What should be people’s role in talking the inflation, energy and fuel crises in Bangladesh?
Mehjabin Bhanu: The government has taken various initiatives to meet the ongoing electricity, energy and water crisis. In between, changes are coming to the office program. Educational institution weekly holiday has been made 2 days. Shops, shopping malls are closed by 8 pm. Besides, initiatives are taken to solve the electricity crisis by carrying out area-wise load shedding across the country. However, the work of various factories is being disrupted due to load shedding. Production is declining. There are reports of major disruptions in agriculture. The government has to pay extra attention to this. If there is a regular disruption in agricultural production, food shortages can occur. We also have a responsibility to overcome this crisis. To be economical in electricity use, to prevent wastage should also be focused. Then the implementation of government initiatives will be possible. The instability created by the Russia-Ukraine war in the international oil market has had an impact on Bangladesh’s electricity production. As a result, load shedding has recently returned across the country. The price of fuel has been increased by a jump of up to 50 percent. The government is looking for a way out of this situation. Other developed countries like UK, Japan, Germany are also facing energy crisis. There is an emphasis on being economical in the use of electricity. It is uncertain how long the energy crisis will last in the global market. The countries of the subcontinent are also facing energy crisis. Pakistan continues to adopt austerity measures in electricity consumption due to the crisis. What is the deplorable condition of Sri Lanka due to energy crisis? There is no alternative to frugality and austerity to tackle the power crisis. The concerned department of the government should find out where electricity is wasted, where there is redundancy and where electricity can be saved – these things should be controlled to control the supply and use of electricity. Wherever energy can be saved, measures should be taken to do so. It must be remembered that the main cause of the ongoing power crisis is not the generation and transmission system. Such a situation is due to tension in gas and oil supply. Most of the country’s power generation plants are oil dependent. But now fuel oil is expensive in the world. In a developing country like Bangladesh, there is no alternative to emphasize gas, oil and coal-based electricity as well as renewable energy. Renewable sources should also be looked at to make electrification sustainable. Besides, electricity has been imported from various countries including India. If the continuity and speed of the government’s work in the power generation sector continues, we can expect a solution to the power crisis in the near future. However, there is a need for transparency in all aspects of electricity production or import. The government should be careful to ensure that national interest prevails in all cases.
Almost all countries, developed, developing and underdeveloped, are going through extreme deflation. United States in June; In July, various European countries, including the United Kingdom, witnessed the highest inflation. Inflation in the Eurozone is setting new records almost every day. Prices of all commodities starting from food and housing rent are on the rise. In July, Germany’s inflation reached 7.6 percent. The whole of Europe, including Germany, is under the pressure of inflation. In the last 25 years, 19 Eurozone countries have faced the highest inflation of 8.9 percent.
Spain has the highest inflation among European countries. After 38 years in the country, the inflation rate was 10.8 percent in July, which was 10.2 percent a month ago. Meanwhile, the highest inflation in 40 years has been seen in the UK as food and fuel prices rise. In July, its rate was 9.4 percent. And after November 1981, inflation in the United States rose to 9.3 percent in June.
Economists say that due to high inflation, the cost of living in the country is increasing at a large rate. The Russia-Ukraine war has become a big shock for the world economy without overcoming the threat of Corona. Besides the start of this war, inflation is increasing due to the increase in the price of food, fuel and ship fares in the world market and disrupting the supply system. Due to Russia’s attack on Ukraine, the prices of oil and gas and food grains have increased in the international market. Import-dependent countries are the most affected. High inflation pressures on them. For this, consumers are forced to reduce their spending.
In this situation, the pressure of inflation control is increasing on the policy makers of the country. According to the rules of economics, bank interest rates have to be increased to prevent high inflation. Higher interest rates will reduce borrowing by businessmen and entrepreneurs. As a result, the money flow in the market will decrease. Less money flow means less people will buy in the market or reduce the amount of buying. The price of goods is bound to fall. Because people have less money, the demand will decrease. Low demand means inflation will be on the decline. The economy may suffer if the adverse effects of deflation are felt in the market; But hopefully, it is temporary. In the long run it can bring good results for the market. If the inflation decreases, the economy can be stimulated by reducing the bank interest rate and increasing the liquidity flow again. According to the Quantitative Theory of Money, when the money supply decreases, commodity prices are bound to decrease.
The US Federal Reserve has raised policy interest rates three times in just the past few months. The Reserve Bank of India has hiked policy interest rates three times between May and August last year. As prices continue to rise, policy interest rates should be raised continuously and commercial banks should also be monitored to increase lending rates. The central bank often tries to reduce the amount by selling government bonds in the open market by withdrawing money from the market. As a result, the lending capacity of commercial banks decreases.
Thus, the central bank tries to control inflation by selling bonds in the open market. Apart from this, the central bank often tries to eliminate monetary inflation by controlling the amount of bank loans with the help of changing the reserve rate of commercial banks, applying moral pressure, direct credit control etc. Almost every country has started taking effective measures to control inflation, the practical evidence of which is mentioned above. Bangladesh has also taken some effective measures. We, Bangladeshi people should cooperate with the government in tackling the crisis. We must play our own role in mitigating the crisis.