Not only has the Coronavirus pandemic inflicted the greatest public health crisis the world has grappled with in at least 100 years, the attendant economic crisis has been more damaging than anything since the Great Depression, that started in the late 1920s and lasted till around the middle of the next decade. This was confirmed this week by the International Monetary Fund, as it cut global growth forecasts, or you may say increased its already dismal global contraction forecast - it now estimates a contraction of 4.9% in global gross domestic product in 2020, lower than the 3% fall it predicted in April.
The fund also downgraded its GDP forecast for 2021. It now expects a growth rate of 5.4% from the 5.8% forecast made in April (the positive reading reflects the fact that economic activity will be coming from a lower base following 2020′s heavy contraction). Chief Economist Gita Gopinath noted that the steep decline in activity comes with a catastrophic hit to the global labor market, and that the global decline in work hours caused by the response to the virus in the second quarter of the year is likely to be equivalent to a loss of more than 300 million full-time jobs. There is nothing even remotely uplifting in any of this.
On almost the same day, courtesy of the state-funded think tank Bangladesh Institute of Development Studies, we learned that almost 10% of the population in Bangladesh - some 16.4 million or 1.64 crore people - have been pushed below the poverty line in light of the pandemic. They are now being described as the “new poor”. The country’s poverty rate as a result is now close to 30% again, after years of good work had managed to bring the figure down close to 20%, as measured by the country’s own “age-old” poverty line. BIDS research director Dr Binayak Sen, who led the study, himself said if the line were to be updated in Bangladesh, it would result in a much higher number falling below it.
Perhaps understandably, given the nature of lockdowns and other social distancing measures we have seen imposed as part of the response to the virus, it is the urban workers who have suffered the most. Another study by BIDS that was presented in the same webinar found the income of urban workers had decreased by 60 percent, while that of rural workers had decreased by 10 percent. To be sure, there are no winners in a pandemic. And there is no good news here. But in the harshest way possible, the Coronavirus crisis may finally have reversed the unrelenting rural-to-urban push that has been choking the capital for so long now.