Mr. Golam Morshed, UNO of Barhatta Upazila inaugurating emergency relief distribution initiative at Barhatta.
COVID-19 pandemic is a health emergency but severely affected the economy, lives and livelihoods, social values that impacted human behaviour negatively. The developing countries with fragile economy, shortage of skilled workforce, absence of necessary infrastructure for health and social services can confront the pandemic at best 4-6 months with its own resources, afterwards, they need external support. Given the nature of the virus, it is easy to predict that the pandemic will continue for long time but difficult to predict at this point the full extent of implications in social and economic sectors.
Bangladesh is a densely populated country with a developing economy, while agriculture, service and all other sectors contribute to GDP but economic growth of the country mostly depends on income from garment export and remittance of migrant workers.
Before COVID-19 pandemic, the overall economic situation was stable, GDP growth rate was 7-8% in the successive years, reduced the number of people living below the poverty line (20.5%) and the percentage of extreme poor (13%). Bangladesh developed the 8th five years national plan considering the SDGs to implement from July 2020, invested in developing infrastructure to attract Foreign Direct Investment and provided incentives to improve export. All these had a positive impact on macro economy, however, GDP growth has not benefited the poor, marginalised people particularly women equally like the rich and the middle-class.
COVID-19 pandemic affected the country severely, exposed the weaknesses of the governance, inefficiency of the bureaucracy, heavy reliance on the garment sector and remittances, have affected the overall economy. The World Bank predicted, GDP growth for the year 2019-2020 will be 1.6% in oppose to the plan of 8% in Bangladesh. The parliament approved the national budget in June 2020 for the fiscal year starting from July 2020 to June 2021, where 58% of the income is proposed to earn from revenue collection and the rest 42% will be borrowed from internal and external sources. Dependence on huge amount of borrowed money to manage the national budget would be tremendous challenging for the government and exposes financial inability to provide social and economic services to the poor and the marginalised sections because a lion share of the budget will be utilised to pay salaries to the government staff, interest and instalments of the debt.
The government had to lockdown normal activities, people’s mobility and all the economic activities to stop the spread of pandemic. The lockdown has a crippling effect on worker’s income and businesses across the country. The economy has almost come to a standstill; negative effects are being observed in almost all the sectors that resulted in poverty rate in Bangladesh have risen from 20.5 to 40.9 percent (CPD 2020).
Moreover, 10.30 million people are at risk of losing their jobs (Citizen Platform 2020), almost three hundred thousand migrant workers got back to the country and now unemployed, around a million garment workers already lost their work and several millions are on leave without pay for indefinite period, most of them are poor women, many of them may not again come back to the city. Cities attracted poor people from the villages to migrate for jobs in the past, but now the reversed trend is evident. Due to shrinking job opportunities at the urban centres, lower middle class and the poor people are going back to the villages. All these have a stringent impact on poor women to manage their daily lives.
Due to COVID-19, most of the people, particularly the poor women and other vulnerable groups, have experienced a deep cut in their income because of social isolation and almost immediately fell into financial crisis, as they usually do not have much savings. Without outside support, they are opted for borrowing money from any sources available for them to survive. In many cases, informal sources e.g. moneylenders, may be the only option available to them, which is very expensive. In many cases the poor are selling out their productive assets. Both of these further exacerbate their financial health, and push them further down the poverty line.
The agriculture sector is already reeling from the deep cut in the price of produce because of low demand and simultaneous increase in the cost of transporting the product; marginal and poor farmers are usually the hardest hit in these situations. Because of joblessness, poor and lower middle class people are going back to their ancient villages due to inability to pay house rent and meet up other costs associated with staying in the cities. This will have tremendous pressure on the agriculture sector, the only option for people to have a living in rural areas. The sector is already overcrowded because of surplus labour, accommodating new workers will affect full time employment of the rural masses which will have an effect on reduction of the daily wage rate.
Hundreds of thousands of migrant workers (around 300,000) have already returned, out of fear of the virus or upon losing their jobs, majority of whom belong to low and lower-middle income rural households. Many are also heavily indebted because they borrowed large sums for migration. Thus, returning migrants and their families are also facing immediate economic hardship. Around 100,000 people paid for migration to work in the middle east and other countries but they cannot go because of the pandemic. These people are tensed, whether they can go abroad to work within a few months or will they be able to get invested money back from the agencies?
Low-income people, especially poor women, ethnic and religious minorities those are involved with informal economic activities are the quickest hit in the COVID-19-induced economic crisis. In the urban centre, suddenly, the number of customers are reduced for street vendors, small shops, rickshaw pullers, auto drivers, and cobblers, to name a few. Many workers in the service sector such as restaurants and beauty parlours are either fired or sent home with unpaid leave. Home service providers such as maids are facing a similar fate. Most of these people depend on their daily income and the rest get by with monthly wages, with little or no savings.
The RMG industry in Bangladesh is facing a serious crisis. Millions of RMG workers have been affected economically, majority of them are women from poor socioeconomic backgrounds, and mostly working at a low wage in garments factories predominantly producing low-price garments. In the face of the concerns raised by the trade unions and the RMG employers, on March 25th 2020 the Government announced BDT 500 million stimulus package, of which the majority is allocated for workers’ wages and benefits. The finance ministry unveiled the guideline for the disbursement of the stimulus package for the export-oriented sectors to protect them from the economic fallout. It is reported that the owners of export-oriented companies and factories can pay wages to their workers for up to three months from the stimulus package (Daily Star 2.4.2020).
Trade Unions believed that RMG workers are at high-risk, burdened by the mental pressure of providing for their families in the wake of rampant job insecurity and financial suffering caused by unpaid wages, layoffs and exposure to infection. The trade unions themselves had played an active role in negotiating with owners, associations, and the government to ensure workers’ salaries and job security; although they are experiencing difficulties in communicating, mobilising and carrying out protests in lockdown circumstances. Trade Unions said, BDT 5,00 million stimulus package from the government was a timely initiative to lessen uncertainty about workers’ wage payments; but they criticised it for leaving workers at owner’s discretion, questioning the adequacy of the amount, and also doubting owners’ dependency on the government stimulus. They also criticised the package for not being designed on the principle of greatest need and for there not being an explicit role of trade unions behind the formulation & declaration of stimulus package (BIGD-2020).
In terms of gender equality, Bangladesh has not performed better than any other developing countries. The country is one of the worst performers in ensuring economic participation and creating opportunity for women and marginalised populations to have reasonable share in state and non-state resources including access to employment, health and legal services as well as changing perception of men about equal rights of women. As a result, women leaders and CSOs expressed concern on increased gender-based violence due to lockdown, isolation, stress and poverty.
Increase in GBV, especially domestic violence, child marriage, abuse, exploitation, neglect to the elderly people is already evident in the society. In addition, 49.2% of women and girls in households feel safety and security is an issue due to the lockdown and loss of livelihoods. Impact of COVID-19 putting adolescent girls at high risk with insufficient access to sexual and reproductive health management and child marriage. Referral systems are not well functioning as police, health and social services are diverted to COVID-19 response. (UNDP 2020) According to a study by The Bangladesh Nari Sramik Kendra (BNSK) on internal migrant female workers, almost 94% of workers in Dhaka faced domestic violence for the lack of income during the pandemic. The study was conducted from the period of March-April 2020, and covered 154 families from urban low-income areas. Majority of women (88%) in the survey worked in informal jobs such as domestic help, street vendor and cleaner; and the remaining 12% were garment workers. Respondents from the study reported their husbands tortured them due to the mental stress followed by economic insecurity caused by job losses.
Another report alleged rise in domestic violence cases in Bangladesh during the lockdown. Focusing on the recent MJF study conducted in April 2020 with 17,203 women, which revealed that 4249 women were subjected to domestic violence during the lockdown, the report stated that lack of social activities and financial pressures are increasing rifts within families.
Lack of oversight and monitoring leading to discrimination, violation of rights, anomalies and malpractices. Inadequate social service provision heightened vulnerability to stigmatization and discrimination of the marginalized groups. Institutional accountability weakened due to lack of access to services and grievance platforms for people to complain, report and seek redress.
BNPS believes, prevention and mitigation led by women and youth supported by the community leaders, public and private sectors can have quick and impactful results. To improve the situation, it is necessary to increase institutional and community capacities and counter discrimination, prevent violent extremism, and violence against women and vulnerable groups. Ensuring continued functioning of small producers, informal workers and SMEs across the sectors is vital to continue production and safeguarding access of vulnerable people to food and other goods and services are essential. To do this, the situation should be analysed using equity lens, ensuring gender equality in all the services including incomes and employment. Special effort needs to be placed on stopping drop out of adolescent girls from the schools and child marriage.
