NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Alex Robinson & Rakib Avi

As the COVID-19 pandemic sent shockwaves around the world, policymakers have been scrambling to adapt responses in a rapidly evolving context. In a country like Bangladesh, for example, where 85 percent of the population earns less than $5.90 a day, government-imposed lockdowns have quickly transformed from public health measures into full-blown humanitarian crises: Bangladesh’s vast informal economy accounts for 9 out of every 10 jobs, so the devastating effects of lockdown due to COVID-19 were felt almost immediately. According to a nation-wide rapid response survey, households living in extreme poverty reported an income drop of 73 percent from February to the first week of April. With the lockdown halting all but the most essential economic activity, many families are now unable to afford even basic necessities.

To mitigate the profound disruption to life and livelihood caused by efforts to contain the virus, governments must rapidly scale social support to vulnerable households. Cash transfers have become the most widely adopted form of intervention, representing 65 percent of COVID-related social assistance schemes. For people living in extreme poverty, cash support can be a lifeline until the economy reopens. To respond to the threatened food security of millions of families that are now being pushed into poverty in Bangladesh, BRAC, a leading global development organization based in Bangladesh, decided to launch a cash transfer program to 200,000 of the most vulnerable families in the country, both the urban poor living on daily wages and ultra-poor families living in rural areas.

Photo courtesy of Ismael Ferdous.