Corona-induced fault-lines on Bangladesh economy

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The Covid-19 pandemic has wielded a devastating effect on the country's socio-economy in the past quarter, weakening and exacerbating numerous fault-lines and vulnerabilities that existed in a variety of sectors. That becomes obvious from a review of results released during recent times.

Take including the survey conducted simply by Bangladesh Institute of Creation Studies (BIDS) during Might. It found an impressive 16.4 million people sliding below poverty brand due to corona-induced difficulties.

Around 50 % of them reported a decline on income, while over 20 % among below Tk 15,000 monthly category claimed that they had no revenue. Among the persons earning significantly less than Tk 11,000 per month, 57 % had no income, 32 per cent observed a decline in earnings, and no more than 11 % reported salary at the previous level. This has took place in the wake of a 10 % rise in commodity price.

Another BIDS survey in small and medium enterprises (SMEs) shows 63 per cent workers usually do not anticipate any wages for May. Among the owners and managers, 66 % expected their sales quantity to be significantly less than the previous time, as 76 % factories had unsold shares and 73 % were yet to get payments against distributed commodities. The problem was worst in leather and leather items industry, fabric for domestic market, residence textiles and rural SMEs.

The workers reportedly revealed that their daily meals have come right down to 2.75 from 3 meals each day due to loss of income. It can be recalled that 96 per cent of the country's professional units participate in the SME sector, which accounts for 25 per cent of GDP and generates occupation for 86 % workers.

The BIDS claimed that Tk 300 billion would be needed to replace corona-induced losses along with payment of partial wages for staff up to November this season. But just a negligible part of the Tk 200 billion incentive package currently sanctioned by the federal government offers been disbursed in this sector till nowadays.

Meanwhile, a portion of expatriate Bangladeshi workers returning from the center East possess narrated harrowing tales of deprivations and harassment, in a survey conducted simply by the Refugee and Migratory Activity Research Unit of Dhaka University. The workers who returned from Saudi Arabia, the United Arab Emirates, Qatar and Malaysia alleged non-repayment of salaries and forcible return home due to the pandemic despite possessing necessary papers for stay. Regarding to available numbers, around 12.30 million expatriate Bangladeshis work in various countries around the world. A lot more than 100,000 of these have returned home since the outbreak of coronavirus.

Another alarming trend has been the push-migration of many unemployed citizens from Dhaka city with their ancestral homes. Regarding to a study conducted by BRAC in-may, about 36 % city dwellers have misplaced their careers and 3.0 per cent didn't receive salaries despite having jobs. Among the daily wage labourers, 62 % are actually without work. Profit of city dwellers possesses declined by 60 %, while this trend in addition has been seen in 10 various other district towns.

This outflow is having a multiplier effect on other sectors like housing, as rented houses are becoming vacant at an accelerated pace. This in turn is putting enormous economic pressure on the property owners, as evidenced by 'To-let' signs springing up all around the capital city.

Another computerized victim of Covid-19 has been the hotels and eating places sector, where as much as 3.0 million personnel were employed prior to the virus struck. But now about 60 per cent staff in this sector have grown to be unemployed. The aristocratic upper-end restaurants have largely been turn off, and others happen to be somehow carrying on organization with just one-third of personnel. The country's transfer, tourism and hospitality sectors will be facing a similar fate as passenger actions have been severely curtailed because of lockdown restrictions together with concern with mass transportation among citizens. This fear can be having an extremely detrimental influence on the country's stores and plazas.

The problems of RMG workers have become acute by now. Through the first three weeks of June alone, 11,000 personnel were sacked by 46 factories. Before that, 9,000 personnel were let go in 69 garments factories up to June 01, claims the government's commercial police. Although labour laws is being violated during these dismissals, the Department of Inspection for Factories and Establishments (DIFE) is normally however to take any action. This is happening in spite of the Tk 50 billion incentive bundle for the RMG factory owners sanctioned by the federal government. The textiles and jute sectors happen to be likewise enduring lethal bites of the corona. The government has now made a decision to send 25,000 workers used in 25 loss-incurring BJMC mills into retirement through golden handshakes, and revive those afterwards through public-private partnership initiatives. And alongside a shambolic health-sector response, the choke-keep on the education program is unlikely to become relaxed before September.

In a country focus report on Bangladesh, the International Monetary Fund (IMF) has claimed in mid-June that the monetary impact of Covid-19 in Bangladesh has been felt in three main areas: a drop in domestic monetary activity; a decline in RMG exports; and a fall in remittances. The most considerable problems facing Bangladesh today involve limited healthcare infrastructure for tackling Covid-19 that will require considerable support from advancement partners; and maintaining transparency, accountability, effectiveness and very good governance in measures taken to manage the crisis. The IMF also known as for an audit of Covid-19-related expenditures within a year following the pandemic disappears.
Source: https://thefinancialexpress.com.bd

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