ced by Jamaat-e-Islami. The latest spell of hartal, from last Thursday to this Thursday, has severely disrupted production and sales of the manufacturing sector; academic activities at schools, colleges and universities; services in healthcare and hospitality sectors, and the supply chain of the commodity market. The Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) has estimated the financial losses of a single-day hartal at Tk 1,500 crore. The FBCCI says all the major arteries of the economy, specially the export sector, have been shattered due to hartal. Experts say the country’s economic growth is mainly driven by its rising exports and in recent years, the country has attained above 6.0 percent growth in GDP. The incumbent government has targeted to lift the GDP growth to 7.3 percent in the current financial year (FY), which requires stable political situation throughout the year. The FBCCI says hartal is the main barrier to achieving the GDP growth target. The economic growth in the first quarter (July-September) of current FY already slowed down for lower investment mainly caused by a sense of uncertainty due to political stability. Though the political climate appeared to be calm after the January 5 elections, the latest wave of hartals has invited instability once again. The country needs stable political climate to attract required investment in support of achieving the GDP growth target, experts say. Readymade garment (RMG) exporters say they neither can transport exportable goods from their factories to the ports nor release imported raw materials from the ports to their factories due to hartals for days together. A BGMEA study conducted in late 2006 shows that the loss faced by the export-oriented readymade garment industry in a single day’s hartal is around Tk 1.08 billion. Pharmaceuticals industry, cement producers, poultry industry, leather and frozen foods exporters have also become hostages to hartals due to absence of legal initiatives to ban hartals. Meanwhile, Bangladesh Bank (BB) in its December-end report stated that agriculture, small trade and industrial activities were disrupted seriously due to hartals which has been wrecking the country’s economic wheel and may lead to mid-term and long-term economic setback. The central bank report noted that the recovery of the economic wheel requires immediate restoration of normalcy across the country in order to spare the supply chain of farm and non-farm and industrial sectors. According to the World Bank’s estimation in 2001, economic losses in Bangladesh on account of hartal stood at $10 billion during the 1995-1999 period with a day’s hartal causing a loss of $50 million. The UNDP estimated the cost of hartal in a different perspective, saying that hartal on an average took away 4.5 percent of the country’s GDP per annum during the 1991-2000 period. With the economy getting bigger, the magnitude of the economic losses caused by instability has become much higher and more severe now compared to the last decade. A recent estimate says a single-day hartal causes a loss of around $500 million to the economy as the size of country’s GDP became $134 billion at the end of FY 14 from $70 billion in the middle of the last decade. During the 2001-2006 period, some 173 days of countrywide hartals were enforced. Preliminary estimate suggests, from early 2009 till date, there has been 20-25 days of nationwide hartals. According to a UNDP study, the numbers of nationwide hartals were 72 days during 1991-94 period, 93 days during 1995-98 period and 110 days during 1999-2000 periods. During last five years, some 61 days’ hartals and blockades were enforced across the country except for the ongoing hartals.
Thursday, November 6, 2014
Economy bleeds:Daily Sun
ced by Jamaat-e-Islami. The latest spell of hartal, from last Thursday to this Thursday, has severely disrupted production and sales of the manufacturing sector; academic activities at schools, colleges and universities; services in healthcare and hospitality sectors, and the supply chain of the commodity market. The Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) has estimated the financial losses of a single-day hartal at Tk 1,500 crore. The FBCCI says all the major arteries of the economy, specially the export sector, have been shattered due to hartal. Experts say the country’s economic growth is mainly driven by its rising exports and in recent years, the country has attained above 6.0 percent growth in GDP. The incumbent government has targeted to lift the GDP growth to 7.3 percent in the current financial year (FY), which requires stable political situation throughout the year. The FBCCI says hartal is the main barrier to achieving the GDP growth target. The economic growth in the first quarter (July-September) of current FY already slowed down for lower investment mainly caused by a sense of uncertainty due to political stability. Though the political climate appeared to be calm after the January 5 elections, the latest wave of hartals has invited instability once again. The country needs stable political climate to attract required investment in support of achieving the GDP growth target, experts say. Readymade garment (RMG) exporters say they neither can transport exportable goods from their factories to the ports nor release imported raw materials from the ports to their factories due to hartals for days together. A BGMEA study conducted in late 2006 shows that the loss faced by the export-oriented readymade garment industry in a single day’s hartal is around Tk 1.08 billion. Pharmaceuticals industry, cement producers, poultry industry, leather and frozen foods exporters have also become hostages to hartals due to absence of legal initiatives to ban hartals. Meanwhile, Bangladesh Bank (BB) in its December-end report stated that agriculture, small trade and industrial activities were disrupted seriously due to hartals which has been wrecking the country’s economic wheel and may lead to mid-term and long-term economic setback. The central bank report noted that the recovery of the economic wheel requires immediate restoration of normalcy across the country in order to spare the supply chain of farm and non-farm and industrial sectors. According to the World Bank’s estimation in 2001, economic losses in Bangladesh on account of hartal stood at $10 billion during the 1995-1999 period with a day’s hartal causing a loss of $50 million. The UNDP estimated the cost of hartal in a different perspective, saying that hartal on an average took away 4.5 percent of the country’s GDP per annum during the 1991-2000 period. With the economy getting bigger, the magnitude of the economic losses caused by instability has become much higher and more severe now compared to the last decade. A recent estimate says a single-day hartal causes a loss of around $500 million to the economy as the size of country’s GDP became $134 billion at the end of FY 14 from $70 billion in the middle of the last decade. During the 2001-2006 period, some 173 days of countrywide hartals were enforced. Preliminary estimate suggests, from early 2009 till date, there has been 20-25 days of nationwide hartals. According to a UNDP study, the numbers of nationwide hartals were 72 days during 1991-94 period, 93 days during 1995-98 period and 110 days during 1999-2000 periods. During last five years, some 61 days’ hartals and blockades were enforced across the country except for the ongoing hartals.
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