Md Mazadul Hoque
A worrying sentence written by Isabelle Durant, Deputy Secretary- General of UNCTAD, reads “US$ 2 trillion to $3.4 trillions of income loss and 25 million job cuts as a result of COVID-19 outbreak. It is the sign of cyclical unemployment that appears at the period of long-term economic downturn.
When the economy shows sign of slowdown or loses its growth pace, cyclical unemployment is continuously rising. Public life in countries around the world has come to a near standstill in absence of doing routine jobs.
No countries in the world never expects unemployment situation to a great extent in economy. If it is said on the basis of macroeconomic context, any economy with steadily rising unemployment rate is expected to fall in what to do situation in any moment.
Those economies experiencing high unemployment rate never dream to go forward economically. But, this rate is gradually on the rise worldwide as a result of COVID-19 outbreak that began in December last of immediate past year.
Among 199 novel coronavirus infected countries, the country -Bangladesh also listed in beginning of March this year. As World Health Organizations (WHO) termed COVID-19 as pandemic with high emphasize, the whole world has been bound to stop all offices, production centers and services centers under lockdown program.
The lockdown came following fast spreading COVID-19 that claiming thousand lives in day. Already, US President Donald Trump approved a $2-trillion relief package from which $350 billion would be given through banking channel to small business where 60 million people are involved as employees, according to Financial Times.
Amid countrywide lockdown, vast number of workers employed in both formal and informal sectors is passing bad time in fear of losing jobs. The decision for cut off workers on small scale has already been on the process. Those who are working in small and medium enterprises are affected by COVID-19.
The demand for products manufactured in small and medium sized enterprises is on the decline drastically. So, there is no alternative avenue to run nearly five thousand factories at this moment. The labor force is being made assurance for monthly salary and wages. In the wake of vulnerable situation, the country’s eminent economists are raising their voices to save economy as well as workers anyhow. They warned that the economy will go to unknown destinations if right measures are not taken in hand right now.
Jobless people would a threat for our economy. If 64 million workers, employed in informal sectors, do not find any jobs to survive, it would be tough to control them resulting in rising criminal activities. From my view, as a stimulus package declared by the government, Tk 50-billion for the export oriented sector is laudable, but other domestic industries and services sectors that create millions of jobs and economic opportunities should not be left out.
According to the state-run Bureau of Statistics (BBS), Bangladesh is home to 8.07 million macro, micro and medium sized business units across the country. Among the dominant activities, the whole sale and retail trade accounts for 45.91 percent followed by the transportation and storage at 13.65 percent, manufacturing at 11.76 percent, hospitality and food services at 4.77 percent, education at 3.93 percent, construction sector at 2.39 percent and agriculture, forestry and fishing 2.90 percent.
Large job creating sectors – poultry and livestock, agro-processing, hotel and restaurant, transportation, construction, education, shops and malls, trading business have been hit hard by the impact of COVID-19.
Millions of worker and staffers have already become jobless. If COVID-19 is prolonged many more will lose jobs and income. Such kind of unemployment is called cyclical unemployment in economy. The world saw cyclical unemployment during great depression. When demand for goods and services are on decline trend, the production units need not existing employees any more calling this situation as cyclical unemployment.
To tackle this situation, there needs to be provided more stimulus packages to the workers of small and medium sized factories. “Around 24 million day laborers in Bangladesh have become jobless due to corona outbreak”- reported a leading English language newspaper on March 31.
The United Nations has already called for $2.5 trillion coronavirus crisis package for developing countries as UNCTAD disclosed this figure in its website. Bangladesh might seek financial aid to address the current need. As developing countries have taken an enormous hit by COVID-19 in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings including from falling commodity prices and declining tourist revenues, the newly introduced package should go to them- UNCTAD also said.
So, the need for moving is a must to seize financial package created for the countries hit by COVID-19.
According to reliable sources, Bangladesh unemployment rate for 2018 was 4.31 percent, a 0.06 percent decline from 2017. Unemployment rate recorded in India 2.55 percent, Vietnam 1.89 percent, Bhutan 2.20 percent, Pakistan 3.04 percent, and Indonesia 4.30 percent.
In such a situation, rise unemployment rate is not acceptable. To provide the unemployed people with jobs, a program titled “Food for Works” might have been introduced shortly until COVID -19 outbreak exist.
The state has to take responsibility of the people who have lost their jobs due to unexpected situation across the world. I do believe millions of on the jobs people will not be affected much if they are temporarily unemployed as the government is determined to feed them by any means.
The unemployed must be brought under the program launched by the government. The wealthy people should stand by the poverty-stricken people alongside government. International donors must respond to the crisis.
The state and not-state entities must play their roles to rescue the sufferings that the people may suffer because of the deadly virus.
Md Mazadul Hoque is a banker and analyst of economic affairs. E-mail: [email protected]