Syed Jamaluddin
Economists and business leaders feel that the economy is facing a disaster because of hartal, blockade and political instability. Industries, big and small, are stagnating. There is no momentum in financial transactions. Business leaders think that many of them are in difficulties for want of gas and electricity. Political turmoil has come on top of this. Economy is adversely affected as a result of hartal and blockade. Many people lose employment. They can not reach the place of their work in time for lack of transport during hartal. Total disruption in work causes loss to the economy.
Behaviour of the political parties is a cause of concern to the business community. Political instability is destroying the economy. The country is going backward. Both sides -the government and the opposition - are going for extremes. The parties do not appear to care about the country. Decisions are not taken on the basis of consensus.
Frequent rise in prices of gas and power are negatively impacting business and industries. Prices of imported raw materials have also gone up. That is why businesses are not earning profits. New investors have lost interest in investment. New entrepreneurs are not getting bank loans. Fluctuations in exchange rates are causing problem.
Investors will turn back if unstable situation continues. Therefore security of capital is urgently needed. Investors prefer a stable environment. Violent programmes will impede growth and the country would be a loser. Poor people will be affected most by violent programmes. Political parties will have to decide if they want to come out of this situation. The Asian Development Bank has warned that without investment it will not be possible to reach the growth target. The International Monetary Fund (IMF) delegation has also said the same thing.
Exporters are incurring losses as they can not make shipment of goods due to shutdown and road blockade. Prices of vegetables, eggs and meat soared recently due to political strikes. Frequent shutdowns have snapped the supply chain. All items are becoming costlier. The ongoing political unrest may dent the country ratings.
Prices of essentials, especially vegetables and fish, increased in the kitchen market aggravating the sufferings of the low and middle groups which traders attributed to the frequent hartals that disrupted the supply chain. Goods from outlying areas could not reach the capital timely due to hartal. Prices witnessed a fresh hike because of the transportation problem caused by shutdown.
The president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said that political conflict will discourage foreign investment and have a negative impact in economic growth. Strikes would hamper export-import activities. The law and order situation has deteriorated during the recent hartals. Investors from many countries were considering Bangladesh as an investment destination but recent events may turn them back.
Confrontational politics is dragging the country backwards. Since all power belongs to the government, they have to come forward to solve the problem. If the demand of the opposition is just, the government should not hesitate to accept this. The United States has asked the Awami League and BNP to hold dialogues and work out a mechanism for conducting the next parliamentary elections. Robert Blake, the US Asst Secretary of State, gave this message in clear terms during his recent visit.
There is no doubt that hartals are damaging the economy. But the causes of hartal have to be looked into. Unless the causes of hartal are removed, it is bound to happen again and again whether we like it or not. Politicians are responsible for this and they have to find out a solution. They have to be engaged in discussion for resolving the differences. Uncompromising attitude will not be helpful. If the two parties - the Awami League and BNP - fail to resolve the conflict, worse days are ahead.
Business activities are shrinking. Investment and export have declined. Businessmen have reduced the import of capital machinery. Banks are losing interest in opening letter of credit. Expenditure on import has declined by 11.35 per cent in last October. Consumer goods import declined by 42.38 per cent, capital machinery import went down by 28.16 per cent. Petroleum import has registered a decline of 7.45 per cent. Import of industrial raw materials came down by 4.51 per cent. The above figures are quoted from Bangladesh Bank report.
According to the economists, investment climate is not congenial because of high interest rates of bank and gas-power crisis. Political situation has heated up due to the controversy centring the caretaker government system. Imports have gone down due to Hall-Mark scandal. Economy is passing through a difficult time .Businessmen feel discourged to open letter of credit. Papers are moving to head office, board meeting and central bank. This is happening after the Hall-Mark affair. Bangladesh Bank report shows that export target could not be realised during the last five months.
According to manufacturers, demand for consumer products has gone down recently due to fall in income of the buyers. Farmers do not get fair prices for their cash crops such as paddy, jute and tobacco. It is estimated that sales of consumer products have declined by 20 per cent. Slow pace in development had adverse impact on the purchasing power of the rural population. Global economic recession did have spillover impact on the Bangladesh economy, according to the economists.
Apart from hartal, there is another reason for negative impact. Donors are not responding to the request of the government for holding the meeting of the Bangladesh Development Forum (BDF). The last meeting was held in February 2010.Deteriorating relationship with the donors is responsible for the delay in holding the meeting. Donors have reduced new pledges of aid. This will have negative impact on the economy. BDF meeting is perhaps stuck up due to the Padma Bridge issue. Padma Bridge issue is affecting our ties with all the donors.
The writer is an economist
and columnist.
syedjamaluddin22@yahoo.com
