COVID-19 may drive 5m to poverty

The coronavirus pandemic has hit the economy hard and may drive 5 million people to poverty.

The source of income of over 50 million workers in the informal sector is at stake and so millions of men and women could find themselves without employment and lose their purchasing power. This will simply push them back below the poverty line.

Alarm spread all over the country after Bangladesh’s first coronavirus case was detected in March. In a move to control the spread, the government declared a general holiday from 26 March. After repeated extensions, the holiday has now been extended till 26 April. The workers who live a hand-to-mouth existence have been dealt the hardest blow. Transport workers, rickshaw-pullers, day labourers, hotel and restaurant workers and small shopkeepers are all without work. And many among the middle class and lower middle class are in fear of losing their jobs.

Speaking to Prothom Alo, economist Zahid Hossain said coronavirus has increased the risk of becoming poor. All these days, cyclones, floods and droughts created the risk of poverty. But now the coronavirus outbreak has impacted all sectors in the country. But the impact has been felt the most in the informal sector. Already many people have become unemployed, he said.

5 million at risk

According to the Bangladesh Bureau of Statistics (BBS), in 2019 the poverty rate in the country was 20 per cent. The rate of rate of extreme poverty was 10.5 per cent. That means there are 32 million poor people in the country. Of them, 17.5 million are ultra poor.

Fluctuations in the economy put the livelihoods of certain people at risk. They become unemployed and poor again. In 2015 the General Economics Division (GED) of the Planning Commission drew up a strategy paper to address this problem, where it stated that 25 per cent of the country’s poor hover around the poverty line. When the economy is doing well, those among these people who then have good earnings, go up above the poverty line.

Then again, 12 per cent of those just above the poverty line, sink below again when there are cyclones, floods or droughts. The COVID-19 outbreak has put these people most at risk. According to the GED calculation, there are 34 million poor people in the country at present. Among them, 4.2 million are at risk of falling below the poverty line again.

Poverty in Bangladesh is measured according to ability to meet basic needs. If a citizen of this country fails to have a daily intake of 2,122 calories, that person is considered poor. And if he does not have the ability to earn enough for a daily 1,805 calories then he is considered ultra poor. According to GED, if the monthly income of a 4-member family is Tk 6,400, then each member of the family will be able to have a daily intake of 2,122 calories. And if the family has a monthly income of Tk 5,200, then each member will be able to have a daily intake of 1,805 calories.

GED member Shamsul Alam told Prothom Alo, that because of coronavirus, the 4 million to 4.2 million people who are at risk of becoming poor, may fall into poverty once again. He said the risk of becoming poor is higher than any time before as all informal sectors have come to a halt.

The World Bank published a report in October last year concerning poverty in Bangladesh. It said that 52 per cent of Bangladesh’s population was at the risk of becoming poor. Anyone earning below 1.50 dollars a day was considered poor.

* This report appeared in the print edition of Prothom Alo and has been rewritten in English by Ayesha Kabir