A proper understanding of the pandemic's economic impacts requires a detailed nationwide survey.
If we want to focus on poverty, inequality and employment – three big factors in development – a household level survey is a must.
Based on this understanding, we – South Asian Network on Economic Modeling (SANEM) – conducted a survey in November-December 2020.
In conducting this survey, our advantage was that in 2018 we conducted a survey on these same households.
Despite some attritions, we can say around 5,600 families that we surveyed largely represent the whole country.
We asked the participants various questions including their food consumption, non-food consumption, their income, employment status, remittance, what challenges they faced during the pandemic and the strategies they undertook in confronting those challenges.
The questions we asked mostly covered the major areas of livelihood.
Our findings' major difference with those of surveys conducted by many other organisations in 2020, who also found poverty rising in the country, is that our survey has a much larger coverage to represent the whole country.
Our survey covered all the eight divisions and 64 districts.
As per our findings, the country's overall poverty rate has gone up to 42% and we found extreme poverty to be 28.5%.
If we compare this scenario with that of our 2018 survey conducted on the same households, the overall poverty was 21.6% and extreme poverty was 9.5%.
That means, overall poverty almost doubled and extreme poverty increased by around three times. This is indeed very alarming.
We conducted the survey in November-December last year. That means the impact of Covid-19 has been severe even till the end of the year.
Various indicators that showed grave impact of Covid-19 during the beginning of the lockdown actually did not abate even at the end of the year.
Poverty, however, is not the only issue of concern. Racing with poverty, inequality – in the forms of income, expenditure and various other means – has also increased.
If we compare the top five percent with the bottom 20, both the income and expenditure gaps are widening.
Besides, the tech divide also exposed rising inequality in access to technology between the urban and rural people. A digital divide between the poor and non-poor has also widened.
Among the major impacts with respect to the labour market, we found that more than 55% households experienced income fall even if they did not necessarily lose their jobs, while 8 to 9% households said they lost their jobs.
From our findings it is clear that since the onset of Covid-19 crisis, there had been a major disruption in the labour market, and it continued till the end of the year.
As per our findings, we put forth five recommendations. We, however, did not put them in any particular order as all these recommendations are equally important to confront the aforementioned Covid-19 induced livelihood crisis.
We believe a better Covid-19 crisis management is essential considering the disastrous impacts we saw on the economy, livelihood, and health due to the pandemic.
We found in our survey that only around 22% people felt that the government support measures were sufficient.
That means around 78% of households found the support measures insufficient. This shows the importance of expanding government support through various social safety net programs and stimulus packages.
The commendable commitment that the honourable Prime Minister made last year to provide cash assistance to 50 lakh households was not fully realised as the support could not be delivered to more than 37 lakh households due to issues like insufficient management, delays due to wrong listing and wrong targeting, and these challenges have been admitted to in the the discussions organised by the finance ministry in November last year.
Therefore, with strong political commitment we need institutional support – both from bureaucracy as well as all kinds of organs of the government – to translate this commitment into action.
Here we have huge lackings that often results in failure to execute many good initiatives.
During the pandemic, the poor people were largely affected by the price hike of basic commodities. This sector requires a lot of attention.
We have witnessed myriad examples of corruption even during the pandemic. We have emphasised on the reduction of corruption.
And finally, we recommend creation of employment opportunities.
We do not have many social protection programmes linked to the vulnerability in the labour market, although the labour market was immensely disrupted during this pandemic.
I believe we need some new social protection programmes targeting the labour market like employment guarantee schemes for those who lost their jobs. Also, a vast number of people who have fallen into poverty due to pandemic need to be brought under the government's social protection programmes. Government's stimulus packages targeting economic recovery need to be made more effective.
If such projects can be designed and implemented in real life, we can curb the unprecedented rise of poverty.
Selim Raihan is an Executive Director of SANEM.