The ongoing violence-induced stagnation across Bangladesh has resulted in a fresh setback for the country’s foreign income.
Remittances have been especially affected, while the export sector is experiencing either a state of inactivity or losses, with freelancers sitting idly for the last six days.
According to industry insiders and experts, Bangladesh’s economy, which has been dealing with various domestic and external pressures for some time, has counted losses or seen stuck payments to the tune of approximately $1.15 billion from foreign sources.
They said these losses would impact the country’s foreign exchange reserves, already under pressure for a long period.
In the last three months, Bangladesh’s earnings from remittances showed some good signs, with the country gaining $6.83 billion from expatriates, Bangladesh Bank data says.
As per the data, approximately $450-$480 million in remittances was stuck due to the suspension of banking and internet services, insiders said.
Moreover, freelancers’ income has come to a halt due to the internet blackout.
According to experts, Bangladesh usually earns around $1.5 billion annually from freelancing, which means the country lost almost $25-$30 million in the last six days.
Bangladesh Bank data for July-April of FY24 says the country earned $33.67 billion from merchandise export during the time, meaning it lost about $600-$650 million in export earnings or they were stuck.
Meanwhile, readymade garment exporters said losses in the sector was around $950-$960 million – some $160 million per day.
However, all of it was coming to an end as the government has relaxed its curfew from 10am to 5pm from Wednesday, and offices will be able to carry out their activities from 11am to 3pm.
Moreover, broadband internet services were supposed to be partially restored at 10pm on Tuesday, as stated by State Minister for ICT Zunaid Ahmed Palak.
Concerns
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), told Dhaka Tribune that exporters would face problems as they had not received any fresh instructions.
“Moreover, they will experience further issues with old orders as they could not provide any updates to buyers about the circumstances. If buyers opt for alternative sourcing due to the non-communication, there are concerns about cancellations of those orders,” he added.
Regarding remittances, the veteran economist said the ongoing situation was worse than Covid-19 as all transactions were halted, including through hundi and unofficial channels.
This would obviously impact the income from expatriates, which had just seen a positive trend for the last few months, he added.
Ahsan noted that earnings from freelancing and the ICT sector was totally shut due to the suspension of internet services, calling the damage irreparable.
He added that small businesses might need government aid in the form of incentives to make up for the losses they had incurred.
Businesses also said they would request incentives for the losses suffered during the recent violence.
Talking to Dhaka Tribune, Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the BKMEA would talk with the home ministry about reopening factories.
“Our sector is losing $160 million per day, meaning the sector has lost $960 million in the last six days. We cannot communicate with our buyers due to the internet blackout and we do not know how we will convince them [to stay with us],” he added, mentioning that even the country managers of different brands could not communicate with the buyers.
Earlier on Tuesday, BGMEA President SM Mannan Kochi told the media that the sector was losing Tk1,600 crore per day directly.
