Bangladesh is facing a significant economic setback as a result of the worst political violence since Prime Minister Sheikh Hasina solidified her grip on power in January elections. The unrest, fueled by student protests against a government jobs quota system, has resulted in an estimated $10 billion impact on the economy. This figure is expected to climb further, according to Zaved Akhtar, president of the Foreign Investors’ Chamber of Commerce and Industry (FCCI).
The curfews and internet shutdown implemented to quell the protests have severely disrupted businesses and hampered economic activity. Akhtar highlights the ongoing struggle to restore full economic operations, stating that the country is currently operating at a mere 50% of its potential. This grim reality has dire implications for Bangladesh, particularly given its dwindling foreign exchange reserves.
The FCCI, representing investors from 35 countries, underscores the urgency of the situation. With reserves having plummeted to $21.8 billion last month, the government faces mounting pressure to secure additional funds. Negotiations with creditors and the International Monetary Fund (IMF) are taking on a renewed sense of urgency, especially as the garments sector, a key source of foreign exchange earnings, continues to grapple with the disruptions.
While the government has recently eased the curfew and restored mobile internet access after an 11-day blackout, concerns remain. Reports from the Prothom Alo newspaper indicate that security forces have apprehended around 10,000 people in the past 12 days, raising fears of a widening crackdown following the suppression of protests.
The government blames the opposition for exploiting the student protests, alleging that they orchestrated militant-like attacks after the top court ruled to abolish most of the government jobs quota system. Amnesty International claims the violence has resulted in the deaths of 200 people, while the home ministry provides a lower initial death toll of 147. The ongoing political turmoil and its economic ramifications are casting a shadow over Bangladesh’s recovery efforts.
