The influx of Rohingyas in Cox’s Bazar has raised poverty rates among the host population by approximately 52 percent owing to reduction in daily wages, said a World Bank (WB) report released yesterday.
The multilateral lender said average daily wages of the host population in the district fell by 24 percent between August 2017 and May 2018.
The average daily wage was Tk 402 before the recent crisis and it dropped to Tk 303 in in May 2018, according to the report.
“The reduction in daily wages is estimated to have negatively impacted labour incomes and increased poverty for hosts,” said the WB in its Bangladesh Poverty Assessment report.
However, the impacts have not been large enough to change national poverty rates, it added.
The report said the district of Cox’s Bazar in Chattogram division experienced a dramatic increase in the number of refugees arriving from Myanmar at the end of August 2017.
Within a period of three months, approximately 650,000 Rohingya refugees arrived to the two small upazilas of Teknaf and Ukhia and settled with high poverty conditions, more than doubling the population living in the area.
The report, citing a 2011 poverty map, said poverty rate for the upazilas was 38 percent, with more than 80 percent of the population living in rural areas.
The total estimated host population in the two upazilas was 680,000.
“This latest influx of Rohingya refugees poses a considerable welfare challenge for both the refugees and the host population. The concentration of refugees in a small geographic area is putting pressure on service delivery, local wages, and prices of commodities,” said the report.
The WB said the economy of Cox’s Bazar was predominantly agricultural and host workers in the area were highly reliant on wage employment and daily work.
The report using the Household Income and Expenditure Survey said 99 percent of Bangladeshi households in Cox’s Bazar have at least one household member working.
Importantly, about 70 percent of the host workers derive income from wage employment and 50 percent from daily work, making changes in daily labour wages of concern for local residents’ incomes, it added.
“Daily labour is particularly important for poor households, as 80 percent of local workers living in poverty obtain income from daily labour,” said the report. The report said the refugees had livelihood activities similar to Bangladeshis living on the other side of the border before they were displaced.
About 56 percent of the recent refugee households have at least one member working, it added.
The WB said the sudden and large influx of refugees in a relatively small area has impacted the labour market, leading to a fall in wages because of increased supply of labour in the area.
“Poor households save little, if any, of what they earn, and thus the fall in wages has an immediate and large effect on consumption and poverty. The short-term impact of lower wages is negative for those who are working, but there may be positive effects for those who hire labour,” said the WB.
It, however, said food products’ inflation has not significantly affected local poverty rates.