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Dilemma of middle and poor classes

Tiki Tam Tam

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Dilemma of middle and poor classes

At a time when the price hike of food items and essential commodities has hit all classes of people, the fixed income groups -- including those without work, retired employees of either government or non-government organisations or employees of private firms, mills and factories -- find themselves in a bind.

The National Pay Commission award in 2009, recommending pay hike, reached only about 21 lakh people belonging to government and autonomous bodies, but the effect of pay hike, or rather the money gushing out of a small group of beneficiaries' pockets, has affected the vast multitude of people.

Sadly true, the economy of the country is in recession. As a consequence of the closure of the mills and factories due to various reasons, joblessness has surged up. An ominous addition is that, hard hit by the job cut in Malaysia, Saudi Arabia, Libya and other Middle East countries due to political turmoil, thousands of workers are returning home.

Other than in garment factories, which employ about 30 lakh youth, the employment situation in the country is very bleak. There is no mistaking the fact that buildings and superstructures that are sprawling in the cities and towns and even in the remotest villages do not actually reflect the oft-vaunted economic boom. Although the wealthy are doing somewhat better, most middle-class families feel squeezed.

In the face of the grim fact that our currency depreciates against the dollar everyday, the prices of essential commodities, which are mostly imported from abroad, are spiraling.

With prices of food stuff and daily essentials soaring every day, Abdur Rahim, a retired government employee, with four members in the family dependent on him, faces a grueling battle with his small monthly pension and pension benefit he has put in a bank. He is worried about the cut in the bank rate as a part of the government fiscal policy reforms. "The cut in interest rate may or may not help the Bangladesh economy to reach new milestones in productivity and growth but it has certainly impoverished me, when the prices are rising," he laments.

Mahmud Ali, who retired from sector corporation service, is in a similar bind. Years ago, he invested his entire retirement benefits in the national savings scheme at an annual interest rate of 13%. After the scheme matured, he had to invest his fund at a much lower rate (10.5%) prevalent at that time. "At a time when the prices are rising steadily every day, my monthly income is falling," he says. What will he do if he or any member of his family becomes seriously ill?

Lamentably, the country has no healthcare system to take care of the people who served the government, nay the country, with competence, commitment, dedication and integrity while in service. These people, with no means to bridge the shortfall in their earning, are now in a desperate situation.

Unlike Abdur Rahim and Mahmud ali, Abdul Kadir has the qualifications and ability to study different savings options, but he won't do that because of inertia. "I don't have the inclination to continuously look for newer and complicated saving options," he says.

After the shocking stock market crash in 1996 and then in 2010 nobody has any desire to go into that business.

Falling interest rates are only one cause of growing despondency in middle-class savers. A bigger but less expressed cause of worry is the shrinking of saving options. Because of skyrocketing prices, real estate and gold have ceased to be tools of investment for poorer sections. More than 90% of the middle-class people have neither the know-how nor faith in the financial institutions in the country.

It is true that, in the new global economy, savings in financial assets (deposits, bonds, mutual funds and stocks) are more productive than in physical assets (property and gold), but in Bangladesh looters and scamsters with tempting offers of fake business are there to exterminate you.

What is most worrisome is that financial instruments that replaced physical models of savings in the last decade have lost their lustre. Returns are also falling in tax-saving schemes. So, in effect, part of the uncertainty in the saving community stems from the fear of the failure of the financial institutions.

Inflation, that now hovers over 8.5%, is an indirect tax and hurts the poor the most. It erodes savings, and keeps interest rate high. On the other hand, job creation remains a grand idea and illusion only. Despite the fact that funds were made available in many projects like health, education and agriculture, and most prominently in power sector in the last two and a half years, the agencies concerned could not utilise these allocations.

That means that the country has seen little growth during the last two years. Caught in the unending battle between price hike of daily essentials and meagre resources like fixed earnings, lack of risk-free options for investment, and dwindling earning from saving schemes the middle-class, not to speak of the poor, are getting not only squeezed but also ruined.

The trend towards inequality is rife with the potential for social conflict, not just between classes but also within the middle and poorer classes. The daily occurrence of murder, extortion, hijacking and dowry deaths are ample evidence of the simmering conflict in the country. This growing inequality could even threaten those who benefit from it by putting an end to the economic expansion that the nation envisions. This signals a great depression that the nation can't head-off even with the best of rhetoric, or the astute and pragmatic planning done within the four walls of the cozy government buildings.

The saddest part is that life is simply getting harder for the middle-class. Not that the middle-class ever lived very well, but most could afford the basics. Today, the soaring prices and the diminishing value of the taka have eroded even the minimum standard of life. The danger is that growing disparities in wealth and living standard will undermine the sense of community and optimism that have kept the country from being riven by class resentments.
Dilemma of middle and poor classes

This is the situation that is affecting all countries and there seems to be no answer. Some have lesser problems and some greater. Whatever, the common man still suffers.

The Govts trot out fancy statistics on the rising GDP and all that, but the inflation and rise in food prices and essential commodities are killing the common man. One cannot eat GDP.

One wonders what will be the salvation of common people all over?
 

UKBengali

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Well over time(decades) the living standards of the average Bangladeshi will invariably rise as it is very diffcult to have higher and higher GDP without the general public getting wealthier.

What this reports highlights is that inflation is now running at a critically high level nearly 10% a year. One of the root causes is the surge in fuel prices. Inflation needs to be tackled as best as BD can but the other thing that would really help is a yearly salary review, as workers in industries like garments cannot wait 5 years or so for their pay to be hiked so that inflation is factored in.
 

Tiki Tam Tam

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We just had a debate on NDTV today.

Higher GDP does not always mean it is spreading around the whole population equitably!

In fact, the gap between the haves and have nots is increasing. Same is the case with China!

There was an interesting note also regarding malnutrition. Maggi noodles are cheap and fills the stomach, but are of no use as far as nutritional value is concerned. Therefore, a large number are filling their stomach (Pet bhore khao) with this junk food and lo and behold you are getting sick people, who think that they have had a jolly good meal!! Advertisements are playing havoc with the illiterate and semi literate minds fed on TV commercials.

But had they had the traditional food, even in meagre quantities, things would not have been so bad!

But packaged food is being 'modern' right?

In fact, jhal muri may have more nutrition value than Maggi Noodles!

I was reading a US report on Packaged food and the adverse effect of preservatives on health!
 

Tiki Tam Tam

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Is this defense releted? Mr. T-Faz the modarator?

Check the threads.

The only so called defence oriented threads are pictures of defence equipment, mostly obsolescent ones!

Apparently, there is nothing beyond that in so far as defence is concerned, that Bangaldeshi are equipped to discuss.

Maybe, the Moderator should close down the whole sub forum or rename it Bangaldeshi Military Equipment photos and images!

That would be fair to the Bangaldeshis.
 

Tiki Tam Tam

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Veggie prices skyrocket

Prices of various vegetables, used to prepare popular iftar dishes for breaking Ramadan fast, skyrocketed yesterday amid a surge in demand.

Prices of sugar, onion, and chickpea also marked rise, after a brief stability which followed the businesses assurance to Prime Minister Sheikh Hasina that they would keep the prices stable.

The prices of cucumber shot up 132 percent yesterday to as high as Tk 60 a kilogram, in the markets of the capital, the highest price of which was Tk 25 on Thursday.

Prices of green chilli soared 65 percent to as high as Tk 80 a kilogram, the highest price of which was Tk 50 on Thursday, according to the Department of Agricultural Marketing.

Eggplants were found selling for Tk 25-50 a kg, the highest price of which was Tk 30 on Thursday......
Veggie prices skyrocket



Sugar crisis again

JS body happy, buyers unhappy with prices
Rashidul Hasan

A number of retailers of Karwan Bazar kitchen market in the capital yesterday complained to a parliamentary body that dealers are not supplying them sugar for sale.

However, instead of paying heed to the complaint, the delegation of the parliamentary body on commerce ministry observed that it's "nothing unusual" and assured them of sugar supply soon.

The delegation was comprised of business leaders, high officials of the commerce ministry and members of the law-enforcement agencies.

Meanwhile, a retailer of Mohammadpur Town Hall kitchen market was seen selling sugar on condition that consumers would have to buy one or two more commodities from him........
Sugar crisis again

India has also been hit with the rising food prices.

Yesterday, the Parliament debated the same and the Opposition had the Govt on the mat!

But will it change the situation?

No. That is the sad part.

Food prices makes the theory 'what goes up, must come down', stand on its head!
 

Tiki Tam Tam

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May 15, 2006
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Price situation worrying
Long on talk, short on result

By all accounts, productivity, import, supply and availability of essential commodities have been reasonably steady. Yet, prices of a number of items, like, sugar, edible oil and gram are on a spiral. Prices of vegetables, including green chili, onion and cucumber, have shot up unusually. These are critical items for Ramadan.

It is important to note that such a pricey situation is set against denuding purchasing power of the consumers on account of persisting high rate of inflation. So erratic have been the prices that even middle and high-middle class groups find it difficult to afford a wholesome iftar. One can only imagine how hard hit are the lower income brackets.

It is welcome news that the government is planning to distribute rice, free of cost, weighing 10 kgs per family, to 66 lac destitute households under its Vulnerable Group Feeding (VGF) programme. But being ultra poor they are effectively outside the market mechanism. The question is what happens to millions of those who have to procure the daily provisions from the marketplace?

Despite repeated exhortation from various levels of government to keep prices affordable, followed by visit to markets by parliamentary body on the commerce ministry, nothing seems to be working as the market players are going their way. Profiteering is out of steps with the spirit of Ramadan. The latest assurances given by the businessmen to the Prime Minster to keep prices stable worked only for a few days and then it is back to square one.

In a free market economy, the forces of demand and supply should be allowed to operate unhindered. But when vested interests close to power have a sense of impunity in manipulating the market of key commodities, it is down to assertion of political will for the desired outcome.

Besides, Trading Corporation of Bangladesh (TCB) will have to play the role of a bigger market operator to strengthen the supply side by way of neutralising the market manipulators.
Price situation worrying

The latest situation.

The whole world is reeling with this problem and none seem to care.

In China the food inflation is spiralling and India claims that it has it under control and it is 5% down from 21%.

Everywhere the politicians are long on talk and short on delivery.

And what is worse news is that the world is going to face another recession.

Indian and US stock exchanges went down to an all time low.

I wonder what is the position of the other stock exchanges of the world.

One wonders what is the answer.
 

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