At least 5.2 lakh people have fallen into poverty because of rice price hike which has also caused a rise in head count poverty rate by 0.32 percentage points in past few months in the country, according to a study of the South Asian Network on Economic Modelling.
Rice prices are still high and on the rise despite imports, said the independent research organisation in its Quarterly Review of Bangladesh Economy released on Saturday at a briefing at BRAC Centre in Dhaka.
According to Bangladesh Bureau of Statistics, the government’s statistical body, the rate of poverty was 24.3 per cent in the country.
Import of rice in the July-September of the current fiscal year 2017-18 became by five times the total import of the last FY 2016-2017, it said.
The country imported rice of Tk 2,912 crore in the first three months of FY 2018 against rice import of Tk 36 crore in the same period of FY 2017.
Rice prices increased on an average 22-30.43 per cent in the past one year, it added.
South Asian Network on Economic Modelling apprehended that the rice price might increase further in the domestic market as price was on the rise in international market.
Its executive director Selim Raihan presented a keynote paper at the briefing.
‘Many people fell into the poverty as they could not get enough time to adjust the rising price of the staple through increasing income as the prices of rice increased following lower production due to floods,’ he said.
Failure to import rice in time and problems in supply chain management from Chittagong port to market also flamed the rising price, he said.
It is a matter of concern that the price of the main food item is on the rise despite huge import, he added.
Using a computable general equilibrium model, the research organisation simulated a shock of 35 per cent increase in the price of rice in the Bangladesh economy, it said.
The think-tank also suggested for a rice policy with respect to production, import, supply management and strategic agreements with the rice exporting countries.
At the briefing, the organisation also expressed apprehension about the rise in scams in the banking sector and high rise in non-performing loans saying that these were reflections of weak regulation and political patronage in the sector.
There is a need for a political will, proper regulation, empowering Bangladesh Bank, and speedy trial of the financial crimes, the organisation said.
It identified five challenges for Bangladesh economy in the current fiscal year.
The challenges include political uncertainty looming over national election which can affect already stagnant private investment, rising food inflation, slow growth of exports and remittance and governance issues around the banking sector.
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