FE ONLINE DESK | Financial Express May 01, 2020

Bangladesh poverty rate may rise to 40.9 per cent due to COVID-19 pandemic impacts, SANEM has said in a research report.

The current national average poverty rate in the country is 20.4 per cent, the South Asian Network on Economic Modeling (SANEM) mentions in the report issued on Friday.

A total of 40 districts will experience the rise in the percentage of poverty more than the national average, the report shows.

SANEM Executive Director Dr Selim Raihan led the research – assessing the poverty impacts of the COVID-19 pandemic in the country.

According to the SANEM report, in addition to 34 million existing poor (BBS), 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 vulnerable.

Simulation results suggest that most of the newly poor in Bangladesh will be concentrated in economic activities like crop, animal and fishing production (43 per cent), different manufacturing activities including RMG (16 per cent), retail trade (11 per cent), transport activities (10 per cent), and construction activities (7 per cent), the report says.

Given that the majority of these people are employed in informal activities (85 per cent 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, it adds.

According to the SANEM study, the estimated pandemic impact is found to be lower for Dhaka, Narayanganj, Gazipur, Munshiganj, Brahmanbaria and Narshingdi.

Welcoming the government-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.

SANEM, launched in January 2007 in Dhaka, is a non-profit research organiation registered with the Registrar of Joint Stock Companies and Firms in Bangladesh.