Economic opportunity for the unemployed

With the aim to increase economic opportunities for the low-income or unemployed youth community in urban areas, World Bank Group’s International Development Association offered Bangladesh a loan of $200 million in a recent agreement. The fund is likely to be spent primarily to help the migrant workers returning from abroad due to Covid-19 pandemic. The proposed loan is repayable in 30 years with a grace period of five years at an interest rate of 1.25 per cent.

 The agreement was signed between the Economic Relations Division (ERD) of the Finance Ministry and IDA. Under the agreement IDA will finance a project titled ‘Recovery and Advancement of Informal Sector Employment Project (RAISE).’

It has been revealed that the project will be implemented by Palli Karma Sahayak Foundation (PKSF) under the Financial Institutions Division of the Ministry of Finance and the Wage Earners’ Welfare Board under the Ministry of Expatriates’ Welfare and Overseas Employment. The objective of the project is increasing the economic opportunities of the low-income youth community in urban areas and the returnee migrants. The trainees will be provided with support to gain required skill through on-the-job training, and get loans for business and entrepreneurship development.

The country has witnessed overwhelming suffering of the returnee workers coming from various Middle-eastern and European countries as Covid-19 swept through those countries since early 2020. As per government decision in those countries public and private offices and businesses were closed down for an indefinite period and as a result a large number of the Bangladeshi expatriates had to leave well-paid jobs and businesses and return with little or no savings.

Once in Bangladesh they had to spend weeks in isolation and then a year in lockdown. During these periods they maintained a family with saved money or by selling some property.

Starting a new business in the country was not a possible option for most of them either for the lack of working capital or having no useful business connection. Under the IDA funded project, the social and economic integration of the returnee migrants will be achieved through creating micro entrepreneurs and establishing linkages with different organisations and financial institutions. This will help them access and re-integrate into the local labour market and go abroad again after achieving specific skills and expertise. According to project planning, this part of the project will be implemented by the Wage Earners’ Welfare Board at a cost of $50 million. The proposed RAISE project will be funded by $200 million from the IDA Fund.

This is worth the mention that Covid-19 has left a trail of deaths and devastation unparalleled in recent human history. One ILO research finding shows that the impact of the Covid-19 pandemic on jobs has been harder than what was normally expected to happen. The labor markets got distressed as businesses closed down one after another throughout 2020 across the continents. Millions of workers lost jobs and small traders pulled down their shutters with no certainty when normalcy would return. The ILO also projected that global working hours in 2021 will be 4.3 percent lower than the levels in the fourth quarter of 2019, prior to the outbreak of the pandemic. This working hour loss was equivalent to 125 million full-time jobs. In June, the ILO had projected a decline of 3.5 percent, or 100 million full-time jobs. In this connection,  it was said that high-income countries suffered a 3.6 percent decline in total hours worked in the third quarter of this year.

The ILO also found that Covid-19 had hit young women hardest among young people. Another research conducted locally shows that 54 per cent and 72 per cent of main earners from rural areas and urban slums had no job/work in early April 2020.  Whereas, the same people had regular work before the lockdown (February 2020). It was further said that after lifting the lockdown, the unemployment rate among the main wage earners declined to 17 per cent. On the other hand, earnings of rickshaw pullers declined by 54 per cent in June-July 2020 compared to February 2020.

Researchers predict that the impact of the pandemic may last much longer than what people thought in the beginning. It therefore calls for pragmatic planning and time-befitting action on a priority basis.