Institute of Development Studies

Crises Revisited: global recession, flash floods and food inflation in Dhaka

Naomi Hossain, September 2009

Is the global economic crisis over? Not in the Dhaka community of Notun Bazaar, where garments factory workers are facing shorter working hours as export orders slow down. Revisiting this slum community, where we had researched the food, fuel and financial crises in February in advance of the G20 meeting, brought home the complex, compound nature of the crises people actually face.

Notun Bazaar Revisited: global crises amidst everyday crises

In August, Mamun Rashid and Nabil Zuberi and I visited the community of Notun Bazaar in Dhaka where we had conducted the Accounts of Crisis research in February 2009. We wanted to know how people there were doing five months on. Were food prices rising again, as newspapers and public opinion suggested? Were jobs in the export-oriented garments industry (the main employer) still plentiful?

We turned up days after flash floods had paralysed Dhaka. Heavy rain is expected in the monsoon, but with its over-crowded, unpaved streets and open sewers, Notun Bazaar was hard hit; people spent more than 24 hours wading through filthy water, resulting in sickness for many. A teenage girl recounted how her year-old baby, who had livened up our focus group discussions back in February, had died from an unknown illness since we last visited. Hers was a tragic, routine story of medical negligence. These are among the multiple mini-crises that people in Notun Bazaar appear to cope with as a matter of course.

When we last visited, ‘Chacha', a recycling business owner, had drawn a crowd by haranguing us for ‘just talking' and not providing anything useful. We freely admitted our uselessness, and once we explained the purpose of our research, Chacha invited us for tea and chat. In August, Chacha brought us up to speed on local events. A ruling party supporter, Chacha stated what others confirmed: that Notun Bazaar people felt happier and more secure because the new government kept rice prices stable and low. He was earning less from his recycling business than in February, as the recession pushed commodity prices down. But this paled into insignificance compared to the crucial price of rice.

The end of the ‘Walmart effect'? Garments exports slow down

Back in February, people thought the garments industry might weather the economic storm, because Bangladeshi factories produce clothes extremely cheaply. But was this ‘Walmart effect' still holding in August? Were Bangladeshi workers still secure in their jobs at the low social and labour standards end of the industry?

Sonia and Rana, a couple we first met in February, told us what had changed. Garments workers were facing shorter shifts, and getting no overtime since May or June. Wages are anyway so low that many workers rely on overtime to meet basic living costs. Sonia and Rana had a joint monthly income of Tk 10,000 (US$145) with overtime, but last month brought home only half, or Tk 5,000 (US$72). Rana has sold their mobile phone to keep costs down.

Workers said jobs were available, but factories were under pressure to lower costs and raise productivity. This view fits with the macroeconomic indicators: growth in the sector has slowed down, but compared to other exports, Bangladeshi garments have done relatively well so far, as one of the cheapest places to manufacture clothes. One local factory had closed, owing workers three months back-pay. Workers took to the streets, and clashed with the police. Taking their protests to the employers' association, they were promised redress, but were still waiting when we met them, some weeks later.

Food prices in the fasting season

In February, people were still reeling from the 2008 food price hike. By August 2009, rice prices had been stable and low for several months, and many had recovered from the food price shocks. Low rice prices were credited to the responsive new government, rather than to low global food grain prices. But cooking oil and other high nutritional-value foods were still expensive, and increasingly so. This was partly a seasonal hike, as costs always rise around Ramadan, but these foods also remain at historically high prices on the international market.

In one shop, the shopkeeper told us that he sometimes encountered irate customers when prices rose fast, as they were doing by the hour in the run up to Ramadan. As we talked, a customer bought a kilo of red lentils, an important iftar (post-fast meal) item. ‘Brother, you have to pay another Tk 2', the shopkeeper said. ‘Lentils have gone up'. The customer argued a little, complained a little, and reluctantly handed over an additional Tk 1. The shopkeeper accepted it and shrugged. ‘You see for yourself', he said.

Naomi Hossain is a Research Fellow in the Participation, Power and Social Change Team at IDS.

Comment

Do you have an opinion on this story? Want to share your thoughts? Why not try the Eldis Community IDS News Discussions Group and leave your comments.

Related Publications

• Hossain, N., Eyben, R. et al (2009) 'Accounts of Crisis: Poor People's Experiences of the Food, Fuel and Financial Crises in Five Countries' , Brighton: IDS
• Hossain, N., Rashid, M. and Zuberi, N. (2009) 'The Food and Financial Crises Five Months Later'