Hartal' a Curse for the Economy

Cover StoryIssue: April , 2013

'Hartal' a curse for the Economy

ABSTRACTOver the years in Bangladesh 'hartal' has become so frequent that its impact on realizing the demand has been tarnishedand can easily be termed as 'useless' or causing harm to the 'hartal' calling party by reducing their popularity. Hartals areoften called in 'for the people's interest' but in many times during 'hartal' observation free movement of people arerestricted, properties are destroyed, and economic activities were forcefully curbed.

'Hartal' called for political and non political reasons have become inevitable and it is being used very frequently as an extremedemocratic right. Historical use of such important tool gifted us several incredible achievements i.e. independence of the countryand return of the democracy. This tool speeded up our unity since language movement in 1952 and end up with independence ofBangladesh by 1971. But, the 'hartal' calling trend did not stop there and as time went away, this constructive tool turned intodestructive tool for the nation as a whole. Most of us do believe that this is no more an effective tool to press and realize demandof public. Information from business and trade organizations shows that a day-long 'hartal' costs the country around USD 500million (FBCCI) from our GDP and our export oriented clothing sector being the backbone of export economy suffers for aroundUSD 45 million (BGMEA) from the export earnings. Though our resilient people working hard to recover the losses done andtrying keep our GDP and export figures in shape. But there are several other losses, which cannot be expressed in financial termsuch as death tolls of citizens, injuries, educational lossand physiological-psychological disturbance in home along with greatimage destruction globally.It is also true that there are several groups who earns and tries to earn benefits from 'hartal' and theyare: political leaders and parties, traders stocking goods to raise price, terrorists, corrupt businessmen and a large group ofpeople who are hired for the political mass gathering. Bangladesh Textile Today (BTT) team lead by Abrar A Apu, MSc have triedto dig out cause and effect of 'hartal' on our clothing & textiles manufacturing industry.

Introduction:'Hartal' is a Gujarati term but commonly used in many South Asian languages including Bengali. 'Hartal' means strike action orclosing down of road- traffic, shops and warehouses, workplaces, offices, courts of law and etc. with the object of realizing ademand. 'Hartal' was first used during the Indian Independence Movement. It is a mode of appealing to the sympathies of agovernment to change an unpopular or unacceptable decision(Factotum), which were seldom used in the history.

Over the years in Bangladesh 'hartal' has become so frequent that its impact on realizing the demand has been tarnished andcan easily be termed as 'useless' or causing harm to the 'hartal' calling party by reducing their popularity. Hartals are often calledin 'for the people's interest' but in many times during 'hartal' observation free movement of people are restricted, properties aredestroyed, and economic activities were forcefully curbed.

Bangladesh with its resource constraints depends on its economic well being to a large extent on how well it does in its exportbusiness as well as in attracting foreign direct investment to the country. Political disturbances such as hartal and conflictsamong the political parties are certain to lead to a slowdown of economic production(Islam).Political strikes or turmoil affects every sector and therefore, every people have to pay tolls as their working environmentsaffected. The strike cuts off farmers from the markets in local zone, the same is for clothing business, which is global andcomplicated in nature. 'Hartal' cuts it off from the international market, thus resulting uncountable losses.

A research report from UNDP on Bangladesh published in March'05 found that 95% of 3000 respondents in six urban divisionsthought that hartals have a very negative or somewhat negative impact on the economy and disruption to mobility, businessactivities, and daily activities. 50% of the respondents believed that politicians gain financially from calling hartals.

Chronology of 'Hartal':The greatest leader of all time in Indian subcontinent, Mohandas Karamchand Gandhi (1869 -1948) lead the first 'hartal'phenomenon in Asia. This is the origin of 'hartal' in South Asian region. For Bangladesh the first 'hartal' stemmed from theLanguage Movement. The biggest achievement in our history is snatching away our identity as Bangladesh and Bangladeshi in1971 liberation movement. The Language Movement of 1952 triggered a number of hartals. In 1952, a 'hartal' was observed fora longer period, from 22 to 24 February (UNDP, 2005). If we look back at the history we get that 297 hartals took place between1982 and 1990 and 827 hartals took place between 1991 and 2002(UNDP, 2005). From the period of 2009 to 2012 there were53 days hartals observed while in the current year from January to March 16 days hartals took place in Bangladesh. Until the dayof writing this paper on April 20, 2013 there were 6 days 'hartal' in this month, and more hartals are likely to come'. Two majorpolitical parties namely Bangladesh Nationalist Party (BNP) and Bangladesh Awami League (BAL) called hartals in theiralternative tenures, which can be described through following figure:

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Since 1947 to 1998, the hartal scenario can be described by the following figure regenerated from data of UNDP report,published in 2005 with title' 'Beyond Hartals: Towards Democratic Dialogue in Bangladesh'. The analysis of the data on hartalsshows that between 1947 and 2002, an estimated 1172 hartals were observed in the country(UNDP, 2005)

The most common reasons for calling hartals as disclosed in the UNDP research report published in March 2005 for the periodcounted from 1997-2002. The reasons were political killings (212 hartals), inter-party and intra-party conflicts (154 hartals),law and order and the human security situation (144 hartals), better governance and public utilities and services (134 hartals).

Historical evidence shows that during the present democratic system initiated in 1991, the average number of Hartals per yearhas been more than three times higher (46 per year) compared to earlier regime (CPD)


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Source: SangbadpatreHartalchitra by AjoyDasgupta (2001); Ahmed, Imtiaz (2011); Odhikar; ASK and CPD

Impact of Hartals:There is no government discloser of national loss (GDP) on hartal, but many private think tanks, associations and organizationestimated loss due to 'hartal'. Acceptable Method for calculating the loss could not be developed by any one, which would give usaccurate figure.Recently, Dhaka based think tank CPD (Center for Policy Dialogue) has calculated impact of 'hartal' by applyingComputable General Equilibrium (GCE) model. As per their report a day 'hartal' eats up approximately USD 1.0 billion of thecountry's national gross domestic product (CPD, april'13). Different organization's claims on each day hartal impact that variessubstantially, such as the premier umbrella organization for businessmen in Bangladesh, Federation of Bangladesh Chambers ofCommerce and Industries (FBCCI) assessment in 2013 each day hartal impacts worth USD 1.3 billion losses on economy. DhakaChamber of Commerce and Industry (DCCI) in a survey found that a 'hartal' costs USD 205 million per day or 0.2 per cent of theGDP, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) survey claims loss of 20 million per day in itssector.

UNDP survey report showed that from 90/91 to 99/00, the average GDP loss was 4.5%. The World Bank (Periodic EconomicUpdate April 2001: 13), estimates that during the 1990s approximately 5% of Gross Domestic Product (GDP) was lost annuallydue to hartals.


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'Hartal' Phenomenon is bearing clear Indication in Bangladesh:

Slowdown in investment and economic growth.Consecutive and longer 'hartal' period, slowdown future economic growth.Clothing sector is lagging behind to grab the opportunity predicted by McKinsey&Company.In global perspective, Bangladesh is losing country and brand image of clothing manufacturer.Clothing buyers are searching alternative sourcing destinations. Being unable to come to Bangladesh during 'hartal'turmoils several already diverted their orders.The country has started to realize weakening of socio-economic condition of the citizens.


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The country become more vulnerable to internal and external shocks

The Impact of Hartals on our Clothing Sector : can be explained as (Economic Policy Paper on Political Stability andEconomic Development: The Case of Bangladesh):

Perception of People on Hartal:UNDP report on Hartal for Bangladesh perspective hasshown several important findings through conductinginterviews with 3000 respondents around the country.Those findings can be summarized as following:

Hartals are not only ineffective in changingpolicy, but have negative impacts on citizens andsociety.

Disruption to mobility, business activities, and dailyactivities are considered as severe impacts on society.

Day laborers and middle and lower socio-economic groups are worst affected by hartals.

Politicians gain financially from calling hartals.

Hartals remain as a legitimate democratic tool.There are political alternatives of calling hartals.

Alternatives of Hartals:To majority of population 'hartal' is a package ofdestruction and ineffective tool in the present time(UNDP). Neighboring countries, in many suchsituations, have been practicing alternative tool of'hartal' and keeping away any mass violence anddestruction to people and government. Such as

i) Hunger strike is a non-violent program. Anna Hazare,a renowned person, through hunger strike realizedmany demands.

ii) Silent procession can be observed across the countrywithout obstructing running vehicles on the roads.

iii) Grand rally can be arranged in all divisional towns. The government's mistakes can be criticized in a democratic way.

iv) The opposition party can go to parliament where they can point out government's mistakes. If the ruling party does not giveany scope to discuss in parliament, then they can walk out repeatedly, but they should not boycott parliament. The people wouldrealise that the opposition party want to have discussion with the government but they are not given any scope. It will brightentheir image, which will help in the general election later (Hossain).

Conclusion:

It is clear to all that hartals are extremely destructive and harmful to all. We all talk about looking for alternatives, but very fewof us (civil society, print media, broadcast media, business and trade organizations, different associations and etc.) do take aunited stand against hartals. Introduction of transparent and scanning methods of political party funding will certainly help ourbusiness sectors contribute in the constructive alternative to hartals.More than 42 years of our national politics proofs thatmutual understanding or win-win situation is never encouraged and accepted among political parties, most of the time simplydue to ego problems. The consequential huge losses have been counted by general public and their principal instruments ofsurvival- service or business, which constitute lion share of the country. Though it is already delayed, the civil societyorganizations, BGMEA, BKMEA, DCCI, FBCCI, MCC, BTMA, media associations and other associations should come forward in aunited form with contractive tools and suggestions which will compel major political parties to follow, and then the nation willcome out of deadly curse of hartals.


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Bibliography

UNDP. (2005). BEYOND HARTALS: TOWARDS DEMOCRATIC DIALOGUE IN BANGLADESH. Reaeach, UNDP.Economic Policy Paper on Political Stability and Economic Development: The Case of Bangladesh. Dhaka Chamber.Dasgupta, S. H., Ahmed, I. (., Odhikar, & CPD, A. a. (2001).Factotum. (n.d.). A 'hartal' not a revolution ! Retrieved 04 19, 2013, from Sunday Observer: http://www.sundayobserver.lk/2003/08/10/fea04.htmlIslam, M. S. (n.d.). Tough times ahead for the RMG sector. ough times ahead for the RMG sector . Dhaka, Bangladesh.Hossain, I. (n.d.). Hartal and some thoughts. Retrieved 04 22, 2013, from Daily Sun: http://www.daily-sun.com/details_yes_07-04-2013_Hartal-and-some-thoughts_461_2_28_1_2.htmlLtd, S. M. (2005). beyond Hartals. UNDP. UNDP.http://www.defence.pk/forums/bangladesh-defence/112456-bangaldesh-hartal-4.html#ixzz2R0OiqO00Bangladesh 2013: Assessing Economic Implications of the Present Political Shocks (CPD, 13th April'13)http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDNfMDZfMTNfMV8xXzE2MjIwNA==http://news.priyo.com/business/2012/04/29/dcci-suggests-alternative-hart-50507.htmlhttp://www.semantikoz.com/blog/the-economic-cost-of-hartals-for-bangladesh/http://www.thedailystar.net/beta2/news/a-country-of-hartals/


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Hartal' a Curse for the Economy