POLITICAL INSTABILITY A MAJOR OBSTACLE TO ECONOMIC GROWTH IN BANGLADESH

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POLITICAL INSTABILITY A MAJOR OBSTACLE TO ECONOMIC GROWTH IN BANGLADESH

ABSTRACT

This article examined the relationship of political instability and Economic growth of Bangladesh. Political stability plays a crucial role in economic development, integration of economic modes and in maintaining natural development in the national economy. An unstable political environment can be detrimental to the speed of economic development for any country of the world. Any kinds of lingering inactivity can be barrier to international or domestic trade. That can cause an obstruction for commercial organizations that import or export perishable goods. Opposition political parties and interest groups in Bangladesh organize hartals, one kind of strikes as a form of protest against the ruling parties that last an entire working day though the duration could either be shorter or even longer. Hartal has a history of civil disobedience against colonialism in South Asian countries, but that is increased dramatically in Bangladesh in last decades.

It is observed carefully at various forms of political instability, such as, civil-war onset, social unrest, coups d’état, and transitions to and from democracy and its connection to economic growth. The effect on different arena of economy like Export, Price level, Activity of port, Tourism sector, Human right etc. is considered as well. This paper provided strong evidences of substantial productivity loss by firms when multiple hartals occur in a week. Though it has been found that firms re-optimize in response to political strikes, they became able to substitute among factors inputs, mostly by decreasing costs on wages and capital consumptions. Obviously small firms suffer the most due to hartal because it is harder for them to re-optimize those factors to reduce the expenditures in the short-run. Another disappointing fact that hartal imposes a large cost on the whole economy. It has the negative impacts on GDP, revenue collection and some other crucial economic factors. These findings suggest that the relationship between economic growth and political stability are more complex than is widely presumed.

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