The PMO directed several initiatives which include reduction of duties and taxes, import by TCB, punitive actions against importers' syndicates, display of price lists at the retail markets by the city corporations, selling of some essential items at different city points by TCB and other governmental agencies including BDR, vigilance by intelligence and law enforcement agencies, close monitoring of market prices, etc.

The involvement of PMO in regulating the prices, apparently, has gone unheeded. The private TV channels have been airing market reviews which show that while the buyers were very much dismayed at the prevailing price level the shopkeepers predicting further rise in the coming days.

Against this backdrop on September 13, Khandaker Shahidul Islam, (secretary, PMO) called and presided over a meeting which was attended by high officials from different ministries and organizations including Chittagong Port and Bangladesh Bank. The port authority informed the meeting that huge number of containers is lying at its yards containing essential items for clearance. BB, reportedly, has also presented a very rosy picture of the supply side.

The consumer right activists and market analysts, however, hold somewhat different views. They blame government failure to streamline the supply chains, which is frustrating its efforts to cool the prices. For example the prices of potatoes is on the rise. In a week in the kitchen markets prices increased from Tk. 18.00 to Tk. 20.00 per kilogram, registering an increase of over 120 percent in a year. Against estimated market demand of about 800,000 tons till the next crop of potato is harvested in early December, the available stock in cold storages said to be around 500,000 tons.

Similarly, against the estimated demand of 50,000 tons of chickpeas the available stock and imports in pipeline amount to 30,000 tons. It seems there is gap between availability and estimated demand in case of other items too. With inelastic demand, with even a small shortfall in supply of an item of everyday consumption there could be sharp rise in prices.

Several factors contributed to the unprecedented rise in prices during the tenure of the present government. In two articles on price spiral that appeared in The Daily Star on May 22 and August 18, I tried to highlight them. The main reasons are fall or near stagnation in production of rice, wheat, pulses, oil seed, sugarcane, jute, etc; depreciation in the value of the taka; rise of importers' syndicate with close nexus with a powerful quarter within the government; all-pervasive corruption and toll collection, rise in transportation costs, etc.

Prudent policies as well as administrative measures are needed to combat the situation. However, the government appears to be concentrating on administrative measures mainly to bring the prices down. The measures like selling of rice through OMS dealers or other essential items by TCB, BADC, BFDC, and BDR at several points in the city may give respite to some consumers temporarily, but they are unlikely to have any impact on overall price spiral.

The NBR has reduced import duties on certain items, though the finance minister earlier expressed his doubts about efficacy of tax reductions in curbing prices. The importers allege that these reductions were too meager and too late. The consumers are unlikely to enjoy any benefit of this belated action during the Ramadan.

The personnel of intelligence and law enforcement agencies started visiting wholesale and retail markets. If their visits deter the toll collectors from visiting the markets there would be reduction in cost of doing business and might have positive impacts on prices.

However, in a recent seminar in the FBCCI the business leaders alleged that to bear the "Eidi" payable to law enforcement and other governmental agencies the traders are left with no choice but to increase the prices during the Ramadan by a few percentage points.

The government embarked on distributing over 100,000 tons of rice through about 10,000 OMS dealers throughout the country. TCB and other governmental agencies have also started selling some essential items from trucks at different points of the metropolis at reduced prices. However, they would meet only a tiny fraction of consumers demand. In case corruptions engulf the system, which is typical of governmental distribution efforts, they would bring more shame than applause from the public.

All of a sudden the taka has started appreciating. Good news for the importers. The finance minister has already claimed a laurel and predicted that as a result prices would come down. In any case, the fasting faithful would not be able to enjoy the benefits this time. Some bankers and economists sensed government's hands behind the rising value of the taka, which they apprehend would have adverse impacts on export earnings and remittance inflow through official channels from expatriate workers.

The government is in a difficult situation. In the short run, if the movement of goods can be made unhindered by toll collections by ruling party cadres, goons, and law enforcing agencies, the prices, particularly of agricultural produce, may come down by several percentage points. Some restriction on exports of vegetables and fish would improve the supply situation markedly and scale down the prices. However, no such efforts are in the offing.

The PMO's involvement in combating prices was not well advised. It would not make any difference but only would demonstrate ineffectiveness of the highest office. The consumers will continue to suffer from price spiral during the month of Ramadan and the rest of the tenure of the present government. The inclement weather has making a bad situation even worse. Whatever actions the government has taken so far seem to be too little, too late.

The author is a former Secretary to the government.