The adverse impacts of Covid-19 on the labour market will have serious ramifications in terms of attaining Sustainable Development Goals (SDGs) for Bangladesh, experts said at a conference on Monday.
So, they said, policy responses need to be designed considering the immediate, short-term, and medium-term ramifications of the pandemic.
They made the observations at the second plenary session of a conference, titled “Bangladesh Emerging from the Pandemic: Coping Experiences and Policy Choices,” jointly organized by the Citizen’s Platform SDGs and the Centre for Policy Dialogue (CPD).
Asif Ibrahim, vice-chairman of New Age Group and Industries and a core group member of the platform, co-chaired the session titled “Implications of Covid-19 for the Labour Market.”
Bangladesh’s economic growth, incubated in the last decade, was unable to provide a buffer or shock-absorbent mechanism to the vulnerable poverty-stricken population, especially the poor that has little to no savings, he said.
“The shutdown of the major core sectors in the economy has created this job loss,” he said, citing data from multiple sources.
As per the data, 7 million jobs in the micro, small, and medium enterprise (MSME) sector, 5 million jobs in the transport sector, 3 million jobs in the construction sector, and more than 3 million jobs in the manufacturing sector disappeared temporarily during the initial lockdown.
An additional 10 million people became jobless in the agriculture sector with the total number of temporary job losses standing at around 25 million.
“Migrant workers have been stuck here and access to the international labour markets has been further disrupted, as the oil situation is prolonged with fears that falling oil prices will reduce the demand for Bangladesh workers in the middle east, and such incidents might worsen the economic situation,” Ibrahim further noted.
Since the first detection of Covid-19 in March 2020 and in the backdrop of the upward trends in the number of infections and deaths, Bangladesh has experienced stoppages and slowdown of economic activities resulting in the loss of employment and income for a large number of people in the workforce.
The implications of the pandemic on the livelihoods of the marginal population working in the informal sector of the Bangladeshi labour market, in both urban and rural areas, have been especially devastating, speakers also said at the event.
An estimated 20 million urban migrant workers of the informal sector entailing rickshaw pullers, hawkers, day laborers, street vendors, restaurant workers, construction workers had lost jobs during the initial lockdown, with 16.5 million being pushed to extreme poverty.
A total of 640,000 people who are mostly engaged in the informal sector, living in over 3300 slums in the capital, as well as the rural poor average income, dropped by more than 80% since the outbreak of the virus.
Slum residents lost 82% of their daily income, which is a drop of about Tk81 from Tk108, while per capita daily income loss across rural poor Bangladesh declined from Tk89 to Tk56.
“Over the short term, the stimulus packages will need to be redesigned in view of the pandemic experience which we have seen has lower access and availability, as high-cost borrowing will likely put many families into the debt trap, said Professor Mustafizur Rahman, distinguished fellow of CPD, after his keynote presentation.
“To this end, we have to ensure more credit at a subsidized rate required for farmers and low-income people and more importance should be given to extending support through NGOs and microfinance institutions,” he added.
Rahman further said that disasters, whether induced naturally or economically or by health risks, leave footprints of different intensities over a prolonged period which need support measures.
While immediate support measures help to mitigate the urgent needs of individuals and households, for the marginalized groups, restoration and rejuvenation of the labour market are one of the key pathways to a sustainable recovery of the marginalized and the “pushed behind,” the economist pointed out.
According to the keynote presentation, titled “Responding to COVID 19: Findings on Employment Related Adjustments from Household Survey in Bangladesh,” about 78% of surveyed individuals had reduced expenditure to cope with the impact of the pandemic, while 52% of households changed dietary patterns involuntarily.
About half of households experienced a decline in savings and even more had to resort to borrowings with the average loan size of the households doubling in the last year.
Support from the government was limited, only 20% of the households could receive some form of government support, and a bigger segment of households sought support from private sources, friends, family, neighbours, and private charity.
Around 5% of the poor families that were surveyed during the long term could eat only once a day. However, before the onset of the epidemic 91.7% of respondents ate three meals a day.
Most of them do not have savings which have had an additional negative impact on their food intake and nutritional status during this income crisis, according to survey findings.