Weathering the storm
Despite undoubted strains on the Bangladeshi economy wrought by world events, Syed Badrul Ahsan is optimistic about the country’s ability to pull through
There is little question that Bangladesh’s economy is currently under pressure. Questions about the declining state of the nation’s foreign exchange reserves persist, though the government has been at pains to deny that conditions as they happen to be should give rise to any worries. Yet over the past couple of months, fears have grown that the foreign exchange reserves, which earlier amounted to over $40bn, may have slipped to below $38bn.
The government has puta brave face on it, which is not surprising, given that, in the next ten months or so, Bangladesh will be electing a new parliament. Pressure, both domestic and external, on the Sheikh Hasina government is growing for a transparent, fair and inclusive election in December this year, if not earlier. Nowhere has this pressure been more apparent than in a series of high-level visits by US government officials to Dhaka, the better to stress the need for a credible election. A senior State Department official recently held a meeting with editors of leading Bangladesh newspapers on the subject.
While aware of the grave need for an election that will be a departure from the election of 2014, where as many as 153 lawmakers out of 300 elected legislators were declared elected unopposed; or the vote of 2018, which critics have dubbed the ‘midnight election’ because of the alleged manipulation of votes even before the polling centres opened, the ruling administration also remains cognisant of the need to maintain the economic progress that has so far been made.
To the government’s credit, since Sheikh Hasina took charge as Prime Minister in early 2009, infrastructure development has been a priority, one driven by the requirement of increased foreign investment in the country. A good number of export processing zones, overseen by the Bangladesh Investment Development Authority (BIDA), have been opened. Meanwhile, work on Payra Port has continued apace, promising to provide a fillip to development, namely export-oriented, programmes. The recent inauguration of the Padma Bridge over the River Padma, too, has been a boon,and not merely in the area of communication for the country;it has also opened the door to newer business establishments being set up in all the districts that have had the benefit of linkage through the bridge.
Even as Bangladesh’s economy tries to recover following the ravages of Covid-19, it is – like so many others – at present hostage to the ramifications of the Russia-Ukraine war. The conflict has had a telling effect on food grain imports, as well as exports of certain essential items which go a long way in boosting the national economy. Raw materials for the Rooppur nuclear power plant, supplied by Moscow, have been uncertain owing to sanctions imposed by the West on the movement of Russian ships. Indeed, in recent weeks Bangladesh officials have gone out on a limb trying to explain why Russian ships, having replaced their original names with new ones, have had to be turned away from the country’s ports, lest it lead to complications over the sanctions regime.
In recent days, as a cost-cutting measure, the government has revised the Annual Development Plan (ADP), not only as a means towards trimming expenses but also as a way of focusing on the country’s priorities. At a time when businessmen are facing problems regarding an opening of Letters of Credit (LCs), with scores of banks turning down appeals to this end by industrialists, it becomes pretty clear that the government has little intention of loosening its grip on the levers of the economy. As a measure of its seriousness, the Rampal coal power plant, a joint enterprise of the Bangladesh-India Friendship Power Company Limited, has resumed production after a month of having been in suspension owing to an absence of supplies of coal.
For all the difficulties it faces, Bangladesh has nevertheless successfully managed to stay away from the sorts of problems the Sri Lankan economy has beenup against and is still navigating. It has succeeded in avoiding the kinds of issues which have overtaken Sri Lanka (consider Hambantota) and Pakistan (for example, Gwadar) and has thus kept the levers of its economy in its own hands. Its recent request for a $4.5bn ;loan from the IMF, ostensibly to keep the economy running, is regarded as a pragmatic move by observers of the national economy. The IMF has approved the request, which is a measure of its confidence in the ability of the Bangladesh government to keep the national economic wheels in motion.
The future, therefore, looks safe. A private pharmaceutical company has undertaken the task of constructing a factory in Gazipur, outside Dhaka, the objective being to produce insulin at low cost for diabetes patients in the country. On a somewhat nationalistic note, Wisdom Attires, a local garments organisation, has decided to use the Bengali language on its product tags as a mark of respect to the young men who laid down their lives during the Bengali language movement in February 1952.
Syed Badrul Ahsan is a Bangladeshi journalist and political commentator based in London. He is the author of biographies of Bangladesh’s founder Sheikh Mujibur Rahman and the country’s first prime minister Tajuddin Ahmad