Some concerns about macro stability
Raise doubts about reserve's ability.
Ties overlooking national woes
Like guiding a ship without crews.
Let people know a deal’s nitty-gritty.
As Bangladesh faces serious concerns about growing budget deficit and the figure about forex reserve, government has started a negotiation with IMF team for a credit of $4.5 billion. Though balance of payment has been negative for two years,forex reserve is enough to meet the need of the country for 5 months.
But debate raged over government’s boasting of $35 billion reserve. Many keep saying reserve is much lower than the official claim. Government already used the reserve by lending some to commercial banks and Sri Lanka,financing the dredging work of Payra port,creating a new industrial fund. A total of $8 billion was used. Government keeps showing the spent part in the forex reserve. IMF insists that government discard the figure from reserve and portray the true reserve.
However, government’s gradualist policy has started to yield dividend. 50 basis points increase of policy rate and stern caution from the central bank about opening of LCs of goods deemed not urgent significantly reduced import.Meanwhile, depreciation of taka in the open market also played a role.But food inflation shows no sign to abate. Rather, a report says food import was lowest in 7 years(Source:"Rice,Wheat and Lentils:Food Grain Imports Lowest in Years",MasudMilad,Daily Prothom Alo,October 26,2022)1. But many here are optimistic that pledged delivery of food will happen in time and winter crop production will be good.
Strong dollar and depreciation of taka also get blame for rising food prices.But exporters and others criticized govt for managing the rate of taka which is lower than the market rate.
Following the discussion with IMF and the gradualist policy, another policy rate increase is likely. When policy rate rises there is a curb in money supply.It means Taka will appreciate in future. Rise in interest rate and appreciation of taka will block unnecessary spending.At the same time,it will give government a sigh of relief before import of food grain.
However,Pakistan's removal from FATF's grey list,depreciation of both Indian and Pakistani rupees,Russian support for Myanmar's apparel industry, and decision of Benin(third largest cotton exporter to Bangladesh) to set up export zone for RMG and textile factories augur ill for Bangladesh apparel industry(source:"Tular Bikolpo Bazaar Khujte Hobey Bangladeshke(Bangladesh Has To Find Alternative Cotton Market)",Nujhat Kamal,Ekhon,October 28,2022)2,which witnesses fall in exports in two consecutive months this year alone. Before any further policy rate hike,Bangladesh Bank should let Taka depreciate so that any later appreciation could at least ensure the Taka-Rupee exchange rate prevailed prior to the Ukraine war.
Bangladesh’s closeness with oil-richer countries and upcoming high profile visits of royals of gulf countries herald that macroeconomic stability may not be a concern. Bangladesh signed a military agreement with Qatar to send troops in the kingdom. Saudi Arabia is in talks with Bangladesh for similar agreement. In recent years,when Pakistan in crisis Saudis perked billions of dollars in Pak central bank on condition that Pakistan would send the money back in a notice of 72 hours and Pakistan would not use it elsewhere (Source:"Saudi Conditions ",Editorial,Dawn,November 30,2021)3.The artificially swollen reserve sent a positive signal about Pakistani rupee and prevented its wild fall.Qatar back in 2013/14,when Bangladesh sought first ECF to IMF,approached Bangladesh about perking some of its forex reserve in the central bank.If somewhat flexible arrangement is made this time coupled with more workers to gulf countries and concessional oil-gas , then balance of payment will be healthy again.
Difficult times lie ahead.High oil price is partly to blame. It is useless to make commitment if Bangladesh fails to gain something to address its macroeconomic concerns.
Notes and References:
- For more read https://en.prothomalo.com/business/local/qlftfspdcb
- For more see https://m.youtube.com/watch?v=9034w1ByVgo
- For more read at https://www.dawn.com/news/1661100
[Update:This piece has been updated on November 01,2022 at 10:50 am and at 16:05 pm Bangladesh Standard Time. Updates include inclusion of key references.]
(22 octobre --- 28 octobre)
Ma Semaine Gastronomique
| Date |
Petit déjeuner |
Déjeuner |
Dîner |
Snacks,Sucreries,Boissons et Fritures |
| 22 |
Pain tchapati,Omelette |
Riz,Ruhi,Crevettes,Papaye,Soupe aux lentilles |
Riz,Ruhi,Crevettes,Papaye |
Nouilles, Lait |
| 23 |
Pain tchapati,Pommes de terre |
Riz,gourde calebasse |
Riz,gourde calebasse |
--- |
| 24 |
Pain tchapati,Omelette |
Riz,Cumin noir,Haricot vert-Eddoe-crevette sec,Purée de pomme de terre,Soupe aux lentilles |
Paratha,Purée de pomme de terre,Cumin noir |
Nouilles,Lait |
| 25 |
Pain tchapati,Lentilles-Papaya |
Riz,Courge amère,Ruhi,Épinard malabar |
Pain tchapati(fait par moi),Épinard malabar,Ruhi |
Lait |
| 26
|
Pain tchapati(fait par moi),Omelette |
Riz,Courge amère,Papaye-Haricot vert,Soupe aux lentilles |
Pain tchapati(fait par moi),Papaye-Haricot vert |
--- |
| 27 |
Pain tchapati,Papaye-Haricot vert |
Riz,Gourde calebasses,Purée de banane verte |
Pain tchapati,Gourde calebasse |
Lait |
| 28
|
Paratha,Gourde calebasse |
Riz,Épinard,Ruhi,Courge amère-pommes de terre |
Pain tchapati(fait par moi),Courge amère-pommes de terre,Riz,Ruhi |
Lait |
Hungry people rally behind the queue,
Leaving the government with ideas few
How to fix the food security
To help the ones most needy
It is likely the crisis will brew. |
As commodity prices soar,a record in decades,sufferings and ordeals of ordinary people get worsened.More and more people struggle to queue behind govt ration.So far it is not clear how many managed to get a free ration card. But it appears govt has to widen its ongoing social security programs in order to accommodate more and more people in distress.
Government food security programs include Open Market Sale(OMS),Money for Work,Vulnerable Group Feeding (VGD),Govt Relief,and Employment Generation Program for Ultra Poor. March of hungry people left no choice but to widen the ongoing programs. In 2017-18,Tk 9470 crores were spent on various food security programs. A year later,in 2018-19,Tk 10457 crores were spent on such programs. In 2018-19, 12.1 million people were subject to OMS programs,costing govt TK 832 crores. Government allotted TK 1085.07 crores for VGD programs,1730.81 crores for VGF and TK 1650 crores for employment for ultra poor in 2018-19(Source: BER 2019).This year govt planned to feed 10 million poor households. Family card has been distributed by govt in this regard.A budget of Tk 5280 crores are also allotted. Card holder can avail maximum of 2 litres of soybean oil,2 Kgs of lentil,1 kg of sugar and 2 kgs of onion(Source: The Business Standard,October 22,2022).
When we were kids ,we used to see scenes like people waiting in queue for hours for flour,sugar and oil. Things have improved. But family card concept is invoking that old memories of bygone era. This is an indication how worst the hunger situation has become. In Global Hunger Index,Bangladesh’s position slipped to 84 from 76 out of 121 countries. Clearly, our vulnerability in ensuring food still prevails. Any volatility in oil and grain markets hits us hard.
This is government initiative. But any private initiative/effort is hard to find. In our neighboring cities like Kolkata,Jaipur,Lahore,Delhi,Karachi we see lots of private langars/ charities to feed the vulnerable or the hungry. Such community-led effort is needed here. We simply cannot let millions of people starve indefinitely. Platforms of businessmen and other professional bodies should step in to chalk out how to coordinate such charities across the country/ at least in key poverty pockets in some urban areas. This solidarity will only improve their public image.
Our cities by any standard do not qualify for a proper city. Even the Mughals installed resting places,water tanks,shower rooms for travellers who would make a brief stopover. Some of them were free. Even the concept of langars,which is pretty common in the subcontinent, is conspicuously absent here. To qualify for a proper city, Bangladeshi cities should build such urban facilities(We do not have proper public toilet and cheap taxi service)so that most of the city dwellers/ travellers can avail them.
As crisis knocks on our doors,we have to prove that we are better than the Mughals by starting some free langars across the city. Our development story will mock us if a single life is lost in the looming crisis.
(14 octobre --- 21 octobre)
Ma Semaine Gastronomique
| Date |
Petit déjeuner |
Déjeuner |
Dîner |
Snacks,Sucreries,Boissons et Fritures |
| 15 |
Pain tchapati,Lait |
Riz,Radis,Ruhi,Soupe aux lentilles plat |
Pain tchapati,Ruhi,Radis,Soupe aux lentilles plat |
Riz gonflé |
| 16 |
Pain tchapati,Radis |
Riz,Ruhi,Feuilles de l'amarante rouge,Ruhi,Radis,Haricot vert,Soupe aux lentilles |
Pain tchapati,Haricot vert,Soupe aux lentilles |
--- |
| 17 |
Pain tchapati, Haricot vert |
Riz,Soupe aux lentilles, Calebasse gourde,Haricot vert,Ruhi |
Pain tchapati,Purée de pomme de terre, Omelette |
Jhal mury |
| 18 |
Pain tchapati,Omelette |
Riz,Purée de pomme de terre,Courge amère,Papaye-Citrouille,Soupe aux lentilles, Lait |
Pain tchapati,Papaye-Citrouille |
Jhal mury |
| 19 |
Pain tchapati,Papaye-Citrouille |
Riz,Soupe aux haricots mungo, Calebasse gourde,Feuilles de l'amarante rouge |
Pain tchapati,Purée de pomme de terre, Omelette |
Riz gonflé, Lait |
| 20 |
Pain tchapati,Omelette,Calebasse gourde |
Riz,Radis-Puntio barbe,Gombo |
Pain tchapati,Radis,Gombo |
Riz gonflé, Lait |
| 21 |
Pain tchapati,Radis |
Riz,Épinard, Ruhi |
Nouilles
|
--- |
Power cut invokes old memories
As oil price brings miseries.
Energy deal may not be sound
For few boots on the ground
As bad times may raise worries.
Dhaka has nowadays become city of frequent power cut. In my neighborhood, power cut at measured intervals sometimes lasts more than 2 hours. The situation is worse outside Dhaka,where power cut lasts more than 7 hours. This is the fallout of high oil price, stemming from the ongoing war in Ukraine. In addition, strong dollar complicated the problem by raising the import cost.Currently Bangladesh produces 12500 megawatts of electricity daily against the demand of 14500 megawatts. (Source: Daily Prothom Alo,Jalani Sonkot Berechhey,Sorboccho Load shedding(Energy Crisis Deepens,Power Cut Becomes Awful ),Mohiuddin Ahmed,P-1,October 11,2022).
Industrial production slowed down due to frequent power cuts.As fertilizer production gets top priority, LNG and subsidies go to produce food and fertilizer. Higher fuel cost also makes private power producers to slash their production.
LNG being the cheapest source of fuel has also been touched by the rising fuel price.Luckily, the price has come down to a tolerable level in international market,yet 57 powerplants have yet to see their production in full swing. Before the election of 2018,government inked deal with Qatar and Oman for long-term LNG supply. Being a substitute for oil ,LNG also witnessed unusual hike in its price following the volatile oil market. As more countries include LNG in their energy menu,LNG price shoots up. Qatar turned down Bangladesh’s urgent request of sending extra LNG. Instead the country stressed that it would consider such request after 2025.So our energy deals is not securing our energy needs.
Russia on the other hand has made it clear that it wants the repayment of Rooppur Nuclear Powerplant in ruble. It would further raise the cost of repayment as the payment has to be converted into several currencies(first yuan then to ruble). It is still undecided who will bear the extra charge for this multiple conversion.However, Russia is determined to complete the powerplant in time. When it will come into operation, it will tremendously help the irrigation system of Bangladesh. Currently, 4.215 million[*] hectares of land are irrigated by shallow and low-lift pumps(Source:BER 2019). These pumps intensively consume diesel. If we somehow manage to run the pumps with the electricity from nuclear power then we will save lots of money. This year alone,FY 2022-23,govt allotted Tk 83000 crores of subsidy,a large part of which will be spent on diesel and fertilizer subsidy. Previous year,govt spent TK 56000 crores on diesel and gas subsidy.
Significant part of our gas goes to electricity generation(40.80%). And the gas-run powerplants account for more than 55% of electricity. Continuous supply of gas could boost our electricity production and give our industry a competitive edge as gas is cheaper than diesel and furnace oil.
Our energy and food security should reflect our own interest. It should not be based on other’s whims or unreasonable demands. In the past,we witnessed how our energy deals flawed us in times of need. It is not wise to compromise our energy security by committing to send few boots on the ground and to comply demands of a tiny section of our society. Any energy deal should be based on pure economic terms and advantage our economy gains from such deal.Sweat and blood in exchange for few petrol dollars in a war that our people do not want is the least desirable thing in light of national interest. And such interest is well protected in the hands of the representatives who have people’s mandate to say the last words. Let the Parliament be the place to finalize such policies instead of closed door under-the-table deals that only doom the people and the country.
[Note: *This piece has been updated on October 21,2022 at 9:40 am Bangladesh Standard Time(BST)."42.15 hectares" is substituted with "4.215 million hectares".]
(08 octobre --- 14 octobre)
Ma Semaine Gastronomique
| Date |
Petit déjeuner |
Déjeuner |
Dîner |
Snacks,Sucreries,Boissons et Fritures |
| 08 |
Pain tchapati,Omelette |
Riz,Papaye,Gourde de serpent,Soupe aux lentilles |
Riz,Gourde de serpent,Soupe aux lentilles |
Riz gonflé |
| 09 |
Pain tchapati,Omelette |
Riz,Ruhi,Aubergine-Ruban sec-Petit Taro Chinois-Eddoe-Bombili sec |
Riz,Œuf poché,Aubergine-Ruban sec-Petit Taro Chinois-Eddoe-Bombili sec |
Riz gonflé |
| 10 |
Pain tchapati,Mélasse |
Riz,Haricot vert,Soupe aux lentilles |
Riz,Haricot vert,Soupe aux lentilles |
Riz gonflé |
| 11 |
Pain tchapati,Œuf poché,Haricot vert |
Riz,Haricot vert,Épinard malabar,Ruhi |
Riz,Épinard malabar,Ruhi |
Riz gonflé,Lait |
| 12 |
Pain tchapati,Papaye-Pommes de terre |
Riz,Papaye-Pommes de terre,Aubergine-Ruban sec-Petit Taro Chinois-Eddoe-Bombili sec-Gourde épineuse,Courge amère,Soupe aux lentilles |
Riz,Haricot vert,Soupe aux lentilles |
Riz gonflé |
| 13 |
Pain tchapati,Omelette, Courge amère |
Riz,Labra(Gourde calebasse-Graines du jacquier-Eddoe),Courge amère |
Riz,Labra(Gourde calebasse-Graines du jacquier-Eddoe),Œuf poché |
Riz gonflé |
| 14 |
Pain tchapati,Haricot |
Riz,Purée des Pommes de terre,Gourde calebasse,Soupe aux lentilles |
Riz,Purée des Pommes de terre,Gourde calebasse,Soupe aux lentilles,Œuf poché |
Riz gonflé |
Strong dollar and high oil price
Hint there will be hungry cries.
Stock release,langar,less ethanol production
Could comfort the people in desperation.
International Monetary Fund(IMF) in its latest “World Economic Outlook” depicted a grim future about growth and inflation in the coming months. Inflation may cause further damage to food security, pushing millions of people to starvation like situation. Earlier, World Bank downgraded Bangladesh’s growth forecast from 7.0% to 6.2% for the year 2022-23.
Bangladesh government in its latest draft BBS report officially acknowledged that inflation touched the double digit figure (10). But actually food inflation is much higher than the double digit figure. Both the coarse rice price and flour price rose to Tk 55/kg; a year ago the two items were sold at Tk 40/kg. Eggs are sold at Tk 156/dozen; a year ago a dozen cost Tk 108/102. Milk is sold at Tk 90/liter; a year ago it was sold at Tk 80/liter. A laundry soap,which is used for both washing body & clothes,costs Tk 23; a year ago it cost Tk 18. So coarse rice and flour registered a 37.5% increase. Egg recorded a 44.44% rise while Milk witnessed a 12.5% rise. Meanwhile laundry soap registered a 27.77% increase. Even Nilotica Tilapia registered a 33.33% increase in the span of one year.Even the pangash catfish,which many despise for being cultivated in swear water,registered an increase in price.
This clearly demonstrates how high inflation is pinching people from all walks of life. What is worrying is that high oil price and inflation complicate the ongoing situation. As the anticipation of further Taka depreciation gets stronger, price level may further rise. Government’s focus is on food production, so subsidies for fertilizer production and irrigation during the winter get top priority at the cost of city dwellers who spend more time in the dark.
So far central bank adopted a gradualist monetary policy by raising the policy rate by 50 point basis. It reflects government’s determination to not affect the employment ahead of election year. Another small increase in policy rate is expected.Lending rate,which has not been raised yet,may also rise,making investment more costly.
The prime concern for the ordinary citizens is the food inflation. Checking food inflation should be the top priority. Though govt has taken programs to feed the vulnerable people,such programs are politically biased and not free from corruption. It is not just to keep blaming the war in Ukraine for the hike in food grain price.As the aggregate demand may fall in future due to high interest rate and inflation, ethanol production may also fall. Food grain used in ethanol production could easily be diverted to poorer countries. Many countries could also relax their food grain stock to help friendly countries.
Bangladesh dealt with this kind of situation in the past. When we were kids, we witnessed how school grew vegetables and garrison produced food like the communist countries. Government could instruct army to produce rice, vegetables and fish inside the cantonment where land is aplenty and labor is cheap.
Government in association with businessmen could set up langar(public eatery) at selected urban pockets where 5 million people could take at least one meal daily.
It is important to maintain one cheapest source of protein,one cheapest source of vegetables and one cheapest source of carbohydrate for cash-strapped lower income group. There should be no compromise with protein and calorie intake of individuals.
(01 octobre --- 07 octobre)
Ma Semaine Gastronomique
| Date |
Petit déjeuner |
Déjeuner |
Dîner |
Snacks,Sucreries,Boissons et Fritures |
| 01 |
Pain tchapati,Mélasse |
Riz,Purée de pomme de terre(fait par moi),Soupe aux lentilles |
Pain tchapati(fait par moi),Soupe aux lentilles |
Riz gonflé,Firny(Riz dans lait concentré et sucré),Mélasse |
| 02 |
Pain tchapati,Lait |
Riz,Feuilles de pomme de terre,Soupe aux lentilles |
Pain tchapati(fait par moi),Feuilles de pomme de terre,Soupe aux lentilles |
Riz gonflé, Mélasse |
| 03 |
Pain tchapati,Mélasse |
Riz,Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
Pain tchapati(fait par moi), Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
--- |
| 04 |
Pain tchapati, Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
Riz,Soupe aux lentilles,Courge amère, Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
Pain tchapati(fait par moi), Soupe aux lentilles,
Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
Mélasse |
| 05 |
Pain tchapati(fait par moi),Labra(Papaye-Gourde Épineuse-Eddoe(Petit Taro chinois)-Pommes de terre) |
Khichury,Papaya,Œuf poché |
Riz,Œuf poché,Papaye |
--- |
| 06 |
Pain tchapati, Papaye |
Riz,Épinard Malabar, Labra(Citrouilles-Papaye-Pommes de terre-Gourde Épineuse) |
Riz,Œuf poché,Épinard Malabar
Labra(Papaye-Gourde Épineuse-Citrouilles-Pommes de terre) |
Mélasse,Riz gonflé |
| 07 |
Pain tchapati,Omelette |
Riz,Pama croaker, Gourde blanche |
Riz,Gourde blanche, Œuf poché |
Arachides,Riz gonflé |
|