Unbridled price-spiral
Saturday, 12 July 2008
Price spiral is a common phenomenon in our life and recently it has become obviously critical. Everybody is in trouble, because of this. It is very much distinct that the price of each and every item of our life-support basic commodities is fluctuating everyday. The fundamental reasons behind it are: firstly, the production of staple food grains was severely hampered all over the world due to natural calamities as well as climatic changes. Secondly, production of bio-fuel consumes a large amount of maize, wheat etc. So the procurement constraints relating to such items have become clear to the import-oriented countries like ours. The prices of rice, wheat, pulse, edible oil etc., have increased now in a prounced way over the level of the previous years.
Our domestic scenario is, however, quite different from that of the outside world. Last year, we faced two successive floods, a severe cyclone, SIDR, that caused a serious decline of production in our real sectors. As a result, lower production in our domestic agro-based sector and scarcity in the international market directly added to the price spiral. Secondly, the unscrupulous raid and seize of storehouses, 'imprisonment' of allegedly corrupt businessmen, and, finally, the tug of war among the ministries of government exacerbated the problem. Furthermore, the increase of fuel-price has given a new dimension to the price-hike situation. We are aware of the fact that the oil price normally affects the production and transportation of food items. Recently, the fuel price has domestically been increased -- by about 36%. But we know that even after the recent hike in fuel-price, the increased price is still lower than that of the international market. Thus, fuel is yet a subsidised product in our country. Nevertheless, the government has to allocate a large amount of subsidy for imported fuel. But the subsidy on diesel should continue on a large scale rather than that on octane. Because diesel price is directly related to agro-based and industrial production as well as transportation etc.
While the price spiralling continues in the international market, our trend, however, is quite bizarre. Here price increases day by day, even hour-to-hour. How strange! Everyday we talk about 'syndicates' in media, newspapers, talk-shows, seminars etc., but nobody could do anything in breaking such syndication. Sometimes, we surmise as if there is no controlling or regulating authority. The government seems to be in a vulnerable position in tackling the issue.
All concerned circles -- the government, business community and others -- should take a pro-active stance in order to address this issue. Production in real sectors must be increased. We are looking forward to efforts for solving the price-spiralling phenomenon because the low-income people will not be able to sustain their normal life if the price-hike continues in an unbridled manner.
Shahidul Hoque Patwary.
Jatrabari, Dhaka.
shahid20_bd@yahoo.com
Our domestic scenario is, however, quite different from that of the outside world. Last year, we faced two successive floods, a severe cyclone, SIDR, that caused a serious decline of production in our real sectors. As a result, lower production in our domestic agro-based sector and scarcity in the international market directly added to the price spiral. Secondly, the unscrupulous raid and seize of storehouses, 'imprisonment' of allegedly corrupt businessmen, and, finally, the tug of war among the ministries of government exacerbated the problem. Furthermore, the increase of fuel-price has given a new dimension to the price-hike situation. We are aware of the fact that the oil price normally affects the production and transportation of food items. Recently, the fuel price has domestically been increased -- by about 36%. But we know that even after the recent hike in fuel-price, the increased price is still lower than that of the international market. Thus, fuel is yet a subsidised product in our country. Nevertheless, the government has to allocate a large amount of subsidy for imported fuel. But the subsidy on diesel should continue on a large scale rather than that on octane. Because diesel price is directly related to agro-based and industrial production as well as transportation etc.
While the price spiralling continues in the international market, our trend, however, is quite bizarre. Here price increases day by day, even hour-to-hour. How strange! Everyday we talk about 'syndicates' in media, newspapers, talk-shows, seminars etc., but nobody could do anything in breaking such syndication. Sometimes, we surmise as if there is no controlling or regulating authority. The government seems to be in a vulnerable position in tackling the issue.
All concerned circles -- the government, business community and others -- should take a pro-active stance in order to address this issue. Production in real sectors must be increased. We are looking forward to efforts for solving the price-spiralling phenomenon because the low-income people will not be able to sustain their normal life if the price-hike continues in an unbridled manner.
Shahidul Hoque Patwary.
Jatrabari, Dhaka.
shahid20_bd@yahoo.com