One of the main objectives of this policy conclave is to create connections and raise awareness among everyone. Overall, various panelists have already shared their views and observations on what could be the reasonable price for food products. Suggestions and proposals have come from different individuals. We will work on how to implement them. In today’s main paper discussion, the speaker has tried to explain why we should focus on long-term solutions rather than short-term ones. Keeping that goal in mind, this policy conclave has been organized to consider the views of all stakeholders.

The main paper today highlighted how we have seen a 6 percent stable inflation rate over the past 15 years. It’s not just inflation; we have also kept GDP size, bank interest rates, tax-GDP ratio, loan-GDP ratio, and even exchange rates artificially stable for a long time. The combined impact of all these has been felt by the current interim government. Addressing this issue is not an easy task. This gathering aims to understand and tackle the crisis that is emerging in the economy. We are considering a strategy for rice. The government does not want to purchase rice from the open market right now in order to increase supply. If necessary, the government will import rice. The main paper presenter mentioned that rice prices are determined in 12 steps in the market. We will soon discuss what can be done to stop this.

The variation in food prices is actually a symptom; the problem lies elsewhere. The issue starts with the destruction of institutional capacity. After the fall of the Sheikh Hasina government, even the Khatib of Baitul Mukarram fled, revealing that no institution remained untouched by destruction.

From the bureaucracy to state intelligence agencies, the judiciary, academia, and the business community, we have seen collusion with criminal networks. This has created a combined responsibility, and finding a way out of this situation is not an easy task. During the nearly five months that the interim government has been in power, a significant portion of that time has been spent addressing instability caused by various forms of unrest, whether it be labor dissatisfaction, the unrest within Ansar, or various judicial problems—a rather tumultuous period.

For example, the Karwan Bazar Somiti has recommended implementing a receipt system. If possible, we will certainly try to implement it. Additionally, we have received recommendations from supermarket business representatives to extend the tax net. However, in my opinion, our target for increasing taxes should not be too high. Compared to our capacity, we are in a shameful position in terms of tax-GDP ratio. In this case, institutionally, we have not been able to create any effective impact or establish a level playing field. We have not yet created an environment conducive to tax collection based on initiatives. One example of this is the excessively high tax on sugar, as most of the sugar in our country is imported. The demand for sugar is nearly 50 times greater than the locally produced 40-50 tons. We need to investigate whether it is possible to produce sugar locally to meet the demand, but the issue I am highlighting here is that it is easy to impose duties on imported sugar through the port. Another area where easy tax collection is possible is telecom or internet services. By imposing unregulated taxes in such areas where tax collection is easy, consumer costs are skyrocketing. So why is the government following this path?

The government follows this path because it needs to sell Savings Certificates, which offer high-interest rates, in order to cover its operational costs. To provide these interest rates, taxes like this are imposed. Now it is time for us to think about creating a level playing field for imposing taxes and duties.

When the then-finance minister, M Saifur Rahman, introduced the VAT act in 1991, it brought about a revolutionary change in our economy. Over time, however, various amendments were made that essentially rendered it ineffective. Later, in 2012, when a new VAT law was proposed with several well-thought-out suggestions, unfortunately, the business community did not allow its implementation. Had it been implemented, it would have ensured much greater transparency, which the business community did not want. Therefore, the variation in prices is a symptom, not the problem.

In my view, our fundamental problem is the inequality of resources. Economic policies have been formulated to aid the wealthy due to this disparity. There are many obstacles in formulating policies that would genuinely benefit the general public. Adding to this is the destruction of institutional capacity. Consequently, economic policies were designed with the goal of making certain business groups even wealthier. There’s no denying this. So now the question is, how do we address this?

Over the past 15 years, we’ve seen that there hasn’t been much investment in the country. Apart from a few institutions, no one has really invested in Bangladesh. If there is no investment, how can we increase revenue? How will economic activities grow? How will there be equitable distribution of resources?

Now is the time to think fundamentally about these issues. Therefore, I believe that rather than expanding the tax net, the focus should be on creating fairness in taxation, establishing a level playing field for tax collection, and taking sector-specific initiatives for businesses instead of isolated actions. If we can create this alignment, I am confident that VAT collection will be much higher than it is now. And if VAT is collected, tax revenue will increase. When businesses evade VAT, they naturally cannot pay taxes, because they have no profit from their operations. When they are forced to limit their production and sales, where will they get the money to pay taxes? That’s why, in my opinion, VAT collection requires more fundamental, sensitive thinking.

At this event, we’ve heard from rice mill owners’ representatives who mentioned that many are going bankrupt. They talked about a powerful rice mill syndicate called ‘The Eleven,’ a specific term. It’s true that businesses in this sector are increasingly being marginalized. However, it’s also true that many of them invest in unnecessary and unprofitable sectors, bringing these troubles upon themselves. Furthermore, businesses are creating problems among themselves by getting involved in various political activities. This is something we need to think about as well.

Once again, egg traders are talking about the limitations of the open market. At the same time, in our banking system, we have seen criminalization over the past 15 years. We witnessed how a large bank like Islami Bank was destroyed. As a former businessman and a customer of this bank, I have personal experience witnessing its downfall and seeing the extent of corruption within the bank and its operations. The bank’s owners viewed themselves as the ultimate decision-makers for all of the bank’s activities, with multiple members of the same family occupying positions on the board. In the end, the bank turned into a family-owned company. Currently, we are hearing that NPLs (non-performing loans) are as high as 70-80 percent, and in some banks, they are at 85-90 percent, which is unbelievable. How is this possible? We should have an integrated approach to address these issues, which I regret has not been implemented yet. It is crucial to take action on this, as it will send a message to our economy that, sooner or later, the wicked will be punished and the virtuous will prevail.

Another key reason for being here today is to inform you about the activities of the Trading Corporation of Bangladesh (TCB). TCB purchases goods worth nearly BDT 120 billion. That means it is quite a large business entity. But how was such a large business operation destroyed? It is shocking to see that only 142 people are managing BDT 120 billion worth of transactions. This is a very sad situation. Very few people are involved in TCB’s operations, and only they participate in the DPM (Direct Procurement Method) or the OTM (Open Tender Method). As a result, a monopoly has been created. Today, I urge the businesspeople present here to please get involved in this.

By participating, you will benefit, as TCB sells goods in the market at subsidized prices. This will help support the marginalized population. Furthermore, for your participation, I will work to reduce the scale of the TCB’s tendering process so that more businesses can get involved. Additionally, the chairman of TCB has already assured that payments will be guaranteed by the state. So, rest assured, you will receive your due payments. TCB provides food to almost Ten million people under social security programs. On the surface, this sounds good, but every year, new communities are added, making them victims of the ongoing wealth distribution inequity. From this perspective, the state must decide whether it will only increase TCB’s supplies each year or whether it will focus on improving the skills of these communities through policy formulation and help lift them out of marginalization. Which approach is more urgent?

Unfortunately, corruption has also infiltrated TCB, from dealers to procurement (distribution of subsidies). The worst part is that on paper, when we collected some basic data on ten million beneficiaries, it became clear that the number had actually dropped to 5.7 million. This is preliminary data, and if we further refine this data, I believe the number will decrease by another 2-2.5 million. A sample of this corruption can be seen when I visited the homes of beneficiaries and asked them how they would feel if their card was cut off. They replied, “By Allah’s grace, that won’t happen!” So the question arises: why were these people given cards? Some homes received two or three cards, and even families living in multi-storied buildings were given TCB cards. We have not yet addressed these issues but will do so in the future. I will personally visit the ground level and gather further data to take the necessary actions. Since our mandate is to reach ten million people, we will involve the actual marginalized populations. Once again, I urge the businesspeople here to please participate in TCB’s operations.

For a long time, S Alam Group has played a significant role in the import of consumer goods in Bangladesh. However, following their recent absence and departure from the country, rumors have circulated in the market. From the Ministry of Commerce, we are working closely with all relevant stakeholders to manage the market and prevent any major crisis. By God’s grace, so far, no such crisis has occurred, and we want to assure you that, Insha’Allah, there will be no issues during the month of Ramadan either.

Among the imported goods we handle are sugar, oil, chickpeas, dates, and some other essential items. Additionally, some agricultural products, such as onions and potatoes, are imported based on market demand. However, I want to make it clear that, thanks to God’s grace, there is no crisis in the market right now.

Recently, there have been some rumors regarding the oil market. In our country, there are a few major producers and refineries that control delivery orders (DO) and supply orders (SO). Some traders and vested interest groups are spreading rumors through the media, claiming there is a crisis, in an attempt to create instability among consumers. This may provide an opportunity for stockpilers to take advantage of the situation.

I especially urge the media to think before publishing news—whose interests are you protecting? Who benefits from the information? Is your news favoring stockpilers, or is it protecting the interests of the common consumer?

The government may face difficulties, but it must acknowledge the institutional failures and corruption that have emerged in the market and find solutions to address them.

After analyzing the international market, we find no legitimate reason for price hikes; in fact, prices should be decreasing. We do not intend to control the market but aim to ensure fair competition. To achieve this, the Competition Commission, Consumer Rights Protection Department, TCB, Tariff Commission, and NBR are all working together to make the market more affordable for consumers.

I have taken steps to make the Competition Commission more effective. After meeting with the Chairman of the Commission, I urged them to implement necessary reforms without hesitation. The Commission must be able to operate independently to prevent anti-competitive activities.

We are analyzing the market and observing that some traders are intentionally attempting to create a crisis. However, the government remains fully alert. To better understand the market situation, we are preparing a specific Terms of Reference (TOR) with the coordination of government agencies, research institutions, and journalists. This will enable us to analyze the entire value chain from producers to retailers.

We do not wish to make decisions based on assumptions. We need to know precisely if extortion is taking place, where it is happening, and the amounts involved. Only then can we make informed decisions based on data.

We have also taken steps to enhance Bangladesh’s internal capacity in oilseed production and the oil industry. Bangladesh produces about 500,000 to 600,000 tons of high-quality rice bran oil annually, which was previously exported to India. We have imposed a 25 percent tariff on this export to ensure that the oil remains in the domestic market. This will reduce our reliance on imports and stabilize the market.

We have reduced the duty difference between imported and locally produced oil to such an extent that refineries can now import finished oil if they wish. This will make the market more competitive. Furthermore, discussions are ongoing with the Bangladesh Bank and the Economic Advisor to introduce a commodity refinancing scheme, which will help manage the pressure on prices caused by interest costs.

The factories processing oilseeds in Bangladesh are being operated at full capacity with the cooperation of the Tariff Commission and NBR. I hope that with increased local production, the market will become more stable.

The previous government passed a law making vitamin fortification in oil mandatory. We are currently researching whether fortification will remain mandatory or become optional. The final decision will be made based on research and consultations.

Now, open oil sales are permitted across the country. Personally, I have been using open oil for a month, and my family has adopted the same practice. Based on my experience, there is practically no difference between open oil and packaged oil, except for the price. In many cases, prices have been unnecessarily inflated.

My father used to bring open oil in bottles, which was both eco-friendly and cost-effective. We want to maintain the choice in the market—those who prefer packaged oil can continue using it, and those who prefer open oil should have that option as well.

Stability in the market cannot be achieved through a single measure. The government, traders, media, and consumers all need to work together. I hope that in the coming days, including during Ramadan, our market will remain competitive, and reasonable prices for food products will be ensured.

Sk Bashir Uddin: Commerce Adviser

[Delivered as the Chief Guest at the policy conclave on “Fair Pricing of Food Commodities: Searching Market Supervision Strategies,” organized by Bonik Barta]