Friday, 30 September, 2022

Fall of industrial production alarming

Fall of industrial production alarming

That the industrial production lowers amid the power and gas crisis in the country is a real threat to our economy that was already struggling to ensure full recovery from the pandemic-led crisis. The disrupted market supply and inflation induced by the Russia-Ukraine war have put the world economies in new challenges which, according to many people, are more difficult than that of the pandemic. Bangladesh’s economy is also feeling the heat of the war.

It is learnt that though the government has declared special stimulus packages during the pandemic in order to keep afloat the industrial sector, many of the companies were yet to recover fully. The gas and power rationing initiated in response to the prevailing energy crisis has put a new spoke in their wheel. Due to the disrupted supply, industrial production has lowered to a great degree, almost 50-60 per cent in some cases. Consequently, many exporters are failing shipment deadlines and facing trouble paying wages to their employees. On the other hand, the production cost has also increased by 20 per cent. Against this backdrop, the local producers have found it difficult to stay competitive in the global market. If such a situation prevails for a long time, not only the country’s export earnings will decline, many companies will close in near future, hampering the economic progress of the country.

Therefore, the government must take immediate steps in this regard. Uninterrupted supply of gas and power should be ensured to the industries at any cost. In this regard, the policymakers may consider keeping export sectors out of gas and power rationing to ensure uninterrupted international business. If necessary, buying gas from the spot market that was stopped following the unusual price hike of gas in the international market should be resumed. As immediate measures, the abovementioned strategies can be followed.

The current situation is actually a result of not being bold enough to explore offshore oil and gas, poor maintenance of pipelines and not being proactive. It is also a stark reminder of just how important it is for a country to have its own supply of fuel. So, the country must give priority to lessening the dependence on imported LNG and must focus on domestic oil and gas exploration that has been halted for a long time.