The country may see model district budgets from the next fiscal year to help the local people understand about their development activities, according to Finance Minister AMA Muhith.

“I had proposed in the very first year that we should have budget for every district, but we've not been able to get it. I hope from the next year, we'll have at least model district budgets,” he said.

Muhith spoke at a seminar on medium-term budget framework (MTBF) at the city's Ruposhi Bangla Hotel.

He said if there is district budget, at lest local people can understand what development programmes are undertaken for their areas.

Finance Division of the finance ministry organised the seminar on "Deepening medium term budget framework" where Cabinet Secretary Mosharraf Hossain Bhuyian, Finance Secretary Fazle Kabir were also present.

About the failure of adopting district budget, Muhith said the government could not do much about that because of the current accounting system which did not provide any element for accounting by the district. “But, now it has been introduced in the country.”

There should be decentralisation of power from Dhaka, he said. "Our constitution wants it and it was in the constitution of 1959 and 60, but, I must say, politically we don't want it,” Muhith said.

“This is not a matter of this party or that party. The power is supposed to be delivered to the local government, not to be devolved. If power is delivered, it can be taken back any time.”

About the World Bank (WB), the minister said the global lender does not adjust itself with innovations. “Many new ideas were not initially supported by the World Bank.”

Citing his bureaucratic experiences, Muhith said the government once had moved to prepare a new Trade and Industrial Policy and also Water Resource Planning Organisation, but the World Bank did not support it. “But UNDP and other donor agencies supported those.”

The WB later came up and took the credit for it. “As a government officer at that time, I had registered a protest against the leading donor agency's such claim.”

Muhith said there should be a number of portfolio projects in the hands of the Planning Commission from which it can choose the best ones.

He said every project should have a feasibility study which will determine its selection.

About the MTBF, the minister said this new budgetary planning was introduced in 2004 when as a member of the opposition party, Awami League, he supported the move.

Muhith said MTBF should be on multiyear basis for the sake of its implementation in a proper manner.

News: The Daily Star/Bangladesh/9th-Dec-12

Financial institutions should focus more on rebuilding trust in the banking sector with tightening regulatory and supervisory structures, said an Indian economist.

Developing countries like Bangladesh have to strengthen banking regulation and supervision as it is the main instrument for rebuilding and bolstering of trust in the sector, said YV Reddy, a former governor of Reserve Bank of India. He said though the global financial crisis does not harm the trust of the banking industries in developing countries, it is time to emphasise on rebuilding of trust.

Reddy spoke at the 12th Nurul Matin Memorial Lecture on trust in banking, organised by Bangladesh Institute of Bank Management at Ruposhi Bangla Hotel in the capital yesterday.

The world is integrating more rapidly, he said. “Growing contagion risks from ever increasing integration with the global financial system are heightening the need of bolstering defences against erosion of trust.”

Bangladesh Bank Governor Atiur Rahman said experience shows that without firm ethical underpinnings, regulatory compliance responsibilities tend to get neglected particularly in good times, as in the run up to the global financial crisis.

He said the right ethical motivations will draw financial intermediaries away from financing of speculative and unproductive wasteful activities.

“It is some years now that we have adopted this approach in Bangladesh's financial sector; beginning with a BB guided initiative of mainstreaming corporate social responsibility in the institutional ethos and objectives of banks and financial institutions.”

That has in turn motivated and enthused banks and financial institutions in socially responsible financing and also environmentally responsible 'green' financing, with due attention to address ecological degradation and climate change threat concerns, according to the governor.

News: The Daily Star/Bangladesh/9th-Dec-12

Participants take part in a roundtable on mobile financial services at The Daily Star Centre in Dhaka yesterday.

Bangladesh can use mobile financial services not only to accelerate financial inclusion, but also to bring more than 85 percent unbanked population to the mainstream at a cost effective manner.

Despite the enormous demand for mobile phone-based financial services, a large-scale adoption is yet not seen.

Analysts and policymakers made the observation at a roundtable co-organised by The Daily Star, BRAC Bank and bKash at The Daily Star Centre yesterday.

Former adviser to caretaker government Abdul Muyeed Chowdhury moderated the programme.

Some of the discussants proposed to form a body comprising the officials of the central bank, the telecom regulator, microfinance regulator and other stakeholders, to promote the services.

“A body can be formed to identify the problems and expand the services further,” said Khondkar Ibrahim Khaled, chairman of Bangladesh Krishi Bank and former deputy governor of Bangladesh Bank.

He said microfinance institutions can be the alternatives to the banks in expanding the mobile financial services across the country.

Muhammad Abdul Mazid, former chairman of the National Board of Revenue, also echoed the views of Ibrahim Khaled on the coordination issue.

“There is a necessity of coordination among the regulators to avoid any conflicting situation,” said Mazid who presented a paper on mobile financial services in Bangladesh.

The coordination issue came to the limelight as mobile financial services in Bangladesh are a bank-led model run by mobile phone companies, which are regulated by the Bangladesh Telecommunication Regulatory Commission (BTRC).

Often these two regulators come up with separate orders having no coordination between them.

Iqbal Quadir, a director of bKash and a teacher at the Massachusetts Institute of Technology in the US, also raised the conflicting issues between the banking regulator and the telecom regulator.

AB Mirza Azizul Islam, another former adviser to caretaker government, also stressed the need for coordination in the regulatory framework of the Bangladesh Bank and the BTRC.

Abdul Muyeed Chowdhury also endorsed the idea of forming a separate committee to promote the services.

Bangladesh, with a population of 150 million and a per capita income of around $800, has seen a steady economic growth over the past 15 years. Poverty rates have halved from 60 percent in early 1990s to 31 percent in 2010.

This development has also been reflected in the growth of the country's financial sector, supported by the recent transformation in banking technology.

Speakers said despite these significant improvements, access to basic financial services is still restricted to only 15 percent people.

They said, for the financially excluded people, opening and maintaining bank accounts can be costly, complex and time-consuming due to a lack of education and awareness.

The central bank has allowed 23 banks to operate mobile financial services. But only two banks -- BRAC and Dutch-Bangla -- have come up with the services and registered 20 lakh clients so far.

“Identity is a big problem,” said Nazrul Islam Khan, secretary to the ICT ministry, on the security concern in mobile banking services.

Khan said he is trying to convince the government to make an accurate database of the population, which can be used for mobile banking services.

Mahabub Hossain, executive director of BRAC, a non-government organisation, said mobile banking can benefit the poor who feel shy to go to a bank. But further investment is needed to reach out to the people, he added.

Khalid Shams, former chairman of Grameenphone, said there are some risks in the service, but Bangladesh should seize the opportunity.

Shams, a former bureaucrat, also asked the operators to come up with new products for the targeted people.

Abul Kashem Md Shirin, deputy managing director of Dutch-Bangla Bank, said cost is not a big issue in mobile banking as there will be no cost if there is no use. On security concern, he said it is like using credit/debit cards and there is nothing to be anxious.

Michael Kuehner, chief executive officer of mobile operator Robi, said costing and convenience of services are the two main components in mobile banking.

Hassan Zaman, chief economist of the central bank, said they have planned to launch a financial literacy campaign to make people aware. On why other banks are not coming with the mobile banking services, he said may be it is for the investment and profit margin issues.

Zaman also said the BB is trying to disburse money to the targeted people through mobile phones under different government programmes.

Brig Gen (retd) Shahedul Anam Khan, defence and strategic affairs editor of The Daily Star, delivered a welcome address, while Shah Husain Imam and Salehuddin Ahmed, associate editor and managing editor of the daily, and Syed Mahbubur Rahman, managing director of BRAC Bank, also spoke.

News: The Daily Star/Bangladesh/9th-Dec-12

"We must grow from being a 'knowledge'-bank to being a 'solution'-bank." This is the new agenda of the new World Bank president Jim Yong Kim. Dr Kim is a Japanese-speaking Korean. He moved from Korea to the United States of America at the age of five. Being an anthropologist and a social worker, now he is the president of the World Bank (WB). From an immigrant to a president of the World Bank, he is the first Asian American to be the head of this Washington-based multilateral capital donor. It is a long way for him.

Mr Kim has crossed that long way, his daily life having been full of struggle and experience. Through struggle, he has understood that the daily life of the human being is the best book of the world. That is why he has given the clarification on how his dream 'solution-bank' will work. He said, "..as a solution-bank, we will work with our partners, clients, and local communities to learn and promote a process of discovery. Through decades of development work I've learned that the best solutions to economic and social problems often lie with the individuals and communities coping with these challenges in their daily life. They have been my greatest teachers. We must listen to, and act on, their insights."

We know the history of the World Bank. It was founded 68 years before as a 'reconstruction bank' focused on rebuilding Europe after the Second World War. Robert McNamara, the radical chief of this global body, changed the character of the World Bank (WB). He is the first man who made the WB as an institution for the whole world. Mr McNamara transformed it from a reconstruction bank to a 'lending bank'. He extended funding for poverty reduction in the developing countries. It was then a great decision for the WB and for promotion of the developing countries' socio-economical and political interests. It was also a reflection of the European and American policy towards the developing countries at that stage. However, the WB got itself transformed into a knowledge-bank after the era of Mr McNamara.

Now its first Asian-American president wants to write a new chapter for the WB. About his new chapter, Kim has said, "I believe it is time for us to write the next chapter in our evolution: it is time for us to become a 'solution'-bank. We must listen, learn, and be partner with countries and beneficiaries to build bottom-up solutions. This is how we will increase our relevance and our value in today's and tomorrow's global economy."

In the present-day world, the developing countries are searching for new solutions to a different set of challenges; they aim at ensuring the participation of their poor people in the growth process. Such countries want to close their infrastructure and energy deficits. Besides that, they want second-generation policy reforms, embracing their roles as responsible and generous stakeholders in the global system. The low income countries are also searching for new solutions to help accelerate growth, boost competitiveness, and lift their citizens out of poverty. In addition to that, the fragile states, according to the WB, now want to overcome conflict and to ensure security, justice and jobs. Even then, in his address to the plenary session of the annual summit of the WB this year, the WB president gave two examples. One relates to the case of an old woman of Honduras and another is that of a mother in India. The old woman of Honduras said for their safety, they want more police but they need, above all, more jobs. The mother in India said they do not just want to escape poverty; they want to build and achieve all dimensions of prosperity such as good health, higher incomes, quality education and justice.

The demand and the situation as such are only new but also very different from any time of the past. And the demand of the society and the transition of the world economy are basically in favour of writing a new chapter. In this situation, the decision of Mr Jim Yong Kim is not only right but also the only way; there is no other alternative. The WB must have to write a new chapter and this chapter is obviously its transformation into a 'solution-bank'. But how they will write this chapter? In his address to the plenary session of the annual conference of the WB this year, Mr Kim said that the fuel of his life is a citation of Martin Luther King Jr. He, thus, quoted the latter, "the arc of the moral universe is long, but it bends towards justice." He further stated that he would like to carry it with himself to the WB Group. Is it possible for him to bend it towards justice? Mr Kim has said, it is a challenge to bend the arc and he has accepted that challenge. Why has he to bend the arc towards justice? About this, he said, "with over one billion people living in extreme poverty and 200 million unemployed, now it is not the time to go our own way or to focus only on our own narrow interests."

In such a world, one cannot focus on one's narrow interest only. Organisations like the WB should have broader, long-term goals to serve. The WB is not only a bank but also the global development organisation. So when the world economy is changing, the demand of the people of world have also been changing. The WB must also change. Mr Kim wants this change. He said, "to be an effective solution-bank, we will need to seek answers beyond our walls". Besides that, Mr Kim said in an interview with a newspaper, "we are going to eliminate the bureaucracy." To eliminate bureaucracy, he will like to run the WB in a befitting way. "First we'll be establishing a clear and measurable bottom line…… second we're strengthening our implementation results …. third, we will rapidly improve our ability to provide our clients with integrated solutions for maximum impact…….fourth, we need to continue investing data and analytic tools, building on the success of the Open Data initiative."

So it is clear that Mr Kim has a detailed plan to bring about changes to the WB from a bureaucratic knowledge-bank to a solution-bank. It is a revolutionary programme. Mr McNamara also did a great deal of changes to the WB. It was also the demand of the then bi-polar world. Now, in this unipolar world, it is also the demand of the world to make a change to the WB in accordance with to-day's the socio-economical demand. Mr Kim is fully appreciative of this need. So he has accordingly drawn up the agenda for this.

Now the centre of the global economy is changing in a unipolar world. But identification of the centre of this economy involves an uncertain process. Many political transformations are changing the demand and the movement of the global economy at every moment. So, the present time is more indecisive and unpredictable in character than that of the bipolar world. That is why it will be relevant to see how Mr Kim will move forward to bring about appropriate changes to the WB to realise his dream about its becoming a solution-bank. He is a dreamer and an optimist.

News: The Daily Financial Express/Bangladesh/8th-Dec-12

Stocks returned to the red again after meagre improvement in the previous week as ongoing downtrend and subsequent fear of unknown bottom is still puzzling the investors to come out of the 'wait-and-see policy'.

The market witnessed five trading sessions as usual. Among those, four sessions lost 150.72 points while one session gained 6.39 points.

Week-on-week, the prime index of the Dhaka Stock Exchange, DGEN, plunged 144.33 points or 3.43 per cent to close at 4,066.25.

The all share price index DSI went down by 120.09 points or 3.37 per cent to end at 3,440.01. The blue-chip index DSE-20 also lost 96.47 points or 2.82 per cent to close at 3,319.69.

The Chittagong Stock Exchange also declined with the CSE Selective Category Index falling by 265.48 points or 3.24 per cent to close at 7,901.52.

"Addition of a new listing barely helped the market to recover. There was only one positive session during the entire week. Average volume and turnover continued to decline amid poor participation of investors," commented LankaBangla Securities in its weekly market analysis.

"During the week, World Bank's visit regarding Padma Bridge financing issue failed to create positive sentiment, while in earlier months, the investors overreacted to the issue as the bourse was responding quicker to come out of the illusion of knowledge and resulting impulse trading, especially in the current downtrend," the IDLC Investments said in its weekly market analysis.

In the midway of the week, 'hartal day' made the market slow as hartal sentiment influenced the market pulse. As a result, the investors were not keen to participate and turnover hit the five months' low, the IDLC analysis said.

The investors adopted a 'wait-and-see policy' amid increase of political violence. However, Generation Next Fashions created buzz which gained by 335 per cent and occupied 15.52 per cent of total trade on debut trading session, it added.

Week closed over falling sentiment. News of gloomy outlook over much wanted Padma Bridge financing by World Bank scared the market. However, it had not affected the market like before. Fear of unknown bottom of ongoing downtrend is still puzzling investors to come out of the 'wait-and-see policy', it added.

News: The Daily Financial Express/Bangladesh/8th-Dec-12