Page 76 - IBT August 2021 Issue

Economic Insight
Fatema Begum is not sure how old she is, but
estimates it to be a little over 20.
She was brought to Dhaka at age four by her
grandmother and sent to work in a household.
After years of mistreatment and abuse, she
started working at a garments factory, but
that also stopped when she got married.
In April 2020, just after the country went into
a “general holiday shutdown”, Fatema found
out she was pregnant. She also found out her
husband, a rickshaw-puller, has married over
a dozen other women in secret, and her
pregnancy prompted her husband to abandon
her as she could not earn anymore.
Unable to find any other work amid the
pandemic, she started pulling a rickshaw to
make ends meet, but the heavy labour while in
delicate health caused her son’s prenatal
death. She fell sick and was hospitalized for a
month, for which she had to take loans of over
Tk 1 lakh. After recovering, she went back to
the road, this time driving an auto-rickshaw
in the capital, to pay back her loan.
Until July, Fatema was able to pay off Tk Two-thirds of workers who visited a
60,000 of the loan, and was counting days
when her debt would be repaid and she could medical facility had to take out a loan
go back to her village home. for their healthcare needs or a family
Despite all the economic progress Bangladesh
have made, including the growth, millions of member’s, and the report says such
informal workers and micro businesses loans, often taken at high interest rates,
remained on the brink of uncertainty at the
onset of even a small fallout or accident, and
the pandemic pushed many of them off the
edge.
"People employed in the urban service sectors,
in particular, were badly hit. A majority of the
jobs in the urban service sector are informal
and there is little job security in these
engagements," said economist Dr Selim
Raihan, executive director of think-tank South
Asian Network on Economic Modelling
(SANEM) in a February 2021 report in The
Daily Star that found poverty rate in the
country has doubled since 2018.
With lost jobs and crashing businesses due to
lockdown and economic fallouts, informal
workers like Fatima and small business
owners were forced to borrow money, with no
foreseeable light at the end of the proverbial
tunnel. According to a study by BRAC, New
York University and UN Women Bangladesh,
77 percent of informal workers’ families lost
income, 62 percent saw their average savings
dip, and 31 percent saw their outstanding debt
rise in the first seven months of the pandemic
(April-October 2020).
Another study by Citizen’s Platform for SDGs
74
THE DEBT
TRAP
Bangladesh in April this year found that 93 percent of micro,
small and medium enterprises (MSMEs) faced financial crunch,
and 75 percent of them had to borrow.
The ebb-and-flowing nature of the country’s COVID-19
restrictions has had an impact on these businesses as well, as
many took loans in the later part of last year when the
economy somewhat reopened – in hopes of making back the
losses and getting their businesses back on track.
Md Babul, who sells plastic goods in two small shops in
Dhaka’s Adabar and Darussalam, told The Daily Star in July
that he incurred a debt of Tk 5 lakh in the last year and a half.
Of it, Tk 3 lakh was from a bank and the rest Tk 2 lakh from a
private moneylender, at a staggering interest rate of 30
percent.
He said he made the loans expecting his business to bounce
back as businesses opened in June last year, but with the
country in lockdown again, the doors to his shops remain shut
and the interest keeps piling up.
The government did allocate funds to help such groups to cope
with the pandemic’s fallouts, but many have been left out of
can put the recipient in a debt trap. does not have a choice. She walks for over six and their last visit to a healthcare facility cost them Tk 1,655 –
hours just to commute to and from her meaning that every time a domestic worker visited a
workplace, and even then, considers herself healthcare facility, they had to spend over a week’s earnings.
fortunate that she has a job, because the Tk Unsurprisingly, two-thirds of workers who visited a medical
that on grounds of technicalities in the criteria. 5,000 she makes a month is vital to the facility had to take out a loan for their healthcare needs or a
In January, Tk 1,500 crore was earmarked under a stimulus treatment of her cancer-afflicted son. family member’s, and the report says such loans, often taken
package for small traders, entrepreneurs and farmers, and While this may seem like an extreme case, at high interest rates, can put the recipient in a debt trap.
engaged eight government and semi-government institutions thousands of informal workers who live hand Around 85 percent of respondents said they delayed health
to disburse those. However, informally-run micro-businesses to mouth have been faced with monumental care at some point, largely due to a lack of money. While the
and hawkers were left out of it, as the eligibility criteria said challenges with dipping incomes and rising government in 2020 decided to send cash aid of Tk 2,500 to
the beneficiaries must have trade licenses and permanent uncertainties, and no social protection about 50 lakh low income people including domestic workers
establishments. mechanism to save them. by end of July that year, until mid-September the National
It may be worth mentioning here that a whopping 85 percent The country has over 4.3 crore women Domestic Women Workers union reported that none of its
of the country’s employed labour force is in the informal workers, and a vast majority -- 90 percent -- of members received the support.
sector, according to the latest (2017) Labour Force Survey them are in the informal sector according to With a sharp rise in cases, the government imposed a “strict”
conducted by the Bangladesh Bureau of Statistics. recent estimates. Domestic workers like Asiya lockdown in the country at the beginning of July, and after a
However, when talking about big numbers, it is easy to lose are not included within the scope of the labour one-week relaxation of restrictions ahead of Eid, re-imposed it
sight of the true personal strife that is reduced to just law, and are only technically recognized as till the first week of August at the time of writing this report.
statistics. workers through the Domestic Workers While the government maintains that this is the best way to
Take the case of 65-year-old Asiya Begum. She was Protection and Welfare policy 2015. contain the spread of the coronavirus, various quarters have
photographed in July on the outskirts of Dhaka, wading According to a 2020 study by Women in termed it inhuman and ineffective to restrict earning sources
through ankle-deep water in the rain walking from her Informal Employment: Globalizing and for low-income and daily wage earners without providing them
workplace in the capital’s Lalmatia to her house in Organizing, the COVID-19 pandemic has with food assistance at least. Only time can tell when the
Hemayetpur of Savar, a distance of about 15 kilometres. With brought unseen sufferings for these domestic pandemic will be contained fully and life as we knew it
a lockdown in place, there was no transportation available, but workers. The average survey respondent pre-2020 can resume, but until then, the many Fatemas and
Asiya, a daily domestic help in the sunset years of her life,
reported a typical weekly income of Tk 1,250, Babuls and Asiya’s will have little hope to hold on to.