For rural economy, burden gets heavy



Nargis Akhter, Md Lokman and their three children — are one of many families who moved to their village homes or hometowns from cities due to the continuing Covid-19 economic fallout.

Lokman worked as a day labourer when he first arrived in Dhaka, and until recently, was a pick-up van driver. The family lived on a monthly income of Tk 18,000, paying rent and utilities worth Tk 4,000 for a single room and spending the rest on food and their children’s education.

When the shutdown started in late March, however, Lokman had no earnings and fell four months behind in rent. At the time, the family was entirely dependent on handouts and loans from their relatives and friends.

“We thought when the lockdown ended, everything would get back to normal,” said Nargis.

In June, when the shutdown ended, Lokman failed to make enough to pay back several months of rent and other expenses. Their landlord gave them notice to vacate the room.

“We thought over and over again what to do, and finally realised that we might be able to manage food with the income, but it is impossible to pay the rent and repay the loans,” Nargis said.

So, last month, the family of five moved to their village home in Kalmakanda, Netrokona. Lokman managed to lease two kathas of land at Tk 15,000 — that he borrowed from acquaintances in the village — for farming, and hopes to produce enough paddy for the family to get by for six months.

An unofficial estimate by Varatia Parishad, a tenants’ platform, says over 50,000 families have already left Dhaka, without a steady income to afford living in the capital.

A recent study titled “Livelihoods, Coping, and Support during COVID-19”, jointly conducted by Power and Participation Research Centre (PPRC) and Brac Institute of Government and Development (BIGD), showed urban-rural migration was six percent in April but it rose to 13.3 percent between April and June.

For Dhaka alone, this figure was 15.6 percent.

The study, which surveyed 7,638 rural and urban households across the country, noted that this urban exit was driven by four expenditure burdens — house rent, health costs, transportation, and utilities.

The situation is not very different for those who once held white-collar jobs or worked abroad.

Punno Gopal Paul and Shudipta Rani Chowdhury, a young couple in Dhaka, had a rude awakening when Punno was sacked from his job as a merchandiser at a buying house on April 21.

In July, after spending all their savings on rent, they left the city for Pabna.

“It was getting difficult to pay Tk 15,000 for rent alongside maintaining a family of three, with no job,” said Shudipta.

The couple are currently dependent on extended family.

“Punno never learnt how to run a business or farming. He is still trying for jobs in Pabna town, while I’m preparing for government jobs, although there are almost no job circulars,” said Shudipta.

Another large number of people currently adding to the unemployed in rural areas are overseas workers.

According to Prof Mustafizur Rahman, distinguished fellow of Centre for Policy Dialogue (CPD), although more than six lakh people go abroad for jobs every year; this year they are stuck with no way to go.

Most migrant workers are from rural areas, and particularly from low and lower-middle income households.

Some had been in the country for a holiday when Covid-19 halted flights, or returned when they lost their jobs or had no work temporarily, and are currently unable to go back.

At least 95,062 Bangladeshi workers returned home from 26 countries between April and August 30, according to data from the expatriates’ welfare ministry.

Ekramul Hossain, a migrant worker from Iraq, lost his job and returned to Bangladesh, where he is currently struggling to set up a business.

He used to earn around $1,200 per month.

Ekramul has taken a loan of Tk 4 lakh from a relative and applied for another Tk 2 lakh (with a nine percent interest rate) from Bangladesh Krishi Bank to set up a dairy farm.

Expatriates’ Welfare and Overseas Employment Minister Imran Ahmad announced recently that the ministry has formed a Tk 700 crore fund for the welfare of returned foreign workers, who will be entitled to loans at four percent interest rate.

As an expatriate worker, although Ekramul can avail this, he doesn’t know where to apply for it.

“Currently, I am able to earn Tk 3,000 to Tk 5,000 every month, after meeting all the business expenses. Maybe I can reap the benefits later, but now, my situation is not good,” he said.

WAYOUT?

Hossain Zillur Rahman, executive chairman at PPRC, said policymakers should include the needs of the rural non-agricultural sector in policies and stimulus packages.

“The stimulus package of Tk 72,750 crores to counter the adverse effect of coronavirus on the country’s economy has been designed for the formal economy,” said Hossain Zillur, adding that rural people in any case hardly access finance from banks due to so many formalities.

In April, the government announced total stimulus packages adding up to Tk 72,750 crore — for small and medium industries, and the agricultural sector, among others.

“The government can announce a stimulus package that will be disbursed not via banks but by microfinance institutions. But in the first phase, the government should undertake a large-scale policy consultative process in order to find out what to do in this situation,” he added.

Prof Mustafizur said stimulus packages aimed at the rural economy — such as Tk 5,000 crore for the agriculture sector and Tk 20,000 crores for cottage, micro, small, and medium enterprises — must be disbursed quickly.

He also stressed creating more non-agricultural employment opportunities in rural areas.

“There must be employment opportunities for labour-intensive work, such as renovating rural roads and investing in public works. These can help informal sector workers who returned to their villages.”

Dr Sayema Haque Bidisha, professor of economics at the University of Dhaka, said since many young people don’t have the means to live in the cities anymore or take up agricultural work, they should be given entrepreneurial support — by introducing them into the supply chain process, providing them with training, and ensuring access to finance.

“The government’s strategy must include rural-based small-scale employment generation programmes such as micro, small, and cottage industries.

“Relaxing the provisioning policies of SME loans is also important so that the stimulus package for SMEs can be disbursed as early as possible.”

She also stressed on investing in rural infrastructure development in order to decentralise so that people need not move to cities for adequate education and health services.

 

 





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