Bangladesh’s economy is facing significant challenges due to high inflation, declining exports, and a dollar crisis. The situation has been further exacerbated by recent conflicts related to the quota reform movement, which have led to widespread disruptions. The shutdown of the internet and imposition of curfews have paralysed a large portion of the economic sector, compounding the country’s economic difficulties.
The violence surrounding the quota reform movement has had a severe impact on Bangladesh’s economy. The closure of Textile and garment factories, shops, and port operations, coupled with nationwide internet shutdowns and curfews, has paralysed key economic activities. Economists warn that the repercussions of this unrest could surpass those of the COVID-19 pandemic. It’s estimated that the instability is costing the economy approximately one billion dollars per day. This crisis is being viewed as a major economic shock for the country.
The recent surge in the dollar’s price in Bangladesh is a significant concern. In the past two weeks, the exchange rate has risen from Tk 118-119 to Tk 124-125 per dollar. This increase follows a period where the dollar was priced at Tk 121-122. The rise in dollar prices is attributed to a reduction in the supply of dollars, which is linked to a drop in expatriate remittances and a decrease in foreign visitors. This shortage is contributing to the ongoing reserve crisis and exacerbating economic instability in the country.
We buy dollars from banks that come from outside. The current abnormal situation has reduced the supply of dollars.”
Meanwhile, the flow of expatriate income has come to a halt since July 16 due to the deteriorating law and order situation across the country centred on the quota reform movement and the imposition of curfews, internet shutdowns and bank closures for a few days. In July, remittances of $1.90 billion have arrived in the country. Remittances of $2.54 billion came in the previous month. Accordingly, remittances have decreased by $632 million or Tk 7,457 crore in one month.
The textile sector is Bangladesh’s major economic growth. Many other textile mills in major industrial hubs like Tongi, Joydebpur in Gazipur, Bhaluka in Mymensingh, Palash, Madhabdi in Narsingdi, Savar, Narayanganj and Ashulia in Dhaka have also been suffering from the acute gas shortage for over a month.
Mithela Textile Industries, a weaving-dyeing-printing factory in Narayanganj’s Araihazar, has seen its production drops for the past month due to a severe gas crisis and current violence. “I don’t know what to do. Please pray for me so that I can survive until the end.” However, Mithela Textile is still operating at a deficient capacity.
Textile millers report that production at 80% of the country’s mills has dropped to an average of 40% due to the gas crisis. They fear this will hinder their ability to supply raw materials to RMG factories on time, impacting the revenue of the country’s main export product.
Current crisis and gas disruption insufficient gas pressure disrupts the fabrics and cloth dyeing process, delaying raw material supply by 15-20 days for each purchase order.
The dollar is rising And if the crisis continues like this, nothing can be imported. Then commodity prices will increase and the crisis will increase
Due to current violence, Our clothing buyers turning away and do not want to come to the country. Exports in the garment sector are declining. Another Remittance also declines.
We, as members of the next-generation textile and apparel business community of Bangladesh today issued a statement showing solidarity with the ongoing demand by the people of Bangladesh
“As members of the business community, we cannot stand silent and watch the sad loss of innocent lives and people’s demands go unheard. We reiterate our concerns for all citizens of this country. As proud members of an independent nation, we believe that all individuals should be able to exercise their rights peacefully.”
It’s time for all of us to work together to sustain our business and economy.
Author: Mahbub Khan Himel Director of Mithela Textile Industries Ltd and co-chairman standing committee of FBCCI.
