Just as Bangladesh’s economy was sailing gradually to make a turnaround from the pandemic, the Russia-Ukraine war has suddenly emerged as a major obstacle standing in the way of its faster recovery. The country has already started to feel the pinch of the conflict and it is likely to increase poverty and eat into growth, warn the global lenders, policymakers and experts.
Meanwhile, the situation led the International Monetary Fund (IMF), the World Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development and the European Investment Bank to caution on Friday of “extensive” economic fallout from Russia’s invasion of Ukraine and expressed horror at the “devastating human catastrophe”. The higher prices of commodities would be more painful for a country like Bangladesh, which depends largely on the international market to feed its growing economy and huge numbers of population. The Ukraine crisis sent crude oil prices rocketing close to record levels of $140 per barrel, while other commodities including aluminium, coal, copper, natural gas, nickel, tin, wheat and zinc have hit historic highs on supply fears.
Experts fear Bangladesh is likely to face a series of troubles on both economic and geo-political fronts. Economic shock will be felt immediately whereas geo-political difficulty will be visible in the near future. A world with China and Russia together against the US, Europe and Japan places very heavy demands on those countries such as Bangladesh who choose to stay neutral. In such a world South and Southeast Asia are in a tough spot. And to remain so will in future be a harder challenge. The people are already struggling with higher inflation for the last couple of months as prices of food; transport and housing have increased substantially. Again, the government has also signalled that there will be upsurge in prices of utilities as it is mulling a cut in subsidies.
It is to be noted that Ukraine and Russia are global players in agri-food markets, representing 53 per cent of global trade in sunflower oil and seeds and 27 per cent in wheat. Bangladesh has to import nearly 90 per cent of its requirement for wheat, so its prices surged after the war broke out owing to the export disruption from the Black Sea region. Bangladesh relies on Russia for 3.7 per cent of its agri-food commodity supply, whereas it is 2.1 per cent on Ukraine, showed the UNCTAD report last week. We want authorities must take effective measures to keep prices under control to give relief to people during the holy month.
