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4 September, 2015 00:00 00 AM
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Government cannot sit on the fence with a show of helplessness on the plea of practicing market economy. Hoarding, black marketing and profiteering have no place in market economy

Tormenting price rises

Anis Ahmed
Tormenting price rises
Despite assurances that prices of essentials would not be allowed to rise unreasonably, the opposite is happening

There was a time soon after the taking over of power by the present government some six years ago when prices of some essential commodities were noted to be dropping. But that trend had started earlier under the caretaker government. Prices of some imported kitchen items such as sugar and cooking oil were noted to be dropping. Only the trend was sustained after the takeover by the elected government. Observers of the market found out that this decrease in prices had a great deal to do with the substantially reduced imported prices of these commodities . There was no special effort on the part of the government at that time that lead to significant price reductions. But the government did not lose any chance to take full credit for such price decreases.
The real challenge for the government started building up on the eve of last Ramadan when the international prices of  some commodities in everyday use showed an uptrend. The uptrend continues but the same is not so pronounced to cause fat increases in their prices in local markets. But prices of these essentials have not crawled up but leapt up-- to be more precise-- in recent months. What is more important, government has been hardly found determined or active to do whatever it could do to contain such undeserved price rises.
The commerce minister thundered dire warnings to traders before the Ramadan and the Eid-ul-Fitr that he would ensure price control. But that proved to be only empty rhetoric as the same was not backed up by any effective plans or their execution.
The minister’s warnings only seemed to be challenged by the bazaar syndicates. The authorities appear now to have surrendered to these syndicates after some pretentious and tall talks about giving a bloody nose to the syndicates. How strong and all powerful these syndicates have become can be seen only from the amazing shooting up of the prices of onions and other perishables during the last couple of weeks notwithstanding that their supplies are overflowing.  Business, where it is conducted ethically, cannot lead to consumers’ sufferings. Businesses ought to be guided not by the lust for supernormal profits, but legitimate ones. If the opposite had any sanction, then hoarding, black-marketing and profiteering would not be seen as unlawful activities.  Unfortunately, ethics or the normal rules of business is rather absent in the current practice of many businesses in Bangladesh specially the ones that deal with products in every day use the consumption of which buyers cannot postpone whatever their prices. Exploiting this vulnerability of the buyers, a section of people engaged in the trade of these daily consumables have formed ‘ syndicates ’ to go on artificially inflating prices of essential goods consumed by common people.
Recently, explanations have been offered from some institutional sources of businesses that the higher prices of consumer products are linked to their similarly rising prices in international markets. Thus, the increased prices of consumer goods in international markets are being passed on down to local consumers, in their view.
 But this explanation sounds not tenable in the backdrop of the price increases that started at least eight months ago when the prices of most of these consumption goods such as soybean oil were on the low side in the international market. This factor, plus repeated duty reductions on them, should have much lowered their prices months ago.
But this did not happen. Furthermore, the very recent imports of some consumption goods may have become costlier as a consequence of their higher prices externally. But why should stocks of these goods, imported earlier at lower prices and enjoying the benefits of duty reductions on them, are selling now at substantially higher prices on the lame excuse of their present higher import prices. Besides, even at the higher import prices, prices of goods in the internal market should ‘ proportionately’ reflect the deductions of duty on them. But this is not seen which brings into question the aspect of price manipulations for undue profiteering which is a penal offence.
Meeting the needs of consumers satisfactorily in terms of availability of goods and services at reasonable and affordable prices while also making their legitimate and acceptable profits have been the goals of good businessmen everywhere at all times. But Bangladesh today is a sad case of a flagrant violation of such business norms.
Government cannot sit on the fence with a show of helplessness on the plea of practicing market economy. Market economy principles determine prices based on the interactions of market forces and the same are found to be gainful for consumers. But hoarding, black marketing and profiteering have no place in market economy and are to be considered as what they are -- offences to be recognised and acted upon by the laws of the land, firmly without discrimination. Nothing in market economy principles approves that government does not reserve the right of intervention to correct market failures in the interest of unfairly exploited common people or in the vital interest of the economy.

The writer is a contributor to The Independent

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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