Bangladesh has incurred a loss of around Taka 250 crore due to  imposition of the UK’s embargo on air cargo from Dhaka to Britain since March 10.The UK’s unilateral decision has inflicted a severe blow to country’s export trades, especially readymade garments and perishable commodities to the United Kingdom. Besides, such decision severely damaged earning of Bangladesh Biman, the national flag carrier that alone carries all types of cargo from Bangladesh to the UK.As part of compliances of the British requirements Bangladesh has engaged a British company to supervise and keep its surveillances on the security issues of Hazrat Shahjajal International Airport. But ironical though, the UK is yet to withdraw its embargo on cargo carrying that not only surprised but also frustrated the Bangladeshi export traders. Business circle believes that Bangladesh might have been made hostage to force Dhaka to hire a British security agency to look after the securities in Dhaka airport. Regarding withdrawal of UK ban on direct cargo flights from Dhaka to London concerned sources said, “As per our foreign office an evaluator is likely to arrive in Dhaka on April 8 for assessing the overall situation in the airport.” It is, therefore, clear that the ban is not going to be withdrawn until the evaluator submits report and subsequent evaluation is made. “This is time consuming “, the source said adding that by this time Bangladesh export trades would suffer due to the unwanted embargo. Withdrawing ban on direct cargo flights from Dhaka airport is a political decision but as per international compliance the government has taken every measure in the airport, said Civil Aviation and Tourism Minister Rashed Khan Menon.While talking with the Daily Observer he said, “We are doing our best and the overall situation has already improved.”Regarding withdraw of ban on direct cargo flight the minister said, “We cannot say when it would be withdrawn as the ban is the UK government’s political decision.”In the mean time exporters and logistics service providers claim they are incurring huge losses every day due to time consuming scanning, non availability of cargo planes, increased rates of air shipments and due to no sheds in the airport for keeping the cargoes.Firoz Ahmed, Director Flight Operation of a US based logistic company in Bangladesh said every day 19 passenger and cargo flights are Flying from Dhaka airport. He said on an average 1000 tons cargoes are being airlifted from Dhaka airport. But due to ban on direct flights both the Biman and other cargo services are making losses every day.He said the Biman itself is making Tk 4.5 million losses every day as its cargo section cannot carry goods due to ban by the UK government.Syed Mohamamad Bakhtear, Director, Bangladesh Association of Freight Forwarding Agents (BAFFA) who is responsible for port operation said, “Our exporters are also losing their money in exporting even non perishable items.”He said due to lengthy scanning system and unavailable of flights the exports need to wait for long time and exporters are to pay delay penalty to the buyers.He said the cargo flights operators are also making losses as most of the spaces remaining empty and the cargo flights towards London is closed down.He said the goodwill and image loses of the country are not to be calculated. He estimates on an average the local exports are losing more than Tk100 million per day including losses exportable goods which are being kept in the open air days after days and even months in the airport.To remove the lengthy process and keep the exportable goods in safer shades the government is encouraging BGMEA and BAFFA for their private investment in the airport area.The BAFFA office bearer said, “We on our own initiative are taking some measures on security ground.”He said the BAFFA at its own costs is employing people to maintain security in the airport.”He said, “We are also training our people at our own costs in the interest of the country.”The BGMEA President Md. Siddiqur Rahman said, “We are also setting up shed in the airport premises to keep our imported and exportable goods there.”He said, “The Civil Aviation Authority (CAAB) is giving us a place and we will set up a shed with our own money.”Abdus Salam Murshedy former BGMEA leader, said that with the rising costs of air shipment and delayed flights they are incurring losses. He said when they miss the sea shipment, they go for air shipment at double prices but currently the costs in air shipment due to some safety measures they need to wait for flights.Farid Uddin, a senior official of the GTS Logistics, said that the existing process is time consuming and many times they miss the scheduled flights for export of perishable goods.He said due to stoppage of direct cargo flights from Dhaka airport to UK some exporters have to pay extra charges as the goods are entering in the UK via Arab countries.He said the government has appointed a British company for overall security and safety maintenance in the airport, so it is expected that the existing ban on cargo flights would be withdrawn.A freight forwarding agent stationed in Dhaka airport said that due to beefed up security measures their goods cannot enter the cargo village.He said, “We have to keep our cargo vehicles on the roads outside the airport as the security persons do not allow our trucks to enter nearby cargo village which once was not restricted.”

Bangladesh Garment Manufacturers and Exporters Association on Monday objected to   western buyers groups publishing on their websites the names of the factories with whom they have suspended business relations. In a meeting with the Alliance for Bangladesh Worker Safety, a North American retailers group, the BGMEA on Monday urged the platform not to publish the name of the factories on its website which have been dropped from its supplier list, pointing out that the announcement made by the retailers’ group has been influencing other buyers to shift business elsewhere. In the meeting, the Alliance officials said it was the mandate of the retailers’ group to make the names of the suspended factories public on its website and only the board of directors of the Alliance can take any further decision on the issue. The BGMEA suggested Accord and Alliance to send the names of terminated factories to their signatory brands and buyers through e-mail. ‘Alliance executive director M Rabin suggested us to raise the issue to the Alliance board of directors and we have decided to send a letter to James Moriarty, former US ambassador to Bangladesh and one of the directors of the Alliance board,’ BGMEA vice president Mahmud Hassan Khan Babu told New Age. He said the trade body also made same calls to the Accord on Fire and Building Safety in Bangladesh, a platform of EU brands and retailers, and the Accord said they would discuss the issue in its next steering committee meeting. The two platforms have so far terminated business relations with 83 readymade garment factories, but all the terminated factories have not failed to make the required progress in remediation, Babu said. He said the Alliance suspended 60 factories from its supplier list, but only one fourth of the factories failed to achieve remediation progress and some of the factories were dropped from the list due to relocation or closure, while some withdrew their names willingly from the Alliance list. Babu said there are a good number of buyers who are not members of the Alliance or Accord but doing business with the factories. ‘When the Accord and the Alliance on their websites publicly name a factory as a terminated supplier, other buyers feel shaky to place order to that factory,’ he said. After the Rana Plaza building collapse, which killed more than 1,100 people, mostly garment workers, in April 2013, North American retailers, including top brands Walmart and Gap, formed the Alliance and European retailers formed the Accord undertaking a five-year plan which set timelines and accountability for inspections and training and workers’ empowerment programmes.”

There is considerable interest as well as difference of opinion about the effects of strikes on economic activities. The popular view is that hartals and blockades have a significant effect on the economy – the loss amounting about 3-4 per cent of gross domestic product (GDP). The ready-made garment sector (RMG) could be a suitable candidate for examining these effects,  as  the  sector  accounts  for  roughly  one-eighth  of  the  country’s  GDP.  Using very detailed production data from 33 large factories, a group of researchers of International Growth Center (IGC), Bangladesh has made some interesting observations on the subject. Titled as “The Effect of Political and Labour Unrest on Productivity: Evidence from Bangladeshi Garments”, the research was  carried out by Anik Ashraf, Rocco Macchiavello, Atonu Rabbani and Christopher Woodruff. They find that factories adjust production fully in the face of a single isolated hartal. Production increases the day before and the day of hartal,  and  then  falls  back  in two  days  after  the  hartal.  But there is no net change in output. However, both extended hartals and workers’ protest programmes have substantial negative effects on production. Perhaps, surprisingly, even extended hartals have little effect on worker absenteeism. The authors seem to find significant effects on inputs delivered to production lines after three days of  strikes,  and  significant  negative  effects  on  efficiency  after  five  days  of  hartals.  They find that workers’  protest programmes  have  larger  and  more  immediate  effects,  and  higher  costs  to  the  affected factories. A protest in the neighbourhood of a factory reduces both the total number of labour hours and the output per labour hour even during protests of a single day. Moreover, the data suggest that the protests have lingering effects.  There is no reallocation of work around the period of strikes. The researchers are not aware of other estimates of the effect of protests of RMG workers on productivity in the sector.  But the results that they obtained on political strikes, and particularly  those  for  an  isolated  hartal, contrast with the estimates of more substantial costs from several sources. The  results appear  to  be similar to those of other researches which find modest effects of hartals on large firms, though their analysis does not differentiate between one-off and sustained hartals. Combining these two types of events, data of the current research of IGC also suggest modest effects on the set of large RMG factories.  Volatility  in  the  external  environment  is  a  reality  that  firms  in  most  low-income  countries face. The data here suggest that firms have adapted to deal with these disruptions quite well. However, there is at least one characteristic of the setting which appears to be important. The fact that workers tend to live fairly close to the factories where they work may explain the lack  of  an  effect  on  absenteeism  and  production  on  the  day  of    hartal.  The  effects  on transportation are caused through  supply  chains  rather  than  labour,  and  show  up  only  after several days of continuous strike activities.  The analysis suggests that direct costs of hartals are negligible for all compared to those caused by hartlas spanning many consecutive days. But there may be other channels not addressed by present data through which  production  in  the  RMG  sector is affected by hartals.  For example, researchers are not  able  to  say anything about costs to factories from delayed shipments out. Contracts with buyers typically call for buyers to pay shipment costs from the port of Chittagong, but sellers are liable for the much more expensive air freight charges when goods are not delivered to the port on time. Hence, transportation delays that they find affecting inputs may also result in substantial costs to factories due to delayed shipments out. Finally, hartals may have more substantial effects  in  other  sectors  of  the  economy,  for  example,  the  retail  sector,  and  on  smaller businesses.  But,  the  data  do  suggest  that  the  estimates  of  the  effect  of  hartals  which  rely  on  the assumption of an across-the-board proportional decrease in output in all sectors are likely to overstate the costs of hartals. The researchers examined the effects of political strikes and labour unrest on production in large ready-made garment factories in Bangladesh. They apparently find that political strikes (hartals) lasting one or two days have very little effect on productivity or worker absenteeism but see some negative effects on factories for strikes lasting five days or more. The main channel for negative effects appears to be supply chain disruptions rather than worker absenteeism. These effects are much more modest than what is typically portrayed in the press, but are similar to other academic studies.  Labour unrest  has  a  more  immediate  negative  effect,  increasing absenteeism and quality defect rates and decreasing output. Where protests extend to a second day, we find that production falls by around 10 per cent in factories in the affected area. However, there is at least one characteristic of the setting which appears to be important. The fact that workers usually live fairly close to the factories where they work may explain the lack  of  an  effect  on  absenteeism  and  production  on  the  day  of  hartal.  The  effects  of transportation  operate  through  supply  chains  rather  than  labour,  and  show  up  only  after several days of continuous strike activities.