Finance ministers in Washington fail to deliver on G20 promises

April 30, 2009

Eurodad, 27 April 2009

Finance ministers from around the world met in Washington at the Spring Meetings of the World Bank and the International Monetary Fund this weekend with the promise to pin down the details of the G20 agreements made in London on 2 April. From the point of view of the millions of people in low-income countries suffering from inequitable economic policies compounded by the effects of the current crisis the meetings in the last two days made very little positive progress. The small clarifications on gold sales, Special Drawing Rights and other issues indicate that there is very little or no concessional, low condition money available and considerable policy and procedural obstacles to getting what little there is.

At the beginning of the month the leaders of the twenty biggest world economies agreed to make available more than $1 trillion to help countries meet their immediate financial needs arising from the crisis and to boost economic activity worldwide. The IMF was the definitive winner of the London April 2 G20 deal, with the promise to quadruple its resources – from $250 billion up to $1 trillion. The meeting of the finance ministers in Washington was expected to clarify how and how much of this money would help poorer countries counter the effects of the crisis, and how International Financial Institutions would be reformed. Despite the urgency of the moment and the promise for resolute action, Finance Ministers managed to do little more than restate the London commitments. Impoverished countries don’t know yet on how much they will count and the extent to which the IMF will grant this finance at reasonable terms and avoid making past mistakes.

No clarity on funding for poorer countries

Initial calculations by Eurodad earlier this month suggested that only $24 billion, a mere fortieth of the $1 trillion promised in London, was earmarked for low-income countries. African and other leaders, plus civil society groups, have been calling for increased grant or highly concessional resources for low-income countries. Using proceeds from IMF gold sales is one option agreed in principle by the G20. Another that found its way into the G20 communiqué was increasing the concessionality of Fund resources for low-income countries by issuing Special Drawing Rights (which have a non-concessional interest rate attached).

The IMFC Communiqué of 25 April 2009 simply restates the intention to “double the Fund’s concessional lending capacity for low-income countries, while ensuring debt sustainability, and exploring scope for increased concessionality.” This actually means that low-income countries will be able to access only some $4 billion extra IMF resources at below market interest rates. To obtain more poor countries would have to borrow at market interest rates, which are presently very low, but may rise in the near future and trap them into new spirals of unsustainable debt.

However even if low-income countries want to obtain this money to stimulate their economies they may not be able to. Their borrowing is limited by thresholds of what the Bank and the Fund consider to be sustainable debt levels (calculated using the controversial Bank/Fund Debt Sustainability Framework). And the latest Fund programmes for low-income countries that Eurodad has analysed prohibit poor countries from borrowing at market interest rates. Therefore the $19 billion for low income countries from the SDR increase is more of a mirage than a real funding option. The Fund is also being silent on the possibility of providing grants to low income countries.

Europeans block progressive deal on IMF gold sales

Civil society organisations are calling to use a greater share of the gold sales proceeds to fund poor countries’ needs. In 2007 the IMF decided to sell a tiny share of its huge gold reserves to meet their administrative costs, which were not met by the Fund’s low lending activity at the time. Due to the increase in the gold price, this plan will generate much more resources than expected in 2007. The G20 has now recommended that up to US$1 billion of these unforeseen additional profits be used to support the poorest countries in the face of the financial and economic crisis. Some CSOs suggest that the full additional profit from the gold sales – US$5.2 billion – should be used to help the poorest countries weather the financial storm and fight poverty.

The IMF Executive Board had a heated discussion on this issue last week, where some European countries – including Belgium and the Nordic constituency – expressed strong objections to using a sizeable share of proceeds from the gold sales for poor countries. Arguments range from the need to “protect the Fund’s capital base”, to the “unfairness of using gold sales for poor countries when emerging economies are paying higher market interest rates to meet Fund’s operational needs that will be not covered if more gold sales proceeds are channelled to low income countries”, according to the Nordic Baltic constituency. However, preliminary CSO calculations show that channelling US$5.2 billion generated from gold sales to the poorest countries will not have any impact on the plan to use part of the proceeds from gold sales for the Fund’s new income model to cover its administrative and operating costs.

Unfortunately, due to the strong split in the Executive Board, the IMFC Communique only mentions that IMF “subsidies (for low income countries) could be financed through a combination of bilateral contributions—possibly by new donors—and the Fund’s resources and income, including the use of additional resources from agreed gold sales.” The Board asked the Fund’s management last week to draft a second paper to spell out the options available in an attempt to take a decision which is being painfully delayed.

Size matters: how expansionary the Fund can be?

But cheap lending – or even grants – is only half of the picture. Conditions attached to these loans will also determine the extent to which this lending will do any good to low income countries. The IMFC Communiqué echoes recent changes in IMF conditionality, including the creation of the new Flexible Credit Line (FCL), which provides precautionary finance for higher middle income countries such as Mexico which the Fund considers to have strong macroeconomic performance. The Communiqué also calls “on the IMF to ensure the successful and evenhanded implementation of this new lending and conditionality framework, and ask the Managing Director to report on progress at our next meeting.”

Although the FCL is an improvement from past Fund’s facilities for its lighter conditionality framework, this facility is only available for a very reduced group of countries. This concern is echoed in the G24 Communiqué. This developing country grouping “encouraged the IMF to apply in its LIC lending the same flexibility and streamlined and review-based conditionality, as agreed for other lending facilities.” According to a senior developing country official “the Flexible Credit Line has opened Pandora’s box. There is no way other developing countries are going to agree that only a few benefit from lighter conditionality frameworks. Probably this is the beginning of better times for streamlining IMF’s conditionality.”

Yet the Fund still has a long way to go to allow generous expansionary fiscal and monetary policies in its programmes. Recent speeches by IMF Managing Director Strauss-Kahn, and the IMFC Communiqué call to “maintain expansionary monetary policies (and)… deliver the scale of sustained fiscal effort necessary to restore growth’. However, a Eurodad discussion paper circulated in Washington – and reports by Third World Network (TWN) and Center for Economic Policy Research – show that IMF programmes still do not include resolute countercyclical policies. Eurodad co-organised a workshop in Washington with TWN, Oxfam and ActionAid to discuss the extent to which the IMF was changing its stance in the context of the crisis. Despite claims to have flexibilised fiscal and monetary targets in its programmes for poor countries, the IMF’s baseline is so stringent that current programme targets are still far from the types of countercyclical policies that rich countries are implementing. Even if the Fund claims to have clear instructions to consistently advice expansionary policies to all countries without exception the reality is that changing deep-rooted policy convictions is rarely achieved overnight in large institutions unless strong guidelines are adopted and closely monitored by the Board of Governors.

Europeans also an obstacle on IMF governance reform

Not much has happened either on governance reform. The Communiqué merely records the need to “complete the quota reform by 2011 … (which will result in) increases in the quota shares of dynamic economies.” Once again the poorest countries are left out from the deal. On this issue, the growing split between low income countries and emerging economies – particularly those that have been accepted into the selective Group of Twenty – is increasingly apparent. Middle income countries which feel that they have a change to be included in the circles that matter when it comes to global economic and financial governance are less and less interested in uniting with the world poorest in a common front.

European governments also played a less than helpful role on this issue. Public comments and proposals were raised by governments from other regions. Brazilian Finance Minister Guido Mantega said, for example: “the IMF repented from many of its past sins. But it still has to address the original sin: its democratic deficit.” US Treasury Secretary Timothy Geithner called for emerging nations to be given more voting shares in the IMF. He also suggested slimming the the Fund’s 24-member board to 22 representatives by 2010 and just 20 by 2012, while maintaining the number of seats for developing countries, thereby strengthening their position. However Belgian Finance Minister Didier Reynders, whose small government has as many votes on the Fund’s board as China and fields a representative there, told Reuters that he supports the status quo: “I think for the moment the representation around the table is attractive. The European countries are having to finance the Fund very strongly”.

The way forward

The lack of progress at the Spring Meetings leaves a lot of homework to be done in the next few weeks. The Fund will struggle to get a deal on gold sales and pin down the details for the SDR increase. It will rush to complete before the Annual Meetings the reform of its low-income country facilities and the flexibilisation of the Debt Sustainability Framework. It will also have to speed up work on voice and quota reform. These piecemeal internal reforms might deliver significant change if coalitions are built to push much further than most IMF staff want.

Despite the recent headlines about a $1 trillion deal for the Fund, the general sense Eurodad staff and members picked up in Washington was not that supportive of a long term role for the Fund. CSOs have for a long time advocated that the Fund should fully withdraw from, or seriously limit, its role in low income countries. However, according to the former Turkish Finance Minister Kemal Dervis now researcher at the Brookings Institution, rich countries have only turned to the Fund now because it was the only institution available. This does not indicate a desire to perpetuate a prominent role for the Fund once the crisis is over. Seriously limiting the role of the Fund to macroeconomic surveillance; creating a panel to monitor its performance; and increasing its linkages to the UN system were some of the proposals put forward by Dervis in a seminar organised by the Frederich Ebert Foundation. UN DESA Under-Secretary General Jomo Sundaram went further, suggesting a World Central Bank to eventually phase-out the need for an IMF.

The June 2009 UN conference on the impacts of the financial crisis in low income countries will give an indication of the extent to which rich and emerging countries have an appetite to re-balance power between the UN and the IFIs. So far the lack of progress to detail the IMF reforms in a progressive direction, as well as the dramatic lack of interest in the UN conference seems to show that we will not get the necessary shake up of global economic and governance institutions.

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A raw deal, through and through

April 30, 2009

Tanim Ahmed*, NewAge, April 30, 2009

Since the government’s estimation of production costs and fixing the procurement price does not involve farmers’ representatives or accommodate their opinions, it is natural that their interests would not be reflected fully.

IT IS the same story almost everywhere. The only variables appear to be the names and places. The trend, according to farmers’ accounts, has hardly changed over time. In a nutshell, they hardly benefit from the government’s procurement drive or the price that is fixed for government procurement. They agree that such a price acts as an indicator for the market but it is just that — an indicator. It does not necessarily mean that farmers will get that price in the open market.
   

Besides, government procurement is not of such scale that it would make tangible dent with only 12 lakh tonnes against 15 times that much in total production for the boro season. According to reports, the government plans to procure rice at Tk 22 per kilogram and paddy at Tk 14 per kilogram. Estimates by the Department of Agricultural Extension show that paddy production cost per kilogram was around Tk 8.5 offering almost 65 per cent profit, which should be considered reasonable.
   

As it turns out, this calculation of profit is only an oversimplification of the complexities involved. The production cost of paddy is estimated based on official data and figures. For instance, although farmers often have to buy fertilisers from the black market with a premium and end up paying double, sometimes triple, agriculture department’s estimates do not account for that. It is often the case that farmers are denied their full requirement of fertilisers through official channels and have to resort to the black market, which again thrives because of pilferage from government stocks and unscrupulous fertiliser dealers. It is also often the case that farmers end up using more fertiliser than the agriculture department’s official estimation for a host of reasons.
   

Labour and irrigation cost quite naturally vary but the estimates are typically found to be lower than the actual costs on the field. One reason for this gap between the field reality and the agriculture department’s exercise on paper is that the entire process does not include farmers or their representatives at any stage of the exercise. They are consulted neither by the agriculture department nor by the government when fixing a procurement price.
   

There are further problems with the procurement drive because the bulk of government purchase, almost 10 lakh tonnes will be rice and not paddy that the farmers might be able to sell directly. When the government buys rice, it is the millers who get the benefit and their price that is established where it would be officially presumed that the farmers received the government’s procurement price, which the government apparently considers a ‘minimum support price’ that is in vogue in many other countries including India. However, the market prices are often decided by the large millers and wholesalers where farmers are often heavily undercut when they sell their produce. They seldom get a price that is even close to the government fixed price or make sufficient profits to see them off comfortably till the next harvest.
   

One must work backwards from the government fixed procurement price for rice to arrive at the realistic market price for paddy. In other words, regardless of the government’s procurement price for paddy, the fixed rate of Tk 22 for rice would determine the true market rate for paddy. Generally, a maund (37.3kg) of paddy yields around 25kg of rice. At the fixed rate of Tk 22 per kg then 25kgs would be Tk 550. This price would have to include the millers’ overhead and profits as well. But even without accounting for that, price of each kilogram of paddy comes to about Tk 15, which is just one taka above the government procurement price. But according to reports in newspapers and claims made by farmers they have had to sell their boro paddy for even Tk 300 per maund.
   

Farmers from different parts of the country would also point out that they have paid far higher prices for fertilisers than the government rates, that their expenditure on labour is also far higher than the government’s estimates of about 40 man days of labour for one acre (100 decimals) at a cost of Tk 120 per man-day. According to farmers, however, boro cultivation on 1 bigha (33 decimals) requires at least 20 man-days with a unit cost of Tk 150. Their cost of irrigation, especially diesel-run irrigation, is also much higher than the agriculture department’s estimated Tk 3,000 per acre.
   

These anomalies in estimation of the paddy production cost leading to a procurement price are only part of the problem though. The farmers, especially small and marginal farmer, across the country would readily admit that they do not even attempt to sell paddy when the government procurement drive is going on. And their recent experience from the short wheat procurement drive would further add to the deterring factors. Even according to officials of the agriculture department, only party cadres or those considered Awami League supporters were given priority and most of the people who could manage to sell wheat were party faithfuls.
   

There is no guarantee that it would be different for boro paddy. To make things worse, officials involved in the procurement drive enforce stringent regulations for the paddy to qualify for government purchase. It is often the case that farmers are told that the paddy has far too much moisture than the stipulated level. Some are told that the quality of paddy is simply not good enough. In such cases the farmers find it more convenient to sell of the paddy at the nearby market for whatever price they get and return to their villages. They point out that the next day that same paddy will end up in government warehouse when it goes through different parties who have a better ‘understanding’ with the procurement officials.
   

Since the government’s estimation of production costs and fixing the procurement price does not involve farmers’ representatives or accommodate their opinions, it is natural that their interests would not be reflected fully. It is something that needs a sustained campaign from the citizens as well as the political parties for the government to acknowledge and accommodate. What can be done, however, is that the procurement drives will have to be made through mobile units that are more accessible to farmers. Additionally, this procurement drive will have to be run in such manner that it works in a similar manner as the open market where the farmers do not face too many hassles.
   

Although the government’s fixed prices work out well on paper, it appears that the procurement price has been fixed not so much for farmers’ interests as it was for consumers’ interests. In fact, that has been one of the main agendas of successive governments—to keep rice prices down for the urban middle class. While cheap rice at city markets would certainly be appreciated by the affluent and the more influential urban middle class, it would fail to sustain the vast majority of rural poor. Farmers are already feeling rather discouraged to plant paddy for the next few season except for what they might need. It is also unlikely that a flawed approach would spell doom for the government or for the country’s food security. But it would certainly add to the resentment of a large number of farmers. And they would not be a long way off thinking that the government values their urban counterparts much more than them.


Bangladesh central bank governor defends rejection of IMF advice

April 28, 2009

The Daily Star, April 28, 2009

Outgoing Bangladesh Bank Governor Salehuddin Ahmed today said he had rejected at least four IMF suggestions, including the one of adopting policy support instrument (PSI), in four years in office considering the country’s interest.

The other suggestions were: Introducing a tight monitoring policy, increase in cash reserve requirement (CRR) for the scheduled banks with the Bangladesh Bank and opening of capital account.

“We had told the IMF that we didn’t need a PSI,” Dr Salehuddin Ahmed, whose tenure would end this month, told reporters at his farewell briefing in the central bank.

Ahmed also said, “There was no capital outflow from Bangladesh in the recession period. We stayed safe because of not allowing opening of capital account.”

He cited example of India from where billions of dollars have been out flown for allowing opening of capital account.

Ahmed also stressed doing homework and developing negotiation capacity of officials before going for singing any deal with donors such as International Monetary Fund (IMF) and the World Bank.

“The IMF listened to us and was convinced,” said Ahmed who will be replaced by Dr Atiur Rahman, an economist from May 1.

The governor also focused on central bank’s role as the regulator of the financial sector, overall economic situation and challenges in the recession period and the fiscal package to tackle the recession-hit industries.

“Over the past four years the BB acted as an enabling and caring body for the financial sector,” said Ahmed.

He said, “The financial sector and the country’s overall macroeconomic situation remain stable because of the central bank’s proper role.”

Export and remittance remain steady despite global meltdown, he noted.

Bangladesh’s macroeconomic stability is better than other South Asian nations, mainly because of BB’s prudent role, he claimed.

Still he emphasised on more interactions with the stakeholders for better stability of the financial institutions.


Anti-debt coalition activists stage a protest against the upcoming Asian Development Bank meeting

April 28, 2009

alertnet.org 27 April 2009

2009-04-27t131334z_01_jak11_rtridsp_2_indonesia_articleimage

A group of Anti-Debt Coalition activists stage a protest against the upcoming Asian Development Bank (ADB) meeting, in Jakarta April 27, 2009. The ADB meeting in May is scheduled to be held in the Indonesia’s resort island of Bali. REUTERS/Dadang Tri (INDONESIA) 


Half of the 74 Privatised State Owned Enterprise (SoEs) Closed Down in Bangladesh

April 26, 2009

NewAge, April 25, 2009

Almost half of the 74 state-owned enterprises divested in the past were closed down that raised question about the quality of ‘so called privatisation’.
   

A total of 74 state-owned enterprises belong to textiles, jute, manufacturing, chemicals, food, leather and banking sector were sold out since the establishment of the Privatisation Board in 1993 and thereafter the Privatization Commission in 2000.
   

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A closed state-owned jute mills. — New Age photo

Of them, 54 were divested through outright sale and 20 through off-loading of shares by suggestion of the lending agencies especially the World Bank.
   

Among the privatised enterprises, which are still in business limp badly, they said.

Serious questions can be raised about the privatisation process itself, said Bangladesh Enterprise Institute president Farooq Sobhan. He suggested changes to the existing privatisation process.
   

Industries minister Dilip Barua, has, however, favoured a provision to halt privatisation of the state-run entities.
   

He made his intention clear while unveiling the draft of the new industrial policy on Saturday at local hotel.
   

’Many privatised factories remain inoperative or non-functional under new ownership. In some cases, land is sold off after take-over,’ he said.
   

Apart from 74 SOEs, some 24 SoEs have already been listed by the commissions to get them disposed off under a World Bank’s multi million ‘bank modernisation and enterprise growth’ project.
   

Tenders have already been called for three SoEs.
   

Around 305 state owned enterprises comprising industrial, commercial and financial institutions were put under public ownership in 1974-75.
   

The size of the public sector enterprises have reduced considerably after the paradigm shift in the government’s economic policy towards privatisation.
   

However, in name of privatisation successive governments sold out many viable SoEs at very cheap rate, said an official of the Bangladesh Forest Industries and Development Corporation.
   

He said Wood Treating Plant at Daulatpur in Khulna was divested to private entrepreneur although the organisation was running on break event and employed more than 200 workers.
   

A relative of the than privatisation commission chairman purchase the plant and curtailed more than 150 workers.
   

The abortive attempt to privatise Rupali Bank, country’s fourth largest commercial bank, has added further burden on the government exchequer, said the finance ministry officials.
  

 The three-year long unsuccessful bargaining with A Saudi prince deteriorated the financial position of the loss making bank that was put on sale in 2005.


Who’s and why’s of a stimulus

April 23, 2009

Tanim Ahmed*, NewAge, April 23, 2009

It is evident from the outlay of the stimulus package and the specific measures focusing upon export sectors that the package presumes a continuation of strong outward orientation of the economy, although a more inward orientation might help Bangladesh to fare better through the financial crisis.

WITH limited resources, the government’s recently announced stimulus package was bound to disappoint some quarters. The money, a little over Tk 3,425 crore, could only go so far. And towards that end it only appears to have hurt the sentiments of those directly involved with readymade garments. Economists and experts have been conspicuously silent on this issue which should be enough of an indication that few sympathised with the demands of the garment manufacturers, although the knitwear sector could have used some assistance which even the finance minister later agreed at a meeting with the knitwear manufacturers.
   

It is evident from the outlay of the stimulus package and the specific measures focusing upon export sectors that the package presumes a continuation of strong outward orientation of the economy, although a more inward orientation might help Bangladesh to fare better through the financial crisis should it begin to tell upon Bangladesh’s international trade prospects. Then again a stimulus package aimed at countering the effects of an international financial meltdown that might only affect the economy indirectly, the government would, for the short term, look towards providing assistance to the export sectors.
   

However, on the outward orientation, even as much as can be gathered from the projections for the next fiscal year, the government does not appear much concerned about creating employment, generating demand or boosting local consumption in order to sustain the economy. The sole exception is the poultry industry perhaps only to prove the rule. This industry is hardly export-oriented and aimed fully for local consumption. Having been doubly hit many poultry plants were forced to shut down with thousands losing their jobs. 
   

When the military-controlled interim regime brought about sweeping tariff measures, apparently upon the advice of the International Monetary Fund, increasing the tariffs for a number of industrial raw materials and decreasing them for finished consumer and luxury goods, the poultry sector saw its production costs soar with feed, chicks and equipment becoming much costlier almost overnight. This was followed by the avian flu scare. Thus, assistance to this sector would generate some employment and subsidies would also help keep production costs low that would eventually result in lowering chicken prices on the market thus increasing consumer welfare.
   

Similar to poultry, the dairy sector, which is apparently going through a tough time, could have been included in the package with cash assistance and higher incentives in order for the cost of dairy production, especially milk, to become cheaper. Apparently, the major brands of dairy milk suppliers are refusing to purchase milk as powder milk has all of a sudden become cheaper. There is a strong demand for dairy milk in the cities, where people are compelled to choose from milk brands with the nagging suspicion of feeding their children with melamine-tainted milk. A large section of residents in Dhaka would be willing to pay a handsome premium for dairy milk of good quality. This is perhaps one of those few sectors that would show immediate results with some government assistance.
   

The increased cash assistance to the export sectors would surely contribute to their competitiveness, especially when considering that manufacturers and producers of like products in other countries might get similar assistance. But this assistance also presumes that the export market will remain as it is with its demand as before. The package does not suggest that the government apprehends the consumption of foreign consumers who are more directly hit by the financial meltdown would shrink at all. But that will very likely happen in case of high-end products while low-end high-volume products might fare better. That is perhaps one reason that the garment sector continues to exhibit little sign of being affected.
   The matter that begs further explanation is how the government would raise these funds as they have been allocated in addition to what there was in the budget. This would either have to be through higher taxes or through new money. Both would have strong implications for an economy where the government is trying to stimulate the market. Alternatively, of course and perhaps that is a more practical solution, the sourcing of these funds might only need some paperwork. It is only common knowledge that funds allocated for the annual development programmes under the budget seldom get spent. In fact, this year a large portion of those funds will almost surely remain unspent and all the government would have to do is reallocate them. But since it would be the same lethargic bureaucracy managing and channelling the funds and the same government machinery trying to spend the money, at least a portion of the funds might very well end up unused as is typically the case. As has been pointed out before by economists and experts, the problem is more to do with efficient and effective spending of funds rather than the act of allocating these funds.
   

If the rate of implementation of the stimulus package is anything similar to that of the annual development plan that the government has displayed in the last two years, then the business quarters would not have much to look forward to. One can only hope that political direction would help the bureaucracy become somewhat more earnest.
   

Interestingly, agriculture was included in the stimulus and allocated a large chunk, Tk 1,500 crore, as subsidies. One wonders how that subsidy is going to be used. At the very end of boro season, the farmers would not require funds for either irrigation or fertiliser as it would hardly help the yield at this point. An announcement by the agriculture minister, Matia Chowdhury, that fearing corruption and irregularity the government has decided against it precludes the possibility of direct cash assistance to the farmers. 
   

Corruption or irregularities, however, do not seem to deter the government from providing direct assistance to the exporters. Surely it is a much more complicated and a far more taxing exercise for the government to execute such a programme for farmers, but the benefits would also be equally rewarding, for the government as well the people, its constituents. With rice prices falling through the floor, farmers are dreading the time that they will have to harvest their crop and take it to the market to sell.
   

The other measure to help the lot of poor farmers was an additional outlay of Tk 500 crore for the recapitalisation of small loans. However, there are no indications that this effort will be coupled with that to relax the prohibitive amount of paperwork and requirements for the small and marginal farmers to avail such facilities. But the bigger question still remains the price of rice, which according to a number of observers has plummeted not entirely due to economic reasons but due to the government’s agreement with the garment factory owners’ request to sell the allotted rice through open market sales instead of rationing it to the garment workers. This had apparently caused the prices to plummet in the market as well. But the allotted rice remains unsold and the government is now burdened with substantial stock of rice procured from the last boro yield. Unless this is off loaded soon, the government will be unable to carry out fresh procurement this boro season, which is likely to be another good harvest.
   

The package, which is worth less than even one per cent, closer to half a per cent in fact, of the entire GDP does not address the prospect of increasing employment generation in the domestic market. It is important because one of the major unsettling impacts of financial crisis or recession is an increase in unemployment also giving rise to social tension. Employment generation could well be one of the main tools counter those effects. In that respect that package remains almost entirely silent. Although one would hope that the budget for the next fiscal year would lay strong emphasis on the domestic economy, creating employment, raising demand and boosting consumption, there is little indication that it would receive the kind of attention it deserves.

*Contact: tanimahmed@gmail.com


World’s first ‘climate refugees’

April 22, 2009

AlJazeera, April 21, 2009

Environmentalists predict that climate change will affect more than 375 million people every year by 2015, due to natural disasters and rising sea levels. 

Thousands of people in Bangladesh are thought to be the world’s first “climate refugees” due to severe flooding. 

Nicholas Haque reports from Kutubdia island in southern Bangladesh.