For many millions of families across the world, their income does not derive from one specific dependable source, like a job. Put crudely, a large proportion of the global population is constantly hustling for a living, and their ability to earn a viable income is finely balanced.
COVID-19 has thrown this informal ecosystem into disarray.
The domino effect
Let’s take Bangladesh as an example. The garment industry has been a huge source of employment and income for this Asian nation over many decades. As COVID hit, clothing sales in high and middle income countries fell off a cliff, resulting in cancelled orders and delayed payments. That in turn led to tens of thousands of layoffs at garment factories, which directly affected middle class families in cities like Dhaka.
But the further impacts were even more dramatic. Income from those factory jobs normally feeds into the country’s wider economy — to rickshaw drivers, food stand operators, cleaners, childminders, and a whole host of ancillary workers. One man in the city of Chattogram told us, “There is no work of carrying cement, sand or bricks. People now hang out more outside, there’s no work.”
Some of that lost income would have flowed back to families in rural areas, as a supplement to subsistence farming. These families generally have little or nothing in the form of reserves, leaving them badly exposed to any economic shock. Like a pandemic.
“The effects of all this have been enormous.”
Add to all this the impact of movement restrictions and lockdowns and it’s clear just how serious the situation could quickly become for the poorest families. “The effects of all this have been enormous, and a real setback in the fight against extreme poverty in Bangladesh,” according to Concern’s Hasina Rahman. “And then there are the thousands of migrant workers who are being sent home from the Gulf and other countries, with the resulting loss in valuable remittances and the added burden on the villages and towns to which they are returning.”
A global problem
This situation is being replicated across different sectors in Concern’s countries of operation.
Much of our work in Somalia is with extremely vulnerable people who have been displaced from their rural homes to informal settlements in Mogadishu. They earn what they can by a variety of informal means — casual labor, laundry, construction, small trading, etc.
Many of those with whom our researchers have spoken report serious challenges. One women who has a produce stall told us “Most of the customers can`t afford the vegetables such as pumpkins, potatoes, onions and all green vegetables. Sometimes the supplies I am selling get destroyed when there is no one purchasing them.” Another woman described how her daughter had worked in the household of a family in Mogadishu for a monthly salary of $30, but by August she had lost her job.
For agrarian economies like Malawi, the impact of closed borders and price hikes for farming inputs such as seeds and fertilizer is endangering the coming planting season — and the work and income that comes with it. Those same border closures are also preventing laborers from crossing into Mozambique to seek work.
For a country like Haiti, which is massively exposed to the vagaries of international markets, the added economic whiplash of the pandemic is having far-reaching consequences. For example, parents who have lost jobs and income are struggling to afford school fees, leaving children in danger of losing their chance at education, and lessening their future earning potential. With fewer pupils, the schools are beginning to lay off teachers.
The tourism industry is a vital source of foreign exchange for the continent of Africa, supporting many valuable jobs in places like Kenya and Ethiopia. The World Bank says that 1 in 20 jobs in sub-Saharan Africa is in the travel and tourism sector, while the UNWTO puts the value of that sector at about $38 billion per annum for the entire continent
Closed borders and cancelled flights have decimated the industry, with the UN estimating that up to 2 million direct and indirect tourism jobs will be lost in Africa because of the pandemic. In Kenya’s Narok county, where the Maasai Mara sits, Governor Samuel Ole Tunai told Al Jazeera that between June and October – the high season marking the climax of the wildebeest migration – the local government usually takes in at least $200m. Much of that income, which supports poor rural communities, will be wiped out. Ongoing travel restrictions and uncertainty mean that there is little relief in sight.
How we can help
Cash-based assistance has become one of the most valuable emergency-response tools available to help those in crisis. Few countries in which we work have a comprehensive social safety net or welfare system, so cash support payments to those identified as the most vulnerable helps them to get by in the short to medium term.
For those reliant on agriculture for their income, we are working to help them access the essential inputs needed to get planting under way.
The economic fallout of the pandemic has brought into sharp focus the value of the work done by Concern and other organizations to help improve the resilience of low-income households across the world. “It’s clear that families with an increased asset base and access to savings — like those who take part in our “graduation” programs — are much better placed to face financial disruptions like those brought about by the pandemic,” according to Concern’s Kirk Prichard. “That’s why we’re so keen to protect and expand these investments. It’s a sustainable way to help people lift themselves to a place where they cope with crisis.”
“It’s our job to advocate strongly on their behalf.”
Finally, an important function of organizations like Concern is to advocate on behalf of those we work with, both at a national and international level, to ensure that they are not left behind. Makayla Palazzo of Concern’s advocacy team says “As governments in higher income countries implement multi-billion dollar stimulus packages, the cost of supporting more vulnerable economies is tiny by comparison. It is our job to advocate strongly on their behalf.”