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The Financial Express

How costly should Dhaka City be?

| Updated: October 25, 2017 02:54:09


How costly should Dhaka City be?
In a year marked by volatility of commodity prices, Dhaka City has ranked joint 71st with Canadian city Montrea. According to the Economist Intelligence Unit's (EIU's) 2016 Worldwide Cost of Living Survey, Singapore has remained the costliest city for the third consecutive years. Importantly enough, five of the cheapest cities are from the subcontinent with Bangalore and Mumbai ranking second and third in terms of cheaper living cost. Chennai and Delhi have also featured at the bottom of the 133 cities surveyed by the EIU. 
Now what has prevented Dhaka from making it to the global list of the 10 cheapest cities? The EIU's worldwide cost of living survey takes into cognizance more than 400 individual comparative prices across 160 products and services in 133 cities. Dhaka's ranking on a par with Montreal does not make a happy reading for the Bangladesh capital. After all, government amenities and services available in the Canadian city are far better than can be expected in Dhaka. In terms of food, drink, clothing, household supplies, personal care items, house rent, transport, utility bills, private schools, domestic help and recreational facilities, there are wide gaps between what is available in Dhaka and  in equivalent costly cities in the developed world like Montreal. 
However, things could indeed be different -better say rational, if only a few things were taken effective care of. The fact that farmers produce staple foods, vegetables and many other items of daily need enough for the nation should have tempered the cost of living index. But it has not happened. Instead, farmers find it difficult to reimburse the production cost of paddy and even potato. Depending on seasonal fluctuation of demand and supply, prices of quite a few items like onion, garlic and ginger simply become erratic. What remains a throw-away price in the harvesting season, shots up like a meteor when farmers have no stock but only the traders have the opportunity of dictating terms through market manipulation. 
Against this general picture of commodity prices -- whether it concerns imported or locally grown ones -- countrywide, there are special rules for the cities with the capital staying on the summit of the price pyramid. Farmers and traders try to have an early access to the capital's market with their seasonal produces including fruits. At times such a ploy works and farmers also have the opportunity to derive some benefit from early seasonal production. But it is the traders -- usually the wholesalers who get the lion's share of the profit. They make good use of their monopoly hold on the market. 
What adds to the price escalation is primarily the transport cost. A truck-load of tomatoes, bananas, pineapples, mangoes, oranges or guavas coming from northern districts, Rangamati or other hill districts, southern or western districts costs a lot. If guavas and coconuts are transported by water cargoes from the country's south, the fruits are available at a cheaper rate. It surely is a policy blunder on the part of powerful people who have not thought of turning railway the main mode of transport for carrying goods and passengers. If goods trains transported the deliveries of perishable items, it could almost do away with the middlemen who actually eat the cream of food business here. In India, goods wagons used for the purpose keep the commodity prices low. 
Apart from the transport cost, illegal tolls the trucks have to pay on way to the capital also contribute to substantial increase in prices of commodities. Long queues of trucks at the ferries in particular only make the matter worse for the transportation. Some of the perishable produces rot before they reach their destination. But traders try to make up for the loss by hiking the prices of the goods. 
Why cost of living goes up in cities is explained by the irrational difference in prices of the same produce at the farm level and in city markets. If transportation costs were reasonably low, the price gap would not be so outrageously yawning. Even the retail traders have to pay illegal tolls in order to keep possession of the makeshift space allotted to them. All this adds up to cost of living in cities like Dhaka.
So far services are concerned, corruption eats up a very a substantial portion of investment. Businesspeople and even common people have to be ready for paying speed money in order to facilitate what should have been easily and normally available in due process. There are corrupt elements and their lackeys who have entered into an impregnable coalition for serving their mutual interests at the cost of subscribers or clients. 
No wonder, prevalence of disorder or chaos is at times deliberately allowed to continue because this serves vested interests. Even the lawlessness on the road apparently serves some quarters. Traffic congestion takes away life out of people doing business or serving any organization in the city's busy hubs. Loss of time and energy does not bother the policy-makers any more because it seems they have accepted it as a fait accompli. This is exactly how living costs in Dhaka city escalates along with causing its inhabitants pain and sufferings. 
The need is to stem the mass movement of people to cities by creating job opportunities in their localities. This city is unable to take the pressure any more. Let local government be strengthened in order to strike a balance between urban lure and rural charms through developing local economic and enterprising bases.                    
 

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