• Tuesday, Sep 29, 2020
  • Last Update : 07:44 pm

ED: SMEs are no small matter

  • Published at 08:24 pm July 19th, 2020
SMEs
Photo: BIGSTOCK

We cannot afford to stand back and watch as smaller industries falter and collapse

The pandemic is far from over, and we are already seeing disheartening results: Over 16 million people have newly become poor due to the lockdowns and the ensuing loss of income, apropos of which a recent Dhaka Tribune editorial highlighted the need to tap into our expertise in poverty alleviation. 

However, loss of income is one thing, loss of employment is another: Due to low production and the disruption caused to the supply chain, around 6 million people now find themselves without jobs.

That is 6 million people, mostly working in small and medium-sized industries, who have now lost their sources of income, creating another group of people who may find themselves newly poor as a result of the pandemic.

However, the local labour market had been going through a crisis even before the pandemic began, with job creation unable to match the number of people entering the job market each year -- a situation further exacerbated by a lack of quality education, skill mismatch, poor job elasticity, and gender inequality.

In fact, the pandemic has served to highlight these problems even further: An over-reliance on a few sectors, an oversaturated job market, and lack of effective social safety nets have led to short-term development that is far from sustainable.

For example, one of the most commendable steps taken by the government has been the disbursement of stimulus packages for businesses to ensure sustained employment. But, while these disbursements have easily made their way to big businesses, smaller industries have not been as lucky, thanks in part due to weak or absent bank connections.

In such a situation, we cannot afford to stand back and watch as smaller industries -- which account for 80% of overall employment -- falter and collapse, pushing us further towards economic disaster.

Our political and budgetary focus must shift entirely towards the current crisis: First and foremost, we must implement wider and more reliable social safety nets to cater to the poor and unemployed. And, secondly, the size of our stimulus packages must be increased and made more accessible to SMEs for continued sustenance and employment retention.

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