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The Financial Express

Rising inflation and pandemic-hit poor  


Rising inflation and pandemic-hit poor   

When the pandemic was at its peak in the months between March and May, most economic activities came to a standstill across the country. Millions lost jobs and other sources of income. Hundreds of families left Dhaka city for village homes for not being able to meet the high living expenses. The worst-hit were the poor and low-income people. Many of them resorted to begging.

As the government allowed resumption of economic activities from the last day of May, the situation has eased to a great extent, but it is well short of the pre-pandemic period. Many small and micro-enterprises that ceased operation during the time of 'holiday', have been closed permanently. Some are operating partially. These are informal enterprises where more than 80 per cent of the country's workforce is engaged.

Many small and medium enterprises that have resumed operation are offering reduced wages to their workers and employees. The prevailing situation is so difficult that employees are left with no option but to accept the offer. It is hard to blame the employers since they have also suffered enough.

The middle-class is also equally affected by the pandemic. They witnessed severe erosion in their income. Many families ate up their savings during this difficult time.

Though economic activities have resumed, the common people are not out of the woods. They are still licking their financial wounds. That is why the pace of many economic activities continues to be slow.

Many others who had gone back to villages have preferred to stay back seeing no prospect of reemployment in cities, mainly Dhaka. Others in their thousands have returned to urban centres looking for employment.

Overall, the situation as far as the poor and low-income people are concerned is very much uncertain.

Against this backdrop, the cost of living has been witnessing an unabated rise in recent months. According to the official (the Bangladesh Bureau of Statistics) data, the point-to-point inflation in October last was about 6.5 per cent, the highest in the past 12 months and far above the government-projected rate. Inflation has gone up by one percentage point for one year.

The prices of most essential items, including rice, edible oil, spices, have been on the rise for the past few months. What is worrying most is the price trend of the main staple, rice.

The spike in the cost of living is causing pains and sufferings to the poor, low-income and also middle-class people. Yet these people are not staging protests on the street. But the fact remains that the sufferings and hardship are there and none but the victims are enduring those. 

The poor and low-income people, in particular, are badly affected by the high rice prices as 60 per cent of their expenditure on food is, reportedly, on rice. So, any substantial increase in the prices of this item does hurt them most.

Usually, the rice prices show a declining trend as soon as the harvest of Aman, the second-largest rice crop, begins. This year, the opposite has happened. However, there are reasons for this trend. The prices of rice came under pressure during the last Boro season despite a bumper harvest. The food department also could not meet the food procurement target. Consecutive floods this year affected Aman production. So, the arrival of newly harvested Aman rice and paddy has not been able to cool off the rice market. The duty-free import of a large quantity of rice is likely to leave some impact on the rice market.

That farmers are getting a better price for rice in the recent rice seasons is a welcome development. But it is also equally important to keep the rice prices within the reach of the poor and low-income people.

What seems more important now is creation of employment opportunities, even temporary ones for the poor, living in both urban and rural areas. The test relief, cash for works and similar kinds of temporary employment programmes should be taken up extensively in the upcoming winter. Besides, cash handouts could also be made available to poor and low-income people.

The government some months back started a loan package for farmers, low-income professionals etc., but the implementation of the package has been well below the target. The government recently extended the execution period of the package. Hopefully, the benefit of the loan package would reach who need it most.

The government has a safety net programme for various groups of hapless people at the grassroots level. That is a structured one. But millions in both rural and urban areas need help desperately because of the Covid-19 pandemic effect. The government cannot leave them alone to suffer in one of the most difficult times in human history. 

It is true none will die from starvation in the country. These days, such deaths are not allowed to take place.

Even during the ongoing pandemic, Bangladesh has done well, economically. That is in terms of GDP growth or per capita income. The performance has also triggered heart-burning among some people living beyond the border.

The government must be aware of the difficulties the poor and low-income people are in. So, it should initiate measures to help these people.

 

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