Price stabilization and normalization

Publish: 9:00 PM, July 14, 2021 | Update: 9:00:PM, July 14, 2021

The present government in Bangladesh is seen to be doing a great deal of good things in different spheres. But in the area of price stabilization and normalization its successes need to be greater.

Government must realise that price normalization depends critically on the unhindered interaction of economic forces, on private decisions and other intangibles which cannot be so drastically regulated or should not be regulated by authoritative governmental actions. Government cannot intervene in these processes rudely and suddenly and achieve results instantly. If this is attempted, then the risks of breaking down of the supply chain become acute which then tend to create more difficulties for price control from scarcity of the demanded goods. Thus, government has to tread the path very carefully while engaging in activities to normalize prices. But it is also a fact that price control can be achieved in phases with tenacious work to that end and correct application of policies with patience and foresight at every phase.

The supply of many essential commodities still largely remains under the grip of a few large importers . Therefore, the first task in order is to break the powers of these few importers. But this must be done with delicacy. Any sudden wholesale action against the limited number of large suppliers of essential commodities will create the ground for them to dabble in more mischief to disrupt the supply chain. On the other hand, they would not be able to hold their stocks for too long as that would mean suffering losses. Therefore, the best results can be obtained for now by allowing these importers to do their business with pressures lifted from them. But this does not mean that they should not be under official persuasion to do their business honestly.

Meanwhile, government should go all out to encourage the alternative importers or ones who tried their hands in the import business in the past but failed in the face of syndicated operations. These people can be swiftly provided with import licenses and extended other facilities so that they can quickly make their presence felt in the import business of essentials. The above approach can be the most appropriate one in not creating sudden snags in import operations while also gradually weakening the influences and powers of a coterie of large importers.

Side by side, government should promptly also take the important decision of fully reactivating the Trading Corporation of Bangladesh (TCB) and acting on it with real speed. TCB’s operations can be profitable for itself while providing much comfort to consumers from stable or reasonable prices. TCB’s activities were winded up over the years on the plea of free market economy or the principle that government must not be involved in business operations.

But this had proved to be am ineffective decision in the Bangladesh context. Other countries which are also the practitioners of market economy, have maintained such state trading or the capacities to intervene in the market to create competition with private businesses or suppliers to restraint unethical activities on the part of the latter. Therefore, there would be nothing wrong or inconsistent for Bangladesh to revive state trading for a while on a large scale through the TCB to import essential commodities in bulk and market them in a bid to break the monopolies of private importers and put them under a pressure to operate ethically to survive in business.

Holy Eid-ul-Azha is knocking at the door. Already, price manipulators or syndicate wallahs are noted resorting to their old tricks of ripping people off centering on fabricated accounts of scarcity and lockdown. Government must not allow this to happen. Government must realize that a huge number of people have been again pushed below the poverty line recently from the pandemic. It would be very regrettable if these pandemic hit people with reduced income or no income are again hit by insensitive and exploitative business persons.