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Sales of luxury cars, home collapse amid Bangladesh graft drive

Sales of luxury cars, home collapse amid Bangladesh graft drive
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First Published: Tue, Mar 06 2007. 09 25 AM IST
Updated: Tue, Mar 06 2007. 09 25 AM IST
DHAKA: Sales of luxury flats and cars have almost ground to a halt in Bangladesh since the new government launched a nationwide crackdown on corruption, company officials say.
The authorities started to tackle widespread graft in late January after a military-backed government came to power with a pledge to wage an all-out fight on graft and go after underworld-linked politicians.
“The sales of luxury flats are almost nil. Only a few NRBs (non-resident Bangladeshis) are buying some flats,” said Abdul Awal, president of Real Estate and Housing Association of Bangladesh (REHAB).
“The market is undergoing a severe correction because of the prevailing situation following the interim government’s crackdown on corruption,” he added.
REHAB groups Bangladesh’s thriving real estate development companies which together have been selling more than 10,000 apartments a year, mostly in the booming capital Dhaka and southeastern port city of Chittagong.
But the crackdown has seen sales of even small and medium flats cut in half, Awal said.
The government’s anti-corruption commission last month unveiled a list of 50 allegedly corrupt politicians, bureaucrats, businessmen and accused them of amassing millions of taka in unaccounted money.
The commission ordered the 50 to submit wealth statements or face confiscation of their properties. More than 30 have been arrested by military-led forces and placed in custody on corruption charges.
Last week security forces seized a $300,000 luxury SUV belonging to Haris Chowdhury, a political secretary of outgoing Prime Minister Khaleda Zia, and said it was “evidence” of corruption.
The REHAB president said the popular clampdown on ill-gotten gains was having an impact on every segment of life.
Last month REHAB held its four-day annual sales fair at a plush city hotel. Thousands of willing buyers have turned out in previous years but the 2007 show fell flat with developers reporting that only small units were selling.
Before the new interim government took over, luxury flats in one of the world’s poorest countries were fetching an astounding 10,000 taka to 12,000 taka (Rs6,463 to Rs7,752) per square foot (0.09 square metres) in Dhaka.
Prices in the city’s upmarket Gulshan and Baridhara districts had almost doubled in the last three to four years, Awal said.
“But now people are shy. The correction is being felt everywhere and we think it will continue for some time,” Awal added.
The sales of luxury cars like BMW, Mercedes, Lexus and Porsche have also crashed.
“All I can say is that the effect is there,” said general manager Ariful Azim of Executive Motors, the local BMW dealership.
BMW has dominated top-end sales in Bangladesh since Executive Motors launched the German car on the market in 2003 with a target of just 25 sales. Last year alone, BMW sold 110 vehicles.
“There is no denying the fact that sales have been dull in the last two months. There are reservations among some people,” said Muneer Uddin, a manager of Rancon Motors, which sells Mercedes cars.
The government’s anti-graft body, which last week named a former army chief as its new boss, said it would prosecute several hundred more suspects in the coming weeks.
The military-backed government took over in January after president Iajuddin Ahmed stepped down as head of a previous caretaker government, cancelled disputed elections and imposed a state of emergency.
The decision to cancel the polls scheduled for 22 January was taken after months of opposition protests alleging that the outgoing administration had tried to rig the ballot.
Bangladesh is one of the world’s poorest and most corrupt countries, where politics is widely seen as a passport to wealth.
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First Published: Tue, Mar 06 2007. 09 25 AM IST
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