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Outside Dhaka

Economy in dire straits

Blockade-crippled districts major worry for finance boss

Staff Correspondent
**GDP growth to be revised down
Food inflation up
Supply chain disrupted
Farm produce rots
Retail sales fall by 70 percent
Tourists cancel tours**
Serious transport disruption between the capital and districts for more than one month due to the oppo-sition's blockade has emerged as a major threat to the economy, said Finance Minister AMA Muhith yesterday.
Dhaka getting cut off from the rest of the country is dangerous for the economy and "this is the most serious concern", he told reporters at a briefing at the
secretariat. "We will have to keep the districts functional. ”
As the BNP-led alliance began enforcing the countrywide blockade on January 6, pickets resorted to deadly arson and petrol bomb attacks, torching hundreds of trucks and buses and burning dead more than 60 people so far.
The blockade has paralysed supply chain and hit farm incomes, inter-district road and rail communications and
local businesses, particularly the small ones.
Farmers are the worst affected as they are not being able to transport their produce to market. Shop owners say their sales have dropped by 70 percent.
"The impact of hartals in Dhaka is insignificant, but the effect at district level is becoming dangerous,” said Muhith.
Deploying security for additional hours to deter violence is another financial burden. A finance ministry official, seeking anonymity, said law enforcers have so far sought Tk 100 crore.
Muhith, however, declined to disclose the amount and said, "We are yet to make any additional allocation of fund. The expenditure of the law enforcing agencies including the police and Border Guard Bangladesh [BGB] has gone up sharply. "We will have to do something for them. The demand for the fund has been raised."
The minister also said the government has not yet assessed the economic loss caused by the month-long blockade and associated arson or petrol bomb attacks.
He also did not make comments about the economic loss estimated by a number of chambers and associations. With productions, incomes and profits affected, the country has lost an estimated $10 billion in physical damages since the blockade was launched, according to the trade bodies.
Every day, the economy is losing about Tk 2,277.86 crore due to the agitations. The amount would stand at Tk 2,500 crore if the daily loss is calculated taking into account 25 percent of the total industrial production loss, said Dhaka Chamber of Commerce and Industry.
"These are mainly perception-based, not facts-based," said Muhith,
adding that the government would look into the issue when it reviews the economic situation in March.
Replying to a question, he said it would not be possible to take special step for smooth operation of trucks and covered vans carrying industrial raw materials and goods.
"We are already providing them with extra security."
The veteran ruling party politician vehemently criticised the ongoing blockade and violent activities in the name of political movement.
"It is not a political movement. What is happening now is pure and simple enmity against the country. Obstructing the country's development of the country is the sole goal of Khaleda Zia."
"My regret is that people belonging to the BNP have become part of the criminal activities. “
The minister also reacted to BNP Vice-Chairman Hafizuddin Ahmed's demand that the government must step down to pave the way for ending the blockade.
"The thought of resignation of the government is just a sort of balloon without any air."
However, on the current political crisis, he said," I don't know how it will be solved. The prime minister is looking into it."
The ongoing blockade, the longest in the country's history, has cast a shadow on the government's target to achieve 7.3 percent gross development target in the current fiscal year.
"We were confident even in December that it would not go below 7.2 percent. Now we are highly doubtful whether the growth target would be achieved," the minister said.
He mentioned 2014 was a good year for the country because of the government's macroeconomic management. "I was personally hopeful that 2015 would be wonderful for us, “ he added.
"Now I can't make any forecast given the deadly activities going on across the country. “