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The coronavirus pandemic forced nearly half of the marginalised people in Bangladesh to borrow to just to get by amid income losses, according to a study of the Citizen’s Platform for SDGs Bangladesh released yesterday.
And they are likely to remain indebted for next four to five years as their incomes are yet to recover fully, it said.
“We have found that four out of five households have experienced financial hardship due to the Covid-19 crisis. People living in the coastal belts, in slums, persons with disability, and micro, small and medium enterprises suffered more than others,” said Estiaque Bari, a senior lecturer of the economics department at East West University.
He shared the findings of the study at the conference on “Bangladesh emerging from the pandemic: coping experience and policy choice”, jointly organised by the Citizen’s Platform for SDGs Bangladesh and the Centre for Policy Dialogue (CPD) at the Brac Centre Inn.
The survey, conducted among 1,600 marginalised households in February this year, found that seven out 10 households suffered either job losses or temporary shutdown of business in the early phase of the pandemic. The rejoining rate was 97 per cent, and they were mostly involved in low-paid informal sectors services, said Bari.
Average withdrawal of savings per household was Tk 34,460, and people in the haor, coastal and slum areas and the dalits and the returnee migrant workers had to dip into their savings.
And as the income has not risen enough, the incidence of overlapping membership at micro-finance institutions for loans and multiple borrowing are likely to increase, according to the study.
Bari said a dedicated relief programme should be taken for the marginalised communities throughout the pandemic period to safeguard their income loss.
He recommended the government provide soft loans to these marginalised households through local government bodies to speed up their recovery.
“The economy will need a recovery package 2.0 with distributive justice,” said Towfiqul Islam Khan, senior research fellow at the CPD, referring to an advanced version of the stimulus package.
The economist stressed the need for supporting the marginalised people at a time of rising prices of daily essentials and considering their struggle.
He said most of the macroeconomic correlates are in the recovery trajectory but at a different pace.
“Macroeconomic stability is no longer in a comfortable state because of rising commodity prices fueled by both international prices and unfavourable government policy, significant negative overall balance of payments leading to reduced foreign exchange reserves, and the volatile exchange rate.”
The government’s fiscal space has squeezed, according to Khan.
“The global environment is still uncertain and volatile – fragmented economic recovery and demand in the large economies, steep rise of commodity prices, the emergence of new (omicron) Covid-19 variant.”
At this stage, a targeted flow of fiscal resources to the more vulnerable households and relatively smaller and informal enterprises will have more aggregate domestic demand augmenting effect and protect the marginalised groups, he said.
Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling, said social recovery was still slow.
He said the stimulus package suffered from the problem of financing, management, and monitoring. “We have not seen any monitoring yet.”
In the opening session, MA Mannan, planning minister, said amidst the pandemic, Bangladesh had done better than many other countries like India and China in terms of growth.
“Exports have already rebounded. Besides, the agriculture sector has showed good performance.”
Regarding the vulnerable health sector, he said the government was working to modernise and strengthen around 15,000 community clinics to provide improved health care services to the people.
Now, at least 35 types of medicines are provided at free of cost to the patients from these clinics, he said, adding that training will be provided to build up the skills of health service providers.
The poverty situation has improved a lot than earlier stages, said the minister
Sultana Kamal, a core group member of the Citizen’s Platform for SDGs, said there was data anarchy.
“So, on what basis will the policy-makers take decision to overcome the situation?”
She, however, lauded the government as the pandemic issue was given attention in the 8th five-year plan.
Sudipto Mukerjee, resident representative of the UNDP Bangladesh, appreciated the remedial measures of the government, which managed the Covid-19 fallouts.
Even the economic resilience of Bangladesh has surprised many developed countries as the country achieved a good growth of GDP during the pandemic, he said, emphasising investment in the social development sector.
Fahmida Khatun, executive director of the CPD, called for robust investment in the health sector to set up physical infrastructures and develop the skills of physicians and nurses.
She called for continuing the subsidised incentive for SMEs as most of the entrepreneurs have not received loans.
She stressed the need for increasing the percentage of women in economic activities to 50 per cent from existing 36 per cent to accelerate the growth of GDP.
While presenting a keynote, Debapriya Bhattacharya, convener of the Citizen’s Platform for SDGs, said the disadvantaged people were disproportionately affected due to the pandemic.
In terms of income, savings and debt, the economic distress was more severe and prolonged compared to health and related fallouts. “Nutrition intake fell irrespective of employment status,” he said.
He listed four shortcomings of stimulus packages: insufficient in terms of GDP; they did not contain required cash transfer and food support measures; low coverage of eligible beneficiaries; and delivery deficit.
Hossain Zillur Rahman, chairman of Brac, said a transparent vision of the government was needed to help the economy recover fast.
Mustafizur Rahman, a distinguished fellow of the CPD, also spoke.
(TDS)
