The size of foreign assistance in the next fiscal’s Annual Development Programme (ADP) is likely to be Tk 215 billion.

This allocation will be Tk 65 billion more than that of the current fiscal’s revised ADP and Tk 28.15 billion bigger than this year’s original ADP outlay, officials said.

The Finance Division in a recent letter to the Planning Ministry said the ADP outlay for the upcoming 2012-13 fiscal would be Tk 543 billion.

Of the total amount, spending in local currency was estimated at Tk 328 billion while project assistance (PA) will be Tk 215 billion, officials said.

Economic Relations Division (ERD) officials said earlier this month, they were asked to apprise the Finance Division of foreign aid demands of difference ministries.

In response, the ERD submitted a compiled demand of Tk 215.6 billion, which later saw a cut by Tk 600 million. The ERD held a series of meetings between April 16 and 19 to assess the project assistance demands and received demands for a total amount of Tk 198 billion. However, they are yet to receive demands from some agencies.

After aggregating all the demands, ERD will send a proposal to the Planning Ministry to finalise the draft of ADP allocations, officials added. The original ADP outlay was Tk 460 billion in the current fiscal. Of the amount, PA constituted Tk 186.85 billion or 41 percent of the total stipulated expenditure.

Later, it was downsized to Tk 410 billion in the revised ADP, where foreign assistance was Tk 150 billion.

UNB adds: The implementation progress of the Annual Development Programme (ADP) in the first nine months (July-March) of the current fiscal was 45 percent, the same rate achieved during the corresponding period of the previous fiscal (2010-11).

According to the Implementation, Monitoring and Evaluation Division (IMED), the expenditure during the nine months was, however, Tk 206.17 billion, up Tk 31.07 billion compared to Tk 175.10 billion during the corresponding period of fiscal 2010-11.

Of the total expenditure, the share of the project assistance was Tk 61.29 billion (33 percent) as against Tk 5104 billion (33 percent) during the same period of the previous fiscal.

The share of the local funding was Tk 144.88 billion (53 percent).

About Tk 172.98 billion, 63 percent of the allocation, was released during the July-March period of fiscal 2011-12. The size of the revised ADP allocation in the current fiscal is Tk 410 billion while the original outlay was Tk 460 billion.

The IMED figures showed that the Statistics Division achieved the highest implementation rate of 223 percent while the Ministry of Civil Aviation and Tourism posted the lowest implementation rate of 1 percent.

The utilisation rate of top 10 ministries and divisions during the nine-month period of 2011-12 fiscal were 54 percent or Tk 167.71 billion in expenditure.

Among the top ministries and divisions, the Local Government Division made the highest expenditure of Tk 53.33 billion (58 percent) followed by the Power Division Tk 46.92 billion (66 percent).

Primary and Mass Education Ministry’s progress was 67 percent (Tk 16.22 billion), while that of Education Ministry 47 percent (Tk 10.03 billion), Health and Family Welfare Ministry 101 percent (Tk 10.13 billion), Energy and Mineral Resources Division 42 percent (Tk 4.50 billion), Water Resources Ministry 42 percent (Tk 6.25 billion), Roads Division 44 percent (9.94 billion), Railways Division 37 percent (Tk 8.40 billion), and Bridge Division 9 percent (Tk 1.97 billion).

The Daily Sun/Bangladesh/ 30th April 2012

Earnings by the National Board of Revenue (NBR) grew by 17.2 percent in the first nine months of the current fiscal year, thanks to a strong drive to collect revenues from both the public and private sectors.

The tax administrator will have to collect Tk 30,000 crore in the next three months to meet the target for the entire fiscal year.

An NBR official said they hope to earn more than the required amount in the next three months to reach the goal.

He also said they collected Tk 500 crore more than the target in the first nine months.

According to NBR statistics, revenue earnings in the July-March period were Tk 62,261 crore against a target of Tk 61,857 crore.

The NBR official said they had a collection target of Tk 91,870 crore for the entire year.

But the "resource committee" of the finance ministry at a recent meeting chaired by Finance Minister AMA Muhith decided to reset the target in the revised budget.

The target for the entire year may be increased by Tk 500 crore-Tk 1,000 crore, said the official, asking not to be named.

The successes of the current year may encourage the NBR to set the next year's target at Tk 1,12,000 crore, 22 percent more than this year's estimated earnings.

In the next three months, revenue worth Tk 3,400 crore will come from Bangladesh Petroleum Corporation alone, he said.

Besides, there is a possibility of earning Tk 742 crore as SIM (subscriber identity module) tax from the mobile operators, the NBR official added.

He also said Alternative Dispute Resolution has been introduced recently to fast-track resolution of tax-related cases out of court, which will spin off revenue of another Tk 100 crore.

He said the NBR has intensified its tax collection drives and is not sparing even the public sector companies.

The official said stern action has been taken against state-owned mobile phone company Teletalk, compelling the operator to commit to pay its dues every month.

The tax administrator also froze the account of the state-run mobile operator as it failed to pay dues in time, said the official.

Besides, the NBR has formed two taskforces to speed up revenue collection. The taskforces have detected tax evasions by a good number of big companies. Revenue worth around Tk 2,000 crore may be realised from them, the official said.

He said, due to the steps they achieved big successes in realising income tax and local-level value added tax.

In the first nine months, growth in income tax was 25 percent and VAT at the local level increased by 20 percent. However, revenue earnings rose by only 10 percent at the import level.

The official said, both the government and the Bangladesh Bank have taken various steps to discourage import of unnecessary goods to ease pressure on the foreign currency reserve. As a result, growth in revenue earnings at the import level is somewhat lower, he added.

The official said the NBR may set an ambitious target in the next fiscal year also. Already the resource committee meeting has made a projection of revenue target for the next year.

The NBR official said the target may be increased by 22 percent over the current fiscal year's earnings and set at Tk 1,12,000 crore.

He said a new VAT law is likely to be introduced in the next fiscal year, and so they are hopeful of meeting the next year's target also.

The Daily Star/Bangladesh/ 30th April 2012

The local currency, Taka, has continued to depreciate against UK pound and Euro for the last two days until Thursday.
The value of almost all major currencies against taka, according to the exchange rate chart of the Janata Bank, remained unchanged.

The pound was traded between Tk 128.40 and 132.40 up by Tk 0.2 and 0.2 respectively, on Thursday compared to the previous day’s exchange rate.

It was traded between Tk 128.20 and 132.20 up by Tk 0.1 and 0.2 respectively on Wednesday compared to the previous day’s rate.

The euro was traded at Tk 105.00 and 108.80, up by Tk 0.2 and 0.2 respectively on Thursday, compared to the preceding day’s rate.

It was traded between Tk 104.8000 and 108.6000, up by Tk 0.4 and 0.4 respectively on Wednesday on the previous day’s rate.

On Thursday, the US dollar was exchanged at Tk 81.45 and sold at Tk 82.45 while the Singaporean dollar was traded between Tk 53.00 and 55.00.

The Daily Sun/Bangladesh/ 27th April 2012

TOKYO: Japan said on Tuesday it will provide $60 billion in loans to the International Monetary Fund, becoming the first non-European nation to commit money to boost the fund’s financial firepower to contain the euro zone debt crisis.

Finance Minister Jun Azumi said Japan hoped Tokyo’s contribution, which will be formally announced at a Group of 20 financial leaders’ meeting later this week, will encourage other countries to follow suit.

Indeed, IMF Managing Director Christine Lagarde was quoted as saying she hoped to secure government agreements this week to raise the IMF’s funds by more than $400 billion, about two-thirds of the amount the Fund had said in January it would need.

“I really hope this week we’ll reach the critical mass of more than $400 billion. We are determined to do all we can,” she was quoted as telling Italy’s main financial newspaper Il Sole 24 Ore, though she also said finally sealing the funds might take a bit longer.

Japan’s announcement comes ahead of the IMF and World Bank Spring Meeting and a G20 finance leaders’ gathering in Washington, which run from Friday to Sunday.

“Following a series of euro zone’s policy responses, it is important to strengthen IMF funding and pave the way for ensuring an end to the crisis not only for the euro zone but also for Japan and Asian countries,” Azumi told a regular news conference after a cabinet meeting.

“I am confident that many other countries will pledge contributions to the IMF,” he said.

The IMF, which acts as a lender of last resort for governments, said in January it would need $600 billion in new resources to help “innocent bystanders” who might be affected by economic and financial spillovers from Europe.

The Daily Sun/Bangladesh/ 18th April 2012

The International Monetary Fund yesterday raised its global growth forecast, with the US boosting the outlook but Asian emerging economies facing slower economic expansion.

The world economy will expand 3.5 percent this year and 4.1 percent in 2013, the IMF said in its April 2012 World Economic Outlook yesterday ahead of the Spring Meetings of the IMF and the World Bank in Washington.

Prospects for the global economy are slowly improving again, but growth is expected to be weak, especially in Europe, and unemployment in many advanced economies will stay high, according to the IMF's latest forecast.

“For the past six months we've been on a rollercoaster ride,” said IMF Chief Economist Olivier Blanchard. “Our baseline is that growth is going to be slow in advanced economies; sustained, but not great, in emerging market and developing economies. But the risk of things turning bad again in Europe is high.”

US economic growth is projected at 2.1 percent in 2012 and 2.5 percent next year, reflecting ongoing fiscal consolidation and continued weakness in housing prices.

On Asia, the report said, weaker external demand has dimmed the outlook for Asia. But resilient domestic demand in China, limited financial spillovers, room for policy easing, and the capacity of Asian banks to step in as European banks de-leverage suggest that the soft landing under way is likely to continue.

Overall, growth in Asia will average 6.0 percent, with China slowing to 8.2 percent and India to 6.9 percent.

The region's emerging economies suffered spillover effects in 2011 from the euro zone crisis, which hit exports to Europe and also pinched trade credit and project finance as European banks were forced to retrench, the report said.

An escalation of the Eurozone crisis could lower emerging Asia's output by 1.25 percent, said the IMF, which also warned of the risks of an oil price spike from tensions in the Middle East.

"The fragility of the external outlook highlights the need for the region to rebalance growth by strengthening domestic sources of demand over the coming years," it said.

The report said many Asian economies could also advance their plans to boost social safety nets and increase investment in infrastructure if another round of fiscal stimulus is warranted.

Another flare-up of the Eurozone sovereign debt crisis or sharp escalation in oil prices on geopolitical uncertainty could easily undermine confidence and disrupt the improving growth path for world economy, the IMF said.

"With the passing of the crisis and some good news about economy, some optimism has returned. It should remain tempered," said Blanchard.

"Even absent another European crisis, most advanced economies still face major brakes on growth. And the risk of another crisis is still very much present and could well affect both advanced and emerging economies," he said.

The IMF said the most immediate concern is still that further escalation of the euro-area crisis would trigger a much more generalised flight from risk. “Geopolitical uncertainty could trigger a sharp increase in oil prices.”

A 50 percent increase in the cost of oil would reduce global output by 1.25 percent, according to the report.

The report said that governments should strengthen policies to solidify the weak recovery and contain potential risks that can weigh on consumer and investor confidence.

Advanced economies should implement medium-term budgetary savings, but not in a way that could undermine the recovery. In developing countries and emerging markets, policies should be geared toward ensuring a soft landing for economies that have seen sustained, very strong credit growth, it said.

The IMF also said Asian nations face elevated price pressures that will constrain monetary easing even as the growth outlook for the region dims.

“Although monetary tightening has been appropriately paused in many Asian economies, and cautiously reversed in some, room for further easing is constrained in economies where underlying inflation pressures remain,” it said.

The Daily Star/Bangladesh/ 18th April 2012