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The Japanese ambassador's suggestions with regards to Bhasan Char can be complemented by a Market Assessment in Bhasan Char, that was conducted by the World Food Programme and UNHCR, the UN's refugee agency in November 2021. This can help the government to get a sense of the current levels of market development on the island, and what needs tol happen from here.
The assessment was led by VAM (Vulnerability Assessment Mapping), Retail, and CBT (Cash-Based Transfers) teams from WFP and CBI (Cash-Based Interventions) team from UNHCR, with enumerator support from Islamic Relief Bangladesh (IRB).
Since the inauguration of the resettlement project by the Bangladeshi government in 2017, traders from the mainland established marketplaces on the island to cater to labourers during the island infrastructure construction phase. They primarily played the role of supplying raw materials for construction and a few food commodities for the labourers and stakeholders associated with construction.
With the construction works scaling down after the final major clusters, they have switched to selling food and non-food commodities, mostly to other Bangladeshi traders, Armed Police Battalion, Bangladesh Navy, Police, and Rohingya market.
Overall market functionality for Bhasan Char was observed to be relatively weak (4.2 out of 10 as highest score), which was lower than the market functionality in Ukhia (5.2) in the same season last year, where Rohingya camps are located. The major strengths were assortment, availability, competition, and access and safety (the presence of barrier/challenge to marginalised groups or presence of physical threat for certain groups or security issues while reaching or in the market), while there needs to be an improvement in the dimensions of resilience of the supply chain and prices on the island.
Currently, there is no market-based intervention for food assistance in place and the current in-kind food basket provided by the humanitarian agencies cannot meet the diverse nutritional needs of Rohingya population. However, refugees did not prefer to receive cash assistance for the food programme specifically, for fear that Bangladesh traders may increase prices of goods and services. Hence, at this stage a hybrid of cash and e-vouchers is preferred.
A market-based intervention should be rolled out in incremental phases so that the traders' responses can be monitored properly before scaling up to 100 percent. Regular price, market functionality index (MFI), and supply chain monitoring will be critical in measuring the full capacity of the markets and helping to guide the gradual introduction and scale up of cash-based programmes.
A rapid injection of cash into the markets (including through large-scale casual labour payments) will likely result in sudden price hikes, widespread commodity shortages, and fierce competition amongst refugees for limited products. However, gradual scale-up of the existing cash for work interventions among refugees is recommended to broaden income generation opportunities for refugees.
When introducing market-based interventions, there are a number of constraints organisations must consider. In terms of the lead time, when scaling up to meet a theoretical increase of demand to 100 percent from current 10 percent of refugees (1,800 individuals) purchasing rice from the market, the big traders present were optimistic about shorter lead times (approximately 2 weeks) compared to the small traders, plausibly due to their strength of comparatively larger businesses and access to large markets in Noakhali and other mainland areas. However, the vast majority of traders claimed they would need at least 2 months to scale up their operations.
Prices of most of the commodities are generally higher than markets in mainland and Cox's Bazar, particularly for eggs, chicken, and vegetables by 10-20 percent, due to the transportation cost from the mainland. Prices of the commodities were decided by the traders of the market committees, and there is no functional price control mechanism in place. Seasonal effects, especially the monsoon season, play a role in price hikes.
Other major constraints were potential for natural disasters and limited storage. In particular, the traders' capacity to preposition goods on the island prior to, and during, the rainy season or before/during disasters is hampered by a critical lack of storage space.
Organisations should place mitigation measures to possible bottlenecks when introducing market-based interventions. Strong coordination within the humanitarian community for all cash injections (regardless of whether they are programmatic or operational) will be critical to managing the growth of the fragile Bhasan Char market.
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