13pc People Lost Jobs Due to Pandemic: BIDS

About 13 percent of people have become unemployed in the country due to the COVID-19 pandemic, according to a survey of Bangladesh Institute of Development Studies (BIDS).

The survey titled ''Coping with COVID -19 and Individual Responses: Findings from a Large Online Survey'' was conducted on 30,000 people covering all divisions and districts.

BIDS conducted the survey from May 5 to 29, 2020. It was unveiled on Wednesday at a virtual conversation titled ''In the Shadow of COVID - Coping, Adjustments, Responses'' organized by BIDS.

It noticed expected and significant negative effects on employment, income and expenditures of people, especially those from low-income groups.

As per the report findings, 19.23% of participants with income less than 5000 takas reported that their income reduced by 75%, while 23.31% of participants with income between 5000-15000 taka reported an income reduction by 50% relative to last month’s income.

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.

BIDS conducted a survey on 375 enterprises and 360 workers from April 26 to May 10, 2020. The report was unveiled on Wednesday.

As per the survey findings of the surveyed entrepreneurs, 76% of goods produced by the entrepreneurs remain unsold and the value of unsold goods is Tk6.75 lakh each.

Economic activities were not completely shut down during the lockdown, while only 16% of SMEs were open. However, it was 38.24% in cases of handicrafts and rural SMEs were opened by 11.40%, the report showed.

According to a survey, Bangladesh will have 16.4 million new poor in 2020 as the income of working-class in urban and rural areas has fallen sharply due to the lockdown to stop the spread of the COVID-19 pandemic.

A research paper titled ''Poverty in the time of Corona: Short-term Effects of Economic Slowdown and Policy Responses through Social Protection'' conducted by Binayak Sen, research director of BIDS estimated the figure on Wednesday.

Under a post-lockdown optimistic scenario, the country's overall poverty to increase by 25.13%, where rural poverty will be 24.23%and urban poverty will be 27.52%.

''We ran several scenarios - representing successive severity of lockdown - under the ''wealth plus labor status'' approach. In a scenario where there is an 80% drop in income for labor class in urban areas and a 10% drop in income for labor class in rural areas in the ''hard lockdown'' exercise, we would have 16.4 million new poor,'' Binayak said in his presentation.

''If we consider a 25% higher poverty line, then an additional 16% to 20% of the population would be in poverty in rural and urban areas. If we update our age-old poverty line accordingly, it will result in much higher poverty where rural poverty would be 45%, and urban poverty would be 36%,'' he added.

To sum up, we have two kinds of vulnerability in poverty-one relates to the risk of slippages of the near-poor into poverty, and the other pertains to the risk of slippages of the moderate poor into extreme poverty, said the economist.

Source: UNB