Economy regains momentum, though not fully

Economic activities have started to regain momentum as industries are reopening after days of closure due to curfew. However, the businesses are yet to return to normalcy fully.

Currently, there has been an indefinite curfew, with relaxed restrictions for up to eight hours a day, across the country, alongside limited internet connection and reduced banking hours. The businesses are struggling to operate against the backdrop.

Following a five-day closure, the banks reopened a limited number of branches for four hours daily on Wednesday and Thursday and faced a huge pressure from clients. Import and export activities also resumed at the Chattogram port, with huge pressure for clearing import goods. 

The internet service was snapped completely on 18 July as the quota reform protests led to clashes on 15 July and turned deadly on the following days. It brought a standstill to import and export activities at the ports. 

In a further development, all industries were declared shut on 19 July when a nationwide curfew was announced for an indefinite period. 

The government later permitted factories in Chattogram to reopen on Tuesday, 23 July, following requests from the business leaders. Production activities resumed in the factories in different areas on Wednesday, including Dhaka, Narayanganj, Gazipur, Narsingdi, and Bhaluka, with most workers returning to work.

However, export-oriented garment, footwear, plastic products, steel, cement, and consumer goods sectors are experiencing difficulties due to lack of raw materials.

According to businesses, the transportation of imported raw materials from Chattogram port is yet to be normal, while a shortage in available trucks and covered vans has driven up the transportation costs. The companies are struggling to receive purchase orders online due to the disruption in internet connection, and are facing difficulties in financial transactions due to reduced banking activities. 

Pacific Jeans resumed production in nine of its garment factories in the Chattogram Export Processing Zone (CEPZ) on Wednesday. A top executive of the company reported a lag in their production targets due to the curfew and estimated it would take two months to normalise the production. 

Syed M Tanvir, managing director of Pacific Jeans, told Prothom Alo, “As the factories were closed, we could not ship several ordered products on time. We are lagging behind in production. We have started communicating with the buyers after the restoration of the internet. We might have to give a discount on some orders.”

MB Knit Fashion resumed production in its factories in Narayanganj two days ago but is still struggling to transport eight containers of imported cloth from the Chattogram port. 

Mohammad Hatem, managing director of the company and executive president of the BKMEA, said the authorities charged them Tk 150,000 as demurrage charges, though the port was shut due to general holidays, curfew, and internet disruption. 

He also said they are facing the charge despite an assurance from the prime minister’s principal secretary on a waiver. However, the port authorities advised them to file an application to avail the facility. 

The National Polymer Group encountered a disruption in the production of plastic goods in its factory at Tongi due to a lack of raw materials. It said some 90 containers of raw materials were now stuck at the Chattogram port. 

Riad Mahmud, managing director of National Polymer Group, reported difficulties in both production and sales, with limited internet hindering online purchase orders.

Anwar Group, a leading industrial group in the construction materials sector, has seen its business dropping to 20-25 per cent of normal levels. Its chairman, Manwar Hossain, also said they are having issues in receiving purchase orders due to the limited internet connection. 

Unilever Bangladesh, a multinational consumer products company,  reported a 50 per cent decrease in sales compared to the normal time. However, the production has been almost normal at their factories. 

Its chairman and managing director, Mohammad Zaved Akhtar, told Prothom Alo that they could not supply any products from their factories in the last few days, due to the internet shutdown. 

In this circumstance, experts underscored the need for the government to focus on maintaining law and order and ensuring a conducive business environment.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said a grave political crisis has resurfaced at a time when the economy has long been in a crisis. The future economic dynamics depend on restoration of political stability.