After the tumultuous protests that ended with the exit of the prime minister, it is time to pick up the pieces. The economic fallout has been devastating to the economy and it is too early to put a figure on how much business and commerce has suffered. Needless to say, the tally will run into billions of Taka. The loss in human life cannot be measured in dollars or BDT and we all mourn the senseless deaths that have taken away so many young lives.
The violence on the streets of Dhaka and nationwide had sent shockwaves throughout the world as every event was covered thoroughly by the international press. It comes as no surprise that the country's image has been shattered. Factory shutdowns, arson, ports clogged with undelivered cargoes (both outbound and inbound), the daily loss of life - have all been seen around the world and inevitably, there was foreign fund outflow from the country. It comes as no surprise that the country's chief bourse suffered immensely as investors' confidence hit a record low.
Thankfully, the nightmare has ended and a new beginning is about to commence. Goods and cargo need to move back to the pre-protest days to restore foreign investors' faith. It had been steadily eroding away and that was due to systemic problems of market manipulation carried out by select players. This syndicate needs to be broken up. On top of all this, the regular devaluation of the national currency against the greenback hasn't helped at all. When coupled with news that official figures on export had been juggled intentionally by state agencies, is it any wonder that foreign capital in the bourses began to disappear?
Any major political upset that affects the stability of the country is closely monitored by foreign investors. As things started getting out of hand on the streets of Dhaka and the violence spilled over to district towns - the writing was on the wall. The government didn't see it unfortunately, but everyone else did. Bangladesh was being perceived as being a nation that no longer provided the stable environment it had once boasted and the outflow of funds had begun. No global investor is going to put money in an uncertain environment. As pointed out recently in a report in this newspaper: "The country's net foreign portfolio investment stood at $89 million in the negative for the nine months through March this year, compared to $45 million in the negative for the same period a year ago, according to the Bangladesh Bank. The negative investment means more money flew out than what came in for investments in listed securities."
On top of all this the national currency, the BDT had lost its value by around 36 per cent against the dollar since the commencement of the Russo-Ukraine war in February 2022. The foreign exchange reserve decreased by nearly 50 per cent over this period. Coming back to the latest protest movement, investors witnessed shut down of the internet for days by the immediate past policymakers. Bangladesh was got isolated from the rest of the world and it had a terrible impact on investors' confidence because of the arbitrary manner in which it was done. Everything came to a standstill. No online banking transactions, no movement in the ports, it is as though the nation had gone back to the Stone Age.
Now that the country is moving past all the shocks to the system, economic activity must be restored at a lightning speed. Billions of dollars in foreign loans have been taken for developing infrastructure and these loans will have to be paid back regardless of who holds the reins of the government. The bourses need to be brought back to life and foreign investors must feel safe to invest again. It is not just the bourses but the special economic zones that have been built at great costs to the national exchequer - they need to become home to foreign firms. It is time to move on and the road to recovery must be a national priority.
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