ISSN 1683-8742

Volume 4 Number 1 January 2005

Democratic solutions for poverty reduction

H.E. Fidel Valdez Ramos

Former President of the Republic of Philippines

Chairman of the Ramos Peace and Development Foundation [RPDEV]

Chairman of the Boao Forum for Asia [BFA]

Editor’s Note

It has been a great honor to receive kind consent of H.E. Fidel Valdez Ramos, Former President of the Republic of Philippines; Chairman, Ramos Peace and Development Foundation (RPDEV) and the Boao Forum for Asia (BFA) regarding the publication of his valuable inaugural speech in the “Annual Retreat 2004”. This session was organized by the Democratic Governance Group, Bureau for Development Policy in Collaboration with The Regional Bureau for Asia and the Pacific and the United Nations Development Programme (UNDP)-Philippines Grand Ballroom, Hyatt Hotel and Casino Manila, Pedro Gil corner M.H. del Pilar Streets, Malate, Manila, Philippines on 19 November 2004. We believe, on the occasion of publishing the fourth consecutive volume of the AJBE, this would be a timely present for our readers to go through a thought-provoking speech by an intellectual like H.E. F.V. Ramos. At the end, I must remind our respected readers that a unanimous decision was taken in the AJBE editorial board meeting regarding the publication of valuable speech, proceedings, etc. as a special reference in the regular issues of AJBE. In this process, I feel honored to inform you that our upcoming issue of AJBE in August 2005 is going to include the speech of Dr. Arthit Ourairat, President of the Rangsit University, Thailand, which will be delivered in the 5th AIUB Convocation to be held on 26 February 2005. 

… Dr. Carmen Z Lamagna

Vice Chancellor of AIUB

Editor of AJBE

Heterogeneous Students, Impartial Teaching and Optimal Allocation of Teaching Methods

Carmen Z. Lamagna

American International University-Bangladesh [AIUB]

Sheikh Tareq Selim

University of Southampton, UK


This paper addresses the issue of identifying optimal mix of teaching methods for an instructor when students are of heterogeneous types. The exact student type cannot be identified ex ante which forces the instructor to act impartially and allocate teaching methods according to some pre-designed plan. In a simple model of instructor-student interaction, we show that if the instructor acts benevolent and impartially towards preparing the initial teaching method plan, there exists a unique optimal mix of teaching methods. We calibrate the impartial teaching model with data on the teaching of Business and Economics related undergraduate and postgraduate units, and find that the characterized optimal teaching method mix differs significantly across different units.

Technological ‘Catching Up’ in Bangladesh EPZS: A Performance Appraisal

Taimur Reza Sharif

East London College and London Commonwealth College, UK

Jamal Uddin Ahmed

Stamford University Bangladesh


In the techno-economics literature, it has been a major query of what should be the strategy of kick-starting economic growth of underdeveloped economies [UDEs] through technological progress. In this connection, many of them have prescribed to create the possibility of reducing technology gap and facilitate catching up activities in the UDEs. In doing so, literature especially on East Asian experiences have highlighted the importance of promotional activities through ‘special technology infrastructure [STI]’. In line with this observation, this study has aimed to deal with two important queries such as “to what extent do the EPZs function like a TP as in the western world or a transitional EPZ as in East Asia?” and “to what extent can the EPZs facilitate catching up possibility for Bangladesh?” Since Sharif and Ahmad [2004] already worked on the theoretical conceptualization process of a STI in a stepwise manner, this study has chosen to work only on the empirical reasonings of this concept in the EPZs of Bangladesh – a case of this study. In doing so, this study has targeted to understanding the level of technological capability [TC] accumulation and cross-fertilization of technology parameters in the STIs [ie, EPZs here]. The study has ended with some important empirical findings regarding the future of Bangladeshi EPZs in its’ technological voyage. It has been understood that Bangladeshi EPZs could reduce its technological gap with the advanced world but still lag far behind in creating the catching up possibility with the technological leaders. This study, therefore, suggested to facilitate development of skilled and knowledgeable workforce and promote effective linkage among technology players for catching up activities indigenously. Finally, this study does not claim to have covered all aspects of technology management in the industrial enterprises of Bangladesh. But in consideration of the fact that there has been so little extensive research done in the area of technology transfer [TT], and technological capability accumulation in the industrial zone of Bangladesh, it can be said, this study stands out from similar literature in such issues which remained hitherto unattended so far.

Managing the Mission-Based Microfinance Institutes of Bangladesh: A Case for Government Intervention

Wali I. Mondal

National University, USA


The Microfinance Institutes (MFIs) are specialized financial institutions that evolved with the growth of microcredit operation in Bangladesh. These bank-like institutes operate as organs of Non-Governmental Organizations (NGOs) in providing non-collateralized loans to the motivated self- employed entrepreneur. The methods used by these MFIs are unique in development finance. Through their operation, the MFIs work as trainers, lenders, and ultimately, as agents of economic development. The makings and functions of the MFIs vary depending on the mission of their parent NGOs. If the objective of an NGO is to provide microcredit only, it is defined as a minimalist organization. On the other hand, if an NGO is engaged in both microfinance and other activities (such as organizing night schools for adult literacy or relief work in disaster stricken areas), it is defined as a maximalist organization. The mission of the parent NGO of a MFI defines its operation. The overwhelming majority of MFIs distinguish their loan products with specialized lending as articulated in their mission statements. With the popularity of the microcredit model in Bangladesh, three MFIs gradually controlled the small loans market giving rise to an oligopoly. These three large MFIs started to wholesale microcredit to smaller MFIs. Very often the terms of such transactions were in conflict with the stated mission of the smaller MFIs. As a result, the Government of Bangladesh (GOB) enacted regulations prohibiting the wholesale of microcredit by any MFI and authorizing Palli Karma-Sahayak Foundation (PKSF) as the only wholesaler of microcredit. The paper analyzes the growth and management of microcredit market in Bangladesh and concludes that with the creation of PKSF, the MFIs in Bangladesh are able to fulfill their mission and co-exist as monopolistically competitive firms.

Marketing strategies for export of fresh vegetables and live crabs produced in Bangladesh

Anwar Hossain

American International University – Bangladesh [AIUB]

A H M Ehsanul Huda Chowdhury

American International University-Bangladesh [AIUB]


The article portrays the features and marketing techniques that are practiced in the case of fresh vegetables and live crabs in Bangladesh. The article also depicts the present international market scenario and opportunities of exporting the fresh vegetables and live crabs from Bangladesh. Moreover in this article some recommendations have been provided to undertake specific marketing strategies of the fresh vegetables and live crabs produced in Bangladesh and to turn the perishable goods of Bangladesh as one of the highest export earning sectors of the country.

The Challenges and Prospects of Effective HR outsourcing for Managerial Activities in the Corporate World of Bangladesh

Gazi Munir Uddin

American International University-Bangladesh [AIUB]


This study makes an attempt to find out the challenges and prospects of effective HR outsourcing for managerial activities in the corporate world of Bangladesh. Statistical techniques have been used to identify HR outsourcing criteria in the corporate world of Bangladesh. The findings have shown that networking activities play a strong role in HR outsourcing and duration of outsourcing is temporary in nature. In Bangladesh, especially financial institutes, real estate developing companies, telecommunication, non-profit organizations, educational ventures and manufacturing companies are the major demand maneuvers of HR outsourcing. Furthermore, it is concluded that the management effectiveness and efficiency are the expected outcomes of HR outsourcing along with professional intimacy.

This paper had been presented at the Department of Business Administration, Gauhati University, Guwahati, India, on January 31, 2004; and the writer is obliged to Prof. Dr. Zakir Hossain of IBA, University of Dhaka

Cultural Constraints in Adopting Communicative Language Teaching: Approach for Teaching English to the Secondary Students in Bangladesh

Borendro Lal Tripura

American International University – Bangladesh [AIUB]


Communicative Language Teaching (CLT) is the most successful and widely discussed method, which is improvised in the western English speaking country, where English is taught to the non-native speakers as a second language since the seventies. Obviously, the introducers counted the socio-cultural and educational settings of the western English speaking countries while introducing the CLT method, which is widely absent in the countries like Bangladesh, where English is neither a first language (L1) nor a second language (L2). However, like some other Asian countries as Japan, China, Indonesia, Vietnam etc., Bangladesh has also introduced communicative curriculum in teaching English for its secondary students from 1998. I would, in this regard, like to argue that language teaching and learning is a process of learning or teaching culture, but presumably, the cultural aspect of CLT approach was not addressed properly while introducing communicative curriculum in Bangladesh. As a result, this particular approach is not achieving expected degree of success in Bangladesh. Consequently, this very article is trying to focus on the particular issue how it has been hindering the application of CLT method in Bangladesh.

Factors Causing High Initial Returns on the Stock Listing Day Evidence from Dhaka Stock Exchange

Md. Hamid Uddin

IBA, University of Dhaka, Bangladesh

Golam Mohammed Chowdhury

IBA, University of Dhaka, Bangladesh

Md. Mohiuddin

American International University – Bangladesh [AIUB]


This study analyses 102 initial public offerings (IPOs) of Bangladesh capital market. The sample period starts from July 01, 1994 and ends on June 30, 2002. The study documents a large under pricing of IPOs in Bangladesh. To find out the causes of this under pricing, the study has identified ex-ante uncertainty of IPOs as the prime reason. Ex-ante uncertainty arises mainly for time difference between pricing of the shares and listing the shares at stock exchange. Other factors causing under pricing are identified as existing financial position and capital structure of IPOs issuing company, role of underwriting company, and size of IPOs etc. The evidence of this study shows that the higher the ex-ante uncertainty of IPOs, the higher under pricing and subsequently the higher the initial return on stock listing day.

Liberalization and tea production in Kenya

Ombuki Charles

Kenyatta University, Kenya


Kenya’s agricultural sector like all other sectors, began to be gradually liberalized in the 1980s following intense pressure from the World Bank (WB). The WB’s promise was that liberalization of the sector would help enhance efficiency in resource (land) use and thus raise agricultural productivity. Using the case of tea, I attempt in this paper to assess the contribution of liberalization as a policy package on smallholder tea production in Kenya. Estimated results of the log-linear model for the determinants of production however, contradict the WB view. They show that liberalization policy has a negative effect on smallholder tea production. This is because in liberalization era, fertilizer prices have risen (following government withdrawal of fertilizer subsidy) beyond levels affordable by most smallholders and the retrenchment of extension staff (aimed at cutting recurrent expenditure) has denied smallholders access to extension services. In addition, the withdrawal of the government’s financial support to KTDA in liberalization era has led to an increase in KTDA’s operation costs. Consequently, KTDA has raised the amount of deductions it effects from smallholder’s tea dues thus leaving them with earnings that are insufficient to attract expanded production. For purposes of policy, the paper proposes re-introduction of government fertilizer subsidies to make fertilizers affordable by majority of smallholders and government support to KTDA so as to lower its operation costs.