Do we know how many lost livelihoods during shutdown?
Everywhere, jobs are being lost on an enormous scale for measures adopted to fight medical crisis due to coronavirus, and Bangladesh is no exception.
But do we know how many people have lost their livelihoods during the period of shutdown that the united states is going through?
In the absence of any official data upon this, how can policymakers do something positive about it -- regardless if there is willingness?
Whenever a journalist asked me easily have an estimate, it made me think, and the following is the outcome.
In making my guesstimate of the numbers who've lost their jobs during the shutdown, I begin from the observation that much of the urban (like the peri-urban) economic activities have come to a standstill.
I then look at numbers engaged as day labourers, e.g., in construction, informal service, transport, food, etc. along with the numbers in petty self-employment in retail trade, food service, repairs, etc. I suppose that those persons have lost their way to obtain livelihoods through the shutdown.
I also assume that those engaged in organised manufacturing should be able to get back to their existing jobs and lay-offs will be limited to about 10 % of their workforce.
I use data from the government's labour force survey (LFS) of 2016-17 and make projections of people engaged as day labourers outside agriculture and in urban petty self-employment.
Predicated on the above assumptions and projections, my estimate is that about one crore persons may have been without jobs during the period of shutdown. This is as well as the almost 30 lakh who were already unemployed.
So, we are discussing 1.3 crore who are without jobs right now. That is practically one in five of Bangladesh's total labour force.
With the foundation of livelihood gone, how does one help them push away hunger in this critical period? The government has announced, in a number of instalments, measures for dealing with the undesireable effects of the shutdown on the economy.
Those measures seem to be quite comprehensive and, at least, include measures to greatly help the poor.
But are the needy getting help right away? Not sure. Why do I say so?
Take the formal sector first. A large area of the package because of this segment is in the type of credit, albeit at low interest.
And the key questions listed below are the efficiency and speed with which the money will be disbursed. One of these may be the component for export-oriented industries to cover workers' wages for 90 days.
Given the conditions for the release of funds out of this pot (for example, workers need to have bank accounts), it is difficult to state how long it might take for money to attain the hands of the workers.
For the time being, there are reports of a lay-off of workers. I wonder whether there is in any manner of knowing when the first taka out of this fund has already reached any worker.
In a situation where there is absolutely no hard data on the amount of workers employed by a business, fulfilling other conditions for the release of funds to meet their wages might not exactly be easy.
A similar comment could be made about the funds allocated for loans to the micro and small enterprise segment.
Just how many such enterprises, especially those at the very small end of the spectrum (e.g., the self-employed or the tiny units with a few salaried workers), will be able to submit an application meeting all the stipulated conditions is anybody's guess.
For free food distribution and open market sales, the problems of implementation are no less serious.
Similarly, there is the issue of making the meals grains available to the indegent without compromising on the health requirements.
Although there were ideas (including without any help) for arranging delivery of the relief to the doorsteps of the needy, media reports and images show either violation of the basic standards or people having to wait extended hours for a lttle bit of handout.
Also, there is the problem of the coverage of such schemes and whether all of the needy are being covered.
As the standard approach in anti-poverty programmes is by using poverty mapping for targeting, one must understand that the present situation has created a big number of "new poor" who may not be confined to the so-called poverty-prone upazilas.
A much wider and more inclusive approach is needed.
We also hear that "committees" have already been formed to get ready "lists" of possible beneficiaries, and "cards" will be given. But one wonders when some actual help will reach the hands of the needy.
It appears that the authorities were caught unprepared. And far time is being lost in getting necessary preparatory work done.
One suggestion that originated from beyond your government (including from myself) was to provide cash transfer to at least that segment who might not exactly be reachable through food assistance.
This group contains not only the poor but also those that may have been just above the poverty line but may have fallen off the cliff as a result of the current crisis.
With just a little innovation (e.g., the application of mobile finance) and effort, such a transfer could possibly be made to get money quickly in the hands of these who are facing a precarious situation.
A back of the envelope calculation shows the next: (i) Taking into account the daily labourers and part of those in the formal and informal sectors who are employed on a precarious basis, I estimated 2 crores to maintain desperate need of cash right now.
If we assume that half the garment personnel may have returned to work already, the above number would be 1.8 crores.
(ii) Using the 2016 poverty line (Tk 2,268 per person) and that each worker has to support a family group of 4.06 (2016 survey), the quantity needed for per month will be Tk 9,208.
If one adjusts it for price increases during 2016-19, you might get some more than Tk 10,000.
So, I would advise a one-time cash transfer of Tk 10,000 per family. (iii) Depending on if the number of target beneficiaries is taken up to be 1.8 or 2 crores, the quantity needed to provide such one-time cash transfer will be between Tk 18,000 and Tk 20,000 crore, which is less than 0.80 per cent of Bangladesh's GDP.
This should maintain the realm of feasibility of the government's budget.
Coming to the line of credit, especially the one designed for the micro and small enterprises, the paperwork and conditions required ought to be kept as simple as possible.
There may be massive publicity (e.g., through electronic and print media) on how the necessary paperwork could possibly be completed.
Furthermore, support could possibly be provided by establishing cells in public areas sector banks and encouraging private banks to greatly help micro-enterprises in this respect.
A mechanism could be developed to involve educated young persons for assisting possible applicants. The government's Youth National Service Programme could be mobilised for such support.
Before concluding this article, i want to get back to the data issue. The this past year that LFS was conducted is 2016-17. And I have no idea when another survey will be completed.
Whenever it is done, the results will reflect the problem during the survey -- not what's prevailing now.
Alternatively, if there was a system of undertaking LFS every quarter every year, we could have had a picture of the situation in 2020 and compared it with that of the sooner years.
That could have enabled us to have a more accurate picture of the true impact of the present crisis on people's livelihoods.
My suggestion, therefore, is always to have a plan to carry out LFS yearly -- and preferably, quarterly every year.
That will permit our policymakers to monitor what is going on in the labour market on a far more regular basis and adopt policies accordingly.
Likewise, other surveys, e.g., the main one on manufacturing industries should also be carried out more often and results published quickly after the surveys are completed.
With good and up-to-date data, policymaking will remain imperfect.
