The commerce minister's recent admission that stern measures against market manipulators could create a sudden crisis has exposed the helplessness and lack of political will of the government, said three top economists and a consumers' body. 

They suggest that the government end the monopoly in the market for edible oil, sugar, flour and other essential commodities and create alternatives to ensure competition in the market and thus benefit consumers.

Earlier on Monday, in the face of the criticism of opposition lawmakers in parliament, Commerce Minister Tipu Munshi said, "We are discussing the syndicate. It is correct that large companies are doing lots of businesses together."

"We need to think…We can put them behind bars and we can fine them. That might be possible," he said.

"But it will be difficult for us to bear the sudden crisis caused by it. That's why we try to remain within the rules and (tackle the situation) through discussions," he added.

In his reaction, Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the commerce minister's speech was an expression of the truth.

"We have created a large oligarch over the years like Russia. There is the existence of those oligarchs in every sector, including the commodity sector. We all know who they are," he said.

The main issue is to regulate them, they should not be destroyed or put behind bars, he said.

"They control the whole commodity market and no one will be able to compete with them as their capacities are high. Because they buy in large quantities. They even have their own shipping," said Mansur.

The government now has no capacity or political intention to regulate them, he said.

"If you have the political will, you can do a lot. But containing them should come with circumspect measures, otherwise there will be a crisis. It has to be done in a systematic approach," he said.

"In the last 20 years, we have built them up like Frankenstein. If we suddenly break them, we may fall into trouble. Because there are no alternatives to their infrastructure," said Mansur.

He underscored the importance of creating competition in the commodity market.

"To create competition, we have to go ahead with the policy front, formulating regulations. We have to regulate the flour, edible oil and sugar. We have to set prices properly adjusting with the global market," he said.

The economist said alternatives to those monopoly powers have to be created slowly, ignoring all their influences, including by rejecting their bribes.

"They have already made thousands of crores of taka in profit manipulating the market in the last two years and they are ready to spend some of that money to keep the manipulative system. So, a strong political will is imperative to regulate them," he said.

"The argument (made by the minister) is that taking action against them could collapse their business and result in a major crisis in the economy," said Zahid Hussain, former lead economist of the World Bank's Dhaka office.

"So, do we mean that the big groups (companies) can do whatever they want? Do we mean they are above the law because the economy is hostage to them? But, no one is supposed to be above the law," he said.

Hussain thinks the conglomerates in commodity markets would not shut their businesses if they were barred from raking in excess profits.

"What is the logic of this assumption? They have interest here, they will not stop making normal profit if you don't let them make extra profit," he said.

The artificial crisis in the market played a role in high inflation coming about. "This at least can be understood from the minister's speech," he added.

"He (minister) is not denying it. I applaud him for that because he is recognising reality. But listening to him, it seems that we are helpless and the cure may be worse than the disease," said Hussain.

The top commodity players can be declared Significant Market Players (SMP) to enforce remedial rules just as had been in the case of Grameenphone of the telecom sector, he said.

"Same method can be applied for the big and dominant players in the edible oil or sugar market. Because players in those commodities don't always play by the rules," he said.

"Now we have to find out how to make them play by the rules. Because if they get leniency, they will not play by the rules. But they will not stop playing. But they wouldn't engage in foul play when you would not let them," he added.

Had the government created many small suppliers in the commodity market, the large players would not have been able to control the market, said Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue.

"For that, we will have to provide banking support and some customs related facilities to the small players," he said.

Syndicates in the commodity and daily essentials market have violated some rules, otherwise the commerce minister would not have mentioned that they can be sent to jail, he said.

He questioned the government allowing such kinds of violations in the first place and not applying the laws on those manipulators.

He thinks that the government has neither adequate machinery nor necessary information to regulate the market.

The syndicate in the commodity and daily essential markets has become a Frankenstein, said Ghulam Rahman, president of the Consumers Association of Bangladesh.

If an alternative supply chain is first not created and the current supply system improved, consumers will fall into more crisis if drastic action is taken against the big players, he said.

"But there is no alternative to controlling them by creating competition in the market. So, the government must bring them under regulation, but in a cautious manner," he said.

Bangladesh may have to get out of the open market model to give comfort to consumers, said Rahman.

"The government has to initiate business and if 25 per cent of the supply is directly provided by the government, they syndicate would not dare to do so much," he said.