Shutdowns may cost Bangladesh's economy $10 billion, says industry group

By Arun Devnath

Bangladesh’s worst political violence since Prime Minister Sheikh Hasina extended her grip in power in January elections could cost the economy $10 billion, a major setback for the nation looking to shore up its foreign exchange reserves. 

The curfews and internet shutdown to quell a student protest over a government jobs quota is estimated to have a $10 billion impact on the economy and costs are expected to climb further, according to Zaved Akhtar, president of the Foreign Investors’ Chamber of Commerce and Industry. 

“While the country is slowly recovering with limited online and physical connectivity, full operations are yet to come back, and we are at best 50 per cent of the economic potential,” Akhtar said in a statement. The FCCI represents investors from 35 countries. 

While the current estimated costs represent a tiny fraction of the $455 billion economy, Bangladesh is in a precarious position with its dwindling foreign exchange reserves. This means the negotiations between Hasina’s government and creditors and the International Monetary Fund for more money will take a renewed urgency since the reserves have fallen to $21.8 billion last month and the garments sector, a key earner of dollars, struggles to fully reopen. 

Bangladesh unblocked the mobile internet Sunday after 11 days of near-complete blackout and the authorities eased the curfew with longer daytime breaks to help businesses. But at the same time, security forces have arrested about 10,000 people in the past 12 days, according to the Prothom Alo newspaper, raising concerns the crackdown will widen after the protests died down. 

Hasina has blamed the opposition for capitalising on the student protests and carrying out militant-like attacks after the top court ruled to abolish most of the government jobs quota system. Amnesty International said the violence has left 200 people dead, while the home ministry put the initial death count at 147.