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The ongoing global economic crisis is having a devastating impact on all export dependent
economies, whether manufacturing or primary product exporting. The collapse in demand in major
industrial countries in North America and the European Union has led to a sharp fall in export demand
from the emerging and developing countries and a collapse in primary commodity and manufactured
product prices. The spread of the shock took the world by surprise. The origin and spread of the crisis
and strategy of Janata Bank Limited is described in the report. Here is the summary of the Key
Findings:

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Y. Between 2004 and 2006 US interest rates rose from Y to 5.35 , triggering a slowdown in the
US housing market.
2. Homeowners, many of whom could only barely afford their mortgage payments when interest
rates were low, began to default on their mortgages.
3. Default rates on sub-prime loans - high risk loans to clients with poor or no credit histories -
rose to record levels.
4. The impact of these defaults were felt across the financial system as many of the mortgages
had been bundled up and sold on to banks and investors.

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5. The rate at which banks lend to each other rises to its highest level since December Y

.
6. The so-called Libor rate is 6.7
75 , way above the Bank of England's 5.75 base rate; banks
either worry whether other banks will survive, or urgently need the money themselves.
7. Governments around the world and specially the developed economy continued to cut interest
rate for shoring up confidence in financial sector.
. But the short-term help does not solve the liquidity crisis - or availability of cash for banks - as
banks remain cautious about lending to each other.

. A lack of credit - to banks, companies and individuals - brings with it the threat of recession,
job losses, bankruptcies, repossessions and a rise in living costs.
Y0. The financial landscape changed dramatically, with several giants of the business world
disappearing.

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YY. Global trade flows are set to shrink by
during 200
, according to a forecast by the World
Trade Organization (WTO).
Y2. Hardest hit will be developed nations, where trade is set to fall Y0 . Poorer countries will see
exports fall 2-3 .
Y3. It would be the biggest drop in trade since World War II.
Y4. Potential losses from the credit crunch could reach $Y trillion and may be even higher. .

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Y5. Financial sector supervision and regulation "lagged behind the rapid innovation and shifts in
business models, leaving scope for excessive risk-taking" and "weak underwriting".

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Y6. Governments around the world and specially the developed economy have been aggressively
battling the current financial crisis -- using fiscal stimulus, monetary easing, as well as
structural intervention.

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Y7. Developing countries that were already vulnerable after the spike in food prices last year have
suffered from a downturn in tourism, remittances from workers living abroad, and the collapse
of commodity prices
Y. About 53 million people in developing countries will remain poor because of the world
economic slowdown, the World Bank has said.
Y
. The Bank says the downturn will reverse many of the gains made in reducing poverty in
developing countries
20. It estimates that 40 of the world's Y07 developing countries are "highly exposed" to the
global crisis.
2Y. And it calls on the rich countries to devote 0.7 of their bail-out packages to help the poor in
developing nations.

These developments will undermine the plans agreed by the UN to reach the world poverty targets
agreed in the Millennium Development Goals by 20Y5.


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22. Financial regulation and oversight will be extended to all financial institutions, instruments and
markets
23. $500bn for the IMF to lend to struggling economies
24. $250bn to boost world trade
25. $250bn for new IMF ³overdraft facility´ countries can draw on
26. $Y00bn that international development banks can lend to poorest countries
27. IMF will raise $6bn from selling gold reserves to increase lending for the poorest countries

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2. Lending rate has been reset at a maximum of Y3 percent

2
. Credit Card & Consumer Loans will not fall into this rate cut

30. Six sectors get loan rescheduling facility without down-payment for six months

3Y. The six sectors are garment, frozen food, leather, jute, textile and tea

32. CRR is to be slashed by Y percentage point from 5 percent now

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33. Aggregate Export figures show that Bangladesh maintained desired growth of export in the
first six months of the Fiscal year 200-0

34. July-September growth rate was above Y
over the same time of the last year.
35. Apparent insensitiveness of overall export growth is due to success in garments and textile
export in the early months of the current fiscal year.
36. Export in the first six months goes even beyond the target for Woven Garments, Knit
Garments, Home textile and Terry Towel
37. Foot wear, tobacco product, agro-processed and few others also shown positive growth during
this period
3. Frozen foods, raw jute, handicrafts, jute goods, ceramic products, cut flower, bicycle,
vegetables etc showed negative growth.
3
. Price of Shrimp went down by about 30 .
40. Export growth may slow down if the recession persists and the protectionism in Developed
countries grows.
4Y. However in that case Balance of Payment may not be affected that much because of sluggish
import growth.

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42. The nation recorded it highest ever remittance inflow in 200. May 200
figure rose at US $

0.05 million.
43. Due to contraction in labor markets in Malaysia and in Middle-East, massive number of labors
was laid-off, they returned home with all of their savings. This can explain this sharp rise.

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44. Export in 200 was higher than in 2007 in every month except May.
45. January 200
figure is much higher than January figures of 200 & 2007.
46. Like National Export, RMG Sector dominates the export earnings.
47. Most items followed same pattern as seen in National Export.

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4.In Raw Jute Sector, while the national export declined sharply in the last quarter of 200,
export of Janata Bank maintained its modest positive trend.

4
.In Jute Product Sector not sharp decrease as seen in national figure. In fact a sudden peak can
be observed in May¶0
.

50.In Footwear Sector though the national export show remarkable resistant to downturn, export
from Janata Bank declined sharply except an abrupt increase in May¶0
.

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Y  â


Though the export showed an upward trend up to December 200, export in two major markets
US and EU declined significantly. This shortage was offset by new markets; UAE, Eastern
Europe and some Central Asian Countries. The expertise built over the years will help
Bangladesh to dominate in the market. The few high end items will see negative growth which
constitutes almost negligible contribution to total RMG export. In fact export of RMG might
grow further due to increase in demand of low end items which comprises more than
0 of
total RMG export.
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Support to the existing customer should continue.
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No new investment should be made in leather industry.
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The existing support should continue.
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These sectors performance is not encouraging. Janata Bank Limited may provide fund in
existing projects where the product¶s buyer reputation is excellent. No new project should be
financed in this sector up to June¶0
.
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Janata Bank Limited may continue its support to its existing customer only.
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Investment should be made until July of this year with caution.
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In Ship-building, capacity takes years to come online and, therefore, advanced planning and
funding is required to ensure the long-term viability of these sectors. This is also a sector that
can improve the long-term competitiveness of the economy. This is where our investment can
play a vital role. 
  

Investment should be encouraged in this sector. Plants comprising brand new Euro or North
American machinery should be given preference.

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Janata Bank may extend its support to import substitute and complimentary sectors like
accessories of RMG & Textile Industry, Packing Material Industry (including paper glue etc),
Wood Extraction and Furniture Sector, Rubber Industry, Power Generation, Small Generator
production, Low Lift Pump Production, Tractor Manufacturing, Agro-Machineries etc.
Emphasis should be given on emerging technologies to expedite the process of expanding the
IT network to all corners of Bangladesh. 

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