Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The Trading Corporation of Bangladesh (TCB) was established on January 1, 1972 with a noble objective. Its open market sale of some essential products at prices that are comparatively lower than in the market is intended to provide relief to low and middle-income people and serve as a government mechanism for intervening in the market during periods of sharp price increases. However, the state-run organisation is so poorly equipped that neither of these objectives is met effectively.
Moreover, the manner in which impoverished people are made to wait in long queues for hours is deeply distressing. Escalating living expenses over the last couple of years have forced many even in the many middle-income brackets to rely on TCB for essentials supplies. The long lines before TCB trucks show the grim economic reality of ordinary people and the devastating toll of soaring inflation on their lives.
Sadly, the people are being forced to receive the supplies at the cost of human dignity. This agonising wait is not only physically demanding but also emotionally taxing. On Wednesday, at least three women fainted in different parts of the capital while waiting in line, which highlights the immense hardship people endure to obtain supplies from TCB trucks and OMS distribution points. Many even return empty-handed after waiting for hours, as the stock of essential commodities often runs out before they reach all those waiting in line.
Compared to the overwhelming demand, the supply of essential commodities through this mechanism is merely a drop in the ocean. Consequently, it has little or no impact on market prices. And the public distribution system, which could have been a potent tool to fulfill the people's basic needs and fight inflation, has remained largely ineffective.
If protecting the poor from rising food prices is a priority, the government must strengthen TCB. Recent media reports have pointed to several factors contributing to TCB's limitations, including manpower shortage, inadequate warehouse facilities, corruption, and limited financial capabilities. These constraints hinder its ability to operate effectively. To make TCB an effective market intervention mechanism, it must be transformed into a robust institution with enhanced operational capacity. Necessary reforms should be undertaken to establish TCB as a full-fledged institution with increased storage capacity and greater decision-making authority regarding the import of essential commodities.
After the formation of the interim government, Bangladesh Bank has been trying to check inflation primarily through a single instrument, hiking the policy rate, based on the orthodox economic belief that inflation is primarily demand-driven and can be controlled by reducing the money supply in the market. To what extent this approach will be effective is much-debated as many argue that the current inflationary pressures are largely driven by issues related to the supply-side, as well as rising import costs and production costs. Furthermore, market manipulation, syndication, and rampant extortion are also fuelling inflation significantly. Apart from increasing market monitoring, a robust operation of the public distribution system could be an effective strategy to combat inflation. But, these critical factors have been largely ignored in the current policy response to curb inflation. The desperate wait of ordinary people calls for the urgent need to enhance TCB's capacity and expand its operations.