Inflation stubborn on nexus of extortionists

A tripartite "agreement on extortion" in the marketing and transportation of products is the reason behind inflation staying indomitable despite duty cuts, the finance adviser of the interim government said Sunday.
On a note of worry over the high prices consumers have to pay notwithstanding the fiscal interventions Dr Salehuddin Ahmed told his audience at a meet that the prices of some commodities remain same despite reduction in import duties by the post-uprising interim government.
"The reason behind is consensus on extortion that persists on the market. Reaching political consensus is extremely difficult but making a consensus on extortion is comparatively easy here," he quipped.
Finance Adviser Dr Ahmed disclosed that there are two to three categories of extortions seen in any market. Of them, some are from the immediate-past regime, some having affiliated with the political parties that are expected to be in power in future and the locals.
"They made a nexus and commit extortion," he said, indicating a change in the racketeering on illegal toll collection that adds up to the prices people pay through their nose.
The custodian of exchequer on the cusp of transition in state power following the August changeover notes that reducing the gap between the cost of production and consumer spending turns into a matter of concern to the interim government.
Explaining the market conundrum, he said people normally blame middleman for price hike of essentials. In the supply chain, some people help facilitate supply of goods who are middleman. "But some people come and halt transport to demand money doing nothing--they are not middleman, they are extortionists."
The finance adviser also disclosed that the government has decided to separate tax policy from tax-collection activities to accomplish a long-awaited must-do to ensure proper functioning of the country's revenue board.
He said the move on bifurcating two major parts of the National Board of Revenue (NBR) had long been discussed but, unfortunately, not implemented yet.
"We have decided in principle to separate the tax-policy part from the tax collection. It means people who make tax policy will not be responsible to collect tax. But it may take some time," he said, while speaking as the chief guest in the opening session of the Annual Conference 2023 of International Business Forum of Bangladesh (IBFB).
The IBFB hosted the event at Gulshan Club in Dhaka where distinguished fellow of the Centre for Policy Dialogue (CPD) and economic whitepaper panel-chief Dr Debapriya Bhattacharya was the conference speaker.
Talking about various reform initiatives, the finance adviser said the "so-called incentive regime for protecting infant industries" is set to be over as they will come out of the culture of giving undue concessions to some industries for years.
The country has been taking care of the infant industries for the last 40-50 years by giving tariff benefits but they still remain in the same state as infant, which is "unexpected".
Focusing on the prevailing macroeconomic situation of Bangladesh, Dr Debapriya Bhattacharya said the country urgently needs a coordinated, effective and trustworthy midterm economic planning, which will help regain confidence of the investors, development partners and trade partners across the globe.
He said investment wouldn't come considering the economic roadmap of just 6-12 months. It requires mid-and long-term planning. The investors want to look at some indicators like tax structure, exchange- rate and-interest-rate regimes in the long term before taking any decision over their business expansion.
"So, we need to accumulate all these things in the midterm economic planning, which will give some sorts of respite to our investors, development-and trade partners under the changed circumstances," the noted economist told the gathering.
On corruption scenario during the immediate-past Awami League government, the finance adviser said corruption and irregularities take place in many countries. "It took place here in the last 15 years to such a level that you can't think of. All the institutions have been destroyed."
Speaking as special guest, mission director at USAID Reed J. Aeschliman said development has always become sustainable when it is led by local entities. This is why USAID will continue to strengthen partnership in many ways.
"Our approach is harnessing the power of the private sector to accelerate development through making more direct investment," said the country chief of the aid agency of the United States-a major trade-and investment partner of Bangladesh.
In opening remarks, IBFB president Humayun Rashid said the platform had worked over the years to create a better business climate in the country.
Terming Bangladesh a place of opportunities, he said the country needs to explore the opportunities through innovations and proper education, digital education in particular.
IBFB founding-president Mahmudul Islam Chowdhury also spoke at the event.

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