Cost of hartal and oborodh: The long and short of it

It was thought that the BNP-led 20-party Alliance would take a leaf out of the recent chapter in political agitation in the country. The experience of the outcome of the most intensified opposition movement during the months preceding the last general election should have been recalled and evaluated. This would have driven home the futility of programmers like hartal and oborodh in achieving political objectives using pressure tactics.
The call for indefinite oborodh by the BNP following its failure to hold rallies and stage demonstrations shows that no lesson has been learned from the past experience. Sometimes failure can be the pillar of success but this is not likely to be the case with regard to the strategy adopted by the BNP to confront a government that is bent upon taking a hard line and conceding nothing to the opponent.
On the other hand, by ignoring the consequences of hartal and oborodh BNP is showing not only stubbornness but also being most inconsiderate of their impact on the economy and people's welfare. It has failed to take into proper account both the short and long time costs of hartal and oborodh giving the impression that national interest has not been kept in view. As their apologist one may ask that being driven to the wall what else could they do? The answer to this can be found in more peaceful manner of making protest and staging demonstrations that has little collateral damage.
Loss of innocent lives and wanton destruction of properties make oborodh and hartal unacceptable on moral ground. From economic point of view these programmes are insidious, having short- and long-term costs. It is to these costs that attention will be given in the following paragraphs. But before that a brief comment on the political objectives of hartal and oborodh is called for.
It has been proved for the umpteenth time that hartal and oborodh do not hurt the government in the sense of weakening it. The offices remain open, work is conducted as 'business as usual', official meetings are held, visits by VIP's take place as scheduled and speeches are made from various forums. Government remains nonchalant and unperturbed. During hartal and oborodh the most visible change is fewer vehicles on the road. This inflicts hardship on the low-paid government employees and the ordinary members of public working for the private sector. Having to pay higher fair for transport, if they are lucky to get them, their pocket immediately feels the pinch. Longer and more frequent is the hartal and oborodh greater is this economic loss incurred by the middle class and the poor. But this is only the tip of the iceberg so far their economic hardship is concerned in the short run as the immediate aftermath of these programmes.
Oborodh causes prices of all essentials to rise because transportation is disrupted. This happens almost immediately after oborodh is enforced. The poor with irregular wages and the middle class with fixed income bear the brunt of the price hike. The economy of hartal and oborodh also works against the poor from the demand side. Transport workers remain idle and day labourers find no employment. Along with their family they are driven to starvation.
Vegetables growers, milk producers and poultry suppliers sustain daily loss as their produce cannot be sent to market due to absence of transport. According to newspaper reports, many farmers have stopped harvesting their produce as prices have fallen at farm level to such an extent that they do not even cover the production cost. The loss of income of these producers affect them immediately and they struggle to make both ends meet.
The transport sector incurs losses of Tk. 2.00 billion (200 crore) for each day's suspended operation. At this rate, the total loss of the blockade January 14 stands at Tk. 20 billion (2000 crore). This is excluding the cost of about 200 vehicles fully or partially damaged in arson attacks.
With disrupted supply of raw materials industries are forced to cut down production. Exporters find it difficult to keep the schedule of delivery running the risk of losing their buyers. The garment industry is the worst hit in this regard. According to newspaper reports, the sector lost about Tk. 4.50 billion (450 crore) in the 12 days after oborodh started as daily production fell by 20 per cent and many shipments had to be cancelled. On a normal day, daily production in the industry is valued at Tk.4.30 billion (430 crore). Not only the Dhaka-Chittagong highway but also the other roads that are used for carrying raw materials and other related resources by forward and backward linkage industries of the RMG sector are affected by oborodh. Due to the ongoing political turmoil the garment industry is facing a serious image crisis. It is reported that buyers are not coming to negotiate their new orders. The garment sector, which just started bouncing back in recent months, had received a severe jolt because of the oborodh programme. If the oborodh continues the garment owners would be hard put to pay wages to workers, repay bank loan, making payment for back-to-back letters of credit, premium insurance and high transportation cost.
The above impacts constitute some of the important and most obvious short-run cost of hartal and oborodh. Prolonged oborodh will spell even greater economic disaster in the long run. The disjunction of the production and supply chain will play havoc with the production process. Many small and medium-scale producers will cease production altogether. Agriculture, fisheries and livestock will face drastic reduction in production. As a result, the prices of food items and essentials will soar high causing run-away inflation. There will be a structural change in the economy to the detriment of the welfare of the people. The poor will become poorer and the middle class will struggle to remain above poverty line. Exports will suffer a severe setback and markets will be lost to other countries.
With normal activities disrupted the government will incur heavy revenue losses. But it can weather this crisis by borrowing from banks even though it may further fuel inflation. So revenue loss is not going to force the government to yield to opposition pressure.
With continuous dislocation almost in all sectors the economy will be derailed from track in the long run. It will be unable to maintain the present rate of growth of GDP (gross domestic product). The above 6.0 per cent GDP growth that has been the norm so far will be difficult to maintain in the absence of adequate investment. Underlying the slower growth will be diminishing confidence of investors to invest in the midst of political turmoil. Slower growth of the economy will mean greater number of poor people.  
Renewed political turmoil and violence may negatively affect foreign investors' confidence, raising risk to growth over the long term, according to forecast made recently by Fitch Ratings. If violence were to persists and directly disrupt economic activity, especially by inflicting damage to the key readymade garment sector, this would be considered as credit negative, the Fitch Ratings reported. Fitch Rating had highlighted substantial political risk as a key source of uncertainty for Bangladesh's economic outlook when it assigned the country a 'BB' rating in August 2014. The Rating agency observed that RMG is a principle element in Bangladesh's development strategy and make up 81 per cent of exports equivalent to 15 per cent of GDP. The concentration of exports in this sector means that a structural slow down here or any broader trend to transfer production assets to other countries would threaten Bangladesh's long-term growth potential. It will thus risk a dramatic deterioration of the external balance including the current account flipping from a surplus to a large deficit.
It cannot be that the short-term costs of hartal and oborodh are not obvious to the BNP and its allies. They also cannot be in the dark about the long-term impact on the economy. Any one can see that the end result of both the cost, short and long-term, is to make the country poorer. As a major party in the politics of the country cherishing national interest BNP cannot be indifferent to the damaging consequences of its actions. If it appears to be behaving so, people will lose trust and confidence in its leadership. It is high time the party took a new turn in opposition politics, a turn that promotes the welfare of the people. The government on its part should create conditions conducive to positive and constructive politics.                
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