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The Financial Express

Restarting economy: Decision outweighs dividend

Poor people bearing the brunt of crisis


JASIM UDDIN HAROON & SAIF UDDIN | Published: July 01, 2020 09:27:14 | Updated: July 01, 2020 13:50:34


A salesman at a shoe shop in the city’s Polwel Super Market sits idle on Tuesday as the Covid-19 situation has put a damper on their bisiness --FE photo by Shafiqul Alam A salesman at a shoe shop in the city’s Polwel Super Market sits idle on Tuesday as the Covid-19 situation has put a damper on their bisiness --FE photo by Shafiqul Alam

Hope ran high on easing restrictions on movement and economic activities, but one month on people from all walks of life are laregely disappointed by the outcome. The poor, in particular, are still struggling to make ends meet.

The government had imposed restrictions on normal economic activities since March 26 in an attempt to slow the spread of coronavirus pandemic. It restarted the economy from May 31, even as positive cases and fatalities jumped.

But the discontinuation of public holiday has failed to meet the expectations of traders, manufacturers, exporters, importers, and people living on the margins.

Fears had deepened among certain quarters that the prolonged restrictions will put a damper on local and foreign investments. Despite easing of most restrictions, the private sector credit flow data continues to be disappointing.

The FE correspondents spoke to a cross section of economic players on the impact of easing restrictions on economic activities.

Traders said they have been opening their shops, although the daily turnover remains much less than the daily expenditures, both direct and indirect.

 

The shop owners, who sell non-essential products like television, refrigerator, air conditioners and mobile phone, said sales are much lower now than the pre-COVID period.

In contrast, sales of clothing items have picked up somewhat, with many believing such shoppers are those who missed Eid shopping.

Merchants complained of limited business hours, saying this is a barrier to increased transactions.

Currently, businesses are allowed to open establishments between 10.00 am and 4.00pm.

The correspondents visited Panthapath, Kataban, Elephant Road, Science Lab, Baily Road and its adjoining areas in the capital and found the otherwise bustling business districts calm and quiet; many avenues looked deserted.

Most of the shops were found operating with limited lighting while many of them switched off the air-conditioning system to save electricity costs.

Imran Shaikh, who manages the Elephant Road Branch of Top Ten Fabric & Tailors, said it has been difficult for them to strike a trade-off between profit and operational costs since the sales volume has shrunk drastically.

"We are running the showroom with limited number of sales persons considering the need for our customers, who approach us for reliable services," he said.

The outlet was running with only 18 staff members, less than half its total employees.

Ronju Ahmed, manager of Almas Super Shop at Bashundhara City, said the branch reopened two weeks back and said the sales are not like they were before.

"We have to remain open, though overall business atmosphere is not favourable," he said. "Limited number of shoppers visits outlets fearing the risk of contracting the virus," he added.

The lower turnout of shoppers has also translated into slugging sales, Mr Ahmed said.

He estimated the turnover volume has more than halved compared with the pre-health emergency period.

Mr Ahmed said they struggle to reach a break-even point, although they sell all types of goods a family needs -- be it middle class or upper middle class.

"It is impossible for any business to provide salaries to their staff without operations for a long," he said, adding that the management disbursed salaries as usual to the staff even when they stayed at home.

Mentioning downtrend in transaction, branch manager of Samsung Smart Plaza at Bashundhara City S K Mohammad Shamim said sales have slipped by almost one-fourth.

"Though the sales of electronic items have dropped, those of washing machines have slightly gone up. Unfortunately, we cannot deliver automatic washers due to supply shortage," he noted.

However, after the Eid vacation, there had been brisk demand for smartphones, he said.

In the meantime, some sales are growing on the e-commerce front, according to some business circles.

Local electronics brand Walton distributes its products through its nearly 17,000 outlets across the country.

Walton Group executive director Uday Hakim said the sales volume in the capital city outlets declined due to the virus situation, but business in other parts of the country is almost normal.

"I believe the situation will improve within the next two weeks on the back of demand for refrigerators ahead of Eid-ul-Azha," he said.

His company has added advantage. Walton is not facing any supply chain disruption amid pandemic as it manufactures most of its products in Bangladesh, Hakim added.

Helal Uddin, president of the Bangladesh Dokan Malik Somity, a platform of retail stores, said that the expectations from reopening remain unmet.

However, retail stores have some cash in their hands following the resumption of shopping malls during Ramadan.

But he said after Eid, there is a drastic fall in business not only in cities, but also in rural areas.

He, however, said if people get much time from the existing 10 am to 4:00 pm then there may be an improvement in sales.

Abul Bashar Chowdhury, a leading importer of commodities, said that the overall demand for imported commodities has dropped during the pandemic.

"It may be around 30 per cent," Mr. Chowdhury said.

He said during the shutdowns, there was panic-buying, but the demand is poor now.

Clothing exporters said some orders have helped slash the liabilities, but those do not fetch profit.

Anwar-Ul Alam Chowdhury, managing director of Evince Group, said the liability has reduced to some extent.

But the chances of getting more orders from buyers are slim.

"How will they place order at a time when big economies are in trouble over COVID?" he said.

Far from the business world, a glimpse into the lives of marginal people tells more horrible stories.

Abul Khair, a porter in the city's Kawran Bazar, said he hardly gets work, though everything is normal now.

"Nowadays, I get only three-five customers, which is nearly one-third of the usual period," he said.

An official of the Bangladesh Institute of Labour Studies or BILS said the marginal people such as construction workers, domestic helps and transport workers are hit hard by the ongoing crisis and passing a tough time and have no idea about what is in store for them.

Programme consultant of BILS Khandoker Abdus Salam told the FE that "Millions of workers have remained unemployed, only a handful of labourers get opportunities to work, they earn much less than what is needed," said Mr Salam.

He fears social unrest unless the marginal people are provided with basic needs.

Mr Salam also underscored the need for food rationing system and a database for transparent management.

"Providing them with food along with free Covid-19 test facility is a must to avoid any untoward situation in the coming days" he added.

jasimharoon@yahoo.com

saif.febd@gmail.com

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