March 19, 2008

Bangladesh: another crisis looming?

The price of rice, the staple food of Bangladeshis keeps on going up. If one is paid the minimum wage that is about 2000 Taka a month, he/she will be able to buy a kg rice a day with nothing to spare. So how one is going to survive? WFP says poorer households are the hardest hit who spend up to 80 percent of their income on food. And this may cause political and social unrest in Bangladesh soon.

Meanwhile Chairman of the Regulatory Reforms Commission and ex adviser of the care taker Government Akbar Ali Khan slammed the Government for furnishing 'rosy' development scenario. His quote that the country is undergoing silent famine has provoked much reaction. In certain parts of the country the silent famine or Monga is again surfacing. According to Independent Bangladesh:
Compared to national average gross domestic manufacturing product at Tk 2,720, it is Tk 254 for Lalmohirhat, Tk 263 for Nilphamar, Tk 341 for Kurigram, Tk 400 for Gaibandha and Tk 820 for relatively well-off Rangur among the monga-prone northern districts.
In Drishtipat blog in a discussion on the global financial meltdown Jyoti lists its impacts on Bangladesh:
1. The government (ie taxpayers) will have to pay more for the past debt. This will mean less money for other expenditure such as health or education.

2. Government will find it harder to borrow. The call for government expenditure beyond its revenue is likely to increase.

3. Private sector will also find it hard to borrow. And this will mean investment will slow, with follow ons to employment and household income.

4. Exports will suffer, especially if Europe enters a recession.

5. Remittances will suffer, even without a global recession. This is because most NRBs will have to pay higher interest payments in their house/credit card/personal loans, and it will mean less money to send home.
Looks like its a double blow for Bangladesh and the situation is so volatile now that a little spark can turn to big fire of protests in the country. We are sadly watching the meltdown and are able to do nothing.


Post a Comment