How Bangladesh Tackle the Economic impact of Russia vs Ukraine War
There have been significant changes in the financial markets and global geopolitics, in addition to disruptions in supply lines, sanctions, the displacement of millions of Ukrainians, and thousands of deaths. When the globe collapsed into the depths of the Covid-19 epidemic two years ago, no one could have imagined this. Yet here we are, in a brand-new hell.
With the official announcement by Ukrainian president Zelenskyy that he intends to comply with one of Vladimir Putin's main demands—that Russia not join NATO—and with Moscow's pledge to scale back "operations," tensions have, to some extent, decreased.
Bangladesh's foreign policy is clear from its abstention in the first UN General Assembly vote on the Ukrainian resolution to its backing in the second. And a major question is still whether Bangladesh would think about looking for alternate payment ways to maintain its commerce with Russia. Because it affects them, how third parties handle the issue has consequences.
Keep in mind that the Russian attack of Ukraine was anticipated, and that the Pakistani PM traveled to Russia early on. The future will reveal whether the growing gulf between Washington and Islamabad has any larger ramifications. Here are some opinions from specialists in the area regarding Bangladesh's response to the issue against this background.
UNGA votes
Two UN General Assembly votes, each with 193 members, were held on March 2 and March 25, respectively, since the start of Russia's full-scale invasion of Ukraine on February 24. The Ukrainian resolution was approved by Bangladesh 23 days after Bangladesh, along with certain other countries including India and China, abstained on March 2.
ShahabEnam Khan, an international relations professor at Jahangirnagar University, claimed that "there hasn't actually been any change in Bangladesh's policy" and that "these two resolutions are separate things."
Before drawing any conclusions, the professor contends that it is crucial to comprehend the fundamental character of the proposed solutions. The first resolution focused mostly on criticizing Russia and demanding that the invasion halt right away. Khan claimed that it included a geopolitical and geostrategic element. Yet, the second vote was in favor of providing humanitarian aid to Ukraine. Khan continued, "Bangladesh cherishes humanitarian assistance, and voting in favor of the welfare of the citizens corresponds with Bangladesh's constitution Article No. 25 and ideals." On March 25, 35 of the 193 member nations abstained, including China and India, two significant powers and economies. It might be inferred that China and India have more stakes than Bangladesh.
Imtiaz Ahmed, professor of international relations at the University of Dhaka claims that Bangladesh's involvement in two UN resolutions on Ukraine demonstrates that the administration is effectively handling the Russia-Ukraine situation. In the face of the crisis, "Bangladesh has acted well," he remarked.
Ahmed asserts that this crisis is distinct from the 1973 and 1979 oil shocks because the globe is transitioning to a multipolar one. He continued, "These UN resolutions do not really measure very much anyway;”
A power plant and hefty trade volume
The Rooppur Power Plant in Bangladesh is one of the primary issues that concern Bangladesh with regard to Russia. Alexander Mantytskiy, the Russian ambassador to Bangladesh, recently reaffirmed that business will go as usual, and there will be no problem regarding Russian financial and technical support.
Russia is another market for ready-made clothing (RMC) created in Bangladesh. Bangladesh exported $550 million to Russia in FY2021 while importing $480 million from that country.
"Yes, RMG commerce would be damaged," said Rumana Hoque, professor of Economics at Dhaka University. "But it is impossible to determine to what extent," she added. "I don't believe the effect will be that significant that it will leave a hole of loss."
Alternative Barter system or Methods
Additionally, several countries, like India and China, are looking for methods to continue doing business with Russia despite the latter's exclusion from the SWIFT payment system.
On March 14, the Bangladesh embassy in Moscow suggested a trade deal with Russia in a letter to the commerce ministry. In exchange for the supply of pharmaceuticals and potatoes to Russia, food grains, including wheat, fertilizers, and edible oil would be imported. Dr. Ahsan H. Mansur, the executive director of the Policy Research Institute of Bangladesh, said that this was "not a normal situation" and warned that secondary punishments for our businesses or our government for following Western prohibitions could result if Bangladesh chose to adopt alternative measures.
Others
Bangladesh should assure the immediate import of wheat, corn, and soybeans to meet the national demands at fair prices in order to end the food crisis. Government assistance programs depending on income level ought to be improved and expanded.
To reduce reliance on imports of commodity crops, the government should promote diversification by increasing the output of wheat, corn, and oilseeds in the following growing seasons. To make this diversification effective, agricultural research, education, and extension agencies should work with farmers to determine which crops and production methods will be lucrative on their farms. Industry 4.0 should be adopted by Bangladesh, notably Farm 4.0. Sustainable intensification techniques could include modernizing existing equipment, promoting emerging digital technologies, and supporting home enterprises and startups.
We conserve energy by not wasting it and exercising caution when utilizing electricity. The government of Bangladesh takes steps to create a load-shedding schedule so that locals are aware and can complete any necessary tasks before load-shedding. Additionally, BPDC and other relevant authorities work continuously on this issue in an effort to develop and create a pleasant situation for Bangladeshi citizens.
Concluding remarks
The invasion of Russia is still going on five months after one of the world's superpowers, Russia, and Ukraine began fighting on February 24, 2022. This calamity has had a significant impact on the two countries. They don't know exactly how much they have lost, but the economies of these two nations are in ruins. Now is a particularly awful moment for this conflict for the entire planet. The two countries that export the most gas, wheat, and crude oil globally are Russia and Ukraine. The war's large price increases for these goods make the world more miserable and have a negative impact on the economy. Maintaining the World’s food security is a serious concern now. Moreover, the price hike of necessary products also makes people’s life unhappy and uncomfortable.
The devastating economic impact Russia-Ukraine war also affects the economy of Bangladesh seriously. The export earnings and import trade is in deep trouble during this war. Because Russia is one of the major clients of Bangladesh’s RMG products. For the sanction, the SWIFT transaction of Russia creates a major threat for Bangladesh. Russia is the major financer of many development projects including the Country’s first nuclear power plant, the Ruppur Power Plant. But Russia assures that this project will not be hampered due to the various sanctions. Food security in Bangladesh is a great threat in recent times.
The long-term recovery from the COVID-19 epidemic is already being threatened by these worries, and they undoubtedly will impede efforts to accomplish the SDGs by 2030. To effectively manage Bangladesh's food security requirements, the government will need to coordinate its efforts, with the assistance of international partners like the IMF to ensure adequate financing, combine consumer subsidies, market intelligence, and swift evaluation of food and fertilizer distribution program performance.
In addition, the power sector of Bangladesh is dreadfully affected by this war. Bangladesh is mainly dependent on imported LNGs for producing electricity. Russia is the major exporter of LNGs for Bangladesh. As a result of the abnormal price hike of LNGs in the world market, Bangladesh can’t import LNGs now and the country’s power sector is in an immense crisis now. Bangladesh's Government and other authorities concerned work continuously to maintain the pace of the growth of the country smoothly. The war between the two countries is not yet over. Let’s see what happened in the future and these two nations sit together and negotiate with each other and find a suitable solution for them. We have to be more careful in this regard so that our economy will not be affected any more in future.