Read more about June’s business and international news
Common call for investment-friendly climate
Business leaders want restoration of investment-friendly environment for accelerating growth and creating jobs. The unanimous call came from a series of pre-budget meetings recently that urged political leadership to come to understanding for stability and smooth business. ‘You correct politics today; everything will be correct tomorrow paving the way for massive investments,’ businessman and former government adviser Manzur Elahi told a consultation in presence of Finance Minister AMA Muhith. At another meeting with Commerce Minister Tofail Ahmed, FBCCI president Kazi Akram Uddin said the community did not expect any repetition of the unrest last year that destroyed many opportunities.
Labour rights abuse in Indian garments?
Labour rights abuses and grave human rights violations, including bonded labour, are allegedly prevalent in India’s garment factories. International Federation for Human Rights (FIDH) disclosed this in a report against the backdrop of Rana Plaza tragedy that drew global spotlight. ‘Indian garment workers also face labour rights abuses that urgently need to be addressed,” said FIDH President Karim Lahidji. To conceal indecent working conditions, garment factory managers and owners deploy well-orchestrated show-responses to external visits by auditors, foreign buyers and NGOs alike, alleged the report titled ‘Behind The Showroom: The Hidden Reality of India’s Garment Workers’.
Emerging market yet to see required private equity
Private equity, an important force in financial markets, accounts for about $200 billion in investment worldwide each year. But only 10% of it reaches emerging markets. International Finance Corporation which works in this area, termed this a tremendous loss of opportunity for investors as capital isn’t being invested in the fastest-growing economies. IFC’s portfolio of private equity investments now stands at more than $4 billion in more than 200 private equity funds. In Bangladesh, IFC is reaching innovative companies through Bangladesh SEAF Ventures, as part of its SME Ventures programme.
How Russian billionaires more offshore
Russia’s biggest oil, gas, mining and retail companies have reportedly moved tens of billions of corporate assets to the Netherlands and other European countries, such as Luxembourg, Cyprus, Switzerland and Ireland, often used for tax avoidance and capital flight. Law firms helped companies like OAO Rosneft, OAO Gazprom, OAO Lukoil and Geneva-headquartered Gunvor Group Ltd., co-founded by an associate of President Vladimir Putin, now under US sanctions. A handful of European tax havens may hold the key to pressuring Russia to pull back from Ukraine. The extensive use of foreign subsidiaries by Russia’s richest businessmen exposes their assets to sanctions.
Bangladesh 6th least expensive economy
The country has been ranked 172nd expensive economy out of 177 nations, according to the World Bank’s price level indexes. Neighbouring India has been placed at 171st and Pakistan at 176th. Bangladesh scored 40.3 on indexes compared to the most expensive economy’s score at 209.6. However, in terms of PPP, Bangladesh stands at the 144th position. The ranking suggests that products in India are generally more expensive than in Bangladesh while cheaper in Pakistan. Bangladesh had a GDP per capita of $731.9 in 2011 while PPP-based GDP per capita was around $2,000 during the year.
US refrains from penalising India on IPR issue
Washington has not included India into the list of the worst offender in intellectual property rights. The US resisted pressure from businesses to take tougher trade action against India. However, the US Trade Representative kept India, then in the midst of elections, on its ‘Priority Watch List’ along with China. The US will start a review of India to assess the new government’s level of engagement. Ruling BJP’s manifesto said, ‘We will embark on the path of IPRs and Patents in a big way.’ Any change in India\s status is unlikely in 2014 and a new process would start in 2015.
FDI inflow into Myanmar projected at $4-5b
Myanmar\s telecommunications sector is seen as a rising star in attracting overseas business interest. An optimism has been aired in the Myanmar Investment Commission’s projection that foreign direct investment would there reach between US$4 billion to $5 billion in 2014-15 fiscal year. The top draw for FDI was the country’s labour-intensive manufacturing sector, accounting for nearly half of the total $3.5 billion invested so far in 2013-14 financial year, at $1.7 billion. The fiscal year ended on March 31. Next year, the manufacturing sector will be trailed by the telecoms sector, with the hotels and tourism industry taking third place.
$100m tax break for Hollywood questioned
California’s $100 million annual tax subsidy for the film and TV industry doesn’t pay off. A report quoting an analyst says for every $1 of subsidy, the state gets back about 65 cents in sales, income and use taxes. Hollywood is a flagship industry, with high-paying jobs for the most populous US state. California and 36 other states offer tax credits to the film industry, with payments totaling $1.4 billion a year. California lost 16,137 entertainment industry jobs between 2004 and 2012, a decline of 11%. New York added 10,675 positions, up almost 25%.
Asia’s growth to drive demand for infrastructures
The economic growth in Southeast Asia, China and India will provide opportunities for companies to invest in infrastructure projects such as airports. China will have a minimum of 400 airports and India will add at least another 100, according to Ram Charan, a business adviser who advised companies including General Electric Co., Tata Group and Verizon Communications Inc. Health-care and consumer industries, especially for luxury goods, also provide opportunities. Economic growth in Indonesia, Vietnam and Thailand has stoked consumption in Southeast Asia. Most of the region’s 600 million people will be middle class by 2020.
WC Cup tourists face sky-high prices in Brazil
Prices of commodities and services are likely to increase manifold in Brazil during the upcoming World Cup football tournament. Many tourists are reportedly advised to keep a whole lot of cash for meeting the prices. Home to some of the world’s most expensive restaurants and hotels, Brazil will shock visitors who expect modest prices of some local items. Even by European and US standards, prices for basic items are often staggering. High prices are nothing new in Brazil which witnessed runaway inflation topping 2,400% a year as recently as 1993.
