“With a negative income shock of 25%, the overall poverty rate will be 40.9%, which means another 20.4% population will fall into poverty due to the impact of COVID-19”, said an assessment of the researchers of SANEM on Saturday.
Researchers of South Asian Network on Economic Modeling (SANEM), led by the think tank’s Executive Director Dr. Selim Raihan have assessed the poverty impacts of the COVID-19 Pandemic in Bangladesh.
In addition to 34 million existing poor (BBS), according to SANEM, in case of uplifting the poverty line income by 1.25 times, there are another 36 million people who are ‘non-poor’ but can be categorised as the vulnerable population.
The researchers have run simulations Using the latest Household Income and Expenditure Survey (HIES) data of Bangladesh Bureau of Statistics (BBS). The key findings of the research also include: Poverty impact of any income shock can differ depending on the people engaged in various economic activities.
Simulation results suggest that most of the newly poor in Bangladesh will be concentrated in economic activities like crop, animal and fishing production (43%), different manufacturing activities including RMG (16%), retail trade (11%), transport activities (10%), and construction activities (7%).
Given that the majority of these people are employed in informal activities (85% of the employed), any employment shock, as in COVID-19, is feared to have severe implications to the overall level of poverty of the country. “Given the geographical dynamics of poverty in Bangladesh, a negative income shock on poverty rates will vary across the regions.
40 districts will experience the rise in the percentage of poverty more than the national average. For example, in Rangamati, there will be an additional 30.9% people falling into poverty”, the findings include.
It also said that in the same fashion, other major affected districts with higher percentages (than the national average of 20.4%) of additional people falling into poverty will be Mymensingh (30.2%), Sunamganj (28.7%), Cox’s Bazar (27.5%), Nilphamari (27.2%), Narail (27.1%), Chottogram (26.9%), Netrokona (25.9%), Chuadanga (25.8%), Sherpur (25.6%), Barguna (25.5%), Shariatpur (25.3%), etc.
“The estimated impact is found to be lower for Dhaka, Narayanganj, Gazipur, Munshiganj, Brahmanbaria and Narshingdi. However, since the initial hot spots of infections are concentrated in many of these areas with a high density of population, in reality, fall in income of households in these regions can be much higher than our assumption of 25% income shock.
Also, the higher concentration of small-scale trading activities, which can be heavily hit by the lockdown, may result in much more depressing impacts than the aforementioned estimations”, SANEM added.
Welcoming the Government of Bangladesh’s announced stimulus packages and social protection programmes, the SANEM team opined that the success of these initiatives depends on three factors: First, effectively identifying the vulnerable people and thereby determining the nature and duration of support.
Second, ensuring that the genuinely affected industries and poor and vulnerable people receive support. Third, introducing a Monitoring and Evaluation (M&E) mechanism to ensure efficiency, transparency and accountability in the distribution mechanism.
