Over 24.5 million new poor still in tatters 

The daily income of the extreme and moderate poor has returned to even above the pre-pandemic level, but 24.5 million new poor continue to reel under adverse impacts of Covid-19 despite some recovery in their employment and income over the last one year, according to a study published on Tuesday.

The economy faced a fragile and segmented recovery, while daily earnings in rural areas increased by 2% over February last year, the pre-Covid time. But the per capita daily income in urban areas is below 14% of what it was in normal times, revealed the study jointly conducted by the Power and Participation Research Centre (PPRC) and the Brac Institute of Governance and Development (BIGD). 

Dr Hossain Zillur Rahman, executive chairman of PPRC, and Dr Imran Matin, executive director of BIGD, presented the findings of the report titled "Poverty Dynamics and Household Realities" prepared through a survey with a sample of 6,099 households.

The report was presented in a virtual programme on Tuesday morning.

Hossain Zillur said the second wave of Covid-19 has hit the country at a time when poor people are grappling with lower resilience because of fragile and segmented recovery from the first wave and with a huge burden of loans and depleting savings.

Rural people lost 24% of their savings because of the pandemic-induced income erosion and the rate is 11% in urban areas, he added.

The number of borrower households doubled and the cumulative amount of loan jumped by 76% in rural areas and 86% in urban areas.

Extreme poor households faced a loan burden amounting to Tk42,499 on average in March this year, which was Tk22,429 in February last year. Up to March, the average loan of extreme poor households increased by 89%, while it increased by 98% for moderate poor and 86% for vulnerable non-poor households.

The country's poor are not able to face any further income shock due to their reduced resilience, Hossain Zillur said, urging the government to impose a "smart lockdown" to avoid such a new income shock. 

He also proposed forming a new poverty alleviation strategy highlighting neo-poor and urban areas.

Dr Imran Matin said 17% of people who were employed at the pre-Covid time had been unemployed in June last year.

Despite some sort of recovery in employment, only 49% of them rejoined their pre-Covid jobs, but 41% had to move to another occupation. About 10% of them failed to manage any income source in the last one year. 

He also said unemployment rates remain high among skilled labour (14%), salaried jobs (13%) and housemaids (32%).

Income of transport workers eroded by 15% due to Covid-19, while it dropped by 22% for skilled labour, 16% for small business and 19% for rickshaw pullers.

Following the recovery in terms of income, urban people are lagging behind in recovery of expenditure too, revealed the report. 

It found that per capita spending on food increased by 2% in rural areas but it went down in urban areas by 17% in March this year over February last year.

About 52% of households in urban areas did not consume meat in the last week and 72% had no milk, 40% had no fruit, revealed the study.

The people in urban slums are facing difficulties with the price hike of the non-food items and the average non-food cost of the families has almost doubled over the last year.

House rent increased by 46% in the last one year in slum areas, while the cost increased by 81% for health, 104% for transportation and 51% for utility.

Hussain Zillur identified the rise of non-food expenditure as one of the three drivers of vulnerability during the Covid crisis. 

He said there is a huge uncertainty of preferred employment. "Occupational recovery concentrated on unskilled sectors. Some 41% in both rural and urban sectors had to move to less skilled sectors."

Women are now doubly burdened in the labour market and the unemployment rate among female-headed households is five times higher than among men. Women also face greater constraints to re-entry into labour markets, he added.

He also said the poor were almost deprived of social protection support in March after one year of the Covid-19 pandemic.

Quoting the report, he said 13% of poor people are depending on support from friends and relatives. Only 2% of people received support from the government in March, which was 9% in June last year. Support from other institutions has also gone down recently.

Hussain Zillur Rahman said more than 22% of people, who were non-poor in February last year, fell below the poverty line due to the adverse impact of Covid-19 in April last year. The rate of the new poor reduced to 21.24% in June last year and dropped to 14.75% in last March.  

He said considering the population size of 166 million, about 24.5 million people remained poor due to Covid-19.

There were 36.52 million new poor in April last year, a calculation in the report showed, and 12.02 million new poor recovered over the last year.

Explaining this, Hossain Zillur said a large section of the population lives a little above the poverty line. They are called vulnerable middle-class people. This category includes drivers, security guards, transport workers, restaurant workers, small entrepreneurs, self-employed and fixed wage workers in the informal sector.

He said they are accustomed to living on a fixed income and they have a certain pattern of living. They have fallen into poverty because the pandemic has eroded their income.

The new poor are facing the most difficult situation to recover their income. And their number is more in the cities. For this, urban areas and new poor people should be given more priority in the poverty alleviation plan in the future, he added.

The people could turn around a little bit from the pandemic shocks they suffered last year. There was some resilience too. This time, their capability to deal with the second wave is very low.

Savings have dropped a lot. The loan burden has doubled. The first wave of Covid-19 reduced their income by 70%. "Much now depends on how we deal with such shocks," Hossain Zillur added.

Only a nominal amount was allocated under the social safety programme before. Now, it must be increased as people's financial capacity has been exhausted. 

He also commented that there should be a comprehensive programme instead of a token one.

Farah Kabir, country director of ActionAid, at the event said a lot of people have migrated to rural areas in the second wave of Covid-19 due to their inability to pay for food and house rents in the cities.

The government should take measures to increase resilience in rural areas for newly migrant people, she added.