Industries estimate that businesses based on the academic activities of students have lost around Tk50,000 crore
Be it small or large, all the sectors of Bangladesh economy have reopened, and the overall pace of their recovery is good. Yet, the economy cannot return to the pre-pandemic level as some sectors related to education are still facing a slump, holding back the speed of recovery.
From schools to universities, around two lakh educational institutions were shut in the middle of March last year, disrupting academic activities of more than 4.5 crore students countrywide. Other sectors of the economy were also shut two weeks later.
From June, all other sectors of the economy were allowed to reopen. But all educational institutions still remain closed. The closure will continue till January 16 this year and may extend further as Bangladesh needs to keep the Covid-19 infection rate at 5% or below for three weeks. For the last two days, the infection rate hovered around 5%.
Apart from disruption in education, businesses related to education economics such as stationery, printing, paper, bakery, ice cream and transportation are still experiencing the brunt of the closure, running at less than 30% of usual business.
The reason is simple. The closure of classrooms reduces the demand for materials used by students, who were forced to join online classes.
Prolonged closure of educational institutions is also leaving a long-lasting impact on the economy.
The knowledge and skills of workers available in the labour supply is a key determinant of both business and economic growth. But today's students who are tomorrow's workforce of the economy are out of classrooms for the last 11 months.
The possible impact can be found in a study released by the Organisation for Economic Cooperation and Development (OECD) last September. It said the world would see a 1.5% drop in economic output for the rest of this century for skill loss due to the pandemic-induced disruption in schooling.
Considering the impact, the World Bank and the United Nations last October urged for reopening of schools.
But it is not that simple. It is not easy to reopen schools amid the pandemic that still remains untamed. The youth are considered super spreaders of coronavirus.
Some developed economies that reopened schools with precautionary measures amid the pandemic were forced to shut them in the face of resurgence of Covid-19.
Former lead economist of the World Bank's Dhaka office Dr Zahid Hussain said book, paper and pen sales had fallen compared to the normal times because of school closure.
"Sales at grocery stores as well as snack, tea and ice cream shops decreased drastically. Business in some informal sectors such as school transports has totally collapsed," he said.
"According to government figures, there are about 4.5 crore students from pre-primary to university level. If they attend classes for 200 days a year and spend at least Tk40 each a day, the educational institution-centric expenditure in a year stands at Tk36,000 crore," said the economist.
Different types of businesses, including stationery stores, book shops, photocopy points, and food outlets, have grown surrounding the main campus of Viqarunnisa Noon School and College on Bailey Road in the capital. In normal times, around 20-25 different types of shops there sell educational materials and food items worth at least Tk15 lakh per day.
However, now, the shops adjacent to the school and other businesses on Bailey Road are not seeing enough business.
Industries estimate that businesses based on academic activities of students have incurred losses of around Tk50,000 crore.
Biddwa Bhavan sells books, paper and pens as well as various types of stationery items in front of Viqarunnisa School. Abid Hossain, the store's manager, told The Business Standard he used to sell items worth Tk30,000-35,000 a day to the students of Siddheswari and Viqarunnisa School but the average figure had now fallen to Tk4,000-5,000.
Similarly, several lakh small and medium-sized businesses centring educational institutions are experiencing crisis. Hundreds of suppliers of paper, books, pens, lab equipment, and other educational materials are in a similar situation.
Street food shops around educational institutions are closed, and the income of rickshaw pullers has also decreased.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said, "A large number of workers in the informal sector, including rickshaw pullers, street food vendors, hawkers, and stationery sellers, are dependent on school students. The economic value of this sector is huge."
The biggest loss is for the students who spent the year outside classrooms, he said, stressing that educational institutions need to be reopened as other countries did ensuring safety measures. If needed there could be two or more shifts a day, and classes could be arranged in playgrounds and other open spaces, he suggested.
Dr Zahid Hussain said there is a shortage of skilled manpower as the country lags behind in human resource development and this situation would deteriorate because of school closure.
The economist continued, "Although the negative effects of school closure on the economy is easy to see, it will take time to understand the long-term impacts on human resources. There has been no real education despite various measures, such as reducing the syllabus at the end of the year, students completing assignments to be promoted to the next grade and automatic promotion in some cases."
He thinks educational institutions need to be reopened in the interest of building skilled manpower, and a national strategy needs to be formulated based on the views of health professionals, parents, and teachers in this regard.
How education can be resumed has to be decided locally by adhering to the strategy, said Zahid.
He recommended that teachers be prioritised for vaccination.
Publication industry faces Tk15,000 crore loss
Khandaker Printing and Packaging has been in the business since 1994. The company invested in a new machine with bank loan and its own capital before the pandemic began.
Its loss has been around Tk6 lakh per month since March last year as press work evaporated.
"It is my family business," said Raihan Khandaker, owner of the company.
"I dreamed that Khandaker Printing would be the largest printing press in the country one day. It is almost impossible for the business to survive now after repaying bank loans of Tk8 lakh and incurring a loss of Tk6 lakh per month," he added.
Entrepreneurs in the sector have said the loss in the printing and publishing industry due to Covid-19 is around Tk15,000 crore.
The Printing Industries Association of Bangladesh reports a loss of Tk8,000 crore of its members, the Bangladesh Publishers and Book-Sellers Association members reports a loss of Tk7,500-Tk8,000 crore while the Bangladesh Knowledge and Creative Publishers Association says its members have lost more than Tk200 crore.
Crisis in paper industry
Bashundhara Group produces an average of 35,000-36,000 tonnes of paper per year at its three mills during normal times. But last year, there was no production at the mills for a long period. The company's production has not returned to more than 40% yet.
Mostafizur Rahman, deputy managing director at Bashundhara Paper Mills, said, "We have been selling paper on a small scale since October last year to print textbooks. There is also some recovery in the sale of paper used in offices. However, large-scale production is still paused as there is no demand for paper for students."
More than 100 paper mills in the country are in the same corner as Bashundhara. The small factories are the worst-hit. According to the Bangladesh Paper Mills Association (BPMA), the country's paper mills have the capacity to produce 15 lakh tonnes of paper annually.
However, production was not more than five to six lakh tonnes last year. More than one lakh tonnes of paper remain unsold in different factories.
Mohammed Younus, vice president of BPMA, said the demand for paper in normal times was 50,000 tonnes per day whereas it dropped to 15,000 tonnes due to the pandemic.
Paper price has also decreased by Tk10,000-15,000 per tonne, he said, adding the sector lost at least Tk5,000 crore last year.
Pen and stationery manufacturers in the dark
GQ Ball Pen Industries Limited, the maker of one of the oldest and renowned Econo brand pens in the country, reported a 66% decline in sales to Tk0.78 crore in the first quarter of the current fiscal year compared to the same period of the previous financial year.
At least 20 companies – including Matador, Pran-RFL, Icon, Great Writing, and Janani – produce more than 200 types of stationery items like calculators, staplers, whole-punch, pens, pencils, highlighters, and diaries in the country.
Due to the closure of educational institutions, not even 40% of the Tk1,500 crore market in this sector has returned to normal, according to industry insiders.
A significant portion of the stationery market is occupied by the All Time brand of Pran-RFL.
Kamruzzaman Kamal, director (marketing) of Pran-RFL, said the sales of stationery items had dropped to almost zero at the beginning of the pandemic.
"Office stationery has made some recovery over the months. However, the recovery of stationery items made for school and college students is very low," he added.
Impact on ice cream, beverage, frozen food industry
The market of ice cream in the country is worth around Tk3,000 crore while annual growth is about 20%. The biggest buyers of ice cream are school and college students.
Production in the ice cream industry, which has almost shut down since the onset of the pandemic, has not reached more than 15%-20% of pre-pandemic period.
Kamrul Islam, the recently departed CEO of Igloo Ice Cream, which commands more than 35% of the country's ice cream market, said the ice cream sector had suffered the most due to the pandemic.
"Although people are slowly returning to normal life, ice cream and beverage companies are continuing huge losses due to the closure of schools and colleges," he said.
He thinks the industry might be able to turn around towards the end of 2021.
Like the ice cream sector, the beverage industry, a market of Tk10,000 crore, has faced a loss of Tk5,000 crore and the frozen food industry a huge loss as students were major buyers of these products.
A large number of workers in the transport sector, including rickshaw pullers and drivers, are affected by the closure of schools and colleges.
Their income has decreased due to the limited movement of students.
The same is true of street food vendors. The income of flower and fruit sellers as well as street hawkers has dropped.