INTERNATIONAL
The GST Network said it has introduced a functionality which simplifies the returns filing process for taxpayers. "A new functionality has been introduced on the GST portal for ease of the taxpayers under which questions will be posed as soon as the taxpayer enters the Returns dashboard and only relevant tiles will be displayed to the taxpayers based on the answers to the questions posed," the GST Network said in a statement. This has been started first with GSTR-3B returns (initial sales return), it added.
For 'nil' GSTR 3B returns, one-click filing has been introduced as no tile will be shown to such taxpayers. Also, a help section has been provided on each page for the convenience of the taxpayer. "Until now, taxpayers were shown all tiles with payments when they enter the Returns dashboard but now they will be shown only those tiles which are relevant for them.
"They will be asked questions and basis their response, they will be shown only relevant tiles, said Prakash Kumar, CEO of the Goods and Services Tax Network (GSTN). The new facility will result in time savings for the taxpayers, said GSTN, which provides the IT backbone for the new indirect tax regime.
SOURCE: The Business Standard
The Asian Development Bank on Wednesday raised its economic growth estimate for developing Asia to 6 percent for this year from a previous estimate of 5.9 per cent, citing stronger than expected exports and China's resilience. The Manila-based ADB kept its 2018 growth forecast at 5.8 per cent. "Developing Asia's growth momentum, supported by recovering exports, demonstrates that openness to trade remains an essential component of inclusive economic development," ADB chief economist Yasuyuki Sawada said in a report, an update of the bank's previous estimates released in September.
China's economy, the world's second largest, is projected to expand by 6.8 per cent this year, higher than the ADB's prior estimate of 6.7 per cent, on strong consumption, the bank said. It kept China's 2018 growth forecast at 6.4 per cent. By region, South Asia will remain the fastest growing region in Asia Pacific, the ADB said, even after the bank cut its 2017 forecast to 6.5 per cent from 6.7 per cent, with India's growth outlook lowered to 6.7 per cent from 7.0 per cent. The recovery in the Indian economy "is more subdued than assumed earlier due to rising crude oil prices, soft private investment growth, and weather-related risks to agriculture," the ADB said.
For 2018, India's economy is projected to grow by 7.3 per cent, slower than ADB's previous estimate of 7.4 per cent, while the overall growth forecast for South Asia was maintained at 7.0 per cent. The growth outlook for Southeast Asia was raised to 5.2 per cent for both this year and in 2018, higher than the September forecasts of 5.0 per cent and 5.1 per cent, respectively, the bank said.
SOURCE: The Business Standard
A Financing Agreement for IBRD loan of USD 250 million (equivalent) for the “Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) Project” was today signed with the World Bank. The Financing Agreement was signed in New Delhi by Joint Secretary, Department of Economic Affairs Shri Sameer Kumar Khare on behalf of Government of India and Mr. Junaid Kamal Ahmad, Country Director, World Bank (India) on behalf of the World Bank.
The Objective of the project is to enhance institutional mechanisms for skills development and increase access to quality and market-relevant training for the work force.
The Key result areas for the project include Institutional Strengthening at the National and State Levels for Planning, Delivering, and Monitoring High-Quality Market-Relevant Training; Improved Quality and Market Relevance of Skills Development Programs; Improved access to and completion of skills training for female trainees and other disadvantaged groups; and Expanding skills training through private-public partnerships (PPPs). The closing date for the project is 31st March, 2023.
SOURCE: PIB
As post-Brexit referendum currency adjustment continues, prices of clothing items increased by 3 per cent in November 2017, compared to 0.9 per cent last year, according to the Consumer Price Inflation figures released by the Office for National Statistics (ONS), recognised as UK’s national statistical institute. Overall inflation too edged up 3.1 per cent. The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.8 per cent in November 2017, unchanged from October 2017. While the Consumer Prices Index (CPI) 12-month rate was 3.1 per cent in November 2017, up from 3.0 per cent in October 2017; it was last higher in March 2012, ONS data showed.
“Higher prices mean that shoppers’ budgets won’t go as far this Christmas, with spending likely to continue its trend of shifting towards essential, predominantly food items and away from discretionary goods,” commented Rachel Lund, head of Retail Insight & Analytics at the British Retail Consortium (BRC) in a press release. “However, the pile of presents under the tree doesn’t have to be smaller this year: our shop price data shows that retailers are still offering lower prices than last year on some of their non-food ranges, so for consumers on a stretched budget there are still options available,” she added.
Source: Fibre2Fashion
Being the highest value-added sector in the textile value-chain, ready-made garments bring in substantial amount of foreign exchange for the country. But a number of constraints have stagnated the sector’s export growth particularly in light of rapid developments in global consumer preferences. The surprising part is that in some cases there is excess demand, but Pakistani manufacturers are unable to fill export orders. Two industry specific issues warrant the undivided attention of policymakers as well as the private sector: raw material and skill-set.
Yesterday this column highlighted the need to develop the skills that are needed to make garments for customers whose requirements evolve on a daily basis. Breathability, durability and quality preferences are becoming more demanding. At the same time fashion preferences have led to computer aided design and techniques such as automated cutting. While there is certainly a dearth of textile training institutes, even the ones in place have a long way to go in terms of imparting modern production practices.
Ideally, the first step for a country when coming up with macro-economic labour policies is the direction. There must be a vision in place which identifies the local competitive advantage and then works to utilize vocational institutes into developing that specific composition of skilled labour.
That direction has largely been absented in Pakistan. The National Vocational & Technical Education Commission (NAVTEC) came up with the National Skills Strategy 2009-13 but experts say the body has yet to realise its aim of bringing structure to the TVET sector in the country.
In Punjab the two bodies responsible for skills development are the Technical Education and Vocational Training Authority (TEVTA) and the Punjab Skills Development Fund (PSDF). As with all government departments, co-ordination between both of these provincial bodies and NAVTEC is missing.
Then there is the issue of conducting a proper gap analysis to identify the relevant skills needed for each sector and product. According to Ijaz Khokhar, Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), each piece of garment such as trousers, shirts, suits, martial arts requires separate skills.
This holds additional significance in light of spurring industrialization in the context of the China Pakistan Economic Corridor (CPEC). The Chinese are in need of skilled labour as their plan is to mostly bring middle and senior level management. However, they have been unable to find the proper human resource so far especially when it comes to factories that will produce higher value-added products like shirts and suits. The need of the hour is to develop garment training institutes while aligning the objectives of all government departments to identify the gap in skills and work on removing them.
SOURCE: The Business Recorder
Bangladesh plans to increase its apparel export to the global market with a high ambition of reaching the USD 50-billion mark by 2021, in line with the government's Vision 2021, which is centred around a goal for the country to attain the middle-income country status by that year when the nation celebrates the golden jubilee of its independence. But doubling the export, which currently stands at USD 28 billion, in just four years' time is going to be a difficult task. The only way to increase the export amount is by adding value to the apparel.
The current competitive advantage of Bangladesh is already being challenged by countries that depend on low-cost production—like Ethiopia. Many European and US retailers and brands will follow these countries if better margins are offered. Moreover, if Bangladesh is to graduate into a middle-income country, then the wages for its four million workers involved with the garment industry will have to rise at the expense of the margins of the apparel producers, resulting in lower profitability and losing that competitive edge. It is a catch-22 situation given our current low-cost production strategy. And it's doom to failure because of the law of nature about a developing country that must offer the benefits of a higher living standard in its journey to becoming a nearly industrialised one.
Therefore, for the growth vision for 2021 to deliver, it is high time the apparel industry leadership fostered change as regards its customer base. The first option is to keep the customers in the apparel sector, not with low cost, but with innovation, collaboration and proliferation, thereby increasing the production volume and margin. Simultaneously, growing the number of customers in the value creation process will be an added bonus.
For decades, international buyers for large international apparel chains and brands have worked under the assumption that labour cost must be kept as low as possible in order for garments to be produced at competitive prices. This widely-held belief has made the industry move from country to country, as the increase in labour cost erode each local market's temporary advantage. One day, possibly soon, this journey will come to an end.
Cheap labour is becoming a rare commodity while the number of low-cost countries is also dwindling. Demonstrated thought leadership by the international retailers and brands need to get ahead of this trend by assessing what they can influence with their existing production partners to generate sustainable efficiency gains, improve their production speed, and ultimately take pressure off labour cost management, thus ensuring that margins are offered as a part of efficiency—not through cheaper labour. Consequently, the challenge for the apparel buyers is to collaborate with their production partners to advance the ideas of innovation, collaboration and proliferation. By inspiring, generating and adopting production innovations that improve speed and efficiency, they can increase their responsiveness to fashion cycles. By collaborating on adopting a standard unit of measure, both parties can, through this act of co-creation, help bring cost transparency to the supply chain and boost productivity. And by managing sub-suppliers and improving coordination with tier one, two and three for fabric, trim and sundries, they can proactively manage the raw material suppliers, consequently delivering positive proliferation.
Next to streamlining the internal processes to gain value growth, the other obvious concept to support the growth of Bangladesh apparel export is the external shift from volume to value customers. According to the Boston Consulting Group, there has been a rebound in consumer confidence since the last financial crisis. As confidence rises, consumers become more willing to splurge on expensive products. Therefore, there are many opportunities for the Bangladesh apparel industry to grow margins by adding value and attracting premium brands and retailers. A blouse or pair of jeans cost more or less the same to produce, and it is mainly the raw materials that are adding cost to production. Managing the raw materials will be crucial but the margin gains will be many times more as the medium to premium brands and retailers sell at a much higher retail price and can buy the product in Bangladesh at a higher price.
The biggest trend in EU and the US for capturing margin building and value adding growth is Experience Economy, which is estimated at USD 1.3 trillion in annual consumer spending in the US alone. The shift from personal goods to experiences will benefit some fashion companies, provided they are positioned correctly. For example, the rise of health and wellness experiences benefits companies that make activewear, athletic footwear, and other apparel for exercising, hiking, and spending time outdoors. The rise in leisure travel will mean higher sales of layering clothes, luggage, and travel accessories.
To respond to this, companies will need to reposition themselves—at the levels of the portfolio and individual brands—by orienting products around specific experiences.
This is where the other opportunity lies for supporting the growth vision for Bangladesh by 2021: shortcutting the traditional entry price brands by adding new medium to premium brands and retailers that are targeting the experience economy. Quick gains could come by addressing these brands in the medium to premium segment with the already established production and supply chains in Bangladesh and harvesting the margins as the retail prices are higher than the entry price brands. In this, Bangladesh faces a few challenges. Medium to premium brands and retailers are looking for value adding design perspectives that will enhance the consumer experience and set the products apart from competition. Does Bangladesh have the ability to add value to design? The second challenge is the perception of Bangladesh as a production hub that ignores social and ethical issues leading up to the collapse of factory buildings due to lack of health and safety. Many US and EU boards of directors see Bangladesh as a liability that can get a bad press and damage their image.
The value creation performance of the Bangladesh apparel industry has, for over 40 years, delivered continued growth but if the apparel industry is to continue to support the growth, change management and repositioning from volume to value are the key. There is no silver bullet to changing the industry's future. What's most important is that Bangladesh and its apparel industry leadership understand the factors that are most relevant to the growth vision that will allow Bangladesh to capitalise on a recovering global economy and return greater value to the future of the country.
SOURCE: The Daily Star
The Ethiopian Textile Industry Development Institute disclosed that the foreign currency generated from the textile sector has been steadily growing. Over the last three months Ethiopia has earned USD 31.2 million from textile and garment export. The Ethiopian textile products have entered into Germany, Italy, China and United States through AGOA stated Institute Communication Directorate Director Bantihun Gessesse.
The burgeoning of the textile industries triggers the expansion of cotton farming by public, private sector and small scale farmers. Currently, the total cotton farm being cultivated has reached 42,000 hectares of land. The domestic cotton production could satisfy the local demand, he added. The institute is providing training cotton growers to maintain the quality of the cotton.
Regarding foreign investors flow, Bantihun said that the prevalent of peace and stability, availability of abundant cheap labor, plenty of cheap energy from hydro power and flourishing industrial parks all over the country are the pulling factor. He said thanks to the enabling investment environment currently foreign companies are injecting their money, technology, experience as well as skills on the sector. In addition, the government is encouraging foreign investors through the provision of various incentives including tax holidays, tax free capital goods importation, custom services provision on the spot, and easily access to financial credit. The director said that university-textile industry linkage is getting strengthened. Formerly, the only institution integrated with the industry was Bahir Dar University but currently more than six universities is enrolling students in textile and garment technology with first and second degrees. The world number one US textile industry known as HDM has installed its factory in Hawassa Industrial Park creating10,000 jobs and expected to create many more jobs in the coming years. Most graduates from technical colleges would benefit from these job opportunities.
SOURCE: Yarns&Fibers
Buyers initially saw chasing limited quantity of quality cotton realizing that under the developing scenario lint imports after rupee devaluation will become costlier. Buyers are rushing to get hold of maximum lint quantity, regardless of its quality at the cotton market on Tuesday which once again pushed cotton prices to a seasonal peak of Rs7,100 per maund. The buyers were also not optimistic about imports of cotton from India since a large-scale pest attack has drastically slashed the crop size.
Cotton brokers said that the delay in allowing cotton imports from India has minimized the possibility of getting quality cotton because much of the high grade cotton would had been lifted by end of this month by Indian textile mills or exported. The surge in cotton prices also had its implication over phutti (seed cotton) as both Sindh and Punjab qualities were quoted in the range of Rs2,800 to Rs3,400 per maund.
At the Karachi Cotton Assocaiton, spot rates were also revised upwards by Rs100 to Rs6,700 per maund. The following major deals reported to have changed hands on ready counter were: 2,000 bales, Khairpur, at Rs6,500 to Rs6550; 1,000 bales, Saleh Pat, at Rs6,650 to Rs6,800; 1,400 bales, Rohri, at Rs6,650 to Rs6,700; 1,000 bales, Daharki, at Rs7,050 to Rs7,100; 1,800 bales, Ghotki, at Rs7,050 to Rs7,100; 600 bales, Mirpur Mathelo, at Rs7,050 to Rs7,100; 1,200 bales, Khairpur, at Rs6,500; 5,000 bales, Khanpur Maher, at Rs7,050; 3,200 bales, Rahimyar Khan, at Rs7,000 to Rs7,100; 2,200 bales, Sadiqabad, at Rs7,000 to Rs7,100; 1,000 bales, Kot Sabzal, at Rs7,100; 2,600 bales, Ahmedpur East, at Rs7,000; 1,000 bales, Dera Ghazi Khan, at Rs6,900; 2,800 bales, Bahawalpur, at Rs6,300 to Rs6,600; 2,600 bales, Faqirwali, at Rs6,450 to Rs6,475; 1,800 bales, Haroonabad, at Rs6,400 to Rs6,500; and 1,800 bales, Mianwali, at Rs6,350 to Rs6,675.
It is being estimated that cotton crop size would be around 11.5 million bales but lint quality is a major concern for the textile industry which still needs around 3m bales to meet the shortfall.
SOURCE:Yarns&Fibers
Cotton price reached to a record level of Rs7,300 per maund in the local market as rupee depreciation increased the commodity’s import cost, an industry official said on Wednesday. “With jump of Rs200/maund, the price of cotton reached the record level of Rs7,300 per maund, which is the highest in the current season,” the official said. Ihsanul Haq, chairman of Pakistan Cotton Ginners Forum (PCGF) said cotton prices are already on the rise due to low cotton production.
“Now with depreciation of rupee and lack of cotton imports from India, a further increasing trend is being witnessed in the cotton market,” Haq added. Last month, government allowed cotton imports from India to meet the growing appetite of key textile industry, though it slapped tough set of rules for consignments from the neighbouring country. Government is likely to start issuing permit for import of cotton from India through land route.
Pakistan, which is the world’s fourth largest cotton producing country, falls short of around four million bales a year to meet the local demand of nearly 16 million bales. PCGF chairman said cotton price in India is also on the rise due to various factors, prompting importers from Pakistan to reconsider placing import orders. The uncertainty in cotton market has depressed buying activity, he added. “It is likely that upward trend in prices of cotton would continue in the coming days in the local market.”
SOURCE: The News
For decades after polyester’s invention in the 1940s, there wasn’t much exciting innovation in the fibres used in the world’s textiles. Until now. With the increased urgency about humanity’s impact on the planet, the race is on to find solutions to reduce the environmental impact of clothing. That’s why fabrics will soon be made of pineapple and banana, and silk and leathers will be grown in a laboratory. The fashion industry is commonly accused of being the second-biggest polluter of the planet, second only to the oil industry. According to the documentary The True Cost, humans consume 80-billion pieces of clothing annually.
With the advent of fast fashion — the quick delivery of new clothing trends to retail outlets — the production of clothes has doubled in the past 15 years, and will continue to grow rapidly if business-as-usual continues. This means continued growth in the production of polyester. The world’s most commonly used textile is a plastic-based synthetic fibre made from coal, air, water and petroleum and takes more than 200 years to decompose. Polyester is also the source of tonnes of plastic microfibres released into the ocean annually and water systems in the course of washing clothes. The Plastic Soup Foundation reports that between 600,000 and 17.7-million microfibres are released into water with every 5kg of washing.
The US nonprofit organisation Orb Media showed recently that billions of people are drinking water contaminated by plastic particles, with 83% of water samples found to be polluted. Polyester is not the only problem fabric. Cotton requires huge quantities of water and pesticides to produce. Rayon and viscose, other much-loved natural fabrics, are manufactured from tree fibres and unless sustainably sourced, these fibres can come from wood logged in ancient and endangered forests. The Ellen MacArthur Foundation in Britain argues in a report released in November that "clothes must be designed differently, worn for longer and recycled as much as possible to stop the global fashion industry [from] consuming a quarter of the world’s annual carbon budget by 2050". It sounds daunting, but the strides made in the renewable energy industry making clean energy an affordable and effective alternative to coal, show that cleaning up the clothing and fashion industry with new fibres, technologies and manufacturing techniques, is not a pipe dream. The work has begun. There have been three areas of innovation during the imagining and creation of a cleaner textile industry: finding more efficient and cleaner ways to recycle and upcycle clothes; creating better ways of growing and manufacturing natural fibres; and inventing new synthetic fabrics.
Clothing from high-income countries are recycled in SA. In the area around Park Station in Johannesburg’s city centre, people sift through large bins of used clothes, selecting items to sell in their microbusinesses. Planet Aid, a British non-profit engaged in recycling, says the average American throws away about 30kg of clothing a year. The Guardian has reported that "351-million kilograms of clothes (equivalent to 2.9-billion T-shirts) are traded annually from Britain alone". Planet Aid takes the view that the trading of these clothes across the world creates jobs and provides a source of affordable clothing. But it has also been argued that selling used clothes from the West to developing countries creates a relationship of dependency and an obstacle to Africa developing a clothing and textile industry.
Compounding these concerns is the problem that the clothes will eventually run out of usability and end up in landfills leaking toxic chemicals into the soil somewhere, out of sight of the West. Or they end up in incinerators, polluting the planet’s atmosphere. But by using new technology, it may be possible to give new life to old clothes and simultaneously overcome some of the issues related to the second-hand clothing trade. Some companies — such as H&M, Levi Strauss and Patagonia — are pulping old clothes and returning the recovered fibres to the fabric supply chain rather then dumping them in a landfill.
In 2016, the H&M Foundation teamed up with the Hong Kong Research Institute of Textiles and Apparel to find a sustainable process for separating and recycling polyester and cotton blends. "This fibre-to-fibre recycling method," it says, "is cost-effective, and there’s no secondary pollution to the environment, ensuring the life of the recycled material is prolonged in a sustainable way." Seattle-based Evrnu worked with Levi Strauss to create jeans from discarded cotton with "98% less water than it takes to make traditional cotton fibre and with 90% reduced CO² emissions compared to polyester production". Also in the recycling category is the well-publicised G-Star Raw collaboration with Pharrell Williams’s company, Bionic, producing denim made from plastic waste recovered from the ocean. Issey Miyake in Japan has been working with recycled polyethylene terephthalate thread for years. His label 132 5, launched in 2010, produces clothes using only recycled polyethylene terephthalate, the clear nontoxic plastic used in water and cold drink bottles. Big brands such as Adidas, H&M and Nike have also been working with recycled plastic.
Many natural fibres are being explored and promoted. In SA, Tony Budden at Hemporium advocates multiple uses of the strong, versatile and (a bonus) antibacterial hemp. Because growing hemp is still illegal in SA, it is imported — mostly from China — and its use is limited. Other plants being used to explore new textiles include nettles, bananas and coffee. Some, like lotus plants, have been used for centuries, but the commercial viability of creating fabric for the mass market still needs to be explored. There are two fabrics created from plant fibre, by Orange Fiber and Piñatex. Orange Fiber is an Italian company that developed a fabric by extracting the cellulose from the citrus fibres discarded during industrial processing. Piñatex is a soft, versatile and vegan alternative for leather made of fibres that are extracted from pineapple leaves.
Other innovative start-ups have been growing materials in labs. US start-up Modern Meadows is growing leather out of yeast that has been engineered to produce a collagen that, with some added enzymes, turns into skin. A Stella McCartney-designed yellow dress on display in New York’s Museum of Modern Art was made using fabric grown by US start-up Bolt Threads. After studying spiders’ silk, Bolt Threads recreated their thread by mimicking their DNA. On their website, they explain that a "yeast produces silk protein in a liquid form during fermentation — very much like the beer-making process". They insisted that no spiders had been harmed in the making of their silk — something that would appeal to McCartney, a lifelong vegetarian. The designer, who in 2017 won the British Fashion Council’s Special Recognition Award for Innovation, told Vogue magazine: "If you’re lucky enough to have a business on this planet, you have to approach it in this [sustainable] way."
SOURCE: The Business Live
Marking India’s 25 years of partnership with the ASEAN, the Modi government seeks to augment its ties with the 10-member regional grouping in the coming year. Not only will the 10 heads of state from the ASEAN region participate in the 69th Republic Day Celebrations as chief guests on January 26, there will also be an India-ASEAN Commemorative Summit that will be held on January 25. The theme of the summit, ‘Shared Values, Common Destiny’, will have a special focus on 3 Cs – Commerce, Connectivity and Culture, sources said.
“The very fact that all 10 leaders are coming from these countries for the Republic Day celebrations and have also agreed to hold a summit for the second time in such a short span of time is an indication of the fact that they recognise India’s ‘Act East Policy’,” said a top official. With connectivity at its core, the summit will also seek to discuss the progress achieved so far in some of the crucial projects such as the Kaladan multi-modal transit transport corridor and India-Thailand Trilateral Highway, which have been moving at snail’s pace for almost a decade now. Efforts will be made to expedite these projects. On the trilateral highway, efforts are being taken to complete the project by 2019 and then extending it to the CLMV (Cambodia, Laos, Myanmar and Vietnam) countries, the official said.
Services trade
In commerce, the summit will also seek to address the most contentious part of the relationship, which is bilateral trade between India and ASEAN. While the free trade agreement on goods have been in place since 2010, the pact on services trade have not yet been ratified by Philippines, Laos and Cambodia. It was signed in 2014.“Yes, the pact on services trade has not yet been implemented as it awaits ratification from some of the countries. But it is hoped that it will be ratified soon and we will be able to implement it,” the official said. ASEAN is India’s fourth largest trading partner. Bilateral trade between India and ASEAN reached $70 billion in 2016-17, up from $65 billion in 2015-16.
The ASEAN is also upset with India for not making enough progress in the China-led mega trade deal – the Regional Comprehensive Economic Partnership (RCEP). The official also said that a master plan on port connectivity will also be developed so that trade with ASEAN can be enhanced with a special focus on maritime connectivity. “We are looking at enhancing port connectivity with the ASEAN countries. Right now almost 10 per cent of India’s trade gets transited through the Singapore port. So we are planning to have more port connectivity,” the official said.
Strategic issues such as revival of the Quadrilateral among US, Japan, Australia and India with a focus on greater security cooperation in the Indo-Pacific region. The government also plans to host a Business and Investment Meet and Expo, Business Conclave, Textile Event and Regional Indian Diaspora Meet in the run up to the summit. In addition to this, academic conferences, business events and cultural festivals will all be organised throughout the year. During the Republic Day celebrations, a ‘special ASEAN element’ will also be introduced in the parade.
‘India is the first country where AIIB has committed over $1-b of financing’
“India is the first country where the Bank has committed more than $1 billion of financing,” said Danny Alexander, Vice-President and Corporate Secretary of the Asian Infrastructure Investment Bank, adding that it is also interested in the NIIF and Mumbai Metro Project. In an interview to BusinessLine , Alexander also dismissed perceptions of competition between multilateral agencies and said that “cooperation” is the watchword for AIIB. “We are co-financing many projects with the World Bank and the Asian Development Bank (ADB),” he said. Excerpts:
In India, what are the sectors that AIIB is interested in financing?
The third annual meeting of the Board of Governors of AIIB will be held in Mumbai in June next year. We are keen to use it as an opportunity to engage with the Indian financial community. The bank is looking to mobilise more private investments in infrastructure finance across Asia. India has been working on it and has various initiatives such as the National Investment and Infrastructure Fund (NIIF). The AIIB might also invest in it.
India is the largest borrower of the AIIB. We have just announced that we will finance Part 6 of the Bangalore Metro project. India is the first country where we have committed to more than $1 billion of financing. We are also looking at the Mumbai metro project, which we will look at next year.
AIIB started working in January 2016 and India is the largest borrower. The main areas are energy, transportation and also funds in India that work on broader infrastructure projects, as well as urban infrastructure and smart cities. The three main priorities of the Bank is mobilising private investment for infrastructure, sustainable infrastructure and cross-country connectivity to improve the links between countries in the region.
What are the AIIB’s plans for 2018?
In 2018, we will have our inaugural bond issuance and start establishing our presence in the financial markets. This year, we received AAA credit rating from three major international rating agencies. The capital of the bank is denominated in US dollars and the bond issuance will also be in the same currency. But as the next step, we want to develop the ability to finance in local currencies. That will probably be in 2019.
What about increasing the membership and annual lending target?
We are a growing bank. We lent $1.7 billion in 2016, which increased to $2.5 billion in 2017. This will increase further next year. In terms of membership, we started with 57 founding members in 2016. During this year, our Board of Governors has approved applications from 23 countries and our total membership is now 80. By the time of our annual meeting in Mumbai, our membership should be closer to 90.
Will the AIIB expand lending operations to other regions?
Asia will always be the most important focus, as the name of the bank reflects. Our Articles of Agreement give us the ability to finance projects in other member countries. We are discussing this internally. We have already financed one project outside Asia in Egypt for solar power. The test we have to apply in such projects is how it will bring economic benefit to Asia.
There are perceptions that AIIB is dominated by China?
That is not correct. The idea of AIIB was put forward by the Chinese government and we are headquartered in Beijing but we are a multi-lateral bank. We take our instructions from all of our member countries.
Will the AIIB invest in North-East India where there is political tension with China?
Our investment is about the project. We do not take any political considerations into account. If there are good infrastructure projects that meet our tests and satisfy our policies and fit in our strategy, then we will put the project for approval to our Board.
The AIIB also has a policy on international relations. For example, if a project is on a disputed waterway, then all parties to the dispute are involved in the decision making. But, I don’t think we have yet considered any projects in the region. It is up to the Indian government to bring us these projects.
Emerging markets shrug off crises for best gains in eight years
In 2017, the world's emerging markets saw blockbuster returns after easy monetary policy and budding global growth joined hands. Currencies and stocks in developing economies are on track for their biggest rallies in eight years.
Bangladesh now a model for workplace safety
Bangladesh has become the model for workplace safety because of its heightened efforts in the aftermath of the Rana Plaza building collapse, said Srinivas Reddy, the outgoing country director of the International Labour Organisation. “Now, there are so many countries in the world that are looking to implement the Bangladeshi model for workplace safety,” Reddy told reporters before departing for Geneva to take up his new post at the ILO headquarters.
The Indian was appointed the ILO country director for Bangladesh in 2013 -- just after the Rana Plaza collapse that claimed 1,138 workers' lives and maimed 2,500. Following the tragic event, the private sector, the Bangladesh government and the ILO joined hands to arrange $30 million as compensation for the victims and bring wholesale improvements in workplace safety. “We want to work closely with the government for further improvement,” Reddy said, while calling for making the Remediation Coordination Cell a credible, one-stop service centre.
Managing $30 million to compensate the Rana Plaza victims was an uphill task. The compensation was made following the ILO Convention 121, which deals with the payment to victims in case of industrial accidents. The government should adopt it as a national employment insurance legislation, so that the victims can get appropriate compensation and without hassle after industrial accidents, Reddy said. Germany, the ILO and the government signed a letter of intent to introduce a national employment injury insurance scheme in Bangladesh. “I hope it happens soon.” He suggested the factory owners fully utilise the funds offered by donor agencies for the purpose of remediation. “Bangladesh should take workplace safety seriously. Those who have not completed the remediation yet should complete it as soon as possible.” Reddy said if any tragedy strikes for their delay in remediation, the whole sector will be affected again.
The ILO official also touched upon the gradual shift towards automation in the garment sector. In 2013, about 4 million workers were employed in the garment sector; that number has now contracted to 3.5 million because of automation at factories. “Automation is the reality of the current situation because the industry wants to be more competitive and productive. But, at the same time you have to create jobs for the unemployed youth.” Besides, Reddy said, many small and medium-sized factories have gone out of business, so it should be looked at how support can be extended to such factories so that they do not shutter and cause job losses. He also recommended the apparel makers invest more on high-end and value-added garment items. “This would be wise because it will bring more value and create more jobs.” Reddy is not opposed to the idea of sub-contracting. “If a small facility can produce in a complaint manner I do not think buyers will disagree.” He called for widespread use of social dialogues to resolve any crisis in the garment sector. “Social dialogues should be practised even if there is no crisis. I am happy that the practice of social dialogue among the factory owners, union leaders and government officials has started in the country. Good industrial relations are also good for business.” The ILO has been working in four particular areas in Bangladesh on a priority basis: workplace safety, skills development, social dialogues and migration of workers. The migration has become a major issue for Bangladesh over the years as there are so many unskilled workers who choose to migrate from this country.
SOURCE: The Daily Star
