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The causes of the recent devaluation of Take and its effects on the economy of Bangladesh

Turbulence in the currency market has become a cause for serious concern. Foreign exchange market, like the domestic commodity market, cannot be manipulated although the flow of forex's supply can be disrupted in time of greater demand. At times, the central bank has to inject greenbacks to stabilise the forex market as the Bangladesh Bank (BB) did with a record $5.31 billion the financial year of 2022.

Yet instead of stabilising, the currency market has become jittery and the central bank was forced to devalue Taka twice after a big depreciation in January 2022 last. Now the latest sale and purchase of a dollar at a record of Tk 102 on the kerb market in May 2022 only highlights the extent of forex crisis. Even importers were compelled to settle import bills at Tk 97 against the BB-fixed rate of 87.60 for a dollar.

Rising import costs, declining remittances and a large payment to the Asian Clearing Union (ACU) as early as January triggered the process of short supply of greenbacks and decline in the forex reserve to $44.33 billion on January 5 2022 from $46.39 billion on June 30 2021, which reached a record reserve of $48 billion in August last. Still the gap between import and export favours widening of the current account deficit.

So this latest forex crunch will put further pressure on the country's forex reserve. Now the question is, how it will impact the country's economy and commodity, foods in particular, inflation. Economies the world over suffered on account of the pandemic and the steeply rising prices of fuel oils have triggered a chain reaction of commodity and service inflation, globally. At home, even utilities are becoming costlier. After gas price hike, electricity is likely to be pricier with a proposal submitted for raising its tariff by 66 per cent. The Bangladesh Energy Regulatory Committee has suggested a 58 per cent raise for per unit power.

At a time when the spectre of hunger looms large over the globe, these developments on the domestic front cannot but make political leaders concerned about its impact on the poorer sections of the population and the overall food security of the country. When the official announcement was surplus production of rice, the country all of a sudden came to know that the staple was in short supply. There was desperate search for overseas market from where rice could be imported. At one stage, duty on import by private companies was slashed to just 2.0 per cent from 16 per cent.

On the heel of the pandemic has come the Russia-Ukraine war and it is wreaking havoc on some essential commodities including one of the most popular staples, wheat in many countries of the world. Russia, the biggest global exporter of wheat and a major exporter Ukraine are engaged in the war and the supply chain of gas and fuel oils, wheat and sunflower oil, of which the war-ravaged country was the biggest exporter, has been severely disrupted or come to a total halt, stoking high inflation. Sectors that earn foreign exchange will benefit on account of devaluation of Taka but compared to the country's overall loss this is small consolation.

So the challenge before the government is stiff. Management of the market and adjustment of Taka- Dollar exchange rates are the immediate challenge and ensuring a sustainable forex reserve and development is the long-term objective. That the government has decided to go slow on less important development projects is a step in the right direction. But getting the priority right is no mean task, when it comes to preparing for the future.

The development model followed so far depending on cheap labour may fail to deliver in the days to come. There is no alternative to developing human resources. Demographic dividend can be reaped if only quality human capital can be developed under a comprehensive and up-to-date education system with required investment in the sector. This is the priority task for the government like any other in the world.

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Translation: English to Bengali Economic affluence and prosperity are likely to reduce the scope and necessity of social protest which is a common phenomenon in many of the developing nations. Though the proposition is not always true and failed to pass the test of time in many countries and many societies, governments in one developing countries nowadays strongly uphold the concept. That's why they have concentrated their focuses, resources and efforts to economic growth to turn their countries affluent and prosperous. The growth-centric or growth-obsessed drive towards prosperity mostly sidelines the distributive aspects which is a major factor of different social protests. Theoretically, social protest is defined as a form of political expression that seeks to bring about a social or political change by influencing the knowledge, attitudes and behaviors of the public or the policies of an organization or institution. These protests generally take the form of overt public displays, demonstrations, civil disobedience and may also include covert activities like petitions, boycotts, lobbying, and even different online activities. In today's world, online activities have become a popular form of social protest, thanks to proliferation of social media and other virtual platforms, Social protest is also considered a strong tool to air the grievances and sometimes compel the government and relevant authorities to address the problems or fix the flaws. In Bangladesh, different kinds of social protests have been observed in last couple of years when economy registered an unrelenting growth Usually social protests mostly ended within a period of time and mostly never linger unless those are serious issues. Those who participate in the protests do not come for any revolutionary change overnight. They mostly want to draw the attention of the policymakers and authorities to rectify the defects within a reasonable time frame.
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Economic affluence and prosperity are likely to reduce the scope and necessity of social protest which is a common phenomenon in many of the developing nations. Though the proposition is not always true and failed to pass the test of time in many countries and many societies, governments in some developing countries nowadays strongly uphold the concept That's why they have concentrated their focuses, resources and efforts to economic growth to turn their countries affluent and prosperous. The growth-centrist or growth-obsessed drive towards prosperity mostly sidelines the distributive aspects which is a major factor of different social protests. Theoretically, social protest is defined as a form of political expression that seeks to bring about a social or political change by influencing the knowledge, attitudes and behaviors of the public or the policies of an organization or institution. These protests generally take the form of overt public displays, demonstrations, civil disobedience and may also include covert activities like petitions, boycotts, lobbying, and even different poline activities. In today's world, online activities have become a popular form of social protest, thanks to proliferation of social media and other virtual platforms Social protest is also considered a strong tool to air the grievances and sometimes compel the government and relevant authorities to address the problems or fix the flaws. In Bangladesh, different kinds of social protests have been observed in last couple of years when economy registered an unrelenting growth Usually social protests mostly ended within a period of time and mostly never linger unless those are serious issues. Those who participate in the protests do not come for any revolutionary change overnight. They mostly want to draw the attention of the policy makers and authorities to rectify the defects within a reasonable time frame. (Translation English to Bengali)
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Write a precis of the following text:Since there is no sign that the war in Ukraine will come to an end soon, any hope of resumption of wheat supply from the warring nations fades on a distant horizon. Innocent and vulnerable people across the length and breadth apart from the Ukrainian refugees will have to pay a heavy price for then fractious international politics. The shockwaves of the war are felt everywhere in an inter connected world. The world's economic recovery will be seriously hampered by the Russia Ukraine war prolonging. Both man-made and climatic hostilities can leave economies everywhere badly wounded and bleeding. Bangladesh cannot evade the deleterious impact of the supply crunch of wheat, the second most important staple food after rice. So far as rice is concerned. It has already recorded another price hike in the past week. What is even more concerning is the negative prospect of paddy harvest. It is not because paddy yield was bad but because the recent inclement weather has wrought havoc with its harvesting. Famers cannot manage enough farm labourers to harvest paddy and take the crop home. In several areas, ripe paddy is simply floating on accumulated rainwater. This is sad indeed! Its impact will be felt on the supply of the staple food. A coordinated move aimed at helping farmers harvest paddy by the local administration could save the crop but no such move was taken.
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