Economic Turmoil in Bangladesh – Curfew and Internet Blackout Paralyze Key Industries

Revolution is still in the air and gaining traction.

During a nationwide curfew and with the army patrolling the streets, a group of industry leaders convened at Bangladesh Prime Minister Sheikh Hasina’s office with urgent requests. These were not the student protesters calling for an end to job quotas, but the country’s top business figures.

More than 800 people arrested after deadly protests in Bangladesh over controversial system for allocating government jobs pic.twitter.com/o10iL3EOge

— TRT World Now (@TRTWorldNow) July 23, 2024

On Monday, business owners urged Hasina to lift the curfew and restore internet services, which had been down for several days due to a complete communications blackout. They requested military protection for the Dhaka-Chattogram highway, the crucial economic route linking the capital to the main port city, fearing potential vandalism.

Hasina explained that the government had to impose the curfew and deploy the army nationwide to protect lives and property. She assured that the curfew would be gradually eased.

However, for millions of Bangladeshi workers, business owners, and thousands of companies, this gradual easing might not be swift enough.

For nearly two weeks, student protesters and security forces have been in a tense standoff, with violent clashes resulting in at least 146 deaths. The protests initially targeted quotas, particularly the 30 percent of government jobs reserved for descendants of those who fought in Bangladesh’s 1971 war of independence. Even though the Bangladesh Supreme Court reduced these quotas on Sunday, the students have issued a list of eight demands, including justice for those killed in the violence. The curfew and internet blockade remain in place.

This situation has brought the economy to a standstill amid high inflation and rapidly depleting foreign reserves. Over the past five days, the economic losses in Bangladesh have exceeded $1.2 billion, as estimated by the business community.

The shutdown of nearly all industries has been exacerbated by vandalism and arson attacks, including damage to the country’s only metro rail system in Dhaka and the national television network’s premises. During a meeting with business leaders on Monday, Hasina blamed the internet blackout on opposition parties, accusing their activists of severing internet cables nationwide. She promised that internet connections would be restored soon.

The ongoing shutdown and communications blackout have severely impacted the ready-made garment sector, which accounts for over 80 percent of the country’s export earnings, exceeding $50 billion. Factories have remained closed since Saturday due to safety concerns, causing daily losses of nearly $150 million, according to SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association.

Police across Bangladesh have been given a shoot-on-sight order if civilians break curfew amid growing protests. @InesdLC reports on the violent and deadly clashes over a new job quota put in place by the government. https://t.co/6rlgy2VMyq pic.twitter.com/8atvmV8Czk

— World News Tonight (@ABCWorldNews) July 21, 2024

Kochi expressed grave concerns about losing the confidence of international buyers, a loss with long-term negative repercussions that cannot be measured merely in monetary terms.

Steelmakers have reported losses of nearly $110 million in the past four days. Suman Chowdhury, general secretary of the Bangladesh Steel Manufacturers Association, stated that the curfew prevented the release of raw materials from the port, disrupting production. To ensure worker safety, they advised employees to stay home.

The production and distribution of pharmaceuticals have also been disrupted, as medicine manufacturers could not obtain imported raw materials from Chattogram port and Dhaka airport. Jahangir Alam, chief financial officer of Beximco Pharma, noted that the internet shutdown prevented customs clearance for their products, leading to production delays.

The burgeoning ceramics industry fears losing export orders worth about $8 million per day, according to Irfan Uddin, secretary of the Bangladesh Ceramic Manufacturers and Exporters Association.

The internet blackout, imposed on Thursday night, has affected almost all businesses and industries, shutting down e-commerce and Facebook-based businesses, which are popular in Bangladesh. These sectors are losing an estimated $5 million in revenue daily.

Shahab Uddin, vice president of the e-Commerce Association of Bangladesh, highlighted that city residents, accustomed to ordering everything online, are struggling with their daily needs.

Call centers are incurring daily losses of at least $3 million, with more than two-thirds of the industry’s revenue coming from global companies. Wahid Sharif, president of the Bangladesh Association of Contact Centers and Outsourcing, warned that the reputational damage from the ongoing internet blackout is “irreparable.”

Commercial banks are also facing potential additional interest payments amounting to millions of dollars due to delays in scheduled payments.

🛜 Curfew, internet blackout, military patrols continue in Bangladesh

👉 Death toll from student protests over jobs quota climbs to 187, local media reports https://t.co/NOEeznqTjz pic.twitter.com/ym17Z9xJt1

— Anadolu English (@anadoluagency) July 23, 2024

Zunaid Ahmed Palak, Bangladesh’s state minister for information and communication technology, acknowledged the financial losses due to the blackout and assured the public that efforts to restore the connection were underway, with repairs expected to be completed soon.

Major Points:

• Business leaders in Bangladesh urged Prime Minister Sheikh Hasina to lift the nationwide curfew and restore internet services, disrupted during a crackdown on student protests.
• The curfew and internet blackout have severely impacted the economy, with losses exceeding $1.2 billion in just five days, affecting key sectors like ready-made garments, steel, pharmaceuticals, and e-commerce.
• Violent clashes between student protesters and security forces, resulting in at least 146 deaths, sparked the unrest, initially centered on government job quotas for descendants of 1971 war veterans.
• The ready-made garment sector, which constitutes over 80% of the country’s export earnings, is losing nearly $150 million daily due to factory closures.
• The internet blackout has caused significant disruptions, particularly to e-commerce and call centers, with daily losses of $5 million and $3 million respectively, alongside concerns about long-term reputational damage.

Susan Guglielmo – Reprinted with permission of Whatfinger News