Professional Documents
Culture Documents
Member Secretary
Mohammed Emdadul Haque FCA
DISCLAIMER Technical Adviser, ICAB
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P49 Exchange Rate Policy P107 Myanmar Pushouts Fiasco News & Events
Bangladesh Perspective in Bangladesh
Foyed Ahmed ACA Aleya Ferdous Circular & Notice
'investor-friendly' environment so as
to attract foreign trade. For
achieving the growth rate of 7% to
8%, the country needs 32% of GDP
from 10 years’ indigenous
investment with a significant
GOVERNMENT amount of FDI. Investment in the
HAS SET TARGETS TO power sector is the number one
BRING DOWN POVERTY TO priority of the government to meet
I
ntroduction development agenda, etiolating
inequalities across and within
“The greatest country, many countries have been an
the richest country is not that important part of the
which has the most capitalists, discussions at different
monopolists, immense international colloquiums.
grabbings, vast fortunes, with There’s an ever-increasing
its sad, sad soil of extreme, deference among sponsors that
degrading, damning poverty, economic growth is not
but the land which there are the adequate to sustainably reduce
most homesteads, poverty if it’s not wide-ranging.
freeholds-where wealth does When world leaders adopted
not show much such the Millennium Declaration in
contrasts-high and low, where 2000, they promised to
all men have enough-a modest generate a more equitable
living and beautiful necessities” economic world. So far, in many
The Author is a said Walt Whitman, a renowned countries, the hierarchy of
Chartered Accountant and American essayist and prospects and opportunities
a Fellow Member of the journalist. have become much stiffer to
Institute of Chartered Accountants scramble. Huge disparities are
of Bangladesh-ICAB Flared income inequality is the there in health and education
crucial test of our time. In services, land and other
advanced economies, the gap productive assets between the
between the rich and poor is at richest and the poorest
its highest level in decades. households.
Inequality trends have been
more mixed in emerging and Wealth inequalities are braided
developing countries, with directly with income inequality.
some countries experiencing They are inherited from
declining inequality, but generations and are intensely
ubiquitous inequities in access seen across many locations
to education, health care, and around the globe, ensnaring
finance are ongoing. The extent large pouches of society in
of inequality, its diverse, its poverty and deprivation. Across
recusant effect on the economy the globe, people living in
and the society-have become poverty and vulnerable social
some of the most fiercely groups have been hit hard by
deliberated issues by the global financial and
economists, policymakers and economic crisis and its
researchers. repercussion, adding urgency to
the need to discourse
The concept of rising income inequalities and their
inequality and its global consequences. There’s growing
residuum has brought the global conciliation on the need
attention of the world leaders, to abridge the high-gap
business communities and between those ‘haves’ and
economists. The international those ‘have-nots’.
communities silhouette its
vision for a post-2015 global As underscored in the
conclusion document of the United Nations trends that will determine the shape of
Conference on Sustainable Development, finding the world in the next decade.
ways and means to successfully down-size
income inequality will necessitate a The WEF said it had been pointing out
transformative modification and an the threats of rising inequality and
all-encompassing slant to the three actinoids of political polarization for more than a
sustainable development – economic, decade, but that the slow pace of
environmental and societal. Properly balanced recovery from the deep recession of
social, economic and environmental policies and 2008 had intensified income gaps within
institutions can help decrease income inequalities countries. Emergency measures such as
when they warrant equality of opportunity, quantitative easing – the creation of
irradiate job creation and guarantee entree to money by central banks – had become
permanent features of economic policy,
and had aggravated inequality by
The concept of rising income boosting the returns of those holding
financial assets. It added that the trends
inequality and its global residuum of recent years had come into sharp
has brought the attention of the focus in 2016 with rising discontent and
dissatisfaction evident in the UK
world leaders, business communities referendum and in the US with Trump’s
and economists. The international victory over Hillary Clinton.
passable social protection for all. Aplenty can be Maps – Current World Income Distribution
erudite from those economies that managed to
reduce substantially inequality even under an
erratic, dicey and fierce global environment. The
international community can play a significant
role in providing backing to policies that help cut
down income inequality.
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quick-witted life. On the who have started to say that technology has replaced many
contrary some people born technology, like globalization, is white and blue-collar jobs that
landless, homeless and adversely affecting the lives of paid well. Workers in the
penniless as their parents die many people. The manufacturing sector have to
with huge burden of debt finally internationally acclaimed British switch to other lower paying
shifted to the unfortunate physicist, Stephen Hawking has jobs. In a recent interview, the
inheritors. So long the system of warned that technology is Honeywell CEO said half of their
inheritance continues, partly to blame for the rise in manufacturing jobs are actually
inequalities are bound to be income inequality; and, that in software and not the physical
perpetuated in the society. great technological advances assembling of parts. But
Inequality of income also causes can leave most people Honeywell is considered as one
due to natural reasons as some “miserably poor.” He said: of the biggest manufacturers in
people are endowed by nature “Everyone can enjoy a life of the world.
with superior talent, intelligence, luxurious leisure if the
better physique and greater machine-produced wealth is The rise of populism and the
capability than others. In shared, or most people can end electoral victory of populists like
additions, governments’ policies up miserably poor if the Trump and the Brexit vote are
on wage structures, minimum machine owners successfully actually partly the result of
wages, education policies and lobby against wealth anger of people at the loss of
facilities, taxation policies, etc. redistribution... so far the trend jobs due to technology.
are the deep-rooted reasons for seems to be toward the second According to Stephen Hawking:
income equalities in an option with technology driving “The automation of factories
economy. ever-increasing inequality.” has already decimated jobs in
traditional manufacturing and
Technology Pullulates Professor Erik Brynjolfsson of the rise of artificial intelligence is
Income Inequality the MIT Sloan School of likely to extend this job
Management, recently wrote: destruction deep into middle
The tech CEOs of Apple, “My reading of the data is that classes, with only the most
Microsoft, Amazon, Facebook technology is the main driver of caring, creative or supervisory
are resounding the world that the recent increases in roles remaining.”
they are making the world a inequality. It is the biggest
better place. But there are those factor.” The problem is that The loss of jobs in the
manufacturing sector due to
technology is now beginning to
happen in the service sector.
Amazon is the largest
distribution company in the
world. In 2016, the company
announced that it now has
45,000 robots across 20
fulfillment centers. A year
before, it announced it had
30,000 robots. This means that
in a single year, Amazon had
increased its robots from
30,000 to 45,000 or a 50
percent increase and the end
result is loss of jobs of humans.
Inequality is a Vicious social unrests in the forms of has been connected with
Cycle for the Economy riot, protest, shooting, looting intentional homicide and
and the Society and loss of many people’s lives. robbery, violent crime well as a
higher prevalence of other
“The rich get richer; the poor Nigeria has one of the world’s social problems such as drug
get poorer” is not just a cliché. biggest populations, the abuse and mental illness.
The concept behind it is a country is overflowing with oil Besides, this increase in social
theoretical process called reserves, and a starving young tensions have been found as a
“wealth concentration.” Under workforce busting with formidable blockade for the
certain conditions, newly innovative ideas. Why is the strengthening of democratic
created wealth is concentrated West African Giant still so poor institutions and a source of
in the possession of that almost 100 million people political unpredictability.
already-wealthy individuals. The live on less than $1 per day? The
process of wealth concentration oil rich country is submersed
with inequality of income,
Income Inequality in the
arguably makes economic
inequality a rancorous cycle. according to a global index, Context of Bangladesh
The effects of wealth which ranks Nigeria at the very
There’s no doubt that the GDP
concentration may extend to bottom of 152 countries in terms
growth and per capita income
future generations. Children of their commitment to fight
of Bangladesh have been
born in a rich family have an inequality.
increasing during the last few
economic advantage, because years. At the same time income
Inequality of income has been
of wealth inherited and possibly gap between the rich and the
strongly linked with crimes and
education, which may increase poor widened though per capita
social conflicts. In particular it
their chances of earning a
higher income than their peers.
These advantages create Income Inequality
another round of the malicious Chile, Mexico and the U.S. top the OECD’s list
cycle. Gini Coefficient
Efficacies in SOCBs
Myths, Realities & Remedies
W
ay back in 1972 the all public limited companies.
banking sector was in These have brought a visible
an absentee ownership paradigm shift in the post
regime. Alike the industries in liberation policies of state
the country Bangladesh principles. The global changes in
Government at that time faced policies had great impact on
or more appropriately was policies of Government that
encountered with the started within the multiparty
management & ownership politics practice. As a sequence
problem of banks. In the post to it, the banking sector started
liberation months banks were growing in the competitive
unattended by any ownerships. landscape – Private vs Public.
At that critical juncture Gradually PCBs were extended
Bongobondhu’s leadership took in number & quantum of
the decision for Government to banking finance occupying
take over all the Banks. Starting larger piece of cake in national
The Author is a with Sonali, Janata, Agrani and bank financing volume. Their
Chartered Accountant & Rupali, Pubali and Uttara as slice is bigger mainly for small
a Fellow Member and names, all the banks were taken scale of Capital Market which is
Past President of the under full control & ownership very slowly grooming despite
Institute of Chartered Accountants of the Government. These banks enormous fund needs in
of Bangladesh-ICAB were in other words development & industrialization.
nationalized by the Government Resultantly alternative source to
of Bangladesh. Consequently banking loans for funds cannot
these got a nomenclature of be availed by entrepreneurs
NCBs- nationalized commercial while causing high cost in
banks. borrowings from Banks.
banks are now called State Owned Commercial measures to recruit new generation
Bank. These 4 SOCBs have been getting constant bankers into the SOCB stream. A
favours from government. These however bankers’ selection committee came in to
created bankers who left NCBs/SOCBs to join recruit for the SOCBs to meet the dearth
PCBs. These bankers however performed with of professional bankers. Those who were
immensely professional excellence in private recruited also shifted or are mostly in the
sector. Being in NCB sector they could not excel process for search of scope to move
well due to either regulated regime or profitably out.
government controlled intervention scenario. But
NCBs gave birth to a new generation of bankers The SOCBs are now offering competitive
who performed with excellence in PCBs. Such remuneration packages for employees in
transformation of bankers’ community from the backdrop of recent 100% rise in the
within a state control to private sector gave them pay scales. The AGMs, DGM & above in
impetus to perform enormously better. This these banks are getting car loans, with
growth in professional bankers left the private extra allowances not relating to
sector grow at a much better and faster pace performance. These policies of incentives
were resembled from PCBs but equal
operational efficacy in SOCB like PCBs is
still a far cry. These should have been
The SOCBs are now offering linked with performance. The branches
competitive remuneration packages mostly opened at the behest of
bureaucracy & politics without viability
for employees in the backdrop of study are mostly liabilities to the bank’s
recent 100% rise in the pay scales. branch network. Less than 10% of the
branches earn profit from portfolio loans.
The AGMs, DGM & above in these Deposit based branches lend funds to HO
banks are getting car loans, which in turn lends to the loan disbursing
branches. Indeed bankers in SOCBs by
with extra allowances not relating and large hardly think about individual
to performance. branch profits rather than safely lending
to HO. The loan portfolios are
concentrated in 5% or less branches in all
SOCBs. While 3/ 4 incentive bonuses are
compared with their tenure in Government sector paid on the basis of base pay to all
banks. Profit motive in them with performance employees whether or not he/she is a
incentives took the PCBs to newer heights. performer. These have left NPL (non
Contrary to this NCB/SOCBs fell apart in performing loans) to rise recklessly. The
bureaucracy & lack of commercial aptitude in term NPL has become a word of phobia
protected regime & based upon welfare motive as for readers. This percentage is reported
Government Banks. Inefficiency of employees at 10+% but leaving apart the colossal
was often not dealt with disciplinary actions volume of loans disbursed which are
which has in turn aggravated (SOCB) banking consistently being re-phased or
sector. restructured only to be prevented from
being categorized as classified loans.
Government sector banks were left in shambles With increased volume of these into
due to absence of professionals who moved at classified loans NPL would have soared
higher attractive packages to private sector. to shameful heights. The delinquent
Those who remained in SOCBs were mostly borrowers avail easiest resort to courts
reluctant to take new challenges in the private obtaining verdicts in their favour. The
sector. Gradually however Central Bank took SOCBs’ law enforcements are deplorably
at loss by its own operational visible profit, attention to profit seriously & professionally by the
earnings. It is now high time to rather than welfare, free SOCB management. The
gradually reduce the branch government services replaced relationship developed over the
network by 20% per year over by reasonable charges should years between NPL borrowers &
atenure to run the networks into be introduced. A task force bankers in SOCBs has never
profitable one. Government is composed of 4 SOCBs can be been pro- profit & recovery.
the owner & hence it should formed to bring forth changes Rather these bankers promote
expect better & cheaper for welfare based banking to be the causes of NPL groups most
services from SOCBs. But free replaced by profit based one. often getting employment in
services to government & Task forces must include private PCBs soon after retiring from
getting new injections of funds sector bankers of excellence & SOCBs. Thus with the insider
into capital from budget looks prominence with reformist information in SOCBs those
like a dual policy. So an thinking. employees get attractive
alternative can be, to pay these packages in private banks as
SOCBs service charges at a The NPL has been increasing in CEO/MD etc. only to the
reduced rate & not inject any an alarming pace sourcing into deterioration of NPL to persist.
sum into its capital. Instruction it wider volume of loans every
to all the SOCBs to replenish year. It has been kept low by Retirees at GM & above level
new capital to meet capital ventilation and artificial must be refrained from joining
inadequacies, can be strictly respiratory system for SOCBs. PCBs as DMD/MD etc. Many
given. Giving them a standard & Even in PCBs, NPL scenario is SOCBs have favoured large
strict time frame like 3 years to vividly dissatisfactory & number of new generation bank
find own sources with reduced dismaying but yet better than promoters by leveraging or
branch network will reduce the SOCBs. Let, however, these impacting upon loan
operational cost. Options to SOC banks are not favoured in disbursements to them. The
employees for voluntary the application of legal DMDs/GMs of these SOCBs
retirements can have easier way regulations by central bank. have joined in those PCBs at
for profit search by these large. This is unethical for
branches. The lending from HO The NPLs should be separately employees of SOCBs and
to branches can be transferred dealt with keeping in view the debars independent decision
to inter branch transactions Indian experience. It is said that making often in favour of SOCB
along with a HO levy like .25%. In when the Going gets tough, the banks. These bankers remaining
that case all such inter branch tough gets going. This is high in transition to PCBs after
lending should be profit based & time that government in retirement in SOCBs often take
HO must not take responsibility association with central bank, wrong decision for their
of NPL etc. The branches are to based on its lessons learned so would-be employers (PCBs)
be held accountable for far, go ahead & drive anew and while still serving in the SOCBs,
individual NPL, profit earnings & afresh for SOCBs. Its NPL even against the stake their
for that networks of branches should be minimised by public current employer (SOCBs). This
are to be made narrower than means, fanfare & unfolding re-employments should be
now. The viability of opening publicities against the NPL stopped by regulations. One
new branches must be checked holders who are brave (?) sons such option could be for at least
with regulator and not on of the soil. 3 years after retirement no
political or bureaucratic employment in PCBs for SOCB
considerations as it happened The SOCBs having been in employees will be allowed. Or
before & happening now. enduringly protected retirement age of SOCBs can be
environment, its bankers have raised to 62 or so for the above
The blame game of inefficiency, developed personal relationship SOCB employees. Alternatives
non-banking performance, NPL, with NPL delinquents. The NPL could be many more however.
big overhead without any borrowers are not even taken
E
xecutive Summary Gross Domestic Product (GDP).
The Authors are: The performance of this sector
By 2050, global food has an overwhelming impact on
requirement will increase major macroeconomic
significantly, driven by a objectives like employment
population increase to 9.8 generation, poverty alleviation,
billion (UN DESA). In order to human resources development
meet the expected increase in and food security. Agriculture in
demand for food and improved Bangladesh averaged 8,622.84
nutrition, particularly in Million BDT from 2006 until
emerging markets, farmers 2016, reaching an all-time
around the world will have to highest of 9,922.80 BDT Million
increase crop production by in 2016.
70%. As a result, food security
turns into a global burning issue. There is no doubt agribusiness
Food security is one of the industry has grown significantly
1
Chartered Accountant and
fundamental rights of the during the past few years by
an Associate Member of the
Institute of Chartered Accountants citizens stated by the crop diversification in many
of Bangladesh-ICAB Constitution of Bangladesh. parts of the country. In order to
Food security exists when all target the continuing food
people, at all times, have access security threats, the
to sufficient, safe and nutritious government of Bangladesh has
food to maintain healthy and developed a number of high
productive lives. The level policy initiatives, including
government of Bangladesh has Vision 2021 and related
identified food security as an Perspective Plan. Achieving
important factor contributing to food security is also a key
its socio-economic stabilization objective of the country’s
and development. Bangladesh poverty reduction strategy and
has made a steady progress in has been recognized to be the
expansion of food production. highest risk in the Bangladesh
Despite the growth in food Climate Change Action Plan.
production and its availability, For increasing food production
food security is still a major and attaining food sufficiency, a
problem for the ultra-poor sustainable growth of the
FIBP Executive
2
community mainly for lack of agricultural sector is required.
Syngenta Bangladesh Limited purchasing power and Bangladesh cannot sustain
inconsistent movement of long-run macroeconomic
commodity prices. stabilization and economic
progress without having a
Agriculture is the largest strong agricultural sector
employment sector in accompanied by a dynamic
Bangladesh. Around 90 per agribusiness sub-sector.
cent of the rural population of However, Bangladesh is yet to
Bangladesh is directly involved achieve comprehensive food
in agriculture. As of 2016, 47% of security that resolves the
the total labour force is problems of inadequate food
engaged in agricultural intake and chronic malnutrition
activities and it contributes among poor people. It would be
around 17% of the country's a great challenge to attain food
security while maintaining sustainable agriculture fundamental rights of the citizens has
practices. Moreover, decreasing arable been enshrined in the Constitution of the
agricultural land, together with constantly country. In idealistic proposition ‘food
increasing population and changing climatic security’ exists when all people, at all
conditions, has made this challenge more acute. times, can enjoy access to sufficient, safe
Solving these problems will require concerted and nutritious food to maintain healthy
action by the government, the private sector and and productive lives. The key elements of
individual households. Continuous efforts need to food security are: (a) availability of
be made in developing and diffusion of improved enough food from domestic production
crop varieties and natural resource management and/or imports to meet the demand, (b)
to generate adequate supply of food to meet the access to the food for all irrespective of
needs of the growing population. level of income and affordability, (c)
proper hygiene and sanitary practices
and safe water for utilisation of food to
have optimum impact on health and
The global food system today is nutrition, and (d) a regulatory framework
in place and its proper implementation
beset by serious challenges and for controlling contamination to ensure
risks. Major demographic shifts are food safety.
society.
• Formulation of National
Agriculture Policy 2013
• Introduction of drought
tolerant new rice “Narika”.
• Information revealed on
Genome sequencing of Jute
Reference
1. Hossain, Dr. Mahabub, Food
security in Bangladesh
Achievement and Challenges
2. FIDA – Syngenta Fellowship
Program
3. The Daily Star (Daily
Newspaper)
4. The Financial Express (Daily
Newspaper)
5. www.businessnews24bd.com
(Online News portal)
6. www.Syngenta.com
7. Foresight. The Future of Food
and Farming (2011) Executive
Summary. The Government
Office for Science, London.
Critical Analysis of
Transfer Pricing Regulations in Bangladesh
I
ntroduction ensure that income arising from
an international transactions
Globalization creates between associated enterprises
unified businesses with shall be computed having
enormous Cross-border regard to the Arm’s length
transaction whilst corporate tax price. Any cost or expense
systems in Bangladesh remain allocated, reimbursed or
nationally focused. Government apportioned between two or
insists that globalization more connected/associated
provides Multi-national Entities enterprises under a mutual
(MNEs) with more scopes to contract/agreement or
manipulate transfer prices and arrangement shall also be at an
reduces taxes than in the past Arm’s length price.
thus the need for tighter
regulation. So there is an Legal Basis for the
increased desire amongst tax Transfer Pricing
The Author is a authorities faced with tight Guidelines
Chartered Accountant and situations to protect and
an Associate Member of the enhance their revenue base The Arm’s-length Standard
Institute of Chartered Accountants encouraging tighter regulations and Transfer Price Approaches
of Bangladesh-ICAB of MNEs.
The following methods have
That is why, Transfer Pricing been prescribed by Section
(TP) becomes a red-hot issue 107C of Income Tax Ordinance,
nowadays in Bangladesh due to 1984 for the determination of
revenue leakage in the the arm’s-length price:
international transactions. The
main motto of implementation i. Comparable uncontrolled
of Transfer Pricing regulations is price (CUP) method.
to ensure fair share of tax
revenue to respective ii. Resale price method (RPM).
jurisdictions and to protect
shifting of profits outside iii. Cost plus method (CPM).
Bangladesh by manipulating
prices. iv. Profit split method (PSM).
would have been charged or paid or has been downward revision in the income
charged or paid, for the same or similar chargeable to tax in Bangladesh that
uncontrolled transaction considering all the means downward revision/adjustment is
relevant facts and circumstances with or between not allowed in Transfer Pricing regulation
non-associated enterprises under similar in Bangladesh.
circumstances.
Selection of methods are very
There are no methods noted a greater or slighter judgmental and requires detailed
significance. The most appropriate method for a knowledge about performing of proper
particular transaction would need to be transfer pricing functional analysis which
determined having regard to the nature of the ultimately helps finding our proper entity
transaction, the availability of reliable information, characterization.
charged or paid or whose profit identify and compare the increased and decreased in an
margins will be tested using the economically significant income year.
most appropriate method. The activities and the
tested party is ordinarily the responsibilities undertaken by Chartered Accountant’s or
party whose prices or profits the independent and the Cost Management
can be verified using the most associated enterprises. Accountant’s Report
reliable data and requiring the
fewest and most reliable Statement of International It is not mandatory for every
adjust¬ments and for which Transactions (TP Return) person to obtain report from a
reliable data regarding Chartered Accountant or Cost
uncontrolled comparables can Every person who has entered Management Accountant in
be located. into even a single international respect of International
transactions shall furnish a Transactions, if aggregate book
The tested party normally statement of international value of international
should be the less complex transactions along with the transactions exceeds BDT 30
party to the controlled return of income. National million between associated
transaction and should be the Board of Revenue prescribed a enterprises for now. If TP audit
party in respect of which the specific format rule 75A for initiates by tax authority and if
most reliable data for submission of such return. they feel that certain
comparability is available. section/documents/
The statement has two parts information needs further
Challenges in Comparability one part mostly deals with investigation and confirmation,
Analysis (Functional analysis) revenue and expenses items tax authority may ask by notice
related to profit and loss in writing the company to get
To suit the functional analysis in accounts and another part deals the information/documents
comparability analysis is the with balance sheet items that attested or verified by a
main challenges ever faced by means capital nature which has
the assesse in practice.
Functional analysis is the
cornerstone of any transfer
pric¬ing exercise. Its purpose is
to obtain an understanding of
the operations of an enterprise
with its associated enterprises
and of the respective roles of
the parties to the controlled
transaction under scrutiny.
This article was published in of five per cent people was 0.77
The Financial Express and per cent. Based on this
is re-printed here
information, it can be estimated
that the portion of 10 per cent
T
he term "economic lower-income level people
development" typically (LILP) was more than 1.54 per
refers to the cent (assuming that income of
improvement in various second five per cent is higher
indicators such as literacy rate, than 1st five per cent). But
life expectancy, poverty rate, according to the Bangladesh
etc. In respect of all the Bureau of Statistics (BBS),
indicators, Bangladesh income of lower-income level 10
economy is developing. Present per cent people is only one per
literacy rate of the country is cent. In comparison to the years
61.5 per cent, life expectancy is 2005-2006 and 2016-2017, it
72 years which is higher than appears that the average
The Author is a the average world standard, income of lower-income level
Chartered Accountant and poverty rate is also on a gradual people of the country is
a Fellow Member of the decreasing trend. Within the decreasing.
Institute of Chartered Accountants last five years, poverty rate has
of Bangladesh-ICAB reduced from 31.5 per cent to If we analyse the increasing rate
22.5 per cent. of wages, rate of inflation in
general and inflation of food
But, one issue that is not in items, this grim reality is found
harmony with the development to be increasingly persistent.
of the country is growing Per capita income in the year
inequality in society. The 2005-2006 was Tk.34,502. Let
indicators that we consider to us consider that this per capita
measure economic income of Tk.34,502
development are based on the represented 98 lower-income
average of various numbers. If level people whose per month
we analyse the numbers income was Tk.893 and two
separately, it may be observed higher-income level people
that the gap between (HILP) whose monthly income
higher-income level and was Tk.100,000. As per this
lower-income level is widening. example per capita income may
In the year 2005-06, the be calculated as under:
position of lower-income level
After ten years, in the year 2015-2016, per capita times but average per capita income has
income reached Tk 108,378 which is 3.14 times increased 3.14 times. Now, question may
higher than per capita income for the year be raised how this gap has been filled up.
2005-06. According to the Annual Economic The answer to the question may be as
Review of 2017, the income of Tk. 3507 for the under:
year 2005-06 rose to Tk. 7680 in 2015-16. Based
on this, income of Tk. 893 of the year 2005-06 has
Level of Income Income of year 2005-06 Income of year 2015-16 Rate of increase
reached Tk. 1956. The income in the year 2015-16
Income of 100 people 3,450,168 10,837,800 3.14 times
has increased 2.19 times compared with the
Income of 98 LILP 1,090,168 2,300,256 2.19 times
income for the year 2005-06. Income of
Income of 2 HILP 2,400,000 8,537,544 3.56 times
lower-income level people has increased 2.19
year 2005-06 has reached Tk. income of higher-income level For the purpose of calculation, it
12579 in 2015-16. Increase in the people increases in two ways-- has been assumed that a
portion of income spent on food one is due to inflation and higher-income level person
items means capacity to secondly, due to income on spent 50 per cent of income on
purchase other important items savings through investment. food, education, shelter,
such as education, medicine, Normally, a major part of clothing, medicine and other
clothing and others has income of higher-income level comfortable and luxurious
decreased. The decrease of people remains unspent for goods, and the remaining 50
purchasing capacity, despite essential items and this unspent per cent was invested for
the increase of income, means amount is invested for further generating income. In the above
decrease in the real income of income. A calculation of example, annual income was Tk.
the person. Now, question may increasing income of 2,400,000 out of which 50 per
be raised how the income of higher-income level people is cent was spent for consumption
higher-income level people has presented below: and the remaining half i.e., Tk.
increased by 3.56 times. The 1,200,000 was invested which
has generated income @ almost
10 per cent and in ten years the
principal amount with income
Income in the Reason of Rate of Income in the
added to it has increased 2.73
year 2005-06 increase increase year 2015-16
times.
2,400,000 Inflation 2.19 5,256,000
1,200,000 Investment 2.73 3,281,544 The analysis clearly indicates
8,537,544 that during the last 10 years,
overall growth rate was
B
ackground of the [It has been observed that all
Study the establishments are not using
similar / Uniform basis for
Under Chapter XV of the calculating Workers Fund. Even
Bangladesh Labour Act 2006 the subsidiaries of Corporations
(BLA 2006), [any Company or are not maintaining uniform
establishment] complies with basis for calculating Workers
the conditions of section 232 of Fund. Some of them are using
BLA 2006 are bound to Profit Before Charging provision
establish Workers Fund (WF) for Workers Fund and some are
i.e. Workers Profit Participation using Profit After Charging
Fund (WPPF), Workers Welfare provision for Workers Fund.]
Fund (WWF) and Workers The fact may be defined
Welfare Foundation Fund numerically as follows:
(WWFF) out of its Net Profit.
The Author is a
Chartered Accountant and Amount in Tk.
a Fellow Member of the Particulars
Institute of Chartered Accountants Case-1 (Before) Case-2 (After)
of Bangladesh-ICAB Sales Revenue 100,000.00 100,000.00
Less: COGS 50,000.00 50,000.00
Gross Profit 50,000.00 50,000.00
Less: Admin & Marketing Expenses 20,000.00 20,000.00
Profit Before Charging Workers Fund 30,000.00* 30,000.00
Amount of Workers Fund 1,500.00 1,428.57
Profit After Charging Workers Fund 28,500.00 28,571.43**
In the above example, the case-1 It has also been observed that
reflects the calculation of [a Corporation has been
Workers Fund before charging calculating Workers Fund @5%
process and the case-2 reflects on Net Profit before charging
the calculation of Workers Fund tax and Workers Fund whereas
after charging process. To an argument has been raised
calculate @ 5% Workers Fund that the Workers Fund should
on Net Profit, under case-1 the have been calculated on Net
basis for calculation is Tk. Profit after tax and Workers
30,000 and the basis under Fund.] The fact may be defined
case-2 is Tk. 28,571.43 numerically as follows:
(30,000*100/105).
1
amended by Bangladesh Labour (Amendment) Act 2013
2
Source from ICAB (letter of organization Ref. No. 28.02.0000.026.33.001/13/410 dated 02 October 2013).
3
Source from ICAB (letter of Organization dated 09 July 2017).
CASE # 1 CASE # 2
WF Calculated on the Net Profit before WF Calculation on the Net Profit After
charging WF & Tax charging Tax and WF
Particulars Tk. Particulars Tk.
Sales Revenue 4,324,262 Sales Revenue 4,324,262
Less: COGS 2,373,721 Less: COGS 2,373,721
Gross Profit 1,950,541 Gross Profit 1,950,541
Less: Other Operating Expenses 548,552 Less: Other Operating Expenses 548,552
Operating Profit/(Loss) 1,401,989 Operating Profit/(Loss) 1,401,989
Add: Other Income 171,288 Add: Other Income 171,288
1,573,277 1,573,277
Less: Other Expenses 10,036 Less: Other Expenses 10,036
Net Profit /(Loss) Before Workers Fund & Tax 1,563,241 Net Profit /(Loss) Before Workers Fund & Tax 1,563,241
Workers Fund (1,563,241X5/105) 74,440 Less: Provision for Tax 586,215
Net Profit /(Loss) Before Tax 1,488,801 Net Profit /(Loss) After Tax 977,026
Less: Provision for Tax 558,301 Less: WF @ 5% 48,851
Net Profit After Tax 930,501 Net Profit After WF 928,175
Definition of Profit
Establishment of Participation
and Welfare Funds
4
amended by Bangladesh Labour (Amendment) Act 2013.
5
amended by Bangladesh Labour (Amendment) Act 2013.
6
amended by Bangladesh Labour (Amendment) Act 2013.
definition of Net Profit means Expenditures under accounting the usual working charges,
"either the profit is considerable concept may not be interest on loans and advances,
before charging the amount of expenditure under tax concept repairs and outgoing,
provision for WF and Tax or the and consequently the tax base depreciation, bounties or
profit is considerable after may increase. On the other subsidies received from
charging the provision for WF hand, section # 244 of BLA Government or from a public
and Tax. 2006 dictates only about the statutory body profits by way of
tax benefit for the concerned premium on shares sold, profits
Fiscal Concessions organization for maintaining on sale proceeds of forfeited
WPPF/WWF/WWFF which is shares, or profits from the sale
Under section 244 of the Act, all irrelevant to the basis for of the whole or part of the
companies to whom this calculation (Net Profit) of these undertaking of the company,
Chapter applies shall be allowed Funds. The basis for calculating but without any deduction in
the allocation made to the Fund the WPPF/WWF/WWFF is respect of income tax or super
as a deduction to arrive at the absolutely the 'Accounting tax or any other tax or duty on
taxable income. Profit'. income or for expenditure by
way of interest on debentures
In the above, the word Review of Companies or otherwise on capital account
'deduction' means that the Act 1994 or on account of any sum which
expenditures for creating the may be set aside in each year
funds are allowable expenditure The definitions of Net profit, out of the profits for reserve or
for the concerned organizations Provision and Reserve are the any other special fund."
to calculate tax and relevant topics of Companies
consequently the accounting Act 1994 for getting the The Schedule XI, Part-III defines
profit and tax base will same. outcome of the study. 'Provision' as "any amount
written off or retained by way of
It is also pertinent to discuss Section 119(3) of Companies Act providing for depreciation,
here that the concept of 1994 defines 'Net Profit' as "the renewals or diminution in value
accounting expenditure and tax profits of the company of assets, or retained by way of
expenditure are not same. calculated after allowing for all providing for any known liability
of which the amount cannot be
determined with substantial
accuracy"
4
The legal opinion was given by Barrister Mahbub Shafique on 28 October 2013 against a query of ICAB regarding the calculation
of Workers Fund.
Continuous Accounting
The Pathway to Modernization of Accounting Services
E
xecutive Summary a professional Chief Financial
Officer should be able to
Microeconomics is not balance the responsibilities of
only applicable for individuals stewardship and business
but also for organizations to partnership, act as an integrator
identify whether an and navigator for the
organization is effectively and organization, be an effective
efficiently managing resources leader in finance & accounting
which is one of the prime and bring professional qualities
objectives of a CFO. However, to role and the organization. For
the present Record to Report these objectives, the CFO is
Process is not allowing the required to ensure that
accounting and finance division resources available to
to perform their works properly. Accounting and Finance
This article tries to explain how Departments are being utilized
Continuous Accounting properly. However, at present in
The Author is a Approach would benefit an most of the cases the reporting
Chartered Accountant and organization in optimizing its procedure which is followed by
an Associate Member of the Accounting and Financing organization is of Traditional
Institute of Chartered Accountants works and provide internal & record-to-report nature where
of Bangladesh-ICAB external stakeholders with more reports are prepared after
relevant and timely information. certain periods has made the
work of a Finance team being
Keywords led by CFO not only
burdensome but also fruitless in
Continuous Accounting; Record certain cases where problems
to Report Process; Integrity; are not identified before it has
Assertions; Automation; Cloud impacted the organization
Technology. heavily. Now, for utilization of
resources more effectively and
Introduction efficiently, the finance team
should work on a real-time basis
Microeconomics, the social to identify problems
science that studies the immediately in order to solve
implications of individual human them before it has huge impact
action, specifically about how on the organization. This article
those decisions affect the tries to enlighten its reader on
utilization and distribution of how “CONTINUOUS
scarce resources, can also be ACCOUNTING” can help a CFO
used for business processes to achieve such objectives.
identify utilization and
distribution of scarce resources Traditional Record to
by a business. Now, as per Report Process
IFAC’s “The Role and
In order to understand how a
Expectations of a CFO” (IFAC )
business is performing, at
1
IFAC, The Role and Expectations of a CFO, https://www.ifac.org/system/files/publications/
files/ Role%20of%20the%20CFO.pdf
Data transformation
Voucher posting (to
Data collection Data validation (generation of
general ledger)
voucher)
Generating user-
Generating account defined financial and
Storing vouchers
trial balance management reports
• In-depth interview;
2
Wikipedia (none), Data Integrity, https://en.wikipedia.org/wiki/Data_integrity
3
Accounting Tools (2017), Bank Reconciliations, https://www.accountingtools.com/articles/2017/5/17/bank-reconciliation
the workload for preparation of opportunity to ensure accounting system used by the
Financial Statements will be compliances of agreements, organizations would also
properly distributed. contracts, rules, regulations, require functionalities such as
laws and standards on regular preparation of financial
Increase of Efficiency : basis. Hence, any statements from trial balances.
Accounts departments get non-compliance would be As predicted by Jake Martin ,
more time to focus on ensuring identified immediately rather with the increase of integrity of
compliances with standards, than at the end of the data due to real-time validation
rules and regulations as they are accounting period and against contracts, agreements,
now free from the over-burden corrective actions can be take standards, rules and regulations
of works previously faced under on real time basis before the across cities or borders, present
Record to Report process after probability of misstatements style bookkeeping and
the end of the reporting period. exceeds the materiality level of accounting may become
Hence, the efficiency of the the auditors. Therefore, at the redundant and use of cloud
Accounts departments end of the period, the technology may increase
increases significantly. compliances of the standards significantly.
and others would definitely
Increase in Time for Analysis : increase significantly. Key Predictions in Support of
As accounting entries are Continuous Accounting
verified on regular basis and Scope for Cloud Technology :
thus trial balance and financial As information for financial As per David Axson’s analysis
statements can be prepared on statements such as journal the following trends as a result
daily basis, the time available for vouchers and trial balances are of change in accounting process
analysis of ratios and key prepared on regular basis, the will be observed by 2020:
financial data also increases
significantly. Furthermore,
actions can be taken against 90%
errors and frauds instantly 80%
which in turn provide scope for 70%
true and fair financial 60%
statements. 50%
40%
Better Financial Decisions : Due 30%
to the availability of information, 20%
Finance Managers can provide 10%
suggestions on the basis of 0%
real-time information which will Abolishment of Finance Staff's Finance Staff's
Transactional involvement in involvement in
be more fruitful.
Accounting decision support, Forward looking
predictive analytics, planning
Ensuring Compliance : As a and performance
result of continuous accounting, management.
Accounting and Finance
Impact of Continuous Accounting by 2020
Departments will have
4
Jake Martin (None), 5 Bold Small Business Accounting Predictions,
http://www.intuit.com.au/r/small-business-accounting/5-bold-small-business-accounting-predictions/
5
David Axson (2015), Death by Digital: Good-Bye to Finance as You Know It,
http://ww2.cfo.com/analytics/2015/10/death-digital-good-bye-finance-know/
6
Blackline (None), Continuous Accounting: The Future of Accounting and Modern Finance is Here
https://www.blackline.com/continuous-accounting
7
DeWayne L. Searcy and Jon B. Woodroof (2003), Continuous Auditing: Leveraging Technology,
http://archives.cpajournal.com/2003/0503/dept/d054603.htm
7
TIME (2002), The Enron Effect, http://content.time.com/time/business/article/0,8599,197363,00.html
T
he exchange rate is one in foreign markets. A lower
of the most important currency makes a country's
determinants of a exports cheaper and its imports
country's relative level of more expensive in foreign
economic health. Exchange markets. A higher exchange
rates play a vital role in a rate can be expected to lower
country's level of trade, which is the country's balance of trade,
critical to most free market while a lower exchange rate
economies in the world. For this would increase it.
reason, exchange rates are
among the most watched, Numerous factors determine
analyzed and governmentally exchange rates, and all are
manipulated economic related to the trading
measures. Yet, the behavior of relationship between two
exchange rate is one of the countries. Exchange rates are
unresolved issues of research to relative and are expressed as a
The Author is a be dealt with. comparison of the currencies of
Chartered Accountant and two countries. Principal
an Associate Member of the An exchange rate is the price of determinants of the exchange
Institute of Chartered Accountants a currency in terms of another rate between two countries are:
of Bangladesh-ICAB currency. Exchange rate is
derived from base currency and Differentials in Inflation
counter/quote currency. In
direct quotation foreign Differentials in Interest Rates
currency is base currency and
the domestic currency is called Current-Account Deficits
counter currency. US dollar is
widely used as base currency Public Debt
with few exception like Euro,
British pound, AUS dollar etc. Terms of Trade
Exchange rate is also
categorized as the Spot rate or Political Stability and
Current rate and Forward rate Economic Performance
(adjusted spot rate for interest
rate differentials . An exchange Differentials in Inflation
rate can be floating or fixed.
Most major nations follow A country with a consistently
floating exchange rate norm, lower inflation rate exhibits a
where market force determines rising currency value, as its
the currency rate. Some nations purchasing power increases
say, Saudi Arabia prefer fixed or relative to other currencies.
pegged exchange rate. During the last half of the 20th
century, the countries with low
Exchange rate movements inflation included Japan,
affect a nation's trading Germany and Switzerland, while
relationships with other nations. the U.S. and Canada achieved
A higher currency makes a low inflation only later. Those
country's exports more countries with higher inflation
expensive and imports cheaper typically see depreciation in
0 Public Debt
2000 2002 2004 2006 2008 2010 2012 2014 2016
2001 2003 2005 2007 2009 2011 2013 2015 Countries will engage in large-scale
deficit financing to pay for public sector
projects and governmental funding.
Source: TheGlobalEconomy.com, The World Bank While such activity stimulates the
domestic economy, nations with large
the exchange rate of newly days ( Tk. 80-84 per USD) The stability and economic
created currency (TAKA) was taka has been depreciating performance will be playing a
fixed with Pound sterling @ £1 against the US dollar since the key role in coming days in
=Taka 18.9677. During early middle of October mainly due context of Bangladesh.
years of Independence to a mismatch between the
Government adopted demand and supply of the References
expansionary monetary and greenback, according to
fiscal policies which eventuated bankers and an economist. 1. Working paper series: WP1502,
inflation @ 50% p.a. The Research Department &
Remittance and exports, the
Monetary Policy Department,
incompatibility between two major sources of foreign Bangladesh Bank.
expansionary monetary and currency for Bangladesh, are in
fiscal policy and a fixed the slow lane, while imports 2. An Assessment of Exchange Rate
exchange rate system made Policy under Floating Rate
have ballooned. As a result,
taka grossly overvalued and Regime, Monzur Hossain &
current account deficit is Mansur Ahmed (2009),
created a sustained trade deficit. widening. Bangladesh Bank Bangladesh Development
In 1983, pound sterling was (BB) has intervened by capping Studies.
replaced by US Dollar as the the exchange rate.
intervening currency. Exchange 3. The International Journal of
rate gradually shifted from fixed Social Sciences, Vol. 18 No. 1
Putting cap is an ad-hoc (2013)
peg to flexible peg. In May 2003, measures and it cannot resolve
in a balanced macroeconomic the exchange rate unrest. This 4. The Daily Star, Prothom-alo and
condition floating exchange rate short term control will hurt the world Bank publications
policy was put in place where market in long run. Long term
exchange rates are free to be policies for the foreign
determined by market forces. exchange market and “Check
But to avoid excessive volatility and balance” measures will be
in the exchange rate, ideal which can be achieved by
Bangladesh Bank could put diversifying export and
politic intervention. balancing exchange rate for
both exporters and importers to
Exchange Rate Volatility control the price fluctuation.
in 2017 Fighting against money
laundering and capital flights Government
The below table shows sudden will remain vital in this regard. estimates the
hike in dollar price in last 90 Most importantly political
number of
expatriate
workers will
cross 1 million
including 1,
13,009 women
during this year.
SOURCE
The Asian Age
13 December 2017
th
I
ntroduction Business to Consumers
Payza
Paypal
Ecommerce Companies
in BD
The concept of online
marketplace was introduced in
2012/13 by akhoni and ajkerdeal.
From 2015 onwards Kaymu and
Daraz is disrupting the market
by investing a huge amount of
money in marketing for quick
sales, which eventually is proven
a wrong step and ultimately
kaymu merged with Daraz in
2017.
E-commerce Users in (CoD) which count for 90% of
Bangladesh the spending behavior.
Daraz BD is one of the online
Furthermore, the second major
shopping sites with a wide
E-commerce users in form of payment is MFS (Mobile
selection of electronics, fashion
Bangladesh are between 25-34 Financial Service). (Source:
and home appliances. They
years and over 80% of eCab)
offer great deals on discount
E-commerce traffic in offers, installment facilities and
Bangladesh comes from three warranty.
major regions. Dhaka leads the
chart with 35% of total traffic, PriyoShop.com is another
closely followed by Chittagong online shop in Bangladesh for a
at 29%, and Gazipur with 15% of vast option of clothing,
total e-commerce activity each footwear, jewelry, accessories,
year. When talking about the electronics, appliance, books,
gender divide, the report restaurants, health & beauty
observes that out of the total products etc. It is one of the
E-commerce activities carried best e-commerce solution
out, males are still the majority, All the payment systems are as
providing online sites for
comprising 83% of the follows:
shopping in Bangladesh starting
population. in 2013.
Cash on Delivery
Payment Methods Mobile Banking (bKash,
With a vast arrangement of
daily necessary products,
SureCash, IFIC Mobile
In Bangladesh the most popular ajkerdeal.com is also one of the
Banking, Dutch Bangla
payment method regarding familiar websites in online
Mobile Banking, UCASH etc)
e-commerce is cash on delivery shopping. Furthermore, they are
a potential market for global global, are eyeing the country's driver of future e-commerce
e-commerce giants due to its emerging e-commerce market. would be a sound logistics
large young population and This industry will need efficient framework: better
high rate of internet shipment and warehouse transportation, improved
penetration. management to cope with the delivery experience, order
growing demand of its management, inventory
Many companies, local and customers soon. The primary visibility and returns
management. Bangladesh and
other emerging markets are
Indicators for e-commerce growth Bangladesh recent statistics going to fuel the estimated
on ICT and telecom infrastructure
annual global e-commerce
Particulars July 2017 growth rate of 28 percent,
Population (2017) 165 million followed by Western Europe
Mobile internet subscribes (Millions) 70.174 and North American countries.
Fixed broadband internet usage 4.771
References
Mobile phone subscribers (Millions) 137.399
Internet subscribers (Millions) 75.024 1. https://en.wikipedia.org/wiki/
E-commerce_in_Bangladesh
Internet penetration 44.5%
2. h t t p : / / t e c h i n e w s 2 4 . c o m /
Coverage 64 districts
e-commerce-business-bangladesh/
Smart phones users of 3G 14
3. http://www.dhakatribune.com/
Laptops, Desktops, etc., 7
business/commerce/2017/03/0
Facebook users 21 million 5/e-commerce-boost-economic
Facebook penetration 12.7% -growth/
Cost of peck hour internet TK. 1.5-2.0 4. http://www.thedailystar.net/
Lowest call rate 1 paisa per sec business/bangladesh-see-72pc-g
rowth-e-commerce-sales-1315810
GDP Groth rate 2017 7.28%
5. http://www.theindependentbd.
GDP $249.86 billion
com/printversion/details/110219
Source: BTRC website, ICT: Information and communication technology
6. http://e-cab.net/
90 7. http://www.brainstation-23.com
79.227 /top-e-commerce-sites-banglad
80 esh-according-alexa/
70 66.862
8. https://hifipublic.com/2015/07/
60 54.058 12/kaymu-releases-survey-report
-on-bangladeshs-e-commerce/)
50 42.282
36.534 9. Bangladesh bank website
40
10. BTRC website,
30
20 11. ICT: Information and
communication technology
10
12. Bureau of statistics website
0
Internet subscribers (in million) 13. http://nbr.gov.bd/
A
bstract the role it plays in
intermediating savings of the
The financial market private and public sector to
plays an important role in productive activities including
economic development of investment. Bangladesh
Bangladesh. It transfers the financial system is dominated
fund from surplus units to by the banking sector, which
deficit units for investment. The fundamentally depends on
main purpose of the study is to short‐ and medium‐term
examine the significance of deposits for financing their
financial market in economic lending portfolios. This limits
development of Bangladesh. availability of funds that would
The study has used only be required for long‐term
secondary data. The secondary investments like infrastructure
data are collected only relevant and housing. Bangladesh has a
to study such as market capital market, with its known
The Author is a capitalization, stock turnover, difficulties, and there is no
Chartered Accountant and number of listed securities and vibrant secondary market for
an Associate Member of the companies, stock index and bonds, which limits the
Institute of Chartered Accountants GDP for measuring economic availability of resources for
of Bangladesh-ICAB development during the period infrastructure financing. This is
of 2005‐ 2015. The main reason starting with a general overview
to consider the certain period is of the current structure of the
the availability of data. The financial system in Bangladesh
study has used some statistical in terms of the 4 key
measures of means, growth markets—money market
rate, and ratio of total market comprising banks, microfinance
capital to GDP method. This institutions and nonbank
study revealed that financial financial institutions, financial
markets have made substantial market, bond market and
contribution in economic insurance market and their
development of Bangladesh. sizes, relationships between the
The study seems to carry an various markets and the
enormous academic value as associated regulatory bodies
only few studies have been assigned to govern the different
undertaken in this area. market segments.
Money Market
in the performance of banks, measures are often constrained. Exchanges, Stock Dealer/Sock
especially between private and Owing to lack of autonomy, Brokers, Merchant Bankers and
public banks. For example, the Bangladesh Bank often cannot Portfolio Managers, Asset
NPL of private banks in June withstand political pressure. Management Companies, Credit
2014 was 5.7%, but it was 23% Rating Companies,
for public commercial banks Fifth, there is widespread Trustees/Custodians and the
and 33% for public specialized allegation from the business Investment Corporation of
development banks. community that bank interest Bangladesh (ICB). The primary
rates and charges in Bangladesh segment of capital market is
Second, the definition of NPLs are too high. These high interest operated through private and
used in Bangladesh was not in rates have adversely impacted public offering of equity and
line with the international investment and domestic bond instruments. The
norms. The standard economic activity. secondary segment of capital
international definition for NPLs market is institutionalized by
was scheduled for adoption Finally, corrective monetary two stock exchanges‐‐Dhaka
from July 2012. This move has, policy actions over the past 15 Stock Exchange and
as expected, contributed to the months or so have tended to Chittagong Stock Exchange.
deterioration of the NPL ratios offset some of these adverse The instruments in these
beginning 2013. effects, particularly in the areas exchanges are equity securities
of inflation and exchange (shares), debentures, corporate
Third, there are important issues market stability. bonds and treasury bonds. The
relating to the corporate capital market in Bangladesh is
governance of banks. Due to Capital Market regulated by the Securities
political connections and Exchange Commission (SEC) of
influences some private banks In last two decades, capital Bangladesh. Below table shows
are able to bypass standards market witnessed a number of some selected indicators of
relating to fit and proper criteria institutional and regulatory capital market developments
for bank board and advancements which have referring to three choice of
management. resulted diversified capital years, year 2007, 2010 and 2014.
market intermediaries. At It can be observed that market
Fourth, the capacity and present, capital market capitalization and the DSE
flexibility of Bangladesh Bank to institutions and intermediaries General Price index increased
supervise the banking industry are of following types: Stock dramatically in the peak year.
and implement prudential
enhance financial stability markets with international funds by issuing bonds, they are
best practices. less dependent on banks and
- Enhancing institutional less exposed to vulnerabilities of
investor demand and Due to the slowing down of the banking system.
promote the mutual fund business activity and loss in Corporations suffer greatly
industry Enhancing supply revenues, it is recommended when there is liquidity crisis in
and demand of equities and that The Stock Exchanges the banks and bond is their
bonds explore new channels of primary source of funds.
revenue generation as
A review of reform measures suggested by the World Government Bonds
recommended after the Federation of Exchanges.
financial market debacle The bond market in Bangladesh
indicates that most of the key Bond Market is dominated by the fixed
measures have been income government debt
implemented except for one In a well‐diversified financial instruments, namely the
although almost 4 years have system bond market has a very National Saving Certificate.
passed since the bubble busted important role to play. Bond These bonds are not tradable in
in late 2010. In particular, financing allows diversification the secondary market. The
despite delays experienced in of credit and investment risks interest rates on this saving
submitting the draft and thus reduces certificate are generally higher
Demutualization Act to macroeconomic vulnerability to than that of other bonds in the
parliament and the Banking shocks and systemic risk market. The national savings
Control Act (BCA), both acts through. The government bond scheme is aimed at mobilizing
have been approved by market forms the backbone of a the savings of small investors
Parliament and the modern securities market in and pensioners at attractive
demutualization of Dhaka and both developed and developing interest rates. Under the
Chittagong stock exchanges countries. The availability of National Savings Directorate,
have been completed. long‐term funds for specific formed under Public Debt Act,
uses such as for infrastructure 1943, national savings
Recommendations for development and long‐ term certificates are sold through
Governance and Operations of industrial financing is facilitated 9,000 post office branches and
Primary and Secondary by the debt market. 3,300 commercial bank
Markets and Self‐ branches functioning as
The bond market links the commission agents. Bangladesh
Regulatory Organizations issuers having long‐term Bank collects the sales
financing needs with investors proceeds and reimburses the
- Protection of the investors willing to place funds in seller at the time of encashment
should be the top priority of long‐term interest bearing (redemption). Government uses
accounting firms, merchant securities. When firms can raise 3 to 5 years term savings
banks and stock exchanges. certificates (Sanchaypotro) for
the purpose of domestic
- The industry needs to define borrowing from the public.
the role of SROs in oversight
and adopt international best Corporate Bond
commercial practices.
The corporate bond market in
- The SEC needs to officially Bangladesh remains at a
recognize many of the SRO’s nascent stage, with a shallow
and begin the process of debenture market. In 1987–2005
integrating Bangladesh’s
only 17 debentures were issued issued in early 1990s defaulted reduces funding costs for
through public offerings. The on the interest payments. investors and for the financial
eight debentures still intermediaries by addressing
outstanding in 2014 had an issue Inefficiencies in the taxation the problem of asset‐liability
value of only $2 million. The system (transaction taxes and mismatches.
corporate bond market faces high rates) have reduced the
important constraints—but also attractiveness of financial Secondary market trading
a potential for growth in bank markets and encouraged tax should be encouraged by
and infrastructure bonds that evasion. The high transaction making trading of government
could spark its development. costs of bond issuance are bonds by primary dealers easier
There are only 3 corporate impediments. and allowing all government
bonds currently operating in the bonds to be accepted as
country ‐‐ IBBL Mudaraba It happens quite often that a collateral by Bangladesh bank.
Perpetual Bond, ACI Zero number of banks form
Coupon Bond and BRAC Bank syndicates for financing large Development of organized
subordinated Bond. projects of companies. futures market will help
Syndicated loans are cheap as promote market liquidity and
Constraints on the well as flexible and tailor‐made, efficient pricing in the
Development of the Bond which makes bonds less secondary market.
Market attractive to the corporate
issuers. Facilitating private issuance of
The bond market of Bangladesh corporate bonds through the
is very underdeveloped. A Finally, the Investment formation of a private
number of factors including Corporation of Bangladesh placement and clarification of
supply side constraints such as (ICB), which enjoys a good regulations of corporate bonds.
a lack of benchmark bonds, reputation in the market, could
inadequate regulatory system, play an important catalytic role Creating market awareness of
market distortions due to through underwriting the corporate bonds.
national savings scheme, and a developmental costs of
lack of interest from private quasi‐public market Insurance Market
companies in bond markets infrastructure.
because of high costs, default of The insurance law has gone
debentures in the past, and the Recommendations for through several amendments
general preference of investor Government and Corporate since 1984. The Insurance Act
in the equities rather than in Bonds 2010 has been enacted by
bonds are responsible for the updating the provisions in the
slow growth of the bond market The deepening of the Insurance Act, 1938. The
in Bangladesh. government bond market Insurance Development and
through creation of large Regulatory Authority Act 2010
Even if there is a full‐fledged benchmark issues, re‐openings has also been framed with a
legal/regulatory framework, and other techniques. The Debt view to synchronizing functions
there is need for a change in Management Office should be of the existing Insurance
some existing laws and strengthened so that the Department in the spirit of the
measures in the form of tighter Ministry of Finance (MOF) can newly‐enacted Insurance Act,
regulation, boosting the issue bonds at market rates. 2010 to maintain proper control
authority’s political and supervision of the sector
independence and access to Asset backed securitization of and protect the interests of
resources. Some of the debt provides a potentially policy holders and beneficiaries.
corporate debentures (bonds) important source of fund and Bangladesh remains behind its
Recommendations
(ii) Adopting investment Since 2007 share market was World’s Bank Investor
regulations as required by upward and sometimes the Protection Ranking for
Section 41 of the Insurance same was downward which Bangladesh 19th, Pakistan 25th,
Act 2010; indicate the fluctuating trend India 38th & Sri Lanka 70th.
and this trend is not considered
(iii) Initiating implementation of to be congenial for the Bangladesh was considered as
this white paper; and economy of Bangladesh. Again, one of the Goldman Sachs Next
for the last couple of months 11 countries for a high potential
(iv) Implementation of the the indices of share market of becoming the world’s largest
following regulations: (a) broke all the prior records in economies in the 21st century
management of IDRA Fund terms of both the increasing along with the BRICs (Brazil,
and (b) CEO appointment. and decreasing trends, while Russia, India and China).
these are not the sound signals
Impact of Capital Market of contributions what the Easy access to ownership of
on the Overall Economy analysts consider. Infrastructure Development
companies, high net worth
The internal force like capital Why Should the private banks and companies
market which can make the Foreigners Invest in through Capital Market.
economy healthy is weak in the Bangladesh Capital
perspective of this country so Requirements for NRBs &
Market?
far. Thus, Bangladesh is being Foreign Investors to
deprived of getting some extra 100% repatriation of capital, Invest in Bangladesh
benefits from this market due to dividend and investment profits.
the lack of sound position in A Foreign Currency (FC)
comparison with other Reinvestment of repatriable Account is needed for inward
neighboring, regional and some dividend treated as new and outward remittance.
other countries. investment. No tax on capital
gains A Non‐resident Investor’s Taka
In support of this statement a Account (NITA) is required for
recent comparative study 10% of all IPOs are reserved for converting foreign currency
regarding some aspects of this NRBs. into Taka.
market can be shown below:
Country’s Terminologies
Stock Indices Market Turnover % of GDP
Exchange Capitalization (US $)
(Millions US $)
Dhaka Stock Exchange (SE) 2,384.18 7,915.00 623 11.67
Colombo SE 2,442.11 7,042.00 579 26.28
Karachi SE 13,630.50 65,820.00 67 51.02
Mumbai SE 15,551.00 1,111,791.00 1,55,651 126.05
Philippines SE 3,501.20 93,951.00 17,305 80.35
Singapore SE 3,547.10 512,895.00 212,568 388.10
Hong Kong SE 23,184.90 2,229,101.00 921,992 1,176.00
London SE 6,360.10 3,945,829.00 6,532,036 166.02
A
bstract business and economic
decisions. It is the process of
The Authors are:
As the social and presenting financial data about
environmental disclosure a company’s financial health,
systems have been developed operating performance, and
over decades, the ethos of flow of fund. Financial reporting
corporate social and disseminates relevant
environmental responsibility information to investors,
came to the fore globally. What creditors and other users in
and how environment-sensitive making investment, credit and
companies (i.e. companies that other economic decisions
are more likely to do respectively. International
environmental damages) Accounting Standard Board
disclose such information (IASB) has issued IASs and
voluntarily affects the public, IFRSs in order to harmonize
especially in Bangladesh, where financial information of the
strong debatable issues companies and to ensure
1
Assistant Professor constantly raise as a result of relevant, reliable, consistent and
Department of Accounting & the rapid economic growth. comparable information for the
Information Systems, Corporate social and users.
Jagannath University environmental responsibility is
no longer an international Corporate social and
obligation but a domestic environmental reporting is
demand for Bangladesh (Ali et concerned with the disclosure
al., 2010). This study will of an entity’s social and
enhance our understanding of environmental related
arguably a very important issue information such as community
in the country’s economy. It will activities, environmental
try to expand the scope of impacts, employee welfares,
research on corporate social products and safety information
and environmental reporting to and consumer interests –
the context of a developing information that is of interest to
country like Bangladesh. wider stakeholders or
community groups in addition
Key Words to shareholders. Stakeholders
need to make decisions by
Corporate Social Responsibility drawing on social and
Professor
2
environmental reporting from
Department of Accounting & (CSR), Corporate Social and
Environmental Reporting various sources to improve their
Information Systems, decision making capacity. Here
Jagannath University (CSER), Corporate
Sustainability, Financial it is recognized that social and
Reporting, Global Reporting environmental reporting stems
Initiative (GRI). from many sources and that
different sources of social and
environmental reporting
Introduction contribute to stakeholder’s
decision making. Information
Financial reporting provides
contributes towards decision
information which is used by the
making through its display of
potential users in making
The broader objective of the study is to develop a ii) Characteristics in common with other
theoretical framework of corporate social and business and society concepts such
environmental reporting (CSER). The specific as business ethics, and
objectives are as follows:
iii) Dynamic phenomenon.
i. To give a thorough idea about corporate
social responsibility (CSR), dimensions of It should be noted that various definitions
CSR, and theories behind CSR practices. defined by scholars may be caused by
different perceptions and interpretations
of CSR identified with American and
European traditions. In other words, in
CSR is the commitment of business further explaining these differences,
Matten and Moon (2008) argued that
to contribute to sustainable such differences in definitions can be
economic development, working attributed to political systems, financial
with employees, their families, the systems, education and labour systems
as well as cultural ethos.. It is, however,
local community and society at large important to note that such differences
to improve their quality of life make it difficult to conduct cross-country
studies on CSR theory and practice in
(The World Business Council for understanding its implications and
Sustainable Development, 2008). outcomes (McWilliams, et al., 2006).
and society, hence CSR, (iii) Society expects ethical and firms should refrain from
consequently, is classified as a responsibility any wrong doing that could
means to an end of profit harm and go against society’s
yielding. Ethical responsibility is expectations beyond the legal
introduced since the legal requirements. Consequently,
(ii) Business needs legal responsibility does not cover firms are expected to contribute
responsibility every aspect of moral behaviour to social justice and transparent
(Masaka, 2008). In other words, accountability in their activities.
Legal responsibility requires “legal” solutions may not
firms to obey the standard rules necessary be “ethical” at the (iv) Society desires voluntary/
and regulations made by a same time. Thus, ethical philanthropic responsibility
higher authority in order to responsibility as part of
perform business activities as pro-activity in social Voluntary or philanthropic
demanded by the society, which responsibility implies how responsibility refers to social
implies that businesses are ethical values are perceived as a activities which are beyond the
expected to play by the rules of duty or task which is obligatory legal requirement and
the game. This is considered for the organisation in relation performed on a completely
another aspect of CSR in to the society (Garriga and voluntary basis to improve the
locating the business within its Melé, 2004). As aspirational quality of life and the welfare of
larger framework.. expectations, it concerns what the society (Kitson and
is right in the eyes of society Campbell, 1996). In other words,
assumptions regarding
congruence between their
values and organizational values
(Mobus, 2005).
Stakeholder Theory
Development of Corporate
Social and Environmental
Reporting
revenue firms that applied the information such that the the relation between taking society
GRI respectively. In addition, the advocates of CSER responsibility and market
GRI is highly praised in all over recommended that it be made performance of listed company –
take the Shanghai industrial
the world because of its compulsory (Moravcikova, k. et
enterprise as the example” (Master’s
comprehensiveness. Hopkins al, 2015 and Noronha et al., dissertation), Xinjiang University of
(2003) contends that the GRI 2012). So, corporate social and Finance, China.
includes some aspects of the environmental Reporting
popular social and (CSER) should ideally discharge Chua, F. and Rahman, A. (2011).
environmental guidelines, such the accountability of an “Institutional pressures and ethical
reckoning by business
as the ISO 14000 and the Global organization’s stakeholders. corporations”, Journal of Business
Sullivan Principles. Chu (2007) After all, legally specified Ethics, 98: 307-329.
claims that the creation of GRI disclosure requirements and
guidelines provides companies enforcement mechanisms will Clarkson, M. B. E. (1985). “A
with prestigious standards in enhance the quality of such stakeholder framework for
analyzing and evaluating corporate
preparing their sustainability reporting.
social performance”, Academy of
reports and the guidelines offer Management Review, 20 (1): 92-117.
stakeholders the opportunity to Bibliography
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reporting has been
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neutral and objective Chu, X. (2007). “Empirical study on
A
bstract NGO schools and Ebtedayee
The Authors are: madrasah are 37941, 23007,
This study investigates 2613, 16580, 29342, 7206
the relationship between respectively. Among the 116,689
number of primary and primary and equivalent
equivalent educational institutions, Barisal Division has
institutions and literacy rates. It 8,346 institutions in its 6
also investigates the districts, Chittagong division
relationship between students has 22,768 institutions in its 11
per teacher of primary and districts, Dhaka division has
equivalent institutions and 31,809 institutions in its 17
Literacy rate in Bangladesh. districts, Khulna division has
Furthermore it aims to 12,146 institutions in its 10
determine which primary districts, Rajshahi division has
institutions have a significant 14,927 institutions in its 8
influence on increasing literacy districts, Rangpur divison has
1
Chartered Accountant and 17,184 institution in its 8 districts
rate. District wise literacy rate,
an Associate Member of the and Sylhet division has 9,509
number of primary and
Institute of Chartered Accountants
equivalent educational institutions in its 4 districts.
of Bangladesh-ICAB
institutions and students per
teacher of primary and Literacy as the ability to
equivalent educational understand and use those
institutions’ data were collected written language forms required
from the Bangladesh Bureau of by society and/or valued by the
Statistics. This research found individual. Young readers can
that number of government construct meaning from a
primary school, number of variety of texts. They read to
kindergarten school, have a learn, to participate in
positive relationship with the communities of readers in
literacy rate and students per school and in everyday life, and
teacher of registered primary for enjoyment.( Mullis, Martin,
school and Ebtedayee Kennedy & Foy, 2007).
madrasah have negative Organisation for Economic
relationship with literacy rate. Co-Operation and Development
2
Assistant Professor (OECD) define literacy as
Department of Accounting Key Words understanding, using, and
and Information Systems reflecting on written texts, in
University of Dhaka order to achieve one’s goals, to
Literacy rate, primary schools,
students per teacher, develop one’s knowledge and
Bangladesh. potential, and to participate in
society.
Introduction A key recommendation of the
National Education Policy 2010
As per ‘District Statistics 2011’ of
is providing pre-primary
Bangladesh Bureau of Statistics,
education (PPE) for all children
the total number of government
and extending compulsory
primary schools, registered
education to grade 8 within the
primary schools, private primary
next decade. It also foresees
schools, Kindergarten schools,
common core curricula and minimum standards teacher of primary and equivalent
of provision for different types of primary and educational institutions and Literacy rate
secondary level institutions. It proposes that in Bangladesh considering previous
teachers’ recruitment, training, professional research in this area. This research had
development and remuneration should be key the objectives to:
elements of the strategy to improve quality of
education. A consolidated education law is 1. Examine the relationship between
proposed as the legal framework for education number of primary and equivalent
management in line with purposes of the policy educational institutions and Literacy
(GOB 2010). rate in Bangladesh.
Major source of literacy statistics at the national 2. Examine the relationship between
level is the decennial censuses conducted by the students per teacher of primary and
Bangladesh Bureau of Statistics. The definition of equivalent educational institutions
literacy has changed during last sixty years; and Literacy rate in Bangladesh
however, the mode of collecting information
remained the same. An individual able to read and Literature Review
write a simple letter in any language has been
Aistear (NCCA, 2009. p. 56) defines
literacy as being more than having the
A key recommendation of the ability to read and write. It is about
National Education Policy 2010 is helping children to communicate with
likely it is that the children skills. Young people from poor grains (ultra poor) and
would have a high literacy level, households are at a greater “sometimes in deficit” during
in other words, though illiteracy disadvantage in acquiring the year (poor). Fifty five
does not cause poverty, poverty foundation skills. Performance percent of children who drop
does cause illiteracy. in certain regions of the country, out come from “food deficit”
ecologically disadvantaged and households despite the fact that
According to the United geographically remote, lags only 45 percent of the
Nations Development behind the national average population fall in this category.
Programme UNDP (1999), a (Ahmed et.al. 2013). Lack of food security, a proxy
minimum of 4 to 6 years of for general poverty, clearly
education is required for Asadullah and Chaudhury affected enrolment and
increasing agricultural (2012) have suggested that continuation in school adversely
productivity. According to after completing primary (Hossain and Zeitlyn 2011).
UNESCO (2005), illiteracy is education a significant
most prevalent in developing proportion of students do not Research Methodology
countries.EFA Global achieve basic literacy and
Monitoring Report 2012 numeracy competencies. Data Collection
recognized the importance of According to Education Watch
foundation skills to enable Report 2008, students who Secondary data are utilized in
youth to prepare for the world completed primary education this study. Data were both
of work, develop their work cycle (grade five) achieved only quantitative and qualitative.
skills, and earn a decent living” 18.7 of the competencies out of This study gathers quantitative
Both primary and secondary 27 tested (Nath & Chowdhury, data in form of literacy rate,
schooling is the vehicle for 2009). number and students per
acquiring foundation skills. teacher of government primary
Deficiencies in the quality of Nearly two-thirds of children schools, registered primary
primary education, discussed never enrolled in primary school schools, private
earlier, are barriers to the come from households “always (non-registered) primary
development of the foundation in deficit” in respect of staple schools, kindergarten schools,
NGO schools, Ebtedayee
madrasah. On the other hand,
the qualitative data consists of
journal, and working paper.
Data Processing
H0: β1 = β2,3,n = 0
Ho: β1 ≥0
Ho: β1 = β2,3,n = 0
Findings and Results students per teacher of
Ebtedayee madrasah are 44.74,
Descriptive Analysis 592.83, 359.48, 40.83, 259.06,
Ha: β1 ≠β2,3,n≠0
458.47, 112.59, 54.81, 53.91,
Table 1 shows a summary of 43.59, 22.25, 30.16, 33.54
The similar formula with t test is
literacy rate, no. of primary and respectively.
used to define hypothesis in
equivalent educational
term of negative one-sided tail
institutions and student per The standard deviation of
hypothesis. The construction of
teacher of those institutions of literacy rate, no. of govt.
hypothesis test can be defined
64 Districts in Bangladesh. The primary school, no. of registered
as the following:
average of literacy rate, no. of primary school, no. of private
govt. primary school, no. of (non-registered) primary
Ho: β1,2,n ≥0
registered primary school, no. of school, no. of kindergarten
private (non-registered) school (pre schooling), no. of
Ha: β1,2,n< 0
primary school, no. of NGO school, no. of Ebtedayee
kindergarten school (pre madrasah, students per teacher
Before interpreting the
schooling), no. of NGO school, of govt. primary school,
regression analysis, we should
no. of Ebtedayee madrasah, students per teacher of
consider the level of
students per teacher of govt. registered primary school,
significance in interpreting the
primary school, students per students per teacher of private
developed hypothesis. This
teacher of registered primary (non-registered) primary
paper utilizes significant level
school, students per teacher of school, students per teacher of
5%. If the p value of variables
private (non-registered) kindergarten school (pre
indicates less than 0.05, it
primary school, students per schooling), students per teacher
means we reject Ho and accept
teacher of kindergarten school of NGO school, students per
Ha.
(pre schooling), students per teacher of Ebtedayee madrasah
teacher of NGO school, are 8.16, 265.65, 185.51, 34.48,
372.58, 376.78, 90.14, 14.99,
14.42, 14.19, 6.07, 11.24, District (12). The minimum District, registered primary
11.71respectively. students per teacher of govt. school is 866 in Dinajpur
primary school, registered District, private
The minimum of literacy rate are primary school, private (non-registered) primary school
in Cox’s Bazar district of (non-registered) primary is 208 in Chittagong District,
Bangladesh which is 30.2%. The school, kindergarten school (pre kindergarten school (pre
minimum no. of govt. primary schooling), NGO school, schooling) is 2684 in Dhaka
school among 64 districts in Ebtedayee madrasah are 33 District, NGO school is 1864 in
Bangladesh is 162 (Meherpur (Rangamati District),23 Mymensingh District,
District). In Munshiganj District, (Rangamati District), 20 Ebtedayee madrasah is 43 in
there are lower no. of registered (Rangamati District), 15 (In 6
Comilla District. The maximum
primary schools and the no. is Districts named Barguna
students per teacher of govt.
69. The minimum no. of private District, Jhalokati District,
primary school is 122 (Sylhet
(non-registered) primary Chandpur District, Lakshmipur
schools are in Feni District (4), District), registered primary
District, Rangamati District,
In Bandarban District, there are Sherpur District) 10 (Bandarban school is 102 (Cox’s Bazar
only 9 kindergarten schools (pre District), 13 (Barguna District) District), private
schooling) which is the lowest respectively. (non-registered) primary
among 64 districts in schoolis 86 (Noakhali District),
Bangladesh. In Jhalokati District, The maximum of literacy rate kindergarten school (pre
there are only 12 NGO schools are in Jhalokati District of schooling) is 45 (Bogra District),
which is the minimum. The Bangladesh which is 65.3%. The NGO school is 79 (Jhalakathi
minimum no. of Ebtedayee maximum no. of govt. primary District), Ebtedayee madrasah
madrasahs are in Bandarban school is 1665 in Chittagong is 84 (Narsingdi District).
Table 1: Summary of literacy rate, no. of primary and equivalent educational institutions and
student per teacher of those institutions (64 Districts of Bangladesh)
Observation
Maximum
Deviation
Minimum
Standard
Variable
Name
Mean
Relationship between number square are 0.618506982 and Table: 2.1 - Regression Statistics
of primary and equivalent 0.528743919 respectively. After
educational institutions and the ensuring free of multicolinearity Regression Statistics
students per teacher of those problem, the high value of R Multiple R 0.786452149
institutions with Literacy rate: square indicates that 62% the R Square 0.618506982
variance of estimator (number
Adjusted R Square 0.528743919
Table 2.1 exposes the regression and students per teacher of
estimation of literacy rate and Standard Error 5.604968853
government primary school,
the dependent variables Observations 64
registered primary school,
(number of primary and private primary school,
equivalent educational kindergarten school, NGO As the p value of F (Table: 2.2) is
institutions and the students per school and ebtedayee significant (0.0000), we can
teacher of those institutions). madrasah) succeeds to explain write down the regression
The model is moderate because the variance of literacy rate. estimation in the following way,
the R square and adjusted R using the coefficient in
Table-2.3:
ANOVA
Df SS MS F Significance F
Regression 12 2597.61388 216.4678 6.89044 0.000000338
Residual 51 1602.19947 31.41568
Total 63 4199.813
Table 3: One-sided (left side) tail Hypothesis Test of Number of there is no positive relationship
Primary and Equivalent Institutions and Student per teacher of between number of these
such Institutions institutions with literacy rate.
Variables Sign of regression P-value Description
coefficient This table also shows only the
students per teacher of
nGPS Positive 0.009563 Ho rejected
registered primary schools and
nRPS Negative 0.112269 Ho failed to be rejected students per teacher of
nPPS Negative 0.051317 Ho failed to be rejected Ebtedayee madrasah have
nKGS Positive 0.005366 Ho rejected significant p values to reject Ho.
It means that the students per
nNGOS Negative 0.00694 Ho rejected teacher of registered primary
nEM Positive 0.992759 Ho failed to be rejected schools and students per
sptGPS Negative 0.191197 Ho failed to be rejected teacher of Ebtedayee madrasah
have negative relationship with
sptRPS Negative 0.022799 Ho rejected
literacy rate. On the other hand,
sptPPS Positive 0.517665 Ho failed to be rejected the p value of other variables
sptKGS Negative 0.678217 Ho failed to be rejected (number of government
sptNGOS Positive 0.06852 Ho failed to be rejected primary schools, private primary
schools, kindergarten schools
sptEM Negative 0.00374 Ho rejected
and students per teacher of
NGO schools) failed to reject
Literacy rate = 62.187589 + kindergarten schools have Ho. Thus, it means that there is
0.013655 nGPS – 0.01023 nRPS positive relationship with no negative relationship
– 0.05357 nPPS + 0.008359 literacy rate. On the other hand, between numbers of these
nKGS – 0.00685 nNGOS + the p value of other variables institutions with literacy rate.
0.000116 nEM – 0.10716 sptGPS (number of registered primary
– 0.20187 sptRPS + 0.043556 schools, number of private Interpretation
sptPPS – 0.05548 sptKGS + primary schools, number of
0.14534 sptNGOS – 0.20898 NGO schools and number of Since the p value of F test was
sptEM…………………………………….(3) Ebtedayee madrasah) failed to significant (0.0000) we recall
reject Ho. Thus, it means that the equation 3 in Findings and
Hypothesis testing:
Conclusion
and NGO school had positive Policy 2010. Dhaka. Ministry of 17. United Nations Development
relationship with the literacy Education. Programme UNDP (1999).
rate whereas data of these two Pacific human development
9. Gujarati, Damodar N. (2004). report: Creating opportunities.
schools were not statistically Basic Econometrics, Fourth
significant. Edition. The McGraw-Hill 18. United Nations Educational,
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B
angladesh has made higher private investment and
remarkable progress over exports. The current account
recent years. With limited surplus expanded, and inflation
resources it has reduced its slowed.
poverty to half and grown its
economy by about six percent Continued high growth will
each year. This country is now require a rebound in
accredited as one of the 11 remittances and higher exports.
emerging economies. Productive jobs need to be
Bangladesh has made created in manufacturing and
substantial progress to become modern services for the large
middle income country by 2021, number of new entrants to the
although it has limitations and labour force and surplus farm
challenges. This country is in labor and to boost female
one of the poorest and the most workforce participation in
densely settled nations on earth. diverse sectors.
The Author is a It is subject to frequent natural
Chartered Accountant and disasters, floods and cyclones Economic Performance
an Associate Member of the which destroy productive
Institute of Chartered Accountants capacity and slow down Higher private investment,
of Bangladesh-ICAB growth. There is both exports, and wages
large-scale underemployment underpinned GDP growth
and low labour productivity. In acceleration to 7.1% in FY2016
the last few years the (ended 30 June 2016) from
government has been trying to 6.6% in the previous year
promote economic growth (Figure 3.15.1).
through the denationalization of
public enterprises and an easing Political calm, improved power
of controls. Over a longer supply, and higher growth in
period, the government has credit to the private sector were
initiated a number of the other major contributors to
anti-poverty programmes to growth. On the supply side,
reduce the unemployment growth was driven by
problem. This Briefing Paper expansion in industry at 11.1%, up
provides a background to these from 9.7% in FY2015, that mainly
policies and reviews the reflected a pickup in medium
Economic performance, and large-scale manufacturing
Economic prospects of aided by steady expansion in
Bangladesh since electricity generation, mining
independence. It also assesses and quarrying, and
the prospects for the economy construction. Supported by
and considers some policy industry expansion, services
changes currently advocated growth accelerated to 6.2%
for a more effective realization from 5.8% in FY2015. Growth in
of the economic potential of the agriculture slowed further,
country. Despite global however, to 2.8% from 3.3% as
headwinds that crimped input costs rose but farm prices
remittances, GDP recorded remained depressed. On the
robust growth in FY2016 on demand side, private
investment was the main source of growth as 5.9% in FY2016 from 6.4% in the previous
public investment was constrained by low year, largely in response to lower global
implementation capacity in line agencies. Total commodity prices, steady domestic
investment equaled 29.7% of GDP, up from 28.9%. supply, and a stable exchange rate
At $2.0 billion, foreign direct investment was still between the Bangladesh taka and the US
less than 1% of GDP. A decline in remittance dollar that translated into taka
inflows curtailed consumer spending but was appreciation against the currencies of
partly offset by higher wages in both the public most of Bangladesh’s trade partners.
and the private sector. Net exports contributed to Year-on-year inflation declined to 5.5% in
growth with higher volumes of exports and lower June 2016 from 6.3% a year earlier
imports, mainly reduced quantities of food grain (Figure 3.15.2).
and fertilizer. Average annual inflation eased to
Food inflation slowed sharply to 4.2%
from 6.3%, and nonfood inflation rose to
7.5% from 6.2%, stoked by increased
Private investment and consumer prices for natural gas and electricity and
higher wages. Driven by accelerating
lending pushed up private credit growth in private credit, expansion in the
growth to 16.8%, exceeding the 14.8% money supply rose to 16.3% in FY2016,
4_ _
0_ _
2_ _
0_ _ - 10 _ _
Jul Jan Jul Jan Jul Jan Jan Jul Jan Jul Dec
2014 2015 2016 2017 2015 2016
Sources: Bangladesh Bank 2017. Monthly Economic Trends. Sources: Bangladesh Bank 2017. Monthly Economic Indicators:
February. http://www.bbs.gov.bd Monthly Update. February. http://www.bbs.gov.bd
weighted average lending rate Spending was lower than up from 4.1% in FY2015. Import
slipped to 10.3% from 11.7% in budgeted as the payments rose by 5.5% in
the same period. The deposit implementation of the annual FY2016, nearly double the 3.0%
rate also declined, to 5.4% from development program growth in FY2015, on higher
6.7%, narrowing banks’ interest continued to underperform and imports of petroleum products,
rate spread marginally by 0.1 because current spending on yarn and other intermediate
percentage points to 4.9. The subsidies was lower than goods for the garment industry,
ratio of nonperforming loans anticipated, as were interest capital machinery, and edible
(NPLs) to all bank loans rose to payments. As a share of GDP, oil. Even with growth in
10.1% at the end of June 2016 revenue rose to 9.9% from 9.6% overseas employment booming
from 9.7% a year earlier. High a year earlier, while spending at 48.2%, remittances from
NPLs remain a concern, declined to 13.0% from 13.5%, workers abroad fell by 2.5% to
especially with those at curtailing the budget deficit to $14.9 billion in FY2016. Lower
state-owned banks standing at 3.1% of GDP (Figure 3.15.5). global oil prices have forced
25.7%. Tax collection by the budget consolidation in the Gulf
National Board of Revenue Domestic financing, mostly economies that host most
grew by 14.6% in FY2016 but fell from nonbank sources, met 90% Bangladeshi migrant workers,
short of the ambitious budget of the deficit. Exports grew by undermining wages and job
target. Nontax revenues also 8.9% in FY2016, up from 3.1% a security. Weaker currencies,
missed the target, mainly year earlier, spurred by a shift to higher living costs, and new
because of lower contributions garments with higher value taxes further squeeze the
from Bangladesh added, and enabled by political earnings left for remittance. The
Telecommunication Regulatory stability. Garment exports, current account surplus
Commission profits and the accounting for over 80% of nonetheless rose to $3.7 billion
Bangladesh Bank dividend. exports, grew briskly at 10.2%, in FY2016, equal to 1.7% of GDP,
from $2.9 billion in FY2015, has, combined with the higher Economic Prospects
aided by lower deficits in the domestic inflation, brought
trade, services, and primary trend appreciation in real Forecasts for FY2017 and
income accounts (Figure 3.15.6). effective exchange rate, up by FY2018 rest on several
5.8% in FY2016 (Figure 3.15.8). assumptions: Political calm will
The higher current account continue and thus support
surplus in FY2016 helped keep The Dhaka Stock Exchange consumer and investor
the taka broadly stable against broad price index stood at confidence. The central bank
the US dollar in nominal terms, 4,507.6 in June 2016, registering will be generally mindful about
depreciating by only 0.8% from a marginal decline of 1.6% from a keeping inflation in check while
a year earlier. Central bank year earlier (Figure 3.15.9). allowing ample private credit
exchange rate policy aims to growth to support economic
build reserves and avoid The market price–earnings ratio activity. Tax authorities will
excessive volatility in the declined to 14.6 from 15.9 in the focus attention on
nominal market rate, which same period, while market administrative reform to boost
protects garment firms whose capitalization fell by 1.9%, with collections and expand the tax
contract pricing is denominated only four new companies listed base, and foreign financing will
in foreign currencies. in FY2016. Prices then moved be available as expected for
Bangladesh has nevertheless higher in the first half of FY2017 planned public investment. The
suffered some loss in export and appear to be broadly in line government will further raise
competitiveness, especially for with the upward trends in other electricity and natural gas prices
minor exports, as US dollar markets, both emerging and to cut subsidies and keep
strength against the currencies industrial. current spending in check.
of Bangladesh’s trade partners Finally, the weather will be
15 _ _ % of GDP
20 _ _
10 _ _
10 _ _
5_ _
0_ _
0_ _
Q1 Q3 Q1 Q3 -10 _ _
2015 2016 2012 2013 2014 2015 2016
Source: Bangladesh Bank. 2017. Major Economic Indicators: Note: Years are fiscal years ending on 30 June of that year.
Monthly Update. February. http://www.bb.org.bd Source: Asian Development Outlook database.
government continues to align in stock exchange prices, it global trade flows and that the
prices with production costs, tightened monitoring to ensure garment industry continues to
and the further implementation that banks abided by statutory improve worker safety and
of salary hikes introduced in limits on market exposure to welfare. Import payments rose
FY2016 for government staff’ avoid a repetition of the 2010 by 8.2% in July–December 2016
and private educational market run-up and collapse. with higher imports of wheat,
institutions to adjust for inflation Exports grew by 4.4% in the petroleum products, capital
and improve living standards. first 7 months of FY2017, down goods, and iron, steel, and other
Inflation is expected to edge up from 8.3% in the year-earlier base metals, though imports of
further to 6.3% in FY2018 as period. Growth in readymade crude oil, fertilizer, and raw
global fuel prices continue to garment exports was 4.1%, cotton declined. Imports are
rise and a new value-added tax down from 9.1%. Export growth expected to grow by 9.0% in
comes into effect at the start of is expected to strengthen in the FY2017 and 10.0% in FY2018 on
the year. The monetary policy second half of FY2017 on higher broadly stable domestic
statement for the second half of projected growth in the demand and some pickup in
FY2017 (January–June 2017) global prices for commodities,
industrial economies, but
supports growth while especially oil. Remittance
exports for the full year are
mitigating inflation risks. The inflows dipped by 17.6% to $6.2
expected to slow to 6.0% from
central bank kept policy rates billion in the first half of FY2017
8.9% in FY2016 (Figure 3.15.12).
unchanged at 6.75% for the as economic tightening
repo rate and 4.75% for reverse continued in Gulf economies
Export growth in FY2018 is
repo because inflation and newly constrained inflows
expectations remain elevated, projected to edge up to 7.0% on
steady external demand and from the US and the United
including for global commodity Kingdom appeared to reflect
prices. It kept the July 2016 improvement in the Bangladesh
political uncertainties there
monetary policy statement market share. Export forecasts
(Figure 3.15.13).
growth targets to June 2017 at assume that policy uncertainty
15.5% for broad money and in the US, United Kingdom, and Despite the 23.5% rise in jobs
16.5% for private credit. euro area is resolved in ways abroad for Bangladeshi workers
Considering current buoyancy not inimical to expansion in in the first 6 months of FY2017,
remittances are expected to several items. The collection of The authorities are expected to
sink further by 7.0% in FY2017 direct taxes could also fall short cut retail fuel prices in FY2017
and 4.0% in FY2018. Falling of its target in light of sluggish but leave enough cushions for
remittances and a larger trade trends in income tax receipts the Bangladesh Petroleum
deficit are expected to push the from commercial banks. Public Corporation to earn an
FY2017 current account into a spending was slated to grow by operating profit and recoup
deficit equal to 1.0% of GDP 28.7% to equal 17.4% of GDP in past losses. Since the beginning
(Figure 3.15.14). FY2017, up from 13.0% the year of low global oil prices in 2014,
before. Current spending is the government has cut prices
The deficit is projected to shrink expected to rise to 9.6% of GDP only once, in FY2016, as policy
to 0.7% in FY2018. Capital and from 7.8% in FY2016, and the focused on eliminating large
financial inflows will likely be annual development program subsidies. Debt indicators are
sufficient to preclude any loss of to 5.6% from 3.9% in FY2016. generally favorable. Public debt
exchange reserves. The taka will Achieving the planned large declined to the equivalent of
likely depreciate marginally in increases will demand 27.2% of GDP in FY2016 from
nominal terms in FY2017 on the concerted efforts. The fiscal 27.4% in FY2015 (Figure 3.15.15).
larger trade deficit and the deficit is expected to be
continued decline in contained within 5.0% of GDP as External debt declined to 11.7%
remittances. The FY2017 planned, three-fifths of it of GDP from 12.2%, with a debt
budget assumes 36.8% growth financed by domestic sources, service ratio of only 2.0% thanks
in revenue, attained by raising mostly nonbanks. Implementing to the government’s preference
the ratio of revenue to GDP to the new value-added tax in for concessional external
12.4% from 9.9% in the previous FY2018 will be crucial to borrowing. Domestic debt rose
year. Achieving this high target advancing tax reform and to 15.5% of GDP in FY2016 from
will be a challenge, considering financing higher infrastructure 15.2% in FY2015 as the
that collection in the first 4 spending to foster growth. As a government met shortfalls in
months grew by only 17.1%. net oil importer, Bangladesh revenue collection largely by
Revenue from customs duties continues to enjoy windfall selling national savings
will be lower with rate cuts on gains from low global oil prices. certificates to the public.
Interest payments were 13.8% of to be created for the 1.4 million measures to diversify the
budget expenditure. These workers who join the workforce manufacturing base and
projections depend on the each year. Female workforce identify new sources of growth
following: Revenues need to rise participation is still low despite and jobs. In addition to
quickly if the government’s sizeable employment in the readymade garments, which
sizeable infrastructure garment industry, minimizing supply 40% of manufacturing
development program is to be women’s contribution to value added and 60% of
implemented. The exchange economic development. manufacturing jobs, the
rate should be managed flexibly Barriers should be removed government is focusing its
too set lower remittance inflows from female participation in efforts on products with high
and encourage exports. organised economic activities in labor intensity and export
Institutional and regulatory diverse sectors. The focus potential such as footwear and
reform needs to be accelerated, should be on increasing returns leather products, jute and other
and infrastructure deficits on education by enhancing the agro-processed goods,
amended, to improve the quality and relevance of electrical and electronic goods,
investment climate. Political education. light engineering, information
stability must be maintained technology services,
and security strengthened to The government seeks to tackle medium-sized shipbuilding,
boost investor confidence. the employment challenge by ceramics, and pharmaceuticals.
promoting high growth led by It is extending the duty-free
Policy Challenge and manufacturing and by import facility for raw materials
Promoting Productive accelerating regional and intermediate inputs used in
development and the rural agro-processing and
jobs transformation. Under the shipbuilding, as well as
Seventh Five-Year Plan, revamping the duty-drawback
Bangladesh faces an FY2016–FY2020, the system to guarantee to
employment challenge. government is implementing exporting firms world prices for
Productive, well-paid jobs need
imported inputs. The central investment, integrating into in agriculture, fisheries, and
bank is expanding its global value chains, and livestock. It emphasizes on the
refinancing window to support diversifying exports to create development of agriculture
labor-intensive small and jobs. To attract private capital, value chains through private
medium-sized enterprises. The these zones will provide investment by encouraging the
government is reviewing import one-stop services to set up commercialization of
tariffs to mitigate any bias factories to produce garments agriculture, promoting a shift to
against exports, aiming to and other goods and to simplify high-value crops, and
weaken effective protection for compliance with regulatory streamlining market access. The
domestic manufacturers and requirements, and they will be government is developing rural
thereby encourage them to able to source raw materials areas by upgrading rural roads
enhance their productivity and readily from domestic supply to reduce user costs, facilitating
competiveness. It has stepped chains. Several of these zones connectivity with railways and
up efforts to gain greater access are attracting domestic and
to untraditional export markets foreign investment interest and waterways to promote
such as the People’s Republic of are expected to become multimodal transport systems
China, India, Japan, the Republic operational in the next couple of and improve logistics, and
of Korea, and Turkey. A years. Under the Seventh developing growth centers. It is
government program of Five-Year Plan, the government allocating more resources to
investment in skills for set a high priority on job transport infrastructure and
employment aims to make the creation in rural areas through power supply improvement in
skills development system more skills training and strengthening the country’s lagging regions in
market oriented and so improve producer and marketer the northwest and south, with a
employability and productivity. cooperatives. The government view to promoting
The government has decided to is strengthening information manufacturing and small and
allow public and private entities and communication technology medium-sized enterprises
alike to set up special economic infrastructure in rural areas to through tax incentives,
zones toward catalyzing private disseminate modern techniques low-interest loans, and special
Reference
1. https://www.adb.org/
countries/bangladesh/
economic zones. A government property, getting credit, and economy
priority is to complete the paying taxes—rank Bangladesh
2. https://www.adb.org/
Dhaka–Chittagong Expressway, in the bottom 10% of the publications/asian-developmen
which will substantially shorten countries covered (Figure t-outlook-2017-update
travel time between the capital 3.15.16).
3. http://www.assignmentpoint.com/
and the main port city. The
business/economics/economy-
government merged the Board Conclusion development-in-bangladesh.ht
of Investment and the ml
Privatization Commission into As a priority initiative, the
Bangladesh Investment 4. http://www.worldbank.org/en/
the new Bangladesh Investment
Development Authority is news/feature/2016/04/30/ban
Development Authority. In gladesh-development-update-b
addition to encouraging coordinating agencies’ efforts angladesh-economy-requires-fo
domestic and foreign private to reduce the costs of doing cus-on-sustainable-and-inclusiv
investment, it assists in setting business in Bangladesh. To e-growth-moving-forward
up industries and provides other improve access to electricity,
5. https://en.wikipedia.org/wiki/
services to investors. To attract the government is investing
Economy_of_Bangladesh
investment, foster rapid heavily in power generation. It is
manufacturing-led growth, and obvious that without private 6. https://www.odi.org/sites/
sector investment jobs and odi.org.uk/files/odi-assets/publi
create jobs, Bangladesh needs
cations-opinion-files/6760.pdf
to reduce the cost of doing economic opportunities for
business. Most cost indicators thousands of people is not 7. http://www.un.org/en/
surveyed by the World possible. Government should development/desa/policy/wes
create favourable environment p/wesp_current/2016wesp_ch1
Bank—for enforcing contracts,
and remove obstacles to ensure _en.pdf
getting electricity, registering
H M Ashraf-uz-Zaman FCA
I
ntroduction Some interesting findings
include- total world economy is
Economy of a country expected to be more than
includes each individual and double in size by 2050, China
every organizational entity. will continue its leadership, India
Hence, a slight positive or and USA who are currently in
negative change in overall second and third position are
economy can compel each and projected to exchange their
everyone face its position and three fastest
consequences. Though the growing economy will be India,
change is not always of same Vietnam and Bangladesh.
direction for all the parties that
comprises the economy. So, Though mere projection of
maintaining balance and future cannot guarantee
development of such complexly anything but still systematic
inter related system is beyond projection is must to prepare a
The Author is a challenging. In Bangladesh, roadmap. And as there is
Chartered Accountant and where the macroeconomic something positive about our
a Fellow Member of the factors are extremely vulnerable country, it is always justified to
Institute of Chartered Accountants the situation is even more have hope that will give us
of Bangladesh-ICAB impulsive. courage to face the uncertain
future. The focus of this
But if we can go through the write-up will be the journey of
near past of our economy, the our economy since liberation
journey will surely persuade for and challenges or opportunities
a brighter and better future. that our economy currently has
Despite of apt infrastructure, on the basis of PWC’s report.
proper planning and sufficient
investment, achieved success in Major Findings of PWC
poverty reduction and Report
sustained economic growth is
extremely creditable. An Major findings of the research
outcome of this consistence are as follows-
performance is that the world is
also viewing our economy as an The world economy is
inspiring one for other projected to be more than
developing economy. double in size by 2050,
assuming broadly growth
“The World in 2050?”- was the friendly policies and no
title of research report of PwC major global
(Price water house Coopers), a civilization-threatening
renowned research catastrophes.
organization based on UK. This
Emerging markets could
report published in February,
grow around twice as fast
2017 and attained a lot of hype
as advanced economies on
around the world. The prime
average
reason of attention towards this
is its expected change in China is expected to be the
dimension of world economy. largest economy in the
world, accounting for around 20% of world Vietnam, India and Bangladesh going
GDP in 2050, with India in second place and to be three of the world’s fastest
USA in third place (based on GDP at PPPs). growing economies over this period.
The fastest growing large EU
Projected changes of three leading economy economy will be Poland. Breakdown
of components of average real GDP
Year: 2016 Year: 2050 growth (2016-2050) of three fastest
% of World % of World growing economy
Country
Position Economy Position Economy
Share Share Advanced economies will continue to
China 1 18 1 20 have higher average incomes, but
USA 2 16 3 12 emerging economies are also
expected to make good progress
India 3 7 2 15
towards closing this gap by 2050.
Sources: IMF for 2016 estimate, PwC projections This emerging economies are thus
for 2050 considered to have long-term
economic potential based on their
analysis.
“The World in 2050?”- was the To realize this growth prospective,
title of research report of PwC emerging economies have to ensure
(Price water house Coopers), stability of macroeconomic factors,
Challenges
Moreover, Home country cannot be judged only by its schools in the last ten years.
bias is projected as a threat GDP growth. In that According to the World
these days. Investors consideration Bangladesh is Economic Forum’s Global
around the world are definitely trying hard to Gender Gap Report 2016,
planning to invest more to improve its social Bangladesh has improved
emerging markets to avoid development indicators. All its overall ranking in Global
such risks. Hence, we have inclusive planning of the Gender Gap Index from 91 in
to recognize these aspects Government seemed to be 2006 to 72 in 2016. These
and develop in a way to successful in case of improvements are
realize these opportunities. education and health highlighted more because
sector. Bangladesh has succeeded
Bangladesh, Egypt, India, to achieve these by using
Pakistan, Philippines, The immunization rate leaser portion of its GDP in
Nigeria, and South Africa increased from 1% in the comparison to other
are projected by the UN to early 1980s to over 70% countries with similar
see a small rise in the share within 10 years. This prevailing conditions.
of those aged 15-64 of the development described by
total population, by an the United Nations The nation appears to be
average of 3% points. This Children’s Fund (UNICEF) successful in gaining
can obviously seemed as an as a near miracle. confidence and optimism of
opportunity if our economy Bangladesh Bureau of rest of the world. According
can utilize them wisely and Educational Information to International Monetary
effectively. and Statistics (BANBEIS) Fund (IMF) the real GDP
showed a 10% increase in growth in 2016 was 7.1
A country’s overall the net enrollment rate for percent. Though World
economic development secondary and primary Bank is expecting the GDP
SOURCE
Reference 5. “World Bank for VAT law The Asian Age
implementation,” Dhaka 3rd November 2017
Myanmar Pushouts
Fiasco in Bangladesh
Aleya Ferdous
I
ntroduction asylum-seekers. Globally in
2017, over 40.3 million people
“No one leaves home were internally displaced as a
unless home is the mouth of a result of conflict. A 22.5 million
shark.” were refugees and 2.8 million
are asylum-seekers. The global
Every year millions of people refugee population contains 51%
across the globe are forced to population who are children
leave their homes and seek under 18. This is quite alarming
refuge mostly to the for us, as a huge quantum of
neighboring countries from future population gets
conflicts, violence, human rights demotivated at the start of life.
violations, maltreatment and
natural disasters interalia. The The humanitarian crisis caused
number of forcibly displaced by increasing violence in
persons has since been Myanmar’s Rakhine State is
The Author is a continuing to rise. The causing endless sufferings on a
Deputy Secretary of the consequences have warranted catastrophic scale. Over
Institute of Chartered Accountants for increased humanitarian 621,000 Rohingya ethnicity
of Bangladesh-ICAB assistance worldwide. Up to children, women and men have
84% of the forcibly displaced been forced to flee to
persons find refuge among Bangladesh to escape violence
people who already struggle in Myanmar since 25th August
with poverty in low- and 2017. Thousands more
middle-income countries. They reportedly remain stranded and
are sheltered amidst those who in peril in Myanmar without the
already lead a life full of misery means to cross the border into
and sufferings. Their survival Bangladesh. Refugees
depends on lives’ amenities and traumatized in Myanmar are
financial assistance. The arriving in Bangladesh. That are
availability of assistance mainly comprising of women
provided by communities and children. Many of them have
wherein they are sheltered . The arrived with injuries caused by
Number of people who fled to gunshots, fire and landmines.
another country in phobia and Rohingya Refugee crisis has
fear of persecution on specific become a burning issue in the
or apprehensive ground, and present world perspective.
who lacks protection from their
country is a talked about & Background
persistent global concern.
The Rohingyas has been facing
Over 65.6 million people identity crisis for long. The
worldwide are in need of Bengali-speaking Muslims and
protection and assistance as a Buddhists in Rakhine state have
consequence of forced existed for decades. But the
displacement. Forcibly most significant inflection point
displaced populations include came in 1982 when Burma’s
refugees, internally displaced junta passed a law that
persons (IDPs) and identified eight ethnicities
entitled to citizenship. The Rohingya were not citizenship if they registered themselves
kept among them, not withstanding that they had as Bengali not Rohingya. Although many
enjoyed equal rights like other Burmese since Muslims in Rakhine state were previously
Burma became independent from British rule in indifferent about how they were labeled,
1948. Almost overnight, they were stripped of the years of oppression, combined with
their citizenship. The Rohingya people who are the tyranny they got submerged in ,
also historically termed as Arakanese Indians are a made the offer inedible. The Rohingyas
stateless Indo-Aryan people from Myanmar’, are facing many restrictions like no travel
Rakhine State,. There has been an estimated 1 without authorization, not marrying
million Rohingya living in Myanmar before the without permission.etc. They were more
2016–17 crisis. On 22 Oct 2017, the UN reported over prohibited from working outside
that an estimated 603,000 refugees from their village; due to movement restriction
inflicted on them sufficient access to
livelihood opportunities, medical care
and education. Refugees arriving in
Bangladesh report about appalling
The humanitarian crisis caused by violations of human rights and other
increasing violence in Myanmar’s abuses in Myanmar. According to these
harrowing accounts, villages have been
Rakhine State is causing endless burnt down, parents or relatives killed in
front of traumatized children, and women
sufferings on a catastrophic scale. and girls raped or brutalized. UNHCR is
Over 621,000 Rohingya ethnicity already working to register new arrivals
and provide comprehensive protection
children, women and men have services.
been forced to flee to Bangladesh Refugee Influx in Bangladesh
to escape violence in Myanmar
since 25th August 2017. The influx of Rohingya refugees from
northern parts of Myanmar’s Rakhine
State into Bangladesh restarted following
attacks at Myanmar Border Guard Police
posts on 25 August 2017. As of 30
Rakhine, had crossed the border into Bangladesh
November 2017, the Inter-Sector
since August 25, 2017. This figure increased to
Coordination Group (ISCG) reported that
624,000, and over 625,000 respectably by
646,0001 Rohingya refugees have
November 2, 2017 and by December 6, 2017. This
already entered into Bangladesh since
refugees are a mix of majority Muslims and a
the attacks. According to ISCG’s rapid
minority is Hindu.
needs assessment, 58 per cent of new
arrivals are children and including a high
In the years since then, the Rohingya were
number of pregnant women (3 per cent).
persecuted, steadily lost their rights, and were the
With the new influx, the current total
victims of violence. The worst of this violence
Rohingya people fled from Myanmar into
erupted in 2012 following the rape of a Buddhist
Bangladesh, coupled with the affected
woman allegedly by Muslim man. That prompted
population in the communities, has
massive religious violence against the Rohingya,
reached a staggering number of 1.2
forcing 140,000 of them into Camps for Internally
million. The Rohingya population in Cox's
Displaced People. International pressure emerged
Bazar is highly vulnerable, having fled
and sustained on the military government finally
away from conflict and inhuman and
agreeing to grant the Rohingya a reduced form of
1. SIM card: the Rohingyas are 5. Criminal activities: The local 4. Earlier the local people got
taking SIM cards illegally people may use them or medical facility and the
whereas the force them to do crime on children got stipends which
Telecommunication their behalf; have been now stopped
department has strictly due to investing on the
mentioned that Rohingya 6. Immoral activities: Long refugees;
will not get any SIM card; term refugee crisis will
socialize and increase the 5. The movement of the local
2. Drug: For their lively hood immoral activities like theft, people has been restricted
even for minimum fraudulence, and smuggling. and they have to carry the
exchange of goods they ID card;
may deal with drugs; Depression in the Local People
6. Theft, fraudulence will
3. Spreading throughout the 1. The local people initially increase;
country: They may spread welcomed the refugees but
gradually they find the 7. The Local people are afraid
that the refugee crisis may
prolong and their sufferings
will continue as they have to
share the resource with
them;
Economic Impact
repatriated soon. The budget long run when the international Environmental Impact
allocation of FY2017-18 may aid will be lessen the pressure Environmental impact will also
even fall short as it was finalised will be on us and cost of living occur as a consequences of
without considering the latest will increase. Most importantly huge waste, soil erosion,
Rohingya influx, and the tourism expenditures in Cox’s deforestation, biodiversity,
government will continue to Bazaar will be greatly reduced ecosystem, use of
spend a lot of money to feed over the next 12 months non-disposable materials and
and shelter the refugees. If the certainly damaging the hotel natural calamity.
crisis is not addressed quickly. and restaurant business.
In long term its affect will be Especially Saint Martin will Humanitarian Support to
huge as the aid of the affect badly on this issue. The the Rohingyas
international bodies will be local businessmen and hotel
lessen as time passes. And the owners are very much Bangladesh initially welcomed
burden will be on us. The frustrated and they are worried the refugees warmly and people
detrimental effects are that if the refugee crisis stays from all corner of Bangladesh
expected to include local food long then there will be a long echoed their voice with the
and transport price hikes, food term impact on our tourism government to support the
grain shortages, and reduced sector. As the Rohingyas work helpless refugees.
tourism, along with increased at a very low rate of daily wages
pressure on natural resources it will affect the local people’s The Ministry of Disaster
and various social issues. In the employment opportunity. Management and Relief of the
Government of Bangladesh and displacement is not a temporary thousand for the next few years.
several national and issue. Sometimes it lasts long
international organisations have which will be a crisis for the local Diplomatic Challenges
been providing humanitarian government. Keeping the law and Initiatives to
support to the refugees. and order system in order is also Overcome the
According to UN website another big challenge. Finding Challenges
(UNOCHA) total incoming fund durable solutions for the
that came to support the forcibly displaced is a challenge. The Rohingya refugee crisis has
Rohingyas was equivalent to Voluntary repatriation to their exposed Bangladesh's
USD 143.19 million of 10 home countries is the preferred diplomatic weaknesses. No
November 2017 which is 33% of long-term outcome for permanent member of the
that fund appealed for refugees; but the lack of United Nations Security Council
Challenges We will face various political solutions to conflicts has strongly backed Dhaka to
challenges to address the prevents many from doing so. resolve the refugee problem.
Rohingya issues. Getting the China renders its support on
international aid in long term is a How to manage the long term Myanmar, India being our
big challenge. As a result the problem is unclear. Over time neighboring friend keeps aside
burden will be on the many will find their way to other Myanmar. Japan, another
government of Bangladesh. locations in Bangladesh. important Asian power, also
Getting loan from international However, one must assume that supported Myanmar. Both
agencies is yet another in the Cox’s Bazaar area there Beijing and New Delhi are
challenge. This type of forced will be several hundred developing ports, including a
deep-sea port, and Special Un security Council calls on 3. Take immediate steps to
Economic Zones (SEZ) in Myanmar to end excessive stop this brutal violence and
Rakhine. Bangladesh, on the military force and inter stem out flow of refugees;
other hand, has not utilised its communal violence in
geography strategically. In Rakhine state; 4. Pursue Strong diplomatic
recent years, not only Myanmar, movement for the returning
even the small island-country, Kofi Annan commission of the Rohingyas to
Sri Lanka has developed calls on Myanmar to resolve Myanmar and their rights;
sophisticated maritime Rohingya crisis in Rakhine;
infrastructures including a 5. Guarantee and uphold
deep-sea port. Our concern is US has declared of political freedoms and the
what Dhaka is doing and how withdrawal of Military freedom of movement for
diplomatically it is convincing assistance in Rakhine; the Rohingya people;
the international communities
to overcome this challenge. In summary Bangladesh faces 6. Ensure support with the
serious challenges in managing help of International
The five point proposal by our the influx of Rohingya. With agencies to the victims;
Prime Minister Sheikh Hasina: prudent diplomatic ability we
should handle the issue. 7. protect and support
1. Myanmar must displaced people during
unconditionally stop the Options for Overcoming the their displacement and
violence and the practice of Fiasco when returning to their
ethnic cleansing in the homes;
Rakhine State immediately The Rohingya crisis has given
and forever; rise to multi-dimensional 8. Ensure the security
problem for Bangladesh. Given measures in the camp areas;
2. Secretary General of the the present budgetary
9. Security measures in the
United Nation as should framework for FY 2017-18, there
Rohingya camps and
immediately send a fact is not much room for additional
adjacent areas, particularly
finding mission to Myanmar; public spending. The extent of
in the Southern of the
government expenditure for the
country have to best
3. All civilians irrespective of Rohingy as will depend on the
lengthened. The law
religion and ethnicity must length of stay of the Rohingyas.
enforcing agencies have to
be protected in Myanmar. In addition to timely measures
be vigilant to stop illegal
For that safe zones could be taken already by govt. and
activities, drug trade,
created inside Myanmar international bodies there can
human trafficking and
under UN supervision; be more means to be
terrorism;
addressed. These may include
4. Ensure sustainable return of but not limited to the following:
10. Use the active people in
all forcibly displaced
constructive way so that
Rohingya in Bangladesh to 1. Invite International
they become less
their homes in Myanmar; observers to visit at a
dependent on aid;
regular basis;
5. The recommendations of 11. The Government will best
Kofi Annan Commission 2. Build camps within deal with this by allowing
Report must be Myanmar for the returning the Rohingya to go to
immediately implanted of refugees to facilitate their school and to work. This will
unconditionally and in its rehabilitation with UN ease our problem and add
entirety. financing and supervision; some value at least;
12. Take short, medium and by international and regional 6. Implications of the Rohingya
long term study and plan to countries and communities. In Crisis for Bangladesh: Centre
overcome the situation; our drive into MIC mode of for Policy Dialogue, 11
development this problem is a November 2017
13. If the crisis is not resolved huge burden on Bangladesh.
soon then a huge amount of We find the govt. has reached 7. https://www.un.org/press/
money, food and natural MoU to end the fiasco. Let en/2017/sc13055.doc.htm
resources will need to be pressure on Military Jaunta
spent to support the needs to be intensified along 8. http://www.bscn.nl/
Rohingya. Facing a mass with efforts and action to sanctions-consulting/sanctions
influx of Rohingyas from earliest resolution of this crisis. -list-countries
Myanmar, Bangladesh Diplomatic pursuits have no
should call on the better alternatives. And
international community to Bangladesh should move ahead
intervene and put pressure taking and sitting together to
on Myanmar to address the end the heinous act of Myanmar
exodus; military Jaunta. But above
everything we aspoire to
14. Bangladesh should survive this challenge with
continue to pursue the honour and dignity. For the sake
diplomacy very prudently. of mankind and humanity we
Especially with the regional should all come forward, raise
partners like BIMSTEC, our voice against all kinds of Government
BCIM who can put pressure transgression and uphold the
on Myanmar; slogan:
estimates the
number of
15. To address the issue extra “With courage let us all combine expatriate
regional platforms like for a mission.”
ASIAN can play a role.
workers will
References cross 1 million
Conclusion including 1,
1. IDMC 2016 Global Overview
There are many other Report 13,009 women
challenges the international during this year.
community is facing today 2. UNHCR 2016 Global Trends
emanating from the refugee Report
influx. We talk of regional
conflicts, economic and social 3. UNHCR Web Site
SOURCE
crises, political instability, The Asian Age
abuses of human rights, racism, 4. Bangladesh: Humanitarian 13 December 2017
th
Productivity in RMG
Continuous Improvement is Key to Achieve
USD 50 Billion Landmark
Mohammad Zahid Hossain FCA
I
mprove constantly and of workers increased by 219%
“ forever the system of during last 5 years, cost of gas
production and service, and electricity also increased in
to improve quality and many folds and other costs also
productivity, and thus increased in line with yearly
constantly decrease costs”. inflation rate. RMG sector is now
compelled to comply with the
William Edwards Deming requirement of Accord and
(October 14, 1900 – December Alliance, the two western
20, 1993) was an American buyers' platforms working to
statistician, and consultant, improve workplace safety. Such
known for his work in the field compliance requirement is also
of Quality management triggering additional costs for
this industry. Considering the
Today’s largest foreign currency strong footprint of Bangladesh
The Author is a generating industry of in global RMG industry,
Chartered Accountant and Bangladesh started its journey Government is also planning to
Fellow Member of the in 1978 by exporting 10,000 reduce cash incentive for RMG
Institute of Chartered Accountants shirts. Only 9 export-oriented export. This industry is currently
of Bangladesh-ICAB
garment manufacturing units under massive pressure to
were operating in Bangladesh at produce quality product at
that time. Jute was the main minimum cost. Despite
export product for then continuous plea of the
Bangladesh’s small economy. exporters to revisit the price of
With the soft start of few the products, buyers are
visionary entrepreneurs’, today suggesting exporters to
RMG proved itself as the most improve the productivity. So, it’s
critical lifeline for the economy inevitable for RMG
of Bangladesh. producers/exporters to ensure
efficiency at every step in
Bangladesh is the second production to remain
largest RMG exporting country competitive in world apparel
in the world. In the financial year market.
2016-2017, the RMG industry
exported goods worth USD Potential Areas to
28.14 billion which was 81% of Improve Productivity
the country’s total export
earnings. Considering the
• Trained workforce: During
growth potentials, Bangladesh
the growth stage of RMG
set a target of USD 50 Billion on
industry in Bangladesh,
account of RMG export by 2021.
average productivity was
25-30%. Most of the
Though this industry registered workers were unskilled or
tremendous growth during last semi-skilled. They had to
several decades, its recent take on-the-job training and
export trend is flagging the learning curve was too long.
need to rethink about this The rate of wastage in raw
industry. Cutting & making material was as high as 20%
charge of RMG buyers dropped and output-per minute was
by 50% while minimum wages much below than then
industry standard. With the passage of time, introduced robots in textile sector. It
workers became well-trained by the trainers is not very far for Bangladesh to
of home and abroad. As a result, they are now introduce robots in RMG sector with
operating at a wastage rate of as low as 3-4%. an objective to compete with global
Some factories are continuously monitoring players in terms of quality and price.
its performance, comparing it with the
industry leaders and effective measures are • Robust IT platform: It is extremely
taken to remove the gap. They are important for RMG factories to
implementing well-tested performance remove flaws from business
improvement techniques including Kaizen, processes. Such glitches always open
Lean Six Sigma etc. and significant the windows of wastage, fraud and
improvement in production process is pilferages. Working in ERP
experienced. environment is the most effective
solution to combat these
• Advanced technology: Machineries with inefficiencies. Manual production
advanced technology is to be introduced to planning gives rise to unnecessary
reduce maintenance cost and increase overtime of workers, air shipment
output. Turkey, China, and Vietnam already due to delay, production of defective
goods etc. Few RMG factories
successfully implemented integrated
Bangladesh is the second largest robust ERP like SAP, Oracle. They
implemented system driven
RMG exporting country in the world. operation in demand forecasting,
In the financial year 2016-2017, the production planning, supply chain
management, costing, accounting
RMG industry exported goods worth etc. The savings of these factories are
USD 28.14 billion which was 81% of so significant that it can comfortably
justify sizeable expenditure in ERP
the country’s total export earnings. implementation.
Considering the growth potentials,
Bangladesh set a target of • Savings in power and energy: Short
supply of electricity and gas is
USD 50 Billion on account of RMG seriously hindering the progress of
export by 2021. RMG sector of the country.
Disruption in the supply of power and
energy is unreasonably increasing the
cost of product. Most of the RMG
RMG Industry: Lifeline to Bangladesh Economy factories are resorting diesel
generator for backup power. This is
81%
Of GDP of the most expensive option for RMG
16%
Bangladesh is
makers to generate emergency
contributed
of the country’s
by the RMG power. Solar based power, modern
total export machineries with low power
earnings come
consumption, installation of energy
from RMG
efficient lighting etc. can save energy
4.4
BANGLADESH is The industry indirectly
2nd
supports livelihood of by 70-80%. It will have direct impact
would require 550 kilowatt dealing with foreign of woven and knitwear worth
per hour would be currency e.g. negotiation of US$ 28.09 billion. During
consumed in case of conversion rate with bank mid eighties’, the value
conventional garment to settle import LC and in addition was much lower
factory. Since 2011, a total encashment of export compared to today because
of 67 Bangladeshi RMG proceed, application of revenue was only from CM
factories have received various hedging techniques (cutting and making).
Leadership in Energy and to reduce FOREX risk. Today, many local factories
Environmental Design Company’s shares can be are operating to produce
(LEED) certification from floated to raise non-interest yarn, fabrics, denim fabric,
the US Green Building bearing funds. Green RMG packing materials, trims etc.
Council (USGBC), one of the factories can be established and there are many dyeing
top green building rating to enjoy reduced tax rates. factories to dye yarn and
systems in the world. fabric. The existing rate of
• Local value addition: A value addition can be
• Smart financial strategies: review of the Bangladesh increased further by
Within the legal framework Bank on RMG showed that strengthening backward
of the central bank, local value addition to the linkages. This initiative is
cheapest funds can be industry was 75.35 per cent extremely important for the
sourced to meet the need of in FY16. Import price of raw sustainability of RMG
working capital and in materials and accessories industry. Due to the supply
acquiring capital stood at US$6.92 billion constraint of land, power
machineries. Earning can be through back-to-back L/C. and energy, many
possible from non The value was 24.7 per cent interested entrepreneurs
conventional sources in of the total export earnings
are not establishing makers do not arrange the cost leadership in global RMG
factories belong to these production facilities in line industry. Government should
backward linkage industries. with the demand. As a work to improve infrastructures
result, idle capacity cost especially Chittagong Sea port
• Outsourcing of non-core wipes out the profitability of condition and eliminate
functions: RMG factories the entity. If the internal bureaucracy. Entrepreneurs are
can outsource non-core demand is not sufficient to required to apply effective
activities to concentrate utilize the full facilities of the techniques to remove
into its core activities. factory, RMG factory can inefficiency from all areas of
Security services, work as contract production processes. The
housekeeping, fleet manufacturer for others. economic growth of the country
management, canteen Thus the product floors can largely depends on RMG
operation etc. does not continuously remain industry. So, stakeholders
match with the core operational and thus cost cannot show any slackness in
competencies of RMG per unit can be kept at the dealing with this
factories. Outsourcing of minimum level. economy-saving industry.
such functions may trigger
extra expenses while this Production cost of apparels is Reference
will eventually improve the significantly rising in exporting
productivity of the industry. countries of the world. By http://www.bgmea.com.bd/
improving the productivity and
• Maximum capacity reducing production cost
utilization: Many garment thereby, Bangladesh can take
P
ublic-Private Partnership upcoming PPP projects and to
or PPP is a joint venture manage any contingent liability
between the government exposure that the government
and the private sector at home may deem appropriate, in order
or abroad and/or between the to support PPP project
government and the financing. Furthermore, the PPP
government of another country Unit provides critical support in
(G2G). In August 2010, the overall financial management
Government of Bangladesh by providing inputs to all
issued the Policy and related national medium-term and
Strategies for Public Private long-term budgetary
Partnership (PPP), in order to
allocations.
facilitate the development of
core sector public infrastructure
Financing PPP Projects
and services that are essential
for the country’s overall
In order to finance these
The Author is a development. The objective of
infrastructural projects, initially,
Chartered Accountant and the PPP program in Bangladesh
a Fellow Member of the is to facilitate the government's the GOB allocates modest
Institute of Chartered Accountants Vision 2021 goal by ensuring a amount of funds in the national
of Bangladesh-ICAB more rapid and inclusive growth budget. These funds are placed
trajectory, and by effectively into three baskets to meet the
fulfilling the need for enhanced expense requirements and then
and high quality public services through relevant viability and
in a fiscally sustainable manner. feasibility studies, the projects
are brought into a
Since its inception, PPP has comprehendible and
proved to be an effective presentable shape. The MOF
method of conceiving, planning PPP Unit manages and oversees
and implementing medium to three keys catalytic Funds
large projects in Bangladesh. called PPP Technical Assistance
The Finance Division of the Fund, Viability Gap Fund and
Ministry of Finance has Bangladesh Infrastructure
established a PPP Unit, called Finance Fund. Objectives of
the MOF PPP Unit, which has these funds are briefly
been vested with responsibility mentioned bellow:
of overseeing the financial
viability of PPP projects and
VGF
sanctioning support funding for
their development and
The Viability Gap Fund, or VGF
financing. The Prime Minister’s
provides supplementary
office itself governs the PPP
government financing to
authority for identification,
approval and monitoring projects that the PPP Unit
ongoing progress of the deems economically vital to the
projects currently under PPP. public interest but that may not
The MOF PPP Unit works on be fully financially viable on a
behalf of the government to commercial basis. VGF monies
monitor budget implications of can be used to share the
T
he Institute of Chartered Accountants of Bangladesh (ICAB) is the
premier accountancy body of Bangladesh. The professional
qualification it offers is highly prized. Membership of ICAB is
recognition of high standards and exceptional skills. Under a twinning
project, the syllabus of ICAB has been revised and is equivalent to that of
the Institute of Chartered Accountants in England and Wales (ICAEW), the
premier global accountancy body.
W
ith a print run of 2500 and growing, The Bangladesh
Accountant reaches the movers and shakers of industry,
commerce and the accounting profession in Bangladesh.
The quarterly journal contains scholarly articles, commentary on
current matters and technical information to inform and educate its
readers. It is a highly valued publication avidly read by all who wish
to keep abreast of the latest developments in the accounting
profession and business and commercial issues in general.
Circulation includes many major companies and financial
institutions, governmental and semi-governmental organisations,
NGOs and international accounting and professional bodies.
VISION
ICAB members hold a widely respected professional accounting qualification which
supports enterprise, corporate governance and sustainable growth in the business
environment.
MISSION
* To promote and regulate high quality financial reporting and auditing in Bangladesh
* To develop and maintain the competence of professional accountants
* To enhance the reputation of the accounting profession in all sectors of the
economy
VALUES
* Integrity: To uphold the highest professional integrity and ethical standards
* Expertise: To conduct professional responsibilities with a high level of knowledge,
competency and skill
* Transparency: To conduct activities in a clear and transparent way
* Accountability: ICAB members to be responsible for their actions
INTERNATIONAL AFFILIATION
ICAB is an active member of the following international and regional accounting bodies:
* The International Federation of Accountants (IFAC)
* The Confederation of Asian and Pacific Accountants (CAPA)
* The South Asian Federation of Accountants (SAFA)
MoU & MRA
ICAB has Memorandum of Understanding (MoU) and the Mutual Recognition
Arrangement (MRA) with the following national & international organizations:
* MoU with the Institute of Chartered Accountants in England & Wales (ICAEW), UK
* MRA with CPA Ireland
* MoU with CIPFA, UK
* MoU with IFRS Foundation
* MoU for Local Governance Support Project in Bangladesh
* MoU with Office of the Comptroller & Auditor General of Bangladesh (OCAG)
CA Bhaban
100 Kazi Nazrul Islam Avenue, Dhaka 1215
GLOBAL
RECOGNITION
OF ICAB
Recognition of ICAB membership by ICAEW
Membership Scheme of The Institute of Chartered Accountants of England and Wales (ICAEW) allows the members of ICAB
to apply for ICAEW membership based on their experience.
Eligibility criteria of this membership scheme are a series of questions which assess ICAB Member’s experience, achievements,
skills and expertise. Each application must be supported by an eligible sponsor. Applicants need to complete an Examination
of Experience.
Details of ICAEW Membership Scheme is available at http://www.icaew.com/membership/becoming-a-member/
members-of-other-bodies/campaigns/pathways-to-membership.
It is noted that ICAB signed a Memorandum of Understanding (MoU) with the Institute of Chartered Accountants in England
and Wales (ICAEW) in 2009 and in continuation and successful implementation of the said MoU, the follow up phase of the
same MoU was signed with the ICAEW in 2014 and in London in 2017. ICAB has been working with ICAEW as the learning and
professional development partner, and also recognized as an approved tuition provider of ICAEW.
As per MoU ICAB Members can be the members of ICAEW after successful completion of 04 papers out of 15. These
members have the opportunity to apply for UK Practicing Certificate (PC) subject to meeting the standard ICAEW PC
requirement.
IFRS Agreement
The Institute of Chartered Accountants of Bangladesh (ICAB) signed an agreement with the International Financial Reporting
Standards (IFRS) Foundation which empowers only ICAB in Bangladesh for development and publication of Bangladesh
Financial Reporting Standards (BFRS), Bangladesh Accounting Standards (BAS) and BFRS for SMEs.
Under this agreement, ICAB has got the copyright license to publish both in print and online electronic editions of BFRS, BAS
and BFRS for SMEs using IFRS, IAS and IFRS for SMEs as issued by the International Accounting Standards Boards (IASB) and
to distribute English language version of these standards in Bangladesh. In accordance with the terms of agreement ICAB has
entered into formal collaboration with the IFRS Foundation and committed to a convergence path towards the full adoption
of IFRS.
Other Memberships
ICAB is an active member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific
Accountants(CAPA) and South Asian Federation of Accountants(SAFA). ICAB is very proactive in SAFA and CAPA. Current
SAFA President has been elected from ICAB and the Executive Secretary appointed from the same Institute. In the year 2012,
2013 and 2014 ICAB has been highly appreciated by IFAC for its continued commitment and compliance with Statement of
Membership Obligations (SMOs), which cover the requirements of quality assurance, education in line with international
education standards, auditing, financial reporting and public sector accounting standards, auditing, investigation and
disciplinary matters.
www.icab.org.bd