Recent ShutdownFICCI estimates of over $10b economic impact on Bangladesh

The recent shutdown has had a significant economic impact on Bangladesh, with estimates of over $10 billion hit and increasing, according to the Foreign Investors’ Chamber of Commerce and Industry (FICCI).

The paper on "Engagement With Honourable Prime Minister’s Adviser for Private Industry and Investment" on Sunday pointed out that the pure play FMCG (fast-moving consumer goods) industry would have a setback of $100 million+, as supply lines and operations have been significantly impacted.

FICCI President Zaved Akhtar said the shutdown has affected export-oriented industries, banking, insurance, logistics, infrastructure, telecom, e-commerce, freelancing, ride-hailing, software development, and MSMEs that rely on social commerce and many others.

“The financial impact of the industry will run up to hundreds of millions of dollars. While the country is slowly recovering with limited online and physical connectivity, full operations are yet to come back, and we are at best 50% of the economic potential. The industry needs full broadband connectivity and mobility connections to operate to its full potential.”

Zaved, also chairman and managing director of Unilever Bangladesh Ltd, said businesses are facing challenges related to the release of goods from ports and accumulating demurrage because of the inactivity during the shutdown.

“Numerous existing investors are currently feeling uncertainty as the team aims to resume regular operations, but challenges and inefficiencies of goods release, running operations and physical reach are driving up costs of business. If we fail to prioritise the ease of doing business for our current investors, we will discourage potential investors from considering Bangladesh as a likely investment destination, especially when the current investors are facing existential crises,” he added.

The FICCI president recommended that for the immediate term, measures required such as data connectivity, safety and security, physical movement and mobility, and ease of doing business. Alongside longer-term steps also need to be taken, he said.

Beyond the financial impact, the image issue that the country is facing cannot be quantified as the reputation has been severely damaged in the past few weeks, Zaved said.