political unrest and its impact on local business

Political Unrest and Impact on Local Business Page 1

1.0 INTRODUCTION

1.1 ORIGIN OF THE REPORT

This term paper has been prepared as a part of partial fulfillment of the course Business Law

(BUS361) of Business Administration Department of East West University. Our course

instructor Ms. Fahmida Hasan has assigned us a report on Political Unrest and Impact on Local

Business. She has authorized the task of writing this term paper on a group basis.

1.2 OBJECTIVE OF THE STUDY

There are some objectives behind every study and our work is not an exception. So we also have

some objectives. The relevant objectives are listed below.

Primary

The primary objective of the study is to analyze the political unrest and its impact on local

business of Bangladesh.

Secondary

The secondary objective of the study is to enlighten the readers about the consequences of

political unrests in Bangladesh. The readers can have a better idea and know more about

the deterioration that occurs in the local business sectors due to political instabilities in the

country.

1.3 SCOPE OF THE STUDY

For our report we have selected five sectors to determine the impact of political unrest on our

local business as well as the total impact it has on the overall economy. The sectors that have

been chosen are: transportation, small business, textile clothing business, revenue collection.

1.4 METHODOLOGY OF THE STUDY

Methodology of the study means the sources of collecting data to conduct the term paper. While

doing the term paper secondary type of data were used. For this term paper we have collected


data and information from various sources such as websites, journals, electronic newspapers etc.

Secondary data source comprised of websites, articles, online newspaper, reports etc.

1.5 LIMITATION OF THE STUDY

It is quite impossible to prepare a report without limitations. Similarly, the limitations that we

faced while creating the term paper are

Firstly, the report has been prepared solely based on secondary data for the study.

Lack of appropriate information was a big factor.

Lack of intellectual thought and analytical ability to make it the most perfect one was

also a drawback.

The current political instability of the country was a major reason for which primary data

could not be collected while preparing the report.

There was a time constraint, as the report had to be prepared within a short span of time

due to the current political situation.

2.0 POLITICAL UNREST:

According to Francesco Passarelli and Guido Tabellini; Political unrest is defined as the sum of

riots, general strikes and anti-government that is as lawful or unlawful collective action aimed

against the national political authority and not en-tailing any military violence. This definition

excludes episodes of individual violence, such as terrorism, political assassination and civil wars,

as well as protests not aimed against national political authority. Political unrest can be referred

to social unrest. It is a state of disconnect or trouble among a group of people with the problem

lying in political manner. Again we can say when the public protest against the government or

where an uprising might take place in the form of a coup by the military in a country is political

unrest.

Political unrest is not a new subject to Bangladesh. What has changed is their frequency and

destructiveness. More than 100 years have passed the worlds first hartals, strikes, blockade were

staged. It took place in South Africa and was lead by the person who conceived the idea,

Mohandas K. Gandhi, to protest the Black Act in 1906. The history of Bangladesh as a nation

state began in 1971. In the past time politics was used for the welfare of country. In those days


there was no quarrel among the politicians for money and power but as today most of the

politicians are interest is grown for money and power not for welfare of country. The

phenomenon of hartal is continuous with persistent regularity in present day at Bangladesh. On

the other hand a stable political situation is strong prerequisite for achieving the targeted

economic growth and creating employment opportunity. Hartal and blockades are used for

political approach. Hartal, strikes, blockade were not everyday matter in those days but at present

time Bangladeshs political system is feeble. For this purpose opposite party called hartals,

strikes and blockades frequently.

2.1 TYPES OF POLITICAL UNREST:

Political unrest can be divided into following types:

Hartal: Hartal is the extreme form of expression of protest in a democratic society.

Strike: A strike directed towards securing the satisfaction of demands of a political

nature. Like all issues connected with the objectives or motives of strike action, the

lawfulness of political strikes is the subject of considerable controversy.

[http://www.eurofound.europa.eu/emire/PORTUGAL/POLITICALSTRIKE-PT.htm]

Blockade: Blockade means the isolation of a nation, area, city, or harbor by hostile ships

or forces in order to prevent the entrance and exit of traffic and commerce.

[http://definitions.uslegal.com/b/blockade/]

3.0 POLITICAL UNREST IN BANGLADESH:

The most common form of political unrest is Hartal. Hartal is originally a Gujarati expression,

which signifies closing down of shops and warehouses with the object of realising a demand.

Essentially a mercantile practice, it acquired political significance in the 1920s and 1930s when

Mahatma Gandhi institutionalised it by organising a series of anti-British general strikes by the

name 'hartal'. After that, hartal became a way to protest throughout the Indian sub-continent.

During the period between the 1920s and 1950s, there were many hartals called against the

British rule. From the 1960s, political activists were increasingly organising hartal, which by

then appeared to them to be a stronger political weapon. There had been hartal for days together


on the eve of the Bangladesh War of Liberation. Indeed, politics of hartal had played decisive

role in mobilizing people on behalf of the Liberation War. In independent Bangladesh, hartal has

become a very frequently used political tool for agitations since the 1980s. In the face of

recurring hartal, called mostly on the issue of legality, the regime of Hussain Mohammad Ershad

(1982-1991) collapsed. After the restoration of democracy in 1991, both Awami League and the

Bangladesh Nationalist Party (BNP)-led opposition have used the weapon of hartal to put

pressure on the government. The crisis escalated in October 2006 and a state of emergency was

declared, elections were postponed and a military backed caretaker government was appointed.

Dr Fakhruddin Ahmed, a former head of the central bank, took over as head of the interim

government in January 2007. The ongoing political unrest in Bangladesh in 2013 has created a

lot of problem for countries economic growth. There are lots of hartals and blockades called by

the opposition parties as the government has not fulfilled the demand of opposition. BNP wants

to do election under Caretaker govt. but govt. is unwilling to resign and choose a caretaker govt.

Not only that but also the recent decisions of Supreme courts against the Jammat leaders and

BNP leaders have created a great problem which turns out in face of hartals and blockades. Thus,

hartal, blockades which once emerged to ventilate grievances to the rulers or government or to

the concerned authority regarding the democratic rights and the legitimate claims, has turned to

an absolute political weapon used sometimes to gain even a petty political interest.

From the history and culture of hartal, we see the actual character of hartal is that during hartal

citizens are prevented from attending to their avocations and traders are prevented from keeping

their shops open or from carrying out their business activities. Also, workers are prevented from

attending to their duties in the factories and other manufacturing establishments leading to loss in

production and subsequent loss in the national economy. Hartal, in recent years, has become

violent as well, resulting in wanton acts of vandalism like destruction of government and private

properties, vehicles which include private cars, engine-run three wheelers as well as rickshaws,

and sometimes injuries and killings. Hence, to the citizenry, hartal is another name for 'anxiety',

'insecurity', 'uncertainty', 'threat' 'intimidation', etc. Accordingly, because of the way it is

exercised, hartal, a political right, is clashing with some other fundamental rights such as right to

liberty, movement, work, conduct business, etc. These individual human rights and hartal as a

political right cannot coexist peacefully. Either hartal or other individual rights have to do away

with the other or others.


[http://www.thedailystar.net/forum/2013/January/law.htm]

4.0 ACTS RELATED TO POLITICAL UNREST

If a person does something illegal in roads and railways he or she may be punished under the

following acts of Bangladesh.

4.1 THE EXPLOSIVES ACT 1884

The Explosives Act IV of 1884, under section 13, with criteria of power to arrest without warrant

persons committing dangerous offences, states that whoever is found committing any act for

which he is punishable under this Act or the rules under this Act, and which tends to cause

explosion or fire in or about any place where an explosive is manufactured or stored, or any

railway or port, or any carriage, ship or boat, may be apprehended without warrant by a Police-

officer, or by the occupier of, or the agent or servant of, or other person authorized by the

occupier of, that place, or by any agent or servant of, or other person authorized by, the railway

administration or conservator of the port, and be removed from the place where he is arrested

and conveyed as soon as conveniently may be before a Magistrate.

4.2 THE EXPLOSIVE SUBSTANCES ACT 1908

The Explosives Substances Act VI of 1908, under section 3, with criteria of Punishment for

causing explosion likely to endanger life, person or property, states that any person who

unlawfully or maliciously causes by any explosive substance an explosion of a nature likely to

endanger life or to cause serious injury to person or property shall, whether any injury to person

or property has been actually caused or not, be punishable with death, or with imprisonment for

life, to which fine may be added, or with imprisonment for a term which may extend to ten years

and shall not be less than five years, to which fine may be added.

The same act, under section 3A, with criteria of punishment for causing explosion with intent to

commit offence, states that any person who causes by any explosion substance an explosion with

intent to commit or, to enable any other person to commit, an offence punishable under any law

for the time being in force shall, whether any offence has been actually committed or not, be

punishable with imprisonment for a term which may extend to seven years and shall not be less

than three years, to which fine may be added.


This act also has, under section 4, with criteria punishment for attempt to cause explosive or for

making or keeping explosive with intent to endanger life or property, that any person who

unlawfully or maliciously

(a) does any act with intent to cause by an explosive substance, or conspires to cause by an

explosive substance, an explosion in Bangladesh of a nature likely to endanger life or to cause

serious injury to person or property or

(b) makes or has in his possession or under his control any explosive substance with intent by

means thereof to endanger life, or cause serious injury to person or property in Bangladesh, or to

enable any other person by means thereof to endanger life or cause serious injury to person or

property in Bangladesh; shall, whether any explosion does or does not take place and whether

any injury to person or property has been actually caused or not, be punished with imprisonment

for a term which may extend to twenty years and shall not be less than three years], to which fine

may be added.

The explosives substances Act VI of 1908, under section 5, with criteria of punishment for

exploding, making or possessing explosives under suspicious circumstances, also states that any

person who explodes or makes or knowingly has in his possession or under his control any

explosive substances, under such circumstances as to give rise to a reasonable suspicion that he

has exploded it for committing an offence or is not making it or does not have it in his possession

or under his control for a lawful object, shall, unless he can show that he exploded it or made it

or had it in his possession or under his control for a lawful object, be punishable with

imprisonment for a term which may extend to fourteen years and shall not be less than two years

to which fine may be added.

4.3 THE POLICE ACT, 1861

The Police Act V of 1861, under section 31, with criteria of police to keep order in public roads,

etc, states that it shall be the duty of the police to keep order on the public roads, and in the

public streets, thoroughfares, ghats and landing-places, and at all other places of public resort,

and to prevent obstructions on the occasions of assemblies and processions on the public roads

and in the public streets, or in the neighbourhood of places of worship, during the time of public


worship, and in any case when any road, street, thoroughfare, ghat or landing-place may be

thronged or may be liable to be obstructed.

This act also in it, under section 34, with criteria of punishment for certain offences on roads, etc

power of police officers, that any person who, on any road or in any open place or street or

thoroughfare within the limits of any town to which this section shall be specially extended by

the Government, commits any of the following offences, to the obstruction, inconvenience,

annoyance, risk, danger or damage of the residents or passengers shall, on conviction before a

Magistrate, be liable to a fine not exceeding fifty taka, or to imprisonment with or without hard

labour not exceeding eight days; and it shall be lawful for any police-officer to take into custody,

without a warrant, any person who within his view commits any of such offences, namely:-

4.4 THE RAILWAYS ACT, 1890

The Railways Act IX 1890 from chapter IX, under section 128, with criteria of endangering

safety of persons travelling by the railway by willful act or omission, states that if a person, by

any unlawful act or by any willful omission or neglect, endangers or causes to be endangered the

safety of any person travelling or being upon any railway, or obstructs or causes to be obstructed

or attempts to obstruct any rolling-stock upon any railway, he shall be punished with

imprisonment for a term which may extend to two years.

This act also says, under section 129, with criteria of endangering safety or persons travelling by

the railway by rash or negligent act or omission, that if a person rashly or negligently does any

act, or omits to do what he is legally bound to do, and the act or omission is likely to endanger

the safety of any person travelling or being upon the railway, he shall be punished with

imprisonment for a term which may extend to one year, or with fine, or with both.

Lastly, this section also includes under section 131, with criteria of arrest for offences against

certain sections, that

(1) If a person commits any offence mentioned in section 100,101,119,120,121,126,127,128 or

129 or in section 130, sub-section (1), he may be arrested without warrant or other written


authority by any railway servant or police-officer or by any other person whom such servant or

officer may call to his aid.

(2) A person so arrested shall, with the least possible delay, be taken before a Magistrate having

authority to try him or commit him for trial.

).

5.0 IMPACT ON LOCAL BUSINESS:

5.1 Impact on Transportation Sector:

The transport sector of Bangladesh consists of a variety of modes. As the country is essentially a

flat plain all three modes of surface transport, i.e. road, railway and water, are widely used in

carrying both passengers and cargo. The airline network is also extensive and effective. But due

to political unrest like hartals transportation sector is hampering a lot. Specially the

transportation on roads and railways. There is a great loss in transport sector due to recent hartal

and political instability since November. Hartal activist burnt down about 400 vehicles from

November, 2012 to 19th

March, 2013.They also set aflame railway 92 times. They burned down

the vehicle of Fire Brigade also. According to the calculation of fire service and civil defense,

356 vehicles have been set afire.

Quantity of Vehicles Burnt:

Month Number of Transport Burnt

November 2012 34

December 2012 83

January 2013 44

February 2013 71

March 2013 124

Total 356

Table-1

Source: Fire service and civil defense


Figure-1: Impact on transportation sector

Loss of Government Transportation Service Provider:

Source Period Loss (Taka) Loss per Day (tk)

BRTC December 2012 to 3rd

March

2013

33900000 364516

Bangladesh Railway November 2012 to March

2013

93900000 776033

Table-2

Figure-2: Loss per Day of Govt. Transportation Provider

According to fire service and civil defense, 356 bus-truck have been set alight from November to

18th March and the loss in money amount is about Tk 14,33,00000.According to another reliable

source of bus-truck owners association and BRTA, from 28th February to 5th March, a loss

money amount is about 18 crore in transport sector. (Prothom Alo,27th

March,2013)

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

BRTC Bangladesh Railway

Loss per Day (tk)

Loss per Day (tk)

0

50

100

150

Impact on Transportation Sector

Number of Transport Burnt


The transport sector suffered a total loss of Tk 700 crore as owners faced a loss of Tk 250 crore

while the workers were deprived of Tk 450 crore wages, following the hartal and blockade like

political programmes this year, said Osman Ali Khan, General Secretary of Bangladesh Sarak

Paribahan Sramik Federation. (http://www.daily-sun.com/details_Transport-sector-incurs-Tk-

700cr-loss-for-hartal,-siege-programmes_690_1_3_1_2.html#sthash.bVOXZ4Mb.dpuf)

5.2 Impact on Small Business:

A small business is a business that is privately owned and operated, with a small number of

employees and relatively low volume of scales. Small businessmen are normally privately owned

corporations, partnerships or sole proprietorships. The legal definition of small varies by country

or by industry. Small businesses are common in many countries, depending on the economic

system in operation. Typical examples include: convenience store, other small shops (such as a

bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses,

photographers, small scale manufacturing etc. According to small business Act 1934, A

business which is independently owned and operated and not dominant in its field is a small

business. There is no doubt that hartal is damaging the small business. Small businesses are

stagnating. The country's shopkeepers and small business holders have expressed their worries

over the future course of the country's economy as a sequel to adverse politics amid frequent

calls for observance of hartal. They expressed their serious concern over the fallouts from the

ongoing political developments that have tended to go violent across the country. The activities

in the shopping malls turned standstill while only a few shops in some localities were opened

during the time of hartal amid apprehension of being attacked. Many small traders sit idle as

ongoing countrywide political troubles have caused disruption to the supply chain of essential

commodities. The shop owners want to keep open the shop during a hartal. But some problems

arise here. Shop owners face absence of salesmen. The question of safety and security is another

problem. Many small traders feel that they have to give up business and go back to the village

for land cultivation. According to UNDP research, strike has led to 3-4% GDP losses during the

1990s. There are about 611 strikes from 1995 to 2002. These created immense burden on the

business firms as the shop often get vandalized during strike violence.(UNDP Report) SA

Quader Keron, secretary general of Bangladesh Dokan Malik Samity, an organization of 2.6


million shop owners across the country told, We are the worst sufferers of strikes as all shops

remain closed duting the hartal hours. (22th April, 2012; The Financial Express)

Loss in Small business Taka (crore)

Per Day loss 600

Yearly Loss 24000

Table-3

Figure-3: Loss in Small Business

Small business includes wholesale and retail market. This hartal not only incurs losses but also a

significant change of price level of goods. Price of vegetable, egg, and meat soared recently due

to political strike. Frequent shutdown has snapped the supply chain. All items are becoming

costlier. Precedent of karwan bazaar cooperative agency Omar Faruk said transport owners

refused to carry goods aimed the country wide panic triggered by political violence, causing a

huge supply shortage of essentials in the market.

a) Wholesale market: Traders convey that the supply of vegetable is decrease a pushing

their price up by 5 to 10 taka per kg over 24 hours between 2/4/2013 to 3/4/2013. He said

onion and garlics price had increased the most, with local onion being wholesaled at tk

32 a kg and imported onion at Tk 35 on the day while the wholesale price of local garlic

had risen to Tk 60 per kg and that of imported garlic to Tk 90. (New Age,March 4,2013

By Staff Correspondent).

0

5000

10000

15000

20000

25000

30000

Per Day loss Yearly Loss


b) Retail Market:

Item Price per kilo on 02-04-13 Price per kilo on 02-04-13

Local Onion 32-35 40

Imported onion 35-38 45

Local garlic 70 90

Imported garlic 130 140

Green chili 100 110

Source: (New Age, March 4, 2013 By Staff Correspondent)

It is estimated that sales of consumer products have declined by 20% (The financial Express,

December 19, 2012 By Syed Jamaluddin). There is a reciprocal relationship between price and

purchasing power. When price are going from low price to high price that is when there is

inflation in economy ,the value of taka is shrinking , that is our purchasing power is going from

being able to buy a lot to being able to buy a little. So, we can say that inflation causing by hartal

has a negative effect on purchasing power of the people.

5.3 Impact on Textile Clothing Business:

Imported feed stocks (fiber, yarn, fabric, dyestuffs, and accessories, etc.) and conversion of those

feed stocks into finished clothing items and exporting them makes our clothing business, and it is

indeed the backbone of our economy. Current political violence and strikes are hindering all

sorts of free movement of goods and people hence both import and export are affected that is

paralyzing our clothing business. Political violence is nothing new to Bangladesh, results of

blame game of political parties. Political strikes or hartal is a democratic right as ours is a

democratic country. A political strike is directed against the government in its capacity, as a

government seems to be failure in public issues.

Percentage of Loss on Hartal:

Criteria Percentage

Production Loss 30%-50%

Absence of Workers 20%-30%

Raising Cost of Production 30%-40%

Lower Production Capacity 15%-20%


Political unrest widens the gap substantially. During strike, in house production is possible to

keep under controllable difficulties, but the shipment activity which is an outdoor job, remains at

halt. Though the clothing production is exempted from 'hartal' purview but the

transports/vehicles used to transport raw materials and finished goods are not exempted from the

strike purview. Thus, a number of small and medium level clothing entrepreneurs are forced out

from the sector due to late shipment which faces threat of discount, cancellation of orders, air

shipment (approx. 11 times costlier than sea shipment), and deferred payment from buyers.

Ongoing strikes, send negative image of the country abroad. The buyers are forced to change the

outsource destination from Bangladesh to India, Cambodia, Sri Lanka and Vietnam as happened

during political instability of Pakistan, the buyers had to switch to Bangladesh. The export

orders worth over USD 500 million have already passed to Indian suppliers and it may further

move out if the situation continues to deteriorate.

Loss in Last 1 Year:

Loss in Textile Industry Taka

Per Day loss 20000000

Yearly Loss 5000000000

Figure-4: Loss in Last 1 year in textile industry

Consecutive 'hartals' multiplies the loss of one day loss. After the strike, every department

involves in clothing business faces 'bottle neck' problems in the production, transportation,

loading and unloading of containers and etc. Industry experts termed this political strike as

'suicidal move' for the industry.

0

100

200

300

400

500

600

Per Day loss Yearly Loss


(Source: Bangladesh Textile Today: A Comprehensive Publication for Textile and Apparel

Industry; Website: www.textiletoday.com.bd)

5.4 Impact on Local Traders

A business report on Natunbarta desk reports that the recent political unrests in Bangladesh have

led to a bad year for border trade with Myanmar, according to local merchants. Aung Myint

Thein, chairman of Maungtaw Merchants Association, states that border trade is decreasing. In

the fiscal year 2012-13, only 65 percent of trade provisions materialized because of the restive

situation in Bangladesh. The 7th Bilateral Trade Promotion Meeting between Bangladesh and

Maungtaw merchants, that had been intended to be held in the third week of May, was also

postponed to a later date because of the political situation in Bangladesh. Merchants of both sides

have been meeting every month to discuss trade promotion issues. Maungtaw merchants are

currently relying on Bangladesh market to sell their fishery products and bamboo. But the

current political situation is acting as a hindrance in this matter.

[Business and Finance, Wed, 05 Jun, 2013 11:21:51 AM, Bangladesh unrest hampers cross-

border trade, Natunbarta Desk, Natunbarta.com]

5.5 Impact on GDP:

Hartals have great impact on total GDP of our country. Every day a huge amount of loss occurs

due to this hartal. A statistics of loss according to different sector are given below:

Loss in GDP:

Sector Loss per Day

(Crore Taka)

Loss per year

(Crore Taka)

Loss in GDP (%)

RMG 360 14400 1.56

Govt. Revenue 250 10000 1.02

Small business 600 24000 2.45

Education 50 2000 0.20

Financial institution 50 2000 0.20

Insurance Company 15 600 0.06


Transportation 60 2400 0.24

Tourism 50 2000 0.20

Production 100 4000 0.41

Others 65 2600 0.26

Total 1600 64000 6.5

Source: Survey conducted by DCCI (Dhaka Chamber of Commerce and Industry)

Figure-5: Loss per year of Different Sectors

Figure-6: Loss in GDP by sectors

010000200003000040000500006000070000

Loss per year (Crore Taka)

01234567

Loss in GDP (%)

Loss in GDP (%)


The economy counts Tk 1,600 crore in losses for each daylong countrywide hartal while the

country faces 40 hartals a year on average raising the figure of the losses to Tk 64,000 crore,

reports UNB. This was found in a survey conducted by the Dhaka Chamber of Commerce and

Industry (DCCI). The survey showed that the GDP is affected by 6.5 percent due to countrywide

shutdowns and the GDP growth could be doubled if there is no hartal. The readymade garment

(RMG) sector counts Tk 360 crore losses each day for hartal while the wholesale market,

shopping malls, showrooms, small shops together count a loss of Tk 600 due to each hartal, it

said. The DCCI chief alleged that political demonstrations are taking place even in commercial

hubs like Motijheel, halting the business activities and hurting the economy. The countrys GDP

in 2011-12 fiscal was Tk 914,780 crore and the estimated GDP for 2012-13 fiscal is Tk 978,814

crore.

6.0 Latest News Related to Political Unrest & Impact on Local Business:

6.1 Blockade disrupts goods delivery from Chittagong port

The delivery of imported goods from the Chittagong port and the 16 adjoining wharfs has

severely been disrupted by the latest stint of countrywide blockade that started on Saturday.

Over the last two days, some 46,000 tonnes of imported goods remained stranded at the wharfs,

as the 72-hour blockade barred vehicles from the highways, according to officials at the Water

Transport Cell. Only 350 TEUs (twenty feet equivalent units) of import containers could be

delivered from the port in 24 hours ending yesterday morning, while around 20,000 TEUs are

still lying on the port yards. In contrast, 2,301 TEUs of import containers were delivered in the

previous 24 hours, prior to the blockade. Other than the setback of not getting timely delivery of

goods, the importers will have to bear additional storage and detention charges, imposed by

Chittagong Port Authority (CPA) and shipping lines respectively for overstaying. CPA allows

containers, normally twenty feet long, to stay at its yards for four days free of charge, after which

it charges $6 per day. Similarly, shipping firms allow free occupancy on their containers for five

days, beyond which they charge upwards of $5 for each day. Since the latest blockade comes

only a little over 24 hours after the previous blockade which lasted for 71 hours, many containers

have easily outstayed the free period offered by CPA and shipping firms, according to Shihab

Chowdhury Biplob, proprietor of a clearing and forwarding firm. He had to pay fines of over Tk


1 lakh to the port authority and shipping lines, for a delay in clearing goods over which his firm

had no control. Importers are now urging the port authority to excuse them from the storage

charges, with Mahbubul Alam, president of Chittagong Chamber of Commerce and Industry,

even sending in a letter to the shipping minister in this regard. He said the storage charges, owing

to the frequent shutdowns and blockade programmes, have doubled or tripled the importers

logistics costs.

[Dwaipayan Barua, Chittgong, Published: Monday, December 2, 2013]

6.2 Political chaos 'causes Tk 500m loss to plastic industry a day'

The countrys plastic industry, like other sectors, is bearing the brunt of the countrys ongoing

political turmoil coupled with the frequent shutdowns. The industry insiders say that the sector

has to incur losses to the tune of Tk 500 million a day because of strike and they also stated that

their overall production, export and local sales have been adversely affected due to frequent

hartals. Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA)

President Jashimuddin stated that repeated shutdowns have broken the total supply chain of the

sector and their daily turnover is almost zero on strike days. He thinks that if the situation

continues, the sector will lose its competitiveness in local and international markets. He also

mentioned that foreign buyers have already begun to withdraw their orders from Bangladesh as

they are in fear that they will not get their delivery on time. Such buyers might switch from

Bangladesh to other countries such as China, Vietnam and India if the situation continues. The

Vice President of BPGMEA, Quazi Anwarul Haque, expressed worries saying that the

manufacturers will become loan defaulters within a short period as they are unable to do business

properly. He added that the sector is forced to cut production as they are unable to carry raw

materials from court regularly because of frequent shutdowns. The production volume has been

reduced to 50 tonnes from 90 tonnes. In the long run, such political unrests will destroy the

business goodwill.

[The Financial Express, Trade and Market

Posted : 13 Nov, 2013 00:00:00

Political chaos 'causes Tk 500m loss to plastic industry a day'

Arafat Ara]


6.3 Saving Bangladesh tourism from political unrest

One of the announcements of a 48-hour strike by Jamaat-e-Islamis has paralysed Bangladeshs

tourism industry during the Eid season. The longest sea beach in the world, Coxs Bazar,

deserted. Coxs Bazar that usually gets thousands of enthusiastic tourists from a range of

countries during Eid has now failed to attract visitors this year because of the strike. Hoteliers in

Coxs Bazar and Kuakata are seen in on the verge of tears while they are talking to the media.

According to an estimate, Coxs Bazar gets nearly one-and-a-half lakh tourists during Eid

holidays. This year, the picture was completely opposite as tourists refused to come fearing they

might not be able to return because of the Jamaat-enforced strike. Tourism business owners said

nearly 400 hotels, motels and guest houses were booked in advance during this years Eid. But

later, after the declaration of 48-hour hartal, tourists and visitors who made advance bookings

cancelled them, leaving the business owners frustrated and anxious. The number of foreign local

tourists visiting Nepal, India, Thailand, Singapore and Malaysia has surged sharply. This season

used to contribute to the country economy about 30 billion taka which would now go to those

countries. Bangladeshis who wanted to enjoy the Eid vacation at places like Coxs Bazar,

Rangamati, Bandarban, the Sunderbans, Kuakata, Sylhet or other local hubs, have now gone to

the neighbouring countries.

[Ekram Kabir, DHAKA Monday 12 August 2013, http://www.daily-

sun.com/index.php?view=details&archiev=yes&arch_date=12-08-2013&type=Saving-

Bangladesh-tourism-from-political-

unrest&pub_no=582&cat_id=4&menu_id=5&news_type_id=1&index=0]


6.4 Strike, political unrest take toll on RMG sector

A file photo shows employees working at a garment factory in Dhaka. Frequent general strikes

and political unrest in recent times have taken their toll on the RMG sector. Frequent general

strikes and political unrest in recent times have taken their toll on the readymade garments

sector, raising cost of production, industry people said. And due to the rise in the production cost,

countrys RMG sector is losing its competitiveness, they said. They expressed their concern that

a number of small and medium level entrepreneurs would be forced out from the sector as they

have been facing threat of discount, cancellation of orders and deferred payment from buyers.

RMG exporters said they were incurring huge losses as they had been forced to increase working

hours and make shipments of their products by air to keep deadlines due to frequent general

strikes. They claimed that during the recent general strikes enforced by the opposition political

parties the production fell by 30-50 per cent and the cost of production went up by 30-40 per

cent. Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said that the

productivity in the RMG sector has been decreasing gradually in recent months due to political

violence and general strike. He also said that usually the production in the RMG sector is 20-25

per cent less than the capacity the sector possesses. But, the ongoing political unrest has widened

the gap to 30-35 per cent. Murshedy, the managing director of Envoy Group, said that in general

strike, 20-30 per cent of workers remain absent at the factories and their absence hampers the

production. He also said that a few number of entrepreneurs have been extending working hours

to maintain the production, but the process will not bring any long-term positive result.

Murshedy said that the ongoing situation would be harmful for the image of the country abroad

and export orders would drop. He said that RMG exporters had been forced to make their

shipments by air to retain the foreign buyers which fuelled the production cost and the


entrepreneurs are incurring huge losses as they have to pay 10 times more for shipments by air

than shipments by ships. Md Siddiqur Rahman, vice-president of the Bangladesh Garments

Manufacturers and Exporters Association, said that though the garments sector remains out of

the purview of general strike, the transportation of garment products do not. So, it is very

difficult to keep deadline for shipment. Siddiqur, the chairman of Sterling Group, said that the

production in the sector had reduced by 30-50 per cent and the cost had increased by 30-40 per

cent due to the recent political turmoil and frequent general strikes. Fazlur Rahman, managing

director of Gemini Garments Ltd, said that continued political violence and frequent general

strikes had been hampering all of the activities in his factory including import of raw materials

and shipment of products. He also said that they get orders from buyers for their competitive

price and efficient shipment. But the recent political unrest has lowered the price competiveness

and efficiency in shipment. Gemini Garments has already lost a buyer from Italy and most of the

buyers from EU and US are cutting their orders from Bangladesh because they do not want to

see any interruption in their supply chain, he said. Shahidullah Azim, managing director of

Classic Fashion Concept Ltd, said that the production in his factory had reduced by 20-25 per

cent due to the general strikes and they missed several deadlines for shipment.

(Moinul Haque, http://newagebd.com/detail.php?date=2013-03-8&nid=43273#.Up8zcCeh3Fw)

6.5 Political unrest a major challenge for businesses

The growing political unrest has added to the challenge facing the entrepreneurs who are already

grappling with increased fuel and electricity prices, higher exchange rates against the dollar and

steep interest rates on bank loans. These factors combined are pushing the cost of business even

higher. The country's business leaders made the observations at the 12th Bangladesh Business

Awards, organised by The Daily Star and DHL Express, at Sonargaon Hotel on December 3,

2013. They said that political instability and hartals do not only take a toll on their day-to-day

operations but also dampen investment sentiments. Amjad Hossain Chowdhury, president of

Metropolitan Chamber of Commerce and Industry in Dhaka, said that the business climate has

not improved and there are more challenges. He also observed that recurring hartals have

become an additional burden and said that they cannot transport raw materials or finished goods

on a hartal day as it creates a lot of stress. They are trying to find out ways to keep the business

running.


[The Daily Star: Saturday, May 19, 2012]

6.6 Onion price spirals again

Onion prices marked a fresh spiral in the wake of serious supply disruption brought about by the

latest spell of countrywide blockades enforced by the opposition alliance. Prices rose as high as

24 percent, as the blockade started. Some retailers were seen selling locally-grown onions for as

much as Tk 100 each kilogram, up from Tk 80 a kilogram, the price three days back. Imported

onions rose to Tk 60-70 per kilogram from Tk 50-55, three days ago. Overall, onion is selling at

Tk 60-90 a kg, up from Tk 50-80 per kg, according to Trading Corporation of Bangladesh. The

fresh spike in prices of the essential cooking ingredient comes at a time when it was starting to

decline following increased arrival of fresh harvests. Nur Mohammad, a retailer, said the prices

would have come down to below Tk 50 per kilogram, from Tk 90-110 per kilogram a month ago,

were it not for the sequence of blockades. The wholesale market has almost become dry as

supply from ports and hubs has fallen drastically due to the blockade, said Narayan Chandra

Saha of Nobin Traders at Syambazar wholesale market. He also said that they are not getting a

truck even after agreeing to pay double the normal fare, all of the trucks are stranded at ports. He

also added that should no truck arrive by the previous night they would have to sit idle the next

morning. However, prices of most other essential commodities including vegetables and rice

remained unchanged as shopper turnout in kitchen markets was sparse amid fears of violence

during the blockade. At midday, only two customers were seen at the shop floor of the Agora

outlet in Wari. On a normal working day, at least 10-12 customers can be seen at that time, said

the outlets manager, adding that daily sales have dropped 30 percent for the blockade. The

prices of seasonal vegetables usually decline during this time because of full swing harvest, but

supply disruption has kept prices at a constant level, he said, while citing the case of cauliflower,

a winter vegetable. It should be selling at Tk 20 a piece but is going at Tk 40. Mohammad Jewel,

a vegetable retailer at Wari, said prices of almost all vegetables except for cauliflower and beans

remained unchanged. The two vegetables experienced a rise in price due to supply shortage.

Mohammad Rajannya, a rice retailer at Palasi market, tipped the prices of the staple to decline in

the coming days, as the aman harvesting is in full swing. Unless the growing regions are cut off

from the rest of the country by political demonstrations, rice prices would drop for increased

supply, he added.


(Published: Monday, December 2, 2013, Star Business Report)

6.7 Stocks continue to decline over political instability

Stocks declined for the fourth day on December 1, 2013, with the key index dropping below the

4,200 points level as investors remained averse to fresh investments amid ongoing political

instability. DSEX, the benchmark general index of the Dhaka Stock Exchange, closed the day at

4,147.21 points, after falling 83.51 points or 1.97 percent. The decline was prolonged by a

strengthened perception of bleak investment outlook, IDLC Investments said in its daily market

analysis. Turnover experienced a drought as the buy side subsided, the investment banker said.

Turnover declined 4.86 percent to Tk 349 crore, compared to the previous day. LankaBangla

Securities mentioned that investors are continuing their wait-and-see policy and waiting for a

clear direction. Gloomy political outlook has been a major setback for the market in recent days,

said the stockbroker. He also thinks that probably all the market participants are expecting

slowdown in corporate profitability because of nationwide blockade and discounting their

valuations accordingly. The losers took a strong lead over the gainers as out of 282 issues traded,

207 declined, 57 advanced and 18 remained unchanged on the premier bourse. All the major

sectors closed in the red: power 2.22 percent, banks 1.89 percent and non-bank financial

institutions 1.83 percent, pharma 1.46 percent and telecoms 1.29 percent. However, life

insurance gained 2.08 percent and tannery 1.45 percent. On the other hand, textile and

engineering suffered the highest amount of sell pressure, losing 2.90 percent and 2.83 percent

respectively. A total of 0.94 lakh trades were executed with 8.74 crore shares and mutual fund

units changing hands on the Dhaka bourse. Delta Life Insurance generated the highest turnover

with 12.06 lakh shares worth Tk 33 crore changing hands. RN Spinning Mills and Meghna

Petroleum were the next popular stocks of the day. Rahima Food was the highest gainer of the

day, posting a rise of 9.95 percent, while Meghna Petroleum was the worst loser, slumping by

20.65 percent following its price adjustment after record date. The Chittagong Stock Exchange

also ended lower for the fourth session with its selective categories index, CSCX, losing 173.96

points, to close at 8,108.68 points. Losers beat gainers 177 to 27, with nine issues remaining

unchanged on the port city bourse that traded 1.25 crore shares and mutual fund units with Tk 45

crore in turnover.


(Star Business Report

Published: Monday, December 2, 2013)

6.8 Political unrest may lead Bangladesh to negative credit rating

On April 25, 2013, a Global rating agency, Moody, apprehended that the prolonged political

unrest might lead Bangladesh to earn negative rating, deterring investment and disrupting

economic growth. Finance advisor to the last caretaker government, Mirza Azizul Islam, agrees

with Moodys assessment. In his opinion, the state-owned banks and some private banks which

are the important elements for the financial sector, have recently plugged by credit fraudulence

and scam and this led to a rise in classified loan and deficit in provisioning of the banks over the

last several months. On the other hand, the real sector is also passing critical moment while

imports and investments are continuously declining due to series of strikes.

(Kayes Sohel, Moody's sign on 7 World Trade Center tower in New York Photo-

theglobalelite.org )

7.0 RECOMMENDATIONS:

Government should take proper steps as a result no such political unrest occurs.

Police forces must be efficient enough to control the political unrest situation.

The prime minister of Bangladesh enjoys absolute power which is guarded by the

constitution. Reducing of prime ministers power and diversifying few to opposition

could reduce political tensions.

Parliament is dominated by government where oppositions are so marginalized. As a

result they prefer streets rather than parliament to press their demand. Constitution could

be amended to enlarge the scope of speaking of opposition party.

Social interaction between leaders of different political parties should be augmented.

Business community is a power pressure group and a major stakeholder in political

stability of the country. In several times they donate big amount of money to the political

parties. They can render a major service to the economy if they stick to the motto

business first, politics letter.


8.0 CONCLUSION:

Political unrest is a common phenomenon in Bangladesh. It has been occurring from the very

beginning of Bangladesh independence. It is happening due to opposition doesnt have any other

platforms to voice their demands and hence use hartals and blockades. Politicians only care

about personal gains and do not heed the impact on the economy because they are immune to the

consequences. The government is hostile, leaving few alternatives; options such as rallies,

protests, hunger-strikes are useless. Hartals and blockades are a strategic tool for opposition

parties utilized in the years prior to elections. Hartals and blockades legitimize the use of

violence, which in turn can undermine the government, thereby raising the chances of electoral

success for opposition parties. This political unrest has great impact on our local business and

overall GDP. Every hartal causes Tk. 200 crore of loss which is a big amount for a country like

Bangladesh. It is affecting the every business sector of Bangladesh. It is high that the

government and opposition should step forward and keep liaison among them so that they can

free us from political unrest and help to develop our economy.

9.0 REFERENCES

References

1. Ara, A, (2013), Political chaos 'causes Tk 500m loss to plastic industry a day, The Financial Express, Trade and Market, Posted : 13 Nov, 2013.

2. Bangladesh Textile Today. (2013) A Comprehensive Publication for Textile and

Apparel Industry. [Online] Available from: www.textiletoday.com.bd. [Accessed on:

01-12-13]

3. Barua, D.(2013), Chittagong, Published: Monday, December 2, 2013

4. Haque, M. (2013) http://newagebd.com/detail.php?date=2013-03-

8&nid=43273#.Up8zcCeh3Fw

5. Jamaluddin, S. (2012) Sales of consumer products have declined by 20%. The financial

Express. December 19.

6. Kabir, E. (2013), DHAKA Monday 12 August 2013,

http://www.dailysun.com/index.php?view=details&archiev=yes&arch_date=12-

082013&type=Saving-Bangladesh-tourism-from-

politicalunrest&pub_no=582&cat_id=4&menu_id=5&news_type_id=1&index=0]


7. Europa (n.d) Portugal Political Strike[Online]Available from:

http://www.eurofound.europa.eu/emire/PORTUGAL/POLITICALSTRIKE-

PT.htm[accessed on 1.12.13]

8. ProthomAlo. (2013) A loss money amount is about 18 crore in transport sector due to hartal. 27th March.

9. Sohel, K. (2013) Moody's sign on 7 World Trade Center tower in New York Photo-

theglobalelite.org )

10. Star Business Report, Published: Monday, December 2, 2013.

11. The Daily Star, Published: May 19, 2012.

12. The Daily Star. (2013) Law, Culture and Politics of Hartal [Online]. Available from: http://www.thedailystar.net/forum/2013/January/law.htm. [Accessed on: 01-12-13]

13. The Dailysun. (2013) Transport Sector incurs tk. 700cr loss for hartal [Online] Available From: http://www.daily-sun.com/details_Transport-sector-incurs-Tk-700cr-

loss-for-hartal,-siege-programmes_690_1_3_1_2.html#sthash.bVOXZ4Mb.dpuf

[Accessed: 20-09-2013]

14. The Financial Express (2012) We are the worst sufferers of strikes as all shops remain

closed during the hartal hours. 22th April.

Journals

1. Ajoy, D. &Sangbadpatrey,H. (2001) Dhaka: Press Institute of Bangladesh, 2001. 2. Available from: http://bdlaws.minlaw.gov.bd/index.php?page=html&language=english.

3. Bangladesh Sanglap Governance, Political crisis, Mediated Deliberation and Citizen Engagement: A case study of Bangladesh and NirbachoniSanglap. [Online] [n.d]. Available

from:http://downloads.bbc.co.uk/worldservice/pdf/wstrust/Bangladesh_Sanglap_Governa

nce.pdf[Accessed on: 01-12-13]

4. Francesco, P. and Guido, T. (2013) Emotions and Political Unrest. [Online] June 2013. Available from: www.hec.ca/iea/seminaires/131024_Guido_Tabellini.pdf .

5. Government of Peoples Republic of Bangladesh, Legislative and Parliamentary Affairs

Division, Laws of Bangladesh. [Online]

6. Government of Peoples Republic of Bangladesh, The Explosives Act 1884. Chapter: IV.

Section: 13. Legislative and Parliamentary Affairs Division

7. Government of Peoples Republic of Bangladesh, The Explosives Substances Act 1908.

Chapter: VI. Section: 3, 3A, 4, 5. Legislative and Parliamentary Affairs Division


8. Government of Peoples Republic of Bangladesh, The Police Act 1861. Chapter: V.

Section: 31, 34. Legislative and Parliamentary Affairs Division

9. Government of Peoples Republic of Bangladesh, The Railway Act 1890. Chapter: IX.

Section: 129,131. Legislative and Parliamentary Affairs Division

10. Imtiaz, A. (2009), Preserving Bangladesh's democratic future, South Asian Journal.

11. Mallika, R. &, Faria, H.B. (2013), Hartal: A Violent Challenge To The Socio- Economic Development Of Bangladesh, International Journal Of Scientific & Technology Research

Volume 2, Issue 8, August 2013.