SNIPPETS (13-12-2018)

I

DT: Articulating the gloom

Given that there are three possibilities to the outcome of this month's general election one can only hope whoever lands up with the Finance Ministry portfolio has nerves of steel. There's an awful mess out there through a combination of massive bank default, shortfall of capital and swindled foreign exchange reserves. All three combine further to put some gloomy looks on the faces of bankers themselves.

A number have had travel restrictions out on them for having been part of a malady they were pushed in to. Others are fearing the sack if unable to either bring in deposits or loanees. Both are out of their hand simply because there's an apathy among depositors scared of watching their money get almost irretrievably stuck. Too many are complaining that on demand they either get partial return or are politely asked to wait for a little longer. Neither should be the case but then that's as real as Sharif Khan winning an Academy Award.

Matters have gone from bad to worse by a silly decision to allow families to become legible for directorship as well as extensions to directorship by individuals who have run banks almost like their own piggy banks. On one hand, leaving shares in the family elevates them to untouchables while extensions just prolong the debacle they are in. With all factors weighed in bad default ranks around Tk 1.3 trillion (1,30,000 crore) - money that if properly circulated could have begotten good, decent business. The word 'could' is relative given that businesses are shy to take up loans in the first place. Those that do are quickly on the path of rescheduled. No wonder so few were denied acceptance of nomination papers for the election on grounds of having loans re- rescheduled and thereby green or clean loans. As everyone knows rescheduling is all about postponing that what is inevitable - bad debt. Unfortunately, ours is a process that provides enough loopholes to escape the noose.

The Bangladesh Bank heist is in a state of doldrums. The enquiry committee report remains unpublished even though the chief of the committee is contesting the election and the Sonali Bank scam accused's assets remain free for had. This is accountability at its worst further demeaned by a willingness to put more funds in to plug the capital hole that has been created.

Then again rude questions prior to an election where muscle and money will undoubtedly reign are enigmas to the natural order of things. Most of the delinquents will have gone abroad while just one or two serving short sentences for minor offences such as spending beyond their means. Perhaps that's a better option if the pilfered money is written off. As for the crow shit on collars - well a good laundry can deal with that.

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II

Another nail in the coffin

That consumer convenience goes for a toss is nothing new. Be it in adulterated food, dead poultry and foal in restaurants, over-billing and lack of connectivity and shortfall in utilities or rank bad quality inputs in finished products the hapless consumer has seen it all. We were told Compressed Natural Gas (CNG) was the answer to dodgy air pollution not to mention cheaper fuel for vehicles. The fairy tale has ended. CNG is partly put to blame for extreme gas availability; whenever it is available, CNG pumps are shut for six hours so that the mineral can be ploughed to homes and industries. Great planning that!

We are now told there isn't enough gas to go round and so imported fuel must be brought in to fuel transport engines and expensive but beneficial quick power plants. No matter what the international power prices are ours was reduced at an all-time international low and remains so whenever it changes. The development partner called the World Bank has been anxious to dismiss this subsidy by tagging local consumer prices with changes in world fuel prices. After years of subsidies the government chose holding prices to make up the deficit before lowering prices.

With a growing impasse threatening the unity of OPEC (Organisation of the Petroleum Exporting Countries), Qatar having pulled out effective next January, Saudi Arabia is in talks with non-OPEC Russia to step back output so as to keep prices stable. No doubt a price to pay for the Khashoggi debacle agreed with the United States. The US continues extracting shoal oil in ensuring prices remain down but it can't do so on its own. Even with prices down it'll still be of concern for Bangladesh. The upshot? No likelihood of reduction in oil prices, especially given the value of the US dollar running supreme against a weakening sterling. Most of the OPEC countries are victims to a carefully engineered economic drought and may have little option but to keep prices down. The harm done to their economies is akin to the Bangladesh consumer, an additional twist of the noose.

And so the latest dumping of bitter medicine is Liquefied Petroleum Gas (LNG), a more expensive proposition to CNG, fully imported - meaning a further drain on foreign exchange and a whole clatter of reconversion of cars and vehicles. Somewhere someone forgot that nationalisation is beneficial in some respects. The 700,000 tonnes LNG market is fully in the hands of a cartel and though only 35 penetration has been achieved, prices have already jumped from Tk 1000 to Tk 1200 in a small passage of time. This is more expensive than gas or CNG and another massive burden on the ever suffering consumer. Yet it could have been controlled. The government is better as a facility, rather than a regulator but when cartels are formed it needs to be a tad more rigid.

The writer may be reached at [email protected]