Socioeconomic impact of Covid-19: An analysis

Md. Joynal Abdin

18 April, 2021 12:00 AM printer

The first web of COVID 19 hit Bangladesh in March 2020. To avoid mass infection and safe life government declared public holidays and instructed citizens to stay at home since 26th March 2020. These public holidays continued for next two months i.e. May 2020. But by this time tension for livelihood rose at its pick, as a result government had to lose up the directives and started to open up economic activities with 50% manpower and social distancing to balance between life and livelihoods. With the flow of time restrictions became loser and finally we lost about 9500 (nine thousand five hundred) valuable life due to COVID. Millions of people are suffering at home or in hospitals, fears, insecurity as well as economic loss of reduced GDP growth from 8.23% to 5.4% in 2019-2020 FY.  Impact of COVID could be analyzed from two different dimensions namely; economic impact of COVID and Social Impact of COVID.   

In economic impact, it has been forecasted that GDP loss of the globe will be 4.5 percent. The global total GDP size was estimated at around 87.55 trillion U.S. dollars in 2019. Estimated 4.5 percent drop in economic growth means almost 3.94 trillion U.S. dollars loss due to the pandemic. Similarly; Bangladesh’s total GDP is estimated at USD 353 billion, that means last year Bangladesh economy lost USD 0.85 billion due to the pandemic. This caused in reducing export earnings for 16%, reducing import for 13.3%. Domestically; tourism and hospitality sector losses taka 40 billion, another major sector faced losses due to the pandemic is transportation sector. About 72.9% transport workers lost their job due to the pandemic last year. Home bound readymade garment sector losses a significant amount of their investment due to the lock down during the Eid, Poza, New Year and other festivals. Education sector especially the private schools, kindergartens, private poly-technique institutes, training centers, university admission coaching, language coaching centers etc. lost their business due to the pandemic. Only a few sectors like healthcare equipment, healthcare institutions, online market portals, ecommerce, logistics, and mobile phone etc. sectors received positive chances to grow even in this pandemic.

Besides economic impact social impact of COVID will be much more pathetic and lengthy. For example; National poverty rate rose by 9% to 29.5% in Bangladesh due to the pandemic. ILO and ADB stated that around 1.12 million to 1.68 million youths in Bangladesh become unemployed in 2020. According to a recent report of the World Bank 68% people working in urban areas lost their jobs due to COVID in Bangladesh. These losses will increase number of poor people in the country. With the increase of poverty, social disparity will go up. It may adversely impact on child education, healthcare facility, mother mortality etc. social indicators.

In response of the COVID 19, government offered a long list of stimulus packages of Taka 1.23 trillion during last one year. Theoretically the stimulus covered a wide range starting from export oriented sector to micro, small, medium and large industries. It also offered stakes for agro-processing, farmer’s credit, low-income people’s loan under the stimulus. But practically; only export oriented sector and medium to large enterprises have availed the facilities at large. Cottage, Micro and Small enterprises are running behind the stimulus but received by a very insignificant numbers. We know about 65% and even more portion of the CMSME stimulus package has already been disbursed. But to how many enterprises and where are their social presence. This portion has mainly been utilized by the medium enterprises where cottage and micro have not reached there. According to a recent study 66% of the CMSMEs have not applied for stimulus support due to their lack of ability or knowhow. Those 34% CMS applied for stimulus support, 45.7% of their application has been rejected. It is easily understandable that, public money cannot be distributed without applicant’s eligibility to replay it. Therefore, more socially responsible package is required to cover up them under the stimulus benefits.

Second round of COVID hit started again after one year of its journey i.e. in March 2021. This time government went for lockdown. We don’t know how long this lockdown will be. But it is easily understandable that, bleeding of low income people and micro, cottage & small entrepreneurs may cause massive social disparity if this lockdown runs for longer period. Social disparity creates social and political unrest. Therefore it’s the right time to formulate appropriate strategies for creating a comprehensive exit plan from COVID and rescue life and livelihood. Life and livelihood both are important. One can’t be purchased with the cost of other’s. If we cannot save both, then Bangladesh’s achievements during last few years including LDC graduation will be meaningless.

Again come to the points that, good governance, political stability (meaningful stability, not by depressing), accountability of the public servants, enforcement of law, creating business opportunity, infrastructural development, economic development, right to speak, right to vote, social parity etc. everything is needed to prosper. But should not be one with the cost of others.

Finally; we would like to appreciate the government that, they came up and handle the COVID 19 effectively. But there are rooms to improve and do better in all aspects. Government may think of offering another round of stimulus packages, but the new package should be focused from the bottom of the pyramid.

 

(The writer is the Executive Secretary of Dhaka Chamber of Commerce and Industry (DCCI)


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