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Conflicting findings about the cost of living are baffling the citizens in Bangladesh. On the one hand, the Consumers Association of Bangladesh (CAB) is saying that the cost of living in Dhaka has gone up by 8.44 per cent as of December last year. On the other, Bangladesh Bureau of Statistics (BBS) claims that the overall inflation has fallen during the period under review.
The cost of living in the capital, according to the CAB survey, hit a four-year high in 2017 due to spiralling prices of rice, vegetables, electricity, gas and other services as well as rising house rent. The city residents saw their living costs go up by 8.44 per cent last year compared to that in the previous year.
Living cost of the 20 million city dwellers hit the highest since 2014 when it rose by 6.82 per cent. The soaring cost shows lack of competition in the market, high profit motive, corruption and extortion in almost every stage of the supply chain.
CAB says the price of rice has gone up by 20.40 per cent on an average from the corresponding period last year. It claims that inflation was 5.91 per cent in last November and 5.83 per cent in December.
According to the BBS, rural food products accounts for 63 per cent in calculating inflation while it is 49 per cent in the urban areas. The planning minister could not, according to reports, explain how the rate of inflation has fallen despite the increase in the price of rice and other essentials.
The price of rice has been on a steady rise since the beginning of last year. In a country where rice is the staple food, it is only natural that increased rice prices will flare up inflation, whether the government admits it or not. It is not clear on what basis BBS data shows that inflation has decreased. The rice price did not fall even after arrival of the fresh crop in the market.
The average price of rice soared by 20.4 per cent in 2017 -- the highest since 2011. And prices of coarse rice rose higher than that of the finer varieties. The rise in prices of coarse rice has hit the poor and low-income people hard.
The millers and big traders hiked the prices of the staple, cashing in on flood-induced losses of crops and depleting stockpile at public granaries last year. The situation could have been better if the government could have adequate stocks of rice. In fact, the authority's failure in inventory management is mainly responsible for the spiralling prices of rice.
Floods have also caused huge crop losses. The grain stock dwindled fast, but it could not replenish those because of the authorities' negligence and incompetence. In fact, there is a need for raising the public stock to 0.8-1.0 million tonnes. The government has to ensure a smooth supply chain.
According to Mercer's latest cost of living survey, Dhaka city is much more expensive than cities like New Delhi and Mumbai. It is hard to believe that the cost of living here is as high as that in the Canadian city of Montreal although the living amenities and conditions in these two cities are wide apart.
Previously, a report prepared by the South Asian Network on Economic Modelling (SANEM) stated that over 0.50 million people have fallen below the poverty line due to the increase in rice prices. Such a situation has left a negative impact on the country's economy. Even then, the government is claiming that the poverty rate is declining fast in the country.
The substantial rise in food prices is definitely hitting the common people very hard. To cope with the price hike, they are cutting expenditure on nutritious food items. Expenditure on health and education is also being reduced. If such trend continues, the country's overall development and attainment of Sustainable Development Goals by 2030 would likely be affected.
There is no denying that a group of dishonest traders are raising the prices of rice, vegetables and other essentials artificially. As such, resistance from consumers is necessary to stop such unhealthy practices of the traders. The government has also a lot to do in this connection. Many of its achievements will go in vain if prices continue to remain at intolerable levels.