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What experts say about economic fallout of Gulshan restaurant attack

  • Published at 01:25 am August 2nd, 2016
  • Last updated at 02:07 am August 2nd, 2016
What experts say about economic fallout of Gulshan restaurant attack
Experts warn that a further attack might lead to badly hurt the Bangladesh economic prospects. They advised the government to tighten security measures along side taking necessary steps to restore the country’s image to the world.AB-Mirza Economists are apprehensive that a further incident like Holey Artisan terrorist attack will decrease foreign investment and lead to more capital flight from Bangladesh as investors feel insecure about making investment decision over security concern. Local investment is going through a stagnant situation which may worsen. A further terrorist attack will contribute to capital flight as investors feel insecure about making investment decision, former finance adviser to caretaker government ABM Mirza Azizul Islam told the Dhaka tribune. Business people think that due to sluggish investment situation, it is not suitable for pouring funds in new projects, he said. According to the Swiss central bank data, Bangladeshi citizens’ deposits with Swiss banks rose by nearly 9% to 550.85 million Swiss franc in 2015. In 2014, Bangladeshi nationals deposited over 506 million Swiss franc. Foreign investment might witness negative trend in the month to come over security concern as investors make investment decision considering the security of money and lives, said Islam. In 2015, Bangladesh witnessed a “historically high level” of growth in foreign direct investment, crossing the figure $2 billion mark, according to the World Investment Report. The only way to restore investors’ confidence is not to let any such untoward incident happen. While through proper investigation, the culprits should be brought to book and measures continued for future security, Islam suggested. He also urged the government to find out the real reason behind the slow growth of local investment and take steps including policy support to boost investment, or else, the opportunity for new employment generation would be hindered. Ahsan-H-Mansur The implementation of big projects like Dhaka metro rail, Matarbari coal-based power plant would be delayed as the officials of foreign companies are unwilling to visit Bangladesh right now over security concern, economists say. “In the wake of Gulshan restaurant attract, the implementation of big infrastructure projects like metro-rail and Matarbari power plant may be delayed as foreigners working here are reluctant to stay here over security issues,” Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, told the Dhaka Tribune in an interview over phone. The interview aimed at understanding the impacts of recent terrorist attacks on the implementation of country’s mega projects as well as economy. Since the incident killed foreigners including Japaneses, who worked for the metro rail project, it would delay, said Mansur. The foreign nationals will not want to visit Bangladesh until they are assured of a full-fledged security during their stay in Bangladesh and free movement, he opined. On the other hand, it would also cast an adverse impact on new projects as people will think about the security of their employees as well as their invested fund, he added. There will also have an adverse impact on the country’s apparel sector, but it would be possible to overcome if there is no further attack, he observed. But the situation is improving since the government has taken a lot of initiatives in combating militancy in the country. Mansur also urged the government to continue its raid against terrorist hideouts so that there is a clear message to the world that Bangladesh is proactive in eradicating the root of militancy. Bangladesh has postponed the closing bid for a large-scale project funded by the Japan’s official development assistance in the wake of terrorist attack. While the tender submission process for the construction of Matarbari power plant project is closed for an indefinite period, citing security reasons.Abudus-Salam The country’s export-oriented sectors, especially the apparel industry, are once again having the problem of image crisis when it comes to foreigners security in Bangladesh. Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy came up with the remarks while he was talking to the Dhaka Tribune on the impact of export-oriented industries after the terrorist attack on the Gulshan Holey Artisan Cafe. “After the tragic incident of Rana Plaza, the clothing industry is struggling to turn around, but the terrorist attack on the restaurant has once again posed threat to the country’s business image that was rebuilt through safety improvement and ensuring worker’s rights,” said Salam, also former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Following the factory disaster, RMG export growth came down to a single digit. In the last fiscal year, Bangladesh posted a double-digit growth and was back to its fold, Salam said, expressing apprehension of slow growth in the months to come. According to the Export Promotion Bureau data, Bangladesh garment industry has generated $28.09 billion from exports in the fiscal year 2015-16 with a 10.21% growth from the previous year. “We have to compete with international competitors in exporting products.” “Bangladeshi entrepreneurs are very strong to overcome adverse situation, which is already proven, and I hope that they would be able to turn around,” he said, urging the government to take bold and timely decision to combat terrorism.Selima-Ahmad Service sector including hotels, beauty parlours and restaurant business, has been affected badly as people are fearful to go to these places after the recent terror attacks in the country. “Terror attack on Holey Artisan restaurant that killed 20 people has cast adverse impact on the transaction of the service sector as people are now really scared of going to the shops or to the restaurants,” said Salima Ahmed while talking to the Dhaka Tribune recently. The transactions as well as the turnout of consumers have declined as both the buyers and sellers are now afraid of movement over the prevailing sense of insecurity, she said. That is why, both the government and the private sector have to develop a mechanism, which would help remove the prevailing feelings of insecurity and restore confidence among the people on their free movement without fear, said Salima who is also Managing Director of Nalita and Company Ltd. As the installation of security measures is costly, the government should provide policy support, so business people can beef up security at their business organisations, she opined. The service business especially located in the residential area will bear the brunt of the attacks as the government has taken a decision to evict them over security ground. She also stated that it’s a good decision for ensuring security but the government needs to give a minimum timeframe to relocate the business entities located in the residential area. “It’s not the fault of the business people as they got the permission to do the business,” she claimed. Sudden eviction will cast shadow on employment and consequently the government will lose taxes and revenue from the business located in the area, she reminded.