Finance Adviser Salehuddin Ahmed has expressed deep concern over the persistent high prices of essential commodities in the market, despite significant tax reductions on their imports.
He attributed the issue to systemic extortion and collusion in the supply chain, which he said is undermining government efforts to stabilise prices.
Speaking at the International Business Forum Bangladesh’s Annual Conference 2023 at the Gulshan Club in Dhaka on Sunday (December 15), the adviser voiced his frustration: “All kinds of taxes have been reduced on the import of potatoes and onions, yet market prices remain unchanged. While the price of sugar has slightly decreased, the overall market situation remains troubling. I told the Chief Adviser that the problem is structural; product pricing and market control are extremely challenging.”
The event was also attended by CPD honorary fellow Debapriya Bhattacharya, and USAID Mission Director in Bangladesh Reed Eshliman. IBFB President Humayun Rashid delivered the opening remarks.
‘Extortion driving up prices’
Salehuddin highlighted the role of extortionists in inflating product prices.
He claimed the market is controlled by “two or three types of extortionists,” who operate under political and local influence.
“Political compromises are tough, but extortionist compromises are rampant. Go to any market—Karwan Bazar, for instance—and you’ll find it divided into three factions: the previous government’s people, prospective influencers, and locals. This syndicate compromises at every level, causing prices to skyrocket without justification.”
The adviser also pointed out how middlemen often extort truck drivers, saying: “A middleman demanding Tk 500 to let a truck pass isn’t just a middleman; he’s an extortionist.”
Future economic plans and budget outlook
Looking ahead, Salehuddin Ahmed assured that the government is working on the upcoming budget but warned that businesses should not expect dramatic incentives or tax exemptions. “The days of perpetual incentives are over. We need reasonable taxation. Tax exemptions cannot continue indefinitely.”
He also criticised the state of regulatory agencies, saying, “The previous government left the economy in a fragile state. Regulatory oversight has been ineffective for years.”
Call for medium-term economic reforms
Economist Debapriya Bhattacharya emphasised the importance of political stability and a clear roadmap for economic reform.“Economic relief and law enforcement are crucial to gain public trust in reforms. Without ensuring these, any long-term vision will lack public patience and support.”
He advocated for a medium-term economic strategy to address challenges related to Bangladesh’s upcoming transition from an LDC (Least Developed Country) to a developing nation.
“A self-oriented, confidence-building program is critical. Investment relies on long-term certainty, and we need clarity on the benefits we’ll retain post-LDC transition,” he added.
Both speakers underlined the urgency of tackling systemic inefficiencies and ensuring accountability to stabilise the economy and alleviate public distress.