The SME Foundation started training the country's small and medium entrepreneurs on tax and value added tax for free to help them run businesses properly, officials said.

The state-run agency responsible for promoting SMEs across the country has taken steps to organise workshops in four divisional cities in the upcoming fiscal year of 2012-13.

Under the programme, a three-day training workshop to provide training to 40 SME entrepreneurs from Dhaka region began on Tuesday at the office of the foundation in Dhaka, said an official of the agency.

At the workshop, the participants got detailed ideas on topics tax and VAT laws, the loading and unloading system of imported and exported goods, and VAT registration and tax identification certificates.

Syed Rezwanul Kabir, chief executive officer of the SME Foundation, presided over the inaugurating ceremony. Farid Uddin, a member of the National Board of Revenue, and Mohammad Shahab Uddin, a former member of the NBR, were also present.

Forty entrepreneurs from Chittagong region already received training on tax and VAT related issues.

The foundation will organise the same workshop in Khulna and Rajshahi later.

The Daily Star/ Bangladesh/ 24-May-2012

A huge amount of foreign aid has piled up in recent times, due to higher commitments by development partners but low utilisation of funds by the government.

Over the last three fiscal years, the situation has worsened, much to the government's embarrassment.

Till March 31, the total unused foreign aid in the pipeline was $16.61 billion of which the government could spend only 8.47 percent.

However, the government has identified some reasons behind the situation, and the reasons have been the same over the years.

The causes on the government's part include delays and allegation in bidding process, faulty project documents, unrealistic requisition for fund allocation and delays in land acquisition.

And on the development partners' side, the causes are delayed appointment of consultant and delayed approval to contract awarding.

Traditionally, the unused foreign aid in the pipeline remains between $5 billion and $6 billion.

But from fiscal 2008-09, such amount started to increase, and at the beginning of the current fiscal year the amount crossed $13 billion.

When the country's balance of payments (BoP) remains under heavy pressure due to a dearth of foreign currency, a huge amount of foreign aid has been piling up as the ministries could not spend it.

An official of the Economic Relations Division (ERD) said, usually the disbursement period for the commitment made by the donors against a project is four to five years.

The official said, as a result, if the government can use 20-25 percent of the amount in the opening pipeline every year, it is satisfactory.

In fiscal 2010-11, the disbursement of foreign aid was 19 percent of the amount in the opening pipeline. But, till March of the current fiscal year, only 10 percent of the opening pipeline has been disbursed, according to ERD statistics.

At the beginning of the current fiscal year, the foreign aid in the opening pipeline was $13.86 billion. Till March $1.41 billion was disbursed.

If the ERD projection for disbursement in the entire year is realised, only 15 percent of the opening pipeline would get disbursed.

But the ERD officials said they are not sure about realising the projection at $2.18 billion for the entire fiscal year.

From fiscal 2006 to fiscal 2010, disbursement against opening pipeline was between 21 percent and 27.32 percent.

In the last two decades, the highest disbursement of 27.32 percent was in fiscal 2008 during the immediate past caretaker government.

The ERD official said, in the last two to three years Bangladesh received a handsome commitment of foreign aid. But the absorption capacity of the ministries and divisions did not improve, causing a huge amount of unused foreign aid to pile up.

According to ERD statistics, before fiscal 2009-10 Bangladesh received commitment worth $2 billion on an average every fiscal year.

But in fiscal 2009-10, the commitment rose to $2.98 billion and in fiscal 2010-11 the total commitment was $5.9 billion.

Till March of the current fiscal year the donors have already committed $4.15 billion. The ERD official said, at the end of June the amount may reach $6 billion.

The ERD in March reviewed 58 slow projects that were running with foreign aid, and identified the causes of delays on both the government and the donors' sides.

The ERD official said they have taken a new move to increase utilisation of foreign aid.

Major multilateral and bilateral donors will hold face-to-face review meetings with the project directors of the ministries and development partners concerned from time to time.

Already, a two-day review meeting was held this month on 34 World Bank projects. The process will continue, the ERD official said.

Adviser to a former caretaker government Mirza Azizul Islam told The Daily Star that project utilisation is delayed due to weaknesses of the public administration. However, he said, if the public administration is not reformed and their capacity not improved, the problem will not go away.

He said it is a long process and any tangible improvement in the next one year is unlikely.

The ERD and donors have taken initiative to speed up the disbursement of foreign aid. In March, the ERD, the line ministries and development partners including the World Bank and Asian Development Bank sat in a review meeting to identify problems in foreign aid utilisation.

The Daily Star/ Bangladesh/ 24-May-2012

Speakers at a training session on banking put emphasis Monday on bankers-farmers relations for making grass root level bank operations success.

They also viewed that the effective banking activities could be the means of boosting agricultural productions that may lead to food security in the country’s northwest region.

They were addressing the inaugural session of a six-week foundation training course for the newly appointed senior officers and officers of Rajshahi Krishi Unnayan Bank (RAKUB) at its training institute here.

RAKUB Managing Director Pradip Kumar Dutta addressed the session as the chief guest while Director Prof Dr Rustam Ali and Deputy Managing Director Abu Hanif Khan spoke as special guests with principal of the institute Mozammel Haque in the chair. The speakers said the loan disbursement activities should be more need-oriented and pro-farmers so that the target groups especially the farmers and the other concerned could derive the benefits of the lending programme properly.

They highlighted the importance of the Bank in agricultural development of the northwest Bangladesh and asked the participating officers to acquire knowledge from the training and properly apply those in the professional fields for boosting agricultural productions.

As the largest development partner in the agricultural sector of the northwest Bangladesh, RAKUB plays a vital role to earn economic emancipation and free the nation from poverty and hunger through boosting credit-flow to the potential agricultural fields, they added.

In this regard, they asked them to discharge their duties with utmost sincerity and honesty to brighten the image of the Bank.

The Independent/ Bangladesh/ 22-May-2012

In an effort to reduce government borrowing from banks, the central bank instructed executives of all scheduled banks and their branches to motivate people to invest more in national saving instruments. Different types of savings certificate are known as key instruments for government to mobilise funds for deficit financing.

But people, according to sources, have seemingly turned away from investing in this once 'most safe' option.
Even an increase in interest has failed to woo the clients.

As a result, the government's target of raising Tk 60 billion through sales of savings certificates to finance the budget deficit for the current fiscal now seems to be a 'distant dream'.

Amidst this situation, Bangladesh Bank issued a circular recently expressing its resentment, as sales of savings instruments did not pick up despite increase of interest rates. “Despite adopting various steps including increase in interest rates, sales of the national savings instruments still remain very sluggish,” said the directive urging officials to cooperate as well as encourage the clients to invest in various scheme of national savings instruments.

Alongside a fall in the sales of savings instruments in recent times, the savers are learnt to be encashing their savings instruments and depositing the money with banks as they offer higher interests.

“It is learnt that officials of concerned departments are not cooperating rather discouraging people in various ways not to invest in savings instruments,” said the directive issued by Debt Management Department of Bangladesh Bank. It urged officials to help people to participate in nation development activities by involving themselves with national saving schemes.

The recent statistics of saving certificate sales in the first eight months of this fiscal show the income from savings certificates is in the red, which means there was apparently no sale of savings instruments during this period. The earnings from certificate sales have exceeded the amount paid to the clients as interests.

Sources in financial sector informed that huge amount of money of the people are stuck in the capital market. When the market was doing well, people had put money there through selling their savings certificates. The government is now offering more than 13 per cent interest on those certificates.

"However, after the capital market crash, no one is selling shares at a loss and they are waiting for an opportune moment to recover their investments,” said an analyst.

The Independent/ Bangladesh/ 22-May-2012

Badiur Rahman has been re-elected chairman of Al-Arafah Islami Bank Ltd. The Board of Directors of the Bank at its 225th meeting Sunday re-assigned him as the chairman unanimously for the fifth time, said a press release Monday.

According to the decision of the meeting, Badiur Rahman will continue his responsibilities for the period until the next Annual General Meeting (AGM) of the Bank.

The Daily Sun/ Bangladesh/ 22-May-2012