Friday, 9 June, 2023

Global Inflation: Who Will Give Us Relief?

M. Ashiq

Our world is in a deep crisis. The wholesale assault of coronavirus has, for the time being, died down to a considerable extent, but a series of other intractable problems now follow it. Europe is once again witnessing a full-blown war on its soil since the end of the Second World War. Russia and Ukraine are locked in a war of attritions backed by the polarised world of superpowers. Climate change is taking a heavy toll on life and properties, causing indescribable suffering for mankind on our planet.

But presently the lives of people throughout the world are hard hit because of the devastating impact of inflation. Inflation is a major economic turmoil that leads to a sustained rise in the prices of goods and services in general, leading to a continuous rise in the cost of living. Soaring prices of goods and services force people to compromise with their present standard of living. They have to accept the painful costs of inflation against their will. These costs are unavoidable, which are reflected in sacrificing some favourite items from the daily intakes or ending up with less quantity of the same items or exhausting present savings to buy the same quantity of goods or allocating additional hours of time to earn more money to maintain present living standards. Inflation thus upends the life of fixed-income earners and low-income groups of people. They make up the vast majority of the people in our globe. As they cannot increase their income during inflation, they mostly endure the ongoing oppressive inflation, an economic torture they have to accept as a fait accompli silently.

How can the lives of these people be improved during high inflation? Like a good doctor who prescribes the right medicines after carrying out the right diagnosis of the disease, the government is also required to take similar approaches to tackle inflation. Presently the root causes of inflation in every country are attributed to the fallout of the Ukraine war. It is claimed the Ukraine war has led to an increase in global food and energy prices, depreciation or devaluation of the national currency making imports costlier and shortages of other items because of supply chain disruptions. The Ukraine war is identified as the main reason for the domestic price hikes. But the other important factors cannot be ignored in the domestic market that contributes to a steep rise in the market prices of goods and services. These factors originate from the supply side of the economy, such as profiteering motives of the businesses, market manipulation, collusive behaviour and other anti-competitive practices of businesses. When the retail shopkeepers or sellers are asked to explain why market prices have gone up to a large extent, one common answer comes from all of them: “It is the act of the syndicates; it is their organised market manipulation act”. But the irony is that the syndicates remain untraced and untouched as if they are unseen ghosts. However, they are living just around us with royal status. In a weak regulatory framework of the government, these malpractices by businesses are a strong possibility. At the end of the day, it is the consumers who have to suffer heavily as they are exploited by charging higher prices for goods and services.

People look up to the sitting government with a lot of expectations that in order to contain rising prices the government will not only take economic and non-economic measures but also be determined to implement these measures fast and fairly. The government's performance to control inflation will depend absolutely on its sincere intention and the ability to implement economic and non-economic measures. In the market economy or in the mixed economy, the government is always expected to act as a great facilitator. Government machinery is supposed to act as a powerful watchdog instrument against any wrongdoing affecting the interests of the people. The government's failure to ensure the much-needed clean economic governance means the economy will slide into severe chaos and mismanagement and the people's sufferings will, instead of waning, keep mounting. This is exactly what is happening worldwide. The wholesale corruption in every sphere and mismanagement of the economy is the order of the day. Take the case of Sri Lanka. Once a vibrant economy in South Asia is now facing total economic collapse due primarily to utter mismanagement of the economy, massive corruption of the government and private sector bodies and sheer lack of enforcement of standing regulations. Similar is the case with other countries like Pakistan, Lebanon, Venezuela, Argentina, El Salvador, Kenya, Ghana and a host of other countries. It is a familiar story of all the third-world countries.

So, one of the non-economic measures people expect from their government to improve their economic conditions during inflation is to closely watch the activities of corrupt business owners (both local and foreign) and take action against them without fear and favour. Corrupt business owners amass huge wealth at the expense of millions of innocent consumers by creating artificial crises in the market. Sometimes they get timely blessings from corrupt politicians, bureaucrats and other government officials in the regulatory bodies. These corrupt elements duly push the anti-people agenda forward to gain financial bonanzas. The unholy nexus of these groups only brings more economic hardship and misery for the common people. So, it is fitting to say if the government and its administrative machinery cannot provide much-desired economic relief to the people because of corrupt practices and culture, it is tantamount to saying that mankind's misery is not the result of shortages of resources but an unrestrained misuse and mismanagement of resources. Only a courageous and benevolent government can make a big difference in the lives of the people. With the absence of this sort of government, the people will have no other option but to voice their deep frustration by saying: Who will give us relief, and who will give us a better life?


The writer is a former teacher of Scholastica and Sunbeams, Dhaka