Vol. 5 Num 279 Fri. March 11, 2005  
Front Page

Hartal eats up 3-4pc of GDP
Economists question UNDP's calculation method

A UN agency report claims the estimated average cost of hartals to the economy is between 3 and 4 percent of the Gross Domestic Product (GDP) annually, a figure that has been disputed by the leading economist of the country professor Rehman Sobhan.

"We estimate that the average cost of hartals to the economy is somewhat less than the 4.5 per cent, and perhaps realistically falls somewhere between 3 and 4 per cent," says the study conducted by the United Nations Development Programmes (UNDP), released yesterday.

The report, titled 'Beyond Hartals: Towards Democratic Dialogue in Bangladesh,' says a total of 139 countrywide hartals were enforced in the 1990s, with the highest GDP loss at over 9 per cent in the fiscal years 1994-95, 95-96 and 98-99.

The UNDP study cited a World Bank report published in 2001 estimating that during the 1990s, approximately 5 per cent of GDP was lost annually due to hartals. BGMEA said it loses US$ 18 million a day for the shutdown.

The finding also suggested that rural communities --like farmers, fishermen and transport workers - are not at all insulted from the economic and other impacts of hartals.

Formally introducing the study, UNDP Resident Representative Jorgen Lissner highlighted the negative impact of hartals. "In a globalised economy with fierce competition for investment capital and jobs, no country can afford continuous confrontational politics. If a country is largely closed for democratic dialogue, it can't possibly be seen as open for business."

He also pointed out that hartals are an increasingly frequent phenomenon. " Since the restoration of democracy in Bangladesh in 1991, the frequency of hartals has increased dramatically. From 1995 to 2002, for example, 611 hartals were called, compared to the period from1947 to 1954, when only six hartals were called to oppose language restrictions."

"If Bangladesh could save the economic and social losses due to hartals, the nation could aspire to match the outstanding progress being made by other countries in Asia," he noted.

Not everyone agreed with the findings of the report. Professor Rehman Sobhan, Chairperson of the Centre for Policy Dialogue (CPD), who was also present at the programme to release the report, pointed out that it is not scientific to calculate GDP losses by depending on the number of hartal days alone.

"I am not saying that hartal is not damaging our economy… it obviously affected the economic growth," he said, adding, "What I want to point out is that more and extensive analysis is necessary to calculate the loss due to strikes."

"We have witnessed the highest growth during the late 1980s when the number of hartals was also highest," he said, adding that does not mean that the more hartals, the more growth.

Asked about the actual figure of GDP loss due to hartals, he replied, "I can't say as I didn't study the matter."

He continued, "It's a useful work of the UNDP. But its usefulness will depend on the people for whom it has been made," he said, pointing to the politicians.

Professor Nasreen Khundker of Dhaka University, who estimated the figure of GDP loss, defended her calculations at the programme. "This figure should still be taken as a rough estimate. Nevertheless it does provide an idea of the severe economic and development impact of hartals."

"A qualitative analysis of the impact of hartals focusing on a few sectors, including the garment, transport, retail, small business and public sectors, is provided," she said, adding, "Focus group discussions with these groups allowed us to gauge the different impacts on workers in these sectors, and to identify the coping strategies used to recoup losses."

The UNDP study says hartals adversely affect students, teachers and parents as well as the institutions and their authorities, resulting in missed classes and disrupted examinations, as well as a considerable level of stress over security concerns, career prospects and financial situations.

According to the report, many are now calling today's students the 'delayed-generation' as their wait to graduate and enter the workforce becomes longer and longer, causing financial strain on their families.

According to the report, 95 per cent of the more than 3000 people polled believe that hartals damage the economy and society through hampered business activities, lack of access to health and education facilities, damage to property and loss of income.

About 70 per cent said there are alternatives to hartals, including public rallies, discussions in parliament, road marches and sit-in demonstrations.

Both the major political parties have equally used national strikes as a means of protest, the report said, suggesting that all parties co-operate to remove disputes and make the Parliament a place open to all debates.

"Hartal should be use as a last resort to protest and the parties should use alternative ways to raise concerns including forming human chain, signature campaigns, mock parliaments and sit-in programmes, says the report prepared by ten Bangladeshi authors.

The report has also suggested a number of long-term alternatives, including replacing the existing plurality method of election with proportionate representation for a more consensual political system, and reducing the tenure of parliament from five to four years to allow opposition parties more frequent opportunities to consult with the electorate.

The report also recommended that the government establish basic watchdog agencies such as the Ombudsman, a human rights commission and an effective anti-corruption commission.

Speaking at yesterday's conference, the UNDP representative maintained that the report is neither an aid for the ruling BNP, which is now voicing its concern against the negative impact of hartals, nor a critique of the main opposition Awami League, which is presently calling hartals.

He later displayed photographs of world leaders shaking hands, including the prime ministers of India and Pakistan, and Israel and Palestine. Holding up a photograph of prime minister Khaleda Zia and opposition leader Sheikh Hasina, he urged them to sit together, saying, "Its time for us to catch up."


UNDP Resident Representative Jorgen Lissner speaks at a function on releasing a study report titled "Beyond Hartals: Towards Democratic Dialogue in Bangladesh" yesterday in Dhaka. The Netherlands and UNDP-funded study reveals that the economic cost of hartal is 3-4 percent of GDP. Professor Rehman Sobhan, chairman of the Centre for Policy Dialogue (CPD), Samson H Chowdhury, chairman of Square Group, and Yasmeen Morshed of Scholastica School, are also seen. PHOTO: STAR