Rationalizing Fuel Price: So far a half done act
If you have hundred taka to give subsidy, whom do you give it to? A labourer to buy food or a private car owner worried about rising fuel price? Also, don't treat fuel and fertiliser similarly. Why, would you ask?
The way we are going to open this article may seem like dramatizing, but it is not. We will come to the point - in the later part.
All fuels should be brought into market price. All means all - petrol, diesel, cng, everytihng.
Also, do not tie this policy with the price of fertiliser, even though they are related. We hope to deal that issue separately at a later date.
So, if all the prices of fuel is left to catch up the market price and more importantly, to fluctuate, then how it is going to affect the lives of people and how will that influence the macro-economic stability? Just to highlight the issue, let us give an illustraion here:
FBCCI President Anisul Huq spends probably less than one percent of his income on the fuel cost for his private car. However, the fuel that he buys for his car is also subsidized by the Bangladeshi taxpayers! And if the fuel price increases to reflect the international market price and the price fluctuates, it will not be a problem for Mr. Huq or people like him.
Now consider the situation of the worker who work in one of the garment factory that Mr. Huq owns or any other workers for that matter. What percent of their income they spend on transportation? Also, if you consider the situation of a government official who does not take bribe, how does the price increase of fuel affect (if the person has one or two school/college going children, the situation also worsens).
Also, consider the another two illustrations - from the perspective of input into production system. What happens if the price of electricity or fuel goes up? Do that create an existential problem for Mr. Huq's businesses? Probably not. It will cut into his margin probably, but he will be afloat doing business and at the same time will be self-respectful since he as a rich man do not take subsidy from the poor people of the country. I am sure, people like Mr. Huq has good intensions for the general people in the heart. However, we do not know for sure yet.
How about the other input - price of diesel and electricity affects the farmers, too. If these prices doubles, what happens to this farmer?
We have tried to illustrate constrasts in two different scenarios of fuel price increase - one as transportation cost and another as input to production system. These contrasts has to be taken into affect and address the concerns.
Listening to the IMF as they say it would not solve your problem. I do not know what they have in their mind (it can't be something good!). However, we can say this safely - they always suggest something that is easy for them.
Solving a problem is not an easy thing - specifically when you do policy making. The problem of our older generation is that when it comes to the choice between "doing it easy way" and "doing it right way", they have so far chosen the first option. But they need to learn doing it right way - even if that is imperfect, comlex and hard to implement. When something is hard to implement, that is good - because that will create more employement. Don't know what I am talking about? Think - you will know. Or send us a message, we can elaborate the details for you peoples.
Just to illustrate a problem, please allow us to describe one thing. Dr. Tamim is now the Energy Adviser, isn't it? But before that, what he used to do? He was a senior teacher in his faculty/department, or least he is not a junior teacher who doesn't have any say in policy making. Lets see what do they do in BUET as far as policy making. In other universities, there is always problem with elections when it comes to the choice of dean and chairman of different faculty and department. However, in BUET, there is usually no election. Thats should be a good thing you would think - since BUET could follow an international standard method of choosing a department chair or a faculty dean. But that is very complex method and it needs to practice judgement on the part of senior teachers. So, BUET teachers do not go that way - why? Because it is complex, to say the least. Off course, there are other issues beyond the scope of this discussion. So, how do they choose chairman or dean in BUET, you must be thinking. Its funny - they have a rule of rotation - every tenured professor in the department will become both chairman and/or dean - even though we know that many people do know a thing about managing a department or a faculty. But still, they have this rule. Why? Because, it is easy for them to implement. By doing that they have compromised a very basic thing about the development of a university - that is competence and use of merit. So, what do you expect from a guy like Dr. Tamim? Its much easier for him to go for the easiest choie - which is treat all of those above-mentioned scenario equally. That will make his job easier, isn't it? Who cares about competence, merit, good of the people, good of the institution? After all, most of our experts in our country becomes expert by memorizing text-books! May be its our problem that we expect too much from these professors, secretaries and other professionals.
If you thought some of the ideas are worth of your reading time, please forward it to others. If you have an ear to the columinsts in regular traditional media, please forward it to them. If you have an ear to the journalists and news editors of the electronic media, discuss it with them. Hope they would look at the suggestions and give due diligence.
Thanks for your time,
Innovation Line
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Note: This is a freelance column, published mainly in different internet based forums. This column is open for contribution by the members of new generation, sometimes referred to as Gen 71. If you identify yourself as someone from that age-group and want to contribute to this column, please feel free to contact. Thanks to the group moderator for publishing the article.
Dear readers, also, if you thought the article was important enough so it should come under attention of the head of the government please forward the message to them. Email address for the Chief Advisor:
feeedback@pmo.gov.bd_ or at
http://www.cao.gov.bd/feedback/comments.php . The more of you forward it to them, the less will be the need to go back to street agitation. Use ICT to practice democracy. It is already proven that this government responds to the feedback.
Gas, Fuel, Fertiliser
Subsidies at this rate should not continue further
Says finance adviser
Unb, Dhaka
Finance Adviser Mirza Azizul Islam yesterday said subsidies on gas, fuel and fertiliser at the present rate should not continue further as such incentives have long-term adverse effects on economy.
He admitted that there would be some sufferings from the latest hike of compressed natural gas (CNG) price.
"Indeed, there will be some sufferings from CNG price-hike. But how long will you continue to give subsidies on some materials like gas, fuel and fertiliser?" the finance adviser said.
He was talking to journalists on the sidelines of a seminar "Official Statistics: Collection and Dissemination" arranged by Bangladesh Statistical Association at the National Economic Council (NEC) auditorium in the morning.
Presided over by Statistical Association President Prof Quazi Mafizur Rahman, the seminar was also addressed by association vice-president Prof Samad Abedin and secretary general Abdur Rashid Sikder.
The finance adviser said at the beginning of this fiscal year, some Tk 6,000 crore had been allocated as subsidy. But later, the government had to increase the amount of subsidy to Tk 15,000 crore.
Asked whether the price-hike of CNG is timely, he said, "No time is good enough. If the price of CNG was not increased, then the government would have been forced to realise the extra expenses (of subsidy) through increasing tax or through deficit budget."
Aziz said prices of many things like gas or other fuels are many times lower in Bangladesh than the neighbouring countries.
Addressing the seminar as chief guest, the finance adviser urged the Bangladesh Statistical Association to come up with "timely, reliable and objective statistics without being politically influenced."
Without authentic data, no development project can be implemented successfully, he said.
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