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Bank & Finance - September 14, 2023

Syndicate traders root of all doom

Staff Correspondent: In the last one year, it has been possible to rein in commodity prices all over the world. Our neighboring country is Sri Lanka. Inflation was 49 percent. Almost went bankrupt. The government fell. Inflation in Sri Lanka is now 5 percent. It is literally a miracle. But the government of that country has been able to make it a reality. However, we are not able to control the inflation even favorably.
This was saying by eminent economist and former governor of Bangladesh Bank Dr. Mohammad Farasuddin. He was the first Vice-Chancellor of the private university East-West University. Reporters talk about price inflation, survival of common people and what to do.
While ask such a question like-you must be monitoring the market situation. How do you see the survival of ordinary people?
Dr Farashuddin replied that There is no real need to research how ordinary people live. Why only me, the Prime Minister himself has said that common people are suffering due to the market situation. It is recognized that poor people are suffering due to high prices of goods. The government is also blaming the global crisis for this asking such a question then he replied that In the last one year, it has been possible to rein in commodity prices all over the world. Our neighboring country Sri Lanka almost went bankrupt. The government fell. Inflation in Sri Lanka is 5 percent. It is a miracle.
How is it possible in Sri Lanka? He replied that If policies are accepted and implemented, many things can be done. Not by emotions or political influence, but by those who know and understand, the principles should be added to come to a solution. Even if no one is offended by it, there will be nothing to do.
Our question was what could be the policy?
He answered, First, the 9/6 interest rate is long-term. This cannot continue for long. Wherever the world has reduced inflation, it has allowed interest rates to rise. No need to force it. Let it grow.
Second, there is much to say and do in the forex space. It is not possible to explain everything to you in one minute.
Thirdly, keeping control over savings. Savings paper is the direct borrowing of money by the government from the public. If savings bonds are oversold, the purchasing power goes to the government. Then inflation decreased. Reducing dividends on savings bonds and taxing dividends was a bad suggestion by the World Bank. This is why people have turned away from savings certificates. The government is doing some revision now, which I think is a good initiative. It needs to be made easier so that the government can borrow directly from the public.
The government is taking excessive bank loans. If the government continues to borrow from the banking system, the space for private investment will suffer. The government has borrowed heavily from the central bank in the last one year. Borrowing from the central bank means increasing inflation. Because the central bank has no money of its own. This borrowing should be completely stopped.
A lot of things are said from the higher levels of government, syndicates are said. But there is no solution to break the syndicate. Basically, there is no way but to break the syndicate. Today or tomorrow, we have to break the syndicate. The syndicate that wreaked havoc in 1974 is now more active. Due to the syndicate, the government was in a state of disarray by causing famine at that time. Still doing so. Syndicate traders are the main cause of all the destruction of the country.
Now people are in silent famine some say. What do you say?
No. I don’t believe it. This is a different matter. Learning from the situation in 1974, public friend Sheikh Hasina adopted a policy in 1998. There was a terrible flood in 1998. Everything went down. Prime Minister Sheikh Hasina bought and stored 1.5 million tons of food grains. Later, through 9 months VGD card, he broke to one and a half crore people. There was no corruption. Shah SM Kibria led. Matia Chowdhury was the Agriculture Minister. I was then the governor of Bangladesh Bank. Sheikh Hasina’s government can adopt such a policy. There is plenty of stock. Nothing to fear yet.
Fixing the rate of interest, proper management of foreign exchange and breaking up syndicates will liberate the common man. I have written in an article, if five people have import license, it should be canceled and given to 50 people. Many were angry with me. Such a decision must be taken to break the syndicate. The government knows everything, who is making huge profits by hoarding how much.

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