Economy
Labor Unrest Inflicts Tk5,000 Crore Loss on Industry, MCCI Reports
The Metropolitan Chamber of Commerce and Industry (MCCI) has estimated that nearly three weeks of nationwide labour unrest in multiple industries have resulted in a staggering loss of around Tk5,000 crore.
Farooq Ahmed, the Secretary General of MCCI, revealed this information during the release of the Purchasing Managers’ Index (PMI) at the MCCI office in Gulshan today. The event was attended by MCCI Director Tareque Md Ali and Hasnat Alam, Senior Manager of Policy Exchange.
The unrest, which has disrupted sectors such as garment manufacturing, has been marked by incidents of vandalism and arson. Despite most garment factories in Ashulia reopening, protests continued, forcing the closure of at least 30 factories.
Farooq explained that the labour unrest has intensified since the new interim government assumed power in August, spreading to industrial hubs like Narayanganj, Savar, and Ashulia. He noted that more than 100 factories have been either vandalized or set ablaze, resulting in the shutdown of nearly 200 factories. The financial loss estimate of Tk5,000 crore is based on discussions with factory owners, and Farooq suggested the actual figure could be even higher.
Additionally, he warned that non-workers are also participating in the protests, which could further escalate tensions. He called on the home affairs adviser and other authorities to step in to safeguard factories.
Farooq urged the government to act swiftly to stabilize the situation and called on factory owners to address the legitimate demands of workers to avoid further turmoil, which could hinder economic recovery.
Economic Indicators Show Slight Improvement but Remain Contractionary
While the interim government under Dr. Yunus, which took office on 8 August, initially brought brief stability, unrest and natural disasters soon dampened hopes of recovery.
MCCI reported a slight uptick in the PMI index in August, compared to July, but labour unrest and flooding in key districts prevented a stronger recovery. The economy remains in contraction, particularly in the industrial sector. According to MCCI, the August PMI showed a 6.6% increase, reaching 43.5 points. However, the previous month had seen a sharp decline, with the index dropping from 63.9 points in June to 36.9 in July.
Despite the slight recovery in August, the MCCI warned that if labour protests and other issues aren’t resolved soon, economic recovery could be delayed. The PMI readings for agriculture, manufacturing, construction, and services showed mixed trends, with some sectors improving while others struggled.
In a significant development today, September 17, the World Bank announced its intention to mobilize approximately $2 billion in new financing for Bangladesh within the current fiscal year. This substantial financial support aims to bolster critical reforms, enhance flood response, improve air quality, and strengthen the health sector.
During a meeting with Chief Adviser Dr. Muhammad Yunus at the State Guest House Jamuna in Dhaka, the World Bank’s Country Director, Abdoulaye Seck, affirmed the institution’s commitment to increasing its lending to Bangladesh. Seck emphasized the bank’s dedication to expediting support for the Interim Government’s reform agenda. “We are committed to assisting as swiftly and extensively as possible,” Seck stated, underscoring the bank’s focus on addressing the country’s pressing financial needs.
In addition to the new commitments, Seck revealed that the World Bank plans to reallocate approximately $1 billion from existing programs, following consultations with the Bangladeshi government. This move is in response to appeals from Chief Adviser Yunus to international development partners for enhanced support. The repurposing of these funds, combined with the new financing, is expected to elevate the total financial assistance to Bangladesh this fiscal year to around $3 billion.
Seck highlighted that the successful implementation of the proposed reforms is crucial for Bangladesh’s future, particularly for the nation’s youth, with approximately two million individuals entering the job market annually. Chief Adviser Yunus expressed the need for the World Bank’s flexibility in funding reforms and assisting in a new era of governance after 15 years of what he described as “extreme misgovernance.”
Yunus emphasized the necessity for a significant push to rebuild and create new structures from the current challenges. “We need your support to help us build anew and focus on the aspirations of our students,” he urged, calling on the World Bank to be a collaborative partner in this transformative journey.
The Asian Development Bank (ADB) has named Hoe Yun Jeong as its new Country Director for Bangladesh. Jeong will oversee ADB’s operations and lead policy discussions with the interim government, development partners, and stakeholders. He will also begin preparations for ADB’s upcoming Country Partnership Strategy (CPS) for Bangladesh, as the current strategy ends in 2025.
“I am eager to collaborate with the interim government and the people of Bangladesh to restore economic stability and implement necessary reforms for sustained growth,” Jeong stated, emphasizing the need for inclusive and climate-resilient development.
With 25 years of experience, including 15 years at ADB, Jeong has held senior roles in South Korea’s Ministry of Strategy and Finance and served in ADB’s India Resident Mission, where he played a key role in coordinating support for India’s G20 Presidency.
Bangladesh, a member of ADB since 1973, has received $61 billion in loans and grants from the bank. ADB’s current portfolio in Bangladesh includes 53 projects worth around $13 billion, with priorities spanning energy, infrastructure, education, and agriculture.
The Bangladesh Meteorological Department (BMD) has forecast light to moderate rainfall or thundershowers with temporary gusty winds in all eight divisions over the next 24 hours, starting from 9 am today.
According to the BMD, light to moderate rain or thundershowers, accompanied by gusty winds, are expected at a few places in Chattogram and Sylhet divisions, and at one or two places in Rajshahi, Rangpur, Dhaka, Mymensingh, Khulna, and Barishal divisions. Some areas may experience moderately heavy rainfall.
Additionally, both day and night temperatures may rise by 1 to 3 degrees Celsius across the country. On Monday, Sylhet recorded the highest temperature of 35.8 degrees Celsius, while today’s lowest temperature was 24.0 degrees Celsius in Rangamati, Chattogram Division.
In the past 24 hours, rainfall was recorded at 86 mm in Kumarkhali, Khulna Division. The sun is set to go down at 6:00 pm today in the capital, with sunrise expected at 5:46 am tomorrow.
