...Abstract: The Research gives the grievous effect on different parts of Fiscal policy that is affected by Hartal. As a result if the situation becomes entangled in a certain stage the wheel of the entire economy are bound to be halted abruptly and the country’s economy wil be destroyed. For this reason it is essential for our politician to search an alternate of Hartal. The Research identifies a disappointing fact that Hartal imposes a large cost on the economy. Also it attempts to explore the negative impacts on GDP and revenue collection. Based on the findings, a number of suggestive policy measures that the planners and implementers may consider for the future development of political situation in Bangladesh are embedded in the end of the Research. Title of the Research: “Fiscal Policy and Hartal: A Case Study on Bangladesh from 2013 to 2014; specially on the Last National Election Period in Bangladesh”. Intruduction: Fiscal policy is very much related to the Public Finance in the Macroeconomics. Fiscal policy means the process by which government’s expenditures, tax rates and budgets would be monitored the national economy.The term “Hartal” basically comes from Gujarati language. “Hat” means market and “tal” means tala or lock, which referred to locked market or bazaar“bondh.” Hartal was first used during the Indian Independence Movement. It is a way of mass protest often involves a total shutdown of workplaces, offices, shops, courts of law with the object of realizing a...
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...Bangladesh began implementing structural policy reforms to increase the market orientation of its economy in the late 1970s. The authorities adopted significant reforms in agriculture, industry, and trade, and also pursued reforms in the financial and infrastructure sectors. These reforms helped accelerate growth from an annual average of 3 percent in the 1970s to 4 percent in the 1980s and to 5 percent in the 1990s. Sound and sustained macroeconomic management ensured macroeconomic stability, contributing to Bangladesh’s ability to maintain one of the lowest growth volatilities in the world. Major Policy Reforms Contributed to Growth Acceleration: * Agricultural policy * Industrial policy * Trade policy * Infrastructure policy * Financial policy * Macroeconomic policies * Human Development policies Macroeconomic policies Following the initial debacle of the 1972–75 periods, Bangladesh was able to maintain a broad degree of stability of macroeconomic policies, as reflected in relatively low inflation and a stable real exchange rate. Fiscal, monetary and exchange rate management was broadly on track for most of the period until around the end of the 1990s. This long-term good macroeconomic management served Bangladesh well, contributing to incentives for private investment and exports. Inflation has now been reduced to 3–4 percent annually (Chart 7). The correction of the macroeconomic imbalances started in the late 1970s and continued...
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...the paper: With giving an overview of what the monetary policy really is and narrating how the central bank formulates the monetary policies and takes the necessary steps for its implementation in Bangladesh, this paper targets to analyze the impact of monetary policy on the inflationary situation. Methodology: The study depends on I. Extensive literature review of external sources on central banks on formulation and implementation ofmonetary policy for the country II. Publications of Bangladesh Bank Scope of the paper: 1. First of all, monetary policy is a deep sea to swim through. Though Bangladesh practices and implements a limited number of instruments, the mix is always complex to grab the main idea behind it. Extensive analysis of the mix is beyond the scope of the paper. 2. Framing of indices of central bank policies is beyond the limit of this paper. 3. Structured data is hard to collect from the departments of Bangladesh Bank, so complex calculations and data analysis is deliberately avoided. Bangladesh Bank (BB): The central bank of the country, was established as a corporate body by the Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16 December, 1971 by acquiring the liabilities and assets of erstwhile State bank of Pakistan in East Pakistan. Bangladesh Bank is the central bank of the country | | There is a cross departmental committee on monetary policy (MPD) headed by a deputy governor, which includes the officials...
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...* Budget making process. Midterm budget framework. Budget Defined * A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues. * A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. * The two basic elements: Revenues and Expenses. * Revenues are derived primarily from taxes and non-tax revenue. * Government expenses include spending on current goods and services, which economists call government consumption ; government investment expenditures such as infrastructure investment or research expenditure; and transfer payments like unemployment or retirement benefits, Social Safety nets Basis of Budget * Budgets have an economic, political and technical basis. * Unlike a pure economic budget, they are not entirely designed to allocate scarce resources for the best economic use. * They also have a political basis wherein different interests push and pull in an attempt to obtain benefits and avoid burdens. * The technical element is the forecast of the likely levels of revenues and expenses Budget Cycle * Budget Preparation: The first phase of the budget cycle involves preparation by the departments/agencies, ministries and finally ministry of Finance * Legislative Approval: Typically, the legislature has the power to approve or reject a proposed budget. They review it and vote. If approved, it moves...
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...Fiscal Policy generally refers to the use of taxation and government expenditure to regulate the aggregate level of economic activity in a country. Fiscal policy in Bangladesh basically comprises activities, which the country carries out to obtain and use resources to provide services while ensuring optimum efficiency of the economic units. The policy influences the behaviour of economic forces through public finance. Major objectives of the fiscal policy of Bangladesh are to ensure macroeconomic stability of the country, promote economic growth, and develop a mechanism for equitable distribution of income. The main tools to achieve these objectives are variation in public revenue, variation in public expenditure, and management of public debt. These are reflected in the budgetary operations of the government, prepared and implemented on year-on-year basis. In the initial years of independence, the government of Bangladesh had to spend a large amount of its resources in reconstruction and rehabilitation work. It had negative public savings and limited private investment. Despite large inflows of foreign aid, the increasingly large financing gap became the main concern of the government. The situation was further aggravated by frequent internal and external shocks. Under the circumstances, government fiscal policies during 1970s and 1980s were largely oriented at rehabilitating the war-torn economy as well as stabilising it from various shocks. This had gradually lead to weak...
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...over a particular time period. Transactions that reflect inflows of funds generate positive numbers for the country’s balance, while transactions that reflect outflows of funds generate negative numbers for the country. Current Account: The current account is one of the two primary components of the balance of payments, the other being capital account. It is the sum of the balance of trade (net revenue on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers. Calculating Current Account: (Export – Import) + Net Income (abroad) + Net Current Transfer Current Account Overview of Bangladesh: From the chart below we can observe the last five year current account condition year 2007 – 2011, the chart states that Bangladesh had a surplus condition all...
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...Bangladesh Economic Update Bangladesh Economic Update Capital Market Capital Market October 2011 October 2011 Bangladesh Economic Update Volume 2, No. 9, October 2011 Acknowledgement: Bangladesh Economic Update is an output of the Economic Policy Unit of the Unnayan Onneshan, a multidisciplinary research centre based in Dhaka, Bangladesh. The report is prepared by a team, under the guidance of Rashed Al Mahmud Titumir. The team comprises Md. Aslam Hossain and A. Z. M. Saleh. The report is an output of the programme titled Enhancing the responsiveness of the government to address exclusion and inequality. The programme has been supported from a grant of Christian Aid. © Copyright: Unnayan Onneshan-The Innovators The content of this publication may be reproduced for non-commercial purposes with proper citation (please send output to the address mentioned below). Any other form of reproduction, storage in a retrieval system or transmission by any means for commercial purposes, requires permission from the Unnayan Onneshan-The Innovators. For orders and request please contact: Unnayan Onneshan - The Innovators 16/2, Indira Road, Farmgate Dhaka-1215, Bangladesh Tell: + (880-2) 8158274, 9110636 Fax: + (880-2) 8159135 E-mail: info@unnayan.org Web: www.unnayan.org Bangladesh Economic Update, October 2011 2|P a g e SUMMARY This issue of Bangladesh Economic Update discusses the continuous fall in the capital market of Bangladesh. Continuous decrease in the capital market...
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...Introduction Bangladesh is a country of more than 140 million people, and it is one of South Asia’s least developed countries. The country has under gone a major shift in its economic philosophy and management in recent years. At Bangladesh’s birth, the country embraced socialism as the economic ideology with a dominant role for the public sector. But, since the mid-seventies, it undertook a major restructuring towards establishing a market economy with emphasis on private sector-led economic growth. Bangladesh achieved good economic progress during the 1990s by adopting a series of structural and economic reform measures. The stabilization program reduced inflation as well as fiscal and current accounts deficit and established a healthy foreign exchange reserve position. Economic performance improved with gross domestic product (GDP) growth averaging 5 percent in the 1990s compared with 4 percent in the preceding decade. The acceleration in economic growth was accompanied by decreased incidence of poverty and a distinct improvement of some key social indicators. Rapid growth in food grain production has been a remarkable feature of the country’s economic performance in recent years. In FY2000, Bangladesh reached self-sufficiency in food grain production. A combination of factors accounts for the robust growth of the agriculture sector, and in particular of food grains. According to a World Bank estimate, Bangladesh has the 36th largest economy in the world in terms of GNP based...
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...will not affect Bangladesh economy as badly as it can to other developed economy because economy of Bangladesh is not so dependent on international capital or foreign investment. But, still there are and will be some shocks of ongoing global financial crisis available for Bangladesh economy. So, Bangladesh economy will be affected by global financial crisis. Global financial crisis might reduce overseas job opportunities and export earnings. Global financial crisis may turn into a recession. Economy of developing countries including Bangladesh is already going through recession. Bangladesh is a low income country. If global financial crisis continuous then economy of Bangladesh will be suffering. Negative impacts of global financial crisis are beginning to show on the increasingly globalizing economy of Bangladesh. Export growth rate of Bangladesh has turned negative. Export of non-apparels items is being reduced. Depreciation of currencies by competing countries caused erosion of Bangladesh’s competitive strength in the global market. Remittance earnings could be badly affected in near future because number of job seekers going abroad halved as some countries either revoked or have stopped issuing new visas. So, global financial crisis is likely to have negative impacts on GDP growth of Bangladesh. As a result of global financial crisis, macroeconomic performance of Bangladesh is being weakened. Global financial crisis is likely to badly affect exports of Bangladesh as well as aid-flow...
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...The Taka 1917.38 billion proposed budget for the forthcoming fiscal, 2012-13, is sized at 18.1 per cent of the country's gross domestic product (GDP) that is projected to do grow at 7.2 per cent during the year. There are challenges and risks, both domestic and external, that do provide some strong reasons for being not much optimistic at this stage about achieving this growth performance. That does not mean that the growth target itself is overambitious. The actual performance of the Bangladesh economy has otherwise been impressive over the past several years in a row, given the comparative picture of other low-income developing countries and the odds and difficulties, both exogenous and endogenous. But even this performance has been considered below the potential of Bangladesh. This is what the economists, analysts, development practitioners and all others, within and outside, have been stating about Bangladesh over the years. The growth rate, however, is not the sole indicator of 'socio-economic development' in its broad sense. But it unquestionably remains to be one of the important criteria for assessing the overall performance of an economy. The quality of growth -- its nature and dimension of inclusiveness, impact on social development indices concerning the state of education, health, nutrition and, thus, human resource development, income-distribution and employment-generation effects, poverty alleviation efforts etc. -- is also a pertinent point for consideration...
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...The Investment Climate, Governance, and Inclusion in Bangladesh Nicholas Stern Chief Economist and Senior Vice President, World Bank1 Speech delivered at Bangladesh Economic Association, Dhaka January 8, 2002 Mr. Chairman, Ladies and Gentlemen: It is a great pleasure for me to return to Bangladesh after nearly 15 years and to have this opportunity to speak at the Bangladesh Economic Association. I last visited this beautiful country in 1986 as a member of an economic advisory team working on tax reforms. I have followed your country’s significant achievements since the early 1980s: a steady pace of economic growth, strong increases in primary education enrollment and girls’ education, striking reductions in fertility and infant mortality rates, widespread immunization, success in exports of ready-made garments, increases in food production, improvements in disaster preparedness and flood relief, and the emergence of an impressive NGO system and grassroots strengths. These are achievements that many observers would have thought impossible three decades ago, when some were sufficiently foolish as to refer to Bangladesh as a “basket case.” The aggregate statistics on growth and poverty illustrate this progress. As you know, the growth rate of GDP per capita accelerated steadily, from less than 1% a year in the 1970s to 1.8% in the 1980s and above 3% in the 1990s. By the 1990s, Bangladesh’s I am grateful to Shahrokh Fardoust and Halsey Rogers for their contributions to the preparation...
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...Multinational Environment- Bangladesh Submitted by: Niraj Kharel MBA 4th trimester Business Strategy Introduction Bangladesh is emerging as a country capable of producing advanced products like pharmaceuticals, ships and electronics. The world’s eighth largest country in terms of population with approximately 160 million inhabitants will most likely remain heavily dependent on labor-intensive and export-oriented industries for the foreseeable future. However, this is only part of the picture, as an increasing number of companies today look on Bangladesh as a market with growing potential. There are of course still a number of challenges experienced by companies doing business in Bangladesh. Bangladesh has immense potential; people have a positive frame of mind; while the main bottlenecks are to be found in the volatility in the macro & political environment and there are several multinational environmental factors which are discussed below: 1. Government laws, regulation and policies of Bangladesh The government of Bangladesh (GOB) gradually developed seed laws, policies, and regulations for the seed sector that eventually, through various amendments, expanded regulatory oversight over both the private and public sector, and all seed varieties and the governments’ laws, regulation and policies are: * Monetary and Fiscal Policy: The regulation of the money supply and interest rates by a central bank, such as the Central Bank of Bangladesh in order to control inflation...
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...Economic structure and growth When the Europeans set up trading posts around the area of Bangladesh, the British dominated the region. As such, Bangladesh was part of British India until the region was split up into India and Pakistan in 1947. Pakistan was comprised of West Pakistan (current Pakistan) and East Bengal (current Bangladesh. This awkward arrangement of a two-part country with its territorial units 1,600 km apart left the Bengalis marginalized and dissatisfied. In 1971, East Bengal separated from Pakistan and was renamed Bangladesh. Ever since, economic development has been very slow, hampered by political turmoil. It is one of the poorest countries in the world with nominal GDP per head of only USD 1,483 and 36% of the population living below the poverty line of USD 1 per day. The low level of human development is also reflected in the UN’s human development index, which ranks Bangladesh 146th out of 182 countries. Economic development is also hampered by a high vulnerability to inundations. Each year, about a third of the country is flooded during the annual monsoon rains. This severely affects the agricultural sector, washing away crops. While the agricultural sector is not especially important in terms of economic size, since it accounts only for 18% of GDP, it employs 45% of the country’s labor force. The industrial sector contributes 29% to GDP and within this sector the textiles and garment sector is a key growth driver. Unfortunately, the industrial sector...
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...Introduction: International Business means performance of cross border economic activities to maximize long run total profit. In case of International Business we are suppose to follow some domestic regulations and some international regulations. Legally banks and financial institutions can only facilitate payments. However, in International Business global economy is the market profit opportunities are huge. The definition of international business focuses on transactions. The use of this term recognizes that doing business internationally is an activity, not merely a passive observation. Closely linked to activity is the term “satisfaction.” It is crucial that the participants in international business are satisfied. Only if they feel they are better off after the transaction than they were before, will individual business transactions develop into a business relationship. The fact that the transactions are across national borders highlights a key difference between domestic and international business. The international executive is subject to a new set of macro environmental factors, to different constraints, and to quite frequent conflicts resulting from different laws, cultures, and societies. The basic principles of business are still relevant, but their application, complexity, and intensity vary substantially. Area of study within this topic include differences in legal systems, political systems, economic policy, language, accounting standards, labor standards, living...
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...CHAPTER 1 MACROECONOMIC SITUATION [The economy of Bangladesh has successfully tackled the contagion effect of global economic crisis and managed to maintain a sustained growth. According to a provisional estimate, the economy has posted a growth of 6.66 percent in FY2010-11 against that of 6.07 percent in FY2009-10. This performance is mainly attributable to the sustained growth in agriculture sector coupled with recovery of growth in industry sector and the satisfactory performance of service sector. During this period, higher growth in revenue mobilisation and prudent budget management helped maintain macroeconomic stability and discipline in fiscal front. Furthermore, the increasing global demand for goods and services after recovery has helped achieving higher growth in foreign trade, while soaring global food and non-food prices has created inflationary pressure in the country. Alongside adopting various administrative and structural measures, monetary policy instruments have also been used to reduce the inflationary pressure. Moreover, slower growth in remittance inflows and higher import demand due to massive investment in infrastructure sector including the power sector, the current account balance and exchange rate was under pressure during the last quarter of FY2010-11. However, this situation did not emerge as a big challenge to the macroeconomic stability. The foreign exchange reserve remained steady at above US$ 10 billion during this period. Overseas job replacement...
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