Impacts of the pandemic on the informal economy

The International Labour Organization (ILO) defines the informal sector from two perspectives: enterprise and employment. From the enterprise perspective, the informal sector refers to “a group of production units comprised of unincorporated enterprises owned by households, including informal own-account enterprises and enterprises of informal employers (typically small and non-registered enterprises).” From the employment perspective, the informal economy refers to “all remunerative work (i.e., both self-employment and wage employment) that is not registered, regulated or protected by existing legal or regulatory frameworks, as well as non-remunerative work undertaken in an income-producing enterprise.” Informal workers do not have secure employment contracts, workers’ benefits, social protection or workers’ representation. In Bangladesh, informal sector employees comprise farmers, craftspeople, street food traders, street singers, hawkers, day labourers, rickshaw pullers, drivers, retail traders, small manufacturers, private housekeepers, plumbers, and many more who undertake various work that is not documented by, and who do not report to, any official agency. The lockdown and economic shutdown, along with unusually heavy rain and floods, as well as the cyclone Amphan have significantly impacted the informal economy and livelihoods. More than 1.5 million people have been displaced, and almost 80,000 hectares of paddy fields were underwater due to the worst floods in a decade. Local officials fear an upsurge of coronavirus cases as people have had to move to temporary housing due to the flooding. This chapter provides an overview of the impacts of COVID-19 induced economic slowdown on the informal sector in Bangladesh.