<\/p>\n
Bangladesh\u2019s ongoing political crisis is \u2018high risk\u2019 for fragile economy | Business and Economy<\/p>\n
Vegetable trader Afsar Uddin was distraught. He needed to pay nearly 50 percent more to bring a truck of vegetables to his shop in Karwan Bazar, the largest wholesale market for fresh produce in Bangladesh\u2019s capital Dhaka.<\/p>\n
The ongoing countrywide road-rail-waterway blockade imposed by the main opposition Bangladesh Nationalist Party (BNP) and its allies has disrupted the supply chains and significantly pushed up the cost of transport because only a fraction of the trucks and buses have been on the road during the shutdown.<\/p>\n
\u201cJust days ago, I needed to pay 15,000 Bangladeshi takas ($136) for a truck to bring vegetables from the countryside to my shop in Dhaka. Now it has become 22,000 takas ($200) as very few truck owners are allowing their vehicles to ferry goods,\u201d said Uddin. This is on the heels of already high inflation in the country, he pointed out.<\/p>\n
\u201cIf we don\u2019t increase the prices again, we will bear losses. But if we do, then we will end up with unsold, rotten vegetables,\u201d Uddin lamented.<\/p>\n
Tailor Samrat Mia, who lives on a daily paycheque by sewing and altering ready-made garments at Dhaka\u2019s New Market, is also frustrated with the lack of business. \u201cWe are sitting here for the whole day but no customers. Who would come out to buy and alter pants amidst this political crisis?\u201d he asked. \u201cBut we have a family to [take care of] and mouths to feed. Will [politicians] bother?\u201d<\/p>\n
Political unrest in Bangladesh is crippling the country\u2019s already shaky economy and hurting small traders like Uddin and Mia, as the opposition parties attempt to push Prime Minister Sheikh Hasina to quit ahead of a general election scheduled for January.<\/p>\n
BNP and its allies have been demanding the restoration of a caretaker government system to oversee national elections as they believe no free and fair election can take place under Hasina\u2019s regime.<\/p>\n
Hasina\u2019s party \u2014 the Awami League \u2014 has been in power since 2009, and the last two general elections of 2014 and 2018, respectively, were marred with opposition boycotts and allegations of massive vote rigging.<\/p>\n
Hasina, the world\u2019s longest-serving female head of a government, is also accused of brutally suppressing the opposition and dissenting voices during this nearly 15-year period.<\/p>\n
In 2011, the country\u2019s parliament dissolved the caretaker government, a neutral election-time administration that had successfully conducted at least four elections since the South Asian nation\u2019s democratic transition from military dictatorship in the early 90s. Both the Awami League and BNP came to power twice, alternatively, in those elections.<\/p>\n
The BNP\u2019s efforts in the last few years to restore the caretaker government have invited police brutality and thousands of court cases. Now the party and its allies have vowed to step up disruptive events ahead of the national elections and declared a series of nationwide blockades since early November.<\/p>\n
But the brunt of this political impasse is ultimately being borne by ordinary Bangladeshis.<\/p>\n
Rahul Amin, a travel agency executive, is paying at least 10 times his normal fare to work as there are very few buses, autorickshaws and taxis plying, pushing up prices.<\/p>\n
\u201cWe have already been struggling hard with rising food prices and inflations for the last year or so. Now this political turmoil is wreaking havoc in the market,\u201d Amin told Al Jazeera. \u201cI understand the opposition\u2019s demand for a free and fair election, but the whole economy will tank if these [blockades] continue.\u201d<\/p>\n The escalating political standoff is causing serious concerns for the South Asian economy, which has already been squeezed by the global effects of the COVID-19 pandemic and the war in Ukraine. Shrinking foreign currency reserves and strong inflationary pressures pushed Hasina\u2019s administration to seek a $4.7bn loan from the International Monetary Fund (IMF) earlier this year.<\/p>\n At a recent public forum, Abdur Rouf Talukder, the governor of Bangladesh\u2019s central bank, admitted that the country\u2019s economy has hit \u201crock bottom\u201d and they are navigating \u201ca very strenuous period\u201d.<\/p>\n During the July-September quarter, Bangladesh\u2019s balance-of-payments deficit \u2013 its import of commodities, capital and services higher than its exports \u2013 increased to $2.8bn. At the same time, its current-account deficit \u2013 which occurs when a nation sends more money abroad than it receives \u2013 increased to $3.93bn. According to central bank data, foreign currency reserves have fallen to a new low of $20.66bn.<\/p>\n Last month, earnings through exports, the lion\u2019s share of which comes from the ready-made garments (RMG) industry, fell by 13.64 percent to $3.76bn, the lowest in the last 26 months, according to the Export Promotion Bureau.<\/p>\n Inflow of remittances, another important economic lifeline after exports, also fell by 4.4 percent during the last quarter.<\/p>\n Now, the blockades are causing Bangladesh\u2019s economy to lose 65 billion takas ($588m) a day, as per the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country\u2019s apex trade body.<\/p>\n \u201cAll businesses, small and large, are affected by these blockades,\u201d Mahbubul Alam, president of FBCCI, told Al Jazeera. \u201cWe have seen how political violences disrupted the economy for a long period back in 2014 before elections [then]\u2026. The crisis this time will be even bigger.\u201d<\/p>\n Zahid Hussain, former chief economist of the World Bank\u2019s Dhaka office, warned of the same. \u201cThe current political impasse is looking similar to 2014 in which the economy suffered damages worth several billion dollars. This time it may hurt more not just because the economy is bigger, but also because the buffers are thin to begin with,\u201d he said.<\/p>\n Hussain, however, said the current economic crisis cannot be attributed to the political impasse only. \u201c[It] has been there for more than 15 months and counting,\u201d he said. While the global shocks have played a role in creating some of these pressures, the country\u2019s monetary, exchange rate, financial and fiscal policy response did not help either, he added.<\/p>\n Since the start of the pandemic, Bangladesh had capped the lending rate at 9 percent for more than three years until this past July. This gave businesses the scope of grabbing funds at real interest rates of nearly zero (borrowing rate minus inflation, which was hovering at around 10 percent).<\/p>\n The central bank\u2019s policy to keep the value of the country\u2019s currency \u2013 the taka \u2013 artificially inflated also exacerbated inflation.<\/p>\n \u201cNow, a deeper political impasse and violence will add loads of salt to pre-existing injuries,\u201d Hussain said.<\/p>\n Financial analyst Zia Hassan told Al Jazeera that while the political impasse obviously exacerbated economic instability, the roots of the struggle around the balance of payments and dollar reserves can be traced back to deeper structural weaknesses in Bangladesh\u2019s import-dependent, and undiversified economy.<\/p>\n In the fiscal year ending June 2023, Bangladesh imported goods worth $90bn against its export of $55bn \u2013 over 80 percent of which came from RMG products.<\/p>\n Bangladesh\u2019s narrow export base, which is solely reliant on RMG products, and over-reliance on remittance inflows, have left it vulnerable to external shocks for many years now, Hassan says.<\/p>\n Hassan also attributes the current economic downfall to an oligarchy of political elites entrenched in the Sheikh Hasina regime who have control over banking, bureaucracy and business.<\/p>\n Corruption in the country\u2019s banking sector caused a loss of 100 billion takas ($900m) in the 2016-17 fiscal year, found a study by the South Asian Network on Economic Modelling (SANEM), a Bangladeshi think-tank.<\/p>\n Global Financial Integrity (GFI) data indicates that between 2008 and 2017, Bangladesh lost a staggering $7.53bn \u2013 or 17.95 percent of its international trade \u2013 per year on average to trade misinvoicing where companies declared a lower value for their imports and exports to pay lower taxes.<\/p>\n This oligarchy, which has been accused of corruption and money laundering, has stymied reforms that threaten their economic interests, Hassan said. \u201cWithout a political settlement that restores genuine democracy by dislodging entrenched oligarchic networks, meaningful economic reforms are unlikely to be undertaken or implemented effectively,\u201d he added.<\/p>\n Opposition leaders and activists meanwhile say their ongoing blockades are a part of their quest to break up this oligarchy and \u201crestore democracy\u201d in Bangladesh. \u201cIn the last 15 years, the Hasina governments and their beneficiaries have conducted unprecedented corruption. The whole economy is in shambles because of that,\u201d said Ruhul Kabir Rizvi, joint secretary general of BNP.<\/p>\n \u201cBlockades are obviously detrimental to the economy, but if we don\u2019t fight to restore democracy now and allow another sham election, the economy as well as the whole country will be in bigger trouble,\u201d he told Al Jazeera.<\/p>\n Ali Riaz, distinguished professor of politics and government at Illinois State University in the United States, told Al Jazeera that the absence of an inclusive democratic system and pursuing cronyism have led to the economic crisis of Bangladesh.<\/p>\n \u201cThe ruling party needs to understand that stubbornness, use of brute force, silencing opposition and machination may provide an aura of invincibility, but they do not deliver a solution to the economic crisis,\u201d he said. Blaming the opposition or the global economy will not put an end to it, he added.<\/p>\n Riaz said the Awami League needs to address the sources of problems \u2013 break the hold of a small group of beneficiaries in various sectors. \u201cIt is not an easy task,\u201d he said, \u201cand only a new political settlement with popular mandate can deliver this.\u201d<\/p>\n<\/div>\n \u0627\u0644\u0645\u0635\u062f\u0631<\/a>Economy in tatters<\/h2>\n
Need for \u2018restoring democracy\u2019<\/h2>\n
\n
\n\u0623\u062e\u0628\u0627\u0631<\/a><\/p>\n