Geert Bekaert and Campbell R. Harvey's

 

Chronology of Economic, Political and Financial Events in Emerging Markets

 

Bangladesh

Date

Major Political and Economic Events

860327

The export of gold jewelry was allowed under the Jewelry Export Scheme. Exporters must register with the Export Promotion Bureau in addition to their normal registration with the Chief Controller of Imports and Exports.a3(first entry)

8700

Banking crises (late 1980s to 1996): four banks account for 70% of total credit had estimated 20% of NPLs. From late 1980s up to 1996, the entire private/public banking system is technically insolvent.a2

870328

The coverage under the Exchange Rate Fluctuation Burden Absorption Scheme will also be given to foreign currency loans channeled through nationalized commercial banks on the basis of relending by the Government; previously, only the loans channeled through the Development Finance Institutions were covered.a3

890930

Authorized dealers were allowed to grant, without reference to the Bangladesh Bank, loans in domestic currency to foreign-owned manufacturing companies located in Bangladesh to the extent of 140% of their paid-up capital, reserves, undistributed profits, and unremitted dividends as disclosed by their last audited balance sheet.a3

910226

The upper limit on foreign exchange that may be brought into Bangladesh without declaration at the time of arrival was increased to $2,500 a person, irrespective of the resident status of the person.a3

910615

(1)The requirement to obtain prior permission from Bangladesh Bank to issue and transfer shares in favor of nonresidents against foreign investment in industrial ventures in Bangladesh, or to transfer Bangladesh shares and securities from one nonresident holder to another nonresident, or to remit profits earned by nonbank and nonfinancial foreign firms operating in Bangladesh was waived; (2) the purchases of Bangladesh shares and securities by nonresidents, including nonresident Bangladeshis, in stock exchange in Bangladesh were allowed, subject to meeting procedural requirement; (3) industrial units in the private sector were allowed to borrow abroad on commercial terms with the approval of the Board of Investment.a3

921026

The restrictions on remittances of profits by tea companies were removed.a3

920614

Authorized banks were permitted to lend to foreign-owned and -controlled industrial firms operating in Bangladesh without prior approval.a3

9200718

Authorized banks were permitted to transfer savings of expatriates, at the time of the completion of employment in Bangladesh, provided that their salaries and benefits were initially certified by the Board of Investment.a3

930503

Industrial units operating in the export processing zones (joint venture or fully foreign owned) were allowed to obtain short-term foreign currency loans without prior approval from Bangladesh Bank.a3

9500

The introduction of the Insider Trading Laws.a4

960101

Bangladesh Bank ceased to deal in the currencies of ACU member countries. a3

960716

The BB set individual limits on the open exchange position for authorized dealers based on their paid-up capital and reserves.a3

970101

The BB set authorized dealers' net open positions at 12.5% of capital.a3

970131

(Provisions specific to commercial banks and other credit institutions) Authorized dealers' net open position was set at 12.5% of capital.a3

9800

The first prosecution under the Insider Trading Laws.a4

9801

Five listed companies announced a no-dividend payout for fiscal year 1996/1997.

9800

In the second quarter, the DSE (Dhaka Stock Exchange) modified its membership policy to allow foreigners in, aiming to raise the DSE's broker roster from 250 to 300. The Securities and Exchange Commission of Bangledash approved a new netting system that allowed all deals to be settled on the same trading day.

9808

Heavy monsoon rains brought about massive flooding. The DSE ended the open-outcry system and started the new screen-based automated trading system on Aug 10.

981015

The central bank announced a surprise devaluation of the taka by 3%.

9811

The main opposition party, Bangladesh Nationalist Party, and its supporters enforced a 48-hour nationwide strike to protest undemocratic policies of the current administration.

9901

An alliance of three major opposition parties organized strikes to oppose three-day municipal election as well as weaken the government of Prime Minister Sheikh Hasina in the hope that early parliamentary elections would be called (slated for 2001).

9903

The Bangladesh Central Bank revealed that GDP growth fell to 5.6% in fiscal 1997/1998 from 5.9% in the previous year. Bangladesh Finance Minister S.A.M.S. Kibria announced that the economy was back on track after last year's flood.

9904

A pro-investment budget drastically reduced import duties on raw materials and included an amendment to investment laws to allow pension and insurance funds to invest up to 25% of their funds in equities.

9900

Bangladesh launched its first private-sector mutual fund, AIMS First Guaranteed Mutual Fund in the second quarter.

9910

The Bangladesh Securities and Exchange Commission cracked down on 16 listed companies for allegedly forging share certificates. The taka devalued 3%.

200001

While the opposition was boycotting Parliament, the government enacted a public-security law requiring special tribunals to deal with offenders of public peace.

200003

The IPO of Aims First Guaranteed Mutual Fund, the country's first private-sector mutual fund, was oversubscribed by eight times.

200006

A foreign securities company entered the local markets. The Bangladesh Securities and Exchange Commission (SEC) approved the draft for scriptless trading and permitting commercial banks to do merchant banking.

200008

The central bank depreciated the taka by 6%. The opposition called another crippling strike, protesting against the government's move to raise petroleum prices by 13%.

200009

The SEC introduced a new Z group of shares, with trade-for-trade settlement for defaulting companies.

200012

The SEC announced that all public limited companies needed its approval for capital issue.

200000

The government decided to stop the export of natural gas until 50 years of reserves were located.

200100

Tea exports declined.

200105

The taka depreciated 6.5% and the markets witnessed the largest trading volumes of the year as capital inflow into the country rose and investors switched between asset classes.

200106

Monsoons lashed the country.

200107

The election campaign overshadowed economic development efforts.

200110

The Bangladesh Nationalist Party (BNP) won with enough margin to make decisions freely. Begum Zia promised the support the United States in its efforts against terrorism.

20011200

Government increases the price of some fuels by as much as 90% in an effort to balance the country's budget.

20020400

Parliament approves temporary law meant to speed up legal process for dealing with violent crime. Opposition says it will be used to stifle dissent and help establish a one-party state. bbc

20020621

President Chowdhury resigns after ruling Bangladesh Nationalist Party (BNP) accuses him of taking an anti-party line.

20020906

Iajuddin Ahmed sworn in as president.

20030200

Parliament passed the Joint Drive Indemnity Act 2003, granting immunity to the armed forces from legal proceedings in civil courts for their activities under the countrywide anti-crime drive running from October 16th 2002 to January 9th 2003.

20030600

The IMF in mid-June approved the disbursal of a US$490m concessionary loan under the three-year PRGF loan. And the Asian Development Bank (ADB) has agreed to provide US$260m to set up three power plants. a17

20030911

The opposition Awami League (AL) began its boycott of parliament, where the coalition led by the Bangladesh Nationalist Party (BNP) enjoys a two-thirds majority. a17

20040100

The leaders of the seven south Asian countries—Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka—attended the 12th summit of the South Asian Association of Regional Co-operation (SAARC) signed the Islamabad Declaration, committing themselves to fighting terrorism and promoting economic growth through a regional free-trade zone.

20040200

Opposition calls series of general strikes in what it says is an attempt to force government from power.

20040400

The government announces plans to triple farm subsidies to $152m (85m) to boost production.

20040500

Parliament amends its constitution to reserve 45 seats for women. The female MPs will be selected in proportion to each party's support at the last election.

Year

Regulations on Foreign Investors

1998

Restrictions: Foreign investors are free to invest in any industry except the production of arms and other military equipment, production of nuclear energy, mechanized extraction within the boundaries of the reserved forests, security printing of currency notes or minting, and transportation of railroads or air.

Taxation: 10% individual income tax and 15% institutional income tax. No tax on capital gains.a6

1999

No change.a7

2002

Restrictions: Foreign investors receive national treatment and are allowed full ownership in most sectors. The International Monetary Fund reports that foreign investments, with the exception of investments in the industrial sector, require approval. b3

Taxation: Corporate tax rates for industrial companies whose shares are publicly traded is 35% and the rate of those whose shares are not publicly traded is 40%. Tax rate on income of all other companies including banks, financial institutions, insurance companies and local authorities is 45%. b4