Protection tariffs force consumers to pay $70b more in 5yrs: study

Staff Correspondent | Published: 21:54, May 08,2018

 
 

Policy Research Institute chairman Zaidi Sattar speaks at a seminar on ‘protection policy, export diversification and the forgotten consumer’ organised by the PRI in Dhaka on Tuesday. Former interim government adviser AB Mirza Azizul Islam, prime minister’s economic adviser Mashiur Rahman and Consumers Association of Bangladesh president Ghulam Rahman were also present, among others. — New Age photo

Bangladeshi consumers paid about $70.6 billion more than the international prices of imports and import substitutes in last five years due to industrial protection tariffs, a study conducted by the Policy Research Institute of Bangladesh found.
‘In a static sense, industrial protection is a zero-sum game. What producers gain, consumers lose,’ PRI chairman Zaidi Sattar said while presenting the key points of the research at a seminar on protection policy, export diversification and the forgotten consumer held at the PRI office in the capital, Dhaka.
Zaidi showed that the average protection tariff on import and import substitutes in Bangladesh was 26.6 per cent and the rate was much higher than those in many other regional countries.
He said, ‘Tariff raises the prices of competing imports and it helps rise profitability of sales, but doesn’t raise export profitability.’
‘Consumers are the large stakeholders of the economy but they have not been in policy discourse,’ Zaidi said.
The protection tariff raises the prices of the products over the international prices by at least the amount of the tariff and Bangladeshi consumers pay on an average 70 per cent higher price of consumer goods, he said.
Ghulam Rahman, president of the Consumers Association of Bangladesh, said neither the country’s political parties nor the civil society think about the interest of people.
Country’s civil society is divided and they talk about the partisan politics but not about people, while the government says the national budget would be business friendly and it never says it would be consumer friendly, he said.
Ghulam Rahman said that due to protection the prices of MS rod and cement went up on the domestic market while the prices of the items were going down on the international market.
This type of protection cannot protect the interest of consumers, he said.
‘In the name of protecting domestic industries, the government is giving different incentives to the local refiners. Some of the refiners are importing crude soya bean oil, making little modification, bottling and gaining huge profit,’ PRI executive director Ahsan H Mansur said.
Citing the recent price hike of MS rod and cement, he urged the government to reduce and rationalise the protection tariffs for protecting the interest of consumers.
Former interim government adviser AB Mirza Azizul Islam presided over the seminar while prime minister’s economic adviser Mashiur Rahman and former commerce secretary Sohel Ahmed Chowdhury spoke, among others, at the event.

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