The lead-up to the general election, which is just two months away, has plunged Bangladesh into a state of political unrest characterised by violent clashes, shutdowns, and blockade. This escalation in political confrontation is casting a dark shadow on Bangladesh's economy.

Business leaders and economists are worried that once the political parties take to the streets and violence erupts, political disturbances will inflict significant losses on trade, commerce, and industrial activities. These losses, in turn, will exacerbate the strain already experienced by the nation's economy.

The BNP's Oct 28 rally ended violently, marking the return of a general strike after a 45-month hiatus, just as the election draws near. Adding to the turmoil, the country now grapples with a three-day blockade called by the BNP and supported by its allied parties.

On top of that, economists are raising alarm bells about the global energy market's stability due to Israel's military campaign in Gaza. This development has triggered concerns about potential instability in the global energy sector, adding another layer of apprehension to the already precarious situation.

Bangladesh has been trying to stabilise the economy since the decline of the pandemic, but internal and external factors proved to be obstacles in its path. With the dollar crisis sustaining, the high inflation rate has made the lives of citizens tougher.

The prices of daily commodities continue to rise with costs of potatoes and onions rising overnight following the shutdown on Sunday.

Mahbubul Alam, the president of Federation of Bangladesh Chambers of Commerce and Industries, has called for understanding and patience in such dire times.

“With what’s happening now, our economy will take a big hit. If the factories don’t operate properly, our exports and imports will plunge, the supply chain will take a hit and the people will have to pay the price. Our global image will then face a crisis,” he said.

He said politicians should take into consideration the welfare of the country. “Political programmes should be undertaken with the mass people in mind and by avoiding damage to businesses.”

Before the 10th general election, from 2013 to the voting in January 2014 and for several months from Jan 5, 2015, more than 100 people lost their lives in violent protests carried out by the BNP and the Jamaat-e-Islami.

In December 2018, discussion among political parties calmed the tension as all parties took part in the election. But the BNP and like-minded parties reverted to their claims of appointing a caretaker government for the next election and are holding programmes across the country now.

The violence has once again involved torching of public vehicles and bringing the public into harm’s way.

Such political unrest has previously had negative impacts on the economy, so fresh worries have emerged among businessmen and economists.

“We have to think about political tolerance. Otherwise people cannot be moved out of harm’s way and employment will take a hit,” Mahbubul Alam said.

“On behalf of the businessmen, we call for refraining from programmes that could harm the public, businesses and the country. Or else, we’ll fall behind.”

Syed Mahbubur Rahman, managing director of Mutual Trust Bank and former chairman of the Association of Bankers, Bangladesh, said such a political situation will greatly affect the banking sector, which is already struggling under the pressure of mounting loan defaults.

“Bangladesh turned around with success in recovering its economy after the COVID-19 pandemic. But as it was making a turnaround, things got messed up since July last year.”

“The value of the taka is dropping in the exchange rate competition. Interest rates had to be increased to prevent inflation from rising. This put pressure on the banking sector. People’s spending will decrease amid the political programmes like shutdowns and blockade. This will shrink the flow of cash and increase loan defaults. The rising loan default rate at a time of liquidity crisis will further weaken the banks.”

Responding to another question, he said: “I think we need an election without any conflict. Whichever government comes to power, we need one that is stable. And we expect that from all political parties.”

The present situation and its possible future has presented new worries for garment industry owners as well.

Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, said: “If there’s political unrest, shutdowns and violence, the businesses and industries will take a hit foremost. Our product transport and communications will be damaged. Whether it is a rise in the price of gas or electricity and shutdowns or blockade, businesses are harmed the most.”

He said political stability over the past years caused steady growth in the garment sector.

“This has strengthened the economy of the country. I will tell both the political parties [Awami League and BNP] to refrain from violent programmes. It will benefit the businesses and the countrymen, overall.”

“If this situation continues, fresh investments won’t be found and international buyers won’t be willing to come to the country.”

Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association, is still hoping for something good to come out of the present situation.

“I think it’s too soon to comment on this. We will speak about it after observing a few more days,” he said, pointing out that shutdowns and blockades will greatly affect export-based industries.

Zaidi Sattar, the chairman of Policy Research Institute, said: “Export and remittances are two biggest pillars of the country’s economy. Persisting political unrest in the country could cause great harm to our exports. Besides, it will definitely have some [negative] effects on remittances.”

“In the current situation, the politicians have to undertake such programmes to save the economy so that export, import, investment and remittances are not harmed.”

He mentioned that Bangladesh has the potential to make a big leap in economy in the coming years and a long-term plan was needed to make that a reality.

Sattar said: “If we want to make it a reality, our politicians must ensure an investment-friendly environment in the country. No investments will come in unstable circumstances.”