Investors' confidence

The open-ended agitation programme launched by the opposition that has descended into arson and worse is sure to “negatively affect foreign investor confidence, raising risks to growth over the long term” so stated Fitch Ratings, the Singapore-based US rating agency lately. In its findings, the agency pointed out that the continued violence could have long-term negative impact on the country's principal foreign exchange earning garments sector. The blockade of Dhaka has sent the cost of transporting readymade apparels to the port city shooting up dramatically. It has become clear that the politics of violence being perpetuated as the situation continues to drag on has started affecting both production and distribution nationwide. The RMG sector which contributes 81 per cent of total exports is taking a beating. Despite armed escorts being given to convoys, the measure is simply not enough and thousands of unprotected trucks and vans are plying highways with a gnawing sense of insecurity.

The short term effects are plain to see. The danger lies in portraying Bangladesh as an unsafe place to do business in. Policymakers have been trying to project the country as an ideal destination for future Asian investment. The painstaking work done thus far is at risk of being undone should the present situation be allowed to persist over the course of months. Foreign companies will be uneasy to relocate their production capacity to Bangladesh despite being offered cheaper wage rates and other favourable factors. Political stability remains a prime prerequisite in any foreign investment decision-making and we are not doing a very good job at addressing this.