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Bangladesh: Facing the Rice Crisis

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The price of rice in Bangladesh has a correlation with poverty, economic and political stability. In 2000, a wage labourer could buy 6-7 kg of rice with his daily income (about US$0.80). Now, less than half of that can be bought, even though the income has risen over time. Rising food prices could derail all political predictions and spell disaster for the country in 2008.

The labour riots in Dhaka city on the 2nd of January 2008, completely blocked a main highway from 8am to 5 pm in Dhaka, capital of Bangladesh. The action began when several thousand workers from 20 factories took to the streets. Factory bosses locked out workers from SQ Sweaters Ltd in the Sheorapara area of the city; the lockout was in response to protests on the previous two nights when workers allegedly refused to work, seized management officials and held them hostage in the factory. When stones were thrown at cops and vehicles damaged, the army troops visited the site of the demonstrations but did not intervene.

Rice field in Bangladesh
Rice field in Bangladesh

The events began when Salma, a female worker, became ill. Due to management disapproval and fear of being fired, she felt too scared to take time off work. On Sunday Dec 31 she attended work but her condition worsened; the line supervisor refused her permission to leave the night shift, under threat of being sacked. As her condition continued to decline, she was eventually taken home at around 3am. Salma later died at about 4:30am Monday. Workers were told they would be sacked if they attended the funeral service.

Workers’ unrest is no stranger to factories in Bangladesh. In May 2006 a workers revolt occurred at the SQ-affiliated FS Sweaters Ltd factory; a worker was shot dead and 70 others, including cops and journalists, injured in major battles between workers, police and other security forces. The factory remained closed for a week after the clashes. Strikes, roadblocks, occupations and vandalism of factories have continued in recent months in the RMG (Ready Made Garment) and jute mill sectors, repeatedly defying the ban on demonstrations imposed by the caretaker/military government since the declaration of a State of Emergency a year ago. The national minimum wage of $25 (£12.50) a month, even when enforced, is too little for the poor to survive on adequately as inflation of basic necessities eats further into incomes. Many are also in dire straits since the recent flooding and cyclone destroyed the homes and livelihood of millions.

Where 80 percent of export depends on garments and apparels, (20% of GDP in 2007, The Economist) a small untoward incident in the garments sectors sends the alarm bell ringing in the economy. Last year, it sent clothes worth $8.9 billion to rich countries. Revenues from the garment trade are double the remittances sent home by Bangladeshis working overseas—the economy's other pillar. The country has made use of its labour, its only abundant resource. Wages are lower than in China, India, Cambodia or Vietnam, its main competitors. About 2m people—90 percent of them women—work in the rag trade, and another 15m jobs depend indirectly on making clothes, through firms that produce thread, buttons and textiles (The Economist 16/8/07).

The incessant inflation of the past couple of years, eating away at the real incomes of the labour force, has brought this all to a head. In 2005, Khaleda Zia’s government bowing to the pressure from World Bank, increased the prices of kerosene, diesel, octane and petrol to adjust them to international market prices. Price hike of diesel and kerosene raised the cost of both irrigation and transport, leading to increase in prices of agricultural products and increase in fares. Diesel and kerosene account for over 90 percent of petroleum products consumed in the country, making it easy for the government to generate huge revenue by slightly increasing their prices. It is true that in recent times fuel prices have gone up tremendously in the international markets affecting the global economy. The oil price in the international market has shot up beyond 100 US dollar a barrel. The rise in prices will hit hard the poorer section and hamper cereal production.

In Bangladesh politics revolves round the prices of staple foods. The price of rice in Bangladesh has a correlation with poverty, economic and political stability. In 2000, a wage labourer could buy 6-7 kg of rice with his daily income (Taka 60 per day, about 43 p). Now, less than half of that can be bought, even though the income has risen over time. This implies that the real income of the poor, spending 60 percent of their total income on food items, almost halved, forcing them either to reduce per capita consumption of food or use up whatever meagre amount was available for non-food purposes. Rising food prices stand out as a problem that, if left unresolved, could derail all political predictions and spell disaster for the country in 2008.

Food price inflation — ‘agflation’ — is a global phenomenon that is set to continue in 2008. The Economist (6/12/07), states the main reason behind this agflation is subsidies for ethanol, a bio-fuel, in the United States. With oil prices rising to nearly hundred dollars a barrel, it is not surprising that American consumers are looking for alternatives. One alternative presented to the American consumers, however, is skewed by subsidies and interventions (‘more than 200 different kinds’ according to the Economist) that are playing havocs in the world cereal markets. American government subsidises the production of maize for ethanol. American farmers react to this by diverting productions away from other crops.

The chief of the Bangladesh army says the country is facing a catastrophe over rice supplies. Many people have been hit hard by spiralling food prices, which in some cases have doubled over the last year. The government also says that it has introduced food-for-work programmes, and schemes to feed vulnerable and poor people. BBC correspondents say that thousands of poor people can be seen queuing up at numerous stalls set up by the authorities to sell rice at a subsidised rate of 25 taka (18p) per kg. Government officials say that the government currently has about 600,000 tonnes of food grains, and that a minimum stock of 1million tonnes is needed to meet emergencies such as November 2007 cyclone which killed over 3,300 people and left millions homeless.

Political Situation

One year into Bangladesh's state of emergency, the army-backed government is making headway in its drive to crush the two patronage-based personality cults that used to constitute Bangladeshi politics. Both the heads of the two main political dynasties, Mrs Zia of the Bangladesh Nationalist Party and Sheikh Hasina Wajed of the Awami League, are in detention, along with more than a dozen former cabinet ministers. The bosses of many big companies are also on the run. Senior officials say that some 200 top-level targets are being prosecuted. Until recently, dishonesty in public life was so prevalent that Bangladesh regularly topped the world's corruption league tables.

Corruption has destroyed the fabric of the society during Begum Zia’s period of rule from 2001-2006. Widespread corruption exists at all levels of society. Various estimates indicate an annual loss of 2-3 % of the country’s GDP due to corruption. Transparency International Bangladesh reached a figure of 1.85 % of GDP in 1999-2000 gone to waste and the Transparency International Bangladesh Household Survey 2005 (PDF) estimated that bribes in Bangladesh annually amounts to TK 6796 crore ($997 million) - the equivalent of approximately 2% of the GDP. The same study estimates that each Bangladeshi on average pays TK 485 in bribes annually. Some bribes are paid directly, whereas others are transferred through brokers such as lawyers and agents who facilitate the contact with public institutions by bribing officials.

In 2006 an intelligence agency in the country identified 11 mid ranking officials with the National Board of Revenue, who owned 15 luxurious villas in counties of the port city of Chittagong, which costs US$ 2.5 million. It is important to mention here that the monthly salary of these officials is less than US$ 400 per month! The Police and Customs (revenue) are the most corrupt departments in Bangladesh. Almost all the officers, on their retirement, emerged as multi-millionaire. They acquired wealth and properties in their own name and in the names of their spouses. Many of the family members of Prime Minister Begum Khaleda Zia became fabulously rich, by using state power. The most talked about corrupt figure in Bangladesh was Tareq Rahman, eldest son of Khaleda Zia. Tareq became a billionaire in just a few years, while many of his friends, who were partners in indecent sexual activities or in the addiction to Phensidyl  (a cough syrup abused as a drug) also became very rich under the direct patronization of Tareq Rahman. Tareq has established Hawa Bhaban, which,  although considered as one of the offices of the ruling party, was involved in interfering in almost all the business and contracts in the country. Hawa Bhaban buddies were considered as the most influential figures in Bangladesh. One of the Hawa Bhaban pals is Giasuddin Mamun, who is Tareq’s closest friend too. Hailing from an extremely poor family in the southern part of Bangladesh,  Mamun become one of the richest men in Bangladesh through various corruptions, smuggling and many other forms of illegal activities.  During Khaleda Zia’s term in office, the amount of cash minted by 11 corrupt ministers totalled over $1billion.  

When the caretaker government arrested Tareq Zia, and took punitive action against some extremist religious leaders, it proved to be popular and gladdened the heart of the liberal forces in the country. The people were generally carried away by the euphoria of the early success in the crackdown on corrupt bureaucrats, politicians and businessmen and by a sense of nemesis against those who had held the country to ransom. The caretaker government did not stop at punishing corrupt people, it also started mass scale arrests, punishment through trials in kangaroo courts and removal from politics of the leaders of major political parties.

It did not take too long for people to discover that the emergency and the associated changes in the political set-up had been manipulated through the intervention of the Bangladesh armed forces, and that the military was exercising a major influence in the running of the caretaker government.

Western Imperialist and their loyal top-brass in Bangladesh army are trying to install a government of their choice so that the prescriptions of IMF and World Bank could be implemented smoothly in the country. No wonder to achieve this goal they appointed a former top official of the World Bank, Fakruddin Ahmed, as the chief of the caretaker government and have been systematically trying to remove the two former prime ministers, Shiekh Hasina and Khaleda Zia, from the political scene.

The Caretaker government implemented many anti-worker and anti-popular proposals of the IMF and World Bank. More than six thousand workers of four state owned Jute mills at Khulna have been made redundant last year. State owned airlines, ‘Bangladesh Biman’, has been denationalised and more than 2000 employees have lost their jobs through the ‘Voluntary Retirement Schemes’. Last year the Caretaker government increased the price of diesel, petrol, kerosene, gas and the rate of electricity charge. Dr. Debapriya Bhattacharjee, executive director of Centre for Policy Dialogue (CPD) alleged that the Caretaker government has taken the country into the IMF fold.

Conclusion

In July 2007 the country’s 64 districts was affected by floodwater and an estimated 14 million people are suffering due to the flooding. The floods covered over half the country and in some places it was the worst seen in sixty years. Many have died, and diarrhoea, dysentery and other water borne diseases are begun to spread. As if this natural calamity was not enough, two months ago the country was hit by another calamity, this time Cyclone Sidr. The government estimates that over 3,300 people have been killed, although many afflicted areas are still out of reach to rescuers. The Bangladeshi Red Crescent society predicted that the death toll was above 10,000. The government also estimates that around 3 million victims of the storm will need feeding and rehousing.

The cyclone’s confirmed death toll is already much higher than that of Hurricane Katrina, a storm which killed over 1,800 in the southern USA in 2005. News agencies were reporting awful scenes in southern Bangladesh: bloated corpses bobbing in swollen rivers and flooded paddy-fields; whole villages washed into oblivion; and destitute people begging for clothes to enshroud their dead relatives. The storm also destroyed some 600,000 tonnes of rice. This must now be added to an existing shortfall of 1m tonnes, caused by the severe flooding in July 2007.

The government is partly to blame for this distress. It is pursuing an aggressive anti-corruption drive which, though laudable in principle, has created uncertainty in the economy, causing a worrisome drop in investment. Corruption cannot be eliminated by military measures like mass arrests and the punishment and removal from politics of the leaders of major political parties. Corruption is basically a social and political phenomenon and the only means of curbing it is the adoption of measures of socialist transformation and widespread popular campaign against it at the grassroots level. Besides, history shows that the military breeds its own brand of corruption, at times more pernicious and ubiquitous than civilian corruption

In any case the restoration of so called democracy looks far off. An election is scheduled for December 2008. Yet with most of the leaders of the country’s two main political parties in jail, mostly on charges of corruption, it is hard to see who will contest it. It may well be postponed.

Bangladesh is a country with a troubled history. It is one of the world’s poorest countries, born in war and periodically ravaged by the forces of nature. To change the current political and natural disaster in Bangladesh a genuine revolutionary leadership of the Bangladeshi workers and peasants is required. Without such a leadership no real revolutionary change is possible. Without this it is not possible for a nation to turn its situation around. The potential for revolution is there. It needs to be channelled.


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