An article published in a leading national Bengali daily on November 18th, 2008, shows that when price of edible oil decreased 28 per cent in international market, Bangladesh had an 18 per cent increase. If one takes a look on Chicago Mercantile Exchange (CME), one will see that after the record price hike in last summer, price of almost all commodities are decreasing. However, Bangladeshi consumers are still paying the same price as they did last summer. The only logic importers using is that they imported all goods when prices in the international market were high!
If one takes a wrong decision in one's business, who should face the consequences? Of course, the owner of the business concerned. However, in Bangladesh, this is clearly different: if you are an importer in Bangladesh, it is guaranteed that you will never face losses even if you make wrong business decisions. In our country, if an importer makes a wrong decision, he will still make money but the consumers will pay the price for it. Those importers failed to predict a future price decline, and bought commodities from the international market with high price. In a market controlled by syndicates, this happens. Then, why does a welfare-seeking government not want to break the syndicate? Because those who will take decision to break the syndicate somehow also have interest in that business. So, clearly a conflict of interest exists.
According to SHUJON, in the 9th parliament, 169 or 57 per cent of MPs are businessmen, and 128 or 43 per cent MPs have asset worth more than Taka 10 million. Given Bangladesh's situation, will it be wrong if one says, like the last parliament, most of the MPs from the 9th Parliament, regardless of political party, somehow have interest in business. If so, why should we expect that those policymakers will take any fruitful steps by which Bangladeshi consumers will be benefited, unless those they are to sacrifice some of their profits? However, the Awami League (AL)-led government is showing us some hope that price will decrease soon.
The Finance Minister AMA Muhit understood things right: "The main task of the government now is to control prices." He has understood that syndication in business in Bangladesh has become a key problem. "There are two types of syndicates - one is for running businesses and another is illegal syndicate, which is formed to raise prices abnormally. We'll try to induct new people in the syndicate so that the illegal syndicate cannot play with prices," the minister said. He further said that the illegal syndicates, built up with political patronization, plays a wicked role to hike up commodity prices and promised to break up such evil syndicates. His six points, i.e., raising the local production, preparation of food budget, formulating policy for food grain stock, market intervention to dismantle the syndicates' monopoly, formation of pricing commission and empowering the consumers, will surely reduce prices significantly.
Also, the Commerce Minister Faruq Khan said that, from now on, no one will have to pay "toll" to do business. He says, "We want to make an environment for doing proper business for all the business people." The Commerce Minister also assured that government would take all possible initiatives to make Trading Corporation of Bangladesh (TCB) a vibrant organization, so it can perform its activities without any hindrance since TCB is the only arm of the government to intervene in the market when it becomes volatile.
Surely, in Bangladesh, prices of commodities are getting determined by syndicates rather than market forces. New entrepreneurs can't get in the business because of that evil syndicate. Government should focus on breaking that syndicate though in last seven years that syndicate got state patronization. Moreover, if there is a price commission, then it will be hard for the government to adjust quickly with the change in prices in international market. Rather than becoming another syndicate, government should allow market forces to determine the price freely. All government initiatives should be aimed at creating more competition in the export-import market and to eliminate any kinds of evil syndication.
Bangladesh has a history of political turmoil. A World Bank (WB) report mentions that Bangladesh is among at least 33 countries with shaky governments and destitute populations. In addition, according to another World Bank report, only the recent food price hikes, especially in the last summer, might have pushed over four million people into poverty. WB's report also suggests that the food price shock is projected to have raised poverty rate by around 3.0 percentage points from the baseline poverty rate of 2005. Hence, if food prices keep rising, Bangladesh's dream of achieving true democracy and Millennium Development Goals (MDGs) will be under serious threat. And, only competition can ensure price stability. Thus, AL-led grand alliance should reduce the price of commodities by allowing market forces to determine prices rather than any political party-supported syndicates.
*This article was published on the daily Financial Express in Bangladesh on January 18, 2009.
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