Doreen Power Generations and Systems Ltd has been removed from the Dhaka Stock Exchange's (DSE) list of companies flagged over concerns about their ability to continue operations after its latest audited financial statements found no material uncertainty over its going concern.

The development comes as the listed power producer reported a 57.6% year-on-year increase in earnings per share (EPS) to Tk5.03 in FY26, from Tk3.19 in FY25. Its board has also recommended a 15% cash dividend, up from 10% a year earlier.

The company's shares closed at Tk30.60 on the DSE today (26 October).

In a press statement, the company said the exchange removed it from the list after its auditor did not flag any going concern risk or issued a qualified opinion in the financial statements for the year ended 30 June 2026.

Why Doreen Power was flagged

Doreen Power was placed on the DSE's going concern risk list following an observation in its audit report for FY25 under the heading "Material Uncertainty Related to Going Concern".

Based on the observation, the DSE classified the company as a non-marginable security under Rule 11(6) of the Bangladesh Securities and Exchange Commission (Margin) Rules, 2025.

According to the company, its auditor, Huda Vasi Chowdhury & Co, later clarified in writing that the observation applied only to the parent company's separate financial statements, not the group's consolidated accounts.

The uncertainty arose from the expiry of power purchase agreements (PPAs) for three gas-fired power plants with a combined capacity of 66MW operated by the parent company.

However, three subsidiaries continue to generate electricity under valid PPAs with the Bangladesh Rural Electrification Board (BREB) and Bangladesh Power Development Board (BPDB), with agreements running until 2031 and 2037.

The auditor confirmed that the expiry of the parent company's PPAs did not create the same going concern uncertainty for the consolidated group, the company said.

Doreen Power had earlier approached the DSE and the Bangladesh Securities and Exchange Commission (BSEC), submitting the auditor's clarification and seeking removal from the list. The latest audit report has now resolved the issue, the company said.

Board recommends 15% cash dividend

At a board meeting on 8 October, Doreen Power recommended a 15% cash dividend for FY26, compared with 10% in FY25.

Based on the Tk10 face value of each share, the proposed dividend amounts to Tk1.50 per share, subject to shareholder approval.

The company's annual general meeting (AGM) is scheduled for 24 December at 11am on a digital platform. The record date for the dividend and AGM-related entitlements is 12 November.

Its net operating cash flow per share rose 60.9% to Tk18.96 in FY26 from Tk11.78 a year earlier, while net asset value per share stood at Tk57.12 on 30 June 2026, up from Tk52.45 a year earlier.

Listed in 2016, Doreen Power remains in the DSE's "A" category and has regularly held annual general meetings and distributed dividends, according to the company.

It has an authorised capital of Tk200 crore and paid-up capital of Tk181.12 crore, comprising around 18.11 crore shares.

The company's market capitalisation stands at Tk559.66 crore, while its free-float market capitalisation is Tk158.35 crore. Sponsors and directors hold 66.61% of its shares, institutional investors 16.90%, and general investors the remaining 16.49%.

Bangladesh is unlikely to see an immediate fall in remittances from Saudi Arabia even as Houthi attacks on the kingdom intensified from early October, but a slowdown in new migration could weigh on inflows in the years ahead.

Following the attacks, migration to Saudi Arabia, the largest destination for Bangladeshi workers, has already been disrupted. As of Sunday, 144 direct and transit flights had been affected by prolonged flight restrictions at Saudi airports, disrupting the travel plans of around 22,000 passengers.

But economists and manpower experts say remittance inflows are unlikely to be hit immediately because newly arrived migrant workers typically take about a year to start sending significant amounts of money home.

According to them, the longer-term impact will depend on the duration of the crisis, the performance of the Saudi economy and demand for labour, particularly in construction.

A prolonged crisis that damages the Saudi economy could slow job creation and reduce workers’ incomes. But the outcome is not necessarily negative for the kingdom’s economy.

If Houthi missile and drone attacks continue without damaging oilfields and refineries, higher global oil prices could boost Saudi revenues, potentially supporting investment and demand for foreign workers, according to Zahid Hussain, a former lead economist at the World Bank’s Dhaka office.

“But everything is uncertain so far,” he commented.

Remittances are a major source of foreign currency for Bangladesh, accounting for around 7.5 percent of gross domestic product, according to World Bank data. Their importance has grown amid volatility in global energy markets following the US-Israel’s war on Iran, which has sent shockwaves through sectors ranging from agriculture to the garment industry.

In the July-September quarter of the current fiscal year, Saudi Arabia remained Bangladesh’s largest source of remittances. Inflows from the kingdom rose to $1.65 billion, up from $1.23 billion in the same period of FY26, according to Bangladesh Bank data.

The kingdom accounted for 19.20 percent of Bangladesh’s total remittance inflows in the first quarter of FY27, compared with 16.26 percent a year earlier.

During the July-September quarter, overall remittances reached around $8.59 billion, with Gulf Cooperation Council (GCC) countries continuing to account for the bulk of transfers.

DIVERSIFYING OVERSEAS JOBS IS BECOMING URGENT

The latest disruption shows Bangladesh’s heavy reliance on a handful of overseas labour markets, leaving migrant workers and the economy exposed to regional crises.

Since FY2014-15, Saudi Arabia has employed around half of the 96 lakh Bangladeshis who went abroad for work. Workers in the kingdom have sent home an average of $5 billion a year.

The pressure on migration is already evident. Overseas employment fell 36 percent year-on-year to 134,000 in the July-August period this year, following a decline to around 969,000 workers in FY26, the lowest level in five years, according to Bureau of Manpower, Employment and Training data.

Tasneem Siddiqui, executive director of the Refugee and Migratory Movements Research Unit (RMMRU), a local think tank, said the crisis exposed the structural weaknesses of the country’s migration sector.

“Therefore, rather than relying on piecemeal decisions, we must completely overhaul and diversify the manpower market. Otherwise, one crisis after another will emerge, leaving us perpetually vulnerable,” said Tasneem, also a political science professor at Dhaka University.

She said the government needs a long-term strategy to develop skills suited to specific overseas markets and expand employment opportunities beyond traditional destinations.

“Long-term strategic planning is essential. Particularly, allocating a mere 0.08 percent of the budget for a $35 billion remittance sector is grossly insufficient to accomplish meaningful interventions,” she said.

Meanwhile, economist Zahid said Bangladesh should target countries facing ageing populations and labour shortages, including Japan and countries in eastern Europe, where demand for workers in nursing, caregiving and manufacturing could offer alternatives to Middle Eastern markets.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

Sayema Haque Bidisha, an economics professor at Dhaka University, also called for greater diversification of migration destinations, stronger diplomatic engagement and better support for expatriates through overseas missions.

She said Bangladesh needs to improve its international image by demonstrating that its workers can fill skilled jobs, rather than being seen primarily as a source of manual labour.

Shariful Hasan, associate director of BRAC’s Migration Programme and Youth Platform, said earlier this month that many Bangladeshi workers in Saudi Arabia depend on daily or weekly employment and that security concerns have reduced work opportunities.

PAKISTAN FACES GREATER EXPOSURE THAN INDIA

Bangladesh is not the only country with a significant reliance on remittances from Saudi Arabia.

Its neighbour India and Pakistan also depend on money sent home by their citizens working in the kingdom, although the potential impact varies.

Saudi Arabia is Pakistan’s largest source of remittances, contributing $9.78 billion in the last fiscal year, according to State Bank of Pakistan data.

Meanwhile, around 7 percent of India’s international remittance inflows originate from Saudi Arabia. The country receives about $8 billion annually from the kingdom, according to the Reserve Bank of India.

A prolonged crisis that affects employment and earnings in Saudi Arabia could therefore have a greater impact on Pakistan than on India, given Pakistan’s substantial reliance on the kingdom as a source of remittances.

Invest Bangladesh has lined up 15 utility-scale solar power projects for development through public-private partnerships (PPPs) in the coming months as Bangladesh seeks to attract global investment in renewable energy.

The investment opportunities were presented at the World Investment Forum 2026 in Doha, Qatar, where Invest Bangladesh showcased a portfolio of infrastructure and manufacturing projects to around 100 participants, including institutional investors, global financiers and representatives of investment promotion agencies.

According to a press release issued by Invest Bangladesh, Nahian Rahman Rochi, a member of the agency and head of its Investment Development Division, presented the portfolio during a session titled "Invest in Bangladesh: The Billion-Dollar Opportunity Hiding in Plain Sight" today (26 October).
The portfolio includes solar power projects on government land, liquefied natural gas (LNG) infrastructure, the proposed Chattogram Free Trade Zone, port facilities and the Matarbari green dockyard. Investment opportunities in electronics, advanced textiles and medical devices were also highlighted.

Rochi said investors had expressed interest in how they could participate in the proposed projects, while regional partners were keen to explore joint opportunities in economic zones, ports and dry docks.

"These are investments that can serve Bangladesh's growing demand while supporting trade across the region," he said, adding that follow-up discussions would focus on project requirements and bringing together investors, operators and financing partners.

On the forum's first day, Invest Bangladesh Chairman Ashik Chowdhury joined a ministerial panel on turning energy-transition priorities into investable projects.

He outlined how the merger that formed Invest Bangladesh brought investor identification, site preparation, policy coordination and PPP structuring under one platform to help advance renewable energy projects.

Chowdhury also discussed the Sonagazi solar PPP project on underutilised government land, highlighting its potential as a model for similar projects.

At a separate investment ministerial roundtable, he called for greater recognition of the development impact of investments in emerging economies. He proposed that UN Trade and Development (UNCTAD) showcase successful investments and explore risk-sharing mechanisms based on investment guarantees and export credit models.

The World Investment Forum 2026 is being held in Doha from 25 to 27 October, organised by UNCTAD and hosted by the State of Qatar.

Invest Bangladesh also held bilateral meetings with prospective investors, while its programme included a roundtable on strengthening coordination among investment promotion agencies.

GPH Ispat Limited has deferred its proposed Tk968 crore rights share issue, citing prevailing capital market conditions and the need to safeguard the interests of the company and its general shareholders.

The decision was reviewed at a board meeting on 24 October and subsequently placed before shareholders at the company's annual general meeting on 25 October, where it was formally deferred.

Following the disclosure to the Dhaka Stock Exchange (DSE) today (26 October), the company's share price fell 2.53% to close at Tk15.40.
The steelmaker had planned to raise nearly Tk968 crore by issuing 96.78 crore rights shares at a face value of Tk10 each, offering two rights shares for every existing ordinary share.

The proceeds were primarily intended to repay bank loans amid sluggish domestic demand and persistent energy shortages affecting the steel sector.

The company said the proposal would be reconsidered once market conditions improve.

The postponement comes as GPH Ispat grapples with a heavy debt burden. As of 30 June 2026, it had long-term loans of Tk4,088 crore and short-term borrowings of Tk2,802 crore, taking total debt to around Tk6,890 crore. Total liabilities rose 9% year-on-year to Tk8,319 crore in FY26.

To ease its financial strain, the company recently approached Bangladesh Bank seeking a four-month waiver or relaxation of Credit Information Bureau (CIB) requirements.

In a letter to the central bank governor on 24 September, GPH Ispat said procedural requirements were hindering its ability to secure banking facilities and complete debt restructuring negotiations with more than two dozen banks and financial institutions.

Operational challenges have also hit the steelmaker's revenue. Net revenue fell 29% year-on-year to Tk3,940 crore in FY26 from Tk5,606 crore a year earlier.

Revenue from its core MS rod sales dropped 29% to Tk4,038 crore, while MS billet generated no revenue during the year. Income from industrial gas fell 37% to Tk22.72 crore, while export earnings plunged 55% to Tk8 crore.

Net profit plummeted to Tk3.54 crore, leaving the company with a net profit margin of just 0.08%. It remained barely profitable mainly due to lower management expenses and a reduced income tax burden.

Speaking to The Business Standard on condition of anonymity, a senior company official attributed the operational crisis to a severe cash crunch. The liquidity shortage has prevented the company from opening letters of credit (LCs) to import scrap metal and essential raw materials, forcing its factories to operate well below capacity.

Square Pharmaceuticals PLC, the country's leading drug manufacturer, has reported a record consolidated net profit of Tk2,770 crore for FY26 and recommended its highest-ever cash dividend of 130%, alongside plans to invest Tk725 crore to expand production capacity and strengthen its product portfolio.

The company's consolidated profit rose 16% year-on-year from Tk2,396 crore in FY25, continuing its growth trajectory over the past five years. Profit increased from Tk1,817 crore in FY22 to Tk1,898 crore in FY23 and Tk2,092 crore in FY24 before reaching the latest record.

The board recommended a 130% cash dividend, equivalent to Tk13 per share, for the financial year ended 30 June 2026, surpassing the previous record payout of 120% declared for FY25.
The company's annual general meeting is scheduled for 15 December, while the record date for the dividend has been set for 16 November.

Square Pharma's consolidated earnings per share rose 16% to Tk31.24 in FY26. Its net asset value per share increased 13% to Tk178.99, while net operating cash flow per share stood at Tk18.65.

The company has also approved Tk725 crore for balancing, modernisation, rehabilitation and expansion (BMRE), capital machinery purchases and land acquisition to support future growth.

These consolidated figures incorporate performance from Square Pharmaceuticals Kenya EPZ Ltd, Square Lifesciences Ltd, and associate companies including Square Textiles, Square Fashions, and Square Hospitals.

Infographics: TBS
Infographics: TBS

A senior company official said the investment was part of its long-term strategy to reinforce its leadership in the pharmaceutical industry. The plan is expected to help increase production capacity, modernise manufacturing facilities and expand the range of medicines, including biological products and specialised treatments for cancer and chronic diseases.

Since the Covid-19 outbreak in 2020, Square Pharma has invested around Tk2,500 crore in land, machinery and factory expansion projects to meet rising domestic and international demand.

Bangladesh's pharmaceutical market has benefited from growing healthcare awareness, population growth and rising demand for treatments for chronic conditions. However, dependence on imported active pharmaceutical ingredients, particularly from China and India, remains a challenge for local manufacturers.

Founded in 1958 by Samson H Chowdhury, Square Pharma has grown into the country's leading drugmaker, producing around 1,000 types of medicines and exporting to 42 countries across Asia, Africa and Latin America. It became the first Bangladeshi company to export medicines abroad in 1987. Listed on the stock exchanges since 1995, its shares closed at Tk218.80 today (26 October).

Shahjibazar Power Company, a listed power producer, has recommended a 40% cash dividend for FY26, doubling its payout from 20% a year earlier, as its consolidated net profit surged 138.5% year-on-year.

The dividend recommendation and annual financial statements were approved at a board meeting held today (26 October), according to a stock exchange disclosure.

The company reported a consolidated net profit of Tk112.71 crore for FY26, up from Tk47.26 crore in FY25. Consolidated earnings per share (EPS) rose to Tk6.04 from Tk2.53 over the same period.

Its standalone EPS increased to Tk4.82 from Tk3.09, driven by higher plant capacity utilisation, which rose to 76.97% from 62.50% a year earlier, according to the disclosure.

Higher power dispatch helped boost revenue by 23.62%, while lower financial expenses also supported earnings growth.

The company's subsidiary, Petromax Refinery Limited, also contributed to consolidated earnings after returning to profitability, with revenue increasing by 37.44%, the disclosure said.

Consolidated cash flow per share rose to Tk7.33, reflecting improved recovery of receivables from the Bangladesh Power Development Board (BPDB) and a sharp increase in operating cash flow.

Net asset value per share increased to Tk43.29 as of 30 June 2026, from Tk39.25 a year earlier.

The company's annual general meeting (AGM) is scheduled for 31 January 2027 and will be held digitally. The record date for determining eligible shareholders has been set for 29 November 2026.

Grameenphone Ltd (GP) reported a net profit of Tk2,171 crore in the first nine months of 2026, down from Tk2,264 crore in the same period last year, as revenue also declined.

According to the unaudited financial statements approved at a board meeting today (26 October), the telecom operator's revenue fell to Tk11,766.23 crore in January-September from Tk11,947.84 crore a year earlier.

In the third quarter (July-September), GP posted revenue of Tk4,016 crore and net profit of Tk750.85 crore.

Earnings per share (EPS) for the first nine months stood at Tk16.08, compared with Tk16.77 in the corresponding period of 2025. Q3 EPS was Tk5.56.

Net asset value (NAV) per share stood at Tk36.57 as of 30 September, down from Tk36.72 a year earlier.

However, net operating cash flow per share (NOCFPS) rose to Tk42.09 in the first nine months from Tk38.55 in the same period last year, driven by higher net cash generated from operating activities.

Singer Bangladesh Limited's net loss widened 61% year-on-year to Tk77.16 crore in the July-September quarter of 2026, driven by higher operating expenses and finance costs despite revenue growth.

According to unaudited financial statements approved at a board meeting today (26 October), the multinational electronics manufacturer incurred a loss of Tk77.16 crore in the third quarter, up from Tk47.96 crore in the same period last year.

Consequently, loss per share increased to Tk7.74 from Tk4.81, while quarterly revenue grew 7% year-on-year to Tk439 crore.

For the January-September period, the company's cumulative net loss stood at Tk119.44 crore, resulting in a loss per share of Tk11.98. Revenue during the nine months totalled Tk1,854 crore.

The sustained losses have dragged the company's net asset value (NAV) per share into negative territory at Tk10.29, with retained earnings ballooning to negative Tk269 crore. Trading in the 'Z' category, the company's accumulated losses exceed its paid-up capital.

Company sources indicated that although gross profit margin improved slightly by 0.84% in Q3 due to a 4.08% turnover increase, selling prices could not be adjusted to absorb higher product costs driven by promotional offers and channel mix. Although operating profit remained nearly static, heavy net finance costs of Tk204.84 crore in the first nine months led to a pre-tax loss of Tk108.07 crore. A 6.81% rise in Q3 finance costs stemmed from a 16% increase in short-term borrowing utilisation, while operating expenses grew 8.5% due to higher depreciation, salaries, and utility costs.

Conversely, net operating cash flow per share improved to Tk15.14 from Tk14.48 in Q3 2025 due to prudent supplier payment management and collection.

In 2025, Singer failed to declare a dividend for the first time in its history. Its shares closed at Tk75.30 today on the DSE.

Bangladesh received about half of the $1.27 billion in foreign loan commitments in the first quarter of the 2026-27 financial year, according to provisional data released by the Economic Relations Division (ERD) yesterday.

Bilateral and multilateral lenders disbursed $662 million in July-September of the current fiscal year. This was 42 percent lower than the $1.14 billion received during the same period a year earlier.
ERD data showed that most lenders made no financing commitments during the period, except for the Islamic Development Bank (IsDB). Last month, the government signed a $1 billion financing agreement with the IsDB to modernise and expand Eastern Refinery Limited, the country’s only oil refinery.

Japan was the only other financier to commit funds, pledging $3.5 million during July-September. Including the IsDB commitment, total financing pledges increased during the period.

In terms of disbursements, the International Development Association (IDA), an arm of the World Bank Group, provided the highest amount at $196 million. The Asian Development Bank followed with $118 million, while India provided $105 million, according to the ERD.

Foreign financing inflows to Bangladesh, a least developed country that relies partly on foreign sources to meet its financing needs, declined for the third consecutive month.

Despite the fall in inflows, loan repayments rose 5.6 percent year on year to $1.35 billion in July-September of this fiscal year.

ERD data showed that Bangladesh received $8 billion in foreign financing in FY2025-26, down from $8.57 billion in the previous fiscal year. The country repaid $4.49 billion during the same period, nearly 11 percent more than a year earlier.

Global fashion brands must help finance Bangladesh’s garment sector’s shift to clean energy while protecting workers’ rights and livelihoods, speakers said at a Dhaka dialogue yesterday.

They called for fair purchasing practices, accessible financing and safeguards to prevent manufacturers and workers from bearing the transition’s costs.

Organised by Stand.earth, Oxfam in Bangladesh and Breaking the Silence, the dialogue at Lakeshore Hotel brought together policymakers, brands, manufacturers, trade unions and development organisations, according to a press release.

Chief guest Kazi Rafiqul Islam, a member of parliament and the Parliamentary Standing Committee on the Ministry of Planning, said the energy transition was an economic, social and humanitarian transformation, not merely a technological shift.

“While making the industry eco-friendly, we must ensure that workers’ employment, fair wages, safe working environments and social security are not compromised,” he said.

Bangladesh, the world’s third-largest apparel exporter and ninth most climate-vulnerable country, faces significant climate risks, with around four million garment workers, many of them women, particularly exposed to rising temperatures and flooding.

Rachel Kitchin, senior campaign manager at Stand.earth, called for brands to contribute a fair share of decarbonisation and energy-efficiency costs through collective, shared or grant-based financing.

A recent Stand.earth Research Group study found that 15 brands could help Bangladesh avoid 1.26 million tonnes of carbon dioxide emissions annually by 2040, or 8.59 million tonnes cumulatively.

Rumana Rashid, director of the Bangladesh Garment Manufacturers and Exporters Association, stressed the need for training and reskilling as factories adopt cleaner energy and more efficient machinery. Workers’ voices and experience must also inform decisions, she said.The 2025 Fossil Free Fashion Scorecard found that only six of 42 major brands provided suppliers with decarbonisation finance, while just one did so without increasing their debt.

Atwar Rahman, interim head of the project management unit at Oxfam in Bangladesh, said climate and economic justice must go hand in hand. Razequzzaman Ratan, president of the Socialist Labour Front, and BTS Executive Director Roksana Sultana also spoke at the event.

Stand.earth introduced the Clean Fashion Investment Pact, followed by discussions on a roadmap for women workers, transition financing and climate adaptation.

JMI Syringes and Medical Devices Limited incurred a net loss of Tk6.02 crore in FY26, reversing a profit a year earlier, but its board has recommended a 10% final cash dividend for shareholders.

According to the company's price-sensitive information disclosed today (26 October), the board recommended the dividend for the financial year ended 30 June 2026. The company has scheduled its annual general meeting (AGM) for 23 December to seek shareholder approval, with the record date set for 23 November.

Audited financial statements show that the company's net profit of Tk4.49 crore in FY25 turned into a loss of Tk6.02 crore in FY26. Earnings per share (EPS) also fell to a negative Tk2 from Tk1.49 a year earlier.

The company attributed the decline in earnings to lower sales and higher operating expenses. It also booked a Tk7.54 crore adjustment for inventory damaged in an earlier flood, further weighing on its financial performance.

Net asset value (NAV) per share fell to Tk84.23 in FY26, according to the company's disclosure.

Despite the annual loss, JMI Syringes' share price rose 6.56% to Tk123.50 on the Dhaka Stock Exchange.

In his 2025 inaugural address, President Donald Trump said his return to the White House heralded the start of a new golden age for the ​US, especially for the economy.

He and his advisers contend his plans to slap tariffs on imports, deport some immigrants and curtail the arrival of others, cut personal and corporate taxes ‌and slash regulations would unleash growth, reshore manufacturing, and lead to a boom in the economy’s productive capacity.

The US economy may indeed be undergoing profound change, though it is unclear how much of the transformation stems from Trump’s policies and how much from the rapid development of artificial intelligence technologies whose impact on jobs, prices and output remains to be seen.

The picture is somewhat mixed.

Gross domestic product measures the total output of goods and services in an economy, and the rate it ​expands year to year is often cited as a benchmark for economic success.

But there are natural constraints. At a basic level GDP represents the number of people working multiplied by the average ​output per worker. All things equal an aging society with a low natural population increase and a low immigration level -- as in the US right now -- can only grow so fast.

Economists see the underlying US trend growth rate -- the pace at which the economy could expand with full employment and stable, low inflation -- at around 2 percent.

Trump has said his policies could double ​that pace or do even better, but so far quarter-to-quarter growth doesn’t look that much different than it did in prior years.

Some things just haven’t turned out as the administration expected. Steep tariffs ​imposed in the spring of 2025 and expanded since then were in Trump’s view going to cut US dependence on imports and bring manufacturing jobs back to US shores.

The US Supreme Court has since tossed out some of the levies as unconstitutional, though the administration has plans to replace them with taxes imposed under other regulations. “We have very durable tariff authorities,” Treasury Secretary Scott Bessent said last week.

Evidence on how much reshoring is in train has been mixed. Meanwhile imports have continued to ​climb in no small part because of demand for components to build data centers to accommodate AI firms.

Yet at the same time all that imported stuff has helped fuel what has been a big ​upside surprise. Business investment has boomed from the race to build data centers and establish AI capacity as fast as possible. It has been aided as well by corporate tax changes under Trump’s signature One Big Beautiful Bill Act ‌that provide an incentive to invest in capital projects.

The estimates of what’s in the AI-sector pipeline are staggering -- several trillion dollars of capital -- but local blowback against data center projects has also emerged as an important campaign issue.

The local dynamics have made for uncomfortable politics for Republicans, with Trump arguing data centers should be built as fast as possible and criticizing opponents, while local candidates face voters genuinely unnerved by the potential impact on their communities -- and their electricity bills.

But for now, business investment has been a major prop to GDP growth that would otherwise seem laggard.

The potential for the AI boom to usher in an era of profound productivity gains ​has become a touchpoint of optimism throughout the Trump ​administration.

Trump has tried rebranding AI as “super intelligence” and taken a direct interest in the industry, which has important security and defense applications, along with carrying immense potential risks. Bessent has argued that productivity-enhanced growth can fix the country’s fiscal problems without the full pain of hefty cutbacks, and Fed Chairman Kevin Warsh has said rising productivity may temper inflation and allow the ​Fed to lower interest rates.

Yet it’s not clear much has happened yet.

There have been some strong recent jumps in labor output per hour, and many economists ​and business leaders are convinced that the deployment of AI at scale will change much about how companies and people work.

But the data are notoriously volatile and hard to anticipate, and some officials argue that the recent productivity increases are too early to be attributable to the new technology -- as opposed to changes spurred by the demands of the pandemic, like mobile ordering.

Even AI optimists like Warsh have come to acknowledge that the timing and contours of coming economic gains are yet ⁠to be ​determined.

TOO EARLY TO CALL THE REVOLUTION

If some combination of AI and Trump administration policies do reshape the economy’s supply side, it could ​let GDP grow faster with overall less inflation and less concern around slow or negative growth in the labour force.

In economists’ terms it would involve a jump in the economy’s potential trend growth rate.

As it stands, organisations like the Congressional Budget Office see a ​future that looks much the same as the past, with potential growth ebbing alongside the slowdown in population growth rates, and a noninflationary “speed limit” of about 1.8 percent.

The Ashuganj Fertiliser and Chemical Company Limited (AFCCL) in Brahmanbaria remains shut over 1.5 years, leaving the state-run plant unable to produce urea amid the country’s continued reliance on imports.

The factory, which has remained idle since March 1 last year, has missed out on nearly Tk 3,000 crore worth of production over the past 19 months, according to estimates based on its daily output value of around Tk 5 crore.

On April 23 this year, independent lawmaker Rumeen Farhana raised the issue in parliament, calling for the reopening of the factory in her constituency, Brahmanbaria-2.

In response, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood assured lawmakers that gas supplies would resume from May 1, citing the need to protect the country’s agricultural sector.

However, the assurance has yet to materialise, with the authorities unable to provide a definite timeline for restarting operations.

The prolonged closure has also left the government incurring salary and other operating expenses while raising concerns over the condition of machinery that has remained idle for an extended period.

Tajul Islam Bhuiyan, deputy general manager (administration) of AFCCL, said officials had initially expected production to resume in June, but the plan did not materialise because of the gas shortage.

He said increased supplies of liquefied natural gas (LNG) could help restore gas availability at the plant.

Senior officials are also discussing with a foreign company the possibility of operating the factory with a reduced volume of gas, he added.

The plant, which began commercial production in 1983, currently has the capacity to produce around 1,150 tonnes of urea daily, down from its previous daily capacity of approximately 1,600 tonnes, according to factory sources.

It supplies prilled urea to seven neighbouring districts within its designated distribution area, making the suspension of production a concern for regional fertiliser supplies.

Meanwhile, Bangladesh Chemical Industries Corporation (BCIC) Chairman Md Babul Mia expressed hope that production could resume before the end of this year.

Speaking to journalists after visiting the factory last Thursday, he said efforts were underway to ensure adequate gas supplies to keep the country’s fertiliser factories operational.

Bangladesh currently imports around 26 lakh to 27 lakh tonnes of urea annually, he said.

According to the BCIC chairman, operating domestic fertiliser factories at full capacity could enable the country to meet its own demand and potentially export urea.

He said the government aimed to save around Tk 22,000 crore in import costs by bringing all fertiliser factories back into operation.

Factory officials and workers, however, said repeated interruptions in gas supplies over the years had disrupted production schedules and made it difficult for the BCIC to meet its output targets.

They said preparations to restart operations often began when gas became available, but prolonged inactivity frequently caused technical problems with machinery.

By the time repairs were completed, supplies were sometimes suspended again, preventing production from resuming, they alleged.

Abu Kawsar, general secretary of the Ashuganj Fertiliser Factory Workers and Employees Union, said the plant could become profitable if uninterrupted gas supplies were ensured.

He urged the government to take effective measures to protect the state-owned facility, saying repeated shutdowns were undermining its production capacity and making machinery maintenance increasingly difficult.

Meanwhile, Bakhrabad Gas Distribution Company Limited (BGDCL), which supplies gas to the Ashuganj area, said it was awaiting instructions from higher authorities to restore supplies to the factory.

Mohammad Bappi Shahriar, deputy general manager of BGDCL’s transmission department, said the plant required around 48 million cubic feet of gas a day to operate at full capacity.

“We are ready to resume gas supplies to the factory once we receive instructions,” he told The Daily Star.

The country currently has eight fertiliser factories, seven of which are state-owned. Of the eight, six produce urea fertiliser and two produce non-urea fertilisers.

Bangladesh and Malaysia are set to formally begin negotiations on a free trade agreement (FTA) today (27 October), focusing on draft texts, market access, product lists and a timeline for concluding the deal, as both countries seek to expand bilateral trade and reduce existing trade barriers.

The talks will launch at 10am at Pan Pacific Sonargaon Hotel in Dhaka, with Commerce Secretary Sharf Uddin Ahmed Choudhury inaugurating the event.

The two countries have already exchanged preliminary draft agreements which will be discussed following the opening session, officials of the commerce ministry said.

A 31-member Malaysian delegation has arrived in Dhaka to participate in the negotiations. Malaysia's team will be led by Dr Rashidi Said, senior director of the Asia-Pacific Economic Cooperation and Regional Grouping Division at the country's Ministry of Investment, Trade and Industry (MITI).

Khadiza Nazneen, additional secretary (WTO) at the commerce ministry, will lead the Bangladesh team.

A senior commerce ministry official, speaking on condition of anonymity, told TBS that the discussions would cover the texts of the draft agreements, a negotiation timeline and selected products.

The move follows discussions during Prime Minister Tarique Rahman's visit to Malaysia, when a joint statement set a target of concluding the FTA by 2027. The upcoming talks mark the first formal step towards achieving that goal.

Bangladesh eyes export diversification

Bangladesh's trade with Malaysia remains heavily skewed towards imports. In FY25, Bangladesh exported goods worth $282.55 million to Malaysia, while imports stood at $2.29 billion, leaving a trade deficit of around $2.01 billion.

Commerce ministry officials believe an FTA could improve tariff access for Bangladeshi products and open new export opportunities beyond the readymade garment sector, particularly in agricultural products, leather, footwear, pharmaceuticals, processed food and engineering goods.

According to the Export Promotion Bureau, knitwear was Bangladesh's largest export category to Malaysia in FY25, generating $113.49 million. Agricultural products earned $75.69 million, while woven garments brought in $65.32 million.

Other exports include petroleum products, plastics and rubber, engineering goods, pharmaceuticals, chemicals, home textiles, frozen food and furniture.

Energy dominates Malaysian exports

Bangladesh's imports from Malaysia are dominated by fuel and mineral oils, palm oil, chemicals, iron and steel, plastics, machinery and electrical equipment.

According to Malaysia's trade promotion agency MATRADE, Malaysian exports to Bangladesh rose 5.7% to 11.84 billion ringgit in 2024.

World Bank data show Malaysia exported $2.45 billion worth of goods to Bangladesh in 2023, of which fuel products accounted for $1.39 billion, or 56.58%.

Data from the Bangladesh-Malaysia Chamber of Commerce and Industry show Bangladesh exported $293.51 million worth of goods to Malaysia in FY24 against imports of $2.60 billion, resulting in a trade deficit of $2.31 billion.

Beyond tariffs

Officials said negotiations could also cover rules of origin, services, investment and manpower exports, alongside market access.

Opportunities to train and employ Bangladeshi workers in Malaysia's semiconductor industry may also feature in discussions as demand for skilled workers grows.

A key objective for Bangladesh is to maintain competitive access to the Malaysian market after graduating from least developed country status.

Artificial intelligence-generated actors are moving from online short dramas into advertising and other commercial settings in China, offering production teams a cheaper and more controllable alternative to human performers, while raising questions about employment and the future of the entertainment industry.

Li Xiaolong, a young actor and student at the Shanghai Theatre Academy who stars in the short play My Dual Control, said the growing use of AI performers could further narrow job opportunities for human actors as film and television productions face tighter budgets.

A friend working in Hengdian, Zhejiang province, one of China’s major film and television production centers, told Li that fewer actors were working there, with some leaving the profession or taking jobs as costumed performers at tourist attractions. While anecdotal, the account reflects the uncertainty facing some performers.

AI performers give production teams greater control over expressions and movements through text-based instructions, while generally costing less than human actors, Li said. Producers can revise scenes by adjusting prompts, reducing the need for repeated filming. Opportunities have also become harder to secure for actors without a strong personal following. In Li’s experience, even day-rate jobs that once paid more than 1,000 yuan ($150) have become difficult to obtain.

Despite these pressures, Li believes human performance retains qualities AI has not fully replicated. Audiences watching AI short dramas may focus primarily on the plot, he said, and AI performers may suffice when their expressions and actions fit the story. Some viewers, however, continue to prefer the realism and nuance of human acting.

Li recalled a teacher describing acting as: “Living people performing living people for living people”. Building a role requires research into a character’s background and relationships, along with emotional exploration that helps actors bring the character to life. Human performers can show how emotions develop, while AI-generated performances may deliver an immediate result without conveying the same process.

The commercial rise of AI actors can be seen in Fang Taozi, an AI-generated actress whose profile has grown alongside the popularity of AI short dramas. With blunt bangs, long straight black hair and two distinctive moles, she has developed a recognizable appearance and attracted a substantial following on short-video platforms.

The AI drama The Laid-off Girl, which debuted on Douyin on June 12, helped bring Fang to a wider audience. By Aug 25, her Douyin account had more than 510,000 followers. On Aug 27, fashion magazine Cosmo Crush previewed her on its official Weibo account, showing how AI-generated characters are entering spaces traditionally occupied by human celebrities.

For advertisers, an AI character with a recognizable face and an established following can become a vehicle for product promotion. AI characters can maintain a consistent appearance and appear in different scenes without the logistical demands of filming with human performers, making it easier for brands to adapt materials for campaigns.

Rates listed on Douyin’s Xingtu influencer marketing platform for Fang Taozi have reportedly ranged from 168,000 yuan for videos of up to 20 seconds to 208,000 yuan for videos lasting 21 to 60 seconds and 258,000 yuan for videos longer than 60 seconds. Though it should be noted that listed rates do not necessarily reflect actual transaction values or earnings.

Production costs can also be lower. Some industry reports have put the cost of AI short dramas at around 80,000 yuan per minute, though expenses vary with complexity and production methods. The DataEye Research Institute has estimated that China’s market for AI short dramas, including animated dramas, could exceed 40 billion yuan in 2026, up about 138 percent year-on-year. It estimated that the market had exceeded 22 billion yuan in the first five months. These figures, though, cover AI short dramas broadly, not AI actors alone, and are industry estimates rather than official statistics.

Hou Wenjie, secretary-general of the Shanghai-based research institute Yu Ce Think Tank, said the commercial value of AI actors has moved beyond proof of concept into actual monetization.

Fang Taozi’s case illustrates three factors behind this shift, Hou said. First, operational strategy matters more than the technology alone. Rather than appearing only in isolated videos, Fang has an independent account that regularly publishes lifestyle content, including cooking, fitness and commuting. This recreates the sense of everyday companionship associated with human influencers, helping build audience loyalty and support advertising rates.

Second, the monetization model is taking shape. Hou said reported rates of around 160,000 to 250,000 yuan per video exceed those charged by many mid-tier human influencers. AI actors offer brands greater control, predictable scheduling and fewer risks associated with personal scandals, potentially making collaborations easier to manage and less costly.

Third, the projected 40-billion-yuan market and estimated 138 percent annual growth point to demand for content produced efficiently at a lower cost. AI actors are positioned to help meet this demand, Hou said.

Looking ahead, Hou expects AI characters to move beyond short dramas into lifestyle content. Vlog-style accounts that develop recognizable personalities could become more common, although repetitive formats may lead to audience fatigue. Brand partnerships could expand from one-off advertisements to longer-term endorsements and co-branded products. Advances in multimodal AI could also make expressions, movements and interactions with different environments more natural while reducing production costs.

Hou said the industry’s development would require greater attention to virtual-person advertising labels, likeness rights and content authenticity. The commercial value of AI actors is real, he said, but their long-term competitiveness will depend on character development and content innovation rather than technological novelty alone.

Popularity does not guarantee sustainable commercial value. Brands still need to consider audience trust, product suitability and whether a character can maintain engagement beyond a viral hit. The reported removal of an advertisement featuring Fang Taozi over concerns that its claims could mislead consumers highlights the risks of using AI-generated figures in commercial messaging.

The technology has also prompted debate over whether AI characters resemble existing performers too closely. As their appearances become more realistic, questions over likeness, intellectual property and the boundary between imitation and original creation are likely to become more prominent.

The impact on human performers may vary across the industry. Li believes stage performances, including plays and musicals, may be less affected because they rely on live skills and interaction with audiences. Such work requires strong professional foundations, however, and some actors whose experience is mainly in screen productions may find it difficult to move into the field.

AI actors and human performers have already shared the stage in some productions, Li said, but such integration remains less common in film and television. He believes the two do not yet fit convincingly into the same scene in many cases, sometimes making the result look artificial. He expects closer integration as the technology develops.

The future may involve more than a contest between virtual and human actors. AI could take on repetitive or technically demanding tasks, while human performers remain important in roles requiring complex emotional interpretation, live interaction or a distinctive personal presence. Yet if AI performances continue to improve and costs remain lower, demand for some categories of human labor could decline, particularly in productions where speed and budget are the main considerations.

For entertainment companies, AI actors offer a way to control costs and test new formats. Their popularity does not necessarily signal the end of demand for human performers. The industry’s challenge is to identify where AI-generated characters can create commercial value while recognizing the craft, experience and emotional depth human actors bring to storytelling.

Bangladesh and Malaysia will begin negotiations for a free trade agreement (FTA) in Dhaka today as Bangladesh seeks to secure preferential market access after its graduation from the least developed country (LDC) category.

The first round of talks aims to advance an agreement by next year, a commerce ministry official told The Daily Star, asking not to be named.
Additional Commerce Secretary Khadiza Nazneen will lead the Bangladesh delegation at the meeting at Hotel Pan Pacific Sonargaon Dhaka, the official said. A 30-member Malaysian delegation is in the capital for the negotiations.

The proposed FTA is part of Bangladesh’s efforts to expand trade agreements with potential partners ahead of LDC graduation, which will erode some of the trade preferences the country currently enjoys.

Bangladesh signed an economic partnership agreement (EPA) with Japan and a comprehensive economic partnership agreement (CEPA) with South Korea this year to secure preferential market access.

However, both agreements are yet to take effect as they require parliamentary ratification in the respective countries.

Bangladesh also signed a preferential trade agreement (PTA) with Bhutan in December 2020, covering 34 Bhutanese products and 100 Bangladeshi products. The agreement is now in operation.

‘INCLUDE MANPOWER EXPORTS IN NEGOTIATION’

Md Anwar Shahid, president of the Bangladesh Malaysia Chamber of Commerce and Industry (BMCCI), welcomed the initiative, saying Bangladesh should pursue FTAs with potential trading partners to prepare for the loss of preferential market access.

“Trade should be used as a tool for development, as many developed and developing countries have already demonstrated,” he said.

He noted that an FTA with Malaysia could reduce the National Board of Revenue’s tariff revenue but argued that the potential benefits of a trade agreement should not be overlooked.

Anwar also called for including manpower exports in the negotiations, saying Bangladesh’s economic ties with Malaysia remained limited in scope and that Bangladesh had yet to diversify its exports significantly beyond garment products.

Bangladesh exports textiles and apparel, leather and leather goods, jute and jute products, fish and seafood, and pharmaceuticals to Malaysia. Its imports from the country include electrical and electronic equipment, palm oil, machinery and mechanical appliances, rubber products and chemicals.

In fiscal year 2024-25, Bangladesh exported goods worth $282 million to Malaysia and imported goods worth $2.29 billion, according to data from the Export Promotion Bureau and Bangladesh Bank.

The trade gap partly reflects Bangladesh’s substantial imports of palm oil from Malaysia.

‘MALAYSIA COULD BE A GATEWAY TO ASEAN’

M Masrur Reaz, chairman and chief executive officer of Policy Exchange of Bangladesh, also stressed the importance of securing market access and diversifying export destinations ahead of LDC graduation.

He said 84 percent of Bangladesh’s exports were concentrated in the garment sector, while a similar proportion went to just three destinations — the United Kingdom, the United States and the European Union.

Masrur said Bangladesh’s export concentration had been supported by duty-free market access linked to its LDC status, making it important to pursue new trade arrangements as those preferences change.

Asian markets could play a greater role in expanding trade and business after graduation, he said, adding that agreements with Malaysia, Japan, South Korea and other countries would be important in that effort.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

He also noted that Malaysia could potentially serve as a gateway for Bangladesh to access the wider Association of Southeast Asian Nations (ASEAN) market.

Despite the region’s growth potential, Bangladesh’s exports to ASEAN remain low, he said.

The PEB chief also said major trading nations were increasingly focusing on regional markets, partly amid geopolitical uncertainties, making closer trade ties within Asia more important.

Like Anwar, he too suggested that Bangladesh include manpower exports in the FTA negotiations with Malaysia to broaden the scope of bilateral economic cooperation.

Bangladesh repaid more than twice what it received in foreign loans in the first quarter of FY27, as falling loan disbursements and rising debt-servicing costs put pressure on the country's external finances.

The country repaid $1.35 billion in principal and interest on foreign loans in the July-September period against $662.31 million foreign loans disbursed, according to provisional data from the Economic Relations Division (ERD) released yesterday.

This means Bangladesh paid $2.04 in foreign debt servicing for every dollar it received in loans from external sources during the quarter.

Debt servicing rose 5.6% year-on-year from $1.28 billion in the same period of FY26. Principal repayments increased to $858.92 million from $816.99 million, while interest payments climbed to $492.31 million from $462.96 million.

Meanwhile, foreign loan disbursements fell 42.3% from $1.149 billion a year earlier, leaving the government with significantly lower external financing to meet its development obligations.

Of the $662.31 million received during the quarter, $541.74 million came as loans and $110.57 million as grants, according to ERD data.

Economist Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said the rising repayment burden reflected the volume of loans taken in previous years and the contractual obligations attached to them.

"Loans taken under agreements with various development partners in the past must now be repaid, including principal and interest, in accordance with the terms of those agreements. There is no scope to reduce or increase the repayment obligations," he told The Business Standard.

He said the repayment burden would increase further over the next two to three years.

The combination of higher debt servicing and lower disbursements is creating significant financial pressure on the government, potentially complicating revenue collection and budget implementation, Mujeri said.

If foreign loans and grants remain insufficient, the government may have to rely more heavily on domestic borrowing, he warned. Increased borrowing from the central bank could fuel inflation, while greater borrowing from commercial banks could squeeze credit for private businesses, hurting investment and employment.

World Bank, ADB lead disbursements

The World Bank's International Development Association (IDA) and the Asian Development Bank (ADB) were the largest sources of foreign assistance during the quarter, together disbursing $358.62 million, or around 54% of the total.

The IDA disbursed $196.51 million, followed by the ADB with $162.11 million.

India was the third-largest source, providing $104.99 million under bilateral credit arrangements. Japan disbursed $44.66 million, Russia $20.65 million, and China $14.66 million.

The Asian Infrastructure Investment Bank (AIIB) made no disbursements during the period, while other development partners collectively provided $118.73 million.

Commitments rise, but disbursements lag

Despite the decline in actual receipts, foreign loan and grant commitments increased nearly 40% year-on-year to $1.273 billion in July-September, up from $910.67 million in the corresponding period of the previous fiscal year.

Of the total, $1.148 billion was in loans and $125.45 million in grants.

ERD data show that a $1 billion loan commitment was secured from the Islamic Development Bank (IsDB) for the modernisation and expansion of the Eastern Refinery project.

Japan recorded fresh commitments of $3.51 million, while IDA, ADB, China and AIIB reported no new commitments during the quarter.

Mujeri, however, said commitments do not immediately translate into cash disbursements. Development partners have adopted a cautious approach following the formation of the new government, reviewing its policies and plans before proceeding with financing decisions.

He also pointed to gaps in maintaining continuity in agreements and loan arrangements made under the previous government as a factor behind the delays.

The government is currently negotiating a new programme with the International Monetary Fund (IMF). A successful agreement is important because major development partners often consider the outcome of IMF negotiations when making subsequent lending decisions, Mujeri said.

Failure to secure IMF financing could make it harder for Bangladesh to obtain substantial funding from other multilateral lenders, he added.

He urged the government to ensure a timely agreement with the IMF and increase the flow of foreign assistance to ease pressure on public finances and reduce reliance on domestic borrowing.

Japanese companies are increasingly looking to Bangladesh, attracted by its large consumer base, growing middle class and potential for investment.

Surveys by the Japan External Trade Organisation (JETRO) show that consumer goods are among the main areas of interest of the firms.
Over the years, the organisation has also identified Bangladesh as one of South Asia’s most promising destinations for business, citing its large population and rising purchasing power.

Japan has spent years planning to expand investment and relocate more industries to Bangladesh, particularly in garments and textiles, under its Big B plan, or Bay of Bengal Industrial Growth Belt.

The plan envisages an industrial corridor linking Dhaka, Chattogram and Cox’s Bazar, modelled on the industrial hubs of Tokyo and Osaka that developed between the 1960s and 1980s and helped drive industrial growth of the island nation.

A few years ago, more than 85 percent of the nearly 338 Japanese companies running businesses in Bangladesh told JETRO they wanted a free trade agreement between the two countries to boost bilateral trade and investment.

More recently, nearly 72 percent said they planned to expand in Bangladesh within a year or two, viewing the country as a promising market.

In February this year, Bangladesh and Japan signed an Economic Partnership Agreement (EPA) to strengthen trade and investment ties.

Kazuiki Kataoka, country representative of JETRO Bangladesh and the current president of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI), said many Japanese companies are relocating from China to Bangladesh, drawn mainly by lower labour costs and the size of the domestic market.

The companies are investing mainly in readymade garments (RMG) and consumer goods, he said, as a large and growing middle-income population drives demand.

“Mitsubishi and Toyota, for example, have already approached the government for help with producing cars in Bangladesh. Japanese firms are also interested in fast-moving consumer goods and food processing,” he added.

According to Kazuiki, the domestic market is the main attraction.

He said that Japan has a long-term plan for Bangladesh, which explains why the close relationship between the two countries is being emphasised during Prime Minister Tarique Rahman’s visit.

“Japan is now focused on Bangladesh as a market in its own right, rather than using the country as a gateway to other markets,” Kazuiki added.

Tareq Rafi Bhuiyan (Jun), the immediate past president of JBCCI, said Big B, or the Free and Open Indo-Pacific (FOIP), was adopted mainly with Bangladesh’s market in mind. Regional issues are now also being discussed to some extent under the FOIP framework.

He said that several major projects were also planned with the domestic market in mind, including the third terminal at Hazrat Shahjalal International Airport in Dhaka, the deep-sea port and power plants at Matarbari, and the Japanese economic zone at Araihazar.

Matarbari also has strategic importance, as the port is intended to serve as a hub linking the Indian subcontinent with ASEAN and East Asian countries, including Japan.

In July, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) launched a dedicated Japan desk to tap the market’s potential.

BGMEA President Mahmud Hasan Khan said Bangladesh’s apparel exports to Japan have already exceeded $1 billion, but there is considerable scope to increase them further.

He stressed the need for single-stage rules of origin under the agreement, which he said would make exports simpler and cheaper.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

Currently, about 98 percent of Bangladeshi goods enter Japan duty-free under the least developed country (LDC) category. Japan is the only Asian country where Bangladesh’s exports have exceeded $1 billion over the past decade.

Annual exports to Japan have topped $1 billion since the fiscal year 2015-16, while two-way trade exceeded $3 billion in FY18, according to the Export Promotion Bureau (EPB).

Bangladesh imports iron and steel, vehicles and accessories, ships, machinery, mineral fuels, medical and surgical instruments, plastics and electrical machinery from Japan, according to Bangladesh Bank data.

Industry people say the “China plus one” strategy adopted by industrialised countries has made the South Asia region a natural destination for investment. They point to South Asia’s economy of nearly $5 trillion, a population of almost 2 billion, a largely young workforce and a strategic location.

Business leaders say more than 350 Japanese companies now operate in Bangladesh across trading, manufacturing and infrastructure.

Japanese manufacturers, from motorcycle makers to clothing firms, create jobs and help upgrade technology. Small and medium-sized Japanese enterprises are also exploring opportunities in Bangladesh’s information technology, logistics and other service sectors.

Business leaders in both countries expect more Japanese companies to enter Bangladesh once the EPA comes into force.

Eight private commercial banks are set to receive regulatory concessions to provide Tk1,700 crore in fresh loans to City Group and open letters of credit (LCs) for the conglomerate.

The central bank will also allow the banks to treat the group's overdue loans as unclassified rather than non-performing for a specified period under the concessions.

The move aims to keep City Group's operations running, ensure uninterrupted supplies of essential commodities ahead of Ramadan, and help banks recover their outstanding loans.
A Bangladesh Bank deputy governor told The Business Standard, on condition of anonymity, that the central bank held a meeting with City Group and its lending banks today (26 October).

"Some banks have already classified the group's loans. We've told them that, based on applications from the banks and recommendations from the finance ministry, special concessions will be granted to keep the loans out of default status," he said.

"As City is a well-established business group in Bangladesh, we don't want any company to fall into a difficult situation. That is why we are willing to offer special facilities," he added.

Bangladesh Bank Governor Mostaqur Rahman chaired the meeting with representatives of the lending banks at the central bank. Deputy governors Kabir Ahmed and Sarwar Hossain, along with City Group Managing Director Md Hasan, also attended.

The banks were represented by the chairman of Association of Bankers Bangladesh, and the managing directors of City Bank, Mutual Trust Bank, Bank Asia, BRAC Bank, Prime Bank, Eastern Bank, Pubali Bank, and Southeast Bank, among others.

As of March, City Group owed Tk24,185 crore to 47 domestic and foreign banks and financial institutions, including Tk16,246 crore in funded loans and Tk7,939 crore in non-funded liabilities. Its total exposure has since risen to around Tk26,000 crore.

Tk1,700cr syndicated loan

The managing director of a private commercial bank told TBS that the Tk1,700 crore syndicated loan would be used as working capital to keep City Group's operations running.

Under the proposed arrangement, City Bank would provide Tk300 crore, while each of the other seven banks would contribute Tk200 crore.

However, the banker said his bank had yet to approve the loan although approval was likely.

He said banks participating in the new syndicated loan would have to apply to Bangladesh Bank for regulatory concessions. Banks not joining the new facility would instead seek permission to reschedule City Group's existing loans.

Both groups of banks would need to submit applications to the central bank, he said, adding that further discussions would be required to finalise the process.

Banks seek non-classification until 30 June 2027

At the meeting, several banks also sought an exemption until 30 June next year to keep City Group's businesses running and improve their chances of recovering outstanding loans.

Earlier, the group sought to reschedule Tk26,000 crore in loans over 12 years and obtain Tk6,000 crore in working capital. Its loans were at risk of being classified as defaulted.

It wrote to the governor seeking seven forms of policy support, including the suspension of classification. The Association of Bankers, Bangladesh (ABB), submitted a similar request.

In response, Bangladesh Bank allowed banks to maintain the group's existing loan classification until 30 September. The concession prevented its Tk26,000 crore in loans from being classified as defaulted during that period.

However, the central bank did not extend the concession after it expired, leaving most of the group's entities classified as defaulters and cutting off their access to fresh loans and LCs.

Special provision invoked

Section 27KaKa(3) of the Bank Company Act 1991 prohibits banks from extending fresh credit facilities to defaulting borrowers. As a result, City Group entities classified as defaulters cannot obtain new loans or open LCs.

However, under Section 121, Bangladesh Bank can exempt specific cases from this restriction in consultation with the government.

The eight banks have invoked this provision to seek permission to extend fresh loans and LC facilities to City Group to sustain its operations and recover outstanding loans.

Revenue from new financing to repay lenders

Mutual Trust Bank Managing Director Syed Mahbubur Rahman said City Group had run into trouble because of some wrong decisions and investments outside its core business.

"The meeting discussed ways to help the conglomerate overcome the crisis," he said.

Under the proposed arrangement, an escrow account would be opened for banks providing fresh financing. Revenue generated from the new financing would be used exclusively to repay those lenders, with other banks barred from claiming any share of the proceeds.

City Group also plans to sell assets over the next two to three years to repay its loans. However, no special concession would be allowed on the required down payment, he said.

Mahbubur added that Bangladesh Bank did not want City Group's default status to completely cut off its access to fresh financing. However, no bank would be forced to lend, and the final decision would rest with the respective bank's board.

"To secure the proposed financing, City Group has been asked to submit a comprehensive list of all its movable and immovable assets," he added.

The managing director of another bank said seven or eight lenders were providing fresh financing to City Group, while the group had defaulted on loans at many other banks.

He said keeping the group's brands operational and allowing it to open LCs to import essential commodities ahead of the upcoming Ramadan were crucial.

Another private bank managing director said the group's businesses could shut down if it could not access fresh loans and LC facilities.

"This would make it even harder for banks to recover their outstanding loans, prompting them to seek the exemption to keep the group's operations running," the banker added.

The government’s development spending in the first quarter of fiscal year 2026-27 (FY27) fell to its lowest level in at least 17 years, raising concerns about its ability to implement budget plans and support economic growth.

Ministries and divisions spent Tk 12,017 crore, or just 3.89 percent of the Annual Development Programme (ADP) allocation, between July and September, according to data from the Implementation Monitoring and Evaluation Division (IMED) released yesterday.

The implementation rate was 5.09 percent in the same period of FY26, 4.75 percent in FY25 and 7.5 percent in FY24.

ADP implementation this year was also slower than in either of the previous two fiscal years, when widespread administrative disruption following the 2024 mass uprising hampered development spending.

Spending was particularly low in the health sector, despite growing concerns about access to healthcare. The Medical Education and Family Welfare Division spent just 1.86 percent of its allocation, while the Health Services Division used only 1.78 percent, IMED data showed.

Md Deen Islam, a professor of economics at the University of Dhaka, said the slow pace of ADP implementation was worrying because public investment plays a key role in driving domestic demand.

“If public spending falls short of planned levels, domestic demand will weaken, and economic growth will slow,” he said.

Industries such as construction, cement and logistics depend directly on public investment and could suffer if government spending remains low, he added.

Weak implementation could also discourage private investment by undermining confidence in the government’s ability to carry out its plans.

“If the private sector sees that the government cannot implement its plans, it sends the wrong signal. Investors may become more cautious and uncertain about whether to invest under these circumstances,” Deen said.

Delays in major development projects could also increase costs and reduce their economic benefits, he said.

“Many projects may initially have a positive net benefit, meaning their benefits exceed their costs. But delays and rising costs can reduce those benefits,” he said.

Delays in power and transport projects could also raise business costs and reduce private-sector productivity.

“If these projects are delayed or not completed properly and on time, the cost of doing business will rise, and productivity will fall. This could affect private-sector jobs and create further challenges,” he said.

Deen warned that the new government needed to reverse the downward trend early in its tenure to avoid these risks.

“If the new government fails to reverse this downward trend early in its tenure, I am concerned that these risks could materialise,” he added.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh (PRI), shared these concerns, saying the slow pace of ADP implementation reflected persistent weaknesses in government agencies’ ability to carry out projects.

“The expected improvement in implementation capacity has not materialised, suggesting that government agencies continue to struggle to deliver on their budget commitments,” he said.

He said the fact that the implementation rate had fallen below the level recorded under the interim government was particularly concerning, as agencies continued to miss their development targets.

“Budget allocations can deliver their intended economic benefits only when the money is spent on time, and projects are completed effectively,” he said.

Ashikur said improving ADP implementation should be a priority as the economy needs fresh momentum.

“We cannot allow government agencies to remain stuck in an inefficient working mode when the economy urgently needs renewed momentum. Addressing this weakness must be a priority,” he added.