The New Nation - Internet Edition

Dr. M. S. Haq

In an increasingly interdependent and uncertain world, it has been observed: the cause, effect and causality (CEC) associated with price hikes of commodities is neither limited solely to commodities affected by price hikes nor its treatments (I mean, CEC of price hikes) confined only to a set of specific antidotes for say, repeated use in relation to time, space and other variables.

Cutting edge price management strategies - that are for example, wholesome, short to medium term in duration, flexible, growth centered and people owned - could be of some assistance to combating price hikes for a 'given' period of time at local, national and other levels provided that outcome making processes of those strategies are backed, on a continuous basis, by sound institutions, good governance and public administration practices, dependable and affordable criminal justice system, effective operation frameworks, favorable WTO requirements capable of facilitating maximum utilization of comparative and competitive advantages in relevant areas by member states, conducive environments - both political and apolitical - in borderless territories, result-oriented implementation, and affordable, as well as user-friendly recycling potentials, to mention a few.

In light of above and other considerations, the reasons behind present day price hikes of commodities in Bangladesh are for example, both within and beyond its control. The measures such as and as appropriate:

1. A further fixation of demand-supply gaps through for example, internal production - a crash program for boosting up post-flood cultivations could inter alia be instrumental in improving the supply situation;

2. A further exploration of opportunities (as applicable) for procurement of relevant commodities at say, subsidized rates with the assistance of donor organizations such as USAID and WFP;

3. A further intensification of the role of Bangladesh missions in host countries in identifying and negotiating import commodities (by Bangladesh) at rates favorable to the people of Bangladesh and in facilitating the effort of Bangladesh towards importing above commodities - following buying decisions - within a minimum possible lead time from the time of ordering those commodities, per se. Kindly note here, time also means cost;

4. Removal of existing barriers to distribution related supply gaps through appropriate policy and program initiatives and interventions;

5. A more proper handling of say, market intermediaries through an integrated market management system;

6. An enhancement of poor people's and low income groups' coping capacity in these days of price hike through a variety of safety nets such as ration shops, VGF, food for work programs, and cash support;

7. A further improvement in bilateral relations with for example, commodity exporting countries;

8. A further minimization, if not a total elimination, of security related risks, vulnerabilities and threats having impacts, either direct or otherwise, on markets, market behaviors and market opportunities, to mention a few;

9. A more proper and profitable handling of market and market related politics;

10. Strengthening food planning and food security based on local, as well as global trends, situations and developments in pertinent areas; and

11. Enhancement of community participation in monitoring and controlling market prices through legal and other ways and means - both structural and non-structural. Simplification of market and marketing processes, as well as procedures for marketers and promotion of honest marketers to avail of those simplified processes and procedures as soon as practicable and at an affordable cost;

could assist Bangladesh in dealing with challenges and harnessing opportunities associated with price hikes in a meaningful manner.

It may, however, be noted here the above list of measures is not exhaustive and it has been presented in the article as a checklist for government of Bangladesh and others to assist them in the effort towards reviewing the existing price situation in a more serious and comprehensive manner and taking remedial measures based on short and long term perspectives and consequences associated with price hikes in Bangladesh and elsewhere.

Price hikes are, in many respects, sensitive, dynamic and destructive in nature and scope - they have potentials for hurting, in varying degrees, people, progress and prosperity, relative to time, space and other variables.

They could - unless checked in a timely and proper fashion - cause, in a progressive manner or otherwise, substantial damage and loss to for example, good outcomes produced so far, either directly or otherwise, by present government of Bangladesh. It will not be out of place to mention here, political parties of Bangladesh and others could for example, elect to use present day price hike situations in their attempt towards mobilizing and promoting anti-government perceptions and behaviors among Bangladeshis and others in the foreseeable future.

The measures that have already been taken or will be taken by the government in the future for combating price hikes will take an amount of time to produce desirable effects on the price situation. But it is true, a significant change in price structure in say, non-real value terms, might not be forthcoming at least immediately because factors external to price hikes in Bangladesh would need some more time to become stable either in part or in full.

The last word: a reduction in commodity prices in real terms would need, among other things - a significant improvement in production and productivity; more viable, more equitable and more sustainable technology-growth-distribution chains; removal of existing market imperfections, as far as practicable; correction of economic and market fundamentals, as far as practicable; perfecting demand-supply mechanisms, as far as practicable; poverty alleviation; corruption reduction at least to a tolerable extent; and a more proper management of human behaviors; at respective local, national, global and other levels.