Bangladesh is threatened with a severe economic crisis within the upcoming months, particularly in 2023, just like the rest of the world. The long-lasting effects of the COVID-19 pandemic and the subsequent Russia-Ukraine war has caused serious worries for the entire world, and Bangladesh was unable to avoid them despite great effort. Now that the economy is in turmoil, the opposition parties, particularly the BNP-Jamaat alliance, are attempting to gain political advantage and are continuing their political activities because they believe that this is an appropriate time to overthrow the government, which has been in power for more than 13 years in a row. However, the situation would worsen for the people as a result. Consequently, our policymakers and legislators from various political parties should now solely pay attention to bringing some comfort in people’s life.
The economy of Bangladesh had been expanding at the quickest rate in the past decade. This nation received a lot of praise for overcoming economic obstacles unlike Pakistan and Sri Lanka.
It was all going nicely and in the proper direction. But recently, we started to feel some pain. Some experts claim that a number of factors, including a rapid rise in fuel prices of up to 52%, which severely affected the industrial sector, are to blame for the current economic crisis. Food and fuel prices increased as a result of the Covid-19 and Russia-Ukraine war, which had a negative impact on global supply chains. Further consequences included the country’s declining foreign exchange reserves and protracted power disruptions.
Bangladesh was similarly affected by the global economic downturn and soaring inflation at this time. After Pakistan and Sri Lanka, it is the third country in South Asia that is experiencing the worst economic hardships. However, Bangladesh’s economic crisis is not as bad as Sri Lanka’s in terms of scope. It is evident that country’s 93 per cent of power production is based on thermal sources. About 63 per cent of electricity is generated from natural gas alone. while 10 per cent comes from diesel, five per cent is from coal, three per cent from the heavy oil and 3.3 per cent is from renewable resources. Bangladesh is one of the nations that is most vulnerable to this global energy crisis.
Bangladesh experienced its biggest financial crisis as a result of its excessive economic reliance on the apparel industry. They would not have endured these repercussions to the extent that they have if they had diversified their economy across other industrial sectors. In this case, Bangladesh is paying the price for putting too much emphasis on one unit and disregarding all other alternatives. However, according to economic experts, the rising financial crisis in Bangladesh cannot be solely attributed to COVID-19 and the Russia-Ukraine war. Numerous more causes, according to some, contributed to this economic downturn.
For fact, the high cost of infrastructure projects hampered upward economic progress. For example, the Padma Bridge, one of the country’s greatest projects, cost nearly $3.6 billion, despite an earlier estimate in 2007 that it would cost 1.16 billion. Bangladesh paid $12.65 billion for the Rooppur Nuclear Power Plant, although the exact cost of the project won’t be known until it is completely functioning. Similar to this, the Dhaka City Metro Rail Project ended up costing $3.3 billion even though the actual estimates were only $2.1 billion.
The collapse of the banking industry as a result of unending loan defaults is another element contributing to the current crisis. According to the IMF, the true amount of defaulted loans is much higher than twice, in contrast to the central bank’s declaration that the total amount was $11.11 billion. The power sector’s corruption also played a major role in starting this economic disaster. The Power Development Board received $7.1 billion from 2010 to 2021, while Bangladesh Petroleum Corporation earned $3 billion from 2010 to 2015. Unfortunately, these enormous sums were not entirely allocated to the production of electricity.
Similar to that, the crisis was brought on by capital flight out of the nation. According to Global Finance Integrity Report, in the period between 2009 and 2018, an ample amount of $8.27 billion was illegally laundered to Swiss Banks annually by mis-invoicing the values of imports and exports. In 2022, it has increased by 55.1% reaching 871 million. Economists believe that in only the last three months, the value of the Bangladeshi Taka has fallen by about 20% relative to the US dollar.
In addition, the Russia-Ukraine conflict caused imports to rise to 39% of total exports during the fiscal year that concluded on June 30. Similarly, until July of this year, remittances from Bangladeshis living abroad dropped to 5%. Numerous austerity measures are currently being implemented to improve the economy.
Prime Minister Sheikh Hasina on 6 October said Bangladesh will overcome the present financial crisis by 2026. The prime minister also told the media that she had interactions with leaders from many countries on the sidelines of the UN General Assembly where the world leaders expressed fear that the world will face an even more difficult time in 2023 and countries may face severe crises like famines. Sheikh Hasina highlighted the importance of ensuring food security in the face of the current economic and environmental challenges and urged the people to be more attentive about food security. Several other government leaders have also expressed their concerns over the upcoming economic crisis.
With the upcoming national elections at the end of 2023 in mind, the opposition parties, particularly the BNP-Jamaat alliance, have boosted their political activity in an effort to topple the existing government. The opposition is attempting to take advantage of the situation for their own interests, even though it is time for the entire nation to work together to tackle the challenges. Unfortunately, they only care about gaining power and are not concerned with the welfare of the people. Even though it is unclear how they will deal with the effects of the global economic crisis if they win the election, they are nevertheless making an effort to advance their political agenda, particularly by calling for a caretaker government during the approaching general election.
Awami League general secretary Obaidul Quader urged BNP to work for the welfare of the country and its people amid the ongoing global crisis. “All political parties play a responsible role in the democratic state system to deal with such crises, but this nation has never got any responsible behavior from the political evil force named BNP,” he said. Instead, he asserted, the BNP consistently seeks to deceive the populace by attacking the bastion of national unity at critical moments and fishing in muddy waters. According to data based on numerous international studies, Bangladesh is still in a better situation than other nations, much like it was during the COVID-19 epidemic, despite the current global crisis, he added.
We do not criticize the BNP or any other political party for fighting for their political demands provided they were made to ensure the welfare of the populace. However, at this time of crisis, their actions are just making things worse for the nation. The administration should now focus only on resolving the financial obstacles. However, as a result of the BNP’s increasing political activities in recent months, policymakers are currently preoccupied with resolving political conflicts, which is bad for the nation.
Additionally, there is a higher likelihood of terrorist attacks around the nation as the opposition tries to incite anti-government feelings among the populace. Since few new recruits have been apprehended recently, terrorist groups have already been discovered to be actively recruiting and training, and the authorities must continue to exercise extreme caution around them.
Over the past decade, Bangladesh’s Prime Minister Sheikh Hasina has steadfastly guided the country’s progress. Her foresight and visionary leadership are desperately needed to get through the current economic turmoil. We all agree that she has a lot of work to do to make sure the general election next year is free and fair. But we hope that both the government and the opposition put the needs of the people first. The country and its politics will survive only if the people do.
The writer is Chief Editor at Mohammadi News Agency (MNA), Editor at Kishore Bangla and Chief Patron, BangabandhuShishu Kishore Mela