New poor, the new reality
Economist Hossain Zillur Rahman observes that there are many people who are sliding into poverty, who were earlier not counted as the poor. This band of people, he finds, includes urban lower middle class. Currently, Executive Chairman of PPRC and Chairperson of BRAC, Dr Rahman writes how the concept of the new poor has evolved in the recent context of global coronavirus pandemic.
The ‘new poor’ is a concept we developed to express a new reality as coming out of the PPRC-BIGD rapid response surveys during April-October, 2020. People who were subsisting above the poverty line income in Bangladesh were suddenly pushed below the poverty line by the economic shock of Covid-19 induced disruptions in livelihoods and economic activities. The ‘new poor’ are groups who traditionally do not queue up for relief and are socially averse to seeking handouts. But the extreme distress caused by the Covid-19 crisis are forcing these groups either to suffer in silence or shed their social inhibitions and join the queue for relief.
This band of people includes various occupational groups who make up the numerically large urban lower middle class. Such groups include rickshaw-pullers, drivers, security guards, maids, petty traders, transport workers, restaurant workers etc. We felt it was important to coin a new term to express this new reality so as better to engage the attention of the policy-makers. This is important because in addition to the traditional approach to poverty alleviation, a new set of policy approach is required to address the ‘new poor’. I feel vindicated that the new coinage found quick traction and even the government appears to have taken note by announcing an emergency cash transfer program precisely for such groups who are mostly in the urban setting.
The PPRC-BIGD survey also found an additional dynamic related to the ‘new poor’ many of whom had to abandon the cities to return to their rural roots. We termed this phenomenon ‘reverse migration’. Our survey showed Dhaka City experienced 16% of the surveyed population had left the cities by June, 2020. What we found was that these ‘reverse migrants’ were not from the ranks of the extreme poor but in fact were very much from the ranks of the ‘new poor’. The main reasons they were forced to abandon their city dreams, at least for a while, was the twin pressures of income loss and fixed expenditure burdens. Many of these expenditure burdens stem from specific policy biases against the service needs of the urban disadvantaged groups. For example the house rent is an essential cost and it is type of expenditure that it cannot be avoided. However, rent levels faced by the urban poor are also an outcome of a lack of policy focus on affordable housing. Cost of utilities, healthcare, transportation all stem from such policy biases against the service needs of the poorer segments of the urban population.
Since the resumption of economic activities, some of the ‘new poor’ may be returning. But this is not across the board but specific to occupations. Rickshaw-pulling has bounced back so has construction sector labour jobs. But occupations such as private tuition, work at restaurants and many other informal sector jobs remain uncertain at best. Even for those occupations which have bounced back, our June findings indicated that activity recovery had not translated into comparable earnings recovery.
The pandemic is a global issue. What I really see is: what will happen to the people who are not so powerful, what we really need to do for them. First of all the vaccination or other remedy should not be considered through a commercial approach. Ultimately we have to give emphasis on the cumulative initiatives and efforts. There is no alternative to this. It cannot be solved through commercial approach alone.
