Rising living cost in Bangladesh

Not surprisingly, in a recent survey of South Asia's cities on cost of living, Dhaka was placed at the top of the list

Would you believe that the cost of living in Dhaka is as high as that in the Canadian city of Montreal although the living amenities and conditions in these two cities are world apart? The Intelligence Unit of British magazine The Economist in its latest study on the global cost of living in 2015 ranked Dhaka city at number 71 along with Montreal. Cities like Mexico City, Cleveland, or Istanbul turned out to be cheaper than Dhaka in this study. Toronto, Canada's biggest city is ranked 88, which is way cheaper than Dhaka. The Economist studied 133 cities of the world, analysed the strength of dollar and mainly the cost of living for expats and business travellers. Zambia's capital Lusaka seems to offer the best value for money in the world. Despite rampant inflation, a devaluation of its currency, Kwacha, caused by falling copper prices has pushed the city's cost of living down to just 41 percent of New York. The top ten cheapest cities include four Indian cities. Bangalore and Mumbai are second and third cheapest cities of the world. The other two are Chennai and New Delhi. Even Karachi of Pakistan is the world's seventh cheapest city. New York City now features among the world's 10 most expensive cities for the first time in 14 years. London has climbed six places to join four other European cities in the top ten. Falling commodity prices and exchange-rate revisions have caused Olympic Games host Rio de Janeiro to drop 52 places down the ranking, while visitors to Euro 2016 matches in Paris and Lyon will see a mild improvement in prices because of a weaker euro.

In Russia, scheduled host of the 2018 FIFA World Cup, that has seen the biggest decrease over the last year, with St Petersburg and Moscow tumbling 51 and 63 places down the ranking respectively, reflecting a 40 percent decline in living costs over the previous year,” said the study. Every year, we report on the practice of increasing food prices ahead of and during the month of Ramadan. But, this year, with the excuse of excessive rainfall and flooding in one part of the country only, the price hike has started earlier. But how much the destroyed rice and crops in affected areas contributed to this price increase, is still not clear. Within just a week, prices of staples, including rice, sugar, onions, egg plant and other vegetables have increased by Tk5 to 15 per kg. For families with low and fixed incomes, this increase is hard-hitting, affecting their food basket and nutritional requirement. We must also remember that the worst affected from the natural calamities are people who are going to be the most burdened with this extra cost. Even if it is argued that the price of some essentials increased due to rainfall, it does not account for the wide range of commodities, such as sugar and broiler chicken, whose prices have been hiked. In 2013, the national wage in the garment industry in Bangladesh was raised to $68 US dollars per month. Workers had been protesting, hoping for an increase to $100 dollars a month. However, factory owners, who hold significant political power in Bangladesh, argued that they could not afford such high rates.

But paying their workers $100 dollars a month, is less than 50 cents per hour, and that is before the workers pay their taxes on it. These low wages make it cheap and affordable for companies such as Walmart and H&M to outsource the work to factories in Bangladesh, and currently as much as 45 per cent of exports from Bangladesh are related to the garment industry. Workers’ low wages create poor working conditions which lead to disasters such as the one at Rana Plaza, where over a thousand people were killed when a factory collapsed. Tragedies like these are a result of low wages and a lack of investment in the needed infrastructure. If you look at the average cost of living in Dhaka, it is abundantly clear that the 68 dollars many garment workers receive, is not even close to enough to support one person, never mind a family.

Strong government monitoring needs to be ensured to see what is causing this hike. Are there syndicates hoarding food essentials to create an artificial shortage and adding to the inflation? A recent estimate by an FAO expert puts the number of people in Bangladesh suffering from malnutrition at 2.6 crore.

Hiking the price of food items now, a trend which might continue well into the month of Ramadan, only adds to the problem, and as always it is the poor and the middle classes that will be affected the most. Living cost in Dhaka has soared beyond limits. City dwellers are being forced to live with air and noise pollutions, crammed living space with tortuous traffic jams and poor utility services.

Added to these existing problems is the spike of the essential prices. Not surprisingly, in a recent survey of South Asia's cities on cost of living, Dhaka was placed on the top of the list.

However, it is still possible to balance the cost of living. For that to happen the relevant authorities concerned of the government have to proactively handle some critical situations. It is quite apparent that they failed to do the needful, but if they continue to fail, we fear the city may soon reach the brink of collapse. The recent price rise of most commodities has mainly been caused by the unusual increase of rice price triggered during the last monsoon when rice cultivation at the haor areas and some other places of the country was seriously hampered. If at that time the food ministry could manage to have sufficient stock of rice, the staple food's price could have been kept under control. The food ministry had miserably failed in this regard. Increase of rice price had a domino effect on other commodities. There is also a tendency of the country's finance ministry to focus more on presenting bigger and bigger annual budgets every year. This forces the govern meant to squeeze more money out of the public's pocket to support the increased budget. Moreover, utility costs gas, electricity and water over the last few years have been hiked disproportionately; it is also because of increasing budget and introduction of newer taxes. Consequently, it is not just the capital; cost of living has hit hard people everywhere. But the capital's case is further augmented by the increasing house rent.

Besides, the communications ministry has miserably failed to rein in on the city's all private bus services that overcharges the commuters to the tune of double or treble the actual fare. That is why the figure of a rise by 8.44 per cent in the year 2017 that the Consumers Association of Bangladesh (CAB) recently presented might not be the actual one as it scrutinised only data of kitchen markets, food products, essential items and utility services, including gas, electricity and water. The reality is palpably more acute. People are indeed very hard-pressed with the rising cost of living and the government ought to address this matter as a top priority. Clearly, wealth distribution is closely linked to education and skill. Creation of opportunities for the person down the rank should be the prime objective of future development programmes. Concentration of wealth in a few hands has its own backlash at a certain point of time. Mercifully, the world's richest persons like Bill Gates and Warren Buffet have seen virtues in putting their wealth in the service of the needy all across the world. But the richest in other countries have not  acquired the same knowledge; instead they aspire to expand their business empire by means fair or foul to challenge those at the top of the list of the world's richest. Governance and economy are in a mismatch now throughout the world. The multinational companies dictate terms and the few international financial institutions promote their cause.

Developing countries like Bangladesh follow an economic system prescribed for them unaware that it is yawning the gap between the rich and the poor. Rational and equitable distribution of wealth among the people under such a system is impossible.

The writer is a freelancer

[email protected]

 

Rising living cost in Bangladesh

Not surprisingly, in a recent survey of South Asias cities on cost of living, Dhaka was placed at the top of the list

Would you believe that the cost of living in Dhaka is as high as that in the Canadian city of Montreal although the living amenities and conditions in these two cities are world apart? The Intelligence Unit of British magazine The Economist in its latest study on the global cost of living in 2015 ranked Dhaka city at number 71 along with Montreal. Cities like Mexico City, Cleveland, or Istanbul turned out to be cheaper than Dhaka in this study. Toronto, Canadas biggest city is ranked 88, which is way cheaper than Dhaka. The Economist studied 133 cities of the world, analysed the strength of dollar and mainly the cost of living for expats and business travellers. Zambias capital Lusaka seems to offer the best value for money in the world. Despite rampant inflation, a devaluation of its currency, Kwacha, caused by falling copper prices has pushed the citys cost of living down to just 41 percent of New York. The top ten cheapest cities include four Indian cities. Bangalore and Mumbai are second and third cheapest cities of the world. The other two are Chennai and New Delhi. Even Karachi of Pakistan is the worlds seventh cheapest city. New York City now features among the worlds 10 most expensive cities for the first time in 14 years. London has climbed six places to join four other European cities in the top ten. Falling commodity prices and exchange-rate revisions have caused Olympic Games host Rio de Janeiro to drop 52 places down the ranking, while visitors to Euro 2016 matches in Paris and Lyon will see a mild improvement in prices because of a weaker euro. In Russia, scheduled host of the 2018 FIFA World Cup, that has seen the biggest decrease over the last year, with St Petersburg and Moscow tumbling 51 and 63 places down the ranking respectively, reflecting a 40 percent decline in living costs over the previous year, said the study. Every year, we report on the practice of increasing food prices ahead of and during the month of Ramadan. But, this year, with the excuse of excessive rainfall and flooding in one part of the country only, the price hike has started earlier. But how much the destroyed rice and crops in affected areas contributed to this price increase, is still not clear. Within just a week, prices of staples, including rice, sugar, onions, egg plant and other vegetables have increased by Tk5 to 15 per kg. For families with low and fixed incomes, this increase is hard-hitting, affecting their food basket and nutritional requirement. We must also remember that the worst affected from the natural calamities are people who are going to be the most burdened with this extra cost. Even if it is argued that the price of some essentials increased due to rainfall, it does not account for the wide range of commodities, such as sugar and broiler chicken, whose prices have been hiked. In 2013, the national wage in the garment industry in Bangladesh was raised to $68 US dollars per month. Workers had been protesting, hoping for an increase to $100 dollars a month. However, factory owners, who hold significant political power in Bangladesh, argued that they could not afford such high rates. But paying their workers $100 dollars a month, is less than 50 cents per hour, and that is before the workers pay their taxes on it. These low wages make it cheap and affordable for companies such as Walmart and HM to outsource the work to factories in Bangladesh, and currently as much as 45 per cent of exports from Bangladesh are related to the garment industry. Workers low wages create poor working conditions which lead to disasters such as the one at Rana Plaza, where over a thousand people were killed when a factory collapsed. Tragedies like these are a result of low wages and a lack of investment in the needed infrastructure. If you look at the average cost of living in Dhaka, it is abundantly clear that the 68 dollars many garment workers receive, is not even close to enough to support one person, never mind a family. Strong government monitoring needs to be ensured to see what is causing this hike. Are there syndicates hoarding food essentials to create an artificial shortage and adding to the inflation? A recent estimate by an FAO expert puts the number of people in Bangladesh suffering from malnutrition at 2.6 crore. Hiking the price of food items now, a trend which might continue well into the month of Ramadan, only adds to the problem, and as always it is the poor and the middle classes that will be affected the most. Living cost in Dhaka has soared beyond limits. City dwellers are being forced to live with air and noise pollutions, crammed living space with tortuous traffic jams and poor utility services. Added to these existing problems is the spike of the essential prices. Not surprisingly, in a recent survey of South Asias cities on cost of living, Dhaka was placed on the top of the list. However, it is still possible to balance the cost of living. For that to happen the relevant authorities concerned of the government have to proactively handle some critical situations. It is quite apparent that they failed to do the needful, but if they continue to fail, we fear the city may soon reach the brink of collapse. The recent price rise of most commodities has mainly been caused by the unusual increase of rice price triggered during the last monsoon when rice cultivation at the haor areas and some other places of the country was seriously hampered. If at that time the food ministry could manage to have sufficient stock of rice, the staple foods price could have been kept under control. The food ministry had miserably failed in this regard. Increase of rice price had a domino effect on other commodities. There is also a tendency of the countrys finance ministry to focus more on presenting bigger and bigger annual budgets every year. This forces the govern meant to squeeze more money out of the publics pocket to support the increased budget. Moreover, utility costs gas, electricity and water over the last few years have been hiked disproportionately; it is also because of increasing budget and introduction of newer taxes. Consequently, it is not just the capital; cost of living has hit hard people everywhere. But the capitals case is further augmented by the increasing house rent. Besides, the communications ministry has miserably failed to rein in on the citys all private bus services that overcharges the commuters to the tune of double or treble the actual fare. That is why the figure of a rise by 8.44 per cent in the year 2017 that the Consumers Association of Bangladesh (CAB) recently presented might not be the actual one as it scrutinised only data of kitchen markets, food products, essential items and utility services, including gas, electricity and water. The reality is palpably more acute. People are indeed very hard-pressed with the rising cost of living and the government ought to address this matter as a top priority. Clearly, wealth distribution is closely linked to education and skill. Creation of opportunities for the person down the rank should be the prime objective of future development programmes. Concentration of wealth in a few hands has its own backlash at a certain point of time. Mercifully, the worlds richest persons like Bill Gates and Warren Buffet have seen virtues in putting their wealth in the service of the needy all across the world. But the richest in other countries have not acquired the same knowledge; instead they aspire to expand their business empire by means fair or foul to challenge those at the top of the list of the worlds richest. Governance and economy are in a mismatch now throughout the world. The multinational companies dictate terms and the few international financial institutions promote their cause. Developing countries like Bangladesh follow an economic system prescribed for them unaware that it is yawning the gap between the rich and the poor. Rational and equitable distribution of wealth among the people under such a system is impossible. The writer is a freelancer [email protected]