According to a new report released by the World Bank, the ongoing pandemic has reversed Bangladesh's steady trend of poverty reduction, which had continued over the past two decades. Data from the government showed that the poverty rate in the country stood at 21.8 percent in December 2019. Therefore, it can be safely assumed that the rate right now is much higher than that.
Various studies that came out in the recent past had estimated that the pandemic created somewhere between 17.5 and 20 million new poor in the country. And the World Bank also said that 30 percent of the country's population is now living below the poverty line. Despite the government's relatively quick response to the economic shock from the pandemic, its aid packages to the poor were not very effective due to a number of implementation challenges. And small businesses also struggled to access the government's stimulus funds.
Once the first wave of the pandemic started to subside, things did begin to look up, according to the World Bank study. However, as the country is now being severely hit by a new wave of the virus, things could again get much worse.
As we enter a fresh round of "hard lockdown", the economy is expected to get hit hard again. And many more people could lose their jobs as a result, particularly those working in the informal sector—which makes up the majority of our labour force. In order to mitigate these losses and to prevent more people from falling back into poverty, the government needs to immediately come up with new aid packages. However, they must also be designed better and be delivered more efficiently.
At the same time, the government's number one priority has to be to reduce the spread of the virus, so that businesses can go back to functioning as close to normal, as early as possible. In the long run, that is the best way of ensuring that the economic shock of the pandemic is minimised. And for that, mass vaccination is key, as the World Bank pointed out.