Bangladesh’s economy has been under pressure due to the ongoing political unrest centering the January 7 parliamentary elections, according to economists and business leaders. The current spell of blockades and hartals was launched by opposition BNP and its like-minded parties on October 29, a day after their grand rally at Nayapaltan was foiled by police. Police went into action after a police constable was beaten to death during the protests. According to figures revealed by the FBCCI president, the financial losses from 20 days hartals and blockades (October 29 to November 20) stood at Tk 1.30 lakh crore (Tk 6500 crore loss per day), in the overall economic sector of the country. “The economy is losing Tk. 6500 crores a day because of the hartals and blockades,” said Mahbubul Alam, president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI). “So, we repeatedly urged political parties in Bangladesh to avoid activities, which cause financial loss and create public sufferings,” he added. Even though the campaign of hartals and blockades has failed to cripple the normal life, the unrest hit the transport sector hard, disrupted the transportation of goods resulting in price hikes. The opposition has resorted to street protests as the government has rejected its demand for holding the country’s upcoming 12th parliamentary polls under a neutral caretaker government. The transport owners said that the estimated financial loss suffered by the sector is around Tk161 crore per day. Then in 20 days of hartals and blockades, the financial loss is estimated at around Tk3,220 crore.
The 2023 United Nations Climate Change Conference, more commonly referred to as COP28, kicks off today at Dubai, United Arab Emirates with a resounding call to accelerate collective climate action. Bangladesh, being on the frontline of climate change, is attending this year’s climate conference aiming to resolve five important issues together with the least developed countries, and countries that are most endangered and vulnerable due to climate change. Speaking to UNB ahead of the climate conference, Environment, Forest and Climate Change Minister Md Shahab Uddin laid out the five key issues that are on Bangladesh’s agenda this year. “The Bangladesh delegation will play an important role on behalf of the least developed countries and the countries most endangered and vulnerable due to climate change in various issue-based discussions at the COP conference,” said the minister. He said Bangladesh has set a target to work together to settle five important issues in this year’s conference. First global stocktake The first issue on Bangladesh’s agenda is related to the ‘first global stocktake’ which is at the centrestage of this year’s UN Climate Change Conference (COP28). The global stocktake is a process for countries and stakeholders to see where they’re collectively making progress towards meeting the goals of the Paris Climate Change Agreement – and where they’re not. Bangladesh seeks clear steps, including the evaluation of the progress of activities in line with the 1.5 degree Celsius target, future ambitions and concrete milestones from the global stocktake. Loss and Damage fund The term loss and damage refers to the way that countries, particularly ones most vulnerable to climate change, are being affected by the climate crisis – the losses and damages that they have suffered. The United Nations explains it as: “Loss and damage arising from the adverse effects of climate change can include those related to extreme weather events but also slow onset events, such as sea level rise, increasing temperatures, ocean acidification, glacial retreat and related impacts, salinisation, land and forest degradation, loss of biodiversity and desertification.” According to Minister Md Shahab Uddin, Bangladesh is seeking operationalization of the 'Loss and Damage Fund' in COP28 and fixing its 'detailed arrangement' with the aim of addressing climate change-induced loss and damage in the more vulnerable developing countries. Global Goal on Adaptation The Global Goal on Adaptation (GGA) is a collective commitment under Article 7.1 of the Paris Agreement aimed at “enhancing [the world’s] adaptive capacity, strengthening resilience and reducing vulnerability to climate change.” The GGA is meant to serve as a unifying framework that can drive political action and finance for adaptation on the same scale as mitigation. In this year's climate conference, Bangladesh seeks to work together with member states to create and formulate the framework for the 'Global Goal on Adaptation'. Along with other countries that are vulnerable to climate change, Bangladesh will stress member states to strengthen their 2030 mitigation targets outlined in their Nationally Determined Contribution (NDC) to bring them in line with the 1.5 Celsius temperature target and increase funding to LDC countries to implement the NDC. $100 billion dollar in climate financing One other key issue on Dhaka’s agenda concerns climate financing. According to the UN, climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change. According to the Ministry of Environment, Forest and Climate Change, Bangladesh, with other developing countries, will work on ensuring $100 billion per year in climate financing from the developed countries for the countries that are most affected by climate change. Besides, Bangladesh will also work together with other member states to finalise the definition of climate finance. Doubling adaptation funding One of the key agendas of this year’s climate conference is to double the adaptation funding. The Adaptation Fund finances projects and programmes that help vulnerable communities in developing countries adapt to climate change. Initiatives are based on country needs, views and priorities. Bangladesh will echo the need for doubling the adaptation funding in this year’s conference, according to Minister Shahab Uddin. Dhaka will also work on achieving significant progress in the discussion of "New Collective Quantified Goal on Climate Finance" aiming to facilitate climate financing after 2025. The country aims to launch the National Adaptation Plan (2023-2050) this year. The environment minister said a position paper has already been prepared with the views of the country's eminent climate experts and concerned ministries and agencies to properly present Bangladesh's position at the COP summit. “Like the previous COP, Bangladesh has taken initiatives to set up a pavilion of 152 square metres and organise various side events here,” said Minister Shahab Uddin. Dr. Farhina Ahmed, secretary of the Ministry of Environment, Forest and Climate Change, told UNB that Bangladesh will organise 24 sideline programs including 13 seminars at its pavilion at the conference. “As a leader of developing countries, Bangladesh will highlight the impact of climate change in other countries. Bangladesh will also hold a press conference at the venue of the conference before the Resumed high-level segment of the COP-28 conference,” said secretary Farhina. The 28th World Climate Change Conference will conclude on December 12. As part of this, the high-level segment of the conference World Climate Action Summit (WCAS) will be held from December 1 to 2, then again from December 8 to 9, the technical negotiation from November 30 to December 11 and the closing session on December 12. The Environment, Forest and Climate Change Minister Shahab Uddin will lead the Bangladesh delegation to the conference. He will be accompanied by the Minister of Information and Broadcasting Hasan Mahmud, Deputy Minister, Ministry of Environment, Forest and Climate Change Habibun Nahar; Prime Minister's Special Envoy on Climate Change and Environment and Chairman of the Parliamentary Standing Committee on The Ministry of Environment, Forest and Climate Change Saber Hossain Chowdhury, senior officials of various ministries and agencies concerned and prominent climate experts of the country. Health Minister Zahid Maleque and Saima Wazed, daughter of Prime Minister Sheikh Hasina, the elected director of the World Health Organization's (WHO) South-East Asia region, are scheduled to attend the event.
The head of Dhaka Chamber of Commerce and Industry (DCCI) has proposed a wide-ranging dialogue among the political parties, business groups, and civil society organisations to try to resolve the political impasse over the upcoming national election. “A consensus should be reached to avoid activities which are hampering our business and economy, said DCCI president Md. Sameer Sattar in an interview with UNB this week. “This should be done immediately for the greater interest of the economy.” Also read: Political instability always causes economic uncertainty: Ahsan Mansur The interview has been a part of a series the news agency has launched to understand how the election-related protests are hurting the economy. Sameer said political unrest can affect an economy in many ways such as supply chain disruptions, decline in export earnings and higher cost of production. Restoring economic activities in the aftermath of a hartal and blockade in Bangladesh requires a multi-pronged approach that addresses the immediate needs of affected businesses and workers, he said. Sameer, a corporate lawyer, stressed rebuilding trust and confidence and promotion of long-term economic resilience. “If we look at the features of Bangladesh's economy in recent years, we see that the country has faced some economic challenges due to the Covid-19 Pandemic and global unrest, particularly the Russia-Ukraine war,” he pointed out. Also read: Bangladesh stands on the edge of deep ditch before the polls: Dr Debapriya These incidents are causing disruptions in the global supply chain that makes difficult management of foreign exchange reserves, he said. This in turn contributes to the rise in fuel prices, increases the cost of doing business leading to an inflationary pressure, said the DCCI chief. Due to the ongoing opposition-sponsored blockades and hartals, he said, international trade is likely to decline, with limited transport movement disrupting the local supply chain. According to the Export Promotion Bureau (EPB) the export income for the first five months of the current fiscal is 9.31 percent below the annual target of $60 billion, he said. He explained how hartals and blockades affected the economy in 2013 and 2014. In 2013, the Dhaka Chamber reported that such unrest caused a daily economic loss of Tk 1,600 crore. In 2014, daily loss was estimated 0at Tk 2,000 crore in a study by Centre for Policy Dialogue (CPD), a think tank. Also read: Blockades are bad for economy, scare foreign investors: FBCCI President Citing these studies DCCI chief Sameer said the current political unrest is not only jeopardizing the business environment but also impacting the standard of living. This has been particularly affecting the marginalised population amid fear that the national economy may plunge into a state of uncertainty. Sameer said Bangladesh's hartal-blockade culture has become a serious impediment to the country's economic progress. Also read: Economy buffeted by political unrest amid declining forex reserves: Analysts This disruption may have ripple effects throughout the economy, affecting various industries, including manufacturing, agriculture, and trade, he opined. The disruption of production and economic activities may lead to reduced productivity, job loss, and a weakened international market position. Ongoing hartals and blockades are hampering the export and import processes, he observed. The decline in business activity due to hartals and blockades poses a significant threat, especially to Small and Medium-sized Enterprises (SMEs), he said. Also read: Economy bears brunt of ongoing blockades and hartals ahead of polls: Dr Atiur Rahman “With 80 percent share of the informal sector in our economy, including employment, the impact of hartals and blockades is likely to have adverse effects, potentially leading to an increase in poverty,” he warned.
‘Uninterrupted, reliable and affordable’: 3 major objectives for AL in energy and power sector if reelected
The ruling Awami League has set three major objectives for itself in the energy and power sector if returned to power for the next 5 years through the election slated for January 7 - which may just be a formality. “These are to ensure that power and energy supplies are uninterrupted, reliable and affordable,” State Minister for Power, Energy and Mineral Resources Nasrul Hamid said in an interview with UNB. “If we come to power, our main focus will be on dealing with these three main challenges,” he said, adding that technology will be the main tool to face the challenges. Asian economies must ramp up wind and solar power to keep global warming under 1.5C, report says In the coming days, he said, a huge amount of electricity will be added to the national grid from new kinds of sources like nuclear and renewables and synchronising the grid to manage the new electricity is a major challenge. The nature of nuclear power is totally different from conventional energy generated from conventional fossil fuels while solar, a main source of renewable energy, is in turn different from both nuclear or fossil fuel-based plants. Some 2,400 MW of electricity will be coming from Rooppur Nuclear Power Plant while contracts have been awarded for generating 7000 MW of solar power. “This will pose a new challenge for the grid as nuclear needs a stable, constant demand in the grid while solar power will be coming to the grid for a certain time like 10 hours a day,” Nasrul Hamid said. Costly rental power plants keep getting extensions, even in the era of surplus capacity Maintaining balance between the systems with accurate frequency will be the key challenge for the national grid, he explained. For this, establishing a smart grid by replacing the conventional system is the only solution to ensuring grid stability, he observed, saying that when stability is ensured, it will lend reliability to the transmission system. “But if we want to ensure uninterrupted power supply, the distribution system has to be taken underground which involves a huge amount of investment, mainly from the private sector,” he stressed. The next government’s main task will be to take the distribution system underground and already Dhaka Power Distribution Company (DPDC), a major distribution entity has taken up the plan to take its system underground, noted the state minister. He said when the distribution system is uninterrupted, it will give reliability and the industries will not need to maintain captive power plants at their premises. “Right at this moment we cannot ensure uninterrupted and reliable electricity supply to industries,” he said, adding that when uninterrupted power supply is ensured, the gas now being consumed by the captive power plants can be utilised for more power generation in the grid-connected plants. Captive plants are of course not connected to the grid. Plan to float int’l bidding for offshore hydrocarbon exploration dropped before election Ensuring affordability has been another key area of the challenges where the next government will have to take some new measures like introducing flat rates for all consumers or special rates for consumers in certain areas. Currently, Nasrul Hamid said about 18 million ‘lifeline’ consumers are getting electricity at a special tariff rate of Tk 3.75 per unit which puts extra pressure on the overall tariff structure. “But at one stage, we have to get out of the lifeline category of consumers when their ability to pay will be higher than at present,” he said. With regard to energy experts’ allegations that wrongheaded strategy and planning have created over 50 percent of surplus electricity in the grid for which the state has to pay capacity charges without availing electricity, Nasrul Hamid said these ‘experts’ have no real world experience in working with any power plant or power industry. “That’s why they are making such allegations without considering the current state of the power system,” he added. Many experts believe that the Speedy Increased Supply of Power and Energy (Special Act) which was frequently used in awarding contracts to unsolicited bidders, has created huge corruption in the power sector for which the electricity tariffs have gone up excessively. Defending the law, Nasrul Hamid said it has helped the government to get projects passed and implemented rising above the bottlenecks in the sector and also ensured lower prices compared with projects which were awarded through open tender.
Political instability ahead of the national election appeared as a big blow to Bangladesh’s tourism sector as most popular tourist destinations including Cox's Bazar, St. Martin, and Kuakata see sharp drop in the number of visitors. With up to 90 percent of advance bookings canceled, the once-bustling establishments face unprecedented vacancies as people are reluctant to travel amid the countrywide ongoing blockades and hartals enforced by the BNP and some other like-minded opposition parties. Tourism industry insiders claimed they had to count losses worth Tk 1.5 thousand crore in the last several weeks due to cancellation of advance bookings in hotels, motels, and resorts across tourist hotspots until mid-January. Women's participation in the tourism industry should be increased: Speakers Hotel and motel owners said prior to October, over 50-60 percent of rooms in more than 500 hotels and motels in Cox's Bazar were booked daily. However, recent weeks have witnessed a drastic decline in tourists, reducing the number from half a lakh to a mere 5-10 thousand. Most of the visitors are predominantly locals. Similar circumstances prevail in Kuakata and St. Martin. Hotel and motel owners expressed concern about the ripple effect on their employees, as business downturns force layoffs and hinder salary payments. President of the Tour Operators Association of Bangladesh (TOAB), Shiblul Azam Qureshi, laments the impact on tourist spots like Cox's Bazar, St. Martin, Rangamati, and Kuakata. “Now is a critical period for the tourism sector. Bookings for November, December, January, and February—the prime tourist months—have been canceled,” he said. He said Cox's Bazar, Kuakata, Sundarbans, Sylhet, Ratargul, Jaflong-Tamabil, Rangamati, and Patenga Beach, which should be bustling with tourists at this time, now lie empty. Bangladesh, Maldives, Nepal should promote mutual tourism: PM Hasina He also said he has a hotel at St. Martin but its 90% rooms are lying vacant now. “With the tourism season typically starting in October and reaching its peak in November, the ongoing political unrest has resulted in nearly empty hotels and motels this month, with bookings canceled due to the blockade,” he said. Salim Newaz, General Secretary of Cox's Bazar Hotel Motel Guest House Owners' Association, said over 500 hotels and motels are empty now due to the continuous blockade progrmame. 230 BGB platoons deployed on day 2 of blockade Mukhim Khan, general secretary of the Kalatali Marine Drive Road Hotel-Motel Owners' Association, estimated a staggering Tk 1000 to 1500 crore losses due to the prolonged blockade. He urged the concerned to keep tourist vehicles out of the purview of hartals and blockades to salvage the tourism sector. Similarly, Motaleb Sharif, General Secretary of the Kuakata Hotel-Motel Owners’ Association, said, safety concern has led to widespread booking cancellations, as people are reluctant to embark on risky journeys with their families amidst political instability. 48-hour blockade: Miscreants set fire to 3 buses in Natore
Bangladesh’s three big challenges in the fields of economy, international relations, and politics are likely to get deeper centering the January 7 parliamentary elections, Dr. Debapriya Bhattacharya, distinguished fellow of Centre for Policy Dialogue has said. “Bangladesh today stands on the edge of a deep ditch,” he said adding that the problems faced by the country are likely to worsen if the upcoming polls become one-sided. The eminent economist shared his views on a wide range of issues from ongoing political unrest to economic situation and to international interest in an interview with UNB in Dhaka this week. 208 vehicles set on fire across the country since Oct 28 Political unrest and a one-party election will deepen the uncertainty in the economic sector further as around 80 percent population of Bangladesh wants a fair and internationally acceptable election that is very much needed for sustainable economic growth, Dr Debapriya said. Regarding elections without the participation of big political parties, he said the Election Commission is creating political parties giving registration as per their wish. The country is now getting the attention of global powers as they have different interests here. They are watching whether the upcoming election will be like previous ones or inclusive and participatory. Regarding economic challenges, he said people have been bearing the brunt of inflation for a long time, while many countries have improved in this sector after the pandemic and during the Russia-Ukraine war. Here the food inflation is around 12 percent and inflation in rural areas is more than in the urban areas, which was not seen earlier, he noted. Tilted Ctg building: 7-member probe body formed According to him due to the continuous slide of the domestic currency taka, people have to face imported inflation. There is no visible sign of reducing this type of inflation in the recent months, Dr Debapriya said. He said the revenue generation fell severely due to an import decrease by one-fourth in recent past years. He said the inefficiency of the revenue board has resulted in low collection of revenue. The government cannot implement already promised development work at the local government level, even in the election year, he mentioned. This stagnation will not go until an inclusive and free fair parliamentary election, which is necessary to establish accountability in every sector- is held, he said. He said the drastic fall of imports pushed price hikes in the domestic market and a group of syndicates using this as an option for raising prices. The revenue shortfall is widening, corruption and money laundering not reducing despite raising individual and overall income, which is happening due to lack of accountability. The government cannot ensure accountability at the top to bottom level as they are dependent on bureaucrats and state agencies in absence of political and moral legality, he pointed out. Not only that but also some influential countries are interfering in the domestic matter of Bangladesh, which never happened earlier. All of these are the outcome of faulty elections here and they (foreigners) are taking political disagreement and lack of moral legality of the government as an opportunity, he opined. Regarding the legitimacy of past elections Dr Debapriya said those elections had been legal in consideration of the constitution, but there was a lack of political and moral legality, he said. 20-year-old dies falling from 8-storey building in Dhaka’s Sher-e-Bangla Nagar A country becomes stronger when its independent state organs are strengthened, he said adding in Bangladesh both the constitutional institutions and other state agencies are playing a biased role. Regarding labour rights, Dr Debapriya said the Western world expresses concern over the working environment, illegal harassment, and forced disappearance of labour rights activists. Western people, who are the buyers of Bangladeshi garments and other goods, are very much conscious and concerned about these issues. Bangladesh has to reform many areas, such as recovery of huge defaulted loans, reduce money laundering, ensure decent working environment and express their views without fear, he said. In the diplomatic sector, the country has to balance with global power keeping in mind that export destination of Bangladeshi goods, manpower, and remittances.
Eminent economist Dr Ahsan H. Mansur has said that political instability or uncertainty always affects the economy adversely. Dr Mansur, executive director of the Policy Research Institute (PRI), a Dhaka-based think tank, was talking to UNB on the ongoing political situation centred on the 12th national election and the opposition's hartal-blockade programs. “Bangladesh's macroeconomy is facing challenges not seen in the last 25/30 years, so tackling the grave situation politically is very important,” he said. The political unrest alongside the macroeconomic instability is a double blow for the domestic economy, so the current domestic situation is different from any other election period in the history of Bangladesh, Dr Mansur pointed out. Read: Blockades are bad for economy, scare foreign investors: FBCCI President He said, “If the national election is not credible to the international and domestic people, the concern will grow over what steps and reaction come from western countries, which is the export destination of most Bangladeshi products.” Meanwhile, the foreign countries have expressed concern over a decent working environment for labour, security of labour organisations' leaders, and desired wages in the export-oriented garment industries, he said. Bangladesh's human rights record was reviewed for the fourth time under the Universal Periodic Review (UPR), an important UN human rights mechanism. Bangladesh's human rights record is under the scrutiny of the UN, EU, and USA, in this case, the steps for a political resolution and securing labour rights are very crucial, he opined. Regarding releasing the second instalment of the IMF’s USD $4.70 billion loan, Dr. Mansur, who is also a former senior economist of the IMF, said that there is no reason to delay the second instalment of the loan as Bangladesh met most of the conditions set by the global lender. Read: Economy bears brunt of ongoing blockades and hartals ahead of polls: Dr Atiur Rahman He said double-digit inflation has been prevailing in Bangladesh for a long time, while the South Asian countries including Sri Lank had succeeded in controlling inflation. In this area, Bangladesh has to do more to reduce the inflation rate to 4-5 percent. He focused on a market-based foreign exchange rate to make the exchange rate sustainable instead of being controlled by the Bangladesh Bank or Bangladesh Foreign Exchange Dealers Association (BAFEDA). Dr. Masur suggested policy reform and effective measures to stop money laundering or capital flight for a sustainable domestic foreign exchange market, in that the central banks have to apply their regulatory authority without bias or influence. “Despite a huge workforce and advantage of geographical location, Bangladesh cannot attract big volume foreign direct investment (FDI) due to lack of policy reforms and weak regulatory authority. Political unrest will work as another barrier for FDI,” he pointed out. Read: An innovation leap: Nagad Digital Bank aims to extend reach to the unbanked and underbanked Regarding political resolution, he said that there is no alternative to dialogue amongst major political parties, and tolerance of opposition for those who are in strong positions or in power is very important. Dr Mansur said all parties' participation in the upcoming election is the best option for Bangladesh in consideration of the overall current situation, while dialogue and level playing field for political parties are important issues. He thinks that the situation is not normal, as what is happening in Bangladesh is being keenly watched around the world, so the authorities must proceed with reason.
A young entrepreneur in Kurigram's Sadar upazila is reaping the benefits of orange farming, exemplifying self-reliance after completing his education. Abu Raihan Faruk, the enterprising youth, anticipates doubling his investment from selling a high-yield variety of oranges originating from China. Raihan, who finished his studies three years ago, chose entrepreneurship over job hunting. He started to cultivate various local and foreign fruits like mango, orange and grapes on his six-acre farm two and a half years ago. Recognizing the high demand for oranges in the local market, he focused on expanding his orange cultivation. Successful malta cultivation raises hope among farmers in Thakurgaon’s Ranishankail Starting with a single plant of the Chinese orange variety acquired from Bogura district, Raihan successfully grew 100 orange trees through graft cutting in just one and a half years. Encouraged by this success, he invested in commercial cultivation by dedicating two bigha of land to orange farming with an investment of Tk 20,000. Raihan found orange farming relatively hassle-free, requiring only compost fertilizer, pesticides, and anti-fungus spray for a healthy yield. He confidently expects to double his profits this year. He anticipates selling 15-20 maunds of oranges. The potential revenue from his orange harvest is estimated at Tk 80,000. Raihan also highlights the significant demand for oranges in Bangladesh, which currently relies on imports. He believes that local commercial cultivation could meet domestic needs and eventually lead to exporting oranges. Mohammad Kabir Hossain, a visitor to Raihan's orchard, is inspired by Raihan's success and plans to venture into orange farming himself. Biplab Kumar Mohonto, the deputy director of Kurigram's Department of Agriculture Extension (DAE), acknowledged the novelty of orange cultivation in the district and offered support to Raihan. Returnee-migrant bets future on Malta farming in Rajshahi Raihan's journey illustrates how innovative agricultural practices can transform the livelihoods of young entrepreneurs and potentially reshape the agricultural landscape of districts like Kurigram.
President of President Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) Mahbubul Alam has called for shunning the politics of blockades and hartals saying that a day of such protests cost the economy up to Tk6500 crore. Talking to UNB this week Alam said, “We want change in government through fair elections. A strike or blockade causes a loss of Tk6500 crore a day. So we want political stability in the country.” “We do not want a strike or blockade. Strikes or blockades are very harmful to the economy. We are very concerned about this,” he pointed out. Also read: FBCCI urges NBR to extend tax return submission deadline till Dec 31 The FBCCI chief said these types of political activities are also causing violence on the highways, which is giving the wrong message to foreign buyers and investors. He said people are buying goods at higher prices as the supply line is disrupted and transport fares hiked due to the political unrest. The traders are not getting their pre-booked product in time as the vehicle movements on the highways are affected by political programmes. There is a panic among the suppliers and goods producers, he said. The industrial sector is facing disruption in production as the supply of raw materials is being hampered for hartal (general strike) and blockade. If such a situation continues, many factories will shut down, he feared. Also read: FBCCI urges political parties to avoid violence for economy's sake Alam said that Bangladesh Bank has to make dollar supply available for LC opening to import enough consumer items to keep the market stable during the upcoming Ramadan. He said the businesses are facing difficulty in LC opening for the dollar shortage. To overcome the situation he suggested the central bank stops import of luxury and unnecessary goods, and give priority in importing industrial raw materials and consumer goods up to Ramadan. After Covid-19 pandemic and the effect of rising fuel prices due to the Russia-Ukraine war, the entrepreneurs are not able to bear the losses caused by political violence, he said. The political parties must accept that without stability economic growth is impossible and the welfare of people will not come with lower economic growth, he said. Bangladesh is an emerging economy, and private sector entrepreneurs have set up several industrial units here with big efforts, he said. The destructive activities in the domestic arena will provide a negative signal to the foreign buyers, said the FBCCI chief. Also read: Thrust on good governance in banking sector discussed at FSDWC meeting In that case the export earnings might be affected, which is essential for the survival of the industrial sector as well as employment of youth, he said. So both the government and opposition parties should discuss political issues and set alternative programmes instead of hartal and blockade, he opined.
In an interview with the UNB former governor of Bangladesh Bank Dr. Atiur Rahman has explained how the current spate of blockades and burning of vehicles are taking a toll on the economy and suggested ways for reaching a solution. Dr Atiur, currently emiratus professor at Department of Development Studies in Dhaka University, said the fear of setting fire to the carriers is real. The protests have been called by BNP, Jamaat and some smaller allies, to protest the announcement of the schedule for the 12th parliamentary elections for January 7. The opposition demands that Prime Minister Sheikh Hasina steps down and hand over power to a neutral administration to make the vote free and fair. The government has rejected the demand as unconstitutional. The economist said because of the protests the cost of transporting items for both domestic consumption and exports has gone up. Also, most of the drivers and helpers have lost jobs as the vehicles aren’t plying on the roads. These are mainly temporary jobs and thousands have been badly affected by this continuous political unrest, he said this week. He said the ongoing unrest has not only been disrupting the domestic supply chains but also impacting the international supply chains as the inter-district truckers and container vehicles cannot move on the streets. Read: FBCCI urges political parties to avoid violence for economy's sake While the agricultural producers are not getting the prices of their products due to this transport disruption the urban consumers of the same are being forced to pay higher prices, he pointed out. The unrest with threats of torching and attacks on the vehicles and shops has already created a situation where business confidence is gradually shrinking. This is having a huge impact on the levels of investment, according to Dr Atiur. The banks are also worried about the likely defaults of their loans as businesses are facing huge challenges. As the NBR chair has rightly pointed out this political unrest along with the slowdown of imports will have a significant impact on the collection of revenues, he pointed out. This again has an impact on the budget deficit and subsequent need for higher public borrowing. The inflation situation may worsen in such a complex situation. The country faced a similar crisis in 2014 and it was quite difficult for the regulators and government to pull back the economy on track following the political unrest. ‘We managed to come out of this culture of burning …subsequently leading to robust economic growth. However, the country is facing a negative culture of burning its assets after a long time. I hope good sense will prevail among all the stakeholders to avoid another round of political uncertainty and unrest leading to undesired loss of the economy.’ Dr Atiur said. The foreign exchange crisis is likely to be prolonged if the political unrest continues like this. Both imports and exports are getting the hits from supply-side disruptions and cancellations of orders from the buyers, he observed. Read: Economy buffeted by political unrest amid declining forex reserves: Analysts ‘’Also, the foreign direct investment is likely to be negatively affected if this political stalemate continues for a longer time. All these have both direct and indirect implications for the balance of payments which is already under severe pressure,’ he said. The first best solution will be to get all the political parties onboard the election train at any cost. If needed, the Election Commission may be more flexible in its schedule to attract more parties into the election process. Even if some parties still avoid the election train even after such adjustments let it move on with the candidates from contesting parties and individuals who are participating as independents. In the meantime, “we must continue to move further towards market-determined solutions in making both exchange rates and interest rates flexible to bring back our macroeconomic stability.” Simultaneously, the central bank should try to attract more medium-term foreign exchange loans or deposits from friendly central banks of the region to bolster reserves. Read more: Economy is moving towards right track: Finance Minister Apart from this, the central bank must make its best efforts to attract more remittances through official channels by providing some more incentives to the small remitters and providing higher returns to fix dominated NRB bonds for the large remitters, said Dr. Atiur.