Noel Quinn

Bangladesh's export and import can thrive on entrepreneurship and workforce skills the country has developed over the years, said Noel Quinn, a top official of the Hongkong and Shanghai Banking Corporation (HSBC).

Many in the world now see Bangladesh as a successful manufacturing base and are willing to shift here from China, he said.

Growing intra-regional trade in Asia driven by a jump in consumption by rising middleclass and Asia's increased trade with Africa and Latin America have created windows of opportunities for the local entrepreneurs, he said.

Quinn, group general manager and regional head of commercial banking, Asia Pacific of HSBC, was in Dhaka on an official visit late last month. He met entrepreneurs and visited the bank's projects to get an idea about the country's business. This was his second visit to Bangladesh.

He along with Andrew Tilke, the bank's country head, and Mahbubur Rahman, head of commercial banking in Bangladesh, was interviewed by The Daily Star at its office.

“The quality of works produced in Bangladesh is comparable to any market in the world,” said Quinn who oversees HSBC's commercial banking in 17 countries in the Asia and Pacific region.

Apart from high entrepreneurship spirit and quality, he hailed Bangladesh's hardworking population, especially the young ones.

“These young and hardworking individuals have to take up the challenge,” he said.

HSBC, which has been facilitating international trade for more than 140 years in many countries, now considers Bangladesh as one of its top markets.

HSBC opened its first branch in Bangladesh in 1996. Now the bank handles 9 percent of the country's international trade that was worth around $60 billion in 2011-12. Presently HSBC has 13 branches and it is the only bank that has presence in Bangladesh's all seven export processing zones.

Commercial banking is a traditional strength of HSBC. In Bangladesh, it is a popular choice for customers because of the bank's international presence and a wide range of financial services and products.

“As a place for commercial banking, we designate Bangladesh as one of the top 20 markets,” said Quinn.

The bank's business here is comparable with that in Malaysia, Indonesia and Singapore, he said.

Despite all the potential, the HSBC official said Bangladesh has two specific challenges -- power and transportation -- which, if solved, can take the country to a higher growth path.

To him, the issues are more serious for the foreign investors than the locals. Stable supply of power and transportation of goods in a reliable manner are vital for foreign companies, he said.

“Speeder distribution of goods requires continuous development here,” he said.

Quinn also talked on a broad spectrum of issues that include the Eurozone crisis, changing consumption pattern in China and India, Asia's economic outlook and the bank's business strategies.

He said though the financial crisis in the Eurozone dealt a blow to Bangladesh's exports to Europe, it has created opportunities as well.

The HSBC official said the export market in Latin America has expanded and trade flow between Asia and Latin America has increased significantly. Some countries and companies are benefiting from the crisis in the EU.

“If you are a quality organisation, you can benefit,” he said.

Quinn said the growing consumption pattern in India and China has also offset the impact of the Eurozone crisis. In China, 50 million people will graduate to the middle-class in five years, he said.

Despite the global economic slowdown, the HSBC official has high hope on Asia, which according to him, will be the world's growth engine.

“Yes, there will be a slowdown in growth, but Asia as a whole will be the growth engine,” he said.

He said trade in Asia-Pacific grew by 27 percent in 2011. The growth rate is several times higher than the average economic growth of the region. There is still room for growth for quality producers in Bangladesh and Asia.

“We still see continuous growth in Bangladesh, primarily on the back of the shift of manufacturing activities from China into the markets like Bangladesh,” said Quinn.

As there are high quality manufacturers in Bangladesh, HSBC is equally investing in commercial banking and extra capital will be allocated for that, he said.

Andrew Tilke also predicted that there would be a lot of trade between the Asian countries in the years to come. So, Bangladesh's export potential in India and China would grow.

On doing international trade with currencies other than the US dollar, Mahbubur Rahman said it depends on how the currency is moving.

“It's about the suppliers' preference,” said Rahman.

The Daily Star/Bangladesh/ 24th June 2012

The World Bank Group announced yesterday that it will boost efforts to expand energy access, while also increasing support for renewable energy and energy efficiency in developing countries. As part of its effort to support UN Secretary-General Ban Ki- moon’s Sustainable Energy for All initiative, the World Bank will provide about 8 billion U.S. dollars a year in financing for energy projects and programs, which leverages a comparable amount from donors, governments and the private sector.

Meanwhile, the bank will also seek to double leveraging of its energy lending, emphasizing low-carbon energy, to 16 billion dollars a year.

The World Bank, which already supported energy access initiatives in 60 countries around the globe, also pledged to scale up initiatives to provide electricity, clean household fuels and improved cookstoves in selected countries, while also seeking increased financing to implement them, said World Bank Managing Director Mahmoud Mohieldin.

Providing access to electricity to the world’s 1.3 billion people who are without it, and clean household fuels to the 2.7 billion without them, is a priority for the World Bank Group, Mohieldin said.  At the same time, we
will promote energy efficiency practices and facilitate efforts by countries to shift to cleaner energy sources.

Meanwhile, the Climate Investment Funds, managed by the Bank Group and regional multilateral development banks, and to which donors have pledged 7 billion dollars, will also be invested, to a large extent, in renewable energy and energy efficiency projects in ways that leverage private investment.

The World Bank will work with ESMAP and other international agencies to produce a baseline report on current status worldwide, with respect to the three goals of Sustainable Energy for All, which will form the basis for regular global tracking reports to monitor and report on progress towards the 2030 targets for access, renewable energy and energy efficiency.

By mobilizing our knowledge, financial resources and convening power, along with that of our partners, I am convinced that we can find the right strategies and the financing needed to eliminate energy poverty and achieve these goals by 2030, Mohieldin said.

The Independent/Bangladesh/ 23th June 2012

Though the government has drawn up a plan to set up 13 imported coal-fired power plants in seven locations with the total capacity of 7,800 MW by 2015, two leading funding agencies the World Bank and the Asian Development Bank (ADB) - are unlikely to support the plan. The reluctance of the two major lending agencies to finance any coal-fired power plants in Bangladesh was revealed in a study carried out by Japan International Cooperation Agency (Jica) in January this year.

In the Jica study report, titled ‘Data Collection Survey on Coal Power Master Plan Follow-up in Bangladesh’ reveals that “the loan for the imported coal-fired power generation is not expected from the World Bank and the ADB.”

The study further mentions, “The World Bank and ADB have no plan to assist directly coal-fired power development since coal-fired power is not suitable for their stance toward environmental issue.”

According to the Jica study, the planned 13 coal-fired power plants are 600-MW capacity of two plants each in Khulna, two plants each of 600-MW capacity in Chittagong, one 600-MW plant in Chittagong South, four plants each of 600-MW capacity in Materbanri (Chittagong), one 600-MW plant in Meghnaghat near Dhaka, two each 600-MW capacity plants in Mawa near Dhaka and one 600-MW plant in Zajira (Shariatpur).

Of the plants, the government has so far struck deals for three plants—one 600-MW in Khulna under a joint venture with India while another two plants in Mawa and Chittagong private sector. But no deal was signed for other plants. The financing mode of the deal with India has not yet been determined.  Jica says Bangladesh has planned to boost its power generation to 35,000 MW by 2021 as part of the Vision 2021 of which 30 per cent power generation will come from coal-fired plants.

The Japanese agency’s study report also mentioned that the World Bank and the ADB will not even provide any financial support for transmission lines which will be connected with the coal-fired power generation plants.
Under the circumstances, it is not clear as how the government will execute such a mega plan for power generation with imported coal. Referring to ADB’s tough stance against coal fired power plants, either it is imported coal-based or domestic coal-based, the Jica report says “ADB recognises that there are environmental problems regarding domestic coal production in Bangladesh.

It is considered that it is an important to make the balance between energy development and environment.”
About the alternative financing of the imported coal-fired project, the Japanese agency says, “Jica, KfW (German donor agency), the European Bank for Reconstruction and Development (EBRD) can be selected as donor for coal-fired power projects.

However, the study team does not interview KfW and EBRD regarding the coal-fired power generation in Bangladesh.About the Jica study report, Power Secretary Abul Kalam Azad or any top official of Power Division could not be reached for comments.

The Independent/Bangladesh/ 23th June 2012

Lower trade deficit, restricted imports and higher foreign aid have underpinned an improvement in the country's balance of payments (BOP) situation at the end of April of the outgoing financial year.

Bangladesh Bank (BB) data shows the BoP shortfall came down to $106 million in April this year, from $ 419 million in March. In the July-April period of the previous fiscal, the deficit in BoP was as high as $502 million.

A BB high official said the BoP situation has been improved due to lower trade deficit as a result of tightening monetary policy, which also restricted imports and encouraged exports to new destinations and pursued for accelerating the remittance mobilisation.

“BB was serious in executing the monetary policy stance (MPS) and monitored banks regularly, especially on opening of letters of credit (LCs), since the MPS for January-June of the current FY came to force early 2012,” said the official, seeking anonymity.

The country also received around $1.5 billion as foreign loans including $ 300 million from the International Monetary Fund (IMF) that helps ease the pressures in balance of payments, he said.

The official said the merchandise imports in the first half of the current fiscal saw a significant growth that led the central bank to intervene into restricting import of non-productive items so that no abnormal burden could rise with regards to BoP.

Due to the high demand for petroleum products for the fuel-run quick-rental and rental power plants, the country’s import expenditure stood at $ 28.8 billion at the end of May since July 2011, up 11.82 percent compared to the same period of the previous fiscal, according to BB statistics.

Opening of LCs for import of food grains (rice and wheat), capital machinery, industrial raw materials and other products together declined by 6.97 percent this fiscal compared to the previous fiscal.

For food grains, the fall in imports was 70.10 percent while capital machinery 25.82 percent, industrial raw materials 8.05 percent and others imports saw a fall by 4.41 percent in July-April period of the 2011-12 fiscal.

On the other hand, earnings from merchandise exports rose to

$ 21.7 billion in the July-May period of the outgoing fiscal. The growth in exports over the corresponding period was recorded only 8.2 percent. The growth was almost half than the strategic target of 15 percent for FY 2011-12, according to data available from Export Promotion Bureau (EPB).

Meanwhile, the country received a total of $ 11.7 billion in remittance during the July-May period. The country received another $580 million as foreign direct investment during the same period.

The Daily Sun/Bangladesh/ 23th June 2012

SINGAPORE: Oil prices inched up in Asian trade today as wary traders bought up cheap crude to recoup some of their losses after the previous day’s plunge, analysts said.

New York’s main contract, light sweet crude for delivery in August, gained 33 cents to $78.53 a barrel in the afternoon, up from $78.20 in New York, its lowest level since the beginning of October.

Brent North Sea crude for August delivery advanced 65 cents to $89.88 after tumbling to $89.23 in late Thursday trade, dipping below the $90 line for the first time since December 2010.

“We’re seeing a small bounce for now. There is potential for a little bit of short-covering given the big moves last night,” Jason Hughes, head of premium client management at IG Markets Singapore, told AFP.

But he said the market outlook remained grim following disappointing numbers from China and Europe.

Preliminary data from banking giant HSBC on Thursday showed China’s manufacturing activity hit a seven-month low in June, while a separate survey showed eurozone private sector activity sank to the lowest level for three years in the second quarter.

The Daily Sun/Bangladesh/ 23th June 2012