• Thursday, Aug 13, 2020
  • Last Update : 08:07 pm

OP-ED: Our kingdom for a framework

social distancing
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Bangladesh needs a plan for reopening its sectors

  The lockdown in Bangladesh, partially, if not for the most part, ended on May 31. The economy has started to reopen, albeit tentatively. Venues where people congregate en masse are closed or are operating in limited capacity.

The city’s wards in which the infection rate goes above a certain level are being sequestered and put under hard lockdown.

Officially, the government continues to instruct citizens to avoid going out, unless necessary. Despite these restrictions, there have been expert opinions suggesting that the lockdown in Bangladesh, which came too late, may have ended too soon.

Note: Blue-bars: daily new infections during lockdown; Green-bars: daily new infections after lockdown; Red-line: seven-day moving average.

However, we got where we are without a coherent, long-term reopening plan. Reopening the economy is a critical issue, and especially given that we are still far from the light at the end of the Covid tunnel, it is still not too late to put a coherent sector-wise reopening strategy in place.

This is what we try to do in this piece. It is based on a larger research project of ULAB’s Center for Enterprise and Society (CES), based on 100 expert interviews with leading Bangladeshi industrialists, CXOs, NGO leaders, startup founders, economists, and analysts. 

However, before we dive into the framework, let’s revisit arguments in favour of reopening. 

The rationale for reopening the economy

A recent BRAC study has found that there are 47.3 million poor people in Bangladesh who face high economic risk due to Covid-19. The study also found that for nearly 35% of surveyed households, at least one family member lost his or her job between March and May 2020. The average loss to household income is around a staggering 74%.

Moreover, over 1.4 million migrant workers have returned or are on their way back home because they have lost their jobs. This is more than 10% of our migrant worker population.

Meanwhile, as of June 2, at least 1 million garments workers have either been laid off or have permanently lost their jobs. Then there are the cottage, micro, small, and medium enterprises, whose businesses have come to a grinding halt.

Mind you, 87% of workers in Bangladesh are employed in such informal sectors. They don’t have paid leaves, work from home, or in most cases, savings. When the economy is shut down, these workers are out of jobs

But what about government-sponsored stimulus packages? It is true that the government has implemented various relief programs for the poor and vulnerable, including distribution of rice and cash-relief.

However, there are severe limitations to these relief programs, with respect to how scalable they are, or the efficacy of their distribution channels. With regard to distribution channels, digital financial services would have been quite appropriate, and the government has tried to remove various restrictions on mobile wallet transactions, which are laudable.

However, whether the distribution channels are banks for the cottage, micro, and small businesses, and mobile wallets for poorer segments, it is not practical to think that the 47.3% poor will have access to either bank accounts or wallets overnight. 

This is not to discredit the efforts of the government, but to emphasize that a regime of relief is not a meaningful solution for the poor. There is no “lives versus livelihoods” trade-off for these people. These distinctions only work for those farthest removed from hunger.

Assessing important sectors' susceptibility to spreading Covid

In lieu of primary data, as discussed earlier, we spoke to 100 Bangladeshi industrialists, CXOs, NGO leaders, startup founders, economists, and analysts. The idea was to go beyond the judgment and bias of a few.

We also considered available data to assess sectors on the basis of how (a) critical they are to the economy, and (b) how susceptible they are to Covid transmission risks.

The research yielded the following 2X2 matrix.

In this matrix, sectors that are vital to the economy but carry high transmission risk are referred to as “Alert Sectors.” Sectors that are important for the economy but pose relatively less risk are “Allow Sectors.” These, for the most part, have been allowed to remain open during the lockdown due to their importance.

Sectors that are not immediately critical to economic growth, but are critical in other respects, and also have low risks of transmission are “Advance Sectors.” These are the sectors that need to be incentivized and promoted aggressively.

Finally, sectors that are low-priority, economically speaking, and high-risk are the “Avoid Sectors.” Their cost to benefit ratio is high and therefore, should rank low on the government’s list of priority sectors to reopen.

The sectors are mapped out as follows. The vertical axis indicates their importance to the economy while the horizontal represents their risk-profile. 

Fig: “What do the experts think?” Economic importance versus COVID transmission risks Source: ULAB Center for Enterprise and Society Survey Data


Reopening the economy

In light of the above framework, we are proposing a three-phase reopening strategy for Bangladesh. In the first phase, Alert, Advance, and Allow Sectors will be allowed to operate. Alert Sectors must remain vigilant and follow strict guidelines to curb the spread of the disease. Advance and Allow Sectors can continue operations as usual.

In the second phase, once the spread of the disease is under control, Avoid Sectors, such as malls, restaurants, hotels, aviation, etc may be allowed to fully open. It is still too soon for Bangladesh to speculate on when that may be.

Once the peak infection point is reached and daily infection numbers begin to fall, a concrete timeline may be developed.

In the third phase, the pandemic is over, a viable vaccine for the disease has been developed, and the economy can fully reopen and return to the pre-Covid days. Most of the health and safety guidelines may be relaxed, although some may be maintained indefinitely.

Phase 1

This phase is characterized by an over-stretched health-care sector and an out-of-control pandemic. The critically important sectors have to reopen, but under strict guidelines. Safer sectors are allowed to operate as usual, and few are incentivized to expand.

Allow
Business as usual, with standard health and safety guidelines to be followed

Alert
Allowed to operate, but under strict guidelines

Advance
Business as usual, with standard health and safety guidelines; incentivized to expand and grow

Avoid
Complete lockdown of some sectors (aviation, hotels); others may partially operate (restaurants, retail stores)

Phase 2

This phase is characterized
by a falling infection rate,
and a pandemic that is
starting to come under control.
Some of the restrictions from Phase 1 may be relaxed and some riskier sectors allowed
to reopen.

Allow
Business as usual, with standard health and safety guidelines to be followed

Alert
Allowed to operate but under guidelines; some restrictions from Phase 1 maybe relaxed

Advance
Business as usual, with standard health and safety guidelines to be followed

Avoid
Partial opening of most sectors, but under strict guidelines

Phase 3

This phase is enacted when
the pandemic is over, and
the global economy has
started to return to normal. Most restrictions under
Phase 1 and Phase 2 may be relaxed, although some
may be maintained in

perpetuity.

Allow
Business as usual, with standard health and safety guidelines to be followed

Alert
Business as usual, with standard health and safety guidelines to be followed

Advance
Business as usual, with standard health and safety guidelines to be followed

Avoid
Business as usual, with standard health and safety guidelines to be followed

Provisions for the authorities to roll back the relaxing of restrictions with no notice period, if the number of infections begin to rise, should apply during all phases. The qualifying criteria for roll-backs should be clearly articulated and communicated to businesses and the people so that it is possible to implement appropriately. Clearly defined communication goals are integral to the success of any staggered reopening strategy. 

 Alert Sectors: Offices and factories

Among alert sectors are banks, wherein the pandemic presents an opportunity to invest in digital transformation. This will simultaneously increase accessibility of banking services and reduce traffic.

It is unlikely, however, that all banking services can migrate online, and given the crunch banks already face, to undergo a costly process of digital transformation. Branch banking will continue, but it is important to mandate safety precautions.

A study found that of 7,324 documented cases in China, only one outbreak had occurred outdoors. Another study from Japan calculated the risks of infection indoors to be almost 19 times higher than in an open-air environment.

There is also strong evidence that the spread of the disease may be linked to airflow. Therefore, opening banks and other offices, where people sit close to each other for hours, poses high risks. Steps that may be taken to mitigate these risks:

  • Mandatory mask-wearing inside banks and offices, especially for people who are likely to have proximity to others. Therefore, all visitors should be required to wear masks, as well as all personnel who deal with visitors or colleagues in close proximity.

  • Work from home and in shifts: If certain activities are migrating online and certain tasks can be conducted from home, there is no need for a full opening of offices. This will not only make offices a safer space, but also reduce the burden on public transportation. Rotational schemes are also being implemented.

  • Follow a zigzag sitting arrangement so that workers do not have to sit side-by-side. It is also a good time to reinstitute cubicles. Employees ought to be encouraged to conference call even within the same room.

  • Implement mandatory temperature testing of all workers when they enter the workspace.

The threat of working indoors in crowded conditions for a prolonged period is higher on a factory floor. Moreover, factories face an additional burden: The socio-economic profile of factory workers is poorer than office workers.

Be it for financial concerns, existing health concerns, lack of access to services and facilities, lack of awareness, or general apathy towards imposed rules and regulations, the infection-rate and death-rate are both higher in the poorer segments of the population.

This means that there is an added responsibility on the administrators and factories that are reopening to ensure a safe and secure work-environment for their workers. 

Certain factories are following protocols already, but what would be nice to see is case studies of how it is being done, so others can follow suit. This calls for a certain rising to the occasion of a handful of RMG entrepreneurs, not dissimilar to what happened in the months and years after Rana Plaza.

After worldwide criticism of the safety, health, and sustainability protocols of our factories, many stepped up to a degree that heads were turned internationally, and some of our factories won international awards and recognition.

Can we see some of this spirit now? It is bound to pay off in the future, for whoever is able to afford the short-term investment in health, hygiene, and ensuring controls. There are international aid agencies likely to want to step in with technical and financial assistance.

Outside and on public transport

Given that the risk of the spread of coronavirus is higher indoors, in cramped places, with strong air currents, public transport represents very high transmission risk. Theoretically, certain mitigation strategies may help, although there are limits to the practicality of implementing them on a large-scale in Bangladesh.

These include limiting passenger numbers; zig-zag seating patterns; orderly embarking and disembarking; ePayment systems; mandatory masking; etc. Moreover, public transport should be designated quiet zones: Speaking creates aerosols, increasing the risks of spread of the virus and speaking loudly increases the risks of spread, considerably.

Therefore, difficult as it may be to implement, there should be clearer guidelines on some of these matters, so at least those that have a sense of civic responsibility and personal safety can abide.

Advance sectors

The lockdown has led to surges in demand for eCommerce. After initial hesitation, the University Grants Commission (UGC) has made way for large-scale, integrative adoption of online learning. This was critically important, and kudos to the UGC and the Ministry of Education for their leadership.

However, sustained coordination between private universities who have led the way in online learning adoption and public universities and government authorities ought to continue.

This is potentially a value-adding sector, beyond the incredible long-term value of undisrupted education, both in terms of contribution to the GDP, and keeping young minds engaged and at home, while Covid lashes out outside.

The online learning market in India is expected to reach ~$2bn by 2021. So, why can’t we aim to reach $200m in the next five years? This, of course, requires support of technology-backed organizations, startups, and the ICT Ministry. 

Meanwhile, eCommerce has steadily been growing in Bangladesh, but not without significant quality control issues. Large swathes of customers find e-commerce platforms to be unreliable. Complaints that orders from e-commerce portals seem to disappear and products intended to be paid with cash on delivery sometimes never appear.

One or two providers have much better quality control, but at its embryonic stage, quality control issues and weaknesses in delivery infrastructure can do long-term damage to the sector’s growth potential.

Facebook commerce thrives meanwhile. It is important for authorities to consider incentivizing reputed organizations to sell goods and services online to create competition in the space, so the laggards are weeded out, and the customer benefits.

Authorities also ought to consider penalizing e-commerce platforms that do not meet quality standards or for that matter, safety standards deployed by third-party delivery companies. The crisis is an opportunity for e-commerce, and sometimes, a carrot and stick are better than merely a carrot. 

Avoid sectors

The Avoid sectors should be the last to reopen due to their relatively less importance to the economy and high risk-index.

However, incentivizing eCommerce is also going to help a large portion of the Avoid sector -- restaurants, malls, small retail, and boutique shops -- partially operate during the lockdown.

Some sectors such as aviation will eventually reopen since there is always critical travel that merits consideration.

Final thoughts

No country has yet devised a definitive roadmap to reopening the economy. Many countries that have found success in curbing spread and reopened, have also seen recent spikes.

China has had to re-quarantine; France and South Korea re-closed schools; and Germany had also dealt with a rise in new infections. In the US, the highest single-day infection count was also logged after a partial reopening.

In sum, no reopening has gone perfectly smoothly, but some have gone according to plan, in as much as the issues that came up were anticipated and contingency plans developed.

Bangladesh’s reopening plan, therefore, does not need to be perfect. But we need a plan. That’s for sure. 

Ahsan Senan is Lecturer, Department of Economics and Social Sciences, BRAC University. Sajid Amit is Associate Professor and Director, CES, ULAB. Professor Imran Rahman is Special Advisor to the Board of Trustees, ULAB. Oliur Rahman Tarek is Research Associate, CES, ULAB.

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