Foreign-Affairs
Japanese Ambassador visits Bandarban to see development project
Japanese Ambassador to Bangladesh Ito Naoki has visited Bandarban to see development project there.
He attended the handing over ceremony of the “The Project for Providing Bus Service for the Students and the Community Teachers in Bandarban District” to be implemented by JAAGO Foundation and supported by the government of Japan through the Grant Assistance for Grass-roots Human Security Projects (GGHSP).
The project is expected to help improve the commuting environment for students and teachers, and provide access to education and continued learning in Bandarban.
Read: Pursuing economic diplomacy to contribute to timely attainment of SDGs: FM
Korvi Rakshand, Executive Director of JAAGO Foundation, volunteers of JAAGO Foundation and others also attended the ceremony.
“I hope the school bus will help facilitate the access to education by students and teachers and help them go to school more safely and comfortably”, Ambassador Ito said.
Global FDI recovered to pre-pandemic levels in 2021 but uncertainty looms in 2022: UNCTAD
Flows of foreign direct investment (FDI) recovered to pre-pandemic levels last year, hitting nearly $1.6 trillion but the prospects for this year are grimmer, the latest UNCTAD World Investment Report said.
The report entitled "International tax reforms and sustainable investment" said that to cope with an environment of uncertainty and risk aversion, developing countries must get significant help from the international community.
Developing Asia, which receives 40% of global FDI, saw flows rise in 2021 for the third straight year to an all-time high of $619 billion.
FDI in China grew 21% and in Southeast Asia by 44% but South Asia went the other way, falling 26% as flows to India shrank to $45 billion.
"The need for investment in productive capacity, in the Sustainable Development Goals (SDGs) and in climate change mitigation and adaptation is enormous. Current investment trends in these areas are not unanimously positive," said Rebeca Grynspan, Secretary-General of United Nations Conference on Trade and Development (UNCTAD).
Read: Padma Bridge to lead to unprecedented improvement in communication system: Kamal
"It is important that we act now. Even though countries face very alarming immediate problems stemming from the cost-of-living crisis, it is important we are able to invest in the long term."
Coming off a low base in 2020, global FDI flows rose 64 percent to $1.58 trillion last year with momentum from booming merger and acquisition (M&A) activity and rapid growth in international project finance due to loose financing and major infrastructure stimulus packages.
Explore UNCTAD’s interactive data visualization on FDI inflows and outflows in countries and regions over the last 30 years.
While the recovery benefitted all regions, almost three-quarters of the growth was concentrated in developed economies as FDI flows rose 134% and multinational companies posted record profits.
Flows to developing economies rose 30% to $837 billion – the highest level ever recorded – largely due to strength in Asia, a partial recovery in Latin America and the Caribbean and an upswing in Africa.
The share of developing countries in global flows remained just above 50%.
The reinvested earnings component of FDI – profits retained in foreign affiliates by multinational companies – accounted for the bulk of the global growth, reflecting the record rise in corporate profits, especially in developed economies.
The top 10 economies for FDI inflows in 2021 were the United States, China, Hong Kong (China), Singapore, Canada, Brazil, India, South Africa, Russia and Mexico.
2022 Prospects
This year, the business and investment climate has changed dramatically as the war in Ukraine results in a triple crisis of high food and fuel prices and tighter financing.
Other factors clouding the FDI horizon include renewed pandemic impacts, the likelihood of more interest rate rises in major economies, negative sentiment in financial markets and a potential recession.
Read: xBudget FY23: Kamal sees rising inflation as a major challenge
Despite high profits, investment by multinational companies in new projects overseas were still one-fifth below pre-pandemic levels last year. For developing countries, the value of greenfield announcements stayed flat.
"UNCTAD foresees that the growth momentum of 2021 cannot be sustained and that global FDI flows in 2022 will likely move on a downward trajectory, at best remaining flat," the report underline. "However, even if flows should remain relatively stable in value terms, new project activity is likely to suffer more from investor uncertainty."
In 2021, FDI in Latin America and the Caribbean rose 56% – with South America’s growth of 74% sustained by higher demand for commodities and green minerals.
For structurally weak, vulnerable and small economies rose by 15% to 39 trillion, however influx to the least developed countries, landlocked and small island developing states combined accounted only for 2.5 percent of the world total in 2021, down from 3.5 percent in 2020.
The impact of the pandemic intensified fragility and investment in sectors relevant for the SDGs – especially food, agriculture, health and education – continued to fall.
"In 2022, FDI flows to developing economies are expected to be strongly affected by the war in Ukraine and its wider ramifications, and by macroeconomic factors including rising interest rates," the report said. "Fiscal space in many countries will be significantly reduced, especially in oil- and food-importing developing economies."
Investing in Sustainable Development Goals
After taking a significant hit in the first year of the pandemic, international SDG investment jumped 70% last year.
But most of the recovery growth came in renewable energy and energy efficiency, where project values reached more than three times the pre-pandemic level.
"While the 2021 recovery in value terms is positive, investment activity in most SDG-related sectors in developing economies, as measured by project numbers, remained below pre-pandemic levels," the report said.
Read: Around US$ 4 billion invested in private economic zones : Kamal
"Across developing Asia, investment in sectors relevant for the SDGs rose significantly," the report said. "International project finance values in these sectors increased by 74% to $121 billion, primarily because of strong interest in renewable energy."
International project finance is increasingly important for Sustainable Development Goals and climate change investment. Some positive steps in these areas in 2021 could be tested this year.
Announced international project finance deals hit a record of 1,262 projects last year and more than doubled in value to $656 billion.
The introduction of a global minimum tax on foreign direct investment will have important implications for the international investment climate but both developed and developing countries are expected to benefit from an increased revenue collection.
ADB approves $250mn for Bangladesh social resilience programme
Dhaka, June 9 (UNB) - The Asian Development Bank (ADB) on Thursday approved a $250 million policy-based loan to support social protection reforms in Bangladesh designed to protect vulnerable population against socioeconomic challenges.
The loan will finance Subprogram 2 of the Strengthening Social Resilience Program and build on the first subprogram which implemented institutional and policy reforms that strengthened the inclusiveness and responsiveness of social protection in Bangladesh.
“The COVID-19 pandemic highlighted the need to strengthen social protection systems to help people cope and manage disasters and crises,” said ADB Principal Social Sector Specialist for South Asia Hiroko Uchimura-Shiroishi.
“This subprogram continues ADB’s support to improve the coverage and efficiency of social protection programs in Bangladesh, build resilience of the disadvantaged, and support an inclusive recovery.”
Also read: Kamal thanks ADB for budget aid during pandemic
Under the new program, ADB is supporting the government in strengthening reforms to improve social protection coverage and efficiency, deepen the financial inclusion of disadvantaged people, and strengthen the response to diversified protection needs.
In various stages of implementation, some specific reforms include better protection coverage of disadvantaged women and the urban poor.
Subprogram 2 also helps to improve efficiency by digitalization and integration of systems as well as harmonization of government programs.
Also read:ADB reaffims commitment to Bangladesh's sustainable development
Greater financial inclusion of the disadvantaged will be broadened by improving the usability of mobile financial services through the quick response (QR) code payment services, particularly in rural areas.
Mobile clinics help boost health provision to the urban poor, including the floating people in urban areas.
This subprogram also supports a contributory protection scheme by focusing on an employment injury scheme.
Most social protection programs in Bangladesh are funded by the government and target the poor and vulnerable.
This contributory protection scheme will offer protection to a wider population and help augment government financing for social protection.
As of 2021, ADB’s cumulative assistance to Bangladesh since 1973 amounted to about $48 billion through loans, grants, and co-financing. ADB’s active portfolio in the country stands at around $11 billion with 50 projects as of April 2022.
Pursuing economic diplomacy to contribute to timely attainment of SDGs: FM
Foreign Minister Dr AK Abdul Momen has sought stronger efforts to promote economic diplomacy, noting that attracting foreign direct investment has always been a cornerstone of their economic diplomacy.
“As we have lost two years due to the pandemic, time has come to further bolster our efforts,” he said, adding that their endeavour of effectively pursuing economic diplomacy would also immensely contribute to the timely attainment of the sustainable development goals (SDGs).
Momen was speaking as the chief guest at the inaugural session of the “First Economic Diplomacy Week” that began at Foreign Service Academy in city on Thursday.
The Ministry of Foreign Affairs (MoFA), in collaboration with the relevant ministries and divisions, is hosting the programme as the country seeks prosperity through economic diplomacy.
Foreign Secretary Masud Bin Momen, Secretary (Maritime Affairs Unit) Rear Admiral (Retd) Md. Khurshed Alam and reactor at Foreign Service Academy Ambassador Asad Alam Siam, among others, spoke at the session.
Momen said the economic diplomacy package has five components and these are more foreign investment, more trade and export diversity, gainful employment of human resources both at home and abroad, transfer of technology, and quality services to Bangladeshi Diaspora and to others.
Read: Bangladesh wants peace, stability everywhere: FM
He said the ministry of commerce, teaming up with Bangladesh Missions abroad, is in the process of finalizing preferential and free trade deals with a number of countries.
“We have already conducted feasibility studies on 23 countries for bilateral and regional trade agreements, free trade agreement and comprehensive economic agreement. We are opening up new markets,” the foreign minister said.
Foreign Minister Momen said Bangladesh’s stable growth and political stability has raised tens of millions to ‘middle class and affluence’ status.
Apart from being a booming domestic market, he said, Bangladesh is also a strategic hub linking India, China and the ASEAN countries.
Momen hoped that Bangladesh will be a developed nation by 2041 and Father of the Nation Bangabandhu Sheikh Mujibur Rahman’s dream of building a ‘Golden Bengal’ will be realized.
“I am confident that the vision of Prime Minister Sheikh Hasina emphasizing on economic diplomacy and its implementation by all concerned ministries and authorities of the government will help realize this dream,” he said.
A country, one-seventh of whose population had to seek refuge in neighbouring India during 1971; Momen said, Bangladesh is now globally praised due to its generosity and capacity in temporarily sheltering over a million Rohingyas on its land.
Read: Bangladeshi students in Hungary urged to contribute to Bangladesh’s dev
A country that was known to be “controlled by nature and not by men” due to recurrent natural calamities, Bangladesh has now become a global example of disaster preparedness, he said.
Renowned scholars, high officials, business leaders and members of the academia are also joining the two-day programme (Thursday and Saturday).
The issues related to blue economy, climate action, sustainable development goals, agricultural innovations, contact farming, food security, connectivity, human resources and skills development; trade liberalization are being discussed to identify the challenges and opportunities in these areas.
Finland keen to work for development of modern technology
Finland’s Ambassador to Bangladesh Ritva Koukku Ronde has offered the Ministry of Power, Energy and Mineral Resources to work with the Nordic Research Council to conduct research for the development of modern technology.
She made this offer during a meeting with State Minister for Power, Energy and Mineral Resources Nasrul Hamid at his office at the ministry on Wednesday.
Expressing her country’s interest to expand its activities in Bangladesh, the Finnish envoy said that she believes that Finland has a good scope to work in different sectors of modern technology.
Finland can work together with Bangladesh to supply modern technology, she opined.
Welcoming the offer, Nasrul Hamid said that there are huge opportunities for investment in different segments of the power and energy sector including, renewable energy, smart grid, mini-grid, wind power, and setting up charging stations in the country.
READ: Finland eager to support Bangladesh’s sustainable development: Envoy
Both the ambassador and the state minister discussed different issues of mutual interests during their meeting.
Trade and Investment cosular of New Delhi Embassy of Finland Kimmo Siira, Economy and Commercial Matters Rai Chakrabarti were present on the occasion.
Finnish companies urged to explore business opportunities in Bangladesh
Bangladesh has encouraged the Finnish companies to benefit from the “attractive” business opportunities that exist in Bangladesh.
Non-Resident Ambassador of Finland to Bangladesh Ritva Koukku-Ronde met State Minister for Foreign Affairs Md. Shahriar Alam at his office on Tuesday and discussed possible economic engagements between the two countries.
Also read: We just want an election with people’s participation freely: US envoy
Both of them noted the friendly ties between Bangladesh and Finland and discussed ways to expand the relations across sectors, specially in the areas of trade and investment, climate action, SDG, migration and mobility, education and research, renewable energy and digital cooperation. Both sides also exchanged views on regional and multilateral issues including the Ukraine conflict and its implications.
He also advised the Ambassador about Bangladesh’s desire to work together in the areas of migration and mobility.
The Finnish Ambassador appreciated Bangladesh’s role in maintaining regional stability by hosting 1.1 million Rohingyas and providing them with sustainable livelihood and education.
She also praised Bangladesh’s well recognised role in peacekeeping and peace building.
The Ambassador expressed interest in establishing cooperation in the areas of smart city and smart port constructions. She also conveyed the interest of the Finnish energy companies to collaborate with Bangladesh.
The State Minister sought for Finland’s support to Bangladesh’s United Nations Security Council candidature.
The Finnish Ambassador indicated to give due consideration to Bangladesh’s bid, said the Ministry of Foreign Affairs on Wednesday.
The State Minister noted the need for further cooperation in the areas of higher education, skill development and capacity building in key sectors between the countries.
Also read:Success requires partners like Bangladesh amid new global economic order: Hungary
He also flagged the issue of the visa difficulties experienced by the students aiming to go to Finland for pursuing higher studies.
The Ambassador expressed her desire to collaborate more in the higher education sector and assured of easing the visa complexities shortly. Both sides affirmed their desire to continue the positive momentum in the bilateral relationship.
The Ambassador is currently on a bilateral visit to Bangladesh and scheduled to meet the Minister of Commerce and State Minister for Power, Energy and Mineral Resources.
We just want an election with people’s participation freely: US envoy
U.S. Ambassador to Bangladesh Peter Haas on Wednesday reiterated his country’s expectation to see a free and participatory election in Bangladesh with people’s participation.
“The U.S. doesn’t care who wins the election and we just want an election where the people of Bangladesh can choose their leaders,” he told reporters after a meeting with Chief Election Commissioner Kazi Habibul Awal at the Nirbahchan Bhaban in the city’s Agargaon area.
He said it is the job of the Election Commission and entire Bangladeshi society to ensure a credible election and absolutely not a job of the USA.
Ambassador Haas said it requires participation of not only the EC but the government, political parties, media, NGOs and most importantly Bangladeshi people.
He, however, said the EC plays an extremely important role in the whole election process in order to hold free and fair elections consistent with the international standard.
Later, CEC Awal said that first of all the USA had no message about the election in Bangladesh.
“It was a courtesy call. He (Haas) welcomed me as the new CEC and wished me success in all cases,” the CEC said.
In reply to a question, Awal said that they did not actually discuss much about the upcoming national election.
“I said that our election is not as smooth as in America. There is a little turbulence here. We are ready. We hope that we will get cooperation from all the stakeholders and the election will be successful,” he said.
READ: Bangladesh won’t face Sri Lanka-like crisis: Ambassador Haas
Noting that the Election Commission will make its effort to make the election a fair one, he said, “The election will be much more transparent than before, if possible.”
Climate change wipes out $525 bn over last 2 decades: Report
A V20-commissioned report launched on Wednesday alongside the UN climate talks in Bonn, Germany, shows how climate change has already eliminated one fifth of the wealth of these countries, or US$ 525 billion, over the last two decades.
The V20 Group of finance ministers from climate vulnerable economies including Bangladesh called for the immediate establishment of a separate and dedicated international funding for loss and damage crisis-level adaptation action.
Also read: UN: Climate shocks, war fuel multiple looming food crises
The report, titled “Climate Vulnerable Economies Loss Report: Economic losses attributable to climate change in V20 economies over the last two decades (2000-2019)", shows that for the top ten per cent of worst at-risk of the V20 countries, economic losses due to climate change for the past two decades are estimated to exceed half of all growth.
The analysis provides the first ever estimate of the economic losses attributable to anthropogenic climate change only.
Economic losses cut GDP growth in the V20 by one full per cent each year on average which averaged 3.67% in 2019 across the vulnerable economies, according to a message received from Bonn.
From 2000 to 2019, the report estimated economic losses due to hydro-meteorological extreme events are higher than the previous two decades and the world’s most vulnerable economies are also not adapting fast enough to cope with the changing climate as it currently stands.
Though the study analysed historical economic losses, it also highlighted that these losses will continue to increase given the earth’s warming is set to progress to within 1.5 degrees Celsius in the next decade regardless of further actions to reduce emissions.
It noted that losses due to climate change have been growing over time, underscoring that countries are not adapting fast enough.
Kenneth Nana Yaw Ofori-Atta, Ghana Finance Minister, said this should sound alarm bells for the world economy, since V20 are fast-growing engines of global economic growth, whereas the climate crisis has the potential to bring that phase to an end if the world fails to act.
“The failure on the $100 billion of international climate finance delivery, particularly the failure to ensure a 50:50 balance for adaptation, has left us highly exposed. Meeting and exceeding the COP26 agreed Delivery Plan to make-up shortcomings on the $100 billion and to double adaptation finance by 2025 are therefore absolutely crucial to our and the world's economic well-being. But it is no longer enough,” he said.
Also read: Dhaka: Inadequate efforts for climate migrants may lead to global security risk
Minister Ofori-Atta said as matter of pragmatism and justice, the V20 and Climate Vulnerable Forum is calling on COP27 to establish an international financing mechanism for climate change loss and damage in solidarity with victims least responsible for, and least equipped to withstand, the increasingly extreme physical shocks driven by climate change.
Dr Michiel Schaeffer, chief scientist at Finres, author of the study, explained at 1.1°C of warming, the majority of V20 countries have already reached their optimum temperature - any further warming beyond this will cause an acceleration in the loss and damage experiences by societies - this report is an also urgent call for more stringent mitigation action in line with keeping global mean temperature increase below 1.5°C.
Florent Baarsch, CEO of Finres, who led the study, said results are extremely novel they built on new peer-reviewed scientific methods and data that did not exist less than a year ago.
Prof. Dr. Patrick Verkooijen, CEO of the Global Center on Adaptation, which hosts the V20 secretariat, while countries work hard to find enough ambition to reduce emissions within Paris Agreement bounds, the climate emergency has become the lived reality that is devastating lives around the globe.
“Acceleration adaptation at speed and at scale is a solution we have at hand right now to reduce loss and damage. It is not only proven to work but it is also a smart investment that will continue to pay off.”
Dr Seth Ofaso, Ghana CVF Presidency Envoy to the UNFCCC said the $100 billion commitment under the Paris Agreement is for mitigation and adaptation.
“When this was first negotiated over a decade ago, recognition of loss and damage was not what it is today. It is untenable that the world’s rich and responsible nations continue to refuse the poor, vulnerable and least responsible nations support for the crushing costs that we bear because of inaction on the climate crisis.”
Ghana highlighted how the V20 and Climate Vulnerable Forum (CVF) are working unitedly for COP27 in Egypt later this year to deliver concrete results in terms of establishing international funding for loss and damage through a dedicated new instrument.
Dr Ofaso said what the V20 can do on its own is limited and only makes sense if the world’s rich, powerful and climate change responsible nations can be inspired by the V20’s breakthrough efforts and go beyond.
“It should fall on COP27 to decisively act on the void of finance for loss and damage in a clear litmus test for whether those fueling the climate crisis can truly begin to take responsibility for the breath of damage that has been unleashed by it.”
Success requires partners like Bangladesh amid new global economic order: Hungary
Hungarian minister of foreign affairs and trade Peter Szijjarto has said a new world economic order is emerging where success requires partners like Bangladesh.
He described Bangladesh as one of the fastest growing economies where he sees a huge opportunity for Hungarian companies in Bangladesh.
Foreign minister AK Abdul Momen held bilateral talks with the Hungarian minister in Budapest on Tuesday.
Read: Bangladeshi students in Hungary urged to contribute to Bangladesh’s dev
IFAD issues 1st bond connecting capital markets to rural poor around world
The International Fund for Agricultural Development (IFAD) on Wednesday issued its first sustainable development bond with Folksam, a leading insurance and pension fund in Sweden investing in a US$100 million bond.
The entry to capital markets sets the stage for IFAD’s increased investment in food security, rural development and economic growth at a time when the war in Ukraine is pushing global food, fertilizer and energy prices to record levels, putting millions more rural people already reeling from the COVID-19 pandemic at risk of falling into hunger and poverty.
IFAD is the first United Nations Fund and the only UN body and specialized agency other than the World Bank Group to enter capital markets, following the completion of its credit rating process in 2021 which resulted in a AA+ rating from both Standard & Poor’s and Fitch, said a media release received from Rome.
“This inaugural transaction is a key milestone for IFAD and an opportunity to significantly step up its financing to build the resilience of rural populations,” said Katherine Meighan, IFAD’s General Counsel and acting Chief Financial Officer.
Read: Bangladesh a star of growth, says IFAD urging continued focus on rural areas
“We urgently need to scale-up investments to ensure that rural populations who produce one third of the world’s food can continue to feed communities and offer a decent future to their children.”
Small-scale farmers are vulnerable to many shocks in particular climate change impacts, with yields affected by extreme weather events, higher temperatures and changing weather patterns.
Currently one in ten people globally do not have enough to eat, while hunger has been on the rise for the last five years reaching more than 800 million people in 2020.
“The proceeds of IFAD’s first bond issuance will augment IFAD’s capacity to help small-scale farmers adapt to climate change, access supply chains and markets, and produce more diverse foods, thus stimulating rural economies and directly contributing to many Sustainable Development Goals, in particular ending hunger and poverty,” said Natalia Toschi, Head of Funding at IFAD’s Financial Operations Department.
“The need for investment in agriculture is great. The war in Ukraine has, in addition to the suffering of the Ukrainian people, meant record high prices for energy, food and fertilizers. In addition, there is climate change, which is already affecting farmers in many parts of the world. There is therefore an imminent risk of a famine in the world's poorer countries,” said Ylva Wessén, President and CEO of Folksam.
Read: FS seeks SG’s role in transforming SAARC a meaningful regional org
Christopher Flensborg, Head of Climate and Sustainable Finance at SEB, which arranged the bond transaction said they are very happy to welcome IFAD to the bond market.
“Their mandate has never been more important and it is a privilege to assist IFAD to broaden the knowledge around food challenges, solutions and security. To enable private capital to support their effort is essential and we are pleased to see that the Folksam Group takes the lead in this effort and are looking forward to bring additional food and agriculture related finance to the market.”
In recent years, IFAD has been exploring new funding models to empower vulnerable rural populations, meet the changing needs of developing countries which borrow from IFAD and reach its objective of doubling its impact on reducing poverty and hunger by 2030.
Read: It's a priority for IFAD to invest in Bangladesh, says its regional director