Staff Reporter :
High commodity prices combined with increasing inflation could worsen inequality in Bangladesh as poor and low-income group people struggle to maintain their livelihood with their limited earnings, according to the Centre for Police Dialogue (CPD).
“Prices of essential items such as rice, flour, eggs, edible oil, beef, sugar, onions, milk (both powder and liquid) etc. are substantially higher in Bangladesh when compared to the global market, affecting the poor people who are already suffering from erosion of purchasing capacity for pandemic caused income losses,” said the independent think-tank at a media briefing at its office to share its analysis on the Bangladesh economy amid changing global scenario.
CPD mentioned that inflationary pressure will hamper a sustainable and inclusive pandemic recovery, since the real purchasing power of many people will decline, causing further inequality.
It observed that unscrupulous market players have always been active to take advantage of difficult periods, by stockpiling and creating artificial crises in the market.
CPD also recommended for an efficient market management through close monitoring and supervision to keep the commodity prices under control during Ramadan and beyond.
“There is a common tendency in Bangladesh to blame external factors for high commodity prices even if certain items do not have any connection with the global demand,” said CPD Executive Director Dr Fahmida Khatun.
Prices of rice, edible oil, egg, beef and sugar increased significantly faster than the international prices, she said, adding a litre of milk in Dhaka is now more expensive than a litre of milk in Ostrava, Czech Republic, Malaga or Spain.
A dozen of egg now costs more in Dhaka than Dayton of USA, or Cyberjaya of Malaysia, she said.
“However, our monthly average earnings of employees is much lower than the countries,” she added.
CPD stressed the need for a strong market intelligence to check the price manipulation in Bangladesh.
“The role of the competition commission needs to be strengthened particularly in the case of the essential consumer goods market. The commission should develop a database, regularly monitor the dominant market players’ operations, examine the market control and manipulation (if any), and take proper measures,” it said.
CPD urged the government to increase the volume of sale of essential commodities through the open market system (OMS). “Besides, distribution of these commodities must be managed effectively and without any corruption, so that the eligible people have access to these items at low prices,” it suggested.
It also recommended the government to provide direct cash support to the poor, enhance social protection for low-income families, and extend stimulus to the small businesses for their survival during difficult times.
“Moreover, the government should prepare for maintaining adequate food stock not only through better agricultural production but also through importing food. There is a need for actual demand estimation of rice and other food items in the country,” CPD added.
CPD stated that during a crisis, food-exporting countries would not export food without meeting their domestic demands first. If they decided to export, the prices would be exorbitant. Therefore, planning the production and import of food should be done early on.
Regarding the volatile global crude oil market, CPD suggested the government to make advance purchases to mitigate economic pressure as making deals when global prices are high will add greater stress on the government’s finances.
Prof Mustafizur Rhaman, distinguished fellow of the CPD, and Zahid Hussain, former lead economist of The World Bank, and Prof M Tamim, also spoke at the event.
