Government must consider minimising COVID-19 economic cost

Published: 00:00, Mar 23,2020

 
 

THE grave socio-economic consequence of the COVID-19 outbreak may not be avoided unless the government takes immediate regulatory steps to control kitchen and drug markets. Prices of essential goods and some medical supplies such as hand wash and sanitiser and surgical mask have increased since the Institute of Epidemiology, Disease Control and Research reported the first COVID-19 death on March 18. Fearing a full lockdown, people, especially the affluent and the middle class, are stocking food items, a consumer behaviour observed globally that has created an imbalance in the demand and supply of goods, making the market very unstable. In this context, the prime minister on Saturday urged people to avoid stockpiling food items and warned traders against arbitrary price increase. The prime minister also has assured that there are adequate stock of food grains and people must not worry about food security during the coronavirus outbreak. The prime minister’s assurance and warning are both welcome if they are translated into action. Ministers have already made similar comments and given directives in recent times but the kitchen market has remained unstable.

People are still flocking to the market to buy food grains in large amounts to avoid shortage; even open market sale counters are crowded. Prices of rice, edible oil and other items have registered a sharp increase over the weeks. Five teams of the Directorate of National Consumer Rights Protection inspected 16 markets in Dhaka on Friday and found traders to be selling onions for Tk 28–70 a kilogram. The teams have observed that traders have increased prices of almost all kitchen items. The authorities concerned on Thursday fined 56 traders in Dhaka, Barishal and Patuakhali for increasing goods prices exploiting the consumer behaviour against the COVID-19 outbreak circumstances. Similar situations prevailed on the drug market. A box of masks that sold for Tk 50 in early February sold for Tk 1,500 in mid-March. The government appears to be struggling to control prices as the government has almost always done in every instance of a demand shock or a supply shortage.

In addition to public health measures, the government must have plans to tackle the coronavirus outbreak by including price control mechanism and putting in place steps to deter people from hoarding essential goods. Mere rhetorical assurances from the ministers may not stop citizens from panic-buying. What is rather needed is a well-thought-out plan about how to ensure the supply of essential goods in case the country is in a full lockdown to prevent the spread of the coronavirus infection. A global public health emergency of this nature demands multi-pronged approach. The countries that are worst affected by the epidemic have taken economic consequences into consideration and declared rent freeze and other economic benefits to minimise the socio-economic cost of the disease. In so doing, the government must also take into account the impact of the outbreak on the global market and its impending impact on the domestic market.

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