Prolonged unrest will damage economy

The civil unrest that has gripped the country is now into its second week. The loss of life is a national tragedy. And although the government has called for negotiations with the anti-quota movement leadership, there has been no definitive response that could bring this unrest to an amicable close. In the midst of all the violence that has gripped not only the capital city, but several districts and involved thousands of students from not just universities but other educational institutions as well. What is now abundantly clear is the fact that it poses serious risks to supply chain. Should this situation continue, it will have adverse impact on investment and price of essentials are bound to shoot up further.
People are already at wits end with constantly high rates of inflation and if the transportation of foodstuffs is curtailed further by the deteriorating law and order situation, it will add to the woes of people. Looking beyond the wholesale and kitchen markets for food, this situation bodes ill for all sorts of manufactured products. Increasingly, links between Dhaka and the various ports (land, sea and air) are being disrupted, The economy is greatly dependent on the readymade apparels sector (RMG) and lead times for the outbound shipments is very tight under normal circumstances. If RMG factories are not able to ship their goods in time, they will lose their orders.
The impact of such events needs no further explanation. Similarly, if imported raw materials cannot reach designated factories, production will be hampered.
At a time when the government is gearing to open several export processing zones (EPZs), the prospect of foreign companies investing in this country where so much unrest and violence is increasingly becoming a daily event will give them pause for thought. It is not just foreign investment that will shy away, domestic conglomerates and business groups will be loath to make fresh investments in the production sector. That will hamper both growth and future employment. Uncertainty breeds doubt and that is the last thing the country needs right now.
Geopolitically, the events in Bangladesh over the last so many days have brought international condemnation. The government must do all it can to calm things down and bring the students to the negotiation table. This is no longer ----- incident involving the capital city, but a nationwide crisis. Parents are in dread for their children and the spiralling violence on the streets has to stop sooner than later. If this situation is allowed to persist, the violence and loss of life will multiply which is not helping anyone, least of all the economy.
Today inflation stands at around 9.75 per cent but any further macro-economic shock could send inflation to cross the double-digit mark. Regardless of the optimism being sounded by Bangladesh Bank (the central bank) about monetary tightening to bring the economy back on track, the current situation is not helping at all. Indeed, the Asian Development Bank (ADB) has revised Bangladesh's economic growth forecast downward for the current fiscal year. According to ADB, consumers may indeed be greeted with a double-digit inflation figure in the coming months.
Given the current circumstances, these figures, in all probability, may have to be revised again. It cannot be stressed enough that any such prolonged unrest will make previous forecasts meaningless and put the economy and people in greater distress. Peace and stability are the two drivers for economic growth and a congenial and peaceful environment is what the masses desire. It is time to lay down the batons and settle the matter over the negotiation table.