Chittagong Chamber of Commerce and Industry (CCCI) President Omar Hazzaz warns that the recent unrest has inflicted severe damage to Bangladesh's economy, reversing the gains made post-Covid-19 pandemic.
With business operations crippled and investor confidence shaken by the S&P downgrade, Hazzaz, also the proprietor of Reliance International, shared his thoughts about the business prospects and economic outlook after the unrest with The Business Post’s Md Samiur Rahman Sazzad, calling for urgent steps to restore stability and rebuild investors’ trust.
How much are the ongoing crises affecting business?
This unrest, arson attacks, and vandalism significantly hampered Bangladesh's economic growth. After the Covid-19 pandemic, we were striving to revive our economy, but incidents like these disrupt our progress repeatedly.
Our economy, valued at $500 billion, generates a gross domestic output of $1.3 billion daily. Due to this unrest, business activities came to a grinding halt. From July 16 to July 19, the peak of the unrest, we incurred losses of Tk 70,000 to Tk 80,000, including infrastructural damages.
We faced a five-day internet blackout, severely impacting internet-based businesses. Our buyers grew concerned as we could not communicate with them, but we hope to regain their trust as soon as possible.
Operations at Chattogram port, including container handling, import, and export, were halted. On behalf of the CCCI, we urge the state minister for shipping and related authorities to waive the port demurrages for containers stuck at the port. While we seek this waiver for all types of businesses, the ready-made garment sector will benefit the most.
Manufacturing production dropped to zero as factories shut down during the unrest. However, now that internet access is restored, most factories are operational, and highways are secured, we hope to regain stability as soon as possible. Returning to our previous growth rate will take time, but we hope to do so as soon as possible.
S&P has downgraded Bangladesh's long-term sovereign rating. What will be its impact?
It must be reinstated immediately.
The S&P downgrade is a severe blow to our business climate and will deter foreign investment. As an upwardly mobile economy, this negative rating affects every Bangladeshi. This index is crucial for investor confidence, akin to a financial bible.
Urgent steps must be taken to restore Bangladesh’s rating. I urge authorities concerned to take the necessary steps as most of the major foreign investors follow this index while investing.
Bangladesh's global image is deteriorating due to political instability. Will it affect the FDI inflow?
We are a part of the global supply chain. So this disruption definitely hampered Bangladesh’s global image as S&P downgraded us.
Buyers also grew concerned as they were unable to communicate with us during the internet shutdown. They became alarmed and they could get discouraged regarding future investments in Bangladesh due to the country’s unstable condition.
They will search for safer alternatives, and our competitors are just waiting to catch the market.
This is very concerning because attracting other buyers in the future will be challenging if we cannot retain our current buyers.
So, emphasis should be given on how to resolve the situation soon. We must assure them [the buyers] that the situation is controlled and stable. If we cannot do that, our growth will be stunted and hurt everyone.
If the instability continues, how will the traders conduct business?
Manufacturing and production resumed on the second day of the curfew, and internet restoration has mitigated further negative impacts. While businesses are now operating as usual, rebuilding the damaged trust will take time.
Clearly, students were not involved in the arson and violence; other parties are responsible. The government has made progress in controlling the situation, but crucial questions remain.
We must remain vigilant to prevent a recurrence. I expect the situation will not be as it was just a week ago.
