‘If per capita income is USD 2824, why are fish-meat luxury products?’

Noted economist Selim Raihan has said the actual earnings of the low-income people have gone down significantly and they are being compelled to exclude fish and meat from their menu.

A question emerges how the fish and meat become luxury products when the per capita income here is USD 2824, he said while speaking as a keynote speaker at a virtual seminar styled ‘Bangladesh economy: Concerns and actions’ on Thursday.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said the major concerns amid the current economic crisis are high inflation and food security risks.

Inflation has been hovering between 6 and 9.5 per cent since February. There are controversies that the figure is higher in reality, but the authorities understated it, he said, adding that the inflation rates of India, Vietnam and Indonesia are still lower than Bangladesh.

India registered an inflation rate of 6.77 per cent in October when it was 5.71 per cent in Indonesia and 4.3 per cent in Vietnam. But the rate was 8.91 per cent in Bangladesh, he detailed the comparison.

Selim Raihan cited the results of a series survey on the workers of the export-oriented garment industry and said their food security index has been on decline. It denotes the workers and their children are consuming less food than before. Their monthly wages and daily work hours decreased due to the low purchase orders in the industry.

The high inflation rate and the falling actual income have posed a risk to food security. The forex reserve depleted by USD 1 billion on average throughout the last 11 months. Also, there is no good news regarding the export and expatriate income.

The number of import LCs (letter of credit) declined to a good extent. The low import of capital machinery and intermediate raw materials would eventually reduce the economic growth and employment in the current fiscal, he feared.

The economist further said the foreign loans are taking a new shape. If exports and expatriate income do not rise in the coming days, there will be an extra pressure on the economy for repayment of the loans after a few years.

The marginal people should be brought under the social safety programmes for a shorter term to overcome the current crisis. The range of the programmes should be widened as many fresh people will face the risk in food security.

It needs to contain the depletion of the forex reserve. Also, the government needs to be intent to carry out necessary reforms in the revenue and the banking sector for a medium term.

Apart from that, a high-level committee should be formed with all the stakeholders to overcome the current crisis. Action may be taken as per the recommendations of the committee.

In response to a query, Selim Raihan said there is little risk of famine in the country. But talking about famine again and again creates a kind of panic, which may benefit a vested quarter.

Although not a famine, there might be temporary food crises in some places. Action should be taken in advance where such a fear prevails, he added.