Public trust 'paramount' for restoring normalcy in Bangladesh economy

By Ibrahim Khalil Ahasan*

The Bangladesh economy is currently facing significant challenges, and the incoming administration will encounter numerous hurdles ahead. Rebuilding public trust is paramount for restoring normalcy to the national economy. The recent student protests have disrupted both trade and production, exacerbating the situation.

Prominent economists and business leaders have discussed the new government's strategies for revitalizing economic activity, emphasizing the need for entrepreneurs to have a stable work environment. Simultaneously, efforts must be made to increase the availability of dollars in the market.

Ensuring a steady supply of gas and electricity to meet demand is also critical, along with generating new investment opportunities. Economists and business figures assert that the nation's economy can grow despite complex obstacles.

However, these challenges have intensified with the new administration's arrival. The foremost issue remains maintaining law and order, which is vital for securing factories and resuming production. It is crucial to restore normalcy to the supply chain, which has been negatively affected by the recent student protests, resulting in increased product costs. Fortunately, there are signs that the supply system is gradually improving as conditions stabilize.

Despite a decline in product prices, the production sector has yet to recover fully. Chittagong port's import-export activities are still obstructed, leading to significant container backlogs. Due to security concerns, business owners are accepting fewer deliveries, impacting imports and exports.

The public holds high expectations for the new administration, but quickly restoring economic normalcy amidst the ongoing crisis will be challenging. There is hope for improvement if issues such as anomalies, corruption, money laundering, and informal currency exchanges are addressed. Establishing a trusting environment is essential for reinvigorating the economy.

The nation continues to grapple with a dollar crisis, as the current dollar value is artificially sustained and does not align with the central bank’s rates, complicating the process of opening import letters of credit. The economic crisis has also been interlinked with the recent student movement, necessitating prompt action to resolve these emergencies.

The government must explore strategies to boost employment and stimulate economic growth to meet citizens’ expectations and attract further investment. Immediate action is essential to address employment concerns, particularly given the daily financial losses incurred by businesses, including payrolls and production disruptions in medium and large factories.

A spirit of tolerance is required from all parties to support the economy and ensure that no citizen faces financial hardships. According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), production delays lasting four to five days during the unrest caused severe financial setbacks for the export-oriented garment sector.

Advocates for large and medium-sized enterprises argue that measures must be taken to mitigate these losses, as the student protests have particularly hindered the growth of export-driven industries. The nation has been experiencing fluctuations in key economic indicators such as remittances, foreign exchange reserves, and inflation for over a year.

The economy has been under complex stress, and urgent actions are needed to address the economic crisis exacerbated by recent instabilities. The political turmoil has further aggravated food inflation, necessitating swift measures to ensure the stability of the food supply chain.

Declining reserves are currently a critical factor contributing to the economic crisis, underscoring the need for immediate intervention. In recent years, various crises have surfaced within the nation's macroeconomic framework.

To make progress in the forthcoming fiscal year, the economy must confront challenges related to inflation, the dollar crisis, investment, and revenue generation—issues that were not adequately addressed in the previous fiscal period. The global economy is rife with uncertainties, making it essential to navigate these obstacles effectively in the new context.

Creating a conducive investment climate is paramount for achieving objectives across different macroeconomic sectors. There is also a pressing need to address the management crises affecting businesses and industries.

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*Dhaka-based independent columnist and freelance journalist, writes on contemporary international issues

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