Dhaka/Chittagong Stock Exchange News

[TIslam]

Originally Posted by King Nothing

Ranks Tel isnt a landline company. They offer wireless phone services. They've been around for a while i remembering seeing their ads from way back.

I believe you are correct. In fact, non other BTTB (BTCL?) can offer a traditional "landline". RanksTel, from what I read, offer a hybrid system, where the primary network is wireless with fixed base station. The other private "landline" companies perhaps offer a VOIP service like Vonage. Now that a private company was awarded the task of laying underground fiber optic cable across the city, perhaps these so-called landline companies may be in a position to offer actual POTS/PSTN to customer premises.

Well in they other thread you guys both said that corruption isnt something that Bengalis cannot cleansed off.

I, for one, do not think made any such declaration, ever. And if I did, I would like to retract that because unlike many people, I am of the opinion that anybody can change and change for the better.

If you indeed think corruption can be fixed in BD then why bailout here?

Sorry, but I didn't get what you meant by the above.

If you think the govt. is too corrupt too run SOEs dont you think they will fcuk up the privatisation process too?

Please, if we can refrain from using profanity. Yes, there is always the opportunity of making a fine mess of things as long as GoB is in the picture. But listing some SOEs in DSE isn't a huge undertaking say like the construction of the Padma bridge.

“But as we are getting ready to become a public limited company, something new you can see within a short time which will help BTTB to have more customers," the official said."

If turning a government entity into a PLC is manna from heaven, or the magic bullet, then how come there has been no perceptible change (for the better) at Biman? It was turned into a public limited company during the last caretaker government.

[King Nothing]

Originally Posted by TIslam

I, for one, do not think made any such declaration, ever. And if I did, I would like to retract that because unlike many people, I am of the opinion that anybody can change and change for the better.

You misunderstood me. What I meant was you did indeed say in the other thread that Bengalis can change their corruption habits. So why are you giving up on them when it comes to SOEs?

[TIslam]

Originally Posted by King Nothing

You misunderstood me. What I meant was you did indeed say in the other thread that Bengalis can change their corruption habits. So why are you giving up on them when it comes to SOEs?

Well, I see them as separate issues, i.e. corruption and efficiency or lack thereof.

It is has been a proven fact that a government run enterprise, whether in Bangladesh (most corrupt) or Norway (lest corrupt) simply isn't as dynamic and/or productive (efficient). It is very difficult for government employees to be "customer" driven. The quality difference between GP and Teletalk is illustrative of that fact. Monopolies, whether state run or in private hands, of course have the same effect, which is lack of motivation to be more efficient/productive. Furthermore, when it comes to being able to compete, SOEs will always be laggards. The post office and private courier service companies clearly demonstrate that fact, which is a fact the world over.

Here, I would like to draw a distinction though. While the post office may be inefficient when compared to the FedEx and UPSes of the world, it isn't a fair comparison. The government run postal system around the world provide an essential service and function of the government which no private mail or courier companies would be willing to undertake. A post office simply has no choice but to service all and every corner of a country regardless of cost. No private company would be willing to undertake such a venture as it would be loss making. I could make similar case(s) for other essential services like health care, where I believe, profit should be taken out of the equation.

But in general, what business does have (national) government have operating an airline, or making bicycles, where others can do it better, faster and cheaper?

[nayeem007]

I completely agree with Towhid bhai's view point. For Healthcare, it should be public-private partnership. That is the government can provide healthcare to the needy at minimum cost (without thinking of profit), even subsidies are fine. But private hospitals, clinics and drug manufacturers should also be encouraged for innovation and improvement in the medical field.

Almost all breakthrough drugs and high tech medical equipment has come out from private institutes.

[King Nothing]

Originally Posted by nayeem007

I completely agree with Towhid bhai's view point. For Healthcare, it should be public-private partnership. That is the government can provide healthcare to the needy at minimum cost (without thinking of profit), even subsidies are fine.

How is that public-private partnership? Thats public and private running side by side. If the private sector isnt banned from operating in any sector you can have public and private sector operating side by side (provided the private sector responds). Just like in the airlines sector in BD you have Biman then u have others like GMG, Regent, etc operating. I think its time u stood corrected again.

Public healthcare should be totally free of cost. That is if you break an arm you walk into a hospital get ur treatment and come out without paying anything.

[TIslam]

Originally Posted by nayeem007

I completely agree with Towhid bhai's view point. For Healthcare, it should be public-private partnership. That is the government can provide healthcare to the needy at minimum cost (without thinking of profit), even subsidies are fine. But private hospitals, clinics and drug manufacturers should also be encouraged for innovation and improvement in the medical field.

Almost all breakthrough drugs and high tech medical equipment has come out from private institutes.

I agree with you in principle, but I have an issue with the innovation part. Granted that it takes years o research and perhaps a fortune to invent sophisticated healthcare devices and breakthrough/miracle drugs, BUT, who died and decreed like God, only the population of the US has to bear the steep price of cost recuperation and profits for those inventions? Practically all countries with major healthcare purchasing power have rate and price control where the drug makers have no choice but sell at the stipulated price. But when it comes to the US, the whining and hand wringing starts: if you don't let us recoup our costs, if you don't reward as for all the hard work, we'll have to seriously consider getting out of this industry ....

I consider such tactic to be extortion and blackmail and they get away with it because of the big money that is involved in US political arena and the leverage all the lobbyists have over our national politicians.

It is about time that the US has some dispassionate, apolitical mechanisms in place where they set prices with due consideration given to opportunity costs and other high costs related to research and invention, but agree upon prices that can be borne by the market, where the (healthcare) consumer isn't price gouged, yet the manufacturers get more than enough profits.

[TIslam]

Originally Posted by King Nothing

How is that public-private partnership? Thats public and private running side by side. If the private sector isnt banned from operating in any sector you can have public and private sector operating side by side (provided the private sector responds). Just like in the airlines sector in BD you have Biman then u have others like GMG, Regent, etc operating. I think its time u stood corrected again.

Well, I maintain that public-private partnership can only be engaged in limited number of areas, principally to underwrite and subsidize the cost so as to make it affordable to the public (consumer), such as healthcare, public safety, public utility services, but certainly not airlines.

Public healthcare should be totally free of cost. That is if you break an arm you walk into a hospital get ur treatment and come out without paying anything.

Fortunately, despite all its (the country: US) faults, that is how it works here. If you walk in an ER of any hospital, and you have a life threatening situation (such as major injuries, heart attack, stroke, etc.), they will treat you, regardless of your ability to pay or lack thereof.

[nayeem007]

Originally Posted by King Nothing

How is that public-private partnership? Thats public and private running side by side. If the private sector isnt banned from operating in any sector you can have public and private sector operating side by side (provided the private sector responds). Just like in the airlines sector in BD you have Biman then u have others like GMG, Regent, etc operating.

Towhid bhai got what I said.. by partnership I meant working together for a common cause. Not in the "technical" sense of shared equity between government and a private corporation. It's not that difficult to understand the context based on the examples provided..

[nayeem007]

Originally Posted by TIslam

I agree with you in principle, but I have an issue with the innovation part. Granted that it takes years o research and perhaps a fortune to invent sophisticated healthcare devices and breakthrough/miracle drugs, BUT, who died and decreed like God, only the population of the US has to bear the steep price of cost recuperation and profits for those inventions? Practically all countries with major healthcare purchasing power have rate and price control where the drug makers have no choice but sell at the stipulated price. But when it comes to the US, the whining and hand wringing starts: if you don't let us recoup our costs, if you don't reward as for all the hard work, we'll have to seriously consider getting out of this industry ....

I consider such tactic to be extortion and blackmail and they get away with it because of the big money that is involved in US political arena and the leverage all the lobbyists have over our national politicians.

It is about time that the US has some dispassionate, apolitical mechanisms in place where they set prices with due consideration given to opportunity costs and other high costs related to research and invention, but agree upon prices that can be borne by the market, where the (healthcare) consumer isn't price gouged, yet the manufacturers get more than enough profits.

Not just drugs, it includes every kind of medical innovation be it stem cell research or high tech surgical equipments for face transplant. All these innovations are driven by the private sector.

If US only had government/public hospitals then there might have been basic healthcare for everyone, but many of these innovations in healthcare would have been missing.

Thus I feel that both Private and public institutes can work together in this sector. Government can provide basic healthcare, insurance for the underpriviledged, create regulations(as you mentioned) and the private corporations can compete and innovate in the rest of the market.

[King Nothing]

Originally Posted by TIslam

Fortunately, despite all its (the country: US) faults, that is how it works here. If you walk in an ER of any hospital, and you have a life threatening situation (such as major injuries, heart attack, stroke, etc.), they will treat you, regardless of your ability to pay or lack thereof.

But slip you with a bill that makes you go bankrupt. Or take you from your hospital bed and leave you out on the streets if you cant pay your bill (this was an actual case documented in Michael Moore's Sicko).

[TIslam]

Originally Posted by King Nothing

But slip you with a bill that makes you go bankrupt. Or take you from your hospital bed and leave you out on the streets if you cant pay your bill (this was an actual case documented in Michael Moore's Sicko).

Every single horror story makes headlines and so naturally such things needed to be highlighted in Michael Moore's documentary. I did not suggest that the health care system or laws and policies that govern health care is favorable to the average citizenry. The system however, is far more humane when compared to mostly developing nations like Bangladesh or India. Unlike in those countries, a gunshot victim does not simply bleed to death in an ER, if s/he happens to be an indigent, if no friend or relative happen to be with the victim to pursue treatment. Yes, it is true that people go bankrupt owing to astronomical medical bills for some catastrophic illness, but such is not the norm. It happens owing to some bad or unfortunate combination of situation such as a person's relative income/wealth, place (as in city/state) and type of hospital (private or public/non-profit), type of health insurance carried, or lack thereof, existing state laws pertaining to public assistance for medical care, and so on. Most of the time, it is people with health insurance, with inadequate coverage or many exclusionary riders (you had a heart attack, so this policy will not cover any cardio-vascular procedures), are the ones who go bankrupt as opposed to people with no health insurance at all.

Case in point: my father died from complications of a major heart attack, after a prolonged hospital stay. But because he was on Medicaid, the hospital did not come after us (my two sisters or I) for any unpaid bills. My sister received an initial bill from the hospital, but after she referred it to Medicaid, they (the hospital) never bothered her again.

It is actually against state and federal law to discharge or transfer, and in that well publicized case, simply throwing a patient out (or quietly leaving a patient on the street), without proper treatment and doctors certification that treatment has been completed. That hospital along with many of its administrators were sued by the county, state, and federal government.

[King Nothing]

Originally Posted by nayeem007

It's not that difficult to understand the context based on the examples provided..

It definitely is since there is only one definition of public private that I know of.

Government can provide basic healthcare, insurance for the underpriviledged,

Public hospitals should provide all sorts of treatment (surgeries, transplants, operations) which the priavte hospitals offer but free of cost. So that nobody goes without healthcare because they cant afford it.

Not just drugs, it includes every kind of medical innovation be it stem cell research or high tech surgical equipments for face transplant. All these innovations are driven by the private sector.

Public healthcare providers around the world have made such innovations.

[King Nothing]

Originally Posted by TIslam

But in general, what business does have (national) government have operating an airline, or making bicycles, where others can do it better, faster and cheaper?

The same reason why the residents of North Dakota decided to set-up a state owned bank of North Dakota.

It is has been a proven fact that a government run enterprise, whether in Bangladesh (most corrupt) or Norway (lest corrupt) simply isn't as dynamic and/or productive (efficient).

This is the type of statement a Glen Beck, Hannity or O' Reilly would make. This is however simply not true. There are many world class state owned firms in real life - Singapore Airlines - voted the world's best airlines a few times, POSCO the Korean steel maker became a world class firm under state ownership, Petro Bras - The Brazilian state owned oil company is a world class firm with leading technologies, Embraer - The Brazilian manufacturer of regional jets also became a world class firm under state ownership.

French firms like Renault, Alcatel and Thompson all used to be SOEs. These and other SOEs lead the countrys industrial development and technological modernisation until the their privatisations beginning in the 1980s (the time of the Thatcher-Reagan revolution). Countries like France, Finland, Austria, Norway and Italy achieved economic successes after WWII through very large SOE sectors at least until the 1980s. Same for Asian countries like Korea, Singapore and Taiwan. If you go back a 100 years Japan and Germany did the same.

Infact speaking of privatisation a lot of the opposite has happened in many European countries after WWII where many large enterprises were nationalised because they were not doing well. In the 1960s and 70s the Brtish industrial decline prompted both labour and conservative governments to nationalise key firms - Rolls Royce, British Steel, Brtish leyland and Brtish Aerospace. In Greece 43 virtually bankrupt pvt. sector firms were nationalised in the 80s. The bankrupt Swedish shipbuilding industry was rescued in 1970s through nationalisation. In the early 1980s Chrysler was rescued by Ronald Reagan of all people (what a tool!).

This is the history of the developed countries. The question is why do they enforce privatisations and the free-market on developing when they themselves did not follow it while they didnt follow it themselves while they were developing. The only conclusion I can derive is so that the big MNCs from their respective countries can benefit.

[nayeem007]

That's like reinventing the wheel. For a market system to function, you need speedy transfer of information (between the buyers and sellers), legal framework protecting the investors, rule of law e.tc.

70-80 years back without advanced telecommunication technology (internet, cell phone) and a framework for an organized market with regulations (e.g. OTC, ETC) people relied on government to function the vital sectors like energy, railways,ports (the commanding heights of an economy). But as flow of information became prevalent and various rules and regulations were made based on experience, the need of government to intervene in such sectors became irrelevant.

So countries that developed fast in the last few decades, crossed the government controlled state of the economy faster than the previous ones. For Germany and France that started industrializing in late 1800s, government control for few decades was essential as it was difficult for a market system to function with the technology available then. But South Korea, Malaysia, China or Taiwan are moving much faster with privatization. China is already privatizing the banking and telecomm sector, I bet that within next 10 years they will also have private sector play a big role in energy.

Bangladesh needed government to run critical heavy industries like Railway, Power and Banking and telecommunication sector in 1970s. At that time the private sector was nascent, the stock market weak/almost non existent, technology to share information primitive. But 40 years down the line, the situation has vastly changed, internet and telecommunication technology has florished, stock market is much more vibrant with more capital and players involved. So at this point, we can move towards privatizing some sectors like telecomm, aviation or jute industry.

I feel at this time we are still not ready for industries like energy and railway. Since those are much more capital intensive and bigger in scope.. but we need to start laying the groundwork (like having public-private partnership) for the transition.

Because of globalization, Bangladesh can already acquire technology and system (just like China is doing) instead of starting from scratch. US, Germany or UK, might have needed to go through trial and error to develop the market foundation of even basic things like, share issuing process, definition and role of corporation, structure of bond market e.t.c But since we already have that available, we don't need to waste another 40-50 years in going through the whole cycle...

[TIslam]

A very good explanation/reasoning. But I have a simple question for King Nothing: why are SOEs preferred over private sector enterprises (business)? What is it that has a clear advantage or is beneficial for a country and its population?

[King Nothing]

Originally Posted by nayeem007

That's like reinventing the wheel. For a market system to function, you need speedy transfer of information (between the buyers and sellers), legal framework protecting the investors, rule of law e.tc.

70-80 years back without advanced telecommunication technology (internet, cell phone) and a framework for an organized market with regulations (e.g. OTC, ETC) people relied on government to function the vital sectors like energy, railways (the commanding heights of an economy). But as flow of information became prevalent and various rules and regulations were made based on experience, the need of government to intervene in such sectors became irrelevant.

This is rubbish logic at its best. Just because we have internet and cellphone the free market and neoliberalism will lead to development. Thats simply not what happened in Latin America and Africa.

[King Nothing]

Originally Posted by TIslam

A very good explanation/reasoning. But I have a simple question for King Nothing: why are SOEs preferred over private sector enterprises (business)? What is it that has a clear advantage or is beneficial for a country and its population?

The answer is in the video I posted. Please take a look at it. If you want to see the full video (this is a shortened 3 min version) please rent the DVD.

[King Nothing]

Originally Posted by nayeem007

So countries that developed fast in the last few decades, crossed the government controlled state of the economy faster than the previous ones. For Germany and France that started industrializing in late 1800s, government control for few decades was essential as it was difficult for a market system to function with the technology available then.

I dont know wtf you're talking about here. France, Germany, South Korea and Taiwan all had strong SOEs. South Korea, Singapore and Taiwan have bigger SOE sectors then Argentina and the Phillipines (yet the latter 2 are popularly believed to have failed because of an overextended state).

But South Korea, Malaysia, China or Taiwan are moving much faster with privatization. China is already privatizing the banking and telecomm sector,

They are not.

I bet that within next 10 years they will also have private sector play a big role in energy.

As I've said before letting the private sector grow and privatisation are 2 different things. Its time u stood corrected again.

But 40 years down the line, the situation has vastly changed, internet and telecommunication technology has florished, stock market is much more vibrant with more capital and players involved. So at this point, we can move towards privatizing some sectors like telecomm, aviation or jute industry.

Huh? We have cell phone and internet and a bigger stock market so we should privatise what kind of of shitty logic is that? We shut our jute industry in the past with advice from the World Bank. Now we're trying to re-open them again and while we have an honest Industries minister like Dilip Barua I dont think I have to worry about their privatisation.

btw the capital market is anything but vibrant it runs on gujob and insider information.

[nayeem007]

Whatever makes you happy.. we have gone through this discussion dozen times. The world today is a proof that socialism/ communism is a dead ideology. You can keep playing the broken record on "government control" and its benefits...

[nayeem007]

Ok instead of wasting time in a cirular discussion, we can use Bolivia as a guinea pig for our experiment. They are nationalizing all private energy companies... I bet after 5 years the efficiency and productivity of the plants will be worse.

Bolivia defends seizing foreign energy firms

Businesses in the energy sector have been seized by President Evo Morales's left-wing administration.

It follows a trend started by Venezuela's president Hugo Chavez, who has called on all Latin American nations to follow his lead.

Bolivia's government has said it is redistributing oil and gas wealth to the country's indigenous population.

In May 2010, four electricity firms, which between them account for more than half of Bolivia's electricity market, were expropriated.

"We're just fulfilling the promise we made when we were elected, to recover all these areas that were in the hands of the state before these privatisations", Vice President Alvaro Garcia Linera told the BBC World Service.

Armed police
Bolivia's vice president is currently visiting the UK, and is trying to persuade British companies to invest there.

But he has had to answer questions about the expropriation of these electricity firms, one of which was British.

"Foreign investment can come to different areas. All we're expecting is that they comply with the rules of the country," said Mr Linera.

Rurelec, which is based in London, owned just over half of Guaracachi, a power-generating company in Bolivia.

On 1 May 2010, Guaracachi's office was taken over by government forces and handed over to ENDE, the state power company.

Rurelec says armed officers, clad in balaclavas and armed with automatic weapons, smashed their way into their Santa Cruz office.

"Military police came in, they kicked down the doors and they took control of all of our facilities. They removed my finance director at gunpoint", said Peter Earl, Rurelec's chief executive.

Compensation

President Evo Morales is redistributing oil and gas wealth to the country's poor Rurelec is seeking compensation from the Morales government, but so far nothing has been paid.

In May, the company said at least $70m (£46m) would be a "fair" figure.

This week Mr Earl told the BBC: "It depends how the Bolivians choose to play it. If they force us to go to arbitration, we will be claiming in excess of $150m."

Britain's BP and France's GDF Suez have also had assets seized in Bolivia.

The government said it was compensating fairly the former owners of businesses that have been nationalised.

Despite what has happened, firms, such as Rurelec, still seem keen to invest in Bolivia.

The Andean country is one of the poorest and least developed in Latin America, but its economy is growing fast.

It has the region's second largest reserves of natural gas, after Venezuela.


http://www.bbc.co.uk/news/business-11744226