The Centre for Policy Dialogue (CPD), found the price of beef, bread, flour and services like broadband internet is much higher in Bangladesh compared to the South Asian average.
During a press conference titled “Slowdown in global economy and challenges for Bangladesh: How to tackle?” on Thursday they presented the findings of their research.
The think tank found the price of half a kilogram of bread is Tk62 in Bangladesh, which is the highest in the South Asia region.
Whereas, half a kilogram of bread costs Tk45 in Pakistan, Tk50 in Sri Lanka and Tk48 in India and Nepal.
CPD said consumers in Bangladesh have to pay Tk684 per kg of beef, which is also the highest in the region and substantially above the global average of Tk549.
The CPD report said that a kilogram of beef costs Tk375 per kg in Pakistan, around half of Bangladesh's Tk684.
The price is Tk580 per kg in India, Tk465 per kg in Nepal and Tk545 per kg in Sri Lanka.
According to the global report on Food Crises 2022, Bangladesh is one of the countries which are at risk of facing a food crisis.
Several necessities, whether they are produced locally or imported from a more developed country are costlier in Bangladesh than in other developing or developed nations said Executive Director of CPD Dr Fahmida Khatun in her keynote presentation.
She said that the poor and low-income in Bangladesh are facing difficulties making ends meet due to ongoing inflationary pressure, as well as the out-of-pocket expenditure for health is the highest in Bangladesh.
CPD recommended removing advance income tax (AIT), advance tax (AT) and regulatory duty (RD) on all imported essential food items to help people manage their livelihood.
The think tank also suggested the Minimum Wage Board should consider increasing the minimum wages in all industries so that workers earning minimum wages may at least afford basic food.
Private sector corporations should also consider a higher salary increment in 2022, given that a 5% increment in salary in the face of double-digit price hikes is compelling workers to seriously compromise their standard of living.
The effects of global inflation
The numerous crises Bangladesh is currently experiencing, particularly the inflation, power shortages, and declining trends in the balance of payments, should be acknowledged as medium-term issues rather than short-term ones and called for all-round policy support.
The think tank has also expressed concerns regarding apparent coordination failure among the key policymaking agencies of the government in recent months, and according to its most recent study, "Independent Review of Bangladesh's Development," macroeconomic stability should be the main goal of economic policies in light of the current economic instability on both the national and international levels. This starts with reducing inflationary pressure for the underprivileged population groups, meeting the demand for power and energy, and controlling exchange rate volatility.
After inflation as per CPD, the country's energy and power sectors confront multiple challenges – both short and medium-term in nature, however, it says that there is a chance to reduce the power crisis through some additional power from India.
The institution noted that the power plants which are currently under construction (3384MW) are highly unlikely to come into operation due to shortages of energy supply thus the power generation and supply crisis is likely to continue unless sufficient fuel supply is ensured.
Even though the power crisis may be eased in the medium term, the long-term tension will continue as the added generation capacity is mainly import-based, putting a huge burden of capacity payment on the shoulder of the Bangladesh Power Development Board (BPDB), CPD added.
Data on maximum power generation and load shedding seem to be unreliable and misleading as they do not reflect reality.
Renewable energy (RE) needs to be emphasized and prioritized and even during the crisis, RE cannot be utilized as the installed solar-based power remains unutilized.
As global oil prices are declining over time, BPC should consider a downward revision of oil (diesel, octane, petroleum) prices.
It has urged the government to put emphasis on gas exploration in order to reduce the over-dependence on imported fossil fuel and better utilize the existing solar-based power infrastructure.
Khondakar Golam Moazzem, research director said: “Rather than increasing the price of electricity, it is important to reduce various costs of electricity generation including capacity charges because we have to remember that by increasing the price of electricity, we will get Taka not dollars. On the other hand, other costs including capacity charges are in dollars.”
“This is contributing to a deficit in our balance of payments at the end of the day,” he added
In order to address all the crisis, the government should form a committee comprising the representatives of the Prime Minister’s Office, Ministry of Finance, Ministry of Planning, Ministry of Commerce, Ministry of Power, Energy and Mineral Resources, Ministry of Food, Ministry of Agriculture, the Bangladesh Bank and National Board of Revenue, CPD recommended.