I often read the constitution of Bangladesh, especially the preamble, to understand how far we have deviated from the aspiration of the then newly established state in 1971. The pledges made to build a state “free from exploitation, a society in which the rule of law, fundamental human rights and freedom, equality and justice, political, economic and social, will be secured for all citizens” seem distant from where we stand today, over 50 years after independence.
The recent fuel price hike prompted me, an ordinary citizen of the people’s republic, to find solace in the constitution in this dire situation.
It is needless to say how devastating the impact of the fuel price hike will be on every aspect of life. While we look at the immediate impact of the price hike on transportation, this will have a direct, and rippling effect on everything including agriculture, employment, and inflation.
While there might be some legitimacy to the price hike -- although arguable on the timing and approach -- the immediate solution to a deteriorating problem must not create a major catastrophe.
Let me explain how by taking the agriculture sector, while taking a few other factors into consideration We witnessed the most devastating floods in recent times in Sylhet a few months ago, ruining crop fields and seedbeds, fisheries and livestock farms. Some estimates say that around 1,07,785.5 hectares of cropland were submerged in three phases of the flood, damaging crops cultivated on 88,266 hectares of land.
Officials estimate that flash floods damaged crops worth over Tk11.13 billion in Sylhet division alone, affecting 4,29,401 farmers. They also predict that divisional crop production may drop by 2 lakh tons. Similarly, the cultured fish sector, a low-cost source of protein, also witnessed major loss due to floods in Sylhet, which produces almost 3% of the total cultured fish production.
To add to this woe, Bangladesh is also experiencing the adverse effect of climate change. Bangladesh Meteorological Department says that average rainfall in July 2022 dropped more than 57%, the lowest since 1981. This unprecedented weather condition will hamper the cultivation of two major rain-fed crops: Aman and Aush.
Due to inadequate rainfall, the farmers will be forced to go for costlier supplementary irrigation alternatives, especially with costlier diesel prices. It may be mentioned that around 39% of the total annual grain production comes from Aman, and the government estimates to harvest around 3.80 crore tonnes during FY 2021-22.
The worries do not stop here. The government recently increased the price of urea by Tk6 per kg. The upward hike of price in the international fertilizer market since 2020 has become more volatile due to the Ukraine-Russia war.
Charlotte Hebebrand and David Laborde, experts from International Food Policy Research Institute, feared that if the challenges of price volatility are not managed properly, “harvests will suffer, keeping pressure on food prices beyond the short run and adding to food security concerns in many developing countries.”
Taking these majors into consideration, the fuel price hike will have an immense impact on the future food security of the country. While we face the potential of climate-induced low yield, the increased fuel price will make production, post-production, transportation, and storage costlier. Not to mention that the opportunistic activities of hoarders may worsen the situation.
Assessing depleting food stock, and future needs, the government has already given permission to import 8.37 lakh tonnes of rice to stabilize the market. If the predictions become true, the retail price of coarse rice, the main staple of the commoner, may sky-rocket -- which is currently selling at Tk44 to 48 per kg.
If such scenarios arise, the government will be forced to increase imports to stabilize the market, which, in turn, will create pressure on foreign currency.
This is just one area where the fuel price hike will have a direct impact; it will surely have an impact on all other sectors as well. The price of other commodities will surely increase. Transportation has already become costlier. The price competitiveness of our export-oriented industry may witness a challenge.
Unfortunately, our income is unlikely to get increased to face the challenges of inflation. Once again, we will be asked to practice austerity while we, the commoners, have been doing the same since the pandemic began.
As I come to the end of this morbid piece, I request the policymakers to put the people, the commoners, at the heart of policymaking. Think about how a small change can have direct and indirect, short-term and long-term, positive and negative impacts on them. After all, all the economic successes we have are direct results of the sweat of the people.
As I find solace in the constitution, you may find inspiration to uplift the values of an independent country, Bangladesh, and do the needful to fulfill the pledges.
Makshudul Alom Mokul Mondal is an entrepreneur and researcher. He is also a Global Shaper at the World Economic Forum. He graduated from the University of Manchester and Institute of Business Administration (IBA), University of Dhaka.
