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Internet Edition. January 14, 2009, Updated: Bangladesh Time 12:00 AM |
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Absorbing the shocks of credit crunch Maswood Alam Khan Two pieces of disturbing news I read last Saturday do not augur well for the future of the world! News one: a Pakistani businessman, who was the boss of several construction firms, could no more withstand the impact of credit crunch his company was facing due to global economic meltdown. At his home in Sharjah, UAE, he killed himself almost severing his head with an electric saw. News two: a jobless scientist with a doctorate in physics has applied for a street sweeper's job in Seoul, South Korea. These two events, we are afraid, are gloomy precursors to our dismal days ahead. Our newly elected government has embarked upon a five-year long governance of Bangladesh at a time when the whole world seems to have been shrouded by ominously dark economic clouds. Days ahead are pretty challenging. A vision little frosted, a step little missed, or a decision little lax in public administration on the part of the new government may wreck havoc on our economy. It is time we all on a war footing should be bracing ourselves for a battle under the shadow of global economic downturn. Measures of preparedness, before the impending recession pounds us, may save our nation from a precipitous fall into an economic depression. The economic storm now brewing up out in the Occident since December, 2007 is fast moving towards the Orient. The ferocity and the impacts of these economic storms on different spots of the globe will vary depending on the vulnerability and preparedness of the respective countries in facing those economic upheavals. The storm may be a tornado in USA, an earthquake in Japan, and a 'cyclone or no storm' in Bangladesh. Thanks to strong political pressure for ensuring a transparent national election, our people have already been handed national identity cards. The caretaker government with the help of our armed forces has performed a huge mission that will go a long way in facilitating many welfare jobs for our people. Based on a robust database thus made in issuing national identity cards our government can now draw a variety of strategic plans for efficiently serving people both in emergency and peacetime. During a war citizens are advised to adopt some safety measures to minimize their casualties and hardships. Devising shelters, evacuation of children to rural areas, distribution of basic and essential items through rationing, training people with first-aid lessons etc. are among the precautionary measures. Distribution of essential items through rationing is cardinal---a measure we saw very effective also during peacetime when a nation faces economic crises. It was during World War II National Registration Identity Cards were issued to all the Britons with a view to enlisting young people for compulsory military service and distributing among British citizens basic foods and clothing efficiently to guard against shortages. Britain's inability to feed itself was a major problem in 1940, the first full year of the World War II. Every British citizen was then issued with a ration book of coupons. As well as foodstuffs other items were also rationed, including petrol, clothing, and even furniture. While Americans suffered some rationing during World War II for items such as petrol, light bulbs and stockings, they have never had to limit consumption of their staple foods. But, in the early part of the last year food rationing had to be introduced in USA for the first time in their history to protect dwindling supplies of food as the global price skyrocketed with giant food producing countries like USA and Australia struggling to keep up with demand. Growing appetites in China and India, drought in Australia and pests in Vietnam also contributed to the food shortage and soaring prices. Those who lived in USA in 2008 should remember that Sam's Club, Wal-Mart's wholesale wing which sells food to restaurants and other retailers, had limited each customer to four bags of white rice per visit. We should not forget that India, our next door neighbor, last year stopped exportation of rice to our country in the backdrop of price hike of food grains all over the world and we had to face an uphill struggle in procuring rice for our consumption. Probability of food shortage in the current year is very high with recession gripping the western world. At least to keep citizens from suffering food shortage all countries must have already made contingency plans to procure buffer stocks of basic food items. We may not find sources wherefrom we may readily import food if our government now procrastinates in their food management decisions. We may also face overwhelming hurdles in conducting relief operations like 'feeding the hungry' in organized manners if we don't take some preventive measures beforehand. Without a second thought our government should instruct our armed forces to do an emergency job, a job somewhat similar to the one they just performed in issuing national identity cards. Our armed forces may be entrusted with the responsibility of classifying our people according to their poverty levels, getting rationing cards registered and printed for issuance to all individual families in Bangladesh. Readers may brand me as a pathological pessimist raising an unnecessary, false and premature alarm. But, I believe getting ready with rationing cards for our people would help the government not only in tackling the probable economic cyclone that we fear would engulf the whole nation, such cards may also help catering emergency relief to victims of natural calamities that quite frequently befall many regions of our country. In case a recession hits the whole world at full throttle we may not be able to import even one ounce of food grains from any foreign country. So, it is high time the government should now prioritise their plans on how to attain autarky in food by boosting agricultural production, importing rice and stockpiling food grains as a buffer against future shortage. What is now urgently required is for the government to procure from farmers as much as possible staple grains like rice, wheat and pulses at a price well above the growers' production cost and store those grains in silos and warehouses, both public and private, in sufficient quantities with a view to selling the same to all categories of vulnerable people through rationing cards at a price people can afford to pay. The gap between the buying and the selling prices of food grains should be the prime and, if possible, the only subsidy the government should offer to people in general irrespective of their status as growers or consumers, leaving market forces to play their laissez-faire roles according to normal demand and supply of other agricultural inputs. Government's total concentration on subsidization of only foods through rationing should keep both growers and consumers happy-as long as a grower gets a fair price and a consumer also spends a fair price---even if the farmers have to buy fertilizers, seeds, fuels etc. at unsubsidized prices. Our sour past experiences suggest subsidizing any commodity doesn't always yield good results when the price of the subsidized commodity gets lower than the selling price of the same commodity in Indian or Burmese markets. We should rather design our tariffs and duties in such a manner that commodities that grow wings and legs to cross borders may only enter our country, not the other way round, when it is impossible on the part of our BDR personnel to make our long and porous borders impermeable to smugglers. Selling food grains and other edibles at fixed prices under direct supervision of the government is very much possible as has been possible for fuels like petrol, octane, diesel, and compressed gas now being sold through hundreds of outlets throughout the country. Such rationing is also in place at army garrisons for a long time. The concept is same. The government buys a commodity at a higher price and sells the same at a lower price through appointed agents. If necessary, BDR and armed forces personnel may be engaged in pivotal positions where there are possibilities of adopting unfair means to twist the market or to shortchange the consumers. If necessary the whole gamut of private food industries may be nationalized and handed over to a reliable body like TCB or Sena Kallyan Shangstha to run the industries and do the trading business. Such rationing, no matter we are attacked by a recession or not, may also help the government fulfill a commitment to ensure food for people at affordable price the party-in-power promised before the election. Rationing cards may be printed in seven colors for seven types of vulnerable groups: the poorest, the hapless (uncared children and very old people), the lower middle class, the middle class, and all the active and retired public officials including officials of the armed forces and the police. As our armed forces are experienced in dealing with rationing food for their personnel they may be advised to make an elaborate design on how to make a national rationing program efficacious. Some quarters, at the behest of some unscrupulous businessmen, may oppose the idea of introducing food rationing cards on the pretext that such rationing will spawn a new breed of corrupt functionaries and there would be huge drainage of government fund. My reply to those naysayers: "If controlled sale of fuels all over the country by authorized agents through hundreds of stations is possible, if rationing in army garrisons is feasible, and if a private business organization like BATA can sell shoes at fixed prices through their countrywide network of outlets, why the government likewise should fail to employ authorized agents who through their standardized kiosks all over the country will be selling only food products at subsidized prices?"
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