Covid-19: Eid economy shrinks to Tk1,500cr from Tk1,50,000cr

Coronavirus has brought the global economy to its knees and Bangladesh is no exception. To stem the spread of Covid-19, the authorities of the popular shopping malls in Dhaka and elsewhere have decided to keep the markets shut, leaving an impact on overall business performance centring this year’s Eid-ul-Fitr. As a result, the size of the Eid economy has come down from around Tk1,50,000 crore to Tk1,500 crore this year, said insiders.

As per the shop owners’ association, 80 percent of the total clothes sold annually are sold during Eid-ul-Fitr, while the remaining 20 percent rest of the year. During the Eid season, the sale of clothes increases five times. But it’s a whole different ball game this time around, said the business leaders, as the few markets that have been reopened, have already failed to draw crowds.    

Mohammed Saiful, a businessman of Chandni Chowk Market in the city's Nilkhet area, said, “I never imagined that I would have to experience this. We wait throughout the year for selling clothes in volumes during the Eid.”

“But all plans have gone down the drain. Shops are shut. We can’t pay our employees,” said a frustrated Saiful. “I don’t know what’s awaiting us.”

Unlike other Eids, there is no excitement in customers’ mind as well.

Banker Fatema Tuz Zohora said she has not bought any Eid gift for any of her family members this time – even she herself did not receive any gift. “Sustaining the coronavirus pandemic is more important than celebrating Eid,” she opined.

While comparing this year’s Eid with Eids in the past, Bangladesh Shop Owners Association (BSOA) President Helal Uddin said, “There is a gulf of difference – I never experienced this before.” 

Though there are no official statistics, the Eid economy in Bangladesh hovers between Tk1,00,000 crore and Tk1,50,000 crore, said Helal.

Of the total, Zakat, an Islamic levy that Muslims give out as charity every year, accounts for Tk70,000 crore, clothing industry Tk30,000-35,000 crore, essential commodities Tk22,000-25,000 crore, and transportation, Eid bonus and other potential avenues Tk30,000 crore, he said. Besides, around Tk3,000 crore circulate centring tailoring activities and online shopping.    

But this year, the size of the Eid economy has come down to Tk1,000-1,500 crore, said Helal, ventilating his frustration. 

Alongside big shopping malls, markets in divisional cities have remained closed. Only markets at upazila levels and small shops in adjoining areas have reopened their activities following the government order, he said.

Yet, the traders have not been able to make a profit – they have just recovered their investments, said Helal, adding that these small businessmen would now remain tension free for a month. “But what will happen next?” he questioned. 

There are around 90 lakh people employed in around 30 lakh shops across the country. These shops usually make a good business centring the Eid. But apart from the shops selling daily essentials and medicines, almost all the shops remained shut due to the pandemic.

If the situation continues like this, the shop owners won’t have any choice but to sack their employees from the month of June, he added.

As per the shop owners association, of the total Eid sales, clothing accounts for 60 percent, food 20 percent and other products and services the remaining 20 percent.

Usually, both government and private service holders receive a good amount of bonus during the Eid. Moreover, affluent people provide Zakat to the poor. The circulation of the money like this stimulates the economy to a great extent. Though the government employees received Eid bonus, many private organisations did not pay salaries and Eid bonus to their employees this time.    

Referring to this, Dr Muhammad Shahadat Hossain Siddiquee, professor of economics at Dhaka University, said due to coronavirus pandemic, people's income has dropped globally, resulting in the decline in demands.

People are now busy meeting the demand of daily essentials; as a result, people won’t buy clothes, shoes and other fancy items in this Eid, he observed.

Since banking transactions have dropped unlike other times, there has been a fall in usual banking activities this time around, he said. 

Moreover, Bangladesh usually receives a good amount of money in remittance during Eid. But due to global pandemic, remittance flow has dropped. As per Bangladesh Bank records, the country in March received $128.68 crore in remittance which dropped to $108.10 crore in April.  

Due to the global pandemic, said Dr Shahadat, the income of Bangladeshi expatriates has dropped, contributing to the fall in remittance flow. 

Moreover, the transportation sector makes a good income during Eid. But this year the transportation sector is the worst hit due to lockdown, he added.   

Since income has dropped, demand has dropped too, resulting in the slower economic growth, he added. 

Asked, how they are planning to bounce back, shop owners association president Helal Uddin said, “We demanded Tk6,000 crore as loans from the government. We have come to know that the government has allocated Tk4,000 crore for us.” “If given, we want to pay back the amount by doing our jobs,” he added.