Kazi Zahidul Hasan :
Bangladesh appears to be headed towards a deeper political crisis, which the economists warned will have a cascading impact on all economic fronts, consequently lowering its GDP growth.
They said the nonstop road, rail and waterways blockade by the BNP enters sixth day on Sunday, virtually crippling all economic activities across the country.
It has also ‘badly dented’ Bangladesh’s image globally, they added.
“The economy is going to face another round of uncertainty in the wake of renewed political unrest,” Prof Mustafizur Rahman, Executive Director of Center for Policy Dialogue told The New Nation on Sunday. He warns a prolonged political standoff could have a lasting negative impact on Bangladesh’s economic performance and financial stability.
“This could lead to a contraction in manufacturing, sharply decrease retail sales growth, and lower consumer and business confidence, therefore, lowering GDP growth,” he noted.
Prof Mustafizur Rahman, however, urged the rival parties to come forward to end the current confrontational situations through discussions for the economic progress.
“Evidence suggests that political instability has always significant impact on economy. The political situation becomes volatile again and it will severely affect trade and business, supply chain and investment once again,” said Dr AB Mirza Azizul Islam, a noted economist of the country.
He pointed that the overall business and investment climate remained subdued for the last couple of years as the investors scaled back their expansion strategies due to poor infrastructure and energy crisis. “When such an adverse situation is prevailing in the investment front, a fresh uncertainty in the country’s political arena will further weaken their confidence.”
A congenial political environment is key to boost the investors’ confidence and encourage new investors. But eruption of political turmoil time and again made the long-term investors shaky, who may look to invest elsewhere, posing a potential threat to economic development,” he added.
When asked, Mirza Azizul Islam said it is really a bad news that the country is appearing to be headed towards a prolonged turmoil. If it happens, the GDP growth could plunge below 6.0 percent for the first time after 12 years.
“Bangladesh continues to have an average GDP (gross domestic product) growth of 6.0 per cent over the last one decade. But the renewed political unrest could create the roadblock to achieve a similar growth in the current fiscal,” said Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI) of Bangladesh.
He said, restive political programme always have an adverse impact on service sector, industry production and export.
The national economy suffered serious setback from the previous occasion of political unrest during the year 2013. Businesses were trying to recover their losses taking advantage of a relatively calm political situation prevailed during the last year. But unrest appeared again in the country’s political arena pushing the businesses towards further uncertainty.
“If the political turmoil continues, the backbone of the economy will come under serious threat, pushing it towards a longer stagnation,” he added.
From the fear of dire consequences, Ahsan H Mansur suggests that the political parties should pursue a peaceful political environment for uninterrupted development of the country.
He believes that the prevailing political situation could be resolved through dialogue between the feuding parties.
