When Bangladesh's current caretaker government was sworn in on 11 January, the country was on the brink of economic disaster. The economy was still licking its wounds from last year's crippling labour riots, when the all-important garment industry had suddenly exploded over wage concerns. The political violence that followed, pitting Awami League forces against Bangladesh Nationalist Party (BNP) forces, brought life to a halt in the capital and other major cities in January and February. Industry – with the garments sector being among the most visible and hard hit – took on losses that amounted up to millions of dollars a day. Small businesses relying on daily commerce felt the pinch in the absence of customers and consumers. In a country where about half the population lives on less than a dollar (BDT 69) a day, it is safe to assume that the common Bangladeshi cares more about being able to earn enough to survive than about who is sitting in the prime minister's office, or how she got there. As such, even though the new caretaker government was sworn in with the blessings of the army, its real mandate effectively came from an economy deprived of much-needed stability. The interim administration appears to recognise this, and has been extremely active on the economic-policymaking front – taking a wide variety of proactive and reactive measures. The most high-profile of these has been its dealing with trade facilitation and achieving price stability. The government has achieved substantial success in the former, but is yet to succeed in controlling inflation.
Reforms targeted at the country's deep-sea port at Chittagong – which handles about half of international trade – have been at the centre of the administration's proactive initiatives. Prior to 11 January, the port was notoriously rife with corruption, mismanagement and political vested-interest groups. Racketeering and extortion were widespread and went largely unopposed, with local businesses reportedly paying premiums in excess of 20 percent for freight handling.
One of the first acts of the caretaker government was to set up a taskforce to assist in port-management reforms, and its success has been extraordinary. The turnaround time of ships has dropped by more than half, even as the number of ships handled has increased. More tellingly, there are now no ships sitting at anchor, whereas previously the average wait to dock was about two weeks. The measures taken by the military-assisted taskforce included aggressive and simultaneous anti-corruption and anti-crime drives, an improved management structure, and privatisation of various port functions. An integrated approach to handling freight has more than doubled the number of containers that Chittagong can handle in a day. The healthy export sectors, including the garments industry, are undoubtedly the principal beneficiaries of these reforms.
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Despite the obvious benefits of these port reforms, it is still too early to evaluate their impact on the Bangladeshi economy as a whole. In contrast, the government is being judged on a daily basis over its handling of the rising inflation rate – a long-time problem that has dogged successive governments. With the consumer price index (CPI) very closely tied to the country's food stores, rising inflation is felt most painfully through the soaring prices of essential food commodities. Any inflation-mitigation policy would thus have to focus on reducing food-price increases. The question is: What policy measures could the government actually take to curb these increases?