COVID-19, trade and gender in Bangladesh

Abstract

The aim of the paper was to assess the nexus between COVID 19, trade and gender. Since readymade garments (RMG) and remittances (i.e. services exports) dominant exports in Bangladesh, the paper analyses the impact of the COVID-19 via the RMG and remittance shocks on women workers and entrepreneurs in Bangladesh. The economic and social impacts on trade and COVID 19 are large in Bangladesh. Supportive measures were needed to address these deleterious impacts. The paper recommends tapping into the potential for job creation in ready-made garment and service sectors with supporting policies to alleviate women’s unpaid care work, to reduce gender-based violence in the public space and at work and to upgrade women’s skills – in particular, digital skills to accompany the economic transformation to a shift towards the ICT and service sector. It was also suggested that the government should ensure that support packages reach women entrepreneurs by partnering up with micro-finance institutions and offer reduced collaterals, prolonged repayment timeline and flexibility as to the size of the interest free loan.

Keywords:

• Covid-19
• gender
• trade
• empowerment

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Chairman, SANEM and Director, PRI and Senior Research Officer, Overseas Development Institute (ODI), respectively. The paper is based on report prepared under the Bangladesh Trade Policy and Negotiation Capacity Building Support Project Phase I.

2 Bangladesh static Computable General Equilibrium (CGE) model calibrated to the gendered SAM 2000 has been used. Computable General Equilibrium (CGE) captures price and resource allocation implications through the inter-dependence system. The CGE model incorporates market clearing mechanism for major markets – product, factor, and consumer.

3 A poverty model to assess poverty impacts of policy simulations. The household income or consumption outcomes simulated in the SAM and CGE models are linked to the poverty model to assess poverty implications. The employment model captures employment impacts of policy simulations.

4 Although not enough information in available in LFS to categorize workers according to their skills, it has been argued that within the RMG industry, women workers occupy low skilled works compared to men due to lower levels of education and skills. This is perhaps also the case that in the time workers retrenchment, women are the first victims.

5 Simeen Mahmud and Sayema Haque Bidisha (2018), “Female Labor Market Participation in Bangladesh: Structural Changes and Determinants of Labor Supply,” in Selim Raihan edited “Structural Change and Dynamics of Labor Markets in Bangladesh,” South Asia Economic and Policy Studies, Springer, 2018.

6 World Bank. (2015). Bangladesh Development Update. Dhaka: World Bank.

7 Bangladesh CGE model is calibrated to SAM 2020. The 2020 SAM identifies the economic relations through four types of accounts: (i) production activity and commodity accounts for the 46 sectors; (ii) 4 factors of productions with 4 different types of labour and 1 type of capital; (iii) current account transactions among the 4 main institutional agents; household-members and unincorporated capital, corporation, government and the rest of the world; and (iv) two consolidated capital accounts distinguished by public and private origins to capture the flows of savings and investment.

8 Calculating lockdown parameter is not easy as there is not benchmark data. We used the installed capital information of SAM 2020 to measure the lockdown parameter. Using the capital information data, the weekly use of capital has been calculated. The weekly capital use parameters are then used to calculate the sizes of lockdown 4 weeks or 8 weeks as per cent of installed capital of the 17 activities – barring the 6 agricultural activities.

9 Household income = factor income + SP transfers + Remittance. Factor incomes depends on household’s participation in the factor market and thus depends on GDP. While SP and remittances are direct transfers to the households.

10 Jaim, J., (2020), “Exist or exit? Women business‐owners in Bangladesh during COVID‐19”, Feminist Frontiers, September 12, 2020.

11 To date, most recovery policies with a care element have been implemented in high-income countries (UNDP, 2021).

Additional information

Notes on contributors

Bazlul Haque Khondker

Dr Bazlul Haque Khondker is a former Professor of the Department of Economics, University of Dhaka and Chairman of the South Asian Network on Economic Modeling (SANEM). He holds a PhD degree in Economics and an MSc degree in Quantitative Development Economics from the University of Warwick, England.

Laetitia Pettinotti

Dr Laetitia Pettinotti is a Research Fellow at ODI. She is an economist working on issues relating to economic transformation, climate change and gender. Her research interests include the climate finance, development and climate nexus, agriculture, development corridors and livelihoods.