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https://doi.org/10.1177/0971523121995072
South Asian Survey
28(1) 57­
–71, 2021
Š 2021 The Author
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DOI: 10.1177/0971523121995072
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Article
COVID-19 Impacts on
Employment and
Livelihood of Marginal
People in Bangladesh:
Lessons Learned
and Way Forward
Mohammad Imran Hossain1
Abstract
The Novel Corona Virus (COVID-19) has created tremendous negative impacts
on the livelihood of the marginal population in Bangladesh. Many people working
in the informal sector have lost their job and income due to the ongoing
pandemic. Unemployment and poverty among the people in both urban and
rural areas throughout the country have increased. The success in economic
growth in the last few decades could not save poor people to become extreme
poor because economic prosperity was not inclusive in Bangladesh. This study
tries to identify some of the impacts that COVID-19 has imposed on the lives
of marginal population. Then it indicates some of the serious limitations of the
existing economic policies. This article suggests that only growth-oriented policy
measures are not sufficient to reconstruct the economy in the post-COVID era.
Rather Bangladesh needs to adopt employment-oriented economic policies that
are capable to create more jobs and reduce poverty and inequality.
Keywords:
COVID-19, marginal people, loss of income and employment, poverty and
inequality, Bangladesh
1School of Business, University of Liberal Arts Bangladesh, Dhaka, Bangladesh.
Corresponding author:
Mohammad Imran Hossain, School of Business, University of Liberal Arts Bangladesh, House 56,
Road 4/A, Dhanmondi, Dhaka 1209, Bangladesh.
E-mail: imran.hossain1@ulab.edu.bd
58	 South Asian Survey 28(1)
Introduction
The ongoing Novel Corona Virus COVID-19 pandemic has created an
unprecedented economic and social crisis in Bangladesh (Kumar & Pinky,
2020). The substantial progress in household income and poverty reduction
during the last few decades is in a risk of being eroded due to income losses of
the poor. The observed consequences of a sharp decline in demand for
manufactured goods and services due to various control measures taken by the
government particularly from the informal sectors such as the agriculture,
export-oriented ready-made garments and other such labour-intensive sectors
of the economy have affected employment and livelihood of marginal people
(Genoni et al., 2020). In addition, households engaged in informal services and
labour-intensive activities such as construction workers, rickshaw pullers, day
labourers and owners of small grocery stores are in a great danger of income
losses due to slower demand and social distancing measures (Islam et al.,
2020). Moreover, the COVID-19 outbreak and the healthcare burden, together
with related disruptions, are expected to exacerbate the negative impacts on
employment, household income and livelihood in both rural and urban areas
(World Bank, 2020).
Official unemployment rate in Bangladesh is around 4% and every year 2–2.2
million educated unemployed are being added to this list (Trading Economics,
2019). Among the employed people, majority of them are in the informal sector
(Maligalig et al., 2009). Policy Research Institute (PRI) (2020) predicts that
unemployment status of the country will be dreadful sooner due to the pandemic
and related control measures of the government. Table 1 shows unemployment
situation in Bangladesh of the year 2020.
According to Ali and Bhuiyan (2020), a large number of people have recently
become jobless while many more are at the danger of losing jobs. Particularly, the
poor segment of the population who have very small or no saving at all is the
worst victim of the economic meltdown. It is estimated that COVID-19 has
pushed 16.5 million people mainly rickshaw-pullers, transport workers, day
labourers, street-vendors, hawkers, construction labourers and the employees of
hotel, motel and restaurants back into poverty (Islam & Jahangir, 2020). Riaz
(2020) found that 20 million people who solely rely on the informal sector jobs
for their livelihood have already lost their jobs and become temporarily
unemployed due to the measures taken by the government to contain the spread of
the corona disease virus.
Table 1. Unemployment and Underemployment in Bangladesh, 2020.
Gender Unemployment,%
YouthUnemployment
(15–24), %
Labour
Underutilisation,%
Total 4.3 12 7.1
Men 3.3 10 4.8
Women 6.4 15 11
Source: ILO Key Indicators of the Labour Market (KILM).
Hossain	 59
Employment Trend and Informal Employment in
Bangladesh
The total employment in Bangladesh absorbs 70 million workers in 2020.
Employment in the agriculture sector and the service sector adds 79% of the total.
The rest are in the industry sector. Table 2 shows that employment in agriculture
sector has been decreasing while service sector employment and industry sector
employment have been increasing since 2000. In 2020, the service sector
dominated with its largest employment share of 40%.
A total of 95% of the agriculture sector jobs are informal whereas 72% of
total employment in the service sector and 90% of the total employment in
the industry sector are categorised as informal (Danish Trade Union
Development Agency, 2020). Islam (2020) reported that 85%–90% of the
total employment in Bangladesh is informal. International Labour
Organisation (ILO) estimated that around 57% employment in Bangladesh is
fragile without a formal contract. ILO categorises such employment as
delicate category and includes day labourers and other informal jobs. On the
other hand, according to Mujeri (2019), almost 85.1% of the total employed
people in Bangladesh work in the informal sector. Around 13.1 million
informal jobs are ruling in urban areas and around 38.6 million are in the
rural areas of the country. Table 3 indicates that informal jobs dominate in all
sectors of the Bangladesh economy. Among the broad sectors, 95% of the
agriculture sector and 95% of the industry sector jobs are informal. Service
sector had an informal employment share of 72% in 2017.
Table 2. Employment Trend by Aggregate Sector, %, 2000–2020.
Sector 2000 2010 2020
Agriculture 65 47 39
Services 25 35 40
Industry 11 18 21
Source: ILO Key Indicators of the Labour Market (KILM).
Table 3. Informal and Formal Employment (percentage in total employment) and
Employment Distribution by Broad Economic Sector, 2016–2017.
Formal Employment (%) Informal Employment (%)
Gender
Men 18 82
Women 8.2 92
Sector
Service 28 72
Industry 10 90
Agriculture 4.6 95
Source: Bangladesh Bureau of Statistics, Labour Force Survey (LFS), 2016–2017.
60	 South Asian Survey 28(1)
According to Khondker (2019), the share of the informal sector of GDP in
Bangladesh is 43%. Thus, the economic value of the informal sector jobs and the
contribution of the people who work in the informal sector are inevitable. Table 4
presentsinformationaboutGDPshareofformalandinformalsectorsinBangladesh.
Manufacturing sector experienced a significant rise in number of employed
people during the last two decades (Nath, 2012). Employment in the ready-made
garment (RMG) industry with about four million workers has contributed greatly
to this increase (Islam et al., 2016). RMG is playing a great role in the changing
economic and labour landscapes, as it is one of the drivers of dramatic drop in
extreme poverty among employed. This particular sector has played a big role in
empowering women by employing female workers with limited or no education at
all (Raihan & Bidisha, 2018). These people of the society are in a great danger of
Table 4. Contribution by Formal and Informal Sector as GDP Share.
Industry/Sector GDPShare(%)
GDP Share of
FormalSector(%)
GDP Share of
InformalSector(%)
Agricultureand
fishing
18.6 3 15.6
Mining and
quarrying
1.2 1.2 0.0
Manufacturing 17.9 11.1 6.8
Electricity, gas
and water
1.1 1.1 0.0
Construction 8.3 5.6 2.7
Trade 14.9 5.0 10.0
Hotel and
restaurant
0.8 0.5 0.3
Transport,
storage, and
communication
10.7 8.0 2.7
Financial
intermediation
1.8 1.8 0.1
Real estate
and business
activities
6.8 5.1 1.7
Public
administration
2.8 2.7 0.1
Education and
health
5.0 4.6 0.4
Community
and other
privateservices
10.2 7.9 2.3
Total 100 57.0 43.0
Source: ADB (2012).
Hossain	 61
losing income and livelihood as the corona-caused epidemic has left a large portion
of them jobless. Especially employment in the RMG Industry is facing a great
problem of income loss and joblessness due to a sudden decrease in demand for
Bangladeshi RMG products in US and European markets (Bhattacharjee, 2020).
Objectives
This study aims to deliver a comprehensive and indicative overview of some of
the observed and possible impacts of COVID-19 on the livelihood and income of
marginal people in Bangladesh. It also tries to document the lesson learned from
this unexpected economic turmoil caused by the pandemic and identify some of
the limitations of policy measures implemented so far by the Bangladesh
government during the last few decades. Finally, this study presents some policy
recommendations to reconstruct the economy in the post-COVID era and to make
economic growth more inclusive for marginal people. In short, the main attempt
of this study is to summarise some of the socio-economic impacts that are already
seen and potential impacts in the near future of the COVID-19 pandemic on the
segment of marginal population in Bangladesh and suggest policy proposals that
are supposed to be appropriate to reconstruct the economy in the post-COVID era.
Materials and Methods
This article does not perform any quantitative analysis of data to present statistical
estimates. Rather it is designed on the basis of secondary information only because
it is very early to collect broad data on COVID-19. Publications that only focus
the corona pandemic and its impacts on employment and livelihood of marginal
people in the context of Bangladesh are not easy to find. Therefore, for the purpose
of this study, information from various published materials and the Internet
resources were utilised. For a better understanding, publications by different
media outlets, think tanks, research agencies, policy experts and newspapers were
used as the source of information.
Impacts of COVID-19 on Employment and Livelihood
Amartya Sen’s concept of ‘entitlement’refers to a person’s ability to acquire goods.
Achieving this capability usually depends on the production potential of the person
and the opportunity to sell or exchange his/her labour (Sen, 1981). Contrary to the
conventional economic concept of food supply, Amartya Sen’s entitlement theory
argues that food security could be in jeopardy if capacity building is hampered
(Omosa, 1998). Those most affected by the Corona epidemic are those whose
entitlement or ability of exchange depends on their own or others’movements. For
example, the Corona epidemic has reduced the source of income for urban migrant
62	 South Asian Survey 28(1)
workers in the urban informal sector or made it impossible for them to exchange
the kind of labour they sell (FAO, 2020). According to the Google COVID-19
Community Mobility Report (of 25 May 2020), in the Corona situation due to
various health restrictions, the movement of people in Bangladesh’s public transport
has decreased by 56%, in the raw market by 41% and in shopping malls by 72%.
The corona virus disaster has caused two types of employment loss such as
temporary lockdown-induced job loss and permanent impact job loss. Temporary
job loss due to lockdown in the country for two months was estimated to be in
between 12 and 17 million (Ahmed & Kamal, 2020a). Shutdown of the major four
sectors in the economy has created this job loss. Seven million jobs in the micro,
small and medium enterprises (MSME) sector, five million jobs in the transport
sector, three million jobs in the construction sector and more three million jobs in
the manufacturing sector were disappeared temporarily (The Financial Express,
2020). An additional 10 million people have become jobless in the agriculture
sector (Light Castle, 2020). If that figure were added, the number of temporary
job loss would end up somewhere around 25 million.Table 5 summarises estimates
by different development agencies and think tanks about permanent impactful job
loss due to COVID-19 in Bangladesh.
The slum people in the city areas and the rural poor who rely on daily income
for their everyday livelihood are some of the worst victims of COVID-19
(Sakamoto et al., 2020). Currently, a total of 646,000 people mostly engaged in
the informal sector live in over 3,300 slums in the capital Dhaka (Asian Times,
Table 5. Estimates from Various Sources of Permanent Impactful Job Loss.
Source Unemployed(inmillion)
Individuals Impacted
Financially(inmillion)
World Bank 7 28
Asian Development
Bank (ADB)
4 16
Policy Research
InstituteofBangladesh
(PRI)
12 58
Centre for Research
and Information
Dhaka (CRI)
6 24
Centre for Policy
Dialogue (CPD)
– 56
Power and
ParticipationResearch
Centre (PPRC)/
BRAC Institute of
Governance and
Development (BIGD)
– 70
News interviews – 50
Source: Ahmed and Kamal (2020b).
Hossain	 63
2020). On the other hand, more than 70% of Bangladesh’s total population lives
in rural areas (BBS, 2015). The average income of this poor people has dropped
by more than 80% since the outbreak of the corona disease. Slum people lost 82%
of their daily income which is a drop of about 81 Bangladeshi taka ($0.97) from
their previous income of 108 taka ($1.30) in February, while per capita daily
income loss among the rural poor was 56 taka ($0.67) which is a decline of 79%
of their previous income of 89 taka ($1.07) (Kamruzzaman, 2020).
To cope with the income losses, in the urban areas, 69% household reduced
their food consumption; the same number of people took help from their friends.
A total of 38% of household received government help while 42% used their
savings (Business Standard, 2020). Among the rural households, 63% reduced
food consumption, 50% received help from friends while 33% got help from the
government, 55% had to use their savings, 22% households searched for more
work and 22% obtained credit. Table 6 shows the ways in which affected people
coped with income loss during the pandemic (Genoni et al., 2020).
Shima Begum, from Mohammadpur, Dhaka, is one of the millions of such
victims in the country. Shima used to work as a part-time domestic worker in three
households adjacent to her residence. Her husband is a rickshaw puller in the city.
She used to rely on her income of 5000 taka, which is equivalent to US$ 60, to pay
the rent of a small room for her family with two children. Since the COVID-19
outbreak, she lost her job and now it is very difficult for her to survive with the
reduced income of her husband. She said:
Now I cannot afford basic expenses like food and clothing of my family. My two
children had to leave school because it is not possible for me to pay fees. Today, I
cooked only rice and very low-price vegetable. With only a lesser income of my
husband, I cannot manage fish or any other expensive food with the rest of the
money after paying the rent.
This challenge to the livelihood of the people is not only related to the internal
dynamism. Rather the global situation is having a deadly impact.About 10 million
Bangladeshi people work abroad. Hundreds of thousands of them have returned
to the country and many are waiting to return after losing their jobs. They do not
seem to be able to re-enter those countries any time soon, which created a
Table 6. Ways to Cope with Income Shocks among Poor and Vulnerable Households
(in rural and urban Bangladesh, %).
Rural Urban
Reduced food consumption 63 69
Help from friends 50 69
Government help 33 38
Used savings 55 42
Looked for more work 20 9
Obtained credit 22 30
Source: Genoni et al. (2020).
64	 South Asian Survey 28(1)
tremendous negative pressure (Palma, 2020). Access to the international labour
market may be further disrupted as the Corona situation is prolonged with fears
that falling oil prices will reduce the demand for Bangladeshi workers in the
Middle East (Mahmud, 2020). Such incidents might worsen the economic
situation of the country in the near future (Uddin, 2020).
Faridul Islam, from Brahman Baria district 107 kilometres from the capital, is
such a victim. He returned from Saudi Arabia in the beginning of March 2020 and
does not know when he can go back to work. Along with job loss and income loss,
returnees like Faridul also face a social stigma and mental pressure. They feel
anxiety and unsafe about their future livelihood. He said:
I want to live my life like others do. I badly need to go back Saudi Arabia again;
otherwise, my family will not be able to survive. I have to repay the loan that I have
received from my relatives. But I have no idea when or whether I can go overseas again.
During the Corona epidemic, 87% of the country’s poor were in food and
nutrition crisis. The livelihood of 98% of the country’s poor has been severely
affected due to income loss. Most of them do not have minimum savings, which has
had an additional negative impact on their food intake and nutritional status during
this income crisis (bdnews24.com, 2020). A survey by Power and Participation
Research Centre (PPRC) and BRAC Institute of Governance and Development
(BIGD) found that 5% of poor families that were surveyed during the lockdown
period could eat only once a day. However, before the onset of the epidemic, 91.7%
of respondents could eat three meals a day and the rest two meals a day. Poor people
in all over the country were suffering from acute shortage of adequate and nutritious
food, which put them at a risk of long-term health problems (The Daily Star, 2020).
Another seriously affected group is the low-income RMG workers. The RMG
sector of Bangladesh which accounts for employment of around 4.1 million
workers have already fired or furloughed more than a million due to declining
demand from global fashion companies. At present and during the crisis, the
number of cancelled orders only look to set rise (Marc, 2020). According to
Bangladesh Garment Manufacturers and ExportersAssociation (BGMEA), global
buyers cancelled and held up a worth of US$2.95 billion export orders from
approximately 933 factories throughout the country (Reza et al., 2020). Citing
BGMEA data, Fair Wear (2020) reported that cancellations of planned orders, for
April–December 2020, amounts to nearly US$1.7 billion. Around 2.3 million
RMG workers (which is 47% of the total sector employment) might be fired as
both cancellation of current export orders and uncertainty about future exports are
rising (Mahmud et al., 2020).
The coronavirus pandemic has substantially impacted MSMEs across all sectors
of the economy (DCCI, 2020). Many MSMEs are facing distressed time due to
limited sale and shortage of funds to maintain business operations and pay off salaries
of the employees and workers, which is propping up the unemployment rate in the
poor and lower-middle income families (Mahmud et al., 2020). There are around 18
million people working in the sector and many more from their family rely on it
(Alauddin & Chowdhury, 2015). Employees in the MSMEs in all sectors are facing
a threat of permanent layoff (Ahmed & Kamal, 2020a). Loss of these jobs has
Hossain	 65
appeared as the main challenge of COVID-19 impact on livelihood of the people
working in the MSMEs. Many of the job loss caused by government-imposed
restrictions or social distancing measures are temporary. However, most of the layoffs
in the MSMEs caused by the unavoidable decline in trade and output are permanent.
Another harshly affected group is the people working in the private non-
government education institutes. Many low-income schoolteachers in both rural
and urban areas throughout the country have lost their jobs because the students
of those private institutions cannot pay the fees. Students at these schools are
mainly from poor families many of whom left the school forever due to the crisis.
At this time of the Corona epidemic, not only students but also teachers are in a
threat of dropout. Especially, extreme economic uncertainty has arisen among
teachers working in private kindergartens and non-government schools all over
the country. Many of them are being forced to move to low-level occupations and
a new poor class is being created.
Discussion on Lessons Learned and Future Directions
It is true that coronavirus has had a major negative impact on the economy of
Bangladesh and economic growth has slowed down considerably (Mahmood,
2020). More importantly, COVID-19 has shown us how vulnerable is the segment
of marginal population. It also reminded some important issues that were ignored or
were not focused previously on economic policy measures by the government. The
question is what the recovery of the economy during the COVID period will be and
what kind of changes does the economy really need in the post-COVID situation.
The economy of Bangladesh has grown rapidly since the early 1990s
(Chakravorty, 2019; Hossain, 2019). This trend of economic growth has taken a
big hit by COVID-19. Not only economic growth but also the kind of success that
has been seen in poverty alleviation in the last few decades has taken a big shake
in the last few months. Suddenly a huge population have fallen below the poverty
line. Those who were poor before have become poorer. There is also a fear that a
large part of them will not be able to get out of poverty suddenly. Thus, the
ongoing crisis has had a medium to long-term impact.
The government has taken some measures to implement a combination of
fiscal and monetary stimulus (IMF, 2020). However, a jobless recovery might put
the socioeconomic progress at risk, especially in the context of a county with a
large number of marginal population who rely on their daily income. More sector
specific stimulus is required to protect informal jobs and also to create new low-
skill low-income jobs. This study suggests that immediate action plans require
some key points to be focused.
The government needs to provide additional incentives to labour-intensive
sectors and sub sectors. These include agriculture, RMG, livestock and fishery
subsectors, medical goods and equipment manufacturing, food processing, transport
and logistics, retail trade, construction, and pharmaceuticals and healthcare, and so
on. Especially, the agriculture sector with its 41% share contributes the highest in
total employment in the economy (MOF, 2017) and the RMG is one of the largest
66	 South Asian Survey 28(1)
employing sectors for women in the country. Incentives in terms of easy loan may
help recover further employment loss in these two sectors.
Toprotectthevulnerablepeople,thegovernmentshouldresumethelabour-intensive
infrastructure projects at the earliest convenience. Especially, the labour-intensive
public work projects that are to create short-term employment need to be restarted.
Informal sector MSMEs who do not have easy access to formal bank loans
(Bosri, 2016) need to be taken close care of by providing immediate access to
recovery funds. NGOs who work in same areas along with banks can be leveraged
to channel more funds to refinance lost businesses. Different initiatives such as
digital finance services, formalised banking incorporation, and shared risk in loan
provisionshouldbeintegratedforMSMEstoovercometheimpactsofthepandemic.
Immediate steps should be taken in skill development programs for healthcare
workers and to up skill returning remittance workers. Skill training may raise
incomes and improve standards of living among the people who work overseas
(World Bank, 2017). Vocational skill development training related to job linkages
should be considered as a priority in the current coping phase and also for the
future phases of recovery of the pandemic so that trained people can utilise their
earned skills in national or international marketplaces.
The ‘Amar Gram Amar Shohor’ initiative could be an engine of localised
economic activity and job creation. Fast tracking this project in the rural areas
may provide opportunity to decentralise services and local economic activities.
Especially, decentralisation of online and digital sectors will boost employment
and revenue in the rural areas.
Later, in the post-Corona era, what aspects of the Bangladesh economy will
actually be a priority is one important aspect of this study. A big question is what
kind of economic philosophy will work in the place of recovery, the process of
recovery and the kind of reconstruction of the economy in the post-COVID
situation. There is an economic philosophy behind any development plan. A very
big aspect of Bangladesh’s economic philosophy in the last few years was GDP
growth-centric which can be termed as ‘growth-oriented economic philosophy’
(bdnews24.com, 2020). The problem with this growth-centric economic decade is
that if development talks are so dependent on growth, a blurred vision will always
work towards the larger goals of social development and inclusiveness.
To make economic growth inclusive for all people, three areas are very
important: poverty alleviation, employment growth and elimination of inequality.
The indicators that are prevalent about poverty and inequality in the Bangladesh
economy are actually very unrealistic and are measured only by measuring
income. As a result, the multi-dimensional nature of poverty remains ignored and
unfocused. A policy focus on such a multi-dimensional concept of poverty
alleviation in the post-COVID situation is needed. It is important that the poverty
alleviation plan and the kind of policy formulation and initiatives will cover those
multi-dimensional poverty issues.
Besides poverty, one of the country’s biggest challenges is job creation (ILO,
2013). The rate at which employment has grown over the past few decades is
much lower than the rate at which economic growth has grown. There is a fear
that the country is growing without employment. A large number of people who
are engaged in the informal sector do not have any improvement in their work
Hossain	 67
environment and in many cases they are deprived of various forms of labour right
(Mujeri, 2020). Moreover, the post-COVID situation will pose a major challenge
to current employment and future employment creation initiatives. During the
COVID, many have been forced to change professions, enter lower jobs, work for
lower wages and have lost their livelihoods. In formulating economic recovery
policies in the post-COVID situation, it is important to keep in mind that economic
recovery plans need to be linked to employment creation. How to bring the large
number of people who have lost their jobs and forced to change professions back
into the mainstream of work, as well as how to ensure the working environment
and labour rights of the large number of people who are in the informal sector,
should be the focus of the new plan.
Another big challenge of the economy is inequality. Bangladesh have seen the
pace of economic growth over the past decades but also the grey picture of inequality
(Osmani, 2008). Inequality is not just economic. Besides economic inequality, the
issue of social inequality is also very high in Bangladesh. There are major
inequalities in access to health and education services (Mannan, 2013; Son, 2013).
Despite strong growth over the past decades, economic inequality has increased
which raises the question of how inclusive this growth is. Inequality in society
increases if massive employment is not created, if there is a rampant corruption in
thesocietyandifsomelargegroupswhoarepatronisedinvariouswayseconomically
and politically to create illicit wealth and if they smuggle money abroad. If action
is not taken against them, the causes of inequality cannot be eliminated.
In addition to economic inequality, there are terrible inequalities in education
and healthcare (Matin, 2015). In the case of access to healthcare, wealthy people
somehow get better health care at home and abroad but a large number of people
who depend on government health care are deprived in many ways (Joarder et al.,
2019). COVID-19 taught us a great deal that with such a dilapidated state of the
health sector, it is very difficult or even impossible for the country to deal with the
crisis in coming days.
Conclusion
In summary, in the post-COVID situation, there is an opportunity to rebuild the
economy in a new way. It is very important at this time to have an idea and
preparation for how to rebuild the economy. The COVID situation demands a
departure from our conventional notions. In the post-COVID situation, a new action
plan is also needed for the drivers of Bangladesh’s economy in the new reality. At
the same time, it is time to make reforms and action plans that could not be made in
the pre-COVID situation, but which are urgently needed for inclusive development.
History says that crisis creates an opportunity to think new. One of the positive
aspects of this ongoing crisis is that it gives an opportunity to rethink the
development philosophy, economic philosophy and action plan of the days ahead.
The focus of that new thinking should be to move away from growth-centric
narrow thinking and move towards a multi-dimensional development plan. If this
discussion with partners, policymakers and those involved in development
68	 South Asian Survey 28(1)
planning and implementation can begin now, and if the right policies and action
plans can be set, undoubtfully the country will be in a much better position in
economic and social construction in the post-COVID situation.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship
and/or publication of this article.
Funding
The author received no financial support for the research, authorship and/or publication of
this article.
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covid 19 presentation.pdf

  • 1. https://doi.org/10.1177/0971523121995072 South Asian Survey 28(1) 57­ –71, 2021 Š 2021 The Author Reprints and permissions: in.sagepub.com/journals-permissions-india DOI: 10.1177/0971523121995072 journals.sagepub.com/home/sas Article COVID-19 Impacts on Employment and Livelihood of Marginal People in Bangladesh: Lessons Learned and Way Forward Mohammad Imran Hossain1 Abstract The Novel Corona Virus (COVID-19) has created tremendous negative impacts on the livelihood of the marginal population in Bangladesh. Many people working in the informal sector have lost their job and income due to the ongoing pandemic. Unemployment and poverty among the people in both urban and rural areas throughout the country have increased. The success in economic growth in the last few decades could not save poor people to become extreme poor because economic prosperity was not inclusive in Bangladesh. This study tries to identify some of the impacts that COVID-19 has imposed on the lives of marginal population. Then it indicates some of the serious limitations of the existing economic policies. This article suggests that only growth-oriented policy measures are not sufficient to reconstruct the economy in the post-COVID era. Rather Bangladesh needs to adopt employment-oriented economic policies that are capable to create more jobs and reduce poverty and inequality. Keywords: COVID-19, marginal people, loss of income and employment, poverty and inequality, Bangladesh 1School of Business, University of Liberal Arts Bangladesh, Dhaka, Bangladesh. Corresponding author: Mohammad Imran Hossain, School of Business, University of Liberal Arts Bangladesh, House 56, Road 4/A, Dhanmondi, Dhaka 1209, Bangladesh. E-mail: imran.hossain1@ulab.edu.bd
  • 2. 58 South Asian Survey 28(1) Introduction The ongoing Novel Corona Virus COVID-19 pandemic has created an unprecedented economic and social crisis in Bangladesh (Kumar & Pinky, 2020). The substantial progress in household income and poverty reduction during the last few decades is in a risk of being eroded due to income losses of the poor. The observed consequences of a sharp decline in demand for manufactured goods and services due to various control measures taken by the government particularly from the informal sectors such as the agriculture, export-oriented ready-made garments and other such labour-intensive sectors of the economy have affected employment and livelihood of marginal people (Genoni et al., 2020). In addition, households engaged in informal services and labour-intensive activities such as construction workers, rickshaw pullers, day labourers and owners of small grocery stores are in a great danger of income losses due to slower demand and social distancing measures (Islam et al., 2020). Moreover, the COVID-19 outbreak and the healthcare burden, together with related disruptions, are expected to exacerbate the negative impacts on employment, household income and livelihood in both rural and urban areas (World Bank, 2020). Official unemployment rate in Bangladesh is around 4% and every year 2–2.2 million educated unemployed are being added to this list (Trading Economics, 2019). Among the employed people, majority of them are in the informal sector (Maligalig et al., 2009). Policy Research Institute (PRI) (2020) predicts that unemployment status of the country will be dreadful sooner due to the pandemic and related control measures of the government. Table 1 shows unemployment situation in Bangladesh of the year 2020. According to Ali and Bhuiyan (2020), a large number of people have recently become jobless while many more are at the danger of losing jobs. Particularly, the poor segment of the population who have very small or no saving at all is the worst victim of the economic meltdown. It is estimated that COVID-19 has pushed 16.5 million people mainly rickshaw-pullers, transport workers, day labourers, street-vendors, hawkers, construction labourers and the employees of hotel, motel and restaurants back into poverty (Islam & Jahangir, 2020). Riaz (2020) found that 20 million people who solely rely on the informal sector jobs for their livelihood have already lost their jobs and become temporarily unemployed due to the measures taken by the government to contain the spread of the corona disease virus. Table 1. Unemployment and Underemployment in Bangladesh, 2020. Gender Unemployment,% YouthUnemployment (15–24), % Labour Underutilisation,% Total 4.3 12 7.1 Men 3.3 10 4.8 Women 6.4 15 11 Source: ILO Key Indicators of the Labour Market (KILM).
  • 3. Hossain 59 Employment Trend and Informal Employment in Bangladesh The total employment in Bangladesh absorbs 70 million workers in 2020. Employment in the agriculture sector and the service sector adds 79% of the total. The rest are in the industry sector. Table 2 shows that employment in agriculture sector has been decreasing while service sector employment and industry sector employment have been increasing since 2000. In 2020, the service sector dominated with its largest employment share of 40%. A total of 95% of the agriculture sector jobs are informal whereas 72% of total employment in the service sector and 90% of the total employment in the industry sector are categorised as informal (Danish Trade Union Development Agency, 2020). Islam (2020) reported that 85%–90% of the total employment in Bangladesh is informal. International Labour Organisation (ILO) estimated that around 57% employment in Bangladesh is fragile without a formal contract. ILO categorises such employment as delicate category and includes day labourers and other informal jobs. On the other hand, according to Mujeri (2019), almost 85.1% of the total employed people in Bangladesh work in the informal sector. Around 13.1 million informal jobs are ruling in urban areas and around 38.6 million are in the rural areas of the country. Table 3 indicates that informal jobs dominate in all sectors of the Bangladesh economy. Among the broad sectors, 95% of the agriculture sector and 95% of the industry sector jobs are informal. Service sector had an informal employment share of 72% in 2017. Table 2. Employment Trend by Aggregate Sector, %, 2000–2020. Sector 2000 2010 2020 Agriculture 65 47 39 Services 25 35 40 Industry 11 18 21 Source: ILO Key Indicators of the Labour Market (KILM). Table 3. Informal and Formal Employment (percentage in total employment) and Employment Distribution by Broad Economic Sector, 2016–2017. Formal Employment (%) Informal Employment (%) Gender Men 18 82 Women 8.2 92 Sector Service 28 72 Industry 10 90 Agriculture 4.6 95 Source: Bangladesh Bureau of Statistics, Labour Force Survey (LFS), 2016–2017.
  • 4. 60 South Asian Survey 28(1) According to Khondker (2019), the share of the informal sector of GDP in Bangladesh is 43%. Thus, the economic value of the informal sector jobs and the contribution of the people who work in the informal sector are inevitable. Table 4 presentsinformationaboutGDPshareofformalandinformalsectorsinBangladesh. Manufacturing sector experienced a significant rise in number of employed people during the last two decades (Nath, 2012). Employment in the ready-made garment (RMG) industry with about four million workers has contributed greatly to this increase (Islam et al., 2016). RMG is playing a great role in the changing economic and labour landscapes, as it is one of the drivers of dramatic drop in extreme poverty among employed. This particular sector has played a big role in empowering women by employing female workers with limited or no education at all (Raihan & Bidisha, 2018). These people of the society are in a great danger of Table 4. Contribution by Formal and Informal Sector as GDP Share. Industry/Sector GDPShare(%) GDP Share of FormalSector(%) GDP Share of InformalSector(%) Agricultureand fishing 18.6 3 15.6 Mining and quarrying 1.2 1.2 0.0 Manufacturing 17.9 11.1 6.8 Electricity, gas and water 1.1 1.1 0.0 Construction 8.3 5.6 2.7 Trade 14.9 5.0 10.0 Hotel and restaurant 0.8 0.5 0.3 Transport, storage, and communication 10.7 8.0 2.7 Financial intermediation 1.8 1.8 0.1 Real estate and business activities 6.8 5.1 1.7 Public administration 2.8 2.7 0.1 Education and health 5.0 4.6 0.4 Community and other privateservices 10.2 7.9 2.3 Total 100 57.0 43.0 Source: ADB (2012).
  • 5. Hossain 61 losing income and livelihood as the corona-caused epidemic has left a large portion of them jobless. Especially employment in the RMG Industry is facing a great problem of income loss and joblessness due to a sudden decrease in demand for Bangladeshi RMG products in US and European markets (Bhattacharjee, 2020). Objectives This study aims to deliver a comprehensive and indicative overview of some of the observed and possible impacts of COVID-19 on the livelihood and income of marginal people in Bangladesh. It also tries to document the lesson learned from this unexpected economic turmoil caused by the pandemic and identify some of the limitations of policy measures implemented so far by the Bangladesh government during the last few decades. Finally, this study presents some policy recommendations to reconstruct the economy in the post-COVID era and to make economic growth more inclusive for marginal people. In short, the main attempt of this study is to summarise some of the socio-economic impacts that are already seen and potential impacts in the near future of the COVID-19 pandemic on the segment of marginal population in Bangladesh and suggest policy proposals that are supposed to be appropriate to reconstruct the economy in the post-COVID era. Materials and Methods This article does not perform any quantitative analysis of data to present statistical estimates. Rather it is designed on the basis of secondary information only because it is very early to collect broad data on COVID-19. Publications that only focus the corona pandemic and its impacts on employment and livelihood of marginal people in the context of Bangladesh are not easy to find. Therefore, for the purpose of this study, information from various published materials and the Internet resources were utilised. For a better understanding, publications by different media outlets, think tanks, research agencies, policy experts and newspapers were used as the source of information. Impacts of COVID-19 on Employment and Livelihood Amartya Sen’s concept of ‘entitlement’refers to a person’s ability to acquire goods. Achieving this capability usually depends on the production potential of the person and the opportunity to sell or exchange his/her labour (Sen, 1981). Contrary to the conventional economic concept of food supply, Amartya Sen’s entitlement theory argues that food security could be in jeopardy if capacity building is hampered (Omosa, 1998). Those most affected by the Corona epidemic are those whose entitlement or ability of exchange depends on their own or others’movements. For example, the Corona epidemic has reduced the source of income for urban migrant
  • 6. 62 South Asian Survey 28(1) workers in the urban informal sector or made it impossible for them to exchange the kind of labour they sell (FAO, 2020). According to the Google COVID-19 Community Mobility Report (of 25 May 2020), in the Corona situation due to various health restrictions, the movement of people in Bangladesh’s public transport has decreased by 56%, in the raw market by 41% and in shopping malls by 72%. The corona virus disaster has caused two types of employment loss such as temporary lockdown-induced job loss and permanent impact job loss. Temporary job loss due to lockdown in the country for two months was estimated to be in between 12 and 17 million (Ahmed & Kamal, 2020a). Shutdown of the major four sectors in the economy has created this job loss. Seven million jobs in the micro, small and medium enterprises (MSME) sector, five million jobs in the transport sector, three million jobs in the construction sector and more three million jobs in the manufacturing sector were disappeared temporarily (The Financial Express, 2020). An additional 10 million people have become jobless in the agriculture sector (Light Castle, 2020). If that figure were added, the number of temporary job loss would end up somewhere around 25 million.Table 5 summarises estimates by different development agencies and think tanks about permanent impactful job loss due to COVID-19 in Bangladesh. The slum people in the city areas and the rural poor who rely on daily income for their everyday livelihood are some of the worst victims of COVID-19 (Sakamoto et al., 2020). Currently, a total of 646,000 people mostly engaged in the informal sector live in over 3,300 slums in the capital Dhaka (Asian Times, Table 5. Estimates from Various Sources of Permanent Impactful Job Loss. Source Unemployed(inmillion) Individuals Impacted Financially(inmillion) World Bank 7 28 Asian Development Bank (ADB) 4 16 Policy Research InstituteofBangladesh (PRI) 12 58 Centre for Research and Information Dhaka (CRI) 6 24 Centre for Policy Dialogue (CPD) – 56 Power and ParticipationResearch Centre (PPRC)/ BRAC Institute of Governance and Development (BIGD) – 70 News interviews – 50 Source: Ahmed and Kamal (2020b).
  • 7. Hossain 63 2020). On the other hand, more than 70% of Bangladesh’s total population lives in rural areas (BBS, 2015). The average income of this poor people has dropped by more than 80% since the outbreak of the corona disease. Slum people lost 82% of their daily income which is a drop of about 81 Bangladeshi taka ($0.97) from their previous income of 108 taka ($1.30) in February, while per capita daily income loss among the rural poor was 56 taka ($0.67) which is a decline of 79% of their previous income of 89 taka ($1.07) (Kamruzzaman, 2020). To cope with the income losses, in the urban areas, 69% household reduced their food consumption; the same number of people took help from their friends. A total of 38% of household received government help while 42% used their savings (Business Standard, 2020). Among the rural households, 63% reduced food consumption, 50% received help from friends while 33% got help from the government, 55% had to use their savings, 22% households searched for more work and 22% obtained credit. Table 6 shows the ways in which affected people coped with income loss during the pandemic (Genoni et al., 2020). Shima Begum, from Mohammadpur, Dhaka, is one of the millions of such victims in the country. Shima used to work as a part-time domestic worker in three households adjacent to her residence. Her husband is a rickshaw puller in the city. She used to rely on her income of 5000 taka, which is equivalent to US$ 60, to pay the rent of a small room for her family with two children. Since the COVID-19 outbreak, she lost her job and now it is very difficult for her to survive with the reduced income of her husband. She said: Now I cannot afford basic expenses like food and clothing of my family. My two children had to leave school because it is not possible for me to pay fees. Today, I cooked only rice and very low-price vegetable. With only a lesser income of my husband, I cannot manage fish or any other expensive food with the rest of the money after paying the rent. This challenge to the livelihood of the people is not only related to the internal dynamism. Rather the global situation is having a deadly impact.About 10 million Bangladeshi people work abroad. Hundreds of thousands of them have returned to the country and many are waiting to return after losing their jobs. They do not seem to be able to re-enter those countries any time soon, which created a Table 6. Ways to Cope with Income Shocks among Poor and Vulnerable Households (in rural and urban Bangladesh, %). Rural Urban Reduced food consumption 63 69 Help from friends 50 69 Government help 33 38 Used savings 55 42 Looked for more work 20 9 Obtained credit 22 30 Source: Genoni et al. (2020).
  • 8. 64 South Asian Survey 28(1) tremendous negative pressure (Palma, 2020). Access to the international labour market may be further disrupted as the Corona situation is prolonged with fears that falling oil prices will reduce the demand for Bangladeshi workers in the Middle East (Mahmud, 2020). Such incidents might worsen the economic situation of the country in the near future (Uddin, 2020). Faridul Islam, from Brahman Baria district 107 kilometres from the capital, is such a victim. He returned from Saudi Arabia in the beginning of March 2020 and does not know when he can go back to work. Along with job loss and income loss, returnees like Faridul also face a social stigma and mental pressure. They feel anxiety and unsafe about their future livelihood. He said: I want to live my life like others do. I badly need to go back Saudi Arabia again; otherwise, my family will not be able to survive. I have to repay the loan that I have received from my relatives. But I have no idea when or whether I can go overseas again. During the Corona epidemic, 87% of the country’s poor were in food and nutrition crisis. The livelihood of 98% of the country’s poor has been severely affected due to income loss. Most of them do not have minimum savings, which has had an additional negative impact on their food intake and nutritional status during this income crisis (bdnews24.com, 2020). A survey by Power and Participation Research Centre (PPRC) and BRAC Institute of Governance and Development (BIGD) found that 5% of poor families that were surveyed during the lockdown period could eat only once a day. However, before the onset of the epidemic, 91.7% of respondents could eat three meals a day and the rest two meals a day. Poor people in all over the country were suffering from acute shortage of adequate and nutritious food, which put them at a risk of long-term health problems (The Daily Star, 2020). Another seriously affected group is the low-income RMG workers. The RMG sector of Bangladesh which accounts for employment of around 4.1 million workers have already fired or furloughed more than a million due to declining demand from global fashion companies. At present and during the crisis, the number of cancelled orders only look to set rise (Marc, 2020). According to Bangladesh Garment Manufacturers and ExportersAssociation (BGMEA), global buyers cancelled and held up a worth of US$2.95 billion export orders from approximately 933 factories throughout the country (Reza et al., 2020). Citing BGMEA data, Fair Wear (2020) reported that cancellations of planned orders, for April–December 2020, amounts to nearly US$1.7 billion. Around 2.3 million RMG workers (which is 47% of the total sector employment) might be fired as both cancellation of current export orders and uncertainty about future exports are rising (Mahmud et al., 2020). The coronavirus pandemic has substantially impacted MSMEs across all sectors of the economy (DCCI, 2020). Many MSMEs are facing distressed time due to limited sale and shortage of funds to maintain business operations and pay off salaries of the employees and workers, which is propping up the unemployment rate in the poor and lower-middle income families (Mahmud et al., 2020). There are around 18 million people working in the sector and many more from their family rely on it (Alauddin & Chowdhury, 2015). Employees in the MSMEs in all sectors are facing a threat of permanent layoff (Ahmed & Kamal, 2020a). Loss of these jobs has
  • 9. Hossain 65 appeared as the main challenge of COVID-19 impact on livelihood of the people working in the MSMEs. Many of the job loss caused by government-imposed restrictions or social distancing measures are temporary. However, most of the layoffs in the MSMEs caused by the unavoidable decline in trade and output are permanent. Another harshly affected group is the people working in the private non- government education institutes. Many low-income schoolteachers in both rural and urban areas throughout the country have lost their jobs because the students of those private institutions cannot pay the fees. Students at these schools are mainly from poor families many of whom left the school forever due to the crisis. At this time of the Corona epidemic, not only students but also teachers are in a threat of dropout. Especially, extreme economic uncertainty has arisen among teachers working in private kindergartens and non-government schools all over the country. Many of them are being forced to move to low-level occupations and a new poor class is being created. Discussion on Lessons Learned and Future Directions It is true that coronavirus has had a major negative impact on the economy of Bangladesh and economic growth has slowed down considerably (Mahmood, 2020). More importantly, COVID-19 has shown us how vulnerable is the segment of marginal population. It also reminded some important issues that were ignored or were not focused previously on economic policy measures by the government. The question is what the recovery of the economy during the COVID period will be and what kind of changes does the economy really need in the post-COVID situation. The economy of Bangladesh has grown rapidly since the early 1990s (Chakravorty, 2019; Hossain, 2019). This trend of economic growth has taken a big hit by COVID-19. Not only economic growth but also the kind of success that has been seen in poverty alleviation in the last few decades has taken a big shake in the last few months. Suddenly a huge population have fallen below the poverty line. Those who were poor before have become poorer. There is also a fear that a large part of them will not be able to get out of poverty suddenly. Thus, the ongoing crisis has had a medium to long-term impact. The government has taken some measures to implement a combination of fiscal and monetary stimulus (IMF, 2020). However, a jobless recovery might put the socioeconomic progress at risk, especially in the context of a county with a large number of marginal population who rely on their daily income. More sector specific stimulus is required to protect informal jobs and also to create new low- skill low-income jobs. This study suggests that immediate action plans require some key points to be focused. The government needs to provide additional incentives to labour-intensive sectors and sub sectors. These include agriculture, RMG, livestock and fishery subsectors, medical goods and equipment manufacturing, food processing, transport and logistics, retail trade, construction, and pharmaceuticals and healthcare, and so on. Especially, the agriculture sector with its 41% share contributes the highest in total employment in the economy (MOF, 2017) and the RMG is one of the largest
  • 10. 66 South Asian Survey 28(1) employing sectors for women in the country. Incentives in terms of easy loan may help recover further employment loss in these two sectors. Toprotectthevulnerablepeople,thegovernmentshouldresumethelabour-intensive infrastructure projects at the earliest convenience. Especially, the labour-intensive public work projects that are to create short-term employment need to be restarted. Informal sector MSMEs who do not have easy access to formal bank loans (Bosri, 2016) need to be taken close care of by providing immediate access to recovery funds. NGOs who work in same areas along with banks can be leveraged to channel more funds to refinance lost businesses. Different initiatives such as digital finance services, formalised banking incorporation, and shared risk in loan provisionshouldbeintegratedforMSMEstoovercometheimpactsofthepandemic. Immediate steps should be taken in skill development programs for healthcare workers and to up skill returning remittance workers. Skill training may raise incomes and improve standards of living among the people who work overseas (World Bank, 2017). Vocational skill development training related to job linkages should be considered as a priority in the current coping phase and also for the future phases of recovery of the pandemic so that trained people can utilise their earned skills in national or international marketplaces. The ‘Amar Gram Amar Shohor’ initiative could be an engine of localised economic activity and job creation. Fast tracking this project in the rural areas may provide opportunity to decentralise services and local economic activities. Especially, decentralisation of online and digital sectors will boost employment and revenue in the rural areas. Later, in the post-Corona era, what aspects of the Bangladesh economy will actually be a priority is one important aspect of this study. A big question is what kind of economic philosophy will work in the place of recovery, the process of recovery and the kind of reconstruction of the economy in the post-COVID situation. There is an economic philosophy behind any development plan. A very big aspect of Bangladesh’s economic philosophy in the last few years was GDP growth-centric which can be termed as ‘growth-oriented economic philosophy’ (bdnews24.com, 2020). The problem with this growth-centric economic decade is that if development talks are so dependent on growth, a blurred vision will always work towards the larger goals of social development and inclusiveness. To make economic growth inclusive for all people, three areas are very important: poverty alleviation, employment growth and elimination of inequality. The indicators that are prevalent about poverty and inequality in the Bangladesh economy are actually very unrealistic and are measured only by measuring income. As a result, the multi-dimensional nature of poverty remains ignored and unfocused. A policy focus on such a multi-dimensional concept of poverty alleviation in the post-COVID situation is needed. It is important that the poverty alleviation plan and the kind of policy formulation and initiatives will cover those multi-dimensional poverty issues. Besides poverty, one of the country’s biggest challenges is job creation (ILO, 2013). The rate at which employment has grown over the past few decades is much lower than the rate at which economic growth has grown. There is a fear that the country is growing without employment. A large number of people who are engaged in the informal sector do not have any improvement in their work
  • 11. Hossain 67 environment and in many cases they are deprived of various forms of labour right (Mujeri, 2020). Moreover, the post-COVID situation will pose a major challenge to current employment and future employment creation initiatives. During the COVID, many have been forced to change professions, enter lower jobs, work for lower wages and have lost their livelihoods. In formulating economic recovery policies in the post-COVID situation, it is important to keep in mind that economic recovery plans need to be linked to employment creation. How to bring the large number of people who have lost their jobs and forced to change professions back into the mainstream of work, as well as how to ensure the working environment and labour rights of the large number of people who are in the informal sector, should be the focus of the new plan. Another big challenge of the economy is inequality. Bangladesh have seen the pace of economic growth over the past decades but also the grey picture of inequality (Osmani, 2008). Inequality is not just economic. Besides economic inequality, the issue of social inequality is also very high in Bangladesh. There are major inequalities in access to health and education services (Mannan, 2013; Son, 2013). Despite strong growth over the past decades, economic inequality has increased which raises the question of how inclusive this growth is. Inequality in society increases if massive employment is not created, if there is a rampant corruption in thesocietyandifsomelargegroupswhoarepatronisedinvariouswayseconomically and politically to create illicit wealth and if they smuggle money abroad. If action is not taken against them, the causes of inequality cannot be eliminated. In addition to economic inequality, there are terrible inequalities in education and healthcare (Matin, 2015). In the case of access to healthcare, wealthy people somehow get better health care at home and abroad but a large number of people who depend on government health care are deprived in many ways (Joarder et al., 2019). COVID-19 taught us a great deal that with such a dilapidated state of the health sector, it is very difficult or even impossible for the country to deal with the crisis in coming days. Conclusion In summary, in the post-COVID situation, there is an opportunity to rebuild the economy in a new way. It is very important at this time to have an idea and preparation for how to rebuild the economy. The COVID situation demands a departure from our conventional notions. In the post-COVID situation, a new action plan is also needed for the drivers of Bangladesh’s economy in the new reality. At the same time, it is time to make reforms and action plans that could not be made in the pre-COVID situation, but which are urgently needed for inclusive development. History says that crisis creates an opportunity to think new. One of the positive aspects of this ongoing crisis is that it gives an opportunity to rethink the development philosophy, economic philosophy and action plan of the days ahead. The focus of that new thinking should be to move away from growth-centric narrow thinking and move towards a multi-dimensional development plan. If this discussion with partners, policymakers and those involved in development
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