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As per the Bangladesh Bureau of Statistics’ Labor Force Survey 2016, 86.2% of employees aged 15 or older belong to the informal sector. Given the level of employment generated by the informal sector, the growth and stability of the informal sector are critical for maintaining social cohesion and inclusive economic growth.
As the pandemic finally hit the nation, precautionary measures in the form of supply hoarding, hygiene maintenance and social distancing were taken up by civilians, particularly in urban areas. The informal sector was the hit the hardest as citizens refrained from coming out of their homes, leading to lower income levels for the economically marginalized segments like hawkers and rickshaw pullers.
The major immediate ramifications for the informal industry of Bangladesh are as follows:
Once the nation recovers from this crisis, businesses will start operating at its usual pace. However, the informal sector will take the biggest hit among all the sectors in the country. Government has promised to support the economically vulnerable and plans to sell subsidized rice (BDT 10/kg) through VGF scheme and provide cash handouts to the ultra-poor segment. However, systemic level support is imperative for bringing about sustainable changes in the lives of the informal sector workers.
Author: Sanjir Ali, Business Consultant, LightCastle Partners
The LightCastle team has been analyzing the macro and industry level picture and possible impacts wrought about by the Covid-19 crisis. Over the following days, we’ll be covering the major sectors shedding light on the possible short and long term ramifications of the global pandemic. Read all the articles in the series.
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