Country's economic lifeline under threat
Thursday, 30 September 2010
Enayet Rasul Bhuiyan
One does not have to look into many examples to underline the slipping economic governance in Bangladesh. Only the example of the fast deteriorating conditions at Chittagong port that handles the bulk of the country's export and import cargoes should suffice to indicate how callous and uncaring the authorities are towards safeguarding the vial economic interests of the country.
It hardly needs explanation afresh why the Chittagong port occupies a position of pivotal importance for the Bangladesh economy. It underwrites practically the economic security of the country in all respects. For keeping the country's export-oriented industries going, it has to unload imported raw materials of these industries in good time. It has to facilitate export of the produced goods of the same industries for the latter to meet the delivery schedule of the foreign buyers.
The port also helps to bring to the country a very large amount of intermediate products and capital equipment the reaching of which to the local producers in time is crucial for the viable maintenance of the various production processes. In many cases, these equipment and intermediate products are for industries that have been set up with monies borrowed from financial institutions. The timely reaching of these goods to the producers, therefore, is very important for the producers to keep limited their liabilities to lending institutions. The lenders are also hazarded if they do not get repayment of their loans in time as the producers remain handicapped in starting and maintaining their production schedules from delayed delivery of equipment and spares from snags in the operation of the port.
Then, there are the aspects of consumer prices and availability of consumer goods linked to the port. The prices of consumer goods, including indispensables in every day use such as imported food grains, cooking oil, etc., are inexorably linked to their fast unloading at the port and equally as fast freighting to users inside the country. When this process is unduly delayed, it creates the ground for sharp escalations of the prices of these goods at wholesale and retail levels on grounds of scarcity.
Thus, the operation of the port with maximum reasonable efficiency --reflected in the speedy loading and unloading operations of export and import cargoes respectively-- is the sin qua non for the overall health and normalcy of the entire economy as the port's efficiency affects too many areas of economic activities in the country.
When this is the reality and when the port's efficiency was lifted up remarkably under the immediate past government, it is but a very regrettable development--today-- that the authorities are failing to largely retain the improvements which were achieved not to speak of further improvements in the running of the port. According to media reports, even in February-March of the present year, a ship could berth at the port and unload its cargoes and leave within 50 or 60 hours at most. But this turn around time nowadays on average has climbed to six to seven days. In some cases, it is taking as long as 12 to 14 days. The Chittagong port is suffering once again from serious congestion and the shippers are slapping demurrage and surcharge at the rate of minimum $ 150 per every container. This is adding substantially to the cots of import operations. Importers are finding a ground to increase the prices of their goods meant for local consumers citing their higher import prices.
The export-oriented industries specially the garments industries are facing the worst hazards ; their competitiveness depends on meeting the delivery schedules contracted with buyers. But the congestion at the port and inability to load cargoes on ships in time, is forcing them to go for expensive air freighting to at least prevent their orders from getting cancelled that could lead to complete financial disaster. Thus, according to media reports the garments industries had to spend an otherwise unnecessary hefty amount of money as air freighting costs during the last four months that resulted in big erosion of their profits or losses.
Under the circumstances, a meeting was held on September 15 at the Prime Minister's Secretariat where representatives of the main port users were present. It was presided over by the Prime Minister's Principal Secretary and admitting the seriousness of the issue the meeting decided to set up a special advisory committee to advise on the port situation within a week. But nearly two weeks have passed away since then and no committee has been formed till this date. In this backdrop, the various port users on their own held a meeting last Sunday and issued a fresh call to the government pleading for the giving of most urgent attention to the port's situation.
One will only hope that the authorities will now respond to this SOS and take initiatives even at this late hour to improve conditions at Chittagong port for not doing so could invite very great harms to the economy.
One does not have to look into many examples to underline the slipping economic governance in Bangladesh. Only the example of the fast deteriorating conditions at Chittagong port that handles the bulk of the country's export and import cargoes should suffice to indicate how callous and uncaring the authorities are towards safeguarding the vial economic interests of the country.
It hardly needs explanation afresh why the Chittagong port occupies a position of pivotal importance for the Bangladesh economy. It underwrites practically the economic security of the country in all respects. For keeping the country's export-oriented industries going, it has to unload imported raw materials of these industries in good time. It has to facilitate export of the produced goods of the same industries for the latter to meet the delivery schedule of the foreign buyers.
The port also helps to bring to the country a very large amount of intermediate products and capital equipment the reaching of which to the local producers in time is crucial for the viable maintenance of the various production processes. In many cases, these equipment and intermediate products are for industries that have been set up with monies borrowed from financial institutions. The timely reaching of these goods to the producers, therefore, is very important for the producers to keep limited their liabilities to lending institutions. The lenders are also hazarded if they do not get repayment of their loans in time as the producers remain handicapped in starting and maintaining their production schedules from delayed delivery of equipment and spares from snags in the operation of the port.
Then, there are the aspects of consumer prices and availability of consumer goods linked to the port. The prices of consumer goods, including indispensables in every day use such as imported food grains, cooking oil, etc., are inexorably linked to their fast unloading at the port and equally as fast freighting to users inside the country. When this process is unduly delayed, it creates the ground for sharp escalations of the prices of these goods at wholesale and retail levels on grounds of scarcity.
Thus, the operation of the port with maximum reasonable efficiency --reflected in the speedy loading and unloading operations of export and import cargoes respectively-- is the sin qua non for the overall health and normalcy of the entire economy as the port's efficiency affects too many areas of economic activities in the country.
When this is the reality and when the port's efficiency was lifted up remarkably under the immediate past government, it is but a very regrettable development--today-- that the authorities are failing to largely retain the improvements which were achieved not to speak of further improvements in the running of the port. According to media reports, even in February-March of the present year, a ship could berth at the port and unload its cargoes and leave within 50 or 60 hours at most. But this turn around time nowadays on average has climbed to six to seven days. In some cases, it is taking as long as 12 to 14 days. The Chittagong port is suffering once again from serious congestion and the shippers are slapping demurrage and surcharge at the rate of minimum $ 150 per every container. This is adding substantially to the cots of import operations. Importers are finding a ground to increase the prices of their goods meant for local consumers citing their higher import prices.
The export-oriented industries specially the garments industries are facing the worst hazards ; their competitiveness depends on meeting the delivery schedules contracted with buyers. But the congestion at the port and inability to load cargoes on ships in time, is forcing them to go for expensive air freighting to at least prevent their orders from getting cancelled that could lead to complete financial disaster. Thus, according to media reports the garments industries had to spend an otherwise unnecessary hefty amount of money as air freighting costs during the last four months that resulted in big erosion of their profits or losses.
Under the circumstances, a meeting was held on September 15 at the Prime Minister's Secretariat where representatives of the main port users were present. It was presided over by the Prime Minister's Principal Secretary and admitting the seriousness of the issue the meeting decided to set up a special advisory committee to advise on the port situation within a week. But nearly two weeks have passed away since then and no committee has been formed till this date. In this backdrop, the various port users on their own held a meeting last Sunday and issued a fresh call to the government pleading for the giving of most urgent attention to the port's situation.
One will only hope that the authorities will now respond to this SOS and take initiatives even at this late hour to improve conditions at Chittagong port for not doing so could invite very great harms to the economy.