Cover
Story
Pricey
Shocks
Shamim
Ahsasn
In
the first week of Ramadan when the news of price hike of essentials
dominated every important national daily in the country, a
team of Rapid Action Battalion (RAB) raided Khatungonj, a
wholesale market of Chittagong. With onions being one of the
items being sold at unusually high prices, onion wholesale
shops in Khatungonj, Chaktai and Asadgonj were the targets
of the elite forces. Late in the morning of October 19, plainclothes
RAB members appeared at one of Khatungonj's biggest wholesale
markets, Hamidullah Mian Market, and began their queries about
the prices of onions, garlic, ginger, etc. On completion of
their enquiry, they left the scene only to return in uniform
and in bigger numbers.
After
splitting into several teams, they took position at Mita Traders,
Chittagong Store, Mohammadia Centre, Barkat Bhandar, Hoque
Traders, and ordered the shopkeepers to sell onions at Tk
15 a kg. Some readily complied, not happily of course. But
a brawl was clearly in the making when general secretary of
Hamidullah Market Businessmen Society, Afsaruddin appeared
on the spot and locked in a heated exchange of words. Though
the RAB officers behaved themselves, some of the low ranking
members who were carrying clubs with them harassed the businessman.
A ginger wholesaler, Abu Syed, was even beaten up when he
refused to entertain their command. Fortunately, the RAB teams,
sensing trouble, left the scene. The following day, incensed
businessmen observed a day-long closure of the market and
organised rallies protesting the RAB raid.
Price
spiral of essentials during Ramadan is hardly a new trend.
What is new is the unique measure the government has tried
this year to solve the problem. The government's idea of intimidating
traders and using force to control price hike illustrates
how clueless and unprepared it was regarding the price hike
issue that it could take such illogical steps. In the meantime,
it is the same story again -- another Ramadan, another rude
price explosion, again the government is caught off guard
and another bout of unnecessary hardship for consumers. This
time it was the vegetables that set fire in the market. Eggplants
at Tk 70 to Tk 80 and green chilly at Tk 120 per kg broke
all past records. Almost all vegetables other than potatoes
were selling at over Tk 40 per kg. Onions, an item the demand
of which increases during Ramadan, once again touched the
Tk 30 per kg mark. Rice, the price of which is not usually
influenced by Ramadan, was also selling at a much higher price.
For
lower income and middle income group people, going to the
bazar has never been more upsetting. Forty-five-year-old Sajjadul
Kabir, who teaches science subjects at Motijheel Model School,
is indignant when he is asked about the price hike of essentials.
"During every Ramadan prices go up. Everything has suddenly
become so expensive." His six-member family, with two
school-going sons, is to be managed by his sole income. "I
have never seen vegetables being sold at such exorbitant prices
in my entire life. Half a kilogram of cucumbers cost Tk 25
and one hali (four) of lemons, that too, of very
poor quality, cost Tk 24. With a monthly salary of Tk 8,000
how can we survive?
Though
it's already 8 pm, Kaptan Bazar kachabazar (kitchen
market) has a sizeable number of customers. Ershadul Bari,
who works in the accounts section of Apollo garments in Mirpur,
also shares the same sense of despair as Kabir. "I feel
miserable every time I come to the market. My mother has asked
me to buy some vegetables, but I don't know which one to buy.
Even vegetables like kochur loti, usually a cheap
item, is selling at Tk 30 a kg, not to mention tomatoes that
is selling at Tk 100 per kg," he says. Thirty-two-year-old
Ferdous Hasan who sells tickets at Obhisar Cinema Hall, however,
has worked out an intelligent solution: "I have stopped
going to market and since Ramadan began my menu is rice, egg
curry and pulse."
General
consumers invariably blame the government for the merciless
price spiral of essentials. "What is the government doing
now?" was one question every shopper is asking. "They
will not be found now when the most low quality rice is selling
at Tk 18 per kg. They will come again when the election time
comes," says Abdus Sattar, who sells halim at Kaptan
Bazar.
The
government, on its part, is apparently trying to ease the
situation. After the first week of Ramadan the government
has started OMS (Open Market Sale) through more than 10,000
dealers across the country. But two to three days into the
OMS programme there were many complaints. The programme didn't
take off in many areas both in and outside Dhaka. Dealers
were also discouraged.
"Each
of the dealers would get 500 kg of rice for selling in the
open market. You buy at Tk 12 and sell at Tk 13, and then
there is carrying cost. Besides, you need to hire a hand which
brings down the ultimate profit to less than Tk 300,"
explains Saifuddin, a dealer in Gopibagh bazar. The government
however revised the provision of 500 kg allotment per dealer
on October 25 and started to allot 1,000 kg each. But
the OMS programme aimed to have a positive impact on the price
of rice, didn't really work. While price of coarser rice has
gone down by one and one and a half taka, better varities
such as nazirshail is still selling at above Tk 22. But what
could the government do? Even before that, is the government
supposed to do anything about price spiral? Commerce Minister
Altaf Hossain's predecessor Amir Khashru Mahmud Chowdhury
gave the usual answer to the price hike problem: "In
a free market economy, the demand and supply of goods determine
the price, the government has nothing to do here." Many
believe Mahmud lost his ministerial job for his fondness for
this economic theory and his reluctance -- some say inability
-- to do anything about the price hike. The incumbent commerce
minister had a much more valid excuse to explain the market
situation. The month-long flood as well as the consequent
downpour badly damaged crops of more than 40 districts. So
when newsmen heckled him about the price hike he simply put
the blame on Nature's shoulder. He appeased people, however,
with the assurance that if he got three consecutive sunny
days prices would fall down immediately. Nature took mercy
on us and there has been no rain since then. But the prices
continue to soar.
Though
Bangladesh has adopted a free market economy following the
trend of the times, many believe that the market has been
opened too widely and too prematurely. According to this school
of thought, Bangladesh should follow a middle position, a
free market economy with some restrictions. Bangladesh with
its import-dependant market is reaping few benefits, but losing
out substantially because of it.
Maleque,
Programme and Information Officer, CAB (Consumers Association
of Bangladesh), however, has a more historical explanation.
Bangali Muslims traditionally were never businessmen and it
was the Marwaris and Hindus who dominated business and trade.
A culture of business ethics naturally evolved from years
of business experience and was handed down from one generation
to the next. The present generation of businessmen without
such ancestral legacy of fair play, are more concerned about
making quick profits at any cost. Since, in a free market
economy the government does not do business and has no direct
authority over the market, the control of the market largely
goes to the businessmen, many of whom are unscrupulous and
greedy. "It is this particular group of business people
who, taking the advantage of free market economy, are manipulating
the market for their benefit. In the guise of creating an
association, they have actually created a kind of monopoly
and the general consumers are being held hostage by this,"
Maleque elaborates.
Should
Bangladesh then discard free market economy? "No, all
we need is a certain level of government control over the
market so that in a crisis situation it can intervene and
uphold the interest of the consumers," he says. Like
many others, he strongly believes that, had the government
been a little alert, this type of price spiral of essentials
could have been averted.
But
what could the government do in particular to stop the price
hike of essentials during Ramadan? Price spiral during the
holy month is a usual phenomenon. Much of the unusual price
hike centres around the 70 percent import of agricultural
products such as onion, ginger, garlic, turmeric, pulses,
sugar, oil, wheat, rice, etc. At times when consumption of
particular vegetables increases or when the local produce
drastically falls such as during floods or droughts, unscrupulous
businessmen intentionally hoard the supply for a long enough
time to create an artificial crisis in the market. To keep
prices stable the government can import these items and release
the stock in the market in case of any scarcity, either real
or artificially created. If not on a regular basis, such measures
can be taken ahead of special times like Ramadan or after
a natural calamity. Trading Corporation of Bangladesh (TCB)
was in fact established for this very purpose and was in operation
until recently. Maleque gives the example of Bangladesh Sugar
Corporation (BSC) to illustrate his point. "The government
used to import sugar through BSC a couple of years ago. Sugar
was then sold at Tk 30. Interestingly, when the government
stopped importing sugar, letting the private sector take over,
the price went up to Tk 40. That too after reducing the tax
by 15 percent. What's more, 26,000 registered sugar dealers
were left in the cold, deprived of their only means of livelihood.
Now, around five to 10 importers import sugar and control
the market," he says.
There
is, moreover, no system of monitoring prices on a regular
basis, and it is only after media outcry that the government
wakes up. But little can be done to keep the prices stable
. "The commerce ministry can think of making a data bank
on the prices of daily essentials, record the deficit between
demand and supply at different times of the year, keep the
update about the international market rates, especially of
the goods Bangladesh heavily imports," Maleque suggests.
During Ramadan or at any other time when the prices go up,
the businessmen often blame the higher international rates
of a particular good or goods. Being uninformed about international
market rates, the government can exercise little bargaining
power. A data bank on prices of essentials will work as a
guideline for the government regarding when to intervene and
how.
The ignorance
of consumers regarding their rights only worsens the situation.
The government can put up an information cell to keep consumers
informed about the market situation. Provided the government
has data on certain produce and its price in the international
market, it will be possible to work out an approximate price,
taking duty and carrying cost into account. "Informed
consumers will automatically emerge as a pressure group and
can even control the market to a certain extent," he
argues.
Copyright
(R) thedailystar.net 2004
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