Imported inflation
Monday, 22 October 2007
BANGLADESH, at present, has become very worryingly dependent on the import of essential consumer goods. This dependence has been growing relentlessly. It imports nearly all of its requirements of baby food and half of its need for milk in powdered form. The country was once self sufficient in onions, garlic, ginger and other spices. Now the greater parts of the demands for these spices are met by imports. This country produced a surplus of peppers once upon a time. But now it takes care of more than 60 per cent of its demand for pepper from imports. Eighty per cent of the demand for pulses is also met by import. In recent years, it has also been importing, again, a substantial quantity of foodgrains. Ninety per cent of the demand for cooking oil is also met by imports. Even salt is imported in large quantities from time to time. The figures are indicative of the lack of efficiency of its agriculture when Bangladesh has been renowned for the amazing fertility of its soil and its comparative advantage in growing various food products. Bangladesh was once famous for its abundance of fishes. But now, a good part of its demand for fishes is also met by imports.
The fast growing import activities for meeting basic consumption-related needs of people is indeed a cause of concern. When the imports are mainly industrial raw materials or intermediate products, the same can be though of as useful economic activities in view of their value-addition potentials. But surely the same cannot be said about edible goods meant for sheer consumption.
The price-lines of many essential products, specially kitchen items and food products, have soared to unusually high levels in the local markets unlike any other time in memory. Government's various moves to control this price rise are proving to be extremely difficult or impossible because these consumption goods have to be procured from markets outside the country and government has no powers over overseas markets. When these daily consumables are being imported at higher and higher prices by the importers, they cannot be ordered by the government to sell the same at artificially lower prices in local markets. If that has to be done, then the government would be required to give massive subsidies to the importers for each of these items. This course is also not realistic or feasible on the part of the government. Thus, this 'imported inflation' as it is called, continues to ravage our consumers. But this would not happen, if, over the years policies were adopted and pursued sincerely to grow and produce many of these products within the country. In that case, Bangladeshi consumers today would be notably hedged from the imported inflation which is translating into painful costs of living that remains a cause of their every-day anguish.
Faisal Mahmood
Road no. 4, Dhanmondi R A
Dhaka
The fast growing import activities for meeting basic consumption-related needs of people is indeed a cause of concern. When the imports are mainly industrial raw materials or intermediate products, the same can be though of as useful economic activities in view of their value-addition potentials. But surely the same cannot be said about edible goods meant for sheer consumption.
The price-lines of many essential products, specially kitchen items and food products, have soared to unusually high levels in the local markets unlike any other time in memory. Government's various moves to control this price rise are proving to be extremely difficult or impossible because these consumption goods have to be procured from markets outside the country and government has no powers over overseas markets. When these daily consumables are being imported at higher and higher prices by the importers, they cannot be ordered by the government to sell the same at artificially lower prices in local markets. If that has to be done, then the government would be required to give massive subsidies to the importers for each of these items. This course is also not realistic or feasible on the part of the government. Thus, this 'imported inflation' as it is called, continues to ravage our consumers. But this would not happen, if, over the years policies were adopted and pursued sincerely to grow and produce many of these products within the country. In that case, Bangladeshi consumers today would be notably hedged from the imported inflation which is translating into painful costs of living that remains a cause of their every-day anguish.
Faisal Mahmood
Road no. 4, Dhanmondi R A
Dhaka