Syed Fattahul Alim |
Published:
October 23, 2022 8:20:05 PM
As the US dollar continues to soar, other world currencies are plummeting. This drives up the prices of goods and services everywhere. In Bangladesh, the runaway rise in commodity prices is largely due to the depreciation of the taka against the US dollar. Much of the major essential commodities, including edible oil, sugar, wheat, spices, including a substantial amount of the main staple, rice, are imported. And since payments for these imported essentials are made in US dollars, the costs of these taka items naturally skyrocket. Rising transportation costs for these essential items due to the high price of fuel oil and natural gas also add to their market price. These are also the common arguments that commodity importers and wholesalers offer to justify soaring food and other commodity prices in the market. But while presenting their case, traders are not telling the whole truth. It is that they often use the international situation as an excuse to create an artificial crisis in the market with an ulterior motive to arbitrarily increase the price of commodities.
While traders have their good or bad reasons for the excessive rise in prices of essential goods, consumers, especially those in low and very low income groups, have none. Because they are powerless and have no one to listen to their story of why they cannot afford to buy the high priced basic items in the market. If they have a job, their wages or salaries have not increased. One can easily imagine the state of those who do not have a job or live hand to mouth.
How can they survive in such a period of extreme volatility in the market prices of essential raw materials? Ultimately, it is the government that the poorest segment of the population – the largest segment, to be exact – must turn to for help. Thus, the government should play, as it has done during the pandemic, its role in cushioning the less privileged population from the shock of high inflation. Given that the trading community is having a blast with the unprecedented price hike, it has no reason to seek financial support from the government in these difficult times as it has during the pandemic. This time, the government should focus entirely on the low and very low income population and give them the necessary financial support so that they can survive the current economic uncertainties.
Measures may include expanding the scope of open market (OMS) sale of essential commodities through government agencies such as the Trading Corporation of Bangladesh (TCB) across the country. It should be noted at this point that in the meantime, the items listed on the TCB list saw another period of 50% price increases. Under these circumstances, the government should consider lowering the prices of WHO items further to keep them affordable for poor consumers. At the same time, the basket of essential items for sale through OMS should also be expanded to cover the basic necessities of the consumer group under consideration. In the same vein, the government should introduce a rationing system of basic foodstuffs and get them to the target population. The robust role of government in ensuring the distribution of food and other basic necessities to people in need and that too at an affordable price is accepted and practiced around the world. The government must intervene at such times to keep the economy on track. Stories of human suffering have no place in the narrative of the market economy because it is too obsessed with profit.
When the market is blind to the condition of the poor, what other institution is there to help low-income and no-income people? This is the role of government. Even advanced and neoliberal pro-market Western economies, which oppose government intervention in business and cuts in public spending on social programs, must themselves depend on government support in the form of policy measures. rescue in times of crisis. . It happened during the great financial crisis of 2008. It can be remembered here that during this period the US government came to the rescue of failing private financial institutions and other businesses with a big bailout worth US$700 billion under the so-called Emergency Economic Stabilization Act. The amount, through what he called the Troubled Asset Relief Program (TARP), was intended to buy “toxic assets” from banks. In effect, the government has protected delinquent private companies at the expense of public money. A comedown indeed for believers in the market as the ultimate arbiter!
Again, in the current financial crisis, as the global economy, driven by runaway inflation, is rapidly heading into another recession, it is government that is going to be the last resort for business, the mainstays of the neoliberal market capitalism, to stay afloat. The fallout from this turn of events is that the general public, who keep a government going with their support and tax money, are being crowded out by big business when it comes to financial support in times of crisis.
This is what happens in advanced economies where market capitalism reigns. In less advanced economies with a nascent market like Bangladesh, the problem is more pronounced. So the government here is in a constant state of balance between how much of its public resources should be used for the public and how much for business. Of course, the needs of the people must have the highest priority.
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