Bangladesh’s Poor Left Struggling as Power Fight Risks Gains

Photographer: Arun Devnath/Bloomberg

Garment Worker Tanjila Begum in Dhaka. Close

Garment Worker Tanjila Begum in Dhaka.

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Photographer: Arun Devnath/Bloomberg

Garment Worker Tanjila Begum in Dhaka.

Standing on a dusty road in Bangladesh’s capital, Tanjila Begum weighed her options for getting to work at a garment factory as a planned political rally to scrap a Jan. 5 election kept buses off the streets.

For a moment, she considered walking 3 miles (4.8 kilometers) to avoid taking a rickshaw for 40 takas ($0.51), four times more than a bus ride and about 20 percent her average daily wage. In the end, Begum shelled out the cash, as she risked being docked a day’s pay if she arrived late.

“People like me suffer the most from this political unrest,” she said from her home in Rampura, one of the poorest neighborhoods in Dhaka, recalling her ordeal on Dec. 29. “I cannot stay home. I need food, and for that, I need money.”

Begum and others in Asia’s fifth most-populous country won’t get a break soon: An opposition boycott of the election ensures Prime Minister Sheikh Hasina Wajed will return to power, threatening more unrest after the deadliest political violence since the country’s founding in 1971. The turmoil risks hurting an economy forecasted to grow 7 percent next year that pulled more than 16 million people out of poverty since 2000.

“It doesn’t matter which party comes to power -- what matters is a return to political stability,” said Zahid Hussain, an economist at the World Bank based in Dhaka. “Bangladesh has proved all of the doomsayers wrong in terms of improving social indicators and achieving fast rates of economic growth in the last three decades, but if this political turmoil continues, we are going to lose ground.”

Shutdowns

Hussain, 60, said he’s been forced to work from home since the beginning of December because of the threat of violence. The political fight may cost Bangladesh as much as two percentage points of economic growth in 2014, he said, adding that the cost of transporting goods jumps about 10 times during nationwide strikes known as hartals.

Bangladesh lost 71 days to shutdowns and blockades last year, according to The Daily Star, the nation’s top selling English-language newspaper. That’s up from an average of 46 days a year since 1991, according to a study published by the Centre for Policy Dialogue, a research group based in Dhaka.

The Dhaka Chamber of Commerce and Industry estimates the economy loses about $200 million a day during the strikes, which were popularized by Mahatma Gandhi during an independence fight when the British ruled over much of South Asia. Global retailers canceled orders valued at $3.77 million in December as the blockades disrupted shipments, according to data from the Bangladesh Garment Manufacturers and Exporters Association.

‘Unpredictability’

“The political unrest has created an unpredictability in the economy, and foreign investors are watching what happens in the elections and afterwards,” said A. Gafur, executive director of the American Chamber of Commerce in Bangladesh for the past two decades. “Lots of decisions are pending.”

The second-lowest wages in Asia after Myanmar spawned a $20 billion garment industry in Bangladesh that supplies global retailers such as Wal-Mart Stores Inc. (WMT), Hennes & Mauritz AB and Gap Inc. Last month the government raised the minimum wage for the country’s garment workers by 77 percent following labor disputes that shut factories in the aftermath of a building collapse in April that killed 1,100 people.

Higher costs from improved labor and safety standards in the garment sector along with political uncertainty pose challenges for Bangladesh’s economy, the International Monetary Fund said last month. The country’s $140 billion economy will expand 5.5 percent in the fiscal year ending in June, the slowest pace since 2002, before strengthening to 7 percent the following year, according to the IMF.

Living Longer

Bangladesh has made some of the largest improvements in human welfare of any country in the world in the last two decades, according to the World Bank. The average Bangladeshi can now expect to live about four years longer than the average Indian, even though Indians are twice as rich. The number of people living on less than $1.25 a day has dropped by a third, while half as many children die before reaching age 5.

“While economic progress would have been considerably better had there been better infrastructure and less frequent bouts of natural disasters and political unrest, the Bangladeshi economy’s track record despite such constraints speaks volumes about its potential,” Taimur Baig, a Singapore-based economist at Deutsche Bank AG, wrote in a report last month.

Bangladesh has seen several coups and two dozen smaller rebellions since the nation gained independence from Pakistan in 1971 in a war that left an estimated 3 million people dead. The Jan. 5 election will be the fifth since the restoration of democracy in 1991.

Election Boycott

Hasina’s ruling Awami League needs to win only 24 seats of 147 up for grabs on Jan. 5 for a parliamentary majority after taking 127 of 153 uncontested constituencies. The main opposition Bangladesh Nationalist Party is boycotting the vote, and police have surrounded the house of its leader, former prime minister Khaleda Zia, since Dec. 26.

Zia’s party wants a caretaker administration to oversee the vote, a practice implemented in the past three elections after a demand from the Awami League in the 1990s when it was in the opposition. Hasina’s prosecution of Islamist leaders aligned with the BNP for war crimes that took place four decades ago during the country’s founding has spurred attacks with arson and home-made bombs.

Deadliest Year

In 2013, at least 507 people died and another 22,407 were injured in political violence, making it the deadliest year in politics, according to data from Ain O Salish Kendra, a legal aid and human rights organization in Dhaka. Security forces carried out executions and killed innocent bystanders in attempting to quell protests against war crimes verdicts, New York-based Human Rights Watch said in an August report.

The U.S. last month expressed disappointment that Bangladesh’s political leaders failed to agree on a way forward, and joined the European Union in declining to send observers for the election.

India prefers Hasina’s government because her opponents sympathize with its main rival Pakistan, according to Neelam Deo, a retired Indian diplomat and the director of Gateway House: Indian Council on Global Relations.

“If you have a fundamentalist and pro-Pakistani government, then you will have a revival of safe haven for terrorists who operate in our northeastern states,” she said by phone.

Begum, who earns the equivalent of $71 a month at the garment factory, isn’t sure if she’ll vote. She’s much more concerned with keeping her job in Dhaka and avoiding a return to her home in southern Bangladesh.

“Life in my village is far worse,” Begum said in a soft voice. “I cannot think of going back.”

For Related News and Information: Bangladesh Opposition Calls for Transport Blockade From Jan. 1 Bangladesh Axes New Year Fun as Stick-Wielding Women Join Fight Bangladesh Waits for Factory Checks Six Months After Deaths

To contact the reporters on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net; Andrew MacAskill in New Delhi at amacaskill@bloomberg.net

To contact the editor responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net

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