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.
Political unrest in Bangladesh is crippling the country’s already shaky economy and hurting small traders, as the opposition parties attempt to push Prime Minister Sheikh Hasina to quit ahead of a general election scheduled for January.
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’s regime.
Hasina’s party — the Awami League — 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.
Hasina, the world’s longest-serving female head of a government is also accused of brutally suppressing the opposition and dissenting voices during this nearly 15-year period.
The BNP’s 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.
But the brunt of this political impasse is ultimately being borne by ordinary Bangladeshis.
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’s administration to seek a $4.7bn loan from the International Monetary Fund (IMF) earlier this year.
During the July-September quarter, Bangladesh’s balance-of-payments deficit increased to $2.8bn. At the same time, its current-account deficit – which occurs when a nation sends more money abroad than it receives – increased to $3.93bn. According to central bank data, foreign currency reserves have fallen to a new low of $20.66bn.
Now, the blockades are causing Bangladesh’s economy to lose 65 billion takas ($588m) a day, as per the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country’s apex trade body.
Zahid Hussain, former chief economist of the World Bank’s Dhaka office, warned of the same. “The 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,” he said.
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.
Corruption in the country’s 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.
Without a political settlement that restores genuine democracy by dislodging entrenched oligarchic networks, meaningful economic reforms are unlikely to be undertaken or implemented effectively.
Opposition leaders and activists meanwhile say their ongoing blockades are a part of their quest to break up this oligarchy and “restore democracy” in Bangladesh. “In the last 15 years, the Hasina governments and their beneficiaries have conducted unprecedented corruption. The whole economy is in shambles because of that,” said Ruhul Kabir Rizvi, joint secretary general of BNP.
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