Unrest ‘taking its toll’ on Bangladesh economy    

The latest episode of political volatility in the South Asian nation began on January 3 when police banned protests in the capital Dhaka and confined the leader of the country’s main opposition party BNP, Khaleda Zia, to her office. Zia had earlier called for demonstrations on the anniversary of last year’s general election. Although Zia has been released, the government still hasn’t been able to put an end to the unrest, which has so far cost 29 lives.

hartalOn January 21, the authorities announced that they had arrested more than 7,000 opposition activists. Furthermore, Prime Minister Sheikh Hasina accused the opposition of engaging in “terrorism,” referring to activists as militants.

The turmoil has also led to frequent strikes, attacks and transport blockades, hampering economic activity in the country by preventing businesses from operating normally and hurting ordinary citizens’ economic prospects. The opposition has now started a 48-hour shutdown in Dhaka and other parts of the country. The nation’s economy continues to take a beating with both the industrial and agricultural sectors facing losses amounting to millions of dollars due to their inability to ship goods.

In a DW interview, Henrik Maihack, director of the Friedrich Ebert Foundation’s office in Dhaka, says the ongoing political violence will likely have a negative impact on foreign investor confidence as well as on buyers of Bangladesh’s garments. However, if political stability can be restored soon, the country still has a chance to become one of the fastest growing economies in Asia, he adds.

DW: Bangladesh’s political turmoil has been going on for quite some time now. How has it affected people’s daily lives?

People in Bangladesh don’t feel safe at the moment using either public or private transport, as petrol bombs are randomly hurled at moving vehicles. Such incidents have already killed over 30 people since the beginning of the year all over the country. Most of them were innocent people who were just using public transport to commute to work or university.

Public life and businesses – especially the important Ready-Made Garments (RMG) sector – have been heavily constrained by the ongoing blockade, causing hardship to people all over the country. There is a risk that prices for essential food items in city markets will go up further as transport to Dhaka is slower because of the blockade.

You mentioned the important garment industry. What impact has the ongoing crisis had on this sector?

According to some estimates, production in the RMG sector have gone down by as much as 20 percent due to the blockade. Sometimes garments cannot be shipped on time as the roads leading to the port in the city of Chittagong are affected by the blockade.

International buyers are also becoming concerned about their new and existing orders, according to the garment exports association BGMEA. This is not only bad for business, but also for workers who depend on the salaries in the RMG industry, and can be laid off easily in times of crisis.

How come political protests in Bangladesh always lead to parties calling for strikes, in an attempt to disrupt economic activity?

The tradition of hartal or bandh (strike) goes all the way back to the Indian independence movement under Mahatma Gandhi fighting against the British colonial government.

However, the particular form of violent strikes and blockades currently taking place in Bangladesh are a distorted version of an initially non-violent form of political protests.

There have been frequent strikes and transport blockades in the country. How are these actions by political outfits affecting the nation’s economic development?

Although the Bangladeshi economy is very resilient, with growth estimated to be stable at over 6 percent for 2015, the ongoing blockade is taking its toll. 2013 was marked with similar political unrest, and while the first half of 2014 saw the impact of the previous year’s political turmoil on economic growth, the economy bounced back by the second half of the year.

It is therefore essential that the violence ends as soon as possible. Just today, a section of transport workers are angrily protesting against the blockade close to the office of the BNP chairperson Khaleda Zia because they see their incomes dwindling from the ongoing blockade.

What is your outlook for the country’s economy in the coming months?

Hartals and blockades are not new in Bangladesh and economic growth forecasts therefore remain mostly stable for 2015 at just over six percent. It goes without saying that political violence affects economic development in Bangladesh and growth would be even more impressive without it.

This time the blockade has been going on for an unusually long period of time. The unrest could also negatively affect the confidence of foreign investors and buyers of Bangladesh’s garments and other export items – all of which could have a long term impact on economic growth.

However, although economic activity is currently being hampered by the blockade, Bangladesh could see increasing exports to old and new destinations in 2015 making it one of the fastest growing economies in Asia in this year, if political stability can be restored soon.



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