Strikes push up export transport costs by 69pc

Staff Correspondent | Published: 22:56, Dec 08,2016

 
 

Finds a BIDS study

Hartals or general strikes increase the cost of transporting a consignment of exporters by 69 per cent which ultimately reduces profitability, according to a study report.
Political strikes, however, do not affect the production of factories as there was no case of absence of workers during the strikes, the study conducted by the Bangladesh Institute of Development Studies said.
‘The main cost of strike for an exporter is due to transportation disruption including higher transportation cost, longer time to reach at ports, damage of shipment, storage cost and cost for security of the consignment,’ the report said.
The study findings were shared on Thursday at a session on the last day of the two-day BIDS Research Almanac-2016 that started on Wednesday at Lakeshore Hotel in Dhaka.
BIDS research fellow Kazi Iqbal and University of Melbourne student Reshad Ahsan jointly conducted the study titled ‘How do Exporters Cope with Violence : Evidence from Political Strikes in Bangladesh’.
The study was conducted on strike data and export data for the period between 2010 and 2013.
According to the study, hartal, as an immediate effect, reduces the average firm’s probability of export by 1.30 percentage points though there is no significant cumulative effect over eight-day period of hartal on export as exporters increase the shipment on the day before the hartal.
Notice period (the gap between announcement and enforcement of hartal) helps the exporters to adjust their shipment, it said.
A hartal, however, increases the probability of air shipment on the day of hartal by 3 percentage points which also increase the cost of transportation, it said.
It also showed that 99 per cent hartals were called for non-economic issues.
Another study conducted by the BIDS director general KAS Murshid and senior research fellow Mohammad Yunus showed that a 10 per cent increase in price of rice will raise the wage of agricultural workers by 20 per cent.
The study titled ‘Rice price and growth and poverty reduction in Bangladesh’ found that a 10 per cent increase in wholesale and retail price of rice would raise real household income on an average 0.11 per cent.
A household at national level has surplus at 1.14 per cent of total rice production after consumption if the price is increased by 10 per cent.
But the lowest and second lowest quarter of household will not be benefited from the move as the net benefit of price increases will be negative for them, the report showed.
The upper level (third and fourth quarter) of household will be benefited, it said.
The poverty rate would fall slightly from 31.5 per cent to 31.23 per cent, the study found.
Two other study reports on ‘inclusive market development : opportunities and challenges for fisheries, vegetables, seed and fertilizer sectors in Bangladesh’ jointly conducted by BIDS senior research fellow Nazneen Ahmed and research fellow Harunur Rashid Bhuyan and impact of natural barriers on export competitiveness of fruits and vegetables conducted by BIDS research fellow SM Zahedul Islam Chowdhury were presented at the programme.
Bangladesh Agricultural University former vice-chancellor M A Sattar Mandal, agricultural economist A Jabbar, BIDS former DG Quazi Shahabuddin, Research Initiatives Bangladesh executive director Meghna Guhathakurta, BRAC Institute of Governance and Development research adviser Minhaj Mahmud, among others, spoke at the two separate sessions of the programme.

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