Local industry is facing a very critical time almost shutting down for supply chain disruptions caused by the coronavirus, experts said. The government deployed troops, RAB and police to enforce the start of a nationwide 10-day shutdown to slow the spread of the virus in the densely populated country on Thursday, they said.
Besides, all modes of transport and all shops and markets except for those selling daily essentials like medicines and groceries were closed, they mentioned. As part of the move, streets in all cities across the country were empty which resulted in the local industries facing obstacles.
An SME entrepreneur Esrat Jahan Choudhury told Bangladesh Post, “We are passing through a difficult time. If this situation continues, we will have to incur huge losses.” She said if we cannot run the business for a long time how we can pay salaries to employees, rent and different bills.
Esrat requested the government to give them cash incentive to sustain in this critical time. Otherwise, many companies may shut down permanently for fund crises, she added. Economists have suggested providing immediate special cash incentives to those groups of industries most affected by the current coronavirus in order to overcome the worsening national and global crisis.
They said the local industry is vital to the country's economy because it fulfills domestic demand with almost 86 percent employees of total employment in the country in the sector. Recently, export-oriented industries have received a new incentive of Tk 50 billion following Coronavirus tension, but the local industry especially large industries and small and medium enterprises (SMEs) have not gotten anything, they mentioned.
According to the latest Bangladesh Bureau of Statistics (BBS) report, the total labor force of the country is 60.6 million. Out of this, only 14.9 percent work in the institutional sector while the remaining 85.1 percent in the informal. According to the report, 95.4 percent of the total labor force (employed) in the agricultural sector is informal. Besides, 89.9 percent workers in the industrial sector and 71.8 percent of the labor force in the service sector are informally employed.
Currently, the number of small and medium entrepreneurs (SMEs) in the country is around 60 lakh. The contribution of the sector to the GDP is 20.25 percent. Economists opined that SME entrepreneurs usually have very little capital. Hence, most of them will terminate their businesses, they feared while raising the question about what would happen to the workers working in this sector.
In this regard, Planning Minister MA Mannan told the media, “The government wants to help everyone. At first, the government provides the formal sector. Then, it comes to other sectors.” “The government has already given different support to poor people including rice and pulses at the upazila level. If more is needed, we will provide. Everyone is equal to the government,” he informed.
Eminent economist, Zahid Hussain told Bangladesh Post, “The local industry is going to face many challenges as coronavirus has broken down all activities of the country.” He mentioned that most of the workers in Bangladesh anticipate losing jobs as many companies have temporarily closed while many small businessmen are in a critical time for the coronavirus scare.
Hence, the government should immediately create funds to provide cash financial incentives in local industry to manage the bad situation in the country, he added. In order to protect day labourers and lower earner groups, he urged the government to provide money as ‘social protection or security programme,’ extracting from other sectors in the 2019-20 fiscal year budget.
