A
Financial Lifeline in Jeopardy
Organizers are calling on nearly 10 million Bangladeshis
living abroad to freeze the approximately US$2 billion sent home monthly. This
financial lifeline is crucial for the South Asian nation, which turned to the
International Monetary Fund (IMF) for a bailout last year.
Faiz Ahmad Taiyeb, a Bangladeshi engineer working for a
telecom company in Europe, is a prominent voice in this movement. He believes
that reducing remittances could financially undermine Hasina’s government. “By
reducing remittances, we can cut off the financial lifeline to Hasina’s
autocratic government,” Taiyeb asserted.
Expatriate
Support
The call for a remittance boycott has gained traction among
influential Bangladeshi expatriates, including Elias Hussain, a US-based former
TV journalist with over 2 million YouTube followers. Hussain’s endorsement
amplifies the movement’s reach and impact.
Heavy-Handed
Response
The backdrop to this economic strategy is a series of
violent protests that have claimed more than 200 lives since they erupted last
month.
The
protests were initially sparked by demands from students and other
demonstrators to abolish public-sector job quotas amid rising youth
unemployment. The government’s response has been severe, with thousands
arrested and a curfew imposed.
Prime Minister Hasina’s administration, re-elected to a
fourth term in controversial elections boycotted by the opposition, has also
announced a ban on the main Islamic party, Jamaat-e-Islami, and its student
wing, blaming them for the violence.
Economic
Strain
The unrest has drawn international condemnation and
agravated Bangladesh’s economic woes. The country’s foreign exchange reserves
have plummeted to about US$18 billion from nearly US$49 billion two years ago.
Remittances, a significant source of foreign currency, totalled nearly US$24 billion
in the last fiscal year.
Shafquat Rabbee, an adjunct instructor of business analytics
at the University of Dallas, highlighted the critical role of remittances,
comparing them to oil sales receipts for a Middle Eastern country. “Any
reduction could run shockwaves through the country’s macro economy,” he warned.
Boycott
Movement
Leaders of the boycott movement, such as Tokyo-based apparel
merchandiser Saddam Hossain, are urging Bangladeshis in Japan and South Korea
to suspend remittances temporarily despite the financial strain. “I am doing
this for my homeland,” Hossain said. “By killing students, this autocratic
government of Hasina has forfeited all legitimacy.”
Government
Counterarguments
The Hasina administration has strongly criticized the
remittance freeze. Salim Mahmud, secretary of information and research for the
ruling Awami League, labelled the boycott as “unpatriotic” and unrealistic in
the long term. “People back home rely on this money,” he stated, adding that
the boycott could encourage illegal remittance channels.
Economic
Fallout
The protests and subsequent government actions have already
caused significant economic damage, with business leaders estimating losses at US$10
billion.
The
European Union has postponed negotiations with Bangladesh on a new cooperation
deal, citing concerns over the government’s response to the unrest.
The impact of the remittance boycott remains uncertain.
Bangladesh Bank reported a sharp decline in remittances between July 19 and
July 24, attributed to a five-day internet blackout during the protests.
However, economist Jyoti Rahman cautioned that it is too early to attribute
these figures to the boycott.
Potential
Consequences
If the remittance boycott gains traction, it could have
severe consequences for Bangladesh’s economy.
US-based academic Rabbee warned that cutting remittances by
half could push the country into insolvency and crash the local currency.
Zaved Akhtar, president of the Foreign Investors Chamber of
Commerce and Industry, echoed these concerns, noting that the full economic
repercussions are still unfolding.
The
remittance boycott could also backfire, potentially driving a wedge between the
low-income population and the student-led protest movement. Dhaka-based
economist Rubaiyath Sarwar emphasised the complexity of the situation,
suggesting that the government might use the boycott to create friction among
different social groups.
