Luxury in time of austerity

At a time when national media have been crying hoarse about the sorry state of the economy, some news slip through the cracks and this is one of them. According to a report published in this newspaper recently, import of luxury cars have tripled in a year. As per data furnished by the Chattogram Customs House, the number of luxury cars of the 2,000cc to 4,000cc (2.0-litre - 4.0-litre) engine capacity has jumped from 230 to 610 from FY2022 to FY2023. This comes as a surprise because the central bank has gone to great pains to make it clear to us lesser mortals that the government is doing its best to cut down on unnecessary expenditure in a bid to conserve precious foreign exchange (forex). With forex reserves plummeting year-on-year, one can't help wondering why such luxury items are still being imported.
The fact of the matter is that a new class of the uber rich --- ranging from individuals to companies --- has emerged by reaping windfall profits through market price manipulations. Popularly known as "syndicates" these people have minted millions/billions and are unafraid to flaunt their wealth. The money has come off consumers at large, who have witnessed a four to 150 per cent increase in prices of essentials in the market over the course of more than a year.
Hence, it is not a problem for this class of consumers to pay the 500 per cent duty on imported luxury vehicles. There is of course, another side to this story. Bankers (off the record) have stated that there are several loopholes to get around this taxation and this is done in connivance with car importers. One way to achieve this is to take a partial loan for the car so as to stay under the radar of tax authorities and pay the rest in cash. The other malpractice which takes place is when the car imported is registered in the name of the importing agency or some other company. Then this vehicle is re-sold to the ultimate buyer at an agreed amount, because at the end of the day vehicle importers do need to sell vehicles to stay in business.
Then again, it is also true that the numbers being talked about here are not so large and the primary focus of policymakers has been on the restriction of the use of forex for imports that run into millions and billions of dollars and not on a few millions. Despite all that, the sight of so many high-end luxury brand vehicles on city roads is both glaring and deeply offensive to a lot of people. It is tantamount to pouring salt on an open injury because millions of people are going hungry in the land. A significant portion of the middle class has moved down a rung to become lower-middle class but that is no one's concern. What is interesting to note here is that while vehicles for the uber rich have risen dramatically, import of budget-friendly passenger vehicles have dropped sharply. That piece of information sums up the situation in the country where the vast majority are getting hurt economically and a small number of privileged people and business entities feels no qualms about flaunting its dirty wealth.
Let's put those 600+ luxury vehicles under the scanner and see who's been getting what. About 20 per cent (109 vehicles) were imported under the duty-free privilege that is accorded to foreign missions including embassies, high commissions, and the UN agencies. Another 20 per cent (122 luxury cars) were imported by members of parliament (MPs) who are, by law, entitled to duty-free import of vehicles in the luxury category. "In July-November period, 30 duty-free luxury cars had been imported through the Chattogram port, all by diplomats and development partners. Each car in this range usually costs above Tk 10 million after duty-tax payment." The point of contention is not with the foreign missions / bodies but with our own representatives and members of society who could not be more insensitive to the suffering of the vast majority of the populace now struggling under the burdens of cost of living.
Economists have expressed surprise, but why? This lopsidedness in decision-making trend by policymakers has remained the norm throughout the decades. It has hit a nerve because the country is having a devil of a time finding financial resources to pay for the essentials and raw materials for industrial production and so on. It is as though Bangladesh is now living in George Orwell's classic 'Animal Farm' where "some animals are more equal than others", where flaunting social status is of paramount importance to some in the midst of the increasing wealth disparity between the haves and have-nots.

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