Muhammad Mahboob Ali
A string of serious fires, including a major one that brought operations at Hazrat Shahjalal International Airport to a halt, has revealed deep institutional flaws in Bangladesh. These events threaten the country’s economic progress. They are not one-off accidents but symptoms of broader failures in governance that are hurting the entire economy. According to a BBC report, business leaders fear losses could exceed $1bn. The fires at the airport, a Mirpur garment factory, and an industrial plant in Chattogram point to an economic emergency that puts the nation’s growth, financial health, and public well-being at risk.
Recent fires show a repeated neglect of safety rules. This carelessness is eating away at the economy’s foundations. When companies ignore safety and local officials don’t enforce laws, small failures add up to a national problem. This creates a high-risk business climate where the fear of disaster affects loans, investments, and daily trade. The financial damage goes beyond burnt buildings and tragic deaths. Because these fires keep happening, they create uncertainty and throw the economy off balance. The link between supply and demand, investment, and trade gets broken, and everyone feels the effects.
Exports are the main engine of Bangladesh’s economy, and they are especially exposed. The garment industry, which brings in over 80% of export earnings, depends on tight deadlines and firm contracts with global brands. A major factory fire doesn’t just wreck machinery; it ruins production plans. This means delayed shipments, cancelled orders, and lasting harm to the country’s reputation. International buyers, now more cautious about risks, may start looking elsewhere, seeing Bangladesh as an unreliable partner.
Every cancelled order and delayed shipment directly leads to a decline in foreign exchange earnings. This loss of vital US Dollar revenue weakens the country’s financial backbone, limiting its ability to pay for essential imports and service foreign debt.
At the same time, the import sector is facing major delays. The airport fire damaged a key national hub. The airport is essential for bringing in time-sensitive raw materials, especially for garments and medicines. Its temporary closure caused immediate supply problems, leading to factory delays and higher costs for businesses forced to find other shipping options. This hurts the very export factories that rely on these supplies, creating a cycle that slows down production.
This high-risk environment also deters Foreign Direct Investment (FDI). International investors seek stable and predictable environments. Persistent fire incidents signal systemic governance issues and operational risks, making Bangladesh a less attractive destination for the long-term capital needed for infrastructure and industrial growth.
Banks are also in a tough spot. They have lent large sums to industries. A fire that destroys a factory can make it impossible for a business to repay its loans, leading to a rise in bad debt. In response, banks tighten lending for everyone, making it harder to get loans and slowing economic growth. Insurance companies, facing big payouts, raise premiums for all businesses, an extra cost that cuts into profits and discourages investment.
The real impact of these fires is also measured in human suffering. Beyond the lives lost, fires destroy livelihoods and directly cause unemployment. When a factory burns down, workers are laid off indefinitely. These effects hit the poorest the hardest, as low-income workers in factories and the informal economy have the fewest resources to recover.
Fixing this crisis requires a complete strategy where public safety is treated as essential to economic health. A clear, step-by-step plan is needed:
- Update and Enforce Laws (Short-Term): Quickly strengthen the National Building Code and fire safety rules, with clear instructions for hazardous materials and strict separation of factories and homes.
- Empower Institutions (Medium-Term): Give city authorities the tools and mandate to conduct regular, surprise inspections. A public database of results would ensure transparency. Also, invest in the Fire Service with modern equipment, more staff, and better training.
- Modernize Infrastructure (Medium to Long-Term): Treat infrastructure as a priority. Redesign cities to ease traffic, create emergency lanes, and ensure water access for firefighting. Upgrade key economic zones and vital facilities like airports.
- Build a Safety Culture (Long-Term): Launch a national campaign to raise safety awareness among businesses. Offer incentives like tax breaks or lower insurance costs to companies that meet high safety standards.
Societal banking plays a pivotal role in this process through micro-savings and micro-investments. By focusing on community needs and financial inclusion, societal banking institutions can provide access to credit for underserved populations, including small businesses and low-income households. This access empowers individuals to start businesses, invest in education, and enhance their living conditions. Moreover, societal banking promotes responsible lending practices, ensuring that borrowers are supported sustainably.
Additionally, societal banking fosters collaboration between financial institutions and communities, leading to tailored financial products that address specific local needs. This not only enhances financial literacy but also builds trust within communities, encouraging more people to engage with the banking system.
The recent fires are a clear warning. They show how basic failures in governance can trigger a chain reaction: declining foreign exchange earnings, deterred investment, rising inflation, and heightened unemployment, all of which deepen inequality and injustice. If Bangladesh wants to keep growing, building a safe and resilient society is just as important as sound economic policies. The safety of its people and businesses is the real foundation of lasting prosperity. The choice is clear: invest seriously in safety now, or keep risking the nation’s economic future and social fabric with preventable disasters.
The writer is a Professor of Economics at Bangladesh University of Business and Technology
