Unrest poses downside risks for economy

The ongoing unrest across the country poses downside risks of supply chain disruptions and further erosion in investment, economists have said, calling upon all to show restraint for putting an immediate end to violence.
They also stressed the need for keeping the economy, already hit hard by the global and domestic factors, on the right track.
"Unrest and violence cause various economic impacts. If transportation of goods is disrupted, it would cause supply chain disruptions to further fuel the prices of commodities and inflation," Dr Ahsan H Mansoor, executive director of the Policy Research Institute of Bangladesh (PRI) told the FE on Thursday.
Another impact of such unrest will be on perception as the businesses are gripped by a sense of uncertainty and this will compel many investors to be hesitant, he said, adding that this will pose serious down side risks for the economy.
Even the crony capitalists could shy away from investment if the unrest prolongs, he felt. "You see, when uncertainty emerges, such crony capitalists start laundering money abroad," he added.
According to Dr Mansoor, the events in the last couple of days also caused unease in the international arena and this gives a wrong signal to the international investors.
Many international quarters condemned the recent incidents which are harmful for branding of the country, he said, mentioning that a lot of business-related events were cancelled in the last couple of days.
"This is not good for investment", which is already affected due to various factors, he added.
Dr Mohammad Abdur Razzaque, Chairman of the Research and Policy Integration for Development (RAPID), said that though the central bank announced contractionary monetary policy to curb inflation, the aim of the policy would not be achieved if such unrest prolongs.
The supply chain disruption and demand-side management problems caused by the unrest will further push up the inflation, which is already around 9.75 per cent, he said.
It will further affect the macro-economic management which has already been under severe stress, he added.
According to Dr Razzaqe, such unrest would also erode international confidence on Bangladesh causing investment crisis.
And if the unrest continues, it can disrupt the transition in the run up to the LDC graduation, he opined, hoping that all stakeholders would rush for an immediate and peaceful end to the problem.
The country witnessed roadblocks and sporadic clashes amid the students' job-quota reform movement in the last couple of days, resulting in several deaths and injuries.

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