83pc SMEs get no Covid stimulus: Survey

A recent survey has concluded that about 83 percent of small and medium-sized enterprises received no stimulus relief from the government, while 69 percent of SMEs were now unable to pay staff wages along with other fixed and variable costs due to the Covid-19 pandemic.

The survey, which was a part of a study, also found that commercial activities of 86 percent of these firms were negatively affected by the pandemic and 95 percent of SMEs reported a current fall in demand compared to the pre-pandemic period.

The Business Initiative Leading Development (BUILD) and the Policy Exchange Bangladesh jointly conducted the survey in February this year.

The major findings of the survey were revealed at the virtual webinar titled “Covid Stimulus and Links to Employment, Consumption, and Investment: The Bangladesh Experience, Global Lessons, and Priorities for Next Round Support,” said a press release on Thursday.

In his keynote presentation, Policy Exchange Chairman Dr M Masrur Reaz highlighted that the design of the stimulus packages announced by the government were not adequately inclusive because of a lack of consideration of the challenges and needs of small entrepreneurs.

The event was organised virtually by BUILD as part of supporting the government in redesigning a second-round stimulus package for inclusive economic recovery.

He added that the working capital support and the overall design of the packages lacked incentives for employers to sustain employment.

International Labour Organization Director Tuomo Poutiainen said social inclusive measures such as assistance for the youth, real unemployed, vaccination program, access to education, mental health, among others, need to be addressed and linked to the stimulus package.

“To ensure continuity of the growth of investment, productive employment, the social safety net program, the upcoming stimulus package should focus on these inclusive areas,” he said.

He also mentioned that the skill ecosystem of the country needs to be upgraded to provide a technically and technologically sound workforce to attract foreign direct investment in economic zones.

CPD Distinguished Fellow Dr Mustafizur Rahman told the webinar that FDI in the country had been reduced at an alarming rate amid the pandemic, mentioning that out of the $33 billion targeted FDI of 7th Five Year Plan, only $11billion has been achieved.

He also recommended designing segmented stimulus considering the 60.5 million labour force of which 4.4 percent are employees, 44 percent are self-employed, 11.55 percent family helpers and 15.5 percent labourers.

Addressing the webinar as chief guest, Planning Minister MA Mannan said the country’s economy has been growing gradually propelled by millions of small investors.

Mentioning that the FY2021-22 national budget has been formulated on the continued economic recovery amid the pandemic, the minister also said the government will consider the demand of the grassroots by giving importance to activate more SME supportive organisation if a second stimulus package is formulated.

He also appreciated the role of central bank’s role in disbursing stimulus package of the CMSME.

Meanwhile, Bangladesh Bank General Manager Jamal Uddin informed the webinar that 73 percent of the CMSME stimulus package has been disbursed to 1,00,000 entrepreneurs, of which about 5.58 percent are women entrepreneur.

“While 98 percent of announced packages were for large-scale entrepreneurs. In case of agriculture, about 80 percent has been disbursed benefited about 1.7 lakh people,” he added.

While presenting his welcome note, BUILD Chairperson Abul Kasem Khan said the initiatives taken by the government to combat the Covid-19 gave confidence to the economy. However, issues regarding unemployment, demand generation, and savings need to be addressed to make the initiatives more fruitful.