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Prices hit Bangladeshis hard, challenge government

DHAKA - The head of Bangladesh’s army-backed interim government has asked his advisers to tour the country to find reasons for unabated rises in commodity prices, which analysts say pose the biggest challenge to the authority.

Prices of essentials including food, spices, milk, beef and chickens as well as vegetables and fish have gone up by around 100 percent since the caretaker authority, headed by former central bank governor Fakhruddin Ahmed, took over in January following month of political violence.

It cancelled an election planned for last Jan. 22, imposed an indefinite state of emergency, banned political activity and protests, and launched a drive against corruption.

There was wide support for the promised reforms as needed to put the south Asian country on the road to peace and to the free and fair elections Fakhruddin has vowed to hold by December 2008.

But the commodity price rises, blamed partly on spikes in global prices, have been an unprecedented hardship for many Bangladeshis.

Rice, the main staple in Bangladesh, now sells at 36 taka ($0.52) per kilogram, the highest in decades, while prices of wheat, milk and other foodstuffs have also nearly doubled.

‘Never in my life have I seen such a wild increase in prices of almost everything. This cannot be caused just by rises in world markets,’ said a government school teacher in Dhaka.

‘Poor market control is also to be blamed,’ he said, adding further price hikes could make many people starve.

Fakhruddin on Saturday asked his advisers, who act as heads of various ministries, to travel out of the capital at least once a week to check the realities on the ground.

‘Make field visits, talk to the farmers, see if they are getting supplies of fertiliser and what other problems they confront,’ Fakhruddin said.

‘Come back and suggest the best means to help them.’

To keep a close eye on the situation, he has also launched a personal website and e-mail for people to communicate directly with him and give their options, officials said.

Half of Bangladesh’s more than 140 million people still live on less than a dollar a day,.

‘People are very happy over the interim government’s drive against corruption in politics and administration, and encouraged by its continuing efforts to hold a free and credible election,’ said Qazi Kholiquzzaman, president of the Bangladesh Economic Association.

‘But they would like to go to the polling centres with a full belly, at least one secure meal a day,’ he told Reuters.

Importers apathy

While retailers attribute the high prices to increased wholesale rates, the wholesalers point the finger at importers.

The importers argue they have to adjust their rates to international market prices, which show little sign of cooling.

Officials and analysts often say a powerful business ‘syndicate’ controls Bangladesh markets, while the government has failed to establish its own control.

Overall prices have not decreased even though the country’s armed forces have opened hundreds of fair-price shops in the capital Dhaka and other main cities.

‘Prices go up in this country for many reasons including lack of market control,’ said Mustafizur Rahman, head of the Centre for Policy Dialogue, a private think-tank.

Fakhruddin’s government had asked small importers to bring in more goods. But that has apparently not worked as neighbour and key supplier India has frequently raised prices or banned exports for domestic reasons.

‘They (small importers) cannot buy things from far off export outlets, say Canada or Australia,’ said a government official. ‘Only big importers have money to access those markets.’

But Mustafizur said big importers were scared as they have also been targeted in the current anti-corruption drive.