12:00 AM, April 12, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Political instability hampers growth

Political instability hampers growth

GDP growth takes hit

THE World Bank through a recent study has taken stock of reasons why our GDP growth rate has lost a full one per cent in the last fiscal. The violent political agitation campaign waged last year has been identified as one of the key reasons for this downturn. The economic blockade and 85 days of hartal over a six-month period helped cause a US$1.4billion loss for the national economy. These shutdowns caused not only immense human suffering but resulted in severe downturn for most productive sectors including garments, transportation and tourism. This is perhaps the reason why the projected GDP growth rate has been revised downwards from earlier 6.2 per cent to 5.4 per cent.
With factories locked down, entrepreneurs and businesses are in doldrums as to how to pay back bank loans. Our political parties have, for decades, chosen to enforce crippling blockades and hartals to force the government in power to come to the negotiating table. Last year's agitation programmes were a departure from earlier times in that we witnessed the use of firearms and bombs in an attempt to cower an entire nation into submission. The capital city was effectively marooned from the rest of the country. Export-laden transportation vehicles were burnt at will and every sector took a hit. We have been fortunate that strong export demand and a return to normalcy after the general elections have helped avert catastrophe. Attaining a 6.5 per cent GDP growth rate in the next fiscal can only happen if the present calm over an ever shifting political landscape prevails.



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