Ministers blame price hike on syndicates

AMA Muhith, finance minister, speaks at a seminar on Recent Performance of the Bangladesh Economy, jointly organised by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and Bangladesh Institute of Development Studies (BIDS) in Dhaka yesterday. Faruk Khan, commerce minister, Dr Mashiur Rahman, prime minister's economic affairs adviser, Annisul Huq, president of FBCCI, and Dr Mustafa K Mujeri, director general of BIDS, are also seen. FBCCI

The existence of syndicates who are said to be so influential that run the local commodity market to their whims has come to the focal point at a seminar.
“There is no valid ground both from national and international perspectives -- for the recent hike in the prices of essentials in the local market,” Finance Minister AMA Muhith pointed out yesterday while addressing the seminar on Bangladesh economy.
Held at Sonargaon Hotel in Dhaka, it was chaired by Annisul Huq, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
The FBCCI in collaboration with the Bangladesh Institute of Development Studies (BIDS) organised the seminar where business-people, economists and government functionaries dwelt on different aspects of the economy's recent performance.
Pointing his finger at the soaring prices of the staple food, Muhith categorically said there is no crisis of rice in the market.
A monopolistic and syndicate force is very active and it controls the market, the minister admitted and sought suggestions from business leaders, experts and media on how the government could rein in such cartel.
Commerce Minister Faruk Khan, who also spoke at the programme, echoed Muhith's view on syndicates while talking to The Daily Star on the sideline of the seminar.
Khan cited the example of sugar cartel.
When his attention was drawn to the inactiveness of the state-run TCB ( Trading Corporation of Bangladesh), he said, “I have to confess to the fact that there are some problems.”
However, he made an assurance that he would try to activate it by involving private sector businesses.
Such syndicate remains a debate for long, as successive governments failed to show any achievement in taming the dominance of this cartel of some unscrupulous traders who fix the price of each essential item like soybean oil, sugar, pulses, onion etc.
The efforts of the immediate past army-backed caretaker government also turned futile.
Dr Mustafa K Mujeri, BIDS director general, and M Asaduzzaman, a director, presented papers on macro and micro economic situation of the country.
Energy crisis, farm subsidy, capital market, public expenditure, investment, uneven regional growth and governance are among the topics the finance minister dwelt on.
Muhith said the government is considering alternative sources of energy to address the present crisis.
“Import of LNG (liquefied natural gas) can give us a solution in this regard,” he said. “We have to take the investment decision on energy right at the moment to reap its benefit five years later.”
Terming the stock market 'shallow,' the minister said banks' excessive exposure in the capital market deserves monitoring.
Muhith also believes launching of more mutual funds in the market should not be encouraged at this stage.
He said private investment is needed in energy, power, transport and communication sectors, as the government alone could not address the necessity alone.
Dr Mashiur Rahman, prime minister's economic affairs adviser, said inflation is a sensitive issue and it affects the poor most.
“It needs to be examined whether inflation is rising because of the faulty policies, or not,” he said.
The adviser also emphasised skills development of Bangladeshi overseas jobseekers. “Otherwise, they will lag behind the workers from other countries.”
Former finance minister M Syeduzzaman also warned against soaring inflation. He also asked the government to maintain norms and discipline in the banking industry.
“Public concerns about banking should be addressed by the government, not by the central bank,” he said, without elaborating the areas of concerns.
Dr Mujeri in his paper said the economy is likely to grow at 5.8 percent this fiscal year.
“There are some downside risks, such as energy and infrastructure constraints and rising inflationary pressure”, he said.