::: Star Weekend Magazine :::

Economy

Taming the Wild Horse

The Grand Alliance has come to power promising to bring down the price of essentials; the job, however, will remain daunting

Ahmede Hussain

In the elections, the rising price of essentials, especially rice, as an issue, has dimmed corruption and the rise of violent extremism. In the middle of the Four-party Alliance government's term, food prices showed an upward trend, which reached its zenith in 2005. Coarse rice, which was sold at Tk 10 when the previous Awami League government handed over power, shot up to Tk 32. In Sheikh Hasina's last term in office, the country experienced a bumper production of crops and her government also kept a steady reserve of rice. Quite contrary to that, Khaleda’s government followed a free-for-all policy, which gave birth to several curtails that had started to control the market of the essentials. It is alleged that a coterie of thugs and plunderers that mobbed Hawa Bhaban, Khaleda Zia's son Tarique Rahman's office was behind the spiralling prices of essentials. Food production was not good either; coupled with that was the fact that the world economy was going through a recession and food prices were also on the rise on the global market.

The shortage of rice became acute in the caretaker government's rule as prices of rice

The unholy nexus of middle men must be destroyed.

started to go up to reach an all-time high; the real income of the masses plummeted; when the situation turned even worse an economist has even compared it with 'silent famine'. Some short-term measures taken by Dr Fakhruddin Ahmed's government have eventually averted a full-blown humanitarian disaster. In this background came Sheikh Hasina's promise, which has generated widespread popular support in the young and women voters. The latter in particular answered the Grand Alliance's call as they directly bear the brunt of the price hike. But MM Akash, economist and professor of Dhaka University, says, “Bringing down the price of rice to Tk 10 a kilogram is an improbable target, which can never be materialised.” He reasons that if rice is sold at Tk 10 a kg, the farmers will be adversely affected, as their production cost will not decrease to a great extent. Providing them with a free supply of fertiliser will not work as they have to by diesel, the price of which has remained volatile.

Instead of setting the improbable target, the government can develop the purchasing power of the poor by generating employment. The Grand Alliance government has to start employment generation schemes for the rural poor. Akash suggests the creation of self-chosen labour brigades consisting of rural poor who, with the government's technical help, will carry out labour-intensive infrastructural works. Hundred days guaranteed employment, which the caretaker government has initiated must be continued and should include more people under its safety net.

Akash thinks it must also secure food grain supply. The distribution of these supplies can be done by using the offices of the local government bodies, which are going to assume office by February. “If the unholy nexus of the middlemen are not eradicated from the market, the dream of curbing price hike will remain unattainable,” Akash says. A buffer stock, which should be about 15-20 per cent of the total supply, can be created so that the government can intervene whenever speculative trading takes place or when the market shows illogical behaviour.

The new government must keep in mind that it cannot remain an apathetic bystander while ordinary citizens toil. The Trading Corporation of Bangladesh (TCB) can start rationing, something it has abandoned long ago. If it is done, rationing will help the government to control the market and at the same time it will help the masses, especially those belonging to the lower middle class to deal with the ever-increasing cost of living. History suggests that subsequent governments have failed to check corruption in the TCB, one of the major reasons why the rationing system in our country has fallen flat. Checking corruption however will remain a major challenge to bring the prices of essentials within the reach of the ordinary people.

It is understandable that the new government will not be able to tame the wild horse of essentials overnight. But it has to come up with short time remedies that can cushion the poor against inflation and unemployment. It is indeed not easy to change the dynamics of the market overnight, yet the government must know that 140 million hungry stomachs will want a quick fix. Any lax in governance or deterioration of the law and order situation will aggravate the crisis. Never before has a government faced such an uphill task.