Ukraine war Impact in Bangladesh business

The war-induced challenges have surfaced on various fronts. With global economic integration, a
crisis of such nature, which involves a country like Russia, is bound to impact other economies.
The negative impact of the war would not be confined to Russia-Ukraine rather it will hurt all the
nations across the world. Bangladesh is already impacted for the heat of the Russia-Ukraine war
in many ways like Bangladesh’s trade and business, inflow of FDI and access to international
loans and grants and many other things. the impact through reduction in exports and rise in
import bills. For Bangladesh the immediate impacted because higher fuel prices. With the
generation of electricity running increasingly on heavy fuel oil and diesel, and also increasing the
cost of producing electricity and of transportation cost. Bangladesh’s export business will be
hampered in Russia for Ukraine war. bilateral trade between Bangladesh and Russia is worth
nearly $1 billion, while two-way trade with Ukraine amounts to about $350 million where both
trades are affected. Bilateral trade with Russia, US$1.14 billion in the last fiscal year (FY21), is
small compare to Bangladesh's total global trade worth US$ 104.35 billion. Understandably,
disruption in trade, especially export, will be costly. In the last fiscal year, Bangladesh exported
$665.30 million to Russia of which around 95 per cent was textile and clothing. Due to war, it
will be difficult to continue the export as cost of shipping is likely to surge. The more
challenging will be retaining the export receipts as the United States (US) along with European
Union (EU) has imposed sanctions on Russian banks to cut off the country from the global
financial system. Being an oil-importing country, Bangladesh is already feeling the pressure for
high import payments because the price of oil and gas would increase on the global market that
would put pressure on Bangladesh’s balance of payment. It may be impossible or more difficult
for Bangladesh to use dollars or euros to pay for or receive Russian products. This could make
trade much more difficult between the two nations. With high oil prices, the chain effect is felt
through a hike in the prices of gas, fertilizer, and other essentials items. This could lead to rising
costs for farmers in Bangladesh, who are scaling back on fertilizer use to make ends meet the
government raised diesel prices in November 2021 by about 23 percent, which has already been
reflected in the market through the high transport costs and prices of other essential items.

Ref: https://www.dhakatribune.com/business/2022/02/27/no-immediate-impact-on-bangladesh-
but-businesses-wary-of-oil-and-food-price-hike