Bangladesh state of emergency gives hope to investors

By Serajul Islam Quadir

DHAKA, Jan 15 (Reuters) - A state of emergency in Bangladesh principally aimed at tackling political violence to create conditions for a free and fair election has provided a spark for the economy.

The Dhaka Stock Exchange reported that trading volume on Sunday, a working day in the mainly Muslim country, was the highest in 10 years.

The main port of Chittagong, which handles more than 80 percent of Bangladesh's international trade, went back to full operations after political chaos and transport blockades had caused weeks of disruption.

A Jan. 22 national election has been postponed while a new interim government draws up plans for a fresh ballot. The vote was postponed after the president quit as head of a caretaker government in an attempt to halt weeks of political violence.

Political stability from now would boost the chances of the economy achieving growth of 7 percent in the fiscal year to the end of June, the central bank governor, Salehuddin Ahmed, said on Sunday.

The economy grew 6.7 percent in 2005/2006.

The interim government has imposed a state of emergency to rein in the political violence in the country of 140 million people, half of whom live on less than $1 a day.

The state of emergency has generally been welcomed by Bangladeshis after months of violence in which 45 people were killed and hundreds injured.

BUSINESS HOPES

The all-share price index of the Dhaka Stock Exchange (DSE) rose on Sunday by 58.04 points, or 4.46 per cent, to 1,359.20, its highest level since 1996, DSE officials said.

"The investors are coming back, encouraged by the improvement in law and order and a thaw in political bickering among mainstream parties," Salahuddin Ahmed Khan, chief executive of the DSE, told Reuters.

Business leaders said transport blockades or strikes cost the country's crucial garments industry more than $70 million a day in lost business.

Anwar-ul-Alam Chowdhury, a garment exporter and a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the state of emergency would help trade resume but the credibility of the election would be crucial for longer-term business prospects.

"We need a free and fair election that would ensure sustained peace and stability and allow business to grow undisturbed," he said.

No date for the election has been set, but officials say it may take a few more months to arrange.

Garments exports were worth nearly $8 billion in the fiscal year to the end of June 2006, dominating total exports of $10.53 billion.

($1=70.33 taka)