Published in The Business Standard on Friday 1 May 2020
This section of people should be included in the government’s Tk760 crore scheme of income support
A gradual withdrawal of lockdown depends on improvement of health issues in a similar way the other affected countries are reopening their economies and lives. Otherwise it may cause more harm than good in economic activities as well as worsen health concerns.
Obviously informal sector workers – like daily earners, vegetable or fish vendors who are not under contractual obligation are among those groups worst hit by the lockdown. A significant portion of these people, who lifted themselves above the poverty line, may slide into poverty again without having any income. They do not have savings to tide over bad times. They lack political and economic strengths to make their problems heard.
Even if the lockdown starts easing, all of them will not get back to normal livelihood immediately. Because they are involved in tertiary activities, which complement other activities in life and economy. Their services will be required if only other fronts return to normalcy.
So, these people are likely to remain without work and income for a longer period. Their food security and income security will continue to remain vulnerable for months to come. They will need emergency food aid for three to four months even after the lockdown is phased out.
Whatever small capital they had in hands, they would have spent those during lockdown days. So, degradation of livelihood is also feared. Those who ran tea stalls may become hawkers, hawkers may turn into day-labourers.
This section of people should be included in the government’s Tk760 crore scheme of income support as announced by the prime minister. A Tk 2,000 monthly support will be of great support during this tough time when they have no income. A list should be prepared without further delay so that the income support, whatever decided, goes straight to their mobile financial or bank accounts.
The government has decided to bring 50 lakh more people into the social safety-net programme. This will help the urban poor who are not covered by food-aided social support schemes like those in rural areas.
People, mostly in urban areas who lost their livelihood overnight with the enforcement of shutdown, are supposed to come under its coverage.
Informal sector workers, who were thrown out of jobs and remained stuck in village homes since the shutdown, should also come under the new scheme. Construction and transport sectors account for significant portions of informal workers. Trade bodies and associations in the real estate and transport sectors should come forward to help their huge workforce get included in the government’s scheme.
The refinancing scheme for small business should engage non-government organisations so that micro-level entrepreneurs or shop-owners, who have limited or no access to banks, could benefit out of it. Associations of small businesses, like the ones of salon shops, should work to pave the way for their members to access the support fund.
While announcing social and financial schemes, the prime minister has ordered relevant administration to make sure that none of the needy people is left out.
Associations and small trade bodies have a great role to play so that the people in their respective areas are covered by such food, income and finance support programmes announced by the government.
The food aid, incentives and financial stimulus packages, announced by the government for vulnerable groups of people including informal sector workers, should be incorporated in the coming budget so that the vast section of people is adequately covered by social safety-net schemes.
One thing we need to bear in mind is that despite all these support initiatives, a faction of urban poor may seek to go back to village homes due to imminent changes in livelihood patterns. And some of the people, who lost livelihoods due to the shutdown and went to villages, may choose to stay back there.
These people can find their livelihoods in rural farm and non-farm activities. The Tk5,000 crore subsidised farm loan, announced by the government, should be made available to the rural economy to rejuvenate the agro-based ventures to create jobs.
There is a social order issue which must not be ignored. Informal sector workers are engaged in trades and services required for the comfort of city people. These people will naturally switch livelihood from one to another in response to the changing demands.
This is a natural course of upliftment. So long as their services are required, they need to be reintegrated into their works as smoothly as possible. If it does not happen, a social disorder may stem out of a sudden huge joblessness.
Dr Khondaker Golam Moazzem is an economist and research director at Centre for Policy Dialogue