Bangladesh faces $10b setback, image crisis: Biz leaders
The recent shutdown has significantly impacted Bangladesh's economy and severely damaged the country's reputation as a credible and resilient economy, business leaders said on Sunday.
Zaved Akhtar, president of the Foreign Investors Chamber of Commerce and Industries (FICCI), estimated the shutdown's economic impact to be around $10 billion and rising.
Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), quoted the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stating that its member factories incurred losses of Tk6,400 crore.
While the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has yet to assess its losses, insiders suggested they also have incurred significant losses.
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The observations came at a meeting with four cabinet members, led by Salman F Rahman, private industry and investment adviser to the prime minister, at the BIDA office in Dhaka.
Supply lines and operations in the FMCG industry have been significantly impacted, resulting in a setback of over $100 million, said Zaved Akhtar, also the chairman and managing director of Unilever Bangladesh.
Beyond the financial impact, the image issue that the country is facing cannot be quantified as the reputation has been severely damaged in the past few weeks, he noted.
"We have spent 10 years trying to improve the adverse effects of the Rana Plaza disaster in 2013 and the terrorist attack in 2016. This current social unrest set the development back of this country by at least 10 years," said the FICCI president in a written statement.
Amid this situation, business leaders urged the government to support by fostering ease of doing business, waiving port demurrage charges, ensuring uninterrupted energy supply, curbing revenue official harassment, and restoring investor and business confidence.
Responding to businesses' queries and demands, Salman F Rahman said that five broad issues have been identified that businesses want resolved. These issues are related to Chittagong port, the National Board of Revenue (NBR), banking, ICT, and energy supply.
"We will hold separate meetings with the relevant ministries, government departments, and stakeholders to discuss the problems raised by businesses," he said.
Regarding port-related problems highlighted by businesses, Salman said they mentioned port congestion, demurrage costs, and increased turnaround times for shipping lines. Regarding banking issues, businesses expressed the need for extended payment delays, loan rescheduling, and lower interest rates.
He also noted that an alternative or standby internet system for businesses in case of a nationwide shutdown for emergencies is a good suggestion.
Around 50 businesses from various sectors and sub-sectors attended the meeting. They reported that the shutdown and internet blackout affected export-oriented industries, banking, insurance, logistics, infrastructure, telecom, e-commerce, freelancing, ride-hailing, software development, and numerous MSMEs that rely on social commerce, among others.
They also voiced concerns about small businesses, saying they suffered immensely from the nationwide unrest and internet blackout.
After the meeting, Anwar-Ul-Alam Chowdhury Parvez, president of Bangladesh Chamber of Industries, told TBS that businesses need bank support to pay employee salaries and extend loan instalment payment periods. He also highlighted the need for government assistance in paying utility bills.
ICT shaken by internet blackout
During the meeting, an ICT sector leader expressed frustration over explaining internet outages to foreign buyers, which eroded international confidence in Bangladesh's stability.
"When we tell foreign buyers that the data centre was burnt down and the internet was down for seven days, no one in the international arena believes it. They say, your net system is so weak. Then they lose confidence in us," he added.
Salman F Rahman said the country's reputation is at stake due to rumours spread abroad. "We have to repair our image now. The damages can be recovered as soon as we can bring back normalcy."
He also asked businesses to provide details of their financial losses, after which further actions will be determined.
The FBCCI president announced that they are compiling this information to present to the government.
