The picture of inflation portrayed by Centre for Policy Dialogue (CPD) just ahead of the budget presentation for the 2024-25 fiscal is extremely alarming.
Though the overall inflation is 10 per cent the food inflation is way higher. While the issue of high inflation is being heavily discussed for the last couple of years, the government taking any effective steps is unheard of.
The poor and limited income people in Bangladesh are being affected the most by the price hike of daily essentials including rice, pulses, edible oil and sugar. Their incomes didn’t increase much. The analysis done by CPD showed, the price of rice has increased more for the poor than the rich people.
The price of coarse rice has increased by 30 per cent in the last five and a half years. The same coarse rice that used to sell at Tk 40 per kg in January 2019, sold at Tk 52 per kg this May. Over the same period, the prices of miniket and paijam varieties of rice have increased by 17 and 18 per cent respectively.
Compared to January 2019 the price of lentils has increased by 95 per cent and the price of packaged flour has hiked by 54 per cent per kg in May 2024. During the same time, the price of loose soybean oil has increased by 84 per cent and the price of palm oil has gone up by 106 per cent per litre.
The study conducted by CPD shows that the price of rice in Bangladesh is higher than that in Thailand and Vietnam. The price of a kg of sugar in Bangladesh is Tk 130. Meanwhile, in the European Union the price of sugar is Tk 39 when converted in Bangladeshi currency and in the US it is Tk 96. The reason for this is the high import duty.
A few years ago, there came out news that Bangladesh stands on top of the list of countries becoming ultra-rich very fast. Inflation is not an issue for those becoming owner of mass wealth in rapid time.
Meanwhile, the daily essentials have now turned into luxury items for the poor. Earlier, fish and meat used to be considered luxury items to the poor people. But now, rice, pulses, edible oil and sugar have also gone out of reach.
Policymakers of the government usually blame the price hike of food items onto the international situation including the Russia-Ukraine war. Then how did the other countries kept inflation under control? The inflation rate in India is also under five per cent.
The economy of Sri Lanka that went bankrupt a couple of years ago is also rebounding. They have brought the inflation rate under six per cent. For that, they have adopted a few strict measures which the Bangladesh government couldn’t. What could be the logic behind imposing heavy import duty on sugar or fuel oil?
The mismanagement and irregularities in market management have indeed turned into regular practice now. As a result the market of locally produced goods is also held hostage before the syndicate or a certain group of people, let alone the imported goods.
How to recover the market out of this hostage situation then? It is the modernisation of market management and ensuring uninterrupted supply of goods. Alternative measures have to be adopted in cases where the prices of imported or locally produced goods are being hiked as per whims by forming a syndicate.
The open-market sale activity, managed by the TCB has to be kept running everywhere in the country all the time so that the poor can buy daily essentials at discounted price. Occasional activities in one or two mega cities will not produce any positive results.
We need a coordinated and all-out programme to prevent inflation. If Sri Lanka could bring down the inflation rate from a whopping 69.8 per cent to only 6 per cent in a difference of just two years why cannot we?