has been initiated damaging in the medium and long- Mahbub Ahmed, ICCB President between Bangladesh and Canada and term for Bangladesh. July-September 2013 5 News Bulletin ICC Bangladesh News

Commerce Minister G.M. Quader, despite political disturbances. “We in furtherance of trade between M.P. said the foreign investment delivered the products mostly in the two countries. He hoped the in the country will not be affected time. We could do it.” businesses will take full advantage of for any unwelcoming political the facilities and develop market for environment as all political parties On the proposed economic export of non-traditional products are sincere to protect it for the sake partnership agreement between from Bangladesh to Canada.

Canada has consistently participated in the development process of Bangladesh. The people of Canada also have strong affinity towards Bangladesh. The Canadian High Commissioner informed that Bangladesh has traditionally been one of the largest recipients of Canadian development assistance, which exceeded $4 b since 1972.

Canada progressively reduced ICCB President is seen speaking at the seminar on Bangladesh-Canada Trade and Economic Relations held in Dhaka. Commerce Minister GM Quader, M.P. ( 3rd from right), Canadian High Commissioner Heather Cruden barriers to the exports with the ( 2nd from right), Commerce Secretary Mahbub Ahmed (2nd from left), BGMEA President Atiqul Islam (extreme Market Access Initiative for Least right) & Chief Executive Officer of BFTI Dr. Mozibur Rahman (extreme left) were also present. Developed Countries, effective of the economy. There had been Bangladesh and Canada, the minister January 1, 2003. Bangladesh reaped political disturbances over the last said, “We will consider it.” He said considerable benefits from this six months followed by so many though Bangladesh-made products initiative, capturing export gains, strikes, he said adding, “Somehow, are destined only for four major particularly in textiles and apparel. we could manage it and Bangladesh destinations the US, the European The exports value of Bangladesh to will be moving forward despite all Union, Canada and Japan it has very Canada increased by 376 percent in these hurdles.” big potential to expand its trade with 2012 compared to 2003 over last 10 its partners. years. “Bangladesh is a ground for good investment and changes in the ICCB President Mahbubur Rahman The value of Bangladesh’s government will not have any impact sought special attention on the GPT merchandise export was only 250 on foreign investment,” he added. issue so that Bangladesh could take million in 2003 which has increased The Minister said Bangladesh’s advantage of Canadian facility. to 1.12 billion in 2012. On the other exports saw a record growth in the He thanked the Canadian High hand Canada exported over 525 first month of the current fiscal Commissioner for taking initiative million in 2012. IMF team meet ICCB President Discussed on Revision of Foreign Exchange Regulations A three Member IMF team led by Mr. Wilson Varghese, Senior Economist, Technical Assistance Division, Monitory and Capital Markets Department met ICCB President Mahbubur Rahman at the National Secretariat on 19 August. The main purpose of the meeting was to discuss with ICCB President about the private sector views on the revision of Foreign Exchange Regulation Act (FERA).

ICCB President said that in the present context of free market ICC Bangladesh President Mahbubur Rahman (extreme right) is seen with IMF Team Members: Wilson Varghese (2nd from right) Ms. Latifah Merican Cheong (3rd from right) & Alick Bruce-Brand (4th from right) during their economy, it is essential to update the visit to ICCB. Also seen in the picture are: Mohammed Hossain (2nd from left) and ICCB Secretary General Ataur FERA in such a way that it becomes Rahman (extreme left). July-September 2013 6 News Bulletin ICC Bangladesh News more user-friendly. The amended act respective field of operations, to for Commerce and a number of should contribute to the growth of invest in a third country. As a result, MDs/CEOs of banks and other the economy, without compromising we are losing the prospect of earning experts. The IMF team was given the basic interest of the country, he more foreign exchange, he added. copies of newspaper clippings and said. other materials presented during the He suggested to the team that they Dialogue. The Guidelines for Foreign Exchange should look into revised FERA that The meeting was also attended Transactions (GFET) -- 2009, issued has been prepared by Bangladesh by Mohammed Hossain, National by the central bank, still have some Bank and propose amendments Fraud Risk Detection and Mitigation grey areas. Such areas require based on their discussions with Adviser, Central Bank Strengthening clarifications or specific directions of various stakeholders. He also briefed Project Cell, Bangladesh Bank; ICCB the Bangladesh Bank (BB), he added. the team about the suggestions Secretary General Ataur Rahman Mahbubur Rahman mentioned made by the participants at the and two IMF Team members, Bangladesh has liberalized ICC Dialogue on Foreign Exchange namely, Alick Bruce-Brand, IMF foreign exchange rules for foreign Regulations which was held in Expert Consultant and Ms. Latifah investment. But, there are various Dhaka on 3 March 2011, which was Merican Cheong, Founding restrictions for the local investors, attended by Muhammad Faruk Board Member of Asian Women’s except banks, having expertise in Khan, M.P., who was then Minister Leadership University Project. Inc. Participation of ICCB Team at UN-ESCAP Business Development Week in Yangon, Myanmar The UN-ESCAP organized a government officials, representatives Board Member Rashed Maksud 5-day Business Development Week from international agencies and civil Khan, Mr. Asif Ibrahim, Vice in Yangon, Myanmar on 23-27 society organizations, and academics. Chairman of Newage Group of September jointly . The Workshop The participants would have the Industries and Mr. Mahmudul Huq, has been organized by ESCAP Secretariat, ESCAP Business Advisory Council (EBAC) and the United Nations Trade and Productive Capacity Cluster together with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). Against the backdrop of Myanmar’s recent and ongoing fast pace of political and economic liberalization and increased level of openness towards the international community, the Government of Myanmar is seeking to keep this positive momentum going. In order to do so, the Myanmar Government has rightly Asif Ibrahim speaking about his business experience on RMG. recognized the importance of the opportunity to strengthen their expert in the Fisheries Sector and a private sector as an integral part for skills and increase their knowledge former President of the Bangladesh Myanmar’s further socio-economic in all matters pertinent to business, Frozen Food Exporters Association. development, particularly the trade and investment through They made presentations on their catalytic potential of business and numerous sessions conducted business experiences. investment as contributing forces by professionals and experts. for sustainable and inclusive growth, Furthermore, participants can build employment creation, including new and strengthen already existing Ms. Laetitia de Montalivet, Director for women and the youth, income networks and actively engage with of Strategic Development, BD generation and poverty alleviation. other participants, professionals and Department, ICC; Senior Advisor, This event would provide a very experts over the course of the week. ICC Institute of World Business Law timely and needed opportunity to ICC Bangladesh and ICC, Paris made presentations on introduction convene a number of Myanmar are collaborating with UN-ESCAP to ICC Trade Tools: Incoterms, focused technical workshops in this event. ICC Bangladesh was Arbitration and ICC Model with business representatives, represented by ICCB Executive Contracts. July-September 2013 7 News Bulletin ICC Bangladesh News

CDCS helped bankers to develop professional skills said ICCB President The Certified DocumentaryDhaka every year since April, 2008. Finance Corporation(IFC), a private Credit Specialist (CDCS) is It has enabled our professionals to arm of the World Bank. an internationally acclaimed attain this prestigious certification These international programmes professional certification that enables without taking the hassle of going have created a revolution in banking documentary credit practitioners to abroad by spending substantial demonstrate specialized knowledge amount of money, added ICCB sector as more and more of our and application of skills required President. CDCS was developed bankers are participating in these for competent practice, said ICCB in partnership by the Ifs School of programme. These international programmes are helping bankers to develop their professional skills and acquire latest intanational techniques, mentioned ICCB President. Considering the recent scams that have shaken the entire banking sector of Bangladesh it is very essential that our bankers at the branch levels strictly adhere to rules and ethics, he added. Since 2008, when ICC Bangladesh started these programme, 223 have become CDCS Experts, 284 have Mahbubur Rahman, President of ICC Bangladesh handing over a crest to a Certified Documentary Credit Specialists (CDCS) of Islami Bank Bangladesh Ltd, during a Reception Programme held at IBBL Head Office. completed IFC FIT e-learning Also seen in the picture , among others are : IBBL Executive Committee Chairman Engr. Md. Eskander Ali ( 2nd programme and 15 have passed from right). Director General, Bangladesh Institute of Bank Management Dr. Toufic Ahmed Choudhury ( 4th from right) and IBBL Managing Director Mohammad Abdul Mannan ( extreme right) . CITF Examination.

President Mahbubur Rahman while Finance, UK and the International The reception program was presided distributing Certificates, as chief Financial Services Association over by Mohammad Abdul Mannan, guest, to the 95 officials of the islami (IFSA), UK in consultation with the Managing Director of the Bank, Bank Bangladesh ltd. held at its industry experts and endorsed by the the program was attended by Dr. headquarters in Dhaka on 21 August. ICC Hqs. The qualification reflects Toufic Ahmed Choudhury, Director He congratulated the officials and current best practices. General, Bangladesh Institute thanked the Board and Management It may be mentioned that besides the of Bank Management as special of Islami Bank Bangladesh for CDCS Examination, ICC Bangladesh guest and Engr. Md. Eskander Ali, developing the professional skills has been organizing another two Chairman, Executive Committee of the staff by allowing them to important programme namely, “IFC- and Humayun Bokhteyar, ACPA, participate at various international FIT INITIATIVE” and Certificate FCA, Director of the Bank as guests programmes. in International Trade and Finance of honour. Md. Nurul Islam, Md. ICC Bangladesh took the initiative (CITF) of ifs. IFC-FIT Initiative Habibur Rahman Bhuiyan FCA, for selecting Dhaka as a venue for has been developed jointly by ICC Md. Mahbub -Ul-Alam Deputy CDCS Examination conducted by Bangladesh and eBSI ( eBusiness Managing Directors of the Bank Ifs School of Finance worldwide and School of International) of Ireland and ICCB Secretary General Ataur the Examination is being held in with support from International Rahman were also present. ICCB upcoming events Workshop on Credit Risk Certified Documentary Credit Specialist(CDCS) and Loan Portfolio Managment Examination Date: April, 2014 Dhaka: Satarday, 7 December, 2013 Registration Closing: 20 January, 2014 e-Learning Programme on “IFC-FIT Initiative” Registration Start: November, 2013 For further information and registration please contact Secretary General, ICC Bangladesh, Tel : 8621942, 9676698; E-mail: [email protected], [email protected] July-September 2013 8 News Bulletin ICC Bangladesh News

Bangladesh Ambassador Designate to Uzbekistan called on ICC Bangladesh President Bangladesh Ambassador Designate trade issues including cotton supply aiming to ensure supply of 200,000 to Uzbekistan H.E. Mr. Mosud to Bangladesh in a meeting of the tonnes of cotton annually for the Mannan made a courtesy call on ICC Joint Working Commission for local textile industries, sources said. Bangladesh President Mahbubur Trade and Economic Cooperation Uzbekistan is the sixth largest cotton Rahman on July 11. They discussed about the potentials of trade and investment between the two countries. ICCB President Mahbubur Rahman informed the Ambassador that Bangladeshi entrepreneurs are keen to increase export to Uzbekistan and other countries of the Soviet block. He mentioned that Uzbekistan could be a potential market for Bangladeshi jute yarns and there is a huge possibility to export jute yarns to Uzbekistan. Bangladesh exported jute goods and various textile items to Uzbekistan worth $2.576 million during last fiscal, according to the Export Promotion Bangladesh Ambassador Designate to Uzbekistan H.E. Mr. Mosud Mannan (centre) is seen with ICCB President Bureau (EPB) statistics, he said. Mahbubur Rahman (right) & ICCB Secretary General Ataur Rahman (left) during his visit to ICC Bangladesh. Ambassador Mannan informed the ICCB President that he would make held in Tashkent in May 2012. The producer in the world with 4.6 all out efforts to increase export of two countries already exchanged million bales produced in 2011. Bangladeshi protucts to Uzbekistan the draft of the memorandum of and the neighbouring countries. understanding (MoU) which is now Bangladesh’s yearly requirement of In this regard, he requested ICCB under scrutiny. The draft MoU states cotton is nearly 4.0 million bales President to lead a Bangladesh that both the parties will cooperate of which 0.12 million bales are business delegation to Uzbekistan with each other for direct delivery produced locally. Rest of the demand and other countries. of raw cotton from Uzbekistan to nearly 98 per cent is being met by Bangladesh on regular basis. It may be mentioned that Bangladesh importing it from various countries and Uzbekistan have agreed for Bangladesh is about to finalize a deal and about 35 per cent of total cotton cooperation on various bilateral to import cotton from Uzbekistan import comes from Uzbekistan. 56th ICCB Executive Board Meeting held Reviewed various activities and upcoming events The 56th Meeting of the ICCB September. At the beginning of the Board Members offered prayer for Executive Board was held on 10 Meeting ICCB President along with Barrister Dr. M. Zahir, who died in Bangkok on 11 July. The Board Members recalled with gratitude his contribution in formulation of Constitution of Bangladesh, various laws and setting up legal institutions, in particular in establishment of the Bangladesh International Arbitration Centre (BIAC) - The Institution for Alternative Dispute Resolution and in finalizing its rules.

The Executive Board reviewed the activities of ICC Bangladesh during April-August as well as discussed 56th ICCB Executive Board Meeting in progress. about participation at various July-September 2013 9 News Bulletin ICC Bangladesh News

international upcoming events, November. Presided over by ICC Jamil, Mahbubul Alam, R. Maksud such as UNESCAP Workshop Bangladesh President Mahbubur Khan, Barrister Rafique-ul Huq, in Yangon on 23-27 September, Rahman, the Meeting was attended Sheikh Kabir Hossain, Syed Ershad Commonwealth Business Forum in by ICC Bangladesh Vice President Ahmed and Syed Manzur Elahi. Colombo on 11-14 November and Latifur Rahman and the following Asia Pacific Business Forum (APBF) members : A.S.M. Quasem, Aftab ul The meeting was held at ICC of UN-ESACP in Sydney on 25-26 Islam, Kutubuddin Ahmed, Mahbub Bangladesh Board Room.

New ICCB Members Nordic Chamber of Commerce and Industry in Bangladesh (NCCI) has joined ICC Bangladesh as a member under Organization Group. NCCI was founded in 19 January 2011 as a joint initiative of the Nordic Companies operating in Bangladesh. The Nordic businesses have a strong presence in Bangladesh, making significant contributions in various sectors. It has at present fifty Corporate and four Individual

Members. Newage Textiles Ltd. has joined ICC Bangladesh as a member under Corporate Group. Newage Textiles, a sister company of Newage Group of Industries is a manufacturer and exporter of textile products. Established in 2001 this modern plant occupies 120,000 sq. ft. of tranquil park land located at Newage Industrial Park, Kaliakair, 55 km from Dhaka. The plant produces nearly 12 metric tons of fabrics per day to cater to the ready made garment (RMG) factories of Newage Group. The Company specializes in knitting, dyeing and finishing single jersey; honeycomb & lacoste pique; interlock; double jersey; 1x1 rib; 2x2 rib; CVC; TC; cotton/ viscose; cotton/lycra; ottoman and 100% cotton using state-of-art European machineries. The Newage Textiles is certified by various international testing organizations for quality and compliance.

Li & Fung Bangladesh Ltd. has joined ICC Bangladesh as a Corporate Member. Li & Fung (Bangladesh) Limited, a member of the Li & Fung Group, has been in operation in Bangladesh since 1985.The company’s exports of RMG and other consumer products from Bangladesh is over US$1billion. Li & Fung Limited, established in Hong Kong in 1906, is a multinational group and recognized as the world’s leader in consumer goods design, development, sourcing and distribution. The Company specializes in supply chain management of high-volume, time-sensitive goods for leading retailers and brands worldwide via an extensive global network. Over the years, Li & Fung Limited has won numerous industry accolades for its performance, governance and sustainability. The Company is committed to the highest operational standards, conducting its business with integrity and good corporate governance practices with an emphasis on transparency and accountability. Sustainability considerations are embedded into its corporate policies and risk management systems.

Selected ICC Publications

To order your copy, please contact ICC Bangladesh Secretariat July-September 2013 10 News Bulletin ICC Bangladesh News

News in Picture

Director of Fung Global Institute Ms. Barbara Meynert with ICCB President Mahbubur Rahman, during her visit to ICCB. Also seen in the picture are Vice President of Li & Fung Bangladesh Roger Hubert (2nd from left) and ICCB Secretary General Ataur Rahman.

ICCB Secretary General Ataur Rahman speaking at the concluding session of the Trade Workshop on UCP 600 and Incoterms 2010. Also seen in the picture are: Vincent O’ Brien(3rd from left), Digby Bennett (extreme left) and HSBC Officials.

Vincent O’ Brien handing over a Certificate to a participant at Trade Workshop on UCP 600 and Incoterms 2010 for HSBC clients, Jointly organized by ICC Bangladesh and HSBC held in Dhaka on 27 August.

Group picture of participants at ICC Workshop on New ISBP 2013 & URBPO held in Chittagong on 25 August. July-September 2013 11 News Bulletin

Bangladesh Economy Per Capita Income crossed US$1,000 and GDP stood at 6.18 % The size of the Bangladesh economy, technical committee for revision and gourd, olive, ripe palm, marigold, its growth rate and per capita income rebasing of GDP calculation year, rose and tuberose. have increased according to new was also present at the meeting held estimates of the Bangladesh Bureau at the BBS headquarters. The contributions of Bangladesh of Statistics (BBS) using 2005-06 as Forest Industries Development the base year. Under the new base Corporation and Bangladesh year, GDP during FY 2012-13 in Fisheries Development Corporation current prices stood at US$153.58 such as fish fry and dried fish have billion as against US$134.17 billion been included in the agriculture based on existing 1995-96 base year. sector in the new base year. BBS says the inclusions will boost the gross The new estimate also showed an value addition (GVA) of agriculture increase in fiscal 2012-13’s growth by 9 percent. In the industrial sector, rate: the economy grew by 6.18 gas refining activities by state-run percent in constant prices as opposed Petrobangla and data of survey of to 6.03 percent under the existing manufacturing industries (SMI) has base year of 1995-96. Per capita been included in the new base year. income, which stood at $923 in the existing base year, rose to $1,044 in Private power plants along with the new estimate. In addition, the Power Grid Company of Bangladesh new base year showed a reduced have been added to compute GVA gap in savings and investment in the of the power sector. In construction economy. Calculating the per capita sector, brick, wood and fixtures and income, the new base year of 2005- fittings have been added with the 06 has taken into account many existing cement and rod in the new economic activities and service 2005-06 base year. Overall, the GVA sectors which were not reflected in in the industrial sector will increase 5 the calculation in the old base year percent after the inclusion, according of 1995-96. The rise in per capita BBS said the calculation of GDP to BBS. under the new base year will help income manifests the real rise in the The GDP of services sector, too, is people’s purchasing power. reflect a more accurate picture of the set to increase, by 16 percent, under economy as many new sectors have the new base year. BBS has included The estimates were presented on emerged since 1995-96. Under the September 4 at a meeting attended motor vehicles repairing, activities of latest base year, 24 new crops have by Finance Minister AMA Muhith, Trading Corporation of Bangladesh. been added to the basket of 100 to Planning Minister AK Khandker, The economic contributions of calculate the contribution of the Food Minister Muhammad the private airlines, clearing and agricultural sector. The new additions Abdur Razzaque and Fisheries forwarding and travel agents, and Livestock Minister Abdul include green banana, green papaya, internet service providers and cable Latif Biswas. Economist Prof. green coconut, soybean, cucumber, operators would also be accounted in Wahiduddin Mahmud, who heads a hog plum, red amaranth, bottle the new base year. Big boost for Jute Bangladeshi scientists decode genome sequence of golden fibre Three years into the successful productive jute varieties in future. largest producer of jute, after India, genome sequencing of tossa jute, Prime Minister Sheikh Hasina, M.P. and the world’s largest exporter of Bangladeshi scientists led by Dr made announcement during a press the fibre. Maqsudul Alam have unravelled the briefing held on August 18. The genome sequence of deshi (white) decoding of deshi jute genome has Genome sequence represents a jute. This completes the genome come as another success in knowing valuable shortcut, helping scientists sequencing of both genera of jute — better the world’s second most find genes much more easily and tossa and white — thereby opening important natural fibre after cotton. quickly. A genome sequence allows up scopes for developing more Bangladesh is the world’s second scientists to identify and understand July-September 2013 12 News Bulletin Bangladesh Economy how genes work together for the biochemistry and molecular biology Minister. She said the government plant’s different features like growth, department of Dhaka University. has initiated the Basic & Applied development and maintenance as an entire organism. This allows them to manipulate the genes and enhance, reduce or add certain features of the plant.

Dr. Maqsudul Alam, who had earlier decoded the genome of papaya in the US and rubber plant in Malaysia, led the sequencing of both tossa and deshi jute genome. The initiative for jute genome sequencing began in February, 2008 when Maqsudul started exploring the possibilities along with several other Bangladeshi scientists and academics. The whole process was Bangladesh Government has taken Research on Jute Project (BARJ) kicked off with many long distance steps to establish the intellectual by providing necessary funds to conference calls between Maqsudul property right (IPR) on jute and all improve the productivity and quality and plant molecular biologists Prof scientific research on jute including of jute fibre by utilising genome Haseena Khan and Prof Zeba Seraj of its genome sequence, said the Prime information.

Food production to double BARI scientists successfully test four crops a year Bangladeshi agronomists have come It is evident from the BARI According to official statistics, the up with a marvelous way of raising experiments done in 2011-12 and country’s total cropped area stood farm output in a land-strapped 2012-13 cropping seasons that by at 14.94 million hectares in recent country. They have successfully introducing the four-crop rotation, years as against its net cropped experimented with a “four-crop” farmers can potentially harvest over area of only 7.84 million hectares model that shows the country’s food 34 tonnes of rice equivalent yields production could be more than (REY) from each hectare of land. The Crppping Intensity doubled. This comes as a great relief output is more than twice the farmers Single cropped area for an overpopulated country that usually harvest (14.37 tonnes) in a Double cropped area Triple cropped area loses its scarce farmland to non-farm double-crop-a year pattern. REY Quadruple cropped area activities (housing, urbanisation, means the amount of rice one can get by selling mustard, potato, rice and industrialisation and infrastructure 0.0093 whatever grains one grows in a year building) by one percent a year, in a given land. 1.4 according to Daily Star published on September 08. The BARI field experiments also found that in a double-crop pattern, The agronomists at Bangladesh an average farmer gets a gross return 4.1 Agricultural Research Institute of around Tk. 200,000 by investing (BARI) have found out that if just a little over Tk. 100,000. But the cropping intensity is increased amount of return can be as high as by growing four crops a year in Tk. 500,000 if a farmer goes for four- all cultivable lands, farm output crop-a year by making an investment will sharply increase. They have of over Tk. 200,000. The investment 2.2 also dispelled concern about over- is calculated without taking land exploitation of soil resources, saying price/rent into consideration. At 1 that the crop rotation would rather present four crops are grown only in replenish soil nutrients with the 9,300 hectares of land in the country, thanks to the 191 percent cropping green manure in sequence left after three crops in 1.4 million hectares, intensity. Cropping intensity means the harvesting of cereals and other two crops in 4.1 million hectares and the number of crops grown in a piece crops. one crop in 2.2 million hectares. of land in a year. If one crop is grown July-September 2013 13 News Bulletin Bangladesh Economy

in a year, cropping intensity is 100 sufficiency in 1999-2000, due to an while in some other regions they will percent. annual population growth of 2.5 suggest the combination of ‘Aman- million. Thanks to releases of some potato-Boro-Aus’, and in other areas Theoretically, if all cultivable lands high-yielding varieties in recent farmers can go for ‘Aman-mustard- come under quadruple cropping, years and pragmatic policy support, mung bean-Aus’. The choices of crops the country’s total cropped area this year the country again reached can vary from place to place but the would reach an astounding 31.56 a self-sufficiency point as far as rice, main target remains the same — million hectares. Even if all lands the staple, is concerned. going for higher cropping intensity, come under triple cropping, the total cropped area would be as high as Against this backdrop, the BARI according to BARI. 23.25 million hectares, said officials. is taking the four-crop model to Apart from increasing farm Bangladesh’s cropping intensity farmers’ plots on a limited scale production, BARI scientists said, has already reached 191 percent, beginning with the present Aman making the country one of the (winter season) most intensified cropping zone in season on the world. Now, introduction of the successful four-crop rotation, as planned by the completion of government, would further increase a two-year field the country’s cropping intensity (up trials in as many to 400 percent) and thereby increase as 14 areas across the total farm output. the country. According to a 2009 Planning During the last Commission report, Bangladesh two years, they loses over 80 thousand hectares of had experimented agricultural land each year, or in with various crop rotation also mitigates the other words nearly one percent a year combinations of crops in different build-up of pathogens and pests that is being turned into non-agricultural areas of the country so that the four- often occurs when one species is land. crop model is suited to diverse agro- ecological environments. continuously cropped, and can also It is because of the farmland improve soil structure and fertility by depletion that Bangladesh slips In some regions, they will promote alternating deep-rooted and shallow- back, even after achieving rice self- ‘Aman-mustard-Boro-Aus’ pattern rooted plan World’s first zinc-enriched rice released A decade-long research by Bangladesh The National Seed Board (NSB) on based global agro-science scientists has culminated in the release August 26 approved release of the coordinating body Consultative of the world’s first zinc-enriched rice hi-zinc rice — named Brri dhan- Group for International Agricultural variety, capable of fighting diarrhoea 62 — which is also the most early- Research (CGIAR). and pneumonia-induced childhood maturing variety ever released for deaths and stunting. The scientific Aman (winter) season. Besides, Zinc, iron and vitamin-A are the three feat comes with Bangladesh Rice 10 other high most vital micronutrients, deficiency yielding and of which hampers children’s natural submergence, growth and decrease their disease salinity and prevention capacity. In Bangladesh, disease tolerant over 40 percent children under five varieties of are stunted while an estimated 44 rice, jute and percent children of the same age potato were group are at risk of zinc deficiency. also released. The other varieties the NSB released The BRRI are three rice varieties developed breeders developed by the Bangladesh Rice Research Research Institute (BRRI) breeders the hi-zinc rice with support from Institute (BRRI), four rice varieties succeeding in biological fortification HarvestPlus, which is a global by Bangladesh Institute of Nuclear (biofortification) of the staple with one biofortification mission launched Agriculture (Bina) and two jute and of the most vital micronutrients zinc. back in 2004 under the Washington- one potato varieties. July-September 2013 14 News Bulletin Bangladesh Economy

Bangladeshi scientist discovers ‘helpful bacteria’ from lentil roots Bangladeshi scientist Harun-or- lentil samples from Bangladesh. Institute of Nuclear Agriculture Rashid has discovered a new species His research has been recently (BINA), said the new species is of ‘helpful bacteria’ that helps in published in the ‘Systematic and several times more beneficial to the increasing yields by creating nodule Applied Microbiology’ journal. The crops compared to various types of at the root of lentil crops. He said bacteria found on the lentil roots in the bacteria can help in producing other countries. high-end bio-fertilisers. The bacteria belongs to the Rhizobium species, The scientists said rhizobium bacteria according to The Daily Financial mainly creates nodule in lentil roots Express Newspaper published on from which the crops can take July 23. nitrogen as an alternative to urea. It also helps increase the production of Dr. Rashid discovered the bacteria the lentil crops. Dr. Rashid started when researching in Germany International Committee of Bacterial working on the bacteria in 2009 by on “Genetic diversity of rhizobia Taxonomy has permitted him to collecting samples from Germany, nodulating lentil (Lens culinaris) name the new bacteria species. Dr. Turkey, Syria and Bangladesh that in Bangladesh”. He found it on the Rashid, a scientist with Bangladesh create nodule in lentil roots. Dutch-Bangladesh Joint Venture co. to set up 2nd largest LPG plant in country A Bangladesh-Netherlands joint billion in the project. The company companies, Cleanheat LP Gas, venture (JV) company, BM Energy, is has already completed civil work Premier LP Gas, Summit LP Gas, going to set up the country’s second for the plant at Barabkunda area in Bashundhara Gas, and Jamuna largest liquefied petroleum gas Chittagong with the hope to go into Spacetech Gas are in operation in (LPG) bottling plant in Chittagong. commercial production sometime in the country. The combined capacity The capacity of the plant is over the next year. This will be the country’s of the above plants is around 200,000 80,000 tonnes per annum. Currently, eighth LPG plant. It is procuring its tonnes but they supply around Bashundhara has the biggest capacity equipment from Belgium, France, 100,000 tonnes a year. with nearly 85,000 tonnes. Korea and Denmark. The installation In the meantime, international oil The joint venture group involving of equipment will begin in October- company Chevron has also shown its garment-logistics-housing-media November this year. Apart from interest to set up an LPG pant in the business is investing around Tk. 4 two units of government-owned country. Bangladesh has moved up eight notches in Global Competitiveness Index Bangladesh has moved up eight driving productivity and then, fueled rapid growth and lifted notches to 110th in this year’s Global enabling sustained economic growth millions of people out of poverty,” it Competitiveness Index (GCI), and long-term prosperity. said. compared with last year’s 118th. Improvement in two key areas— “The globalCorr uption 22.2 macro-economic management and financial crisis Inadequate supply of infrastructure 17.4 infrastructure—helped the country and the ensuing Ine cient government bureaucracy 15.4 make progress in the index for developments Access to nance 7.4 2013-14, according to the Global have heightened Gevernment instability 6.6 Competitiveness Report (GCR) the role of Inadequate educated workforce 6.1 released by Centre for Policy emerging Foreign currency regulation 3.9 economies Dialogue on September 09. Policy instability 3.5 in the global Tax regulation 3.4 GCR is an annual publication of the context.” “This Poor work ethic in national labour force 3.1 World Economic Forum (WEF), has accelerated Ination 2.5 which has already published the the major Most Tax rates 2.4 report worldwide. GCR is one of economic Problematic Insu cient capacity to innovate 2 the world’s most comprehensive and transformations Factors respected assessments of country already Crime and the 1.9 for Doing competitiveness, offering insight underway, Restrictive labour regulations 1.8 Business into policies, institutions and factors which have Poor public health 0.3 % of Responses July-September 2013 15 News Bulletin Bangladesh Economy

Based on the report, the WEF made force, inflation, tax rates, restrictive February and April this year, based an index of 148 countries this year, labour regulations and poor public on a questionnaire developed by after evaluating 12 different issues, health are also creating barriers in Geneva-based World Economic known as “twelve pillars”. The pillars doing business in Bangladesh, it said. Forum. The findings of the survey include institutions, infrastructure, were absorbed into WEF’s Global macroeconomic environment, Switzerland topped the GCI, followed Competitiveness Report 2013-14. health and primary education, by Singapore, Finland, Germany and higher education and training, the United States. Among the South The survey found inadequate goods market efficiency and Asian nations, India ranked 60th, supply of infrastructure, inefficient labour market efficiency. Financial while Sri Lanka 65th, Bhutan 109th government bureaucracy, access to market development, technological and Nepal 117th. financing and government instability readiness, market size, business were the other significant problematic Bangladesh has made progress factors besides corruption to doing sophistication and innovation have in global competitiveness, business. also been considered to prepare the but corruption has taken competitiveness index. over infrastructure deficit as The respondents, which comprise the main deterrent to doing 71 large and medium companies, According to the latest GCI, the business, according to the Global identified undocumented extra most problematic factors for Competitiveness Report (GCR). payments or bribes on tax payment doing business in Bangladesh are Government instability is a rising and export-import related issues, corruption, inadequate supply concern, which came up to the 5th government’s failure to combat of infrastructure, inefficientspot from 7th in 2012 and 12th corruption, bribes on public utilities government bureaucracy, access of in 2011 in the Executive Opinion and illegal payment on awarding of financing, government instability and Survey. public contracts and licences as the inadequately educated workforce. major elements of corruption. They Policy instability, tax regulations, The Centre for Policy Dialogue also said the corporate ethics of firms poor work ethics in national labour conducted the survey between were not “good enough”. Software export crossed US$100m Bangladesh exported software worth rises in export volume every year. The main destinations of Bangladeshi $101.63 million in 2012-13 financial Even the industry has the potential software products are the US, the year, up by 43.53 percent from the to make the figure $1bn said the UK, Canada, Australia, Denmark, previous year’s $70.81 million. It industry insiders. Netherlands, Germany, India and is a milestone achievement for the Japan. country’s ICT sector. If the current The country has So ware Export Figures 2008-13 export flow continues, software more than 20,000 export will cross $1 billion by 2021, active freelancers Export $101.63m according to BASIS. working at home Target and making However, the target was $85.7m. $70.81m $85.69m contribution The country’s software export is to the foreign $45.31m registering above 40% growth over $35.36m currency $32.91m $45.16m last couple of years. $38.1m $37.48m earning, $27.3m The software is a recent booming according to industry in Bangladesh and enjoying BASIS. 2008-09 2009-10 2010-11 2011-12 2012-13 BIDS jumps 14 points in Asian think-tank survey Bangladesh Institute of Development of the University of Pennsylvania. Studies (BIDS), the country’s premier It is the country’s only think tank, think tank, ranked 15th in a survey out of 35, to have managed a spot in of 40 Asian think tanks, up 14 spots the global ranking, according to the from the previous year. The think Daily Star published on August 01. tank came in 29th in the previous Lowy Institute of Australia secured edition of the survey, conducted on an the top slot, followed by Singapore annual basis by the Think Tanks and Institute of International Affairs and Civil Societies Programme (TTSCP) Centre for Strategic Studies of New July-September 2013 16 News Bulletin Bangladesh Economy

Zealand. The rating list, however, House of the UK and Carnegie than 6,500 think tanks using a set of excludes China, India, Japan and Endowment for International Peace 18 criteria developed by the TTCSP. South Korea, all of which have been of the US, took the top three spots. put in a separate category. The purpose of the rankings is to help This global think tank index is the improve the profile and performance BIDS also made it to the 98th position result of an international survey of think tanks while highlighting on the list of top 150 think tanks in of over 1,950 scholars, public and the important work they do for the worldwide category. Brookings private donors, policy makers and governments and civil societies Institution of the US, Chatham journalists, who helped rank more around the world. Export witnessed over 11pc growth in FY13 Bangladesh fetched US$27.02bn the figure narrowly missed the year’s garment, jute and jute goods brought from exports in the last fiscal year target of $21.54 billion. in the next most earnings, of $1.03 (FY13) against its target of $28bn. billion. Home textile ($791.52 However the export earnings In FY13 the country exported million), agricultural products knitwear products worth $10.47 witnessed 11.18% growth over ($535.74 million), footwear ($419.32 billion and woven garments of the previous fiscal year (FY12), million) and engineering products $11.03 billion. The entry of garment according to the Export Promotion ($367.47 million) were the other items to new destinations like Japan, Bureau (EPB). The figure represents notable export earners. India, South Korea, South Africa, a 3.51% shortfall from the target. Malaysia, Brazil, China, Mexico, The export trend for leather and Australia, New Zealand and Chile, leather products maintained their Readymade garment once again too, has been cited by many industry upward trend during the last fiscal contributed to a lion’s share of the watchers as a factor for the strong year. Leather exports totalled export earnings at 79.63 percent, performance. $399.73m, while leather products bringing in $21.52 billion alone, brought $161.62m, cotton and cotton the highest in the country’s history. Bangladesh currently stands second, products together earned $124.96m, Although it represented a growth of with an approximate 4.80 percent plastic products $84.51m and rubber 12.71 percent over fiscal 2011-12, share of the $412 billion pie. After fetched $13.57m. BD Exports to China rising fast Bangladesh’s exports to China are fast Promotion growing due to the zero-tariff access Bureau (EPB). Bangladesh extended in July 2010. Currently, In fiscal 2012- Exports 458.11 Bangladesh, as a least-developed 13, exports to

To China 401.94 country (LDC), gets duty and quota- China stood In Million $ free entry for 4,788 products to the at $458.11 Chinese market, which, according million, up 319.66 to Bangladesh Tariff Commission, about 14 is 67 percent of the country’s export percent year- basket. on-year. 178.63

Exports to the world’s second largest The popular 97.06 106.95 economy stood at $178.63 million export items in fiscal 2009-10, the year before the to China FY08 FY09 FY10 FY11 FY12 FY13 duty privilege was extended. It shot include up to $319.66 million in the following readymade leather and leather goods, jute and year, according to data from Export garments and textiles, fish and crabs, jute yarn, plastic waste. Trade deficit with India remains high at $4.17 billion in FY13 Deficits in 10 years is around US$ 28 billion The country’s trade gap with India neighbouring country. Bangladesh main export products—readymade remained high at $4.17 billion in officials had earlier hoped that the garments—in late 2011. the recently concluded 2012-13 country’s trade gap with India, financial year as different non-tariff which stood at $4.24 billion in FY Economists and businesses said and para-tariff barriers continued 2011-12, would come down as India that although the trade gap in the to limit Bangladesh’s exports to the gave duty free access to Bangladesh’s FY2012-13 came down slightly by July-September 2013 17 News Bulletin Bangladesh Economy

1.5 per cent, figure of $4.17 billion exports of $563.96 million. In FY12, 3.3 billion while import was around was still high as the potentiality the imports from India were almost US$ 31.3 billion. Thus the trade of Bangladesh’s exports to Indian same at $4.74 billion while exports gap between the two countries has been in favour of India and stood at market was not used properly because were worth $498.41 million. around US$ 28 billion. of Indian barriers. Bangladesh Major export items from Bangladesh imported Indian goods worth $4.74 During the last ten years export from to India are : frozen food; agri- billion in the FY13 against the Bangladesh to India was about US$ products; chemical products; leather; Bangladesh trade with India raw jute; jute goods; knitwear; woven garments while major Imports from ($ in million) 5000 India to Bangladesh are : cotton Export to India and cotton fabrics; vehicles; cereals; Import from India 4000 nuclear reactor, boilers, machinery and mechanical appliances, parts; electrical machinery and equipment 3000 and parts; coffee, tea, mate and spices; rubber and articles; salt, 2000 sulphur, earths and stone, plastering materials, lime and cement; man- 1000 made staple fibres; knitted or crocheted fabrics; aluminium and 0 articles; oil seeds and oleaginous 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2004-05 fruits; miscellaneous grains etc. Microcredit helps borrowers earn more, build up assets : WB Microcredit has helped borrowers in poverty and debt?” organized by institute is not bad as continuous earn and consume more, accumulate the microfinance institute at orium participation is not necessarily a assets, invest in children’s schooling, of Palli Karma-Sahayak Foundation, liability. Extreme poverty reduction and move out of poverty, according Dhaka on July 1. was 3.2 percent for average and 3.6 to a recent study. The study showed percent for continuous participants, significant welfare gains resulting “This is not to say that the non- it said. from microcredit participants, participants have failed to progress especially women. The accrued over the period. Both the participants Incidence of borrowing was only 26 benefits of borrowing alsoand non-participants have gained as percent in 1991, whereas it was 69 outweighed accumulated debt, said the economy has grown,” the study percent in 2011, and the average size the study that tracked the changes said. The amount of household net of borrowing registered a 4 percent microcredit has brought in more worth rose by 320 percent Poverty and Microcredit

than 2000 households in 20 years. 87.6 Participation Status 86.3 to Tk 287,000 in Percentage of Population 78.5 Both participants and non- among the 75.1 P: Participant participants of microcredit gained microcredit NP: Non-Participant 60.6 over the last 20 years but poverty participants 58.2

reduction was higher for participants during fiscal 46. 5 than for the non-participants, 1992-2011, 43.6 34.6 according to the study. The WB and while such 32.9 Institute of Microfinance, a research net worth 23. 1 organization in Bangladesh, jointly increased to 16. 2 conducted the study. Tk 269,000 P NP P NP P NP a m o n g 1991-92 1998-99 2010-11 The rate of extreme poverty declined the non- Moderate Poverty Extreme Poverty by 2.95 percent a year among the participants, microcredit recipients, while the according to the study. So borrowers growth annually over the last 20 rate was 2.77 percent for the non- are not trapped in poverty or debt years. Overall, it has played its part in participants, according to the study. due to microcredit. The WB shared the findings of the study the impressive progress Bangladesh at a discussion on “are microcredit The study also said long-term has made in poverty reduction over participants in Bangladesh trapped membership with a microfinance the past two decades. July-September 2013 18 News Bulletin Bangladesh Economy

MFIs in BD averted microcredit crisis during 2008-2010: WB Micro Finance Institutions (MFIs) internal controls, fixing staffing borrowers plateaued: the country’s in Bangladesh successfully averted a challenges and re-establishing credit four major MFIs stopped adding microcredit crisis during the period discipline to avoid the crisis. branches and staff and the number of 2008 to 2010 as they took necessary active borrowers stopped increasing. steps of slowing growth and other Giving an overview of the microcredit administrative reforms in the sector, market in Bangladesh from 2004 The report points out that the MFIs said a World Bank study, according pulled back in reaction to two main to The Daily Financial Express problems: first, they began to sense Newspaper published on July 31. the negative consequences of market The study titled: “CGAP Study: saturation; second, they became Slowing Growth Key to Avoiding a more aware of internal management Microcredit Crisis in Bangladesh” problems. was conducted by the Consultative Group to Assist the Poor (CGAP). While performance from 2008 to A statement issued by the WB country 2010 did suffer, the sector was back office in Dhaka said the report on solid footing by 2011 and 2012 as indicates that during the period a result of various actions each of the 2008 to 2010, Bangladesh’s MFIs four MFIs undertook on their own. successfully averted a microcredit to 2007, the report shows that the crisis. The report finds that MFIs microfinance industry added 15 per The report analyses a decade’s worth took the necessary steps of slowing cent to 28 per cent active borrowers of financial and performance audits growth and placing renewed focus annually during that time period. But as well as other numbers provided by on repairing finances, improving starting in 2008, the number of total the four largest MFIs. BD needs to develop major cities to become middle-income country: WB Bangladesh will need to develop in Bangladesh presents unique Dhaka City should be more vibrant, its major cities in terms of features which have implications livable and economically diverse economic activities and structural for its journey to middle income to help the country reach middle- transformation to reach the status of status.”Strong economic growth has income status. The capital has an middle-income countries by 2021, sustained and fuelled urbanization advantage of productivity among the year that coincides with the 50th in Bangladesh. Urbanization has other cities and urban centres anniversary of its independence, said enhanced economic transformation because of unrivalled access to a World Bank (WB) publication, through the clustering of economic labour and markets. according to The Daily Financial activities,” observed WB Country Express newspaper published on 18. Director for Bangladesh and Nepal, However, Dhaka is falling behind in Johannes Zutt during the launching accessibility and livability because It says to accelerate growth of the publication. of high congestion and severe Bangladesh needs cities that are constraints in land and housing more capable to innovating, better “As the country has exceptionally markets. It needs to gain a competitive connected internally and to external high population density it needs edge in higher-value-added products markets, and more livable. The equally high economic density to and services, as garment factories process of developing the cities with reach middle-income status. And the tend to de-concentrate on rapidly improved infrastructure and greater highly competitive urban areas can growing outskirts of the city. economic activities will be a critical only sustain high economic density,” task for the government, said the said the WB publication. The peri-urban areas of the capital publication titled “Bangladesh: The Dhaka are rapidly emerging as Path to Middle-income Status from The urban transition, however, competitive manufacturing centres, an Urban Perspective,” launched in is not yielding all of its potential but they have not been able to Dhaka on July 15. economic benefits, because the develop to their full potential cities in Bangladesh have extremely because of poor infrastructural The observations embodied in the poor infrastructure and low level of facilities. Residents, entrepreneurs publication is based on the results services. Low-value added labour- and businesses in the outskirts of of a survey of 1,000 garment firms intensive garment production is a Dhaka also suffer indirectly from the conducted across urban locations in constraint for growth in large cities costs of traffic congestion, said the Bangladesh. The rapid urbanization of the country, said the publication. publication. To transform the peri- July-September 2013 19 News Bulletin Bangladesh Economy

urban areas of Dhaka into globally Dhaka City in access to labour and corridor will be critical for growth,” competitive manufacturing centres, market. But lower productivity the news report quoted WB South Bangladesh will require institutional compensates for lower land and Asia Urban and Water Unit, Sector mechanisms to support coordination housing costs. Chittagong City also Manager, Ming Zhang as saying. between the core and the periphery has an advantage in accessibility Improving the competitiveness of of metropolitan Dhaka. given its access to the port, said the Chittagong Port, and enhancing publication. accessibility within the Dhaka- Chittagong, the main port and the Chittagong corridor will be critical “Chittagong City has failed to for growth. second largest city is a growing capitalise on its natural comparative industrial centre of the country. From advantage as Bangladesh’s largest “Small and medium-size cities the perspective of garment firms, it seaport city. Improving the are uncompetitive locations that is a lower-cost, lower-productivity competitiveness of Chittagong lack access to markets from the location compared to Dhaka City. Port as part of a modern logistic perspective of the garment sector,” It is a less competitive location than chain within the Dhaka-Chittagong said the publication. Poor not covered by BD’s social protection system: ADB A large number of poor and programmes, including the largest stating, “Evaluations of the gender vulnerable people are not covered by Employment Generation for the impact of Bangladesh’s allowances Bangladesh social protection system, Ultra-Poor reach well over 6 million suggest that they have helped leaving them exposed to risks and beneficiaries, or about 23 per cent of increase the access of elderly women unforeseen difficulties, said an Asian all social protection beneficiaries. to healthcare services.” Development Bank (ADB) study. The report published on the ADB website Bangladesh’s expenditure on disaster The SPI is an indicator that on July 03, ranked Bangladesh 28th relief has been a major part of its divides total expenditures on among 35 countries from Asia social protection by the intended and Pacific region based on Social beneficiaries of all social protection Protection Index (SPI). Due to programmes, said the study. Three falling support these people suffer major programmes are taken into from unemployment, ill health, and consideration when calculating SPI natural disasters, the report added. for a given country, social insurance, social assistance and active labour With the expenditures for social market programmes, it added. protection was less than 3 percent of its GDP in 2009, Bangladesh is Introduced in 1998, the programme among the countries where progress accounts for almost 7 per cent of on social protection needs to be Bangladesh’s total social protection accelerated, though its low-income social assistance system, accounting expenditures and covers 21 per cent is likely to constrain its ability to for 19 per cent of social protection of those aged 60 and older, benefiting mobilise the necessary revenue, it spending in 2009, the study stated. 900,000 women in 2009. further said. Almost 18 million people (roughly However, the SPI results suggest that 12 per cent of the population) were Bangladesh needs to expand its social Most of Bangladesh’s existing social beneficiaries of such relief that year, protection systems and make the protection programmes are focused it added. on the labour market, making up impact more equitable not just for the 36 per cent of all social protection The study lauded the social pension poor but for a substantial proportion of expenditures. Its three major programme for elderly women, the non-poor, the study suggested. Bangladesh comes second in financial inclusion in South Asia Bangladesh stands second among microfinance institutions (MFIs) and 48 percent of the households in India South Asian nations in ensuring cooperatives, according to Institute have access to such services and access to financial services for of Microfinance (InM). 60 percent in Pakistan. It has been its citizens, a recent study found. observed that financial inclusion as Around 66 percent of the households The country comes second only to percentage of the total population in Bangladesh now have access to Sri Lanka, where 80.4 percent of increased to 56.43 percent in services including credit, savings the population is covered by the 2010 from 39.76 percent in 2004, and insurance from banks or financial umbrella. In contrast, only Bangladesh Bank said in a report. July-September 2013 20 News Bulletin Bangladesh Economy

A total of 8,936 households were in 63 districts across the country for The study found that households randomly selected from 275 upazilas the study. The households’ five-year have to bear more borrowing credit profiles cost for getting loan from formal 54.12 Access to Credit were used to credit market than from MFIs in percentage of total population define accessand cooperatives. Non-interest to credit, while cost as percentage of average total 36.64 access to savings transaction cost is the highest in 21.78 and access to formal credit market, where it is insurance were over 16 percent. The study, however, 7.99 measured by suggested that fundamental changes current or past in financial policies and market Aggegate Formal Quasi-formalInformal use of these structure are required for sustainable Source : INM Study services. financial inclusion. Nobel Laureate Yunus given rare honour by US Congress Yunus dedicates the highest US civilian award to people of Bangladesh Nobel Laureate Prof Muhammad The achievement places him in the “I’m grateful to the US Congress Yunus received the Congressional company of Norman Borlaug, Martin that it paid attention. Many people Gold Medal, the highest civilian Luther King Jr, Nelson Mandela, Elie do good things that are never award of the United States, in Wiesel, Aung San Suu Kyi and Mother recognised. I’m very blessed that recognition of his efforts toward Teresa — personalities who have combating global poverty. Prof. received the two medals from the way,” he said, while dedicating the Yunus is the seventh person in the US as well as the Nobel Peace Prize. honour to the people of Bangladesh. US history to have won both the Congressional Gold Medal and the Presidential Medal of Freedom, another of the highest US civilian awards. Yunus won the latter award in 2009.

“Professor Yunus set out to do what may be the biggest thing of all, and that is liberating people to seek a better life. And not just any people, but men and women who had only known misery, who had been told they were no good,” House Speaker John Boehner said during the award ceremony held in the Rotunda of the United States Capital in Washington DC on 17 April. House and Senate leaders presented Prof Yunus with the Congressional Gold Medal, which was announced in 2010. House Speaker John Boehner presenting the Congressional Gold Medal to Nobel Laureate Prof Muhammad Yunus “To do all this, he first had to teach in the Rotunda of the US Capitol. House Minority Leader and former Speaker Nancy Pelosi was also present. himself how to run a bank from scratch. That was when he realized In the next five years, Yunus wants to “It’s very emotional. It’s not only an he had to do the exact opposite see at least one percent of the world endorsement, but an inspiration for of what a bank normally does to economy made up of social business, everybody who has supported us make his idea work. Then there was his new passion. actually getting people to borrow the — colleagues and friends, staff and money, to see value in themselves, to borrowers of the Grameen Bank, all Through his Grameen Bank, Nobel spark their sense of wonder. He had the people who participate in social Laureate Yunus pioneered the to convince them that they too didn’t business,” Prof. Yunus told The New movement and helped hundreds need rank or status to advance their York Times ahead of the ceremony in of millions come out of poverty. place in life,” said Speaker. Washington DC. Today, microfinance providers reach July-September 2013 21 News Bulletin Bangladesh Economy

about 200 million clients globally. In Social business is a non-dividend generation. Their main question is: Bangladesh, the Grameen Bank, the company dedicated to solving human What am I going to do with my life? first bank in the world owned by poor problems. It allows the company What is the purpose of my life?” women, has 8.4 million borrowers — to make profit, but it stays with the 96 percent of whom are women. company. The owner will only get Yunus said once people like the idea of social money, they would start In 2010, the US Senate unanimously diverting their business money into approved a bill to award Yunus the social businesses. The microcredit medal, which represents Congress’ pioneer said it was very much highest expression of national possible to eradicate poverty. appreciation for distinguished achievement and contribution. “With the creative power we have Former recipients of the back the original investment, and today, this is a do-able proposition. Congressional Gold Medal include nothing more, according to Prof We can create a world where poverty George Washington, Sir Winston Yunus. doesn’t exist. In order for the next Churchill, Elie Wiesel, Pope John generation to see poverty, we’ll have Paul II, Rev. Dr Martin Luther King He is upbeat about the success of to create poverty museums. That’s Jr and Coretta Scott King. social business, as he was in the case where poverty belongs, not in human of microcredit. “If we can make that 1 percent society.” happen, I think the world will be “There’s a whole generation of completely different. People will see young people coming up with social “So let’s put this on the list of how exciting it is, and soon the level business ideas. Profit making doesn’t impossibilities that we want to make will rise from 1 to 5 percent and pave interest them as much as it interested possible within the next 20 years. the way to 50 percent,” observed people before, particularly the post- That’s the way change takes place,” Nobel Laureate Yunus. war Liberation War of Bangladesh Prof. Yunus said. Prof. Yunus ranked 11th among world’s most influential business thinkers Nobel Peace Laureate Prof. Ferguson, Michael Dell, Howard in 2008. The 2008 list that was done Muhammad Yunus has been featured Gardner and Jimmy Wales in the using a similar methodology had as one of the most influential order. The results were based on author and consultant Gary Hamel business-thinkers in a new ranking Google hits, media mentions and as the no. 1 business-thinkers. Tom compiled by The Wall Street Journal. Davenport, a professor at Babson The founder of Grameen Bank College, compiled this year’s ranking and pioneer of microcredit and with Jeffrey Cronin of Harvard social business concepts that are Business School. being followed around the world was ranked 11th in the 2013 list of “I call the new list the invasion of business-thinkers. the celebrity economists,” Davenport Paul Krugman, Nobel prize winner said. The financial crisis has made in economics, topped the list. He academic citations, according to The economic insight valuable to was followed by Joseph Stiglitz, Wall Street Journal. businesses and consumers alike. Bill Gates, Michael Porter, Thomas “People are casting about for what Friedman, Eric Schmidt, Richard The findings show how much caused the crisis. That’s one of the Branson, Malcolm Gladwell, Robert the business-guru landscape has reasons economists did so well in the Reich, Jack Welch, Prof Yunus, Niall changed since the previous ranking rankings,” Davenport noted. MJL Bangladesh forms joint venture in Myanmar MJL Bangladesh has become the The joint venture company — MJL allowed MJL to take $510,000 as its first local company to explore the & AKT Petroleum Ltd — formally equity investment in the company. untapped Myanmar market by setting started marketing Mobil brand The remaining $490,000 has been up a joint venture company in the once lubricants on July 2 in Yangon with invested by the Myanmar’s AKT. isolated country. The company got the an initial investment of $1 million. chance after the central bank recently MJL Bangladesh owns a 51 percent Many Bangladeshi business people allowed capital investment outside share and Aung Kyun Thar (AKT) visited Myanmar since the country Bangladesh, a long-awaited demand of Co. of Myanmar the rest in the new has opened up its economy after the Bangladeshi business people. company. Bangladesh Bank has remaining isolated for long from the July-September 2013 22 News Bulletin Bangladesh Economy rest of the world. Businesses from an investment wing China, India, the US and Europe are of East Coast Group, considering the country as their next owned by Chowdhury potential investment destination. and his family, holds Also, the Myanmar parliament last the majority stake year passed a foreign investment law, clearing the way for overseas after ExxonMobil’s companies to invest in the country. divestment in 2003. Later, MJL Bangladesh Ltd, formerly MJL Bangladesh known as Mobil Jamuna Lubricant commissioned a lube Ltd, is the first and only joint venture company established by ExxonMobil oil blending plant, the in the downstream petroleum sector first of its kind in the of Bangladesh. EC Securities Ltd, country, in May 2003. Bangladesh Bank announces half yearly Monetary Policy This issue of the Bangladesh bringing average inflation down to amounting to 13.6% in May 2013. Bank (BB) half yearly Monetary the targeted 7.5% level. Data for the GDP growth in FY13 is estimated Policy Statement (MPS) outlines second half of FY13 suggests that to be 6.03% by BBS, slightly short of the monetary policy stance that solid progress was made towards BB’s FY13H2 MPS forecast of 6.1- BB will pursue in H1 FY14 (July- these key objectives. 6.4%. Improved external balances December 2013), based on an are reflected in the accumulation assessment of global and domestic Reserve money growth and growth of international reserves to over macro-economic conditions and of net domestic assets of Bangladesh USD 15 billion at the end of FY13, outlook. This MPS was preceded Bank remained within program sufficient to cover 4.9 months of by productive consultations with a targets, despite the aforementioned projected imports. Foreign exchange range of key stakeholders and web- NFA surge. Broad money growth reserves have risen to a record based comments were also received. was also close to program targets. $16.03 billion—for the first time Average inflation measured using in Bangladesh—on the back of an In FY12 the economy was faced with the 1995/96 base year continued its increase in remittances and exports the challenges of rising inflation decline and in June 2013 it reached and low investment. and balance of payments pressures 7.70% from 8.40% in January, stemming largely from a sudden though core inflation (non-food, Key underlying drivers included surge in oil imports. In order to non fuel) is on a rising trend since double digit remittance and export address these challenges BB pursued April 2013 reflecting aggregate growth coupled with sluggish a more restrained monetary policy demand pressures. Retail interest imports. The Taka: USD nominal stance which, along with other policy rates also declined during these six exchange rate appreciated by 2.6% measures, helped curb inflationary months with the spread between in H2FY13 and real exchange pressures and significantlylending and deposit rates dipping rate data suggests that there has strengthened foreign exchange below 5% and its trend indicating been a marginal loss in export reserves. In FY13 the economy faced that lending rates have declined competitiveness – though BB’s a different set of challenges. Robust faster than deposit rates. Frequent interventions in the foreign exchange foreign remittance and export strikes in H2FY13 contributed to market have limited this significantly growth along with sluggish import general investor uncertainty which by slowing the appreciation of the growth led to a sharp growth of Net along with more stringent lending Taka in keeping with the goal of Foreign Assets (NFA) which needed practices by domestic banks led to a avoiding excessive exchange rate to be sterilized. slowdown in domestic private sector volatility. Moreover by opening up credit growth. working capital borrowing at lower Moreover declining inflation and interest rates from foreign sources concerns over a slowdown in growth The introduction of new foreign to exporters in FY13, and increasing created space for a 50 basis point currency borrowing facilities by BB the size of the Export Development rate cut by BB in January 2013 with partially compensated for this as Fund (EDF), export competitiveness the aim of influencing bank lending some consumers switched to lower is being actively supported. rates downwards. At the same time cost overseas financing with overall the January 2013 MPS set out a private sector credit growth, from Looking ahead to FY14, the inflation monetary program consistent with both local and foreign sources, target announced in the Budget is July-September 2013 23 News Bulletin Bangladesh Economy

7.0% using the 1995/96 base. The possible supply-side disruptions the last ten year average of 6.2%. This equivalent target using the 2005/06 if prolonged nationwide strikes is based on current and projected base could be in the range of 6.0- take place, recent increases in food trends of a number of variables 6.5%. The risks to the inflation inflation in India and as in all years including global growth, exports, target stem partly from likely wage risks due to weather related factors investment, imports, remittances increases in both the public and affecting agriculture. etc. BB will update its forecasts on a private sectors which will further regular basis during the course of the add to existing aggregate demand BB’s current growth outlook for year and the monetary program will pressures. Another risk to food FY14 is that output growth is also be flexible to accommodate any inflation in particular stems from unlikely to deviate significantly from significant change in these forecasts.

Monetary policy stance for H1 FY14 (July-December) The monetary stance in H1 FY14 takes these recent inflation imply that achieving the FY14 inflation target economic developments into account and will target of 7% will be a challenge. a monetary growth path which aims to bring average inflation down to 7% (using the 1995/96 base), while As such BB has decided to keep policy rates unchanged. ensuring that credit growth is sufficient to stimulate Moreover the growing liquidity in the banking system inclusive economic growth. Specifically we aim to suggests that an easing of reserve requirement ratios is contain reserve money growth to 15.5% and broad also unnecessary. Effective transmission of monetary money growth to 17.2% by December 2013. The space policy requires strengthening credit and debt markets for private sector credit growth of 15.5% for December and this will remain a key focus for H1FY14. Overall 2013 and 16.5% in June 2014 has been kept well in there is a greater focus on improving corporate line with economic growth targets and higher than the governance in banks as well as using automation and average of ‘emerging’ Asian economies. capacity building to strengthen BB supervision. This level is sufficient to accommodate a substantial Specific actions within performance agreements rise in demand for credit if it materializes though actual (MOUs) for SCBs and specialized banks including private credit growth may not use up all the space in the Basic Bank include ceilings on loan growth and the monetary program as it will depend on the investment need to provide regular reporting to BB on a number climate in the lead-up to the national elections. The of issues including large loan approvals, single borrower monetary stance also assumes government borrowing exposure, off-balance sheet items etc. Clear progress from the banking sector will remain around the FY14 on these benchmarks will be important before any budgetary figure of 260 billion taka. recapitalization of these banks. The decision to keep repo rates and reserve requirement This monetary policy stance also aims to preserve the ratios unchanged following the fifty basis point rate cut country’s external sector stability. BB anticipates further in January 2013 was based on a number of factors. The build-up in foreign reserves in FY14 though at a more growing inflationary pressures over the past several moderate pace than FY13. BB will continue to support months along with the prospects of wage pressures, a market-based exchange rate while seeking to avoid possible supply-side disruptions and rising regional excessive foreign exchange rate volatility.

Monetary Policy stance for H2 FY13 (January-June) The FY13 H2 monetary policy stance is designed in case there is greater lending appetite for productive to ensure that the credit envelope is sufficient for purposes in H2FY 13 and sufficient to accommodate productive investments to support the attainment of even an optimistic scenario for FY13 output growth. the government’s FY 13 real GDP growth target while keeping it consistent with the targeted 7.5% average At the same time BB remains committed to bringing inflation rate for FY 13. In view of the risks to output inflation down further, and also to avoiding asset price growth due to the uncertain ties around the global bubbles, and as such continues to encourage banks to economy, BB will reduce all repo rates by 50 basis points use the space for private sector growth for productive, and not speculative, purposes. This‘ balanced’ monetary effective immediately. BB has also revised its monetary policy will also aim to minimize excessive volatility of program with a broad money growth target of 17.7% in the exchange rate. June 2013 compared to the FY 13H1 MPS target of 16.5%, and a new private sector growth envelope of 18.5% in These objectives involve trade-offs and the balance June 2013 compared with the original program of 18 %. between BB’s instruments and its targets will be reviewed BB has created further space in its monetary program regularly. July-September 2013 24 News Bulletin

Regional News St.Petersburg G20 Leaders’ Summit for stimulating strong, sustainable and balanced growth The G20 Leaders’ Summit was held in The 2-day-long Summit resulted in IMF, and put in place our Framework St. Petersburg on September 5-6. The the adoption of the G20 Leaders Joint for Strong, Sustainable, and Balanced Summit, which is the culmination of Statement that reflected the G20’s Growth. This coordinated response the Russian Presidency year, marked intentions and concrete mechanisms helped to alleviate severe market the 5th anniversary of the G20 at the for further work on stimulating distress and avert a global depression. Leaders’ level. strong, sustainable and balanced In Toronto, Seoul, Cannes and Los growth. Cabos the G20 demonstrated its leadership in returning to fiscal Vision Statement of G 20 Summit sustainability and promoting growth in St. Petersburg and job creation, structural, financial We, the Leaders of the Group of and tax reforms, anti-corruption, Twenty, reaffirm the role of the development, energy, agriculture, and G20 as the premier forum for our fostering inclusive green growth. We international economic cooperation. also started working in partnership with developing countries outside When we first met in Washington on the G20 to narrow the development The key objective of the G20 at 15 November 2008, financial markets gap and reduce poverty. In Saint this moment, given the continuing were in turmoil, global output was Petersburg we have emphasized instability at the financial markets, contracting at an alarming pace, trade restoring strong and inclusive growth unemployment remaining high was plummeting, unemployment and employment while ensuring and persistent global imbalances, was rising, and the future prosperity fiscal sustainability, promoted is fostering strong, sustainable and of women, men and children was at financing for investment, including in balanced growth. To get closer to stake. A truly global crisis called for a infrastructure; made further progress attaining this goal, Russia has set truly global solution. on financial reforms; and we have forth a number of tasks for the G20 made strong commitments on trade, to stimulate economic growth and In Washington, London and development, addressing tax evasion, job creation, primarily through Pittsburgh, we took decisive steps and on changing the rules that allow encouraging long-term investment, ensuring trust and transparency at the markets and enhancing effective regulation.

Leaders’ attention at their meeting was mainly focused on the issues of ensuring economic growth and financial stability, quality job creation and tackling unemployment, searching for the new sources of growth and investment financing, as well as strengthening multilateral trade and international development assistance. G20 Leaders at St.Petersburg

The G20 Leaders also took into to stimulate the world economy, international tax avoidance related to account the recommendations restore growth, recapitalize financial the erosion of tax bases and shifting elaborated by the Business 20, Civil institutions, launch an ambitious of profits. 20, Labour 20, Think 20 and Youth program to reform the financial 20 throughout the year of the Russian sector, maintain open market Because of our actions, the global Presidency. In addition, Leaders met sand clamp-down on tax havens. economy is more resilient. However, with representatives of the business Significantly, we established the the process of recovery is not community and labour unions on the Financial Stability Board (FSB), completed. Important challenges are sidelines of the Summit. tripled the resources available to the still to be fully addressed, including July-September 2013 25 News Bulletin Regional News

high unemployment. We still need to and transparent global financial community as a whole and make sure work to ensure that growth is strong, system; that the interests of countries at all sustainable, inclusive and balanced. • support strong and more stages of development are taken into representative global institutions; account. We today reaffirm our conviction that the foundation for sustainable • promote open and transparent Nor can we ignore the far-reaching growth and rising prosperity for all governments and impact of our actions. To this end, is an open world economy based • build an inclusive and sustainable we will strengthen our engagement on market principles, effective global economy for all. with the Business20, Labour20, regulation, inclusiveness and strong Civil20, Youth20 and Think20 and global institutions, underpinned by Strong collective action by the listen carefully to all institutions and the closer partnership and collective G20 remains the most effective countries that are not in the Group. action and shared responsibility of way forward. As a forum of major advanced and emerging economies, We will continue to draw on the the G20, based on effective policy we will reinforce our efforts for policy quality analysis and policy advice of coordination. We believe that coordination and collaboration to international organisations, including prosperity must be shared; that the strengthen growth, and manage any the IMF, WB, OECD, FSB, UN, ILO benefits of economic growth are for spill-over effects from our domestic and WTO. all, men and women, the poorest and decisions. We will build on progress most vulnerable, for this generation achieved and combine our efforts and The coordinated response of the G20 and the next. pursue of our commitment to ensure helped to avert a global depression and clearly demonstrated the Group’s Through the G20, we reaffirm our recovery and lay the foundations value as a coordinating body for commitment to act together to for strong, sustainable and balanced growth. Five years after the beginning economic crisis management. Going • raise growth, create jobs and boost of the crisis, we must continue to put forward, the G20 will build on this confidence; the wellbeing of individual people at success and will continue to play a • maintain fiscal sustainability; the centre of our growth agenda. We critical role in the global economy, by • continue to reduce internal and also need to maintain the financial developing a common understanding external imbalances; sector on a sound footing and at the of the new challenges we face and coordinating our actions to overcome • keep markets open for trade and service of the real economy. them. Although the acute phase of the investment; As a Forum representing over 80% crisis is behind us, our determination • promote a rules-based of the global economy, we have a to work together to achieve strong, international economy; responsibility to all citizens. We will sustainable, balanced and inclusive • ensure a stable, well-functioning remain engaged with the international growth is unabated. G20 Finance Ministers pledged growth before austerity The Group of 20 nations pledged on Federal Reserve would scale back rebalancing global demand and debt, July 20 to put growth before austerity, its monetary stimulus dominated that will be readied for a G20 leaders seeking to revive a global economy the two-day talks in Moscow, with summit hosted by President Vladimir that “remains too weak” and adjusting emerging markets most concerned Putin in September. “We remain stimulus policies with care so that by a resulting selloff in stocks and mindful of the risks and unintended recovery is not derailed by volatile bonds, and a flight to the dollar. negative side effects of extended financial markets. Finance Ministers periods of monetary easing,” the and central bankers signed off on a Hosts Russia said G20 policymakers statement said. “Future changes communique that acknowledged had soft-pedalled on goals to cut to monetary policy settings will the benefits of expansive policies government debt in favour of a focus continue to be carefully calibrated in the United States and Japan but on growth and how to exit central and clearly communicated.” In highlighted the recession in the euro bank stimulus with a minimum return for its pledge to ‘message’ its zone and a slowdown in emerging of turmoil. While the US recovery monetary policy intentions clearly, markets. is gaining traction, China’s export Washington managed to ensure that motor is sputtering, Japan’s bid to the text contained no binding fiscal “While our policy actions have break out of deflation has not reached targets, saying that consolidation contributed to contain downside escape velocity, and demand in the should be “calibrated” to economic risks, those still remain elevated,” euro zone is too weak to sustain a conditions. the statement said. “There has been job-creating recovery. an increase in financial market Sources at the meeting said Germany volatility and a tightening of Officials backed an action plan was less assertive than previously over conditions.” Indications that the US to boost jobs and growth, while commitments to reduce borrowing July-September 2013 26 News Bulletin Regional News to follow on from a deal struck in greatest risk of a reversal of capital China faced calls to encourage Toronto in 2010, with the improving inflows that have been one of the domestic demand-driven growth and U.S. economy adding weight to side effects of the Fed stimulus. “One allow greater exchange rate flexibility Washington’s call to focus on growth. thing we would like to emphasise as part of wider efforts to rebalance With youth unemployment rates is the importance of coordination,” the global economy which features a approaching 60 percent in euro zone said Indonesian Finance Minister huge Chinese surplus and matching strugglers Greece and Spain, the Chatib Basri, cautioning that scaling U.S. deficit. Japan, which holds an growth versus austerity debate has back policies of quantitative easing upper house election on July 22, in shifted – reflected in the fact that elsewhere “immediately affects” turn drew criticism for giving little G20 finance and labour ministers emerging markets. detail on structural reforms billed as held a joint session on July 19. The crisis in the euro zone periphery has been exacerbated by capital outflows, and the communique pledged to move “decisively” with reforms to create a banking union in Europe that could revive cross- border lending. Exchange rates and the threat of competitive devaluations barely figured, delegates said – in contrast to an ill-tempered G20 meeting in February coloured by talk of currency wars. Ben Bernanke’s announcement two months ago that the Fed may G20 Finance Ministers and Central Bank Governors in Moscow start to wind down its $85 billion The International Monetary Fund the ‘third arrow’ of Prime Minister in monthly bond purchases sparked warned that turbulence on global Shinzo Abe’s economic turnaround a panicky sell-off, particularly in markets could deepen, while growth plan, G20 sources said. emerging markets. Investors were could be lower than expected due calmed by testimony to Congress to stagnation in the euro zone and Finance Minister Taro Aso said this week by Bernanke, who is not slowdown risks in the developing Tokyo would strive to craft a in Moscow, although he said the exit world. “Global economic conditions credible fiscal plan by the time of the plan from money-printing remained remain challenging, growth is too September G20 summit. Aso also on the cards. weak, unemployment is too high and said he would go ahead next April The G20 accounts for 90 percent of the recovery is too fragile,” Managing with a planned hike in sales taxes, the world economy and two-thirds Director Christine Lagarde told key to stabilising Japan’s public debt of its population – many living in reporters. “So more work is needed which, at over 200 percent of GDP, is the large emerging economies at to improve this situation.” the highest in the G20. China-Asean trade to hit $500b Bilateral trade between China and decade, from US$ 54.77 billion in direct investment from the ASEAN the Association of Southeast Asian 2002 to US$ 400.1 billion in 2012, toward China exceeded US$ 80 Nations (ASEAN) will reach 500 with an average annual growth rate billion, according to the MOC. billion US dollars in 2015, Chinese of 22 per cent. The first half of 2013 Gao said China will further join Vice Minister of Commerce Gao Yan saw a year-on-year growth of 12.2 per cent in China-ASEAN trade that hands with the ASEAN to carry disclosed at a press conference on totaled 210.56 billion US dollars, the out the free trade agreement as the MOC said. China-ASEAN free trade area was established on Jan. 1, 2010. As ASEAN’s biggest trade partner, China kept a trade surplus of 8.5 The 10th China-ASEAN Expo billion US dollars in 2012 in its trade held on Sept. 3-6 in south China’s with the 10-nation group and pledged Guangxi Zhuang Autonomous to increase imports from ASEAN. Region, included a celebration of the July 23. According to the Ministry of By the end of June, Chinese direct Commerce (MOC), China-ASEAN investment in ASEAN countries 10th anniversary of China-ASEAN bilateral trade has surged in the past totaled nearly US$30 billions, and partnership. July-September 2013 27 News Bulletin Regional News

China Worlds top three investors in 2012 China became one of the world’s the country’s economy steams ahead, trillion, and its total assets stood at top three investors for the first with its appetite expanding for both $575.2 billion at the end of 2012. time during last year (2012) as its resources and global market share. In May 2012 China Three Gorges, The government aims to increase foreign investment soared to a new overseas direct investment at an record. The Asian giant’s overseas operator of the world’s biggest direct investment rose 17.6 percent hydro-electric last year from 2011 to $87.8 billion, dam, closed a according to a statement jointly deal to buy a released on 9 September by Chinese 21.35 percent Ministry of Commerce, the National stake in power Bureau of Statistics and the State generator Administration of Foreign Exchange. Energias de Portugal for 2.7 Globally, overseas direct investment billion euros fell 17 percent, with China’s ($3.56 billion). comparative rise making it one of In November, the world’s top three investors, the sovereign statement said without specifying wealth which were the other two. Last year’s fund China increase represented an acceleration Investment Corp (CIC) acquired a 10 from 8.5 percent in 2011, when the percent stake in Britain’s Heathrow average annual rate of 17 percent global economic recovery was weak Airport for 450 million pounds through 2015 to $150 billion. in the face of continuing financial ($704 million). By the end of 2012, China’s turmoil in Europe and the United total outstanding overseas direct States. CIC was set up in 2007 with $200 billion to make better use of China’s investment stood at $531.9 billion, Beijing has been encouraging Chinese colossal foreign exchange reserves the 13th highest in the world, said companies to “go international” as that now amount to nearly $3.5 the statement. Growth picking up in major rich nations, says OECD Growth is picking up pace in most latest Asian Business Cycle Indicators that are more vulnerable to rapid major rich nations but momentum report. Singapore and Malaysia were capital outflows such as India and is slowing or stable in emerging Indonesia bore the brunt of the economies, the Organisation financial turmoil. for Economic Development and Co-operation (OECD) said on September 9. The OECD warned volatile global oil prices due to tension in the Middle Economic growth is accelerating in East could also pose a problem if the the United States, Britain and the situation persists. eurozone, while it is above trend in Japan, according to the OECD’s index of composite leading indicators. The In a separate report, the OECD said index is considered to be a reliable the Philippines is the only emerging guide to future economic activity. now rated as stable. Indonesia and Asian nation with strong business The index suggested Italy and France Thailand had weak ratings. cycle momentum, although China are switching to growth. and Singapore have stabilised, the The OECD said “the key imminent But the OECD, grouping 34 advanced downside risk facing Southeast Asia, OECD Development Centre said. countries, said growth was below China and India is the turmoil in the trend in Brazil and India. Meanwhile financial market, triggered by the Chinese growth was now returning it was returning to trend in China prospects of tapering of quantitative to trend, meriting a “Stay the same” and was around trend level in Russia. easing (QE) policy in the US. reading for the business cycle, after India had a “weak” business cycle It noted emerging Asian economies a slowdown that had weakened reading with growth below trend in with large current account deficits momentum across ASEAN nations. July-September 2013 28 News Bulletin

ICC HQs News ICC responds favourably to G20 final communiqué ICC was buoyed that G20 leaders ICC G20 Advisory Group in this Trade maintained a focus in their final year’s delegation of Business-20 communiqué on their shared representatives also reflected the Protectionism undermines the economic objectives, despite the G20 increasing recognition of ICC’s role benefits of trade and, therefore, Summit in Saint Petersburg being as the voice of international business ICC has routinely called on the G20 dominated by the dark shadow of throughout the process and from to eliminate trade protectionism a deepening crisis in Syria. In the Summit to Summit. measures and other barriers to open declaration, issued following the trade. To this end, ICC is pleased G20 Summit that ran 5-6 September, The work carried out by G20 officials that G20 leaders have extended G20 leaders committed to continue over the last year has produced the standstill agreement until working together to maintain the agreements on trade, protectionism, 2016. ICC urges all G20 leaders to steady if not spectacular progress taxation, anti-corruption and other commit to finalizing a WTO trade on the road to strengthening and re- measures central to ICC’s policy facilitation agreement at the 9th balancing the world economy. agenda and which will generate Ministerial Conference of the WTO in December 2013 in Bali. Investment

While ICC is encouraged by the recognition of G20 leaders on “the key role of long-term investment for sustainable growth and job creation, as well as the importance of putting in place conditions that could promote long-term financing for investment, including in infrastructure and small- and medium-sized enterprises (SMEs)”, more needs to be done in order to address the fall in FDI following the global economic recession, improve underlying investment millions of jobs and stimulate The substantive nature of this conditions and enable long-term communiqué is evidence that the growth in the world economy. It is project financing. The establishment annual Summit is only the most for these reasons that global business of a high-standard multilateral visible part of the process, overlying attaches great importance to the framework for investment, led the result of ongoing work by sherpas G20, especially as so many of today’s by G20 countries and based on and officials throughout the year. major economic problems are ICC Guidelines for International global in nature and require a global Investment could help restore FDI In Saint Petersburg, G20 leaders approach to dealing with them. endorsed a work programme of flows by as much as 25% and address detailed measures for their countries The following sections delineate impediments to the mobilization of to implement. These measures are ICC’s initial views on the outcomes private capital. from Saint Petersburg. In presenting designed to boost sustainable growth Anti-Corruption and job creation, and are the product these views, we note that nations of an established process of policy acting alone – even the most powerful ICC appreciates the G20’s coordination between G20 countries – can no longer produce solutions. acknowledgement of the leadership that has evolved since the G20’s What is vital is more effective and role it can play in this area and its inception in 2009. cooperative global governance. The resolve to enhance transparency recent economic problems of several and close implementation and Business is playing an increasing emerging market countries in the enforcement gaps. Moving forward, role in this process, developing and face of nascent economic recovery ICC urges G20 leaders to honour presenting policy recommendations in the US and Europe further commitments for the complete to the G20. The inclusion of the reinforce the story of inescapable ratification of the UN Convention ICC and CEO members of the interdependence. against Corruption (UNCAC) which July-September 2013 29 News Bulletin ICC HQs News

could result in the eradication of Energy to the G20 agenda. This year’s US$1 trillion in bribes, and lead to special session for “social partners” a 1% increase in economic growth ICC is pleased that the G20 and the formal engagement with in developing countries and a 5% continues to address critical issues business leaders highlighted the increase in investment. related to cross-border energy and steady improvement in government- the challenge of climate change. It business dialogue in the G20 since Taxation welcomes the extended mandate Korea sponsored the first Business-20 ICC welcomes the G20 endorsement for the G20 Energy Sustainability Summit in Seoul in 2010. of the action plan from the Working Group (ESWG), and But more can be done by the G20 to Organisation for Economic encourages the ESWG to continue tap business expertise. International Cooperation and Development its cooperation with international Chamber of Commerce (ICC) (OECD) that identifies a set of organizations regarding sustainable encourages the G20 to more domestic and international actions to development, clean energy, and systematically invite business into address the problems of base erosion energy efficiency. the process, and, as the long-standing and profit sharing (BEPS). ICC Business Engagement interlocutor for international concurs with findings in the OECD report that unintended double non- ICC attaches great significance to the business, International Chamber of taxation should be addressed by G20’s continued acknowledgement Commerce (ICC) stands ready to governments. of the importance of business input support and implement. Global economic outlook dims while US recovery continues, ICC-Ifo survey reveals The world economy has weakened (WTO) to reach a final agreement on Eurozone. Economic expectations slightly this quarter, mainly due trade facilitation, which could result have reached a three-year high, to declining optimism in Asia and in GDP increases of approximately boosting the area’s economic climate Latin America, while North America US$960bn and create over 18 million indicator to its highest level since shows signs of continuing recovery, jobs worldwide, according to a study late 2011. Only Slovenia and Cyprus according to a World Economic by the Peterson Institute. As for expect continued economic decline. Survey published on August 14 signs of global economic recovery, However, while assessments of by the International Chamber of Klaus Wohlrabe, Deputy Head current economic conditions in euro of Ifo’s Center for Business Cycle countries are back up to early 2013 Analysis and Surveys, explained levels, the overall economic climate that developments in the next three is still below its long-term average. months are crucial. Ifo attributes this optimism in the Asia cautious Eurozone to “a lack of bad news” since confidence was boosted last In Asia, the Ifo economic climate year by the European Central Bank indicator fell to below its long-term President Mario Draghi’s pledge to average following a temporary boost protect the Eurozone from collapse. in optimism in the previous quarter. This is giving countries the time they Commerce (ICC) and the Munich- This was driven mainly by increased need to put into effect measures for based economic research institute caution about China’s six-month economic recovery. Ifo. economic outlook, while the current economic situation slipped below ICC-Ifo survey respondents describe Carried out in partnership with ICC, “satisfactory”. the economic situation as “poor” in the latest Ifo World Economic Survey France, Greece, Italy, Portugal, Spain of more than 1,000 economists in North America brightens and Cyprus. They are slightly more 123 countries shows some decline WES experts have become more positive about Belgium, Ireland, in both the current global economic upbeat about North America’s Finland, The Netherlands and situation and the six-month economic situation over the past Slovenia. Germany and Estonia are economic outlook. The poll’s climate year, and expectations continue to the only economies to be scored as indicator dropped to 94.1 for the rise, suggesting economic recovery “satisfactory to good”. third quarter of 2013, back down to will continue. early 2013 levels, despite a rise to Inflation 96.8 in the second quarter. Eurozone hopes up Overall, WES analysts expect a ICC has also been urging members The ICC-Ifo poll suggests emerging 3.2% increase in prices for 2013, of the World Trade Organization economic stabilization in the unchanged from the previous July-September 2013 30 News Bulletin ICC HQs News quarter. Estimates for the euro area over the next six months, and the US 44% for CIS, and a small proportion fell to 1.7% for 2013, down from dollar to appreciate against the euro. say it is “harmful”. 1.9% in the previous quarter. Short- Economic experts were also asked term interest rates, set by central Spotlight on tax competition “Which tax do you find most banks, are expected to remain largely burdensome in administrative terms An ICC special question in the stable on average over the next six for business in your country?”. Here, months. However, a growing number survey focused on business attitudes results vary across the world, with of analysts expect a rise in long-term to governments competing for corporate income tax considered interest rates, which are affected foreign investment by lowering their the most bureaucratically oppressive mainly by the capital market. Despite tax rates. In all world regions, at least in Asia, North America and half the WES experts say business Oceania. Employers’ social security a slight increase forecast in long- contributions are cited as the worst term interest rates over most of the in their country considers legal tax competition between countries to be red tape for tax in Western and Eurozone, decreased or unchanged Eastern Europe, CIS and Latin “potentially harmful if not limited rates are expected in crisis-afflicted America. Meanwhile, VAT or sales countries. by international agreement”. About tax is most burdensome for business a third consider international tax in Africa and the Near East. In most WES participants expect the value competition to be “beneficial” – regions, branch-specific and energy of the US dollar to grow moderately ranging from 21% for Oceania to taxes pose the least trouble. Christopher Newmark to chair ICC Commission on Arbitration and ADR ICC welcomes Christopher Chamber of Commerce (SCC), has over 690 members coming Newmark as the new Chair of the the United Nations Commission from more than 90 countries. It is ICC Commission on Arbitration on International Trade Law responsible for drafting and revising and ADR, the body which drafts and (UNCITRAL) and other arbitration ICC’s dispute resolution rules and revises various ICC rules for settling rules. clauses. international disputes by means of arbitration, mediation, expert The commission successfully proceedings and dispute boards. Mr completed revision of the ICC Newmark will start on his new role Rules of Arbitration in 2011. It has as of 1 January 2014. also recently approved new ICC Mr. Newmark is a partner at the Mediation Rules, which will replace London firm Spenser Underhill the ICC ADR Rules and will enter Newmark LLP, a niche practice into force on 1 January 2014. It is also specializing in international currently revising the ICC Expertise arbitration and ADR. He has and Dispute Board Rules. In its acted as chairman, sole arbitrator or party appointed arbitrator in The ICC Commission on Arbitration research capacity, it proposes new several international arbitrations and ADR brings together experts policies in the interest of efficient under ICC, the London Court of in the field of international dispute and cost-effective dispute resolution Arbitration (LCIA), the Arbitration resolution from across the globe and and provides useful tools for the Institute of the Stockholm across jurisdictions, and currently conduct of dispute resolution. ICC renews CDCS partnership with Institute of Financial Services The International Chamber of qualification for documentary credit Commerce (ICC) and the Institute specialists – those professionals of Financial Services (Ifs), UK have who manage the secure payments announced the renewal of their that underpin international trade 15-year-old partnership in relation transactions – and is acknowledged to the Certificate for Documentary as the benchmark of competence for Credit Specialists (CDCS®) international practitioners in letters qualification. of credit.

CDCS® is delivered and examined Through the partnership, ICC and by the Institute of Financial Services. the Institute of Financial Services It is the globally-recognized will work together to enhance the July-September 2013 31 News Bulletin ICC HQs News

programme on an on-going basis for letters of credit and the career ensure that the skills gained through and augment its uptake across the development of documentary credit the programme of study reflect best globe. professionals. practice. It was first examined in 1999 and since then, CDCS professionals The partnership will support both the CDCS® has been developed in from more than 75 countries have adoption of international standards consultation with industry experts to taken the qualification. ICC announces newly named Commission on Arbitration and ADR better reflect the broad scope of arbitration and other dispute the commission’s activities, which resolution services. Recent projects primarily encompass international include a report on the role of arbitration but also all other dispute parties and their in-house counsel in resolution services offered by ICC. international arbitration and a task force on Decisions as to Costs. The The ICC Commission on Arbitration commission is also responsible for and ADR is ICC’s rule-making drafting and revising ICC’s dispute and research body in the field of resolution rules and clauses. The international dispute resolution. The commission successfully completed global forum comprises more than its work on the revision of the 690 members from over 90 countries ICC Rules of Arbitration in 2011. and includes lawyers, in-house The commission has also recently The ICC Executive Board has counsel, arbitrators, mediators, law approved new ICC Mediation Rules, approved a name change for the professors and experts in various which will replace the ICC ADR dispute resolution fields. ICC Commission on Arbitration. Rules and will enter into force on The commission’s new name is the The commission addresses how new 1 January 2014. It is also currently ICC Commission on Arbitration practices, policies and legislative revising the ICC Expertise and and ADR. The change aims to developments affect international Dispute Board Rules. Christian Albanesi becomes Court Managing Counsel The International Court ofin Argentina and France, having Arbitration of the International studied law at the University of Chamber of Commerce has Buenos Aires and the Sorbonne announced the promotion of University of Paris. Christian Albanesi to the position of Managing Counsel following Prior to joining ICC, Mr. Albanesi, the departure of Victoria Orlowski who also studied Russian language earlier this month. at the Pushkin Institute in Moscow, Mr. Albanesi joined ICC in 2007 as worked in Buenos Aires for three Deputy Counsel in the Court’s Latin years at Argentinian law firm Marval, American, Spanish and Portuguese O’Farrell & Mairal and for six months team and took over as team Counsel at the Paris office of international law in 2011. He is a qualified lawyer firm Freshfields. ICC reacts to OECD Action Plan on international taxation issues ICC has welcomed today’s Lacking coordination between publication of an Organisation countries on tax rules – including for Economic Co-operation and differences between OECD countries Development (OECD) action plan, and emerging markets on source and created in response to a request by residence based taxation – differing the G20, which identifies a set of definitions of economic instruments domestic and international actions and legal entities as well as to address the problems of base administrative procedures can lead erosion and profit sharing. to double taxation or unintended July-September 2013 32 News Bulletin ICC HQs News so called double non-taxation. reflect economic activity and ICC to working together with the OECD Responding to the OECD report the agrees with the OECD report that and G20 to help define the contours ICC Commission on Taxation said unintended double non-taxation, of a suitable global tax framework that it is essential to address these in a situation with so-called hybrid that encourages business activities, issues in the BEPS project. instruments, should be addressed by job creation and economic growth. governments. Speaking on behalf of world With business members in all business, ICC has stressed the need ICC is pleased to note that its project G20 countries, The International for universal rather than sector for International Tax Reform, Chamber of Commerce (ICC) is specific changes of international tax announced at the United Nations uniquely placed to provide business rules stating that corporate income Tax Expert Meeting in October comment on the OECD proposals tax should continue to be levied 2012, will be launched shortly. The and the current overhaul of according to where economic activity project is aligned to the OECD and international taxation rules which takes place and profits are rendered. G20 proposal to develop new global calls for an inclusive and transparent Prices of goods or services must tax standards and ICC looks forward process. ICC names three new Banking Commission Technical Advisors The International Chamber of When facing the numerous and often Reimbursements (URR). In addition, Commerce (ICC) on July 16 complex problems in establishing the newly approved Uniform Rules announced the appointment of documentary compliance and the for Forfaiting (URF) and Uniform three new technical advisors for its interpretation of rules and document Rules for Bank Payment Obligation Commission on Banking – a leading content, banking professionals (URBPO) are now the object of global policy and rule-making body regularly turn to ICC for guidance. official opinions. for the banking industry known worldwide for its trade finance Often cited by courts to products and services including assist in dispute resolution, Uniform Customs and Practice for ICC Banking Commission Opinions are an important Documentary Credits, the most resource for lawyers, successful privately drafted rules for bankers, judges and trade ever developed. other professionals and The advisors will help the scholars in the industry. commission stay relevant within the Today, the ICC Banking ever-evolving trade finance industry. Commission provides official opinions on the The technical advisors are: Nicole interpretation of the long- Keller, Vice-President, KfW IPEX- established Uniform Customs The introduction of the new Bank, Financial Institutions Trade & and Practice for Documentary technical advisors is in line with the Commodity Finance; David Meynell, Credits (UCP), Uniform Rules for commission’s objective to remain a Owner of TradeLC Advisory; Donald Collections (URC), Uniform Rules relevant and recognized authority Smith, President of Global Trade for Demand Guarantees (URDG) within the ever-evolving trade Advisory. and Uniform Rules for Bank-to-Bank finance industry. IMB Piracy Report highlights violence in West Africa Somali piracy has fallen to its lowest on violent piracy and armed robbery compared with 177 incidents for the levels since 2006, focusing attention off the coast of West Africa, the corresponding period in 2012. Seven International Chamber hijackings have been recorded this of Commerce (ICC), year compared with 20 in the first International Maritime half of 2012. The number of sailors Bureau (IMB)’s global taken hostage also fell dramatically; piracy report revealed on down to 127 this year from 334 in the July 15. first six months of 2012.

Worldwide, the IMB In the Gulf of Guinea, in addition to Piracy Reporting Centre a rise in piracy and armed robbery – (PRC) recorded 138 31 incidents so far this year, including piracy incidents in the four hijackings – IMB reports a surge first six months of 2013, in kidnappings at sea and a wider July-September 2013 33 News Bulletin ICC HQs News

range of ship types being targeted. Illicit Maritime activity in West privately contracted armed security This is a new cause for concern in and Central Africa in June 2013 by personnel. a region already known for attacks the heads of the West and Central against vessels in the oil industry and African countries. As of 30 June 2013, Somali pirates theft of gas oil from tankers. were holding 57 crew members for Somali clampdown ransom on four vessels. They were also Armed pirates in the Gulf of holding 11 kidnapped crew members Guinea took 56 sailors hostage and Meanwhile, in East Africa’s Gulf on land in unknown conditions and were responsible for all 30 crew of Aden and Somalia, eight piracy locations. Four of these crew have kidnappings reported so far in 2013. incidents including two hijackings been held since April 2010 and seven One person was reported killed and were recorded in the first six months since September 2010. at least another five injured. Attacks of 2013, with 34 seafarers taken off Nigeria accounted for 22 of the hostage. Elsewhere in the world, low level region’s 31 incidents and 28 of the thefts against vessels in ports and crew kidnappings. IMB attributes this significant anchorages in Indonesia accounted drop in the frequency and range of for 48 attacks of which 43 vessels Mr Mukundan applauded the attacks by Somali pirates to actions were boarded and some crew injured. signing of the Code of Conduct by international navies, as well as IMB’s report includes details of the Concerning the Repression of Piracy, preventive measures by merchant ports and anchorages where attacks Armed Robbery against Ships, and vessels, including the deployment of appear to be concentrated. SMEs face significant financing gap, ICC tells high-level WTO Aid-for-Trade review Speaking at the World Trade risk, continue to act as bottlenecks. finance requests received in 2011 by Organization Annual Aid-for-Trade A panel session examining the commercial banks responding to a Review on July 10, ICC Banking issue, entitled ‘Trade Finance survey amounted to approximately Commission Senior Policy Manager and Value Chains – Overcoming US$4.6 trillion. of this more than Thierry Senechal said that trade Structural Access Issues’, featured US$1.6 trillion was rejected, finance intermediation is crucial representatives from ICC, WTO, suggesting a global, unmet demand today as it provides real-time risk African Development Bank, (or gap) of US$1.6 trillion (of which mitigation, while improving liquidity Asian Development Bank (ADB), US$425 billion in unmet demand and cash flow of the trading parties. International Finance Corporation, was in developing Asia). It also gives localized small- and Centre for the Promotion of Imports medium-sized enterprises (SMEs) from Developing Countries and the When asked to name the most United Nations Economic severe obstacles to growth, panellists and Social Commission pointed to financing constraints as for Asia and the Pacific. one of the most severe obstacles to trade. They said that the economic In closing remarks WTO crisis of 2009 had underscored Director-General Pascal the multilateral trading system’s Lamy said: “Overcoming dependence on trade finance for its existing skills gaps in effective functioning and still today developing countries the financial crisis is casting a long can help them draw shadow with trade finance facing enhanced benefits from headwinds that may completely their participation in the upend the global landscape in which much needed access to credit and multilateral trading system. These it operates in the next five years. working capital to finance exports discussions have brought some key and imports. areas into focus, including access “There are game-changing events to finance — and trade finance in taking place at both the macro- and Panellists agreed financingparticular.” business levels. Recent ICC research constraints are one of the most severe shows that in recent months, obstacles to trade. Between 80-90% Panellists concurred that SMEs merchandise trade has slowed in of global trade depends on some face disproportionate barriers to most major economies, contracted sort of trade finance yet structural finance, especially in developing in Europe and fallen in the BRICS. access issues, related to factors countries. They also face a significant By contrast, economic opportunity such as poorly-developed banking financing gap. A recent ADB study is expanding in eastern and southern sectors or perceived country credit indicates that the total value of trade regions of the globe, with new July-September 2013 34 News Bulletin ICC HQs News champions emerging in terms of their limited resources and perceived financial system may also emerge, growth, including in Indonesia, the risk by lenders. Mr Senechal noted with developed markets in slow gear Philippines, Nigeria, Ghana and that the banking model was severely and developing markets in higher many others,” Mr Senechal said. constrained on a global level with gear. Finally, new SME entrants are “South-South trade is also on the high deleveraging taking place in being starved of trade finance in rise. Just 20 years ago, South-South Europe, poor access to US dollar many countries due the prevailing represented barely 10% of world funding for non-US banks, greater trade finance gap,” he said. trade. By 2020, a third of global selectivity in risk-taking in many trade is likely to be South-South re- emerging markets and a welter of Closing the three-day review, Mr Lamy arranging the global trading system new regulations. said: “This has not just been three in coming years.” days of numbers, reports and analysis “The future of trade finance may Several panellists argued that there look quite different in coming years: but three days of experiences. By any was considerable evidence to support Regulations will become more metric, we achieved the objectives we the contention that SMEs face a complex, reducing the capacity of set ourselves over the past three days number of obstacles and problems in financial institutions to provide and all with one aim in mind: making accessing finance, mainly related to lending. A two-speed economic and trade work for development”. ICC issues taxation handbook The ICC Commission on Taxation model; An optional Common handbook have been made available has released a handbook to help Consolidated Corporate Tax Base in to over 130 members as well as at taxation professionals keep pace Europe: implications for businesses major international taxation events with the latest developments in the worldwide; Exit taxes: world of international taxation. serious obstacles for The handbook comprises ICC international business policy positions on taxation and restructurings and information about the commission’s movements of work programme, members and capital; Improving achievements. tax efficiency: the responsibilities of tax The statements contained in the administrations and booklet are the result of extensive taxpayers. research, discussion and consultation by the commission members. They The ICC Commission include: ICC environmental taxation on Taxation promotes principles; Limitations of deductions transparent and of interests payments; Application non-discriminatory of Anti-Avoidance Rules in the treatment of foreign field of taxation; Transfer pricing investment and earnings that around the world, increasing the and customs value; Tax treatment eliminates tax obstacles to cross- visibility and accessibility of the of international takeovers/mergers; border business transactions. To important work the commission Transfer pricing documentation date, hundreds of copies of the undertakes. ICC sets digital economy priorities Business and legal professionals six-year long tenure as commission issue of Internet governance and representing over 20 organizations chair. cyber-security, were priority issues came together in Paris in the first for the commission along with the week of July at a meeting of the The biannual gathering presented development of a new Global Action ICC Commission on the Digital a chance for members to assess the Plan for the Digital Economy. A Economy. The meeting was led by current digital economy landscape ready and practical compendium of incoming Chair Joseph Alhadeff and discuss strategic priorities in business positions, the first edition who began by paying tribute to his light of developments relating to of the action plan was originally predecessor Herbert Heitmann, Internet governance, data protection submitted on behalf of business to a former Executive Vice-President of and privacy. ministerial conference on electronic External Communications at Royal commerce, jointly organized by the Dutch Shell, for his long and valuable Mr. Alhadeff underscored that Organisation for Economic Co- service to the commission during his privacy, along with the broader operation and Development and the July-September 2013 35 News Bulletin ICC HQs News

Government of Canada in Ottawa in practically address concrete problems and practical set of ICC guidelines 1998, where it was well received as faced when trading digitally. to help executives understand and the consensus business input. enhance company cyber-security. Mr. van der Valk said: “The conference Day two of the meeting commenced is an opportunity for ICC to be in Eric Loeb, Vice-President, of with an update by Christiaan van der the forefront on the paperless trade External Affairs at AT&T and Chair Valk and Jacques Beglinger, co-chairs issue and to step up to represent both of the ICC Task Force on Internet the business and Telecommunications, wrapped community up the meeting agenda by updating and users. It members of the commission on is important the work of the task force, as well that the conference as outcomes of meetings of the is not about World Telecommunication Policy abstract Forum and World Summit on the policy but Information Society Action Lines rather a Forum which took place in May. Mr chance to Loeb also looked ahead to meetings get business including an Internet Corporation people to for Assigned Names and Numbers interact with meeting in South Africa in July, people in October’s Internet Governance of the ICC Task Force on Security government to talk about real issues Forum in Indonesia, and the and Authentication, on preparations that create real challenges.” International Telecommunication for an ICC conference on paperless Vice-chair of the commission Gerard Union Plenipotentiary Conference trade facilitation. Scheduled to take Hartsink led a discussion on the in Busan, Republic of Korea from 20 place in 2014, the conference aims to possibility of developing an impactful October - 7 November. ICC urges Members of the European Parliament to remove B2B sales from scope of Common European Sales Law ICC has asked Members of the The ICC Commission on Commercial ICC delegation met with individual European Parliament (MEPs) to Law and Practice has been involved in MEPs in Brussels in June and remove B2B transactions from the the discussions on the development circulated a letter to members of the scope of a proposed regulation of CESL for a number of years and Parliament’s Internal Market and on Common European Sales Law Consumer Protection Committee (CESL) when they vote on the setting out four reasons why B2B adoption of a draft opinion on transactions should be removed from CESL on 9 July. The removal would the scope of CESL. They are: 1. CESL limit the reach of the law to B2C will not add value to businesses. transactions. 2. CESL risks increasing legal The proposed CESL regulation uncertainty and transactions costs. 3. would put into place an optional Freedom of contract for companies system of contract rules identical in should be preserved. 4. The UN all European Union (EU) member Convention on the International Sale states, with the aim of facilitating of Goods (CISG) already exists. cross-border trade within the EU has repeatedly expressed its concerns for companies. It would also provide about application of the project to Proposed limitations of the scope of a high level of consumer protection B2B contracts, most recently in a CESL to ‘online’ or ‘digital’ contracts statement issued in July 2012, ICC in B2C sales through clear consumer will not ameliorate ICC concerns, position on the EC proposal for rights. However, ICC believes that as most companies conduct a common European Sales Law, the application of CESL to B2B business that would fall within such responding to the October 2012 transactions would not add value for a restricted scope. A preferable proposal for the CESL regulation. business and indeed would create solution would be to exclude B2B confusion and additional costs for In light of the important upcoming transactions entirely from the scope companies trading across the EU. vote in the European Parliament, an of CESL. July-September 2013 36 News Bulletin

WTO News Global value chains offer opportunity for growth and progress Global value chains (GVCs) have multilateral opening in agriculture, and trade facilitation can play become a dominant feature of world manufacturing and services are an important role in supporting trade and investment, offering new much higher in today’s highly the efforts of those economies. prospects for growth, development interconnected world than Overcoming obstacles to GVC and jobs, according to a new joint previously thought. Practical trade participation will pay big dividends: report by the OECD, the WTO and facilitation reforms, such as those developing economies with the UNCTAD presented to the G-20 being negotiated at the WTO today, fastest growing GVC participation Summit in Saint Petersburg on 5-6 offer significant potential to reduce have GDP per capita growth rates September. Effective participation in GVCs will require significant further investment in technology dissemination, skill building and upgrading, the report says.

Implication of Global Value Chains for Trade, Investment, Development and Jobs, presented to Leaders at the G20 Summit in Saint Petersburg on 5-6 September, argues that success in international markets depends as much on the capacity to import high-quality inputs as on the capacity to export: intermediate trade costs and improve countries’ 2% above average, according to the inputs account for over two-thirds ability to participate in GVCs. report. of the goods and 70% of the services The new OECD-WTO-UNCTAD traded worldwide. The report says Open, transparent and predictable report was requested by G20 leaders action is needed now to implement trade and investment policies need at their Los Cabos Summit in June an effective framework for strong, a range of flanking policies to ensure sustainable, balanced and inclusive benefits from GVCs are inclusive 2012, as part of wider efforts to growth, in which all countries could and widespread. In some developing analyse the functioning of GVCs reap benefits. economies, particularly the less and their relationship with trade and developed, there remains much investment flows, development and The new report outlines how both work to be done to address specific jobs. The OECD hosted a G20 stock- the costs of trade and investment obstacles to effective participation taking seminar on GVCs in Paris on protectionism and the benefits of in GVCs. Aid for trade initiatives 29 May. WTO -World Bank to develop services trade database The WTO and the World Bank The data are presented in four can access the database for free. have agreed to jointly develop and modules covering: members’ Policy transparency is a public maintain a database on trade in commitments under the WTO’s good and a shared objective of both services, an area that is becoming General Agreement on Trade in institutions. The World Bank makes Services (GATS); commitments on increasingly important and yet for trade data publicly available under trade in services in regional trade which little information is publicly the Open Data Initiative, as does the agreements; members’ applied WTO with the I-TIP. available, according to WTO press measures affecting trade in services; release issued on 6 August. The joint and services statistics. The first Transparency is particularly database covers various sectors in version of the database has just important in the dynamic area more than 100 countries, such as been launched, as part of the WTO’s of trade in services because the financial, transportation, tourism, Integrated Trade Intelligence Portal regulatory framework is complex and retail, telecommunications, and I-TIP Services portal. little information is publicly available. business services, including law and Policy makers, researchers, trade Cross-border trade in services makes accounting. negotiators, and the general public up one-fifth of all world trade, even July-September 2013 37 News Bulletin WTO News

without considering international institutions. Among other things, Restrictions Database, which went transactions through foreign affiliates the joint database combines WTO public last year. Both institutions data, including those on legal and the temporary movement of will work hard to make sure the people. commitments, trade policy reviews (TPRs) or trade monitoring reports joint database stays up to date and This WTO-World Bank arrangement with World Bank data on applied expands to cover more sectors and exploits synergies between both policies from the Services Trade countries. 27 governments and organizations stress importance of trade facilitation assistance In a joint statement, 27 governments and organizations at the Fourth Aid for Trade Global Review on 8 July underlined the importance of providing technical assistance to trade facilitation programmes of developing countries. They noted that trade facilitation commitments rose by 365 per cent in 2011 to a total of more than US$ 381 million. The following joint statement was issued on behalf of: WTO Members, Australia, Canada, Denmark, European Union, Finland, France, Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, United Kingdom, United States Organisations, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Monetary Fund, Islamic Development Bank Group, Organisation for Economic Cooperation and Development, United Nations Conference on Trade and Development, United Nations Development Programme, United Nations Economic Commission for Europe, World Bank Group, World Customs Organization.

Joint Statement – Trade Facilitation Assistance We issue the following statement countries and regional cooperation 2005 average. Since 2006, over $1.2 on behalf of 27 governments and bodies around the world. A WTO billion in ODA for trade facilitation organisations. Taken together, Trade Facilitation Agreement would has been disbursed. This underlines our support for trade facilitation add significant momentum to these the strong and sustained support programs has global reach. It has initiatives, leading to even greater globally for trade facilitation efforts. assisted developing and least- reductions in trade costs. A WTO Trade Facilitation developed countries in different Because of the tangible economic Agreement would build on the regions to achieve significant results benefits for developing and least- progress made to date. We recognize – cutting border clearance times, developed countries, we attach that there are WTO Members increasing revenue collection, and particular importance to assisting that will require support to fully simplifying procedures for traders. in the implementation of trade implement the Trade Facilitation Trade facilitation reform delivers facilitation reform. A total of more Agreement, complementing tangible benefits to economic than $381 million was committed the support provided to date. growth and development. The to trade facilitation programs in Developing and least-developed widespread recognition of these 2011. This represents an increase WTO Members can be confident benefits is reflected in the pursuit of of 365% (in real terms) of Official of our ongoing support for their trade facilitation initiatives in many Development Assistance to trade implementation of a WTO Trade developing and least-developed facilitation compared to the 2002- Facilitation Agreement.

Fast-changing nature of world trade poses new policy challenges The future of world trade, and is the importance of trade for of trade for development. The the global trading system, will be development”. forecasts and reflections contained shaped by a range of economic, in this report do not foresee a reverse political and social factors, including “The transformation of trade has of globalization. But we should technological innovation, shifts been underway for some time,” remember that the gains it brings in production and consumption said WTO Director-General Pascal could be nullified or at least mitigated patterns, and demographic change, Lamy. “It is manifested most clearly if short-term pressures are allowed according to the 2013 World Trade in wider geographical participation to override long-term interests, and Report published by the WTO on in trade and the rise of international if its social consequences in terms 18 July. Director-General Pascal supply chain production. One of the unevenness of its benefits are Lamy said: “One element clearly element clearly stands out in the neglected. This is why renewed efforts stands out in the Report, and that Report, and that is the importance are needed to revive the vibrancy July-September 2013 38 News Bulletin WTO News of the global trading system.” One generating even greater need for future of trade will also be affected of the most significant drivers of careful resource management. by the extent to which politics change is technology. Not only More effort must also be devoted to and policies successfully address have revolutions in transport and addressing environmental issues, the issues of growing social concern, communications transformed our report says. such as the availability of jobs and world but new developments, such persistent income inequality, as well as 3D printing, and the continuing Economic and political institutions as environmental concerns, say the spread of information technology will continue to have a significant authors of the World Trade Report will continue to do so. Trade and role to play in shaping international foreign direct investment, together co-operation, including in trade, as 2013. with a greater geographical spread will the interplay of cultural customs Main points of the Report are of income growth and opportunity, among countries. : Trends in international trade; will integrate a growing number of countries into more extensive Non-tariff measures will gain Fundamental economic factors international exchange. Higher in prominence and regulatory affecting international trade; Trade incomes and larger populations will convergence will likely constitute openness and the broader socio- put new strains on both renewable the greatest challenge to the economic context; Prospects for and non-renewable resources, trading system of the future. The multilateral trade co-operation etc. Renato Ruggiero, former Director-General, dies in Milan Renato Ruggiero, the first man telecommunications services and on trade facilitation, which is today selected to be Director-General of trade in financial services. among the most important issues the World Trade Organization, has on the WTO’s negotiating agenda. died in Milan at age 83. In 1998, Mr. Ruggiero oversaw the commemoration in Geneva of the A man of prodigious energy and 50th anniversary of the multilateral determination, Mr. Ruggiero trading system which included the served as Director-General from participation at the 2nd Ministerial 1995 to 1999. A product of the Italian diplomatic service, Mr. Conference of many heads of state Ruggiero believed the WTO and and government, including South the multilateral trading system African President Nelson Mandela, were powerful tools for peace and US President Bill Clinton, British prosperity. He was highly adept at Prime Minister Tony Blair, Cuban finding common ground amidst a Mr. Ruggiero was instrumental in President Fidel Castro and Brazilian myriad of seemingly contradictory guiding Ministers through the First President Fernando Henrique negotiating positions. In the late WTO Ministerial Conference in Cardoso. Mr. Ruggiero was the 1990s, he played an important role Singapore in 1996. In Singapore, first Director-General to call for in brokering three important WTO the WTO deepened its activities elimination of all quotas and duties agreements covering information devoted to the Least-developed on exports from the world’s poorest technology products, trade in countries and commenced its work countries. WTO extends scope of the Integrated Trade Intelligence Portal On 23 July, the WTO launched an Agreement on Trade in Services of information and other criteria. expanded version of its Integrated (GATS), services commitments in Search results are presented in Trade Intelligence Portal (I-TIP), regional trade agreements (RTAs), summary form as well as in more which brings together all trade applied measures in services, and detail. It is easy for users to switch policy information relating to WTO services statistics (including the from one module to another. members. I-TIP now includes, for the latest UNCTAD-ITC-WTO trade This new database is available at first time, information on services. in services data). The database will http://i-tip.wto.org/services/ make it easier for members and The new application, known as I-TIP others to access information relevant The WTO has also released an Services, consists of an integrated for services trade policy making. updated version of I-TIP Goods, database that provides information which now contains a wider range on WTO members’ commitments The database can be searched by of non-tariff measure notifications, under the WTO’s General member, sector, agreement, source such as on safeguard measures and July-September 2013 39 News Bulletin WTO News

state trading enterprises, as well Secretariat also showcased how its Integrated Trade Intelligence Portal as enhanced functionalities. I-TIP upgraded Air Services Agreement (I-TIP) also includes information on Projector (ASAP) will enable users to Goods is available at http://i-tip.wto. members’ accession commitments org/goods/ obtain information on the evolution and data taken from the World Trade of bilateral and plurilateral Air At the presentation, the the World Services Agreements and correlated Organization (WTO)’s regular trade Trade Organization (WTO) traffic flows. monitoring reports. Russia joins WTO’s Information Technology Agreement The Committee of Participants commitments, it undertook to agreement are extended to all WTO in the Expansion of Trade in reduce tariffs on information members. Information Technology Products, technology products from 5.4 per on 13 September, confirmed that cent to zero, and to join the ITA. WTO Director-General Roberto the Russian Federation has joined Its IT exports and imports in 2012 Azevêdo, in welcoming the the WTO plurilateral agreement were US$ 0.99 billion and US$ 20.21 participation of the Russian that aims to liberalize trade in billion, respectively. Federation in this plurilateral this important and growing agreement, said that “it marks an sector of the global economy. The The ITA participants represent around 97 per cent of world exports important step forward for Russia’s Russian Federation becomes the information technology sector, as 78th member of the Information in information technology products. well as for the ITA and its mission Technology Agreement (ITA). The ITA provides for participants to completely eliminate duties on IT of bringing down IT prices for Russia joined the WTO on 22 products covered by the Agreement. consumers and businesses across the August 2012. As part of its accession The benefits of this plurilateral g l o b e”. WTO announces winner of 2013 Essay Award for Young Economists The winner of the WTO Essay Award trade and investment choices made provides evidence that cheaper for Young Economists 2013 is Felix by some of the most central players access to foreign inputs reduces Tintelnot of Princeton University, in the global economy. the relative price of higher quality the WTO announced at the annual products in the importing country, meeting of the European Trade The Academic Selection Panel also thus making richer households Study Group in Birmingham, United decided to award an honourable relatively better off. According to the Kingdom, on 12 September. His mention to Benjamin Faber of the Academic Selection Panel, the paper article entitled Global Production University of California Berkeley offers interesting novel contributions with Export Platforms was ranked for his work entitled Trade to trade theory and provides first by the Academic Selection Panel. Liberalization, the Price of Quality, convincing empirical evidence based and Inequality: Evidence from on an impressive dataset. Felix Tintelnot’s paper offers a Felix Tintelnot is a German national. framework to examine multinational He studied economics at the Free firms’ location and production University Berlin (Germany) before decisions and the welfare effects obtaining a Ph.D. in Economics from of such decisions. The general Pennsylvania State University (United equilibrium analysis presented in States). He is currently an IES Fellow the paper reveals that multinational at Princeton University and will join firms play an instrumental role the University of Chicago as assistant in the transmission of technology professor in 2014. improvements to foreign countries. Location decisions of multinationals Benjamin Faber is a German can therefore have important welfare national who received his Ph.D. in effects on countries hosting affiliates economics from the London School and on third countries. In the Mexican Store Prices. This paper of Economics (UK) in 2013 after judgment of the Academic Selection considers a novel distributional visiting the University of California, Panel, Tintelnot’s paper contributes channel of developing country trade Los Angeles and the MIT during his significantly to understanding the liberalization that operates through graduate studies. He is currently an cost structure of multinational differences in cost of living inflation Assistant Professor in the Economics enterprises and thus towards between rich and poor households. Department at the University of evaluating the economic effects of Using a micro-level dataset, Faber California Berkeley. July-September 2013 40 Speaking about ICC Bangladesh International Chamber of Commerce (ICC) - The world business organization was founded by a few visionary business leaders of Europe immediately after the First World War (1919) having its HQrs. in Paris. Over the decades, ICC extended its network outside Europe and now having its presence in 127 countries around the world. Bangladesh National Committee of ICC, established in 1994, is comprised of major Chambers of Commerce & Industry, Business Associations, Stock Exchange, Banks, Non-banking Financial Institutions, Insurance Companies, Trans- national companies, Law & Accounting Firms and large Corporate Houses having significant interest in international trade. The activities of ICC Bangladesh (ICCB) include promotion of foreign trade and investment, trade policy reviews, business dialogues, seminars & workshops on related policy issues, harmonization of trade law & rules, legal reforms, updating businesses with the ICC rules & standards for cross border business transactions. As a part of its regional & international activities, ICC Bangladesh has so far organized four regional & international conferences In the year 2000 a 2-day ICC Asia Conference on “Investment in Developing Countries : Increasing Opportunities” organized by ICCB was inaugurated by the Hon’ble Prime Minister Sheikh Hasina, M.P. and attended by a number of high profile dignitaries including the Thai Deputy Prime Minister & Director General Designate of WTO Dr. Supachai Panitchpakdi, ADB President Tadao Chino, Under Secretary General and Executive Secretary of UN-ESCAP Dr. Kim Hak-Su and Chinese Vice Minister for Foreign Trade & Economic Cooperation Sun Zhengyu. More than 250 participants from 24 countries participated in this event. Again, in 2004, a 2-day International Business Conference on “Global Economic Governance and Challenges of Multilateralism” organized by ICCB was inaugurated by the Hon’ble Prime Minister Khaleda Zia, M.P. and the Prime Minister of Thailand Dr. Thaksin Shinawatra was the Keynote Speaker. A galaxy of global leaders including Director General of WTO Dr. Supachai Panitchpakdi; EU Commissioner for Trade Pascal Lamy; Ministers from Indonesia, Sri Lanka, Sweden, Turkey, Vietnam and Zimbabwe; Governor of Japan Bank for International Cooperation (JBIC), Executive Secretary of UN-ESCAP, Executive Director UN ITC, ICC Chairman Jean-Rene Fourtou, Vice-Chairman Y. S. Park, Secretary General Maria Livanos Cattaui, former ICC Chairman Rahmi M. Koc were present among others. More than 500 participants from 38 countries (3 continents) participated in this event. In 2005, ICC Bangladesh organized a Regional Seminar on “Capital Market Development: Asian Experience”. The Seminar, inaugurated by the President of the People’s Republic of Bangladesh Professor Dr. Iyajuddin Ahmed was attended by Chairmen/CEOs of securities & exchange commissions, stock exchanges, capital market operators, financial institutions and investors from 15 Asian countries. In 2010, ICCB organized a Conference on “Energy for Growth” coinciding with the 15 years of ICC’s presence in Bangladesh. The Conference was inaugurated by the Finance Minister Mr. A.M.A. Muhith, M.P. and attended by ICC Global Chairman Dr. Victor K. Fung, Commerce Minister Mohammad Faruk Khan, M.P., Minister for Development Cooperation of Denmark Soren Pind, Adviser to the Prime Minister for Energy & Mineral Resources Dr. Tawfiq-e- Elahi, BB. Some 800 delegates from home and abroad including energy experts, power developers, gas exploiters, coal miners, international financiers from Australia, China, Denmark, India, Germany, Japan, Singapore, Switzerland, UK and USA. During 2013, the National Committee has organized a total six workshops on International Trade Fraud: Prevention. Control and Remedies; New ISBP 2013 for bankers and URBPO and UCP 600 and Incoterms for HSBC clients. Besides, an Interactive Session on Trade Fraud: Prevention. Control and Remedies, organized by ICC Bangladesh was attended by the Bangladesh Bank Governor and MDs/CEOs of commercial banks. ICCB arranges three regular professional training programmes: e-Learning programme on ‘FIT Initiative’ (Finance of International Trade) supported by ICC, Paris, eBSI (eBusiness School International, Ireland), International Finance Corporation (IFC) & Institute of Export, UK; CDCS and CITF Examinations conducted worldwide every year by ifs School of Finance, UK incorporated by Royal Charter and supported & endorsed by ICC Paris. ICC Bangladesh participates in most of the World Chambers Congress & ICC World Congresses held every two years and WTO Ministerial Meetings as well as ICC Regional Consultative group Meetings.