About 83% of Small and medium-sized enterprises (SMEs) missed out on stimulus relief; and 69% of firms were unable to pay staff wages, social security charges, and other fixed costs due to the Covid-19 pandemic, said a rapid survey released Thursday.
Business Initiative Leading Development(BUILD) and Policy Exchange Bangladesh conducted the survey.
The survey, which was part of a study, also found that Covid hit the sale of 86% of firms and 95% of such business organisations reported lower demand compared to the pre-pandemic time.
These findings were revealed at the webinar "Covid Stimulus and Links to Employment, Consumption, and Investment: The Bangladesh Experience, Global Lessons, and Priorities for Next Round Support" organised by BUILD.
"The national budget for FY2021-22 focused on the continued economic recovery amid the pandemic. If a second stimulus package is formulated, importance will be given to activate more SME-supportive organisations," Planning Minister MA Mannan said at the programme.
BUILD Chair Abul Kasem Khan said unemployment, demand generation, and savings need to be addressed to make the government's fight against Covid-19 more effective.
International Labour Organization Country Director Tuomo Poutiainen said socially inclusive measures like assisting youth, real unemployed, vaccination programmes, access to education, and mental health need to be addressed and linked to the stimulus package. "To ensure continuity of investment growth, productive employment, social safety net programmes, the upcoming stimulus package should focus on inclusive areas."
Policy Exchange Chairman Dr M Masrur Reaz said, "The design of the government announced stimulus packages is not adequately inclusive as they do not properly consider the challenges and needs of small entrepreneurs. The working capital support and the overall design of the packages lacked incentives to help the employers sustain employment."
Sharing examples of stimulus packages in countries such as Germany, India, China, Vietnam, and the US, Dr Reaz proposed several short and long-term recommendations for a robust next round of support.
Nihad Kabir, president of Metropolitan Chamber of Commerce and Industry, said: "The informal economy did not receive the expected benefit from the announced financial stimulus packages (FSPs)."
Centre for Policy Dialogue Distinguished Fellow Dr Mustafizur Rahman suggested for segmented stimulus as "in the labour force of 60.5 million people, 4.4% are employees, 44% are self-employed, 11.55% are family helpers and 15.5% labourers."
Rizwan Rahman, president of Dhaka Chamber of Commerce and Industry, said the terms and conditions for the informal sector to avail FSP need to be simplified; and the initiative to formulate an SME database will identify the true beneficiaries.
Dr Md Masudur Rahman, Chairperson of SME Foundation said, "The government has announced two FSPs for SMEs, but the disbursement process of the commercial banks is not enough. Most of the SMEs are from an informal sector, making them unable to be bankable."
Asif Ibrahim, Chairman, Chittagong Stock Exchange and founder chairperson of BUILD focused on taking learning from the first FSP to make the second more effective.
"Health, education, rural economy should get the highest priority while designing the second stimulus package. Constraints faced by SMEs to avail stimulus package needs to be addressed in an innovative and simplified manner."
BUILD CEO Ferdaus Ara Begum said a redesigned second round of stimulus would be helpful for the private sector – namely for the cottage, micro, small and medium enterprises (CMSMEs).
Federation of Bangladesh Chambers of Commerce and Industries President Md Jashim Uddin Ahmed, Chittagong Chamber of Commerce and Industry President Mahbubul Alam, and Bangladesh Bank General Manager Jamal Uddin also spoke at the event.