Jobs restored, incomes not

Although almost all the people who had lost their jobs in April to May last year because of the pandemic-induced economic downturn found jobs by February, 86 per cent said they are not earning enough to meet their daily necessities, according to a survey.

It also found that people's working hours shrank significantly, and they cut food expenditure and other expenses, obtained credit, and lost their savings.

The nationally representative household survey was conducted by the Centre for Policy Dialogue (CPD) in association with the Oxfam Bangladesh. Some 2,600 households in 16 districts took part.

The findings were presented at a virtual dialogue organised by the think-tank and the Oxfam Bangladesh in association with the Citizen's Platform for SDGs, Bangladesh yesterday.

Of the respondents, more than 60 per cent lost their jobs at some point in April and May in 2020 when the lockdown was in place to quell the virus. They did not find jobs for 95 days on average.

On a positive note, almost all of the people returned to work by February when the adverse impacts of Covid-19 started to recede, the survey report said.

Most of the incremental employment was generated in the agriculture sector (18.45 per cent). At the same time, many people left the services sector (4.38 per cent).

"Given the nature of economic recovery, it is likely that structural transformation went backwards," said Towfiqul Islam Khan, senior research fellow at the CPD, while presenting the findings.

The fieldwork for the survey was conducted between late January and early February 2021, so it did not capture the second wave of the pandemic.

About 78 per cent of the households surveyed had reduced expenditure to cope with the impact of the pandemic, while 52 per cent changed dietary patterns involuntarily.

About half of the households experienced a decline in savings, and more than half had to resort to borrowings. The average loan size doubled last year.

Only 20 per cent of the households received some form of support from the government. A higher number of households got support from private sources, such as friends, family, neighbours, and charities.

The study found more than 85 per cent of the people who had jobs before the pandemic were unemployed for more than one month after the virus hit the country. The average income of individuals eroded by about 12 per cent.

"The decline in income has pushed a significant number of people into lower-income groups, indicating a higher poverty incidence. At the same time, income inequality increased," Khan said.

All the recent research findings in Bangladesh represented a consensus on the impact of Covid-19 that people have significantly lost their income, said Debapriya Bhattacharya, a distinguished fellow of the CPD.

In many cases, they were employed again, but it couldn't compensate for their losses. Many have had to be employed at a job that needs a lower level of skill than the previous ones, he said.

"To cope with the situation, they are eating less and cutting down protein. They are unable to feed their children. Many children are dropping out of school and not getting enough nutrition."

It remains to be seen to what extent government assistance can effectively protect people from poverty and low-skilled employment, said Bhattacharya, also the convenor of the Citizen's Platform for SDGs, Bangladesh.

The noted economist said during the last budget, policymakers, while determining the strategy to pull the country out of the virus-induced downturn, had projected that the crisis would disappear by September-October of 2020.

"They were wrong. And when we had asked them to take a mid-term approach to tackle it, they mocked us. I want to give it back now. It was a state of reluctance and denial, and that reluctance and denial still persists among them," he said.

Bhattacharya said the idea of revival needed to be taken up through a medium-term framework even if the virus and the fear faded because the impact would last a long time.

"The one-year structure is not suitable for recovery, and we need a core budget to overcome it. A framework for at least two to three years is needed."

He said that coronavirus had a hostile effect on everyone in Bangladesh, but the proportion of the hostility on some vulnerable and disadvantaged people was much higher.

The people include tea garden workers, victims of river erosion, tribal, the untouchables, people from chars and haors, and floating workers in Dhaka. The pathogen has also hit small and medium industries.

"So, in addition to the simple revival and reconstruction, much more attention needs to be paid to these people. We have to have a dedicated approach towards disadvantaged people," he said.

"The integration of the recovery plan with structural transformation issues is very necessary."

Prof Rehman Sobhan, chairman of the CPD, said what would be of great relevance to policy interventions was to have a clear understanding of how the incidences of Covid-19 actually affected the areas of the economy.

 "We all underestimated the importance of addressing the coronavirus problem itself," he said. 

"If you look at China and Vietnam, you will see that they addressed the crisis, the primary problem, and took strict measures to contain it. This enabled them to set the path for the recovery."

"It's obvious that if you are responding inadequately or imperfectly to the coronavirus, then it enables successive economic problems to linger on. It may take you into a situation where you go through a partial recovery and a new crisis, which is happening now, then you have to go back to the problem again and revise it," he said.

Tapan Chowdhury, a former adviser to the caretaker government and managing director of Square Pharmaceuticals, said despite the pandemic, substantial investments were made in industries. "This is a hopeful scenario."

Rizwanul Islam, former special adviser on growth, employment and poverty reduction at the International Labour Organisation, said that the government should invest in labour-intensive rural road and infrastructure to stimulate the rural economy.

"This will lead to employment and earning opportunities for various types of workers and help in stimulating the domestic market. Localisation of such public investment programmes should be taken into cognizance."

Prof Mustafizur Rahman, another distinguished fellow at the CPD, said if an inclusive society and economy was not ensured, the crisis would have much deeper impacts.

Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry; Kamran T Rahman, president of the Bangladesh Employers' Federation, Fahmida Khatun, executive director of the CPD; Dipankar Datta, country director of the Oxfam Bangladesh, shared their views at the dialogue.

Ferdaus Ara Begum, chief executive officer at the Business Initiative Leading Development, Md Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, and Razequzzaman Ratan, president of the Socialist Labour Front, also spoke.