Some major RMG company owners have spoken off the record that their respective establishments are refraining from taking new orders. Primarily because certain foreign buyers have come out and stated that should Bangladesh come under economic sanctions, buyers of orders that are in transit or have already reached their destinations are not abliged to make payment for the ordered goods. What a preposterous idea! The problem for Bangladesh is that RMG constitutes 85 per cent of the export basket and so if the RMG sector takes a hit, so does the Bangladesh economy.
Certain policy decisions will have to be made during the current tenure of government. Whether or not Bangladesh will remain at the mercy of foreign interests will depend on policymakers' sincerity in diversifying the economy. Is it not time that the country started patronising other industries with significant export potential such as, synthetic footwear and pharmaceuticals? Or would policymakers be more comfortable sitting in the crosshairs of external powers which could, literally, by virtue of an executive order in a far-off land, obliterate a third of our exports? No one rntertain such negative thoughts in the beginning of the New Year, but such is life.
It is easy to talk about nationalism, patriotism and "self-reliance", whereas it takes one click of the computer mouse on the internet to find out that the country is wholly-import dependent on many economic fronts. Geopolitics can be nastier adversely impacting lives of the masses who have been bled dry by the kitchen markets. It is not just food inflation that worries economists, but the terrible cost of energy that is making production of goods most uneconomical. Scarcity of primary energy sources is threatening to unravel the term "economic miracle" that has been synonymous with Bangladesh for over a decade. Yet, the greedy and shadowy elements who hold much sway over decision-making continue to harp on the old tune that it is better to import primary energy rather than extracting the bountiful coal and exploring natural gas lying underneath our land surface. The voices of those rational beings who cry hoarse about "low-cost energy" is seldom heard but their words reverberate like a prophecy after a decade of import-driven energy policy that is pushing the nation towards financial bankruptcy.
The country has had to resort to very expensive foreign loans to cover these fuel imports and those loans will have to be paid back (with interest as high as SOFR (secured overnight financing rate) + 2.0 per cent interest). Where the money is coming from? To take a lesson from history, Pakistan had run itself aground years ago with its over-enthusiasm in quick rental, independent power plants. The Kingdom of Saudi Arabia (a long-term strategic partner of Pakistan) had bailed out Pakistan with a hefty $5.0 billion dollar package. One must wonder, whether the same package will be offered to Bangladesh or whether Bangladesh will have to take another loan to extricate itself from multi-billion-dollar energy debt that is causing all sorts of trouble for the economy. Obviously, such a large bailout will come with strings attached but then that is the price one must pay for shortsightedness. At least, it will be a step in the right direction for a change - as long as national energy planning shifts away from import-dependence to domestic exploration. These are hardly new statements, but till now had been falling on deaf years. Time will tell if those who have a say in how the country is run also share the thought of such a change and do what needs to be done to set things right - while there is still time.
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