Economic turmoil deepens amid quota reform protests in Bangladesh

Widespread concerns and anxiety have emerged about the nation’s economy amid the movement over the quota reform in government jobs.

The situation then escalated due to violent clashes with law-enforcing agencies, attacks on state property, a curfew, and shutdowns of traffic and internet services.

Trade and commerce, including imports and exports, ground to a halt, with outright disruptions to most services. Small businesses are also experiencing stagnation, and remittances are not coming in.

While violence during protests is not unprecedented, the current scenario is unlike anything business leaders have faced before.

Business leaders say measures can be taken if business operations lull for a few days. However, the sudden stagnation prevented them from taking any preparatory action.

In addition to fungus damaging goods, raw materials are rotting and food items are expiring.

SHOP OWNERS FACE MASSIVE LOSSES

Helal Uddin, the president of the Bangladesh Shop Owners Association, told bdnews24.com: “Usually if shops across the country are closed for a day, the loss amounts to at least Tk 20 billion. This time, the damage is even greater.”

Describing this ‘additional loss’, he said: “The extent of the damage is indescribable and unpredictable. The glue on shoes is deteriorating, the fungus is affecting rice, the transport system has completely broken down, and raw materials are being wasted.”

Highlighting the plight of small traders and hawkers, Helal added: “Who thinks about them? There are 20 million small businesses in the country. Many people sell tea. Hawkers earn and live on a daily basis. Nobody thinks about them.”

Regarding the quota protesters, he said: “They will lead the country in the future. If they don’t consider the plight of small traders now, how will they manage later?”

RMG SECTOR AT RISK

The Bangladesh Garment Manufacturers and Exporters Association or BGMEA has claimed the apparel sector is suffering a daily financial loss of around Tk 16 billion due to the closure of port activities and factories.

SM Mannan, president of the association, said: “The most significant loss is the potential erosion of trust and reliance from international buyers.”

“The irreparable damage to our image due to this unexpected incident is difficult to quantify in monetary terms.”

EXPORT SHIPMENTS CLOSED

According to the National Board of Revenue or NBR, an average of 6,000 consignments of goods were exported daily through 43 customs stations across the country last year. If this calculation is taken into account, about 18,000 shipments have been stuck in the ports for the last three days.

The goods could not be exported as the internet connection was down. At the same time, customs duty on imported goods could not be processed.

At present, all goods at the port are unloaded through the Automated System for Customs Data or ASYCUDA, an integrated customs management system for international trade and transport operations. Later, the NBR ordered the unloading of some products manually at the request of traders.

The Customs Policy Branch of the NBR issued a directive on Monday, permitting only the unloading of industrial raw materials, food products, and perishable goods, according to the company’s spokesperson.

During a meeting with Prime Minister Sheikh Hasina in the afternoon, businessmen urged for the reopening of ports and proposed manually unloading goods if required.

Nasim Manzur of Apex Group said it is feasible to unload goods manually for 24 hours, and he asked for factories to open from Tuesday.

He assured he would shut down operations if problems arose.

He also asked for security on the Dhaka-Chattogram highway.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association or BKMEA, made two requests: firstly if factories can remain operational, workers will be safer and more orderly inside rather than outside, where they could be exploited.

Secondly, he called for the partial restoration of internet services, as the current shutdown is disrupting import and export activities.

DEMAND FOR A QUICK SOLUTION

Zahid Hussain, former chief economist of the World Bank’s Dhaka office, told bdnews24.com: “We are in unusual times. This situation is unlike a pandemic or a global recession and needs to be resolved peacefully and swiftly at the political level.”

He said: “During the pandemic, people were just confined to their homes, but internet shutdowns are not a solution. This time, there has been a virtual lockdown, and the connection has been lost due to the inability to pay electricity bills.”

When asked about the economic impact, Hussain advised against hasty calculations. “The scale of the loss should not be rushed,” he said.

He added: “About 40,000 import consignments are stuck in the country, and around 6,000 export shipments are being disrupted daily. During the pandemic, the economy kept moving online, but now even that has come to a halt. The extent of the damage is significant.”