The new interim government, which assumed power on Thursday night, faces the challenging task of stabilizing the economy by restoring public order and fully reactivating key institutions.

The economy was already struggling before the recent turmoil, and it has nearly come to a standstill following the student-led upheaval that led to the ousting of the Awami League government.

After taking office, Dr. Muhammad Yunus and his newly appointed advisers promptly began their efforts over the weekend to restore the government machinery to full operation.

Despite it being a government office's weekly holiday, the Secretariat was bustling with activity. Several advisers, who were appointed on Friday, began their first day at the administrative hub of the government.

"We are determined not to let the economy come to a standstill," Finance and Planning Adviser Dr Salehuddin Ahmed told reporters at his Secretariat office. He outlined the various factors contributing to the economic slowdown and emphasized that one of his government's major tasks will be to revive the economy as swiftly as possible.

The ousting of the Awami League government after a major student protest has led to widespread disruption. Police stations are empty, the central bank lacks leadership, the revenue chief is under pressure to quit, and banks are either not fully functioning or undergoing major management changes.

The judiciary is also affected. The chief justice has resigned amidst student demonstrations, and lower court judges are worried about their safety.

The economy has been significantly hampered by a combination of factors, including internet blackouts, curfews, and transportation disruptions caused by student protests and the subsequent government crackdown.

These disruptions have led to congestion at Chattogram Port, affecting import and export activities. The instability has also resulted in a depreciation of the local currency, making imports more expensive and further straining the supply chain.

Consumer spending has decreased, export orders have fallen, and industries are grappling with both an energy crisis and a shortage of foreign currency. The overall economic situation is far from normal, with businesses hesitant to operate at full capacity.

Restoration of supply-chain

Economists and analysts of the country say that a  significant boost is needed to revitalize the economy and restore its normal functioning.

Advisers to the interim government, who recently assumed their new roles, have emphasized the immediate need to restore public security in order to revive both daily life and the struggling economy.

Finance and Planning Adviser Dr Salehuddin, a former central bank governor, highlighted the numerous challenges facing the interim government, including a weakened banking sector and persistent inflationary pressures.

He stressed that prioritizing law and order is crucial but not the sole focus; ensuring the smooth functioning of banking and port activities is also essential for economic recovery.

There are signs of improvement, with supplies to the market increasing.Although retail prices have started to decline from their peak, the disruption caused by protests and subsequent violence continues to impact the economy.

While the supply of imported goods has normalized at both sea and land ports,consumer demand remains low due to income loss and a prevailing sense of insecurity. Import-export activities at Benapole, the main land port with India, have resumed after a three-day suspension, and trade is expected to return to normal soon.

Similarly, import activities through Bhomra land port are also operating as usual. However, the supply of imported consumer goods from Chattogram Port to the local market was disrupted for several days due to attacks and vandalism during the protests, further impacting the retail sector.

The supply of essential goods was disrupted due to lighters delaying unloading and anchoring away from landing stations in fear of looting. Vandalism at several ghats along the Shitalakshya river further impacted the supply of commodities to Dhaka, Narayanganj, and other districts.

However, the situation has started to improve. Meanwhile, the readymade garments sector, the country's largest export sector, has ramped up production to meet export deadlines and recover losses from previous disruptions.

This surge in production has led to increased congestion at Chattogram Port, raising concerns about potential delays in meeting supply deadlines.

Private depots in Chattogram are experiencing a significant backlog of export containers due to congestion at the main seaport and increased supply from factories. The situation is causing delays and disruptions for exporters, particularly in the apparel industry.

Industry representatives are urging the port authorities to take urgent action to clear the backlog and ensure smooth export operations.In addition to export backlogs, the port yards are also facing increased pressure from import cargoes.

Disruptions in customs activities have resulted in a backlog of 44,000 import containers at Chattogram Port yards last week. While the port congestion is gradually improving, it is expected to take another 7 to 10 days for operations to return to normal.

What do the economists suggest?

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), stated that the finance adviser's primary task will be to control inflation through robust monetary and fiscal policies and enhanced market management.

He noted that establishing a banking commission is overdue, with its role being to distinguish between willful and ordinary defaulters.

Rahman also emphasized the importance of accurate data for calculating economic indicators like growth, exports, imports, and inflation. Another priority should be combating money laundering by empowering financial intelligence agencies to boost remittance inflows through formal channels.

Furthermore, stabilizing the foreign exchange market and addressing under- and over-invoicing to increase the central bank's foreign reserves are crucial steps.

The finance adviser should also focus on streamlining the stock markets and ensuring effective implementation of projects under the annual development program (ADP). Lastly, debt management and publishing a white paper on the banking sector are additional key priorities, according to Rahman.

Ahsan H Mansur, also from the Policy Research Institute of Bangladesh, agreed with Rahman's points. He believes the new finance adviser should first focus on stabilizing the banking sector and quickly appoint leadership at the central bank.

Mansur also emphasized the need for a clear 100-day action plan, outlining the finance adviser's reform goals and timelines.

This plan should address various financial areas like taxation, trade, and preparation for graduation from Least Developed Country status. These reforms would ideally boost revenue, allowing for increased spending on important sectors like education and health.

Additionally, Mansur proposed establishing separate commissions to oversee the banking sector and the broader financial market (stock market, bond market, and insurance). The banking commission would play a crucial role in monitoring the financial health of each bank.

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