Covid-19: Women bear the economic brunt the most

Highlights:

• The pandemic has shrunken employment and income opportunities for women across industries
• According to a BIGD study, 24% of women-run e-commerce businesses closed in June after struggling to recover from losses
• Over 82% women are in the informal sector, and apart from food assistance, the government has not provided them with any support 
• Stimulus package announced for industries would mostly remain inaccessible for women, as a majority of them do not have formal registration or a trade licence
• Experts recommend formulating a group-based lending provision for women to help their businesses thrive
• They also suggest identifying sectors where women labour is intense and adopting schemes to provide them with financial assistance

On a Monday, a customer pushed her way into the capital's Segunbagicha branch of Women's World when she heard Rani (not her real name) complaining about pay cuts.

Workload has doubled but her salary has been slashed to half of what she used to get before the coronavirus pandemic.

The girls at the counter were rushing in and out of the hair cutting and skincare sections to help the three-four remaining staffers who were busy serving the customers.

More than half of the beauty salon's staff had gone home during the over two-month countrywide shutdown that began on March 26 this year.

Low-paid, they could not afford to stay in the capital when the employer did not pay them salaries as the parlour was closed. They can hardly think of returning to work until clients come back in large numbers as before.

Meanwhile, Rani is skeptical about how long she would be able to continue the job which pays her little to stay away from her family for most of the days.

Like Rani, the pandemic has shrunken employment and income opportunities for women across industries and is threatening to cause more harm to them.

While all – irrespective of gender – are facing economic hardships due to Covid-19, women are bearing the brunt because of the historical baggage of perceptions over gender roles.

When they navigate through the job market, they not only have to have skills for work, but also have to overcome barriers put up by families and society as well.

In an adverse situation like this, there is the fear that the success they have made in different sectors will be discounted, as they lack support and financial means to regain what they lost.

If that is not averted, the gender gap in terms of employment will widen further. In that case, the progress in women empowerment will be undermined.

Working women comprise only 34% of working-age women while it is 78% for working-age men, according to the labour force survey 2016-17.

A study by UN Women and the UN Development Programme finds that women's employment is 19% more at risk than men's globally.

No data is available to understand how many women have lost or are likely to lose their income because of the Covid-19 pandemic in Bangladesh, but studies have shed some light on the matter.  

In a recent research, Professor Sayema Haque Bidisha of the Department of Economics at Dhaka University estimated that those who are facing higher vulnerability to falling below the poverty line during the ongoing economic crisis are highest in elementary occupations (23%), followed by agriculture (22%).

More women [52% of the employed women] work in the agriculture sector than men [24% of the employed men], as per the labour force survey. And in elementary occupations, women's involvement is slightly less (16%) than men (18%).

Women entrepreneurs are also at risk.

One of them, Farhana Nazira, owner of a shop that sells Punjabis in the capital's Murpur-1 area, found herself in a situation in March that she was completely unprepared for. She had just readied a stock of products targeting the Bangla New Year celebration and Eid-ul-Fitr.

Both the festivals passed by, but the pandemic and the two-month-long shutdown until May 31 left her business dry without cash. With almost no sale, she paid her six salesmen at the shop and 12 factory workers for three months half their salaries.

Most of her clothing items still lay stacked months after she opened her shop, which forced her to reduce the size of her operation and bid goodbye to half of her staff.

A recent study by the Brac Institute of Governance and Development (BIGD) found that 24% of women-run e-commerce businesses closed in June after struggling to recover from losses. A majority of them do not have formal registration or a trade licence, which made them ineligible for the government's stimulus package.

More than 82% women are in the informal sector, and apart from food assistance, the government has not come forward with any support for them. 

What is more, the stimulus package declared for the formal sector would mostly remain inaccessible for women.

For example, the government has declared a Tk20,000 crore fund for cottage, micro, small and medium enterprises (CMSME), from which banks will give loans to borrowers at 4% interest rate over the next three years. Another 5% interest will be given in subsidy by the government.

Of loans disbursed by a bank in a year, 5% should go to women entrepreneurs. However, as the Bangladesh Bank said loans would be given based on bank-client relationship and women lag far behind men in terms of financial ties and networking.

In need of urgent cash to keep her business afloat, Farhana in June consulted a private bank to obtain a loan of Tk2 lakh from the stimulus package. She had already taken out an SME loan of Tk5 lakh from that bank, which she has nearly completed paying off.

A month later, in July, she was told that she did not qualify for the loan from the stimulus package. As a last resort, Farhana borrowed money from her relatives, which is what happens to many women entrepreneurs because they lack land-ownership and anything else to offer as collateral.

Even though there are instructions from the authorities that women should get loans without collateral, banks show reluctance while doing due diligence to check the possibility of loan recovery, said Professor Sayema Haque Bidisha.

A group-based lending provision can be formulated for women, she suggested, which would reduce the risk on the one hand and help their businesses thrive on the other.

To help forge a connection between customers and producers, local public representatives should play a role by providing information and setting up a network, Bidisha added.

On Covid-19's impact on women in different occupations, economist Hossain Zillur Rahman said a demand deficit like that of housemaids, coupled with challenges that women come across to switch jobs – familial responsibilities, for example – would cause them to fall behind.

Even after the shutdown, the demand for services of and the product made by women has not gone up much. Policymakers can identify the sectors where women labour is intense and come up with schemes to provide them with financial assistance, Dr Zillur said.

Working women have to juggle their family and career, which is why they often refrain from taking up challenges to climb up to positions with a higher role or a different or a better job. As a result, they remain highly susceptible to job loss during lay-offs, the major factor behind gradual replacement of low-skill jobs of women by machines in the garment industry – a major employer of women.

"We know women take most of the responsibility for caring for their family; they earn less, save less and hold much less secure jobs," said Phumzile Mlambo-Ngcuka, UN women executive director, as reported by UN News.

Farhana, who solidified her position as an entrepreneur over more than a decade to the age of 44, now feels shaky even though she worked with a number of famous local brands like Sadakalo.

The financial storm that the Covid-19 has brought in will cause more women to fall below the poverty line than men.

It is to be seen if the dent in women's economic empowerment becomes permanent under persistent economic pressure and health insecurities.