Tiki Tam Tam
<b>MILITARY PROFESSIONALS</b>
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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?
