Unemployment situation in Bangladesh amid Covid-19 -Pallab Hossain
Bangladesh like other countries of the world is undoubtedly going through an arduous situation to overcome the loses caused by covid-19. Almost every sector has tremendously been affected due to the lockdown amid coronavirus pandemic.
According to a survey conducted by Centre for Policy Dialogue (CPD) around 20 million people, involved in informal sector, have already become temporarily jobless as a fallout of coronavirus, putting a serious stress on the economy. Rickshaw-pullers, transport workers, day-labourers, street-vendors, hawkers, the employees of hotels, restaurants and different shops, markets, construction workers and other informal workers are the worst victims of the halt in economic activity as they have lost their means to earn bread and butter.
The Labour Force Survey-2017, however indicated around 60.8 million people were in various employment or engaged in economic activity while the informal employment was dominating as 85.1 percent of the employed population engaged in the country’s informal employment. The contribution of informal jobs to urban areas was 13.1 million while 38.6 million in rural areas.
Of the total 60.8 million people employed in various ways both in formal and informal sectors, 14 million people get monthly salary from their employers while over a 10 million are day-labourers who get daily wages based on their work. Besides, he said, 27 million people are self-employed like hawkers, street vendors, and small businessmen like grocery and other shop owners.
An overwhelming majority of the country’s 37 million labour forces–self-employed ones and day labourers–have become temporarily jobless and they’ve no earning due to the effect of Covid-19, the survey indicated.
However there are around 4.5 million workers in the RGM sector. Many of the workforces have already become temporarily jobless while many others are at the risk of losing jobs due to the coronavirus shutdown.
The employment of RMG workers basically depend on foreign buyers. But now foreign buyers are cancelling their orders one after another. So, employment in the RMG sector is now at risk. According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data released on 31 March 1048 factories reported 907.14 million pcs worth $2.87 billion export cancelled/ held up.
It is predicted that the pandemic will increase the number of less educated unemployed people. According to ILO, Bangladesh has more than 85.0 per cent informal labour who are extremely vulnerable. The hardest hit of the impact would involve marginalized low-income people, many of whom are daily wage-earners and self-employed. Recently SANEM researchers ran simulations, which revealed that with a negative income shock of 25.0 per cent, the overall poverty rate would be 40.9 per cent, meaning that another 20.4 per cent of the population or 33.0 million people would plunge into poverty.
Besides, the closure of educational institutions is affecting approximately 37.0 million students across the country and if it lasts for a longer period it will engender far-reaching economic and social impacts. While the opportunity for skills development is already shrunk for the youth, the pandemic has made the whole situation even more difficult. It will narrow the upcoming employment opportunity for the fresh graduates. The current massive economic disruption is hurting the 20.0 million youth labour force of Bangladesh.
Meanwhile, SME entrepreneurs in the rural areas are being hit the hardest due to the impact of Covid-19, as their revenue has dropped by 67% in 2020 compared to the previous year. However, the average reduction of revenue for all SMEs is 66% in 2020 compared to 2019.
According to a survey titled “Covid-19 and SMEs: Understanding the Immediate Impact and Coping Strategies” annual revenue was reduced by 67% in 2020 compared to 2019, which is 66% for all SMEs sectors.
According to a survey, jointly published by the Asian Development Bank (ADB) and the International Labour Organization (ILO), Bangladesh will have 16.4 million new poor in 2020 as the income of working class in urban and rural areas have fallen sharply due to the lockdown to stop the spread of Covid-19 pandemic.
The economic importance of the more than 10 million migrants from Bangladesh who sent close to $18 billion in 2019 cannot be overstated. International remittances normally represent around 7% of Bangladesh’s GDP. But the COVID-19 pandemic is having an acute effect on Bangladeshi migrants abroad too, who are largely concentrated in countries with strict lockdown measures. Considering the large volume of Bangladeshi migrants in the Middle East, secondary economic impacts through depressed demand and falling oil prices will also likely add strain to the flow of remittances.
World Bank estimates have projected that total remittances by migrant workers from Bangladesh will fall to $14 billion for 2020 – around a 25% decrease from the previous year. Figures released by Bangladesh Bank show that year-on-year remittances for the month fell by 25%, indicating that the World Bank’s projection is, unfortunately, likely to hold true. The drop in these payments, which have traditionally averaged between $300 and $600 a month, will represent a significant loss to millions of household incomes in Bangladesh.
Under the circumstances, the government should make proper action plans so that the affected people in the informal sector can resume business and the jobless people can engage in economic activities once the situation gets normal.
The writer is a final-year student of Social Work, National University