How is the informal sector coping with the pandemic?
The world is going through an unprecedented situation and so is Bangladesh. The entire country has bottomed out due to the Covid-19 crisis and the impact has intensified.
The delayed declaration of the lockdown has proven to be nothing but a hollow step in preventing the consequences. Therefore, we can clearly see the outcome -- an increase in the virus spreading countrywide. In addition, the economic growth has slowed down.
Think-tanks and local and international experts are meticulously trying to observe the situation, understand the movements, and then offer advice accordingly.
It is a real challenge to dive deep enough to comprehend the impact on marginalized communities due to certain circumscriptions.
What’s happening to the marginalized?
As a result, this issue has remained out of the sight. Now, the question is: What’s happening to these people? How are they tackling the situation?
To feed my curious mind, I took the help of the Key Informant Interview or KII method to obtain the data. Keeping in mind the limitations, I interviewed 20 people of a coastal village named South Rajghat located in Matrabari, Moheshkhali, Cox’s Bazar.
The sample included pop-and-mom shop owners, beverage shop owners, seasonal fruit sellers, and tobacco and betel nut sellers. They were selected based on two criteria: a) they own a small business in the local community market (their family being solely dependent on it) and b) they have at least one school-going child.
After extensive analysis, I drew the following as the few key inferences representing the marginalized community during this crisis:
(1) The analysis suggested that, in comparison with the last two-and-half months, the marginal SME’s income had a decline of 50% to 80%. Furthermore, the tobacco and betel nut sellers faced the worst of the circumstances, having a steep 80% decline of their income.
This depicts that general people have had to reduce the part of their budget which was previously allocated in less necessary products from their daily expenses.
(2) Income has fallen robustly; however, the demand remains almost the same. Chiefly to tackle the pandemic, they started to consume from their own investment. Alongside, there is still a stream of income available as the lockdown has not been strongly imposed as of yet.
There is a chance of fear regarding what the situation will be after a few months given the lockdown becomes strict. Bankruptcy is a possibility for small businesses.
(3) To lessen the spread of the virus, the government has shut down academic institutions such as schools for an uncertain period of time. Though it might seem that the students are sitting idle in their homes, practically 90% of the male students are engaging full-time in their parents’ businesses by helping in financial auditing, selling products, etc.
(4) Recently, a report published by the World Bank apprehends that a large number of school-going children might drop out due to the massive fall of income. In my findings, the situation seems to be somewhat contrary.
All the key informants as well as a father of the primary school-going child showed strong optimism by assuring that their child would be going back to school whenever the situation normalizes.
Only about 20% of the parents said that their children wou not go to high school.
It was even mentioned that they would rather expect their children to keep supporting the family businesses. Nonetheless, maybe the extension of providing stipends and the school feeding program for high school-goers might change the scenario in the future.
Overall, it can be concluded that almost 85% of the working people, six crore in number, belong to the informal sector, making them the backbone of our economy. Lack of assured payrolls and ample security funds along with many other ambiguities have left them in a fragile state.
Moreover, on account of strong unified bodies like BGMEA or TOAB, neither of these people’s problems are well represented or solicited. Hence, the demand to settle the challenges remains unmet.
This report is to break the glass ceiling and uphold real problems of the field which may seem obscure by simply sitting in Dhaka. Finally, I urge the authorities to be considerate in order to mitigate the problems represented above by eventually taking the necessary steps.
Yusuf Munna is a student of development studies at Khulna University and a development economics enthusiast.