The New Nation - Internet Edition

Staff Reporter

Economists at a publication ceremony in the city yesterday laid emphasis on taking urgent steps to build confidence among the country's business community to reduce the present inflationary pressure.

They observed that inflationary pressure would somewhat go down if a business-friendly environment could be created keeping the businessmen and traders above all kinds of fear and intimidation.

At the same time, the government would have to think about the relief and rehabilitation of the flood-affected poor people who have become the main victims of growing inflation.

"It will be very difficult to prevent a social disaster if the social safety net cannot be strengthened," they said.

Terming the unusual price hike of essentials as a 'human disaster,' they observed that thousands of people in both rural and urban areas of the country would go down the poverty level by losing their purchasing power due to growing inflationary pressure.

Speaking on the occasion, former Finance and Planning Adviser of the caretaker government Dr Akbar Ali Khan yesterday said he was observing some ominous signs in the country's overall economy as the price of essentials goes beyond the purchasing power of common people that might result in a serious 'human disaster.'

"It's not only an economic problem, but also a humanitarian problem," he said while speaking as chief guest at the publication ceremony of 'Bangladesh Economic Outlook,' an analytical survey report prepared by Shamunnay, a center for research and development

Dr Khan said the ongoing inflation might take serious turn in the days ahead. "The low income group of people of the country may seriously be affected due to the rising trend of inflation," he said.

Executive Director of BRAC Dr Mahbub Hossain was present as special guest

Dr Khan criticised the caretaker government for the current measures to control the price hike of essentials in the market He said many governments in many countries, including the United States in 1970s, had tried to control the market in the same way Bangladesh is trying now, but they had all uterly failed.

"We're trying to implement a failed theory to control the market," Khan, an economist and a former finance secretary, said.

He also said the private sector was the main driving force of Bangladesh's economy, without involving which economy could not

run smoothly.

In the context of post-flood rehabilitation programmes, the former adviser suggested to ensure food security by building up food-grain stock through constant imports.

Besides, efforts should be made to remove fears from the mind of businessmen and extend all kinds of cooperation to them to import essentials from abroad.

Dr Khan also called upon people to give up the traditional thinking of price hike of essentials to check inflation.

The former adviser said the economic growth would decline fast due to inflationary pressure, which is a mater of serious concern.

Noted economist Dr Atiur Rahman, who is also the chairman of Shamunnay, presented the results of the survey report at the function.

Besides, Dr Selim Raihan, assistant professor of the Department of Economics presented the results of the analytical research.

Dr Atiur Rahman said poor people are facing great difficulties due to skyrocketing of prices of essentials. Despite the improvement of law and order, and governance situation because of the some significant steps by the present caretaker government, businessmen have still remained panic-stricken. Confidence is yet to come back among them. Its negative implications have fallen on overall investment and market Some Tk 14,280 crore remains idle with the banking sector, which is not being invested. In spite of the contractionary monetary policy adopted by the Bangladesh Bank, its impact is yet to fall on the market prices.

According to Dr Atiur Rahman, food price inflation on the basis of point-to-point was 21.3 per cent in August this year, which was much higher than 12.5 per cent as calculated by the Bangladesh Bureau of Statistics.

On the other hand, inflation has increased by 14.1 per cent against the BBS's claim of 8.5 per cent in the last one year.

Citing some challenges for the economy of Bangladesh, he said the country would have to tackle the challenge related to its readymade garment sector. "It seems that the readymade garment sector may face a serious setback in the context of declining export earnings in this sector. It can easily be assumed about the condition of Bangladesh's garment sector when the doors of international markets for Chinese readymade garments will be opened next year," he said.

Dr Atiur also observed that several hundred thousands of workers of garment industry might turn unemployed. Many families might become paupers. Labour unrest is gradually geting visible. So, the government would have to pay serious atention to this sector.