Covid exposes vulnerability of urban new poor

Yusuf Ali, a cobbler in the city, had a weekly earning of Tk2,000-3,000 before the pandemic.

Now it has dropped to Tk800-1,200. Yet, it is better for him than having no income.

Sufferings are still fresh in Yusuf's memory when he and his wife – a housemaid – had no earnings during the shutdown.

Yusuf sits in front of the Basundhara City Shopping Mall, which had been closed for two and a half months since 26 March due to the shutdown. And because of "social distancing", his wife was not allowed into the houses where she worked.

It has now been four months since the shopping mall reopened, but the number of shoppers has not yet increased to what it was before.

The number of people going to shop gives economists an indication of consumer spending.

It means a lot to Yusuf, too. The income of a cobbler like him depends on the number of people coming out of their homes for shopping or work.

Yusuf and his wife are the ones who run the informal economy and who took the first blow of the pandemic, which threw them out of work overnight.

They eked out a living on their own and helped themselves.

Suddenly they found themselves nowhere as Covid-19 pandemic struck.

These are the people who are now being bracketed as "new poor" — mostly the urban working people who were little above the poverty line and are now pushed by the pandemic into poverty with an income less than $1.9 (Tk161) a day.

"The Covid-19 outbreak has exposed that these urban poor are the most vulnerable among the population. They are new poor and they need attention," said Dr Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre (PPRC), a think tank that has extensively researched livelihood losses during the pandemic.

The economy is recovering, but the new urban poor as well as the vulnerable sections of the society are not benefiting much from it, the economist pointed out.

The rural poor get some support from the government's safety-net programmes, which leave the urban poor.

"They have eked out a living all on their own. They are now in distress as their earnings dropped and they slipped into poverty," he said.

Apart from whatever support they get as government aid, rural people have some scopes like farming and small sales of backyard farm produces. But the urban poor have to buy everything and price hikes of essentials have now come as added woes for them – when their incomes depleted.

There should be some mechanisms like the OMS for food items for these people. Since there have been no relief activities since May, the government needs to take up social safety-net programmes for the urban poor, he said.

Hossain Zillur, who is also the chairperson of Brac, suggested that the government should create some urban public work schemes to provide the informal sector people in the city with some temporary works.

"The government needs to be innovative to devise some well-thought schemes in consultation with utility agencies and development practitioners," he said.

The pandemic has made it clear that the urban poor are more vulnerable than the rural poor to shocks like Covid-19, the economist said. "So, on the International Day for the Eradication of Poverty this year, our focus should be on the urban poor," he added.

He referred to the lack of data on informal sector workforce and said they would soon launch a survey on rickshaw-pullers' life and income.

Dr Imran Matin, executive director of the Brac Institute of Governance and Development, pointed to the absence of any social protection mechanism that could help the new urban poor out of the distress.

"So far, we focused on reducing the poverty rate. That is good. But we ignored the vulnerability of the non-poor," he said.

The non-poor are those who lifted themselves a little above the poverty threshold and are always at the risk of slipping back into poverty during unpredictable shocks that leave them without work like the Covid-19 pandemic.

They are the people who defied the virus fear and returned to work to earn their bread, which helped the economy back on the recovery track, said the chief executive of BIGD, which had researched on the urban new poor in partnership with the PPRC.

These people need some social protections like social insurance system which will help them survive during the period of no work.

Such insurance schemes could be in partnership with the government and the private sector. And working people can have their contribution, he suggested.

"Even a minimum support for three months can help one back on their feet," Imran Matin said, asking why a rickshaw-puller does not have social insurance.

Workers in the sectors related to export markets have suffered from job losses during the pandemic and these sectors employ most of the female workforce. They also need to be protected under the insurance scheme, he felt.

According to the Labour Force Survey 2016-17 of the Bangladesh Bureau of Statistics, out of a total of 6.08 crore employed labourers in the country, 85.1% (5.17 crore) work in the informal sector.

Another statistic of the Bangladesh Economic Association (BEA) said nearly 3.6 crore people lost their jobs during the first 66 days of the countrywide shutdown due to the coronavirus pandemic. The government initiatives, including direct cash support, did not reach most of them as they were not listed in any official document as people in need.

Bangladesh had achieved remarkably in poverty reduction over the last decade with the number of poor people falling steadily to 20.5% in the last fiscal year.

But the percentage now could be 35% as the novel coronavirus pandemic dragged 2.1 crore into poverty again, the World Bank estimates.

In its report titled "Losing Livelihoods: The Labor Market Impacts of COVID-19 in Bangladesh", the lending agency said Covid-19 enhanced poverty more in cities and towns than in villages. Rural poverty rose 11% while urban poverty jumped to 32% due to job losses during pandemic.

In its count, people with income less than $1.9 (purchasing power parity) a day are poor. Bangladesh's 54% people, whose income is double the poverty threshold, are also exposed to vulnerabilities like Covid-19 as a 5% drop in earnings put 16% people into poverty afresh.

Covid-19 left 76% workers in Dhaka and 59% in Chattogram without jobs, says the World Bank.

In April, the Centre for Policy Dialogue (CPD) had proposed a monthly income support scheme for 6.84 crore to 7.57 crore people who lost jobs during the pandemic. It would have required an allocation of Tk26,962 crore to Tk29,852 crore.

The CPD proposed a total Tk16,000 of cash transfer for each household for two months, Tk8,000 each month.

A joint research of the BIGD and the PPRC suggests 71% of slum people, who work mostly in informal sectors, were thrown out of jobs since the virus struck in March. Though most of them have returned to work, their earnings have dipped.

As erosion in earnings reduced their food intake, the research suggested an allocation of Tk5,594 crore for paying Tk1,368 per head for the rural poor and Tk1,702 for the urban poor under a cash and food support scheme.

Jahidul Islam and Najifa Farhat contributed to the report