Messages

31

Business Administration / Customs act to be amended to expedite export, import

« on: February 26, 2020, 09:08:09 AM »

Customs officials say in a program


The customs will make submission of bill of entry mandatory by importers within 72 hours of export and import of goods, and provision of penalty will be incorporated in customs act if any importer fails to submit the bill in time.

Currently, it takes up to 10 days to submit bill of entry by the importers in the customs port, which causes unusual delay in releasing goods.

This was said in a program titled ‘Ease of doing business: Trading across border’ in the capital on Tuesday.

Economic Reporters’ Forum (ERF) organized the orientation and awareness program on its premises with the support of the International Finance Corporation (IFC), a member of the World Bank Group, and Bangladesh Customs.

“We will incorporate a provision of imposition of penalty in case of not submitting bill of entry within 72 hours of import,” said customs member (audit, modernization and international trade) Khondaker Muhammad Aminur Rahman at a programe.

High-officials of National Board of Revenue (NBR) shared their recent reform initiatives to simplify trading across borders to improve country’s indicator in the doing business index of the World Bank.

Customs commissioners of Dhaka custom house Md Moazzem Hossain, Kamalpur Inland container depot Md Anwar Hossain, customs bond commissionarate (Dhaka) SM Humayun Kabir, among others, spoke on the occasion.

Private sector specialist of IFC Nusrat Nahid Babi delivered introductory remarks while ERF general secretary SM Rashidul Islam delivered welcome speech.

Customs modernization first secretary AAM Amimul Ehsan Khan gave a detailed presentation on recent initiatives of customs to expedite the trading across the border.

All of the customs commissioners stressed the need for proper coordination between the relevant agencies to improve the process of trading across the border.

Customs member Aminur Rahman said the National Single Window (NSW) would bring 39 agencies under a single roof to ease the process trading across the border.

“Once the NSW project is implemented, the country will see a significant improvement in doing business indicator and it will take one to two days to release goods from ports,” he said.

32

Accounting – The Language of Business / Re: IFRS 10

« on: February 22, 2020, 11:18:51 PM »

Disclosure
There are no disclosures specified in IFRS 10. Instead, IFRS 12 Disclosure of Interests in Other Entities outlines the disclosures required.

Applicability and early adoption
Note: This section has been updated to reflect the amendments to IFRS 10 made in June 2012 and October 2012.

IFRS 10 is applicable to annual reporting periods beginning on or after 1 January 2013 [IFRS 10:C1].

Retrospective application is generally required in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors [IFRS 10:C2]. However, an entity is not required to make adjustments to the accounting for its involvement with entities that were previously consolidated and continue to be consolidated, or entities that were previously unconsolidated and continue not to be consolidated at the date of initial application of the IFRS [IFRS 10:C3].

Furthermore, an entity is not required to present the quantitative information required by paragraph 28(f) of IAS 8 for the annual period immediately preceding the date of initial application of the standard (the beginning of the annual reporting period for which IFRS 10 is first applied) [IFRS 10:C2A-C2B].  However, an entity may choose to present adjusted comparative information for earlier reporting periods, any must clearly identify any unadjusted comparative information and explain the basis on which the comparative information has been prepared [IFRS 10.C6A-C6B].

IFRS 10 prescribes modified accounting on its first application in the following circumstances:

an entity consolidates an entity not previously consolidated [IFRS 10:C4-C4C] an entity no longer consolidates an entity that was previously consolidated [IFRS 10:C5-C5A] in relation to certain amendments to IAS 27 made in 2008 that have been carried forward into IFRS 10 [IFRS 10:C6].
An entity may apply IFRS 10 to an earlier accounting period, but if doing so it must disclose the fact that is has early adopted the standard and also apply:

IFRS 11 Joint Arrangements IFRS 12 Disclosure of Interests in Other Entities IAS 27 Separate Financial Statements (as amended in 2011) IAS 28 Investments in Associates and Joint Ventures (as amended in 2011).
The amendments made by Investment Entities are applicable to annual reporting periods beginning on or after 1 January 2014 [IFRS 10:C1B].  At the date of initial application of the amendments, an entity assesses whether it is an investment entity on the basis of the facts and circumstances that exist at that date and additional transitional provisions apply [IFRS 10:C3B–C3F].

33

Accounting – The Language of Business / Re: IFRS 10

« on: February 22, 2020, 11:18:22 PM »

Changes in ownership interests

Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (i.e. transactions with owners in their capacity as owners). When the proportion of the equity held by non-controlling interests changes, the carrying amounts of the controlling and non-controlling interests area adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the parent.[IFRS 10:23, IFRS 10:B96]

If a parent loses control of a subsidiary, the parent [IFRS 10:25]:

derecognises the assets and liabilities of the former subsidiary from the consolidated statement of financial position recognises any investment retained in the former subsidiary when control is lost and subsequently accounts for it and for any amounts owed by or to the former subsidiary in accordance with relevant IFRSs. That retained interest is remeasured and the remeasured value is regarded as the fair value on initial recognition of a financial asset in accordance with IFRS 9 Financial Instruments or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture recognises the gain or loss associated with the loss of control attributable to the former controlling interest.
If a parent loses control of a subsidiary that does not contain a business in a transaction with an associate or a joint venture gains or losses resulting from those transactions are recognised in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture.*

* Added by Sale or Contribution of Assets between an Investor and its Associate or Joint Venture amendments, effective 1 January 2016, however, the effective date of the amendment was later deferred indefinitely.

Investment entities consolidation exemption
[Note: The investment entity consolidation exemption was introduced by Investment Entities, issued on 31 October 2012 and effective for annual periods beginning on or after 1 January 2014.]

IFRS 10 contains special accounting requirements for investment entities. Where an entity meets the definition of an 'investment entity' (see above), it does not consolidate its subsidiaries, or apply IFRS 3 Business Combinations when it obtains control of another entity.  [IFRS 10:31]

An entity is required to consider all facts and circumstances when assessing whether it is an investment entity, including its purpose and design.  IFRS 10 provides that an investment entity should have the following typical characteristics [IFRS 10:28]:

it has more than one investment it has more than one investor it has investors that are not related parties of the entity it has ownership interests in the form of equity or similar interests.
The absence of any of these typical characteristics does not necessarily disqualify an entity from being classified as an investment entity.

An investment entity is required to measure an investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9 Financial Instruments or IAS 39 Financial Instruments: Recognition and Measurement. [IFRS 10:31]

However, an investment entity is still required to consolidate a subsidiary where that subsidiary provides services that relate to the investment entity’s investment activities. [IFRS 10:32]*

* Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) clarifies, effective 1 January 2016, that this relates to a subsidiary that is not itself an investment entity and whose main purpose and activities are providing services that relate to the investment entity's investment activities.

Because an investment entity is not required to consolidate its subsidiaries, intragroup related party transactions and outstanding balances are not eliminated [IAS 24.4, IAS 39.80].

Special requirements apply where an entity becomes, or ceases to be, an investment entity. [IFRS 10:B100-B101]

The exemption from consolidation only applies to the investment entity itself.  Accordingly, a parent of an investment entity is required to consolidate all entities that it controls, including those controlled through an investment entity subsidiary, unless the parent itself is an investment entity. [IFRS 10:33]

34

Accounting – The Language of Business / Re: IFRS 10

« on: February 22, 2020, 11:17:53 PM »

Accounting requirements
Preparation of consolidated financial statements

A parent prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. [IFRS 10:19]

However, a parent need not present consolidated financial statements if it meets all of the following conditions: [IFRS 10:4(a)]

it is a wholly-owned subsidiary or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets) it did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market, and its ultimate or any intermediate parent of the parent produces financial statements available for public use that comply with IFRSs, in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with IFRS 10.*
* Fair value measurement clause added by Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) amendments, effective 1 January 2016.

Investment entities are prohibited from consolidating particular subsidiaries (see further information below).

Furthermore, post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies are not required to apply the requirements of IFRS 10. [IFRS 10:4B]

Consolidation procedures

Consolidated financial statements: [IFRS 10:B86]

combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries offset (eliminate) the carrying amount of the parent's investment in each subsidiary and the parent's portion of equity of each subsidiary (IFRS 3 Business Combinations explains how to account for any related goodwill) eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full).
A reporting entity includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the reporting entity ceases to control the subsidiary. Income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the acquisition date. [IFRS 10:B88]

The parent and subsidiaries are required to have the same reporting dates, or consolidation based on additional financial information prepared by subsidiary, unless impracticable. Where impracticable, the most recent financial statements of the subsidiary are used, adjusted for the effects of significant transactions or events between the reporting dates of the subsidiary and consolidated financial statements. The difference between the date of the subsidiary's financial statements and that of the consolidated financial statements shall be no more than three months [IFRS 10:B92, IFRS 10:B93]

Non-controlling interests (NCIs)

A parent presents non-controlling interests in its consolidated statement of financial position within equity, separately from the equity of the owners of the parent. [IFRS 10:22]

A reporting entity attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests. The proportion allocated to the parent and non-controlling interests are determined on the basis of present ownership interests. [IFRS 10:B94, IFRS 10:B89]

The reporting entity also attributes total comprehensive income to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. [IFRS 10:B94]

35

Accounting – The Language of Business / IFRS 10

« on: February 22, 2020, 11:17:04 PM »

Summary of IFRS 10
Objective
The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. [IFRS 10:1]

The Standard: [IFRS 10:1]

requires a parent entity (an entity that controls one or more other entities) to present consolidated financial statements defines the principle of control, and establishes control as the basis for consolidation set out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee sets out the accounting requirements for the preparation of consolidated financial statements defines an investment entity and sets out an exception to consolidating particular subsidiaries of an investment entity*.
* Added by Investment Entities amendments, effective 1 January 2014.

 

Key definitions
[IFRS 10:Appendix A]

The financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity
An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee
An entity that:
obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both, and measures and evaluates the performance of substantially all of its investments on a fair value basis.
An entity that controls one or more entities
Existing rights that give the current ability to direct the relevant activities
Rights designed to protect the interest of the party holding those rights without giving that party power over the entity to which those rights relate
Activities of the investee that significantly affect the investee's returns
* Added by Investment Entities amendments, effective 1 January 2014.

 

Control
An investor determines whether it is a parent by assessing whether it controls one or more investees. An investor considers all relevant facts and circumstances when assessing whether it controls an investee. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. [IFRS 10:5-6; IFRS 10:8]

An investor controls an investee if and only if the investor has all of the following elements: [IFRS 10:7]

power over the investee, i.e. the investor has existing rights that give it the ability to direct the relevant activities (the activities that significantly affect the investee's returns) exposure, or rights, to variable returns from its involvement with the investee the ability to use its power over the investee to affect the amount of the investor's returns.
Power arises from rights. Such rights can be straightforward (e.g. through voting rights) or be complex (e.g. embedded in contractual arrangements). An investor that holds only protective rights cannot have power over an investee and so cannot control an investee [IFRS 10:11, IFRS 10:14].

An investor must be exposed, or have rights, to variable returns from its involvement with an investee to control the investee. Such returns must have the potential to vary as a result of the investee's performance and can be positive, negative, or both. [IFRS 10:15]

A parent must not only have power over an investee and exposure or rights to variable returns from its involvement with the investee, a parent must also have the ability to use its power over the investee to affect its returns from its involvement with the investee. [IFRS 10:17].

When assessing whether an investor controls an investee an investor with decision-making rights determines whether it acts as principal or as an agent of other parties. A number of factors are considered in making this assessment. For instance, the remuneration of the decision-maker is considered in determining whether it is an agent. [IFRS 10:B58, IFRS 10:B60]

36

Financial Accounting / Re: ACCA and IMA publish report highlighting long-term global economic issues

« on: February 22, 2020, 11:10:12 PM »

The USA – public debt challenges

The U.S. economy has now expanded continuously for over 10 years, the longest such period in over 150 years. But there are structural changes that represent challenges for policymakers. Perhaps the greatest concern arises from the level of public sector debt, which is on track to reach its highest level since 1946. More positively, the U.S. can operate at lower levels of unemployment without generating upward pressure on inflation. Finally, the resurgence of the oil industry and the emergence of the U.S. as a net exporter of oil is a positive for the economy because it is not reliant on the Middle East for supplies. But again, it is one that requires an adjustment in policy responses and may introduce greater volatility to the economic cycle. Now a lot of investment and spending is tied into the oil market therefore this could increase volatility in the oil sector.

Michael Taylor, Chief Economist at ACCA said: ‘The articles in the Global Economic Themes report look at economic issues that are likely to have an impact over the longer term. 

‘Through much of last year, US-China trade tensions increased which undermined business confidence and investment as well as contributing to a sharp slowdown in global trade. A recent improvement in trade relations resulted in a ‘Phase One’ trade deal which included a modest reduction in some tariffs.’   

Taylor added: ‘China’s economy now faces very serious challenges with the coronavirus epidemic. Extended factory closures and travel restrictions may well completely stall the economy in the first quarter of the year. But provided the virus is brought under control soon, we would expect activity to recover fairly quickly later in the year. However, a prolonged crisis could result in a more permanent reduction in Chinese economic growth for example, if there were significant job losses that further reduce consumer confidence and spending.’

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy, said, ‘We saw confidence in the U.S. tread low throughout the year before an uptick in Q4. The economy continues to expand, and fears of a recession have quelled with continued consumer spending and rising wages. With 2020 being a U.S. presidential election year, confidence should continue to move upward.’

37

Financial Accounting / ACCA and IMA publish report highlighting long-term global economic issues

« on: February 22, 2020, 11:09:42 PM »

ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) have jointly published the Global Economic Themes report. It examines three of the longer-term structural issues that are affecting the global economy as well as the global economic impact of the US-China trade tensions. The three issues are:

·         The Euro – fiscal integration needed

The Euro has survived its first two decades, despite several financial crises that threatened its very existence. But it has not been a success - it has failed to deliver the real economic convergence among its members claimed for it at the outset. Indeed, the Euro’s “one size fits all” monetary policy has delivered economic divergence, not convergence. History suggests that monetary unions only survive in the long run if they become fiscal unions too. The next two decades of the Euro are likely to see further progress in this direction ultimately resulting in a eurozone Finance ministry with tax and spending powers. Limited progress so far has come following financial crises – a prime candidate for the next eurozone crisis is Italy, where public sector debt is very high and the banking system increasingly fragile.

·         China - becoming rich before it becomes old?

Many analysts have predicted that this century will belong to China. Indeed, China has great advantages, including a modern infrastructure, a large domestic market that allows firms to exploit economies of scale and an advanced digital economy. But there are challenges that must be overcome if China is to succeed in propelling itself from a middle-income country to a high income one. High levels of debt, especially among State Owned Enterprises, are now limiting the ability of the authorities to stimulate growth through lower interest rates. In addition, the population of working age is now declining as the population as a whole ages. This will both reduce the trend rate of GDP growth and increase the dependency ratio – fewer workers in relation to an increasing number of older people.

38

BBA Discussion Forum / Delivering SDGs: Country lags behind climate action, inequality, peace and justi

« on: February 22, 2020, 11:05:03 PM »

Rehman Sobhan for parliament session to discuss SDG issues


The country lagged behind in three major areas such as climate action, inequality and peace and justice in the long journey of attaining the Sustainable Development Goals (SDGs) by 2030, said Centre for Policy Dialogue on Thursday.

The deficits would dwarf other achievements and make the entire efforts unsustainable, added economists of the think-tank.

They were speaking at a dialogue titled, ‘Delivering SDGs in Bangladesh: Role of Non-State Actors’. The event was organized in association with the Asia Foundation- Bangladesh, Citizen’s Platform for SDGs, Bangladesh and the Swiss Agency for Development and Cooperation (SDC) at a city hotel.

Abul Kalam Azad, Member of Parliament and Chairman of Parliamentary Standing Committee on Ministry of Planning was the chief guest.

CPD Chairperson Professor Rehman Sobhan also spoke on the occasion.

 Rehman Sobhan suggested for holding two dedicated sessions of parliament a year to discuss the issues involving SDGs.

“There should be full session of the parliament on the issue of implementing the SDGs and perhaps it will meet twice in a year,” said the economist.

Prior to the session, parliamentary committee would undertake initiatives for a series of hearings, where they would involve representatives from government and civil society, he added.

If the exercise was done, the parliamentary committee would report to the house in full, he said further. The hearing in the house would generate high level credibility for the state and its commitment to SDGs, noted Rehman.

 “There should be some interactive mechanism, where the government will not only indentify the sustainable development goals, but will also share responsibility with other civil society players,” said Rehman Sobhan.

 Dr René Holenstein, Ambassador of Switzerland in Bangladesh and Ms Mia Seppo, UN Resident Coordinator and Representative, UNDP Bangladesh;  Kazi Faisal Bin Seraj, Country Representative, The Asia Foundation – Bangladesh attended the dialogue, among others.

“Performances in criteria like education and partnership are relatively green, despite questions remain about their qualities. It is notable that we are not performing better in three areas. Firstly in the area of climate action that also involves global responsibility. Secondly, presence of inequality and third is the peace and justice,” said Dr Debapriya Bhattacharya, distinguished fellow at CPD.

  Any country, which suffered from fragile rule of law and inequality and climate action would never be able to sustain other achievements, said Debapriya, also Convener of Citizen’s Platform for SDGs.

In attaining the peace, justice and strong institutions, CPD executive director Dr Fahmida Khatun suggested for upholding rule of law and ensuring access to justice, especially for women, children, poor and marginalized groups.

She also stressed on building local and national capacity for arbitration, mediation and alternative dispute resolution. 

For combating climate challenges, the think-tank also stressed for scaling up adaptation measures to enhance adaptive capacity, strengthen resilience and reduce vulnerability to climate change.

Furthermore, to reduce inequalities the CPD suggested for  keeping a certain portion of seats in private schools reserved for children from under privileged families and providing free education to them.

It also called for improving social protection programmes to minimize leakages and adverse selection.

The think -tank also suggested that non-state actors be included with the process of SDGs implementation and incorporating them with defined responsibility as they could help implement the goals effectively.

“66% resource will be generated from the private sector. But their roles are not clear. Contribution of Non- State Actors (NSA) are closely involved with SDG targets and they are contributing to this,” Mustafizur Rahman, CPD distinguished fellow, said.

On top of that, there was a fund constraint for the NSA, especially at root levels and if the government or the private sector partnership provided fund, it would be very effective to attain SDGS as they could provide data and implement agendas effectively at low cost, said the economist.

39

BBA Discussion Forum / BB to issue Tk200 notes to mark 'Mujib Borsho

« on: February 22, 2020, 11:03:32 PM »

The central bank will also release commemorative gold and silver coins worth Tk100


Bangladesh Bank is set to launch regular currency notes of Tk200 and commemorative gold and silver coins worth Tk100 on the occasion of birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman on March 17.

The central bank’s initiative is to mark the historic moment, said a top official of the bank.

“We have taken this initiative as part of commemoration of the birth centenary of Bangabandhu Sheikh Mujibur Rahman,” Sirajul Islam, executive director and spokesman of Bangladesh Bank, told UNB.

He said 1,050 gold coins of Tk100 and 5,000 silver coins of similar value will be released.

Additionally, Tk200 currency notes will also come into the market to mark the occasion. But the number of Tk200 notes to be released is yet to be decided, he added.

He, however, did not give any detail of the new commemorative notes.

At present, there are regular currency notes of Tk1, Tk2, Tk5, Tk10, Tk20, Tk50, Tk100, Tk500 and Tk1000 are available in the market, which were released on different occasions. Their designs were changed several times as well.

Earlier, the Bangladesh Bank also introduced a Tk40 note to commemorate the "40th Victory Anniversary of Bangladesh" in 2011.

The Tk40 commemorative note featured a portrait of the Father of the Nation and the National Martyrs’ Memorial in Savar in the front, and six armed men on the back.

Bangladesh Bank introduced a Tk60 note to commemorate "60 years of National Movement" on February 15, 2012, while it issued a Tk25 note to commemorate the 25th anniversary (silver jubilee) of the Security Printing Corporation (Bangladesh) Ltd on January 26, 2013.

On July 8, 2013, Bangladesh Bank issued a Tk100 note to commemorate the 100th anniversary of the Bangladesh National Museum.

40

BBA Discussion Forum / Re: The best kind of regulation

« on: February 22, 2020, 11:02:26 PM »

logo
Today's Paper
News
Bangladesh
Politics
Crime
Environment
Education
Laws & Rights
World
Business
Banks
Commerce
Economy
Regulations
Stock Market
Advertisement
Money
Real Estate
Sports
Cricket
Football
Tennis
Athletics
Formula One
Other Sports
Opinion
Op-Ed
Editorial
Longform
Heritage
Specials
D2
Fashion & Style
Beauty & Grooming
Health & Wellness
Food
Travel
Career & Education
People & Relationships
Decor & Lifestyle
Showtime
More
Videos
Photo Gallery
Magazine
Special Supplements
Epaper
Archive
Subscribe

Home
 Opinion
 Op-Ed
The best kind of regulation
 Tim Worstall
 Published at 07:15 pm February 22nd, 2020
Biz_Oped
Leave it to self-regulation Bigstock


Why a market should regulate itself


We’re told that a certain level of regulation can be -- is -- beneficial to the economy. This is entirely true. The important questions though are not as yet answered by that statement. We need to know who is regulating and how they are doing so.

Take that economists’ model of a “free market.” We can play around with assumptions and outcomes and show that this will be the best of all possible worlds. Or that it won’t be, depending upon how we play with such things. But an important point about the model -- it doesn’t assume no regulation. It, instead, assumes no regulation by those who are not market participants, a very different thing.

That is, we’re assuming away regulators in offices telling people what they may do. We are not assuming that there are no rules, nor that no one enforces the rules. Rather, that those regulations are formed and enforced by those who are making the market exchanges.

Some of these will simply be norms, things enforced purely by habit. When we buy rice or fruit at a market, do we have to take our own bag or do we get one from the stall holder? There’s no particular reason why it should be one way or the other, but there will be that standard process, that norm. It might even differ across places and products but any habitué will know what applies in that place at that time.

Rules will also be more vehemently enforced. The market stall which took your money and refused to provide the goods for it would swiftly be out of business. Partly because no customers would trust it, mostly because other stallholders would quickly drive it out of the area. No one wants to be selling where people will ruin the reputation of producers so badly.

Then there’s regulation simply by consumer preference. It’s entirely feasible to have chilli-flavoured toothpaste and it might even have happened that someone tried to sell it. That it doesn’t generally exist today is because near no one would buy it -- other than at joke shops -- and that means it has been regulated out of existence by that consumer preference.

This is regulation. It’s just that it’s not regulation by bureaucrats, which is how we normally think laws on what may be done are created. As to laws, perhaps that is how they’re created, but as to what happens in markets, we also have those other players. We, depending on how we spend our money, regulate what is on offer.

So, if we, the buyers, regulate what is sold by spending our money on what we desire, and not on what we don’t, when isn’t this enough regulation? There are two slightly different answers to that.

One, which I discuss in a just-published paper, is that sometimes a market transaction affects someone not a part of that transaction. This is called “third party” effects, the usual example being pollution. I sell and you buy freshly grilled meat, and we’re both delighted. But it is the people with the open window above the barbeque who must suffer the smoke.

Because they are not part of the transaction itself, their actions can have no regulatory effect on it -- they won’t influence whether there’s smoke that is. At that point, regulations on smoke emissions outside windows -- or more realistically, in urban areas -- make good sense. Or even a tax upon using charcoal in urban areas. The costs of the pollution are now in the prices paid by the market transactors and thus, those costs are now part of the transaction.

Such third party costs are a valid justification for regulation from outside the market itself. This still leaves what the regulation should be -- a ban, a tax, an insistence upon a particular technology perhaps -- and that will depend upon the details of what is under discussion. There is no hard and fast law for what the rule should be even if we’ve now gained, with these third party costs, a rule as to when there should be some rule.

The second is that we humans are really very good at things we do repeatedly. We’re not so good at things we only do once or twice in a lifetime. If we get cheated by the rice seller, then that’s annoying, but we’re going to be doing it again in a day or two and we’ll go elsewhere. Through the repeat iterations, we quickly regulate those daily markets. This is why we have no need of regulations upon toothpaste flavours -- even if the chilli-flavoured one appeared, it would quickly vanish again.

However, there are those things we do only rarely. Buy a house, take out a mortgage, sign up for a pension plan -- hey, why not get married? -- and so on. We might do these things only once in a lifetime, in fact.

And at this point, our ability to learn and thus tame the market through repeat iterations isn’t there. So, there’s a good argument for greater regulation of the sales of such things. It’s too easy to cheat us, so we need more protection from the law.

The original contention, that regulation can make markets better, is entirely true. It’s just that we’ve got to be careful about how and why. Only when we’ve gained our justification for regulation will we get those two right.

Essentially, regulation from outside the market is only needed when we are dealing with things that have one of the two features: Effects that spill over to those not part of the transaction, and things that we don’t do very often. Things that are just the direct voluntary interaction of buyer and seller, and in commonplace transactions, we can leave to self-regulation.

A market that regulates itself, or one that is regulated by the participants in it, is not an unregulated market; it’s just one not regulated by those outside it.

41

BBA Discussion Forum / The best kind of regulation

« on: February 22, 2020, 11:01:41 PM »

Why a market should regulate itself


We’re told that a certain level of regulation can be -- is -- beneficial to the economy. This is entirely true. The important questions though are not as yet answered by that statement. We need to know who is regulating and how they are doing so.

Take that economists’ model of a “free market.” We can play around with assumptions and outcomes and show that this will be the best of all possible worlds. Or that it won’t be, depending upon how we play with such things. But an important point about the model -- it doesn’t assume no regulation. It, instead, assumes no regulation by those who are not market participants, a very different thing.

That is, we’re assuming away regulators in offices telling people what they may do. We are not assuming that there are no rules, nor that no one enforces the rules. Rather, that those regulations are formed and enforced by those who are making the market exchanges.

Some of these will simply be norms, things enforced purely by habit. When we buy rice or fruit at a market, do we have to take our own bag or do we get one from the stall holder? There’s no particular reason why it should be one way or the other, but there will be that standard process, that norm. It might even differ across places and products but any habitué will know what applies in that place at that time.

Rules will also be more vehemently enforced. The market stall which took your money and refused to provide the goods for it would swiftly be out of business. Partly because no customers would trust it, mostly because other stallholders would quickly drive it out of the area. No one wants to be selling where people will ruin the reputation of producers so badly.

Then there’s regulation simply by consumer preference. It’s entirely feasible to have chilli-flavoured toothpaste and it might even have happened that someone tried to sell it. That it doesn’t generally exist today is because near no one would buy it -- other than at joke shops -- and that means it has been regulated out of existence by that consumer preference.

This is regulation. It’s just that it’s not regulation by bureaucrats, which is how we normally think laws on what may be done are created. As to laws, perhaps that is how they’re created, but as to what happens in markets, we also have those other players. We, depending on how we spend our money, regulate what is on offer.

So, if we, the buyers, regulate what is sold by spending our money on what we desire, and not on what we don’t, when isn’t this enough regulation? There are two slightly different answers to that.

One, which I discuss in a just-published paper, is that sometimes a market transaction affects someone not a part of that transaction. This is called “third party” effects, the usual example being pollution. I sell and you buy freshly grilled meat, and we’re both delighted. But it is the people with the open window above the barbeque who must suffer the smoke.

Because they are not part of the transaction itself, their actions can have no regulatory effect on it -- they won’t influence whether there’s smoke that is. At that point, regulations on smoke emissions outside windows -- or more realistically, in urban areas -- make good sense. Or even a tax upon using charcoal in urban areas. The costs of the pollution are now in the prices paid by the market transactors and thus, those costs are now part of the transaction.

Such third party costs are a valid justification for regulation from outside the market itself. This still leaves what the regulation should be -- a ban, a tax, an insistence upon a particular technology perhaps -- and that will depend upon the details of what is under discussion. There is no hard and fast law for what the rule should be even if we’ve now gained, with these third party costs, a rule as to when there should be some rule.

42

BBA Discussion Forum / Bashundhara launches country's first bitumen plant

« on: February 22, 2020, 10:53:12 PM »

As of now, Bangladesh consumes five lakh tons of bitumen per annum, which is increasing by 10% to 15%


Bashundhara Group, a leading local conglomerate, on Saturday launched the country's first private bitumen plant at Pangoan of Keraniganj in Dhaka with a view to meeting the rising demand for bitumen in domestic market.

Finance Minister AHM Mustafa Kamal inaugurated plant as chief guest, where Ahmed Akbar Subhan, chairman of Bashundhara Group, was present. State Minister for Power, Energy and Mineral Resources Nasrul Hamid was present as special guest.

As of now, Bangladesh consumes five lakh tons of bitumen per annum, which is increasing by 10% to 15%.

With an investment of $200 million, the company has established the plant on 63 acres of land and the yearly production capacity will be nine lakh tons.   

"We did not have a bitumen solution which matches our weather. So our roads were not durable. Now Bashundhara has come up with a solution. We don't have to import anymore,” said AHM Mustafa Kamal.

"The company is also planning to export bitumen after meeting the country's demand. This is a big achievement for Bangladesh," he added.

Bitumen used in road construction is essentially a hydrocarbon product. It is a by-product of fuel oil which is used for road construction because it is easy to produce, reusable, non-toxic, and a strong binder.

“By 2021 we will become exporter of 4,00,000 tons, reaching the highest production capacity in Bangladesh with 9,00,000 tons annually,” said Ahmed Akbar Subhan, chairman of Basundhara Group.

"Apart from brightening the country's image in the global market, Bashundhara will do both saving and earning foreign currency for the country by exporting after meeting the demand of the country," he said.

At present, the demand for bitumen in the country is around five lakh tones, of which 90 percent is imported. The rest 10 percent is supplied by the state-run Eastern Refinery. The demand for bitumen is about 42,000 tonnes per month in Bangladesh.

Of these, Eastern Refinery under Bangladesh Petroleum Corporation (BPC) produces 70,000 tons of bitumen. The rest is imported from various countries in the Middle East.

At the launching program, M Shamim Z Basunia, former professor at Bangladesh University of Engineering, said that the penetration grade of Basundhara bitumen would be 60-70 which was suitable for the weather of Bangladesh.

“We were searching for this weather-friendly product for long. This grade bitumen is being used to construct our Padma Bridge,” he said.

He also said that this plant generated employment.

According to the project description, the bitumen plant has largest drumming capacity, capable of producing 6,000 drums daily.

43

Business Administration / Coronavirus impact: Local hospitality business takes a hit

« on: February 22, 2020, 10:52:01 PM »

International hotels in Dhaka are facing cancellation of bookings amid concerns over the spread of the deadly virus, which has so far claimed more than 2,000 lives


If the city is on fire, the temple in it cannot remain safe. So is the case with the hospitality business of Bangladesh, which has shown signs of slowdown as coronavirus spread in China casts a long shadow on the overall economy.

The dwindling number of international tourists checking in hotels during this peak season spanning January and February and a good number of international expositions being postponed bear out adequately the prevailing situation.

International hotels in Dhaka are facing cancellation of bookings amid concerns over the spread of the deadly virus, which has so far claimed more than 2,000 lives.

Officials say that the number of not only Chinese tourists, but also those from other countries visiting Bangladesh fell significantly between January and February, causing the hotel business to fall by 40% to 45% following the outbreak.   

Upmarket five-star Pan Pacific Sonargaon, Le Meridien, The Westin, Intercontinental Hotel Dhaka and Radisson Blu along with the medium-range hotels are facing booking cancellations.

Janealam Shawon, director (revenue management) of The Westin, talking to Dhaka Tribune last week, said: “Our business is experiencing downtrend since the coronavirus outbreak in China. The decline is already 35%. We fear it may go up to 40%.” 

Sakerina Khaled, marketing and communication manager of Le Meridien, said: “Some events scheduled to be held in Dhaka have already been cancelled, leading to the cancellation of many of our bookings.”

“Annually, around 40% of guests are from China. The bookings have been on the decline for the last two months," she informed.

Musharrat Hasan Promi, assistant manager (customer relations and PR) of Pan Pacific Sonargaon, said, “Suspension of on arrival visa for Chinese citizens for an indefinite period has prompted our Chinese guests to cancel booking while some guests have shifted their bookings."

“We have had almost no new bookings these days,” she added.

Talking to Dhaka Tribune, a high official of Radisson Blu Dhaka said that besides the businesspeople, the number of tourists from China also fell and this trend might continue till April.

Meanwhile, more than half a dozen international expositions to be held in Bangladesh have been postponed following the coronavirus outbreak in China.

This also has negatively affected Bangladesh’s hotel business, sector people have said.

Bangladesh Plastic, Packaging and Printing Industrial Fair 2020, which was scheduled to take place between February 12 and 15 at the International Convention City Bashundhara (ICCB), has been postponed.

Besides, Bangladesh Textiles Mills Association (BTMA) put off the 17th Dhaka International Textile and Garments Machinery Exhibition (DTG) 2020, which was originally scheduled to be held between February 20 and 23 at the ICCB. The international exposition has also been postponed.

The event organizers said about 3,000 international guests were expected to arrive in the country from different countries. Most of them are Chinese citizens. The date of the exposition was postponed because they were unable to come for the virus.

The coronavirus outbreak surfaced in December last year. The World Health Organization declared it an international health emergency on January 30.

Deaths from the coronavirus in mainland China hit 2,360 as of Saturday although the number of new cases fell, as authorities tightened already severe containment measures in the worst-hit city of Wuhan.

44

Business Administration / Re: বেসরকারি বিনিয়োগ বাড়ছে না, বাড়ছে বেকার

« on: February 22, 2020, 10:47:32 PM »

Nice post

45

ICT / Re: Scientists discover powerful antibiotic using AI

« on: February 22, 2020, 10:46:24 PM »

Thanks for sharing