Sunday, December 5, 2010

Trade matters and other updates (December 5, 2010)

First off, Bangladesh
1) India-BD border survey: Linky

Joint survey of the disputed borders along Sylhet-Meghalaya will begin 7 December. The decision came with a view to resolving the nagging disputes over the borders like Dibir haor, Sripur, Tamabil, Sonarhat, Bichnakandi, Protappur and Lalakhal in Sylhet with the Indian state of Meghalaya. Deputy Commissioner of Sylhet Abu Syed Mohammad Hashim told this correspondent that the joint survey would initially cover 13 points on the border from Lobhachhara in Kanaighat upazila to Lalakhal and Dibir haor in Jaintapur upazila and Sonarhat in Kanaighat upazila. It will be held in presence of land officials and BDR, he added.

2) Railway building in BD under Indian credit line: Linky

Only Indian companies will be allowed to bid for the purchase of 50 flat wagons and five bogey break vans under the $1 billion Indian loan. The companies have been asked to offer their bids between Dec 6 and Jan 24. Earlier, Bangladesh Railway floated tender for purchasing 10 engines with Indian loan under the same condition. On Aug 7, Bangladesh signed a $1 billion credit deal with India. Foreign minister Dipu Moni had said the loan will be used to implement 14 projects, including five for the development of the railway. The credit came with an annual 1.75 percent interest, which opposition BNP termed "very high".

3) Cattle smuggling across the BD border: Linky

The BSF has said that cattle trade between India and Bangladesh along the India-Bangladesh border in the Assam-Meghalaya sector should be legalized to a certain extent through border haats. Almost everyday, cattle are seized in the Dhubri area of Assam and also in Khasi-Jaintia Hills, Meghalaya while they are being smuggled into the neighbouring country. Acknowledging the views of his higher-ups, BSF Inspector General (Assam-Meghalaya Frontier) SC Saxena told The Sentinel: “In certain stretches of the international border, our personnel are 90 per cent involved in catching cattle smugglers.” While pointing out that cattle-laden trucks keep coming from the hinterland towards the border, Saxena said: “If the States carry out checking of movement of cattle in their own areas, the BSF’s task of checking cattle smuggling into Bangladesh will be eased to a great extent.”

4) Continuing from the last week, the former Chief Secretary of Assam writes on the Look-East Policy and Bangladesh: Linky

India’s most immediate neighbour, Bangladesh, needs special attention. Close collaboration between these two countries will help achieve growth and prosperity for both. Therefore, the five agreements signed during Bangladesh Prime Minister Sheikh Hasina’s visit to India in January 10-13, 2010 have become significant. These five agreements are on mutual legal assistance in criminal matters, on transfer of sentenced persons, on combating international terrorism, organized crimes and illegal drug trafficking, on cooperation in the power sector and a cultural exchange programme. In pursuance of these agreements certain concrete steps were taken including India’s promise to export 240 MW of power to Bangladesh and to assist that country to build power plants of 1,320 MW each in Khulna and Chittagong.

There are critics in India who do not like that so much concessions have been given to Bangladesh. Some of them feel that the credit of US $1 billion is too much. There is a perpetual adverse balance of trade of about US $1 billion annually which Bangladesh has not been able to wipe out. They do not produce the goods which India can import. The quality also is low. They have plenty of natural gas. But they want to preserve it under ground rather than drill out and export to India. Meanwhile, the value of the smuggled goods, on both sides, has been estimated to have increased to US $3 billion per annum. The Bangladeshi smugglers are reported to be making up the adverse balance of illegal trade by illegal export of arms, gold and narcotics according to a National Council of Applied Economic Research (NCAER) study. After the January, 2010 agreements this type of clandestine trade should end. However, whether that will actually happen is still a moot question.

Bangladesh is expecting to gain considerable improvement of its economy by better connectivity with India. According to the former Bangladesh Foreign Secretary, Farooq Sobhan, the Prime Minister-level talks have “opened up a whole new vista, not only simply in terms of Bangladesh’s bilateral relations with India, but in terms of Bangladesh becoming a middle income country by 2021”. He further stated that “if Bangladesh is to move from an annual growth rate of 6 per cent to 8 or 9 per cent, it must take rapid progress in the integration of its economy with its immediate neighbours, India, Nepal and Bhutan”.

According to Sanjib Baruah, foremost scholar on LEP, “Northeast India’s isolation from its neighbourhood has much older roots: that which came about as a result of the advent of western dominance over sea routes and over global trade and more particularly the British conquest of the region and the decisions to draw lines between the hills and plains, to put barriers of trade between Bhutan and Assam and to treat Myanmar as a strategic frontier – British India’s buffer against French Indochina and China. While the British colonial rulers built a major new transportation infrastructure, aimed primarily at taking tea and other resources out of Assam, the disruption of old trade routes remained colonialism’s most enduring negative legacy”.

Next off, China and Bangladesh
5) Cotton exports to China and elsewhere: Linky

Tamil Nadu Chief Minister M. Karunanidhi on Thursday appealed to the Centre to order an immediate suspension of cotton exports till needs of the domestic textile industry are met and sufficient arrivals in the domestic market bring about a substantial reduction in the price of cotton. In a letter to Prime Minister Manmohan Singh, which was circulated to the media in Chennai, he also sought a cap on the level of cotton yarn exports and also provide for imposition of an export duty for the same. He said the yarn used in handlooms, powerlooms and knitwear was different and needed to be available in sufficient quantity, category-wise, to meet the domestic needs.
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“Normally, the period of 4-5 months after October witnesses a dip in cotton prices owing to fresh arrivals in the market. However, this year, the clearance given for exporting 55 lakh bales of cotton has resulted in a hand to mouth situation by which virtually no cotton is available in the market to build up cotton stocks.” He said competing countries such as China who are the beneficiaries of Indian cotton exports maintain stock to use ratios of about 33 per cent, whereas India’s stock to use ratio is just about 17 per cent. Mr. Karunanidhi said it was urgently necessary to build up cotton stocks during these months of the cotton picking season lasting up to January, so that the textile sector, which provides the maximum employment, next to agriculture is kept continuously fed with raw material.

6) Zorawar Daulat Singh asks why are we being stupid and exporting raw materials to China without being diligent enough in improving our competitiveness: Linky

India's current discourse over its economic relationship with China is nothing short of self-deception. To correct course, we need to recognize the problem. Is anybody listening?

Finally, Nepal
7) Nepali exports piggy-backs on India: Linky

Exports have grown by 5.9 percent to Rs 16.87 billion in the first three months of the current fiscal year 2010/11, according to the Current Microeconomic Situation of the Nepal Rastra Bank (NRB). Such exports had shrunk by 16.5 percent to Rs. 15.94 billion in the same period last year, the report stated. The merchandise export of the country increased by 12.2 percent in September/October, of the current fiscal year compared to the value of the previous month.

The exports to India rose by 11.8 percent in the three months of the fiscal year 2010/11 in contrast to a drop of 11.3 percent in the same period last year. Nevertheless, exports to other countries dropped by 2.4 percent compared to a plunge of 22.7 percent in the same period last year. The increase in the exports to India was largely attributed to the increase in the exports of jute goods, zinc sheet, M.S. pipe, wire, plastic utensils, textiles, threads, Ayurvedic medicine, juice, toothpaste and readymade garments among others. Similarly, exports to other countries declined due mainly to the decrease in the export of pulses, pashmina, handicraft goods, Nepalese paper and paper products, woollen carpet and herbs among others.

Merchandise imports, on the other hand, grew by 3.6 percent to Rs. 92.98 billion in the three months of the fiscal year 2010/11. Such imports had grown by 31.9 percent to Rs. 89.72 billion in the same period last year. Similarly, on a monthly basis, the merchandise imports increased by 4.4 percent in September/October 2010 compared to the value of the previous month. Imports from India grew by 31.9 percent in the review period compared to a growth of 26.8 percent in the same period last year. Likewise, imports from other countries declined by 29.1 percent in contrast to a growth of 38.3 percent in the same period last year. The import of hot rolled sheet in coil, sugar, chemical fertilisers, fruits, dry cell battery and vegetables among others increased from India whereas import of gold, polythene granules, electrical goods, betel-nuts, crude soybean oil and other machinery and parts declined from other countries in the review period.

Total trade deficit during the three months of 2010/11 expanded by 3.2 percent to Rs. 76.11 billion. Trade deficit had risen by 50.7 percent in the same period last year. Trade deficit with India rose by 36.6 percent in the review period compared to a growth of 41.2 percent in the same period last year. On the contrary, trade deficit with other countries declined by 34.2 percent compared to a growth of 63.1 percent in the same period a year ago. The improvement in exports coupled with deceleration in import growth contributed to decline in the ratio of export to import to 18.1 percent in the review period from the ratio of 17.8 percent a year ago.

8) To top off, the costs behind screening of a movie: Linky
9) And as I said earlier, it is important to note how the Judiciary interprets the Constitution as even confirmed terrorists can use the laws of the land to get away legally. Here is one such judgment: Linky

The Supreme Court today said police should not arrest people on flimsy grounds as it could lead to great ignominy and denial of anticipatory bail was also a violation of an individual’s fundamental right to personal liberty. A Bench of Justices Dalveer Bhandari and K S Radhakrishnan said in a judgement that anticipatory bail granted to a person should continue till the conclusion of the trial and no conditions should be imposed for the accused to surrender to obtain a regular bail.
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The apex court made the remarks while granting anticipatory bail to Siddharam Satlingappa Mhetre, a Congress leader allegedly involved in the killing of a BJP worker on September 26, 2009, in Maharashtra. Mhetre moved the apex court after the Bombay High Court had dismissed his anticipatory bail plea.

10) Here is the update on Kishen, the maoist: Linky

It had been rumoured that Kishen had either been killed or seriously injured in an encounter with the police a few months ago. "According to arrested Maoist leader Kanchan and others, Kishen is alive and well and he is leading them in West Bengal," joint commissioner of Kolkata Police, Special Task Force, Rajiv Kumar told newspersons in Kolkata today. Kumar also quoted Kanchan as having claimed during interrogation that Kishen could be in Dandakaranya.

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