“Re-employment not ensuring income recovery, Medium-term strategy for inclusive recovery urged” – CPD observation

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The COVID-19 pandemic and its impacts are still unfolding. There is a heightened need to monitor the impacts of attendant developments on the labour market scenario on a continuous basis. To sustainably enhance decent job opportunities, the private sector will need to play a more decisive role. For this to happen, investment in infrastructure, strengthening of labour market institutions, emphasis on skill development and reforms in doing business will be called for to attract private investment from both domestic and foreign sources.

Policy responses in view of the employment scenario and the labour market need to be designed considering immediate, short term and medium term ramifications of the pandemic. In view of the immediate challenges, there is an urgent need to enhance cash transfers to the marginalised groups and affected households. Over the short term, the stimulus packages will need to be redesigned in view of the experience of the past year. More credit at a subsidised rate is required for farmers and low-income people. More importance should be given to extending support through NGOs and microfinance institutions. Over the medium term, the aspiration of ‘build back better’ ought to guide the path to economic recovery. The overall employment scenario, going beyond the unemployment rate, should be a critical metric to assess the level, nature, trend and success of recovery from the crisis

These observations emerged at the virtual dialogue on Income and Employment in COVID Times: How the People are Coping – Findings from a Household Survey, which was organised by the Centre for Policy Dialogue (CPD) and Oxfam in Bangladesh in association with Citizen’s Platform for SDGs, Bangladesh. The dialogue was held on Wednesday, 5 May 2021.

The dialogue was organised as part of the project titled ‘Enhancing the participation of community-based organisations (CBOs) and civil society organisations (CSOs) in democratic governance in Bangladesh’ which is being implemented by the CPD and the Oxfam in Bangladesh, with support from the European Union in Bangladesh. The project aims to contribute to the implementation of the Sustainable Development Goals (SDGs) by the Government of Bangladesh in a number of areas.

The objective of the dialogue is to discuss the implications of the ongoing COVID-19 pandemic on the Bangladesh employment scenario from the perspectives of coping strategies and policy effectiveness. CPD has recently conducted a nationally representative household survey to capture the transmission channels of COVID-19 impacts on employment and income, adjustment and coping strategies at household levels and efficacy of government policies in addressing the attendant concerns. The dialogue aims to share the survey findings with a broad spectrum of stakeholders to receive comments and feedback. The idea is to come up with a set of recommendations for policy uptake, which will hopefully also contribute to designing resource allocation in the context of the upcoming FY2021-22 budget.

The keynote presentation at the dialogue was made by Mr Towfiqul Islam Khan, Senior Research Fellow, CPD. Sharing the key findings from the study, Mr Khan presented that about 62%, lost their jobs at some point (mostly in April and May 2020 when the ‘general holiday/lockdown’ was in place) due to COVID-19. More than 85% of the employed people in the pre-COVID period who had lost the jobs became unemployed for more than one month. He mentioned that, for more than 40% of the employed population, the employment situation was worse than the pre-COVID-19 period. About 86% of the individuals are not earning enough to meet their daily necessities. The average income of individuals eroded by about 12%. The decline in income has pushed a significant number of people into lower-income groups – indicating a higher poverty incidence. At the same time income inequality increased.

The Guest of Honour at the dialogue, Mr Tapan Chowdhury, Former Advisor to the Caretaker Government and Managing Director, Square Pharmaceutical, opined that the lower-income people were affected most due to the pandemic. The workers were highly affected both in terms of working hours and jobs, particularly in the agriculture and manufacturing sectors. He mentioned that, despite the pandemic, substantial investments were made in industries, which is a hopeful scenario.

Dr Rizwanul Islam, Independent Economist and Former Special Advisor on Growth, Employment and Poverty Reduction, International Labour Organization (ILO), Geneva delivered the special comments at the session. He commented that government should invest in labour-intensive rural road and infrastructure to stimulate the rural economy. This will lead to employment and earning opportunities for various types of labour and help in stimulating the domestic market. At the same time, localisation of such public investment programmes should be taken into cognisance.

CPD’s Chairman, Professor Rehman Sobhan, also spoke at the event. Professor Sobhan stated that effectively delivering government interventions, in cash or in-kind, needs to be developed in view of the impact on employment and income. He also emphasised the government to take the results of the research into cognisance for devising the policy interventions.

Mr Rizwan Rahman, President, Dhaka Chamber of Commerce & Industry (DCCI) and Managing Director, ETBL Holdings Limited, a Discussant at the dialogue, stated that reduction in export earnings and FDI inflow has adversely impacted the investment scenario. These negative developments, in turn, have affected the employment scenario to a considerable degree. He further suggested that the CMSMEs should be provided with the opportunity to take part in the government procurement processes under a quota. Mr Kamran T Rahman, President, Bangladesh Employers’ Federation (BEF), Former Vice President, Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) and Chairman and Managing Director, Pubali Jute Mills Ltd spoke about how affluent countries of the west have been effectively implementing the lockdown thanks to having very well structured unemployment benefit schemes. In developing countries like Bangladesh, it has been difficult to properly implement the lockdown in the absence of such benefits.

A lot of RMG workers lost jobs during the initial phase of the COVID-19 pandemic but they were able to soon return to their work, said Mr Md Shahidullah Azim, Vice President, BGMEA and Managing Director, Classic Fashion Concept Ltd. Mr Razequzzaman Ratan, President, Socialist Labour Front asked for a rationing system for the workers so that they can fulfil their food necessities at low costs. He also demanded specialised hospitals for workers in industrial zones and day-care facilities for children of the workers.

Ms Ferdaus Ara Begum, Chief Executive Officer, Business Initiative Leading Development (BUILD) opined that an increase in employment of the 15-29 year olds might entail adverse social impacts for the future, as they are moving out of education and into employment.  Dr Md. Shahid Uz Zaman, Founder & Executive Director, Eco-Social Development Organization (ESDO), also spoke at the dialogue as another Discussant and shared that non-MPO teachers have not received sufficient support, which will have a negative impact on our education system.

While presenting a summary of the discussion at the session, Dr Debapriya Bhattacharya, Team Leader of the Project, Distinguished Fellow, CPD, and, Convenor, Citizen’s Platform for SDGs, Bangladesh, questioned whether the degradation of the labour would persist in future and said that to address the attendant challenges, medium term recovery strategies are important. Dr Bhattacharya stated that integration of recovery with structural transformation issues is highly important. He also emphasised targeted supports to disadvantaged groups which were disproportionately impacted by the pandemic.

Professor Mustafizur Rahman, Distinguished Fellow, CPD chaired the session. In his closing remarks, he stated that if an inclusive society and economy is not ensured, then such a crisis will have much deeper impacts.

Dr Fahmida Khatun, Executive Director, CPD, and Dr Dipankar Datta, Country Director, Oxfam in Bangladesh shared their views at the dialogue.

The discussion session was attended by development professionals, academicians, private sector representatives, NGO workers and journalists.

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