We are living like the poor, paying like the rich
12 April 2023
Apart from Ukraine war-induced supply chain disruptions and commodity price surges in the global post-Covid pandemic market, the government's weak policies also have been a major contributing factor to the present reserve crunch and food price hike in the country. The poor and the fixed income people continue to struggle with the ever-increasing prices of daily essentials. Thus, many have been forced to compromise on their standard of living, economists have said.
The question is, why are consumers being forced to buy locally produced food at such high prices? Why are field-level growers, farmers and workers so poorly compensated? A handful of items that were once considered the "poor man's protein", are no longer accessible to the poor. We are now living like the poor, but paying like the rich in the absence of strong market monitoring.
Controlling of the dollar rate for a long period, followed by a sudden 25 per cent increase amid global pressure, was one of the main causes of the foreign exchange reserve crisis, the economists mentioned while addressing an event, organised by the Economic Development Research Organisation in the capital recently. To them, over-invoicing and under-invoicing in imports, smuggling money out of the country in various ways and a rise in the use of hundi are all contributing to the reserve crunch.
According to media reports, quoting the study of the Consumers Association of Bangladesh (CAB), the middle-income people have suffered the most throughout the year 2022. The study was prepared on the basis of monthly price data of 141 food items, 49 non-food products and 25 services collected from 11 markets in the Dhaka north and south city corporation areas. Among the major items considered were rice, flour, pulse, sugar, fish, eggs, domestic poultry, edible oil, vegetables, and transport costs. The latest data of the state-run Trading Corporation of Bangladesh (TCB) shows that prices of almost all essentials have increased between 1 per cent and 151 per cent year-on-year on average.
Low-income people are under a lot of pressure due to the increase in the prices of food grains and other essential commodities. Only verbal assurance will be of no use to them. To keep the market stable, the authorities must ensure stockpiling and supply of daily commodities, especially food products. TCB should also be proactive in this regard. If the supply of goods is stable, traders will not be able to raise prices arbitrarily by creating an artificial crisis. But strong market monitoring is a must.
