Dhaka: In Bangladesh, fuel prices were hiked by 50% in one day. After this, the discontent of the Bangladeshi people, who were already suffering from inflation, erupted into huge protests against the government. In some places, these protests turned violent. Also, at some places, the protesters surrounded the fuel pumps and demanded the withdrawal of this price hike. After the economy of Sri Lanka went into the abyss a few days ago, there was a similar huge public uproar in Sri Lanka.
Moreover, some analysts are claiming that Bangladesh also is on the same path. The government of Bangladesh had announced a big hike in the prices of petrol and diesel on Saturday. A whopping 52% hiked petrol-Diesel rates. This is the most significant one-time fuel price hike since the creation of Bangladesh. As a result, petrol rates have increased from 89 takas to 135 takas overnight, while diesel and kerosene rates have also increased by 45%. In the last few months, the foreign reserves of Bangladesh have decreased significantly. Also, the debt burden has increased. Foreign reserves have declined to $38 billion from $45 billion at the beginning of this year. As foreign reserves dwindle, Bangladesh turned to the International Monetary Fund last week and sought a $4.5 billion loan. Against this background, the Bangladesh government has decided to increase the price of fuels.
Furthermore, the import costs for Bangladesh have shot up given the Fuel price hike triggered by the Ukraine conflict and the increased edible oil and food grains, draining foreign currency reserves rapidly. As per some reports, there is a condition to withdrawing concession on fuel rates before taking a loan from the International Monetary Fund. Due to this, the rate was increased. But with this unprecedented price hike, huge discontent has erupted in Bangladesh. Inflation has already skyrocketed in Bangladesh. It is predicted that inflation will flare up further due to this price hike.
In Pakistan and Sri Lanka, foreign reserves have reached the bottom, causing a huge economic crisis. In Sri Lanka, after large demonstrations, the President and the Prime Minister had to leave their power and flee and a new government came into power. Sri Lanka is trying to re-emerge on with Indian help. Now there is fear that another neighbouring country of India in the form of Bangladesh, will be in a similar situation.
Meanwhile, Chinese Foreign Minister Wang Yi is visiting Bangladesh, and four important agreements were signed between the two countries during his visit. In this, the agreement for marine research and assistance in emergencies can create a crisis for India. China is feared to increase its influence on the Bangladesh economy through these agreements.
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