Dhaka among worst cities for global business

Dhaka is among the 10 lowest ranking cities in the world for recruitment, employment and relocation, according to a recent study by an American human resource consultancy firm.

Of the 138 cities selected by Aon Hewitt — based on population size, rate of population growth, level of business investment and geographic spread among the cities covered — Dhaka came in at 130 of the People Risk Index.

The 2013 study measures the risks that organisations face with recruitment, employment and relocation in 138 cities worldwide by analysing factors as demographics, access to education, talent development, employment practices and government regulations.

The points in each category are tallied into a scale from 25 to 250, where 25 represents minimal or no risk and 250 extreme risk.

Dhaka scored 180, the same as Tripoli, and better than Karachi, Baghdad, Luanda (Angola), Port Moresby (Papua New Guinea), Addis Ababa (Ethiopia), Sana’a (Yemen) and Damascus.

The capital was among the top 10 highest risk cities for the employers last year as well, coming in at exactly the same spot in the index as this year.

It stood higher than Karachi at the previous edition’s rankings, too, while Phnom Penh, the capital of Cambodia, which tied with Dhaka, skipped three spots to 127 this year.

The lack of a stable and transparent government, the study said, is a major obstacle to implementing and enforcing business-friendly employment practices and investing in talent development initiatives in these cities.

“Furthermore, the lack of government investment in developing and improving the education and talent development infrastructure increases an employer’s risk in finding skilled talent, as the current infrastructure is unable to support employers’ workforce demands.”

Richard Payne, who was responsible for preparing the index, however, said there is a silver lining for the high-risk cities in the form of population growth in the next decade, which will increase the size of labour pool.

“However, if the education and talent development infrastructure do not improve, these cities will face a surplus of low-skilled workers and a shortage of highly educated professional talent.”

Despite the challenging business and people environment, organisations are still expressing interest in these high-risk locations due to the abundant natural resources and high economic growth potential, Payne added.

Meanwhile, the neighbouring India had nine of its cities in the index, occupying spots between 71 and 113.

Among the Indian cities, Mumbai scored the highest points, coming in at 71, while Jaipur the lowest, bagging the 113th position; the nearby city of Kolkata came in at 104.

Conversely, occupying the top five low-risk spots were New York, Singapore, Toronto, London and Montreal.

The Asian city of Hong Kong also featured among the ten lowest-risk countries — at 7.

“Pro-business employment policies have a significant impact on people risk,” Payne said.

“Where government policies support a more flexible approach to talent immigration, employment practices and the provision of social welfare, these cities are able to attract and retain a talent supply critical for businesses.”

The results of the index are based on in-depth research conducted over a six-month period by Aon Hewitt’s Regional Talent & Rewards Analytics Centre in Singapore.

Data from more than 100 statistical sources provide the quantitative basis for the ratings, which were augmented by the assessment of Aon Hewitt’s local and regional human resources experts from around the world.

“Driven by a need to do more with less, business leaders have to be more innovative around how they invest; this has had an impact on how they think about talent sourcing and work force planning,” said Payne, also the Talent and Rewards practice leader for Aon Hewitt in Asia Pacific.

The index, Payne asserts, enables businesses to make informed decisions — to balance operational requirements with people risks. (Source)

Banks warned against higher deposit rates

The central bank has warned 17 commercial banks against offering higher interest rates on deposits, saying the practice would fuel an unhealthy competition and distort the monetary system.

The Bangladesh Bank sent letters to these banks — two foreign and the rest local private banks — on Monday, a central bank official said.

A BB survey found that 50 percent of the total branches of eight banks offered higher deposit rate than the ceiling, the official said.

Though the BB has not set such a ceiling, the Association of Bankers Bangladesh Ltd, which is a platform of banks’ chief executives, put the limit at 12.5 percent through an informal understanding between banks.

But the survey found that some banks were collecting deposits by offering rates higher than 12.50 percent.

The banks also reported to the BB in February that they had offered 12.50 percent or below.

The main purpose of the survey was to collect data on the extent of this misreporting of deposit interest rates, as accurate data is essential for effective financial and monetary policy.

Members of a BB team collected the data directly from different bank branches in Dhaka and outside in the guise of potential depositors or customers, the official said.

Information on offered interest rate to customers was collected for different time like one month, three months and one year and more, as well as amount of deposit less than Tk 10 lakh, Tk 50 lakh and above.

Data were collected over telephone during last week of January and first two weeks of February from 340 bank branches of four state banks, 30 private banks and seven

foreign banks.

Bank-wise data show that at least one or more branches of the 17 banks are offering more than 12.5 percent (13-14 percent) interest rate for deposits.

“In eight banks, 50 percent or more of the sampled branches are offering more than the reported 12.5 percent interest rate,” the survey report said.

Branch level data indicate that about 16 percent branches (54 branches) offered more than 12.5 percent interest rate for deposit of Tk 50 lakh and above for one year and more maturity period.

About 62 percent branches offered equal to 12.5 percent, and about 22 percent branches offered less than 12.5 percent, the survey found.

However, the deposit rates of some banks went down in line with a decline in their costs of funds, leading to scope to bring down their lending rates as well.

But the banks did not lower their lending rates. The spread (the difference between a bank’s deposit and lending rates) of five banks was above 9 percent in January, according to BB data. (Source)

Mirpur-Airport flyover opens today

Aimed at easing the capital’s traffic movement between Mirpur and Shahjalal International Airport and Gulshan areas, the Mirpur-Airport Road flyover opens to public today.

Prime Minister Sheikh Hasina is expected to inaugurate the flyover.

The Tk 200-crore structure stretches from Matikata at Dhaka Cantonment to Airport Road at Zia Colony. The length of the flyover is 1.8 kilometres, including the length of four landing and climbing ramps.

The 15.5-metre-wide flyover has four lanes. It has a down-ramp opposite Radisson Hotel, an up-ramp from Uttara, a down-ramp to Banani and a down-ramp to Mirpur.

Presently, many people from Mirpur and Pallabi have to take an 11-km detour through Bijoy Sarani or Agargaon to go to the airport.

Now by using the flyover, they will travel only a three-kilometre distance from Mirpur-12 to the airport across Dhaka Cantonment, said Brig Gen Abu Syed Md Masud, project director of the flyover.

In about 20 minutes, commuters will be able to travel to Uttara, Badda, Banani and Gulshan areas without facing any military checkpoints, he added.

Similarly, people coming from the airport and willing to go to Mirpur or Pallabi will also benefit from the flyover.

Noted civil engineer Prof Jamilur Reza Chowdhury, however, said it will help passengers reduce travel distance only after the completion of the Kuril elevated interchange.

Prof Md Shamsul Hoque, who teaches transportation engineering at Buet and is involved in several roadway development schemes in the capital, said such a short-length flyover (overpass) would partially ease up “only the local traffic congestion”, not that of the whole city.

Such overpasses, including the ones at Mohakhali, Banani and Tejgaon, will not make any tangible improvement in overall traffic gridlock until a mass transport system, such as a metro rail, is installed, he added.

Commuters from Banani and Gulshan will be able to go to Mirpur by taking the link bridge on the west of Banani overpass.

The army’s Special Works Organisation started the work on January 25, 2011, and has completed it three months before the deadline.

Mir Aktar Hossain Limited has worked as the construction contractor of the flyover with local design consultants and materials. (Source)

Bangladesh businesses pushed into dire straits to frequent hartals

Three months ago, Shahidul Islam started a makeshift shop in the capital’s bustling Karwan Bazar area in order to support his family living at a village in Barisal.

But his only income source has already come under threat thanks to frequent political shutdowns by the opposition alliance.

“I used to keep the shop open during the hartals earlier this year. But nowadays shutdowns have become so violent I do not dare anymore. I do not want to die in clashes between police and hartal supporters,” he told The Daily Star.

The 49-year-old breadwinner of a seven-member family sells tea, biscuits, cigarettes, breads and banana from morning to night at the western side of the Karwan Bazar underpass.

He runs the tin-roofed stall in an area that bears the most brunt during any political shutdown, as it is located on one of the busiest streets of the capital.

Asked how he recoups the loss due to shutdowns, Shahidul said, “There is no other way.”

The father of five sleeps at a nearby cinema hall at night, as he cannot afford to rent a room or bed in a mess frequented by people living alone in Dhaka.

He said he could neither bring his family to the capital as the living cost here is ever rising.

“The whole family relies on my income,” said Shahidul, who can save between Tk 150 and Tk 200 a day from sales.

He sends Tk 3,000 to his family in Barisal. With this his wife has to maintain the family, which includes four school-going children.

In a sense, Shahidul is not alone, as there are thousands in the city and beyond the city who suffer the same financial losses whenever any political party calls for a hartal.

Kamruzzaman Lalin, manager of SR Foreign Furniture in Panthapath, one of the largest stores for non-branded furniture in the capital, said the losses from the shutdowns are never recouped.

“Our businesses depend on day-to-day sales. Any loss imposed by any political cause is not recovered,” he said, “Retailers cannot afford to bear such losses.”

Shamsul Alam, who sells both wooden and non-wooden doors at a store in Farmgate area, said the slowdown in business had deepened further due to shutdowns.

Their financial turmoil is only a tiny part of the fall-out the country’s economy is going through due to violence on streets. Experts blame mistrust among major political parties for this.

Micro, small and medium-sized businesspeople said shutdowns in Bangladesh had taken new shape.

“In the past, businesses were disrupted only on hartal days. But nowadays, the day before shutdown also witnesses sharp fall in sales due to thin presence of shoppers. This is because hartal supporters have now indulged in destructive activities even on the day before hartals,” said one businessman.

This resulted in people avoiding non-essential outings, he said referring to yesterday’s torching of vehicles in the capital.

Businesspeople said most businesses run on a supply chain. If one part of a chain is affected, the whole chain suffers.

According to an estimate by the International Chamber of Commerce, Bangladesh, each nationwide shutdown costs the country $ 200 million.

Since January, the opposition alliance has observed 13 days as hartals. There were also district-wise hartals, which affected local businesses.

A number of shop-owners in Panthapath and Green Road areas said small and medium businesses cannot afford sales disruption for a week in a month.

There are also shops that defy shutdowns and keep the businesses open despite the heavy risk that their businesses could be attacked and set on fire.

“If shutdowns are enforced for a week in a month, we are left with no other choice. We have to keep the shop open to make a living,” said Kamal Hossain, who manages a branch of a courier service company.

Economists said small shop owners such as Shahidul or Kamal faced the most brunt of political shutdowns. They urged all political parties to sort out their differences quickly to give general people some relief.

On one hand, their incomes are curtailed while on the other, they have to buy essential commodities at a higher price, as shutdowns disrupt supply chain, pushing up prices of the essentials, said Zaid Bakht, a research director of Bangladesh Institute of Development Studies.

Economists and chambers have already warned of dire economic consequences if hartals are not shunned. They say the shutdowns will not only destroy public property and lives but also slow down the economic growth, discourage new investment, shoo away potential investors and dent the country’s hope to become a middle income nation by next decade.

The BNP-led opposition alliance has called 36-hour shutdown from today demanding release of its arrested activists and protest, what it called, “the recent genocide”. (Source)

Ports, banks to remain open Saturday to cover losses of shutdowns

Finance Minister AMA Muhith yesterday assured business leaders of ports and banks remaining open on Saturday, a public holiday, to help cover the losses of frequent shutdowns across the country.

Muhith spoke at a meeting with the business leaders at his office in Dhaka, said Kazi Akram Uddin Ahmed, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), who led the business team to the meeting.

Muhith will meet officials of Bangladesh Bank, NBR, ports and related ministries today to take decisions.

Currently, the customs house at Chittagong port remains open on Saturday for export purposes, but from now, it will also work on import-related issues.

The minister assured the businessmen of withdrawing the 48-hour cut-off time requirement for exports to help cover the time loss from the hartals.

A cut-off time is a period before which the export goods have to reach a port for timely shipment. At Chittagong port, the cut-off time is 48 hours. (Source)