Political economy of Eid-ul-Azha

Mamun Rashid Good thing with Bangladesh is, most of its educated or semi-educated citizens are equally interested in politics, relationship with the neighboring country, river treaties, ups and downs in the capital market, Tagore songs and religious affairs. The bad part is, for all these knowledge gathering, they are increasingly dependent on popular television talk-shows, not on any research papers or even specialist write-ups in the newspapers. I had to take my son to the city's Apollo hospital during the Eid break. As I was coming out, a gentleman approached me in the elevator. He claimed that he knew me from the talk-shows and thought that whatever I speak or spoke always made sense to him. Incidentally, though in the wrong place, he had further questions and queries for me like- shortage of cash notes in the banks during the Eid season, future of our stock market and possible ways to bring down the prices of essentials. He was very focused to pass on the verdict for resignation of the governor of the central bank for shortage of cash notes in the commercial banks before Eid. While he was equally interested to know about possible ways of reducing the price of essentials, he sought my opinion regarding cash shortage in the bank. It was already time out for me, as my son was pushing me hard to go home and attend his home work. However, as a former banker and now business teacher, I was thinking loud on the perceived 'cash shortage in the banks' and overall political economy of Eid-ul-Azha. I sought to know from a statistician friend of mine, working for a government agency, the number of cattle slaughtered or sacrificed during Eid-ul- Azha. He thought it was nearly 6-7 million, out of which around 30 per cent is goat or lamb. If we price each of the cattle at Tk 15,000 on an average, 5 million would take us to a figure of BDT 105 billion or USD 1.4 billion. My readers would be very much aware that cattle market does not accept any credit card or payments through cheques. That means the entire BDT 105 billion was exchanged in cash. If one would include all the ancillary expenses like wood piece, the bamboo mats, knifes, payments to the butcher or 'Kashai' and other related expenditure including food, the overall expenditure outlay during Eid-ul-Azha would easily exceed BDT 120 to 130 billion. Again almost all in cash. Courtesy 'Digital Bangladesh' or 'automation in banking', there has been almost 2000 plus ATM machinesbooths put up by our commercial banks across the country. If each of the ATMs was containing taka 5 lacs in cash on an average, we are again talking about BDT 1.0 billion in cash held for the esteemed bank clients. If the honorable governor was to please my friends, despite having BDT 131 billion cash money in circulation or in hands of the public, only other option open to him would have been to print more cash notes again and thereby contribute significantly towards rising inflation. Now the biggest question remains to be answered from where all these cattle come from? And how the payment is being settled? Has anyone of my readers heard about commercial banks opening letters of credit to import cattle from any neighboring country? I am told almost 40 per cent of the sacrificial animals come from India. These are all being financed through 'Howala' market or popularly known as 'Hundi'. Governments though otherwise very loud against 'Hundi' or 'money transfer through informal channel', prefers to remain silent for the sake of religious sensitivity. I am being often told by my politically conscious friends, if cattle were not being brought in from India, we would have been forced to buy a kilogram of beef at taka 500 plus. Then comes the entire business around hides and skin. Our state-owned banks has age old problems with hides and skin traders. There is a large amount of stuck up fund in this sector. Again for the sake of saving the Eid-ul-Azha market and popularly termed -- 'sadharon jonogon' or 'common people', the state-owned banks are being politically influenced to lend money to the known defaulters to buy hides and skin. Who is the loser in the entire game? The poor government. Why? To safe guard the religious sentiment of the common people. What do they get in return? No matter, what could be the consequence on the overall economic management, subsequent governments are being forced to follow the age old practices. I think, it is time for our regulators to consider a review of the entire situation. Try to weed out the major malpractices in this sector and make this as transparent as possible. We should not want any holy occasion to be exploited by unholy practices and greed. At the same time, we may think of increasing the number of holidays in and around two Eid festivals, by curtailing other holidays and ensure better transport planning. (Mamun Rashid is a banker and economic analyst. E mail: mamun1960@gmail.com)