Remittance shutdown continue until La-Hasina Dracula step down form power.
Bangladesh protest movement launches foreign remittance freeze
Campaign calls on nearly 10 million expats to pressure government over violence
Protesters engage in a clash in Dhaka on July 16. Bangladesh has been plunged into unrest after demonstrations against government job quotas. © Reuters
FAISAL MAHMUD, Contributing writerAugust 2, 2024 15:51 JST
DHAKA -- Weeks of deadly protests in Bangladesh have prompted critics to lean on foreign remittances as their newest weapon against what they blast as state-sanctioned violence.
Organizers are calling on nearly 10 million Bangladeshis living abroad to freeze the flow of about $2 billion sent home monthly, as the Sheikh Hasina government grapples with an economic crisis
that forced it to seek out an IMF bailout last year.
Remittances are the South Asian nation's second-biggest source of foreign currency, a point not lost on boycott organizers like Faiz Ahmad Taiyeb, a Bangladeshi engineer working for a telecom company in Europe.
"By reducing remittances, we can cut off the financial lifeline to Hasina's autocratic government," said Taiyeb.
The new tactic has won the backing of some popular Bangladeshi expats, including U.S.-based Elias Hussain, a former TV journalist turned government critic with over 2 million followers on YouTube.
More than 200 people have been killed since mass protests broke out last month as students and other demonstrators called on Hasina's government to ditch public-sector job quotas amid skyrocketing youth unemployment.
The unrest sparked a heavy-handed government response that drew condemnation at home and abroad. Thousands have been arrested, and this week Hasina's government --
re-elected this year to a fourth term in controversial polls boycotted by the opposition -- said it would ban the main Islamic party, Jamaat-e-Islami, and its student wing, which it blames for the violence.
The job quota system was abolished in 2018 after widespread protests, but the country's High Court ordered its reinstatement in late June.
While Hasina's administration has since agreed to reduce the quotas, a curfew has been implemented and public anger remains high.
Bangladeshi soldiers on duty during a curfew in Dhaka on July 21 as violence erupted amid protests. © Reuters
On Wednesday, the European Union said it had postponed negotiations with Bangladesh on a new cooperation deal covering trade and economic relations after criticism of Dhaka's response to the unrest.
Bangladesh is already struggling with a foreign exchange crisis, which has seen its reserves shrink to about $18 billion from nearly $49 billion two years ago.
The country's overseas remittances, which are subject to government taxes, hit nearly $24 billion in the last fiscal year.
"Remittances for Bangladesh are what oil sales receipts [are] for a Middle Eastern country," said Shafquat Rabbee, an adjunct instructor of business analytics at the University of Dallas. "[Any] reduction could run shockwaves through the country's macro economy."
Tokyo-based apparel merchandiser Saddam Hossain, another leader of the boycott movement, is calling on Bangladeshis in Japan and South Korea to temporarily suspend payments to friends and family back home -- despite the financial strain.
"I am doing this for my homeland," he said. "By killing students, this autocratic government of Hasina has forfeited all legitimacy."
Salim Mahmud, secretary of information and research for the ruling Awami League, slammed the remittance freeze as "unpatriotic" and unrealistic over the long term.
"People back home rely on this money," he told Nikkei Asia. "By urging a halt through legal channels, these individuals are encouraging illegality," he added, referring to unofficial channels that evade remittance duties.
The social media-driven campaign has led ministers from the Hasina administration to urge expatriates to continue sending funds home, while some banks have been directed to raise the U.S. dollar rate for incoming remittances, local media reported.
Bangladesh Prime Minister Sheikh Hasina speaks to reporters in Dhaka on Jan. 8. Her ruling Awami League won a fourth term in power following an election boycotted by the opposition. © Reuters
Business leaders, meanwhile, have warned that the recent protests, curfews and government-ordered internet shutdowns have already caused an estimated $10 billion in economic losses and
threaten Bangladesh's status as an investment destination.
It is currently not clear how many overseas Bangladeshis are taking part in the boycott or how much remittances may fall.
Bangladesh Bank, the country's central bank, reported that remittances between July 19 and July 24 were just $78 million, an amount sometimes received in a single day. But central bank spokesperson Mezbah Ul Haque told Nikkei that the sharply reduced flow could be attributed to a five-day internet blackout during the protests.
Australia-based economist Jyoti Rahman said it was "too early to attribute these figures to boycott."
But "if even a fraction of those who would otherwise have remitted money back to Bangladesh refrain from doing so, it would mean fewer supply of foreign exchange which would mean downward pressure on the taka currency," Rahman added.
Cutting remittances by half could push Bangladesh into insolvency and crash the local currency, warned U.S.-based academic Rabbee.
Zaved Akhtar, president of the Foreign Investors Chamber of Commerce and Industry, cautioned that the "economic repercussions are still unfolding and the total damage could be even greater if the protests continue."
The remittance boycott, however, could backfire if the government turns it against the protest movement.
"The current situation is complex and there are lots of pressure points," said Dhaka-based economist Rubaiyath Sarwar, adding that the government may "attempt to use it as a tool to raise friction between the low-income population and the students."
Campaign calls on nearly 10 million expats to pressure government over violence
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