Tuesday, May 21, 2024


Dhaka Tribune

Growth of the new poor must be prevented to achieve SDG goals

Nearly 50 lakh people are employed in the informal sector, according to the National Association of Small and Cottage Industries, who do not have any specific job, workplace, or capital

Update : 27 Mar 2022, 07:14 PM

73% of the country’s small and micro businesses have not yet recovered from the financial losses induced by the Covid-19 pandemic.

The findings came through a study conducted in July 2021 by the South Asian Network for Economic Modeling (Sanem), 

Nearly 50 lakh people are employed in the informal sector, according to the National Association of Small and Cottage Industries, who do not have any specific job, workplace, or capital.

A survey in September 2020 by the Bangladesh Bureau of Statistics found that the lower-income labour segment has been hit the hardest by the pandemic, with an astounding 80% of labourers losing their jobs.

Similarly, small and micro-businesses are also struggling to stay afloat. 

“We know that there is loss and profit in business. But sometimes you have to face a bigger crisis, and when you do, you don’t want to carry on the business any longer. We don’t have a place for our businesses. Where can we go? On top of that, you have to spend extra to keep your business. Most of the profit goes to this,” said Talebur Rahman, who sells cigarettes from a stall. 

Talebur is now particularly concerned about talks of a new licensing requirement that he says he cannot bear. 

“I heard we have to have a license, and cannot sell loose cigarettes. I already have to pay to be able to sell on the street. Now I have to pay for the license. We have very little capital and from time to time, some of our shops tend to move from one place to another. How can I buy and sell whole packets, who will give me the money? I can’t do business like this,” the cigarette seller said.

Between February-April 2020, the income of people in the rural areas dropped by 79%, according to a survey by the Power and Participation Research Centre (PPRC) and Brac Institute of Governance and Development (BIGD). The percentage is much higher — 89% — among the urban poor.  

In order to achieve the Sustainable Development Goals (SDGs), the government will have to protect informal business owners. With 50 lakh people becoming newly poor, poverty reduction will be a much tougher job than it is already.

This is why the government must focus on preventing new poverty, as well as focusing only on development for the existing poor. Experts say that in addition to grants to the poor, the government should also create policies that are friendly to small business owners.

Rajshahi University economics professor Mahmud Hossain Riyazi says that three SDGs goals should be priority targets in order to achieve the other SDGs. “Three goals among the 17 SDGs are particularly important: Achieving a high growth rate, poverty reduction, and reducing inequality. If these three aren’t achieved, then that will have an impact on achieving other SDGs,” said Riyazi.

“Historically, our government has always focused on macroeconomic stability. But that leaves out the people in the informal sector,” the economics professor said.

That’s why, he said, the policymakers have to be careful when creating new policies that affect small businesses. 

“Things like stopping the sales of loose tobacco products or dual-licensing should be done in a top-down way. The government can increase tax to do that. In Sri Lanka, for example, the tax on alcohol is set in a way that it’s hard to use for most people. But starting from the bottom down would be harassment to the small business owners,” Riyazi said. 

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