Introduction
Starting with the new year, COVID-19 has already managed to create a crisis of an epic scale. The WHO declared the situation as a pandemic on 11 March and the UN Secretary-General António Guterres declared that it is a crisis unlike any in the UN’s 75-year history. The virus has not been proven to be airborne, but it spreads fast enough, through respiratory droplets and contaminated surfaces, threatening to infect millions across the world within a short span of time, and with high mortality rates, threatening to kill tens of thousands in the process.
While frequent and proper handwashing is the number one recommendation to prevent infection, social distancing through measures such as self-isolation and, in extreme cases, complete lockdown of cities and communities appear to contain the spread, as evident from the examples of China, South Korea, and Singapore. But many countries and communities are failing to enforce the desired level of social distancing for a variety of economic and socio-cultural reasons, undermining government efforts to contain the virus.
On the other hand, social distancing may be the measure that most effectively curbs the vicious surge of the virus; yet the same measure is creating a global economic affliction that may last long after the virus subsides. Social distancing means deep paring down of economic activities. Educational institutes are closed, those who can are working from home, most public events area getting cancelled, people are avoiding public places—restaurants, movie theatres, and markets—and cancelling travel plans. In case of lockdown, all but essential economic activities are virtually stalled.
Stock markets worldwide are already sinking, despite government efforts. Experts are predicting a recession if the trend continues, and if liberal, ubiquitous stimulus packages are not put in place. The global economy is one big hyper-connected complex system. It is uncertain how deep the economic impact of the COVID-19 will be and how long it will last.
The Socioeconomic Impact of COVID-19 in Bangladesh
Bangladesh is nowhere near the epicentre of the COVID-19 crisis, yet the number of detected cases is multiplying in recent days. Experience of other countries tells us that without strict measures, the situation may quickly get out of hand. High density of population, large number of migrant workers returning from COVID-19-affected countries, and the unprepared health system make Bangladesh a high-risk country for COVID-19 outbreak. Combined with confusion and lack of information, this has created widespread panic in the country. The country is already experiencing the adverse effect of COVID-19, both in terms of public health and economy.
Immediate Impact
Social distancing—self-isolation and lockdown—causes an immediate and drastic reduction of domestic economic activities. In Bangladesh, citizens have started to practice social distancing since the second half of March, and already its adverse economic impact is evident. And the low-income people are the quickest and hardest hit, especially those living in urban centres and working in the informal sector. Suddenly, the number of customers is plummeting for street vendors and service providers—cobblers, rickshaw drivers, auto drivers, and drivers of ride-sharing services, to name a few. The future is hanging by a thread for the workers in the service sector such as restaurants and beauty parlours. The jobs of home service providers such as maids and drivers are also at risk. Most of these people depend on their daily income and the rest get by with monthly wages, with little to no fallback. When faced with income loss, these people desperately need support just for their sustenance.
The rural economy is already struggling with the falling prices of agricultural commodities and simultaneous hikes in the cost of commercial transportation; we know that marginal and poor farmers are usually the hardest hit in these situations. Hundreds of thousands of migrant workers have already returned, out of fear of the virus or upon losing their jobs, majority of whom belong to low and lower-middle-income rural households. Many are also heavily indebted because they borrowed large sums for migration. Thus, returning migrants and their families are also likely to face immediate economic hardship.
Poor and vulnerable people are also the ones disproportionately exposed to the virus for a variety of reasons. They are at the frontline of providing the essential services or they have to go out to feed their families. They often live in in conditions where social distancing is not feasible, in overcrowded slums or small houses shared with the extended family. Many of them have poor sanitation facilities. They are also likely to be less aware, compared to their educated, wealthier counterpart, about how to mitigate the risk of infection.
Short- and medium-term impact
Bangladesh is not immune to global economic disruption, in fact, our overdependence on overseas migration and the Ready-made Garments industry makes us highly vulnerable. As mentioned earlier, many migrants have already returned after the outbreak. But if the global economy slows down, many more will become jobless and return home; the aspirant migrants will find it difficult to migrate and find jobs abroad. Overseas remittance is a crucial economic lifeline in our rural economy and for many poor and lower-middle-income rural households. Reduction of remittance will not reduce our foreign exchange reserve, but also have an adverse impact on these households.
On the other hand, the global economic crisis means loss of business for the RMG sector in Bangladesh. If the situation persists, many RMG workers are likely to experience a cut in their overtime income and even job loss. Many RMG owners have reported that their orders are already drying up. The government has a high stake in the RMG sector, so the RMG owners may get government support to stay afloat. But will the affected workers be able to negotiate their support from the owners or the government? How will they cope with the uncertainty?
In general, Small and Medium Enterprises (SMEs) that are export-oriented or import raw materials from the global market will also be affected by the slowing world economy and disruption in the supply chain.
There will be a host of other short to medium term adverse socioeconomic impact of COVID-19 across the country. The micro and small businesses that are shut down during the lockdown, may not be able to recover because of cash crisis. Poor people may become heavily indebted during the lockdown, may fall into a deeper poverty trap. The children, particularly those belonging to poor, less educated families, may never make up the lost time in school; this may flatten the curve of their lifetime earning potential.
BIGD’s Response to the COVID-19 Crisis
BIGD exists to create insights and evidence for more effective policy and practice for better development and governance outcomes, especially for the poor and vulnerable, through on-the-ground, rigorous research and capacity building; and it is evident that, because of COVID-19, we have good reasons to worry about the very livelihoods of these people today and in the days to come.
We believe, during this unforeseen national crisis, our research can provide useful and credible insights to policymakers as well as practitioners such as BRAC on how to control the pandemic effectively while minimizing its socioeconomic impact. And the research needs to happen fast because the situation is a fast-evolving and escalating crisis. That is why BIGD has embarked on the Rapid Research Response (RRR) to COVID-19 with a special focus on the lives and livelihoods of the poor and vulnerable people.
Our Value Proposition
We believe that everyone should come together and apply their unique strengths and resources to address this national crisis. Designing and implementing rigorous and policy-relevant social and economic research is the primary expertise of BIGD, so we have decided to deploy our full-capacity in the RRR initiative. At BIGD, we have a pool of experienced and young researchers with a variety of capacities in qualitative and quantitative research, all of them are investing their time and energy in this initiative.
During social distancing, we do not have the option for conducting face-to-face interviews. But we have access to a large contact database from the numerous recent surveys we have done with different demographic and occupational groups in both urban and rural areas throughout Bangladesh. We are using this database to conduct phone surveys.
BIGD runs large-scale quantitative as well as qualitative research projects in the field on a regular basis, and often within a short turnaround time. We have an experienced six-member data and field management team and a large network of enumerators and qualitative field researchers.
COVID-19 related research must be rapid, otherwise, it will lose relevance. It also needs to be frequent as the situations are quickly evolving. Combined with our access to contact databases and our field implementation capabilities, we are confident to start and complete fieldwork with a variety of target groups within the quickest possible time.
Finally, and most importantly, BIGD has an extensive network of policymakers, practitioners and researchers, which we are using to maximize the impact of our RRR initiative. We are extensively collaborating with research institutes and prominent researchers within and outside the country to expand and complement our capacities to conduct rapid research on a wide range of areas. We are using our practitioners’ network to get access to different types of target groups. Most importantly, we are working with crucial policymakers such as the Ministry of Planning and large implementers such as BRAC to address their COVID-19 related research needs.
The epistemic and policy-practice community need to come together at this period of unprecedented crisis and the unknown aftermath. We believe that we can have a meaningful impact through collaboration and cross-fertilization of ideas between like-minded researchers, practitioners, and policymakers. Please let us know if you would like to join hands with us in this journey.
