As the economic impasse prolongs, people across the country are now wondering about the socio-economic costs of the pandemic. A joint study conducted by local and international organisations has quantified the possible damages which can alter the very fabric of our socio-economic structure.
As the total number of reported COVID19 cases crosses 8 million (WHO), the global economy enters a synchronized into the worst recession in living memory. The world’s poorest countries brace for yet another shock that threatens to deepen global inequalities and exacerbate an already challenging situation. Public health and socio-economic concerns are deeply intertwined all over the world, but all the more so in contexts like the least developed countries like Bangladesh.
Our healthcare system has fallen apart and the economy is feared to experience a deep recession which will push millions under the poverty line. The road to recovery is challenging and riddled with uncertainties. The revival effort must be supported by proper survey and research to ensure maximum efficiency of the process. The “COVID19 and National Budget 2020-21: Strategic Review for the low-income population” is a study jointly conducted by national and international organisations. It focused on quantifying the possible damages which will assist in mapping a contingency plan.
Due to the spread of COVID19, the economy and development of Bangladesh have reached a critical point. The epidemic has affected low-income people abnormally. About 10 crores 22 lakh people of the country are at risk of economic and health weakness. About 74 per cent of households have lost their income. More than 1.4 million expatriate workers have lost their jobs and are returning to the country. These grim statistics were the findings of a joint study by BRAC, Data Sense and Unnayan Shamannay (Development Coordination) titled “COVID19 and National Budget 2020-21: Strategic Review for the low-income population”.
The findings were made public through a digital press conference. Former Governor of Bangladesh Bank Dr Atiur Rahman was the chief guest of the ceremony which was presided over by Hossain Zillur Rahman, Chairperson, BRAC and Executive Chairman of Power and Participation Research Centre (PPRC). The research report was presented by Dr Ananya Raihan, Executive Director, D.Net. Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS) Dr Nazneen Ahmed and Executive Director of BRAC Institute of Governance and Development (BIGD), Imran Matin were also present as panellists.
The study was conducted by various national and international organizations including BRAC, BIGD, PPRC, International Monetary Fund (IMF). In addition to reviewing the current statistics, a survey was also conducted and the original report was prepared by adjusting the results obtained. The survey was conducted with 972 randomly selected respondents across twenty-five districts of the country.
Millions are at Risk
The study estimates that in aggregate, 53.64 million people are vulnerable to health and economical risks due to COVID19. It includes the new group of people who are termed as the “new poor”. It includes the people who will be pushed under the poverty line due to the economic inactivity resulting from the lockdown. The number of extremely poor people who are facing high economic risk is 46.3 million, concurrently the number of people at high health risk is 36.3 million.
Perils of the Poor
The survey found that COVID-19 has multiple negative effects on low-income people. Of the households where data was collected, at least one member of 34.7% of households lost their jobs. Between March and May, the average family income fell by about 74%. Workers in the informal sector, including day labourers, have suffered the most. The manufacturing sector has also been hit hard.
For example, exports in the readymade garments sector declined by 74% in April 2020 compared to April 2019. Between mid-March and April 6 this year, 1,117 factories closed and about 2.2 million workers (2.19 million) lost their jobs.
The Vulnerable Segment
The study also found that low-income people are at higher risk of contracting the disease. The death of an earning member of these families will increase the risk of starvation and malnutrition among women and children. Various reports and research studies have shown that food and cash assistance provided by the government to the poor and ultra-poor is not reaching them properly due to lack of coordination across the country.
COVID19 has created new socio-economic divisions and digital divisions. According to statistics, only 34% of households have a smartphone and 54% of households have access to TV. Therefore, children living in the lower part of it are being excluded from digitally conducted educational activities. As a result, children from poorer households will fall behind on education compared to richer households which will have adverse effects on their employment opportunities. As a result, poor families will linger below the poverty line with no economic opportunities.
Most importantly, to fight the pandemic there is an urgent need for efficient public-private partnership and allocation of maximum resources.
The misery of Migrant Workers
In the first eight months of the current financial year, remittances sent home have grown by 10 per cent compared to last year. In the post-COVID 19 worlds, inward remittance is expected to experience a major slump. Due to the falling oil price, economies in the middle east are expected to go into a deep recession. It will have serious consequences on our expatriate income as an overwhelming number of Bangladeshi workers are employed in this region. Bangladeshi workers who are mostly employed in construction and logistics may lose employment and stop sending money. More than 1.4 million expatriate workers have returned or are returning home due to job losses. Immigrants living abroad are also now at risk of falling into debt and social stigma and facing an uncertain future.
People with Disabilities
Covid-19 has put people with disabilities and their families in even more trouble. According to the National Taskforce on Disabilities-friendly Disaster Management Affairs, a total of 15,93,070 people with disability have been registered so far in Bangladesh. The actual number, however, is expected to be far greater. The pandemic has brought more agony for people with disabilities, it has completely shut off the little income they were facilitated by NGO(s) and some companies in the private sector.
- DR ATIUR RAHMAN
emphasised on prioritising public health over economic prosperity. Therefore, he expected this year’s budget to be focused on survival. He added that the pandemic has revealed the wretched state of our healthcare system. The middle class is now at a panic mode over the availability of medical care, the plight of the poor population is even worse. He fears that if the health sector is reinforced and public health is not addressed, foreign investment will be impeded and our economy will not grow.
- DR NAZNEEN AHMED
voiced her concerns over the agony of the improvised population which also includes millions of small businesses across the country. Their incomes have slumped dramatically but expenses like rent and utility remained the same. Therefore, she called for immediate financial assistance from the government to help people at the bottom of the pyramid to survive. She also emphasised on promoting online businesses by making smartphones cheaper.
- DR IMRAN MATIN
explained the importance of strengthening the health sector with infrastructure development and manpower to ease the panic among the general population.
- DR HOSSAIN ZILLUR RAHMAN
urged the authorities to distribute cash incentives to the vulnerable population without further delay. He fears that producing a new list of the recipients will take a lot of time which these people do not have. He urged the authorities to start handing out cash with the list that has been already produced. To ensure that the money reaches the vulnerable population and serves the intended purpose, he suggested increasing the stipend that 7.8 million primary students across Bangladesh receive from Tk 100 to Tk 500. However, the endeavour does not end at allocation, the government has to take account of every socio-economic aspect and listen to the experts before formulating the budget, he added.
The Way Forward
In light of this study, some proposals were put forward for inclusion in the National Budget 2020-21. It includes the introduction of cash assistance for at least three years for the families of low-income earners who have lost their livelihoods and/or lost a family member to COVID19. Also, the introduction of unemployment benefit schemes for the extremely poor and destitute from FY 2020-21 and other unemployed groups from FY 2021-22. They have also urged to make government services and facilities more accessible to the general public. It can be achieved by creating a universal identity system for all citizens irrespective of age. The digital identity system will allow citizens easier access to social security schemes, loans, savings and insurance through public-private partnerships.
Thousands of Bangladeshi migrant workers have lost their livelihoods across the world. Due to falling oil price, economies in the middle east where most of our workers are employed have come to a standstill. As the manpower sector has a bleak chance of recovery for the foreseeable future, we need a contingency plan. We have to create a special program which will allow them to reintegrate to the local workforce.
Most importantly, to fight the pandemic there is an urgent need for efficient public-private partnership and allocation of maximum resources. There is an urgent need to re-adjust our workplaces to reduce health risks. A proper plan is required to implement work from home and alternate working hours in order to maintain social distancing requirements. The experts also suggested that the working hours for factories and offices should be six hours per day and three shifts should be introduced if necessary. It will help reduce traffic congestion and maintain proper physical distance between offices and workplaces and public transport.