COVID-19: Strengthening Workers in the Informal Sector

FROM: Paulo Rodrigues – 19. May 2020

The lockdown measures in developing countries due to the COVID-19 pandemic have serious economic consequences, especially for workers in the informal sector. A look at the situation in Mozambique, Bolivia and Bangladesh makes this clear. Helvetas is helping to mitigate the effects of the pandemic and create prospects for local women and men through appropriate activities.

Workers in the informal sector are hit particularly hard by the consequences of the COVID-19 pandemic and are usually defenseless against the rigorous lockdown measures. To generate income they develop innovative activities based on their own experience and skills.

Manufacturing protective masks in Mozambique

Mozambique's fragile economy was only just beginning to recover after the two tropical cyclones of 2019. But with COVID-19, the tourism sector collapsed, and hotels and restaurants were closed. Many companies are finding it difficult to stay afloat. Therefore, on 24 April, the International Monetary Fund approved 309 million US dollars to mitigate the effects of the pandemic and stabilize the economy by supporting small and medium-sized enterprises (SME). Nevertheless, the economic situation is extremely precarious for many SME.

This is also the case for the 30-year-old entrepreneur Inês Jacinta Ali, who produces baby sheets and kitchen aprons, among other things. She had acquired her craft skills in the Helvetas vocational training project HOJE in northern Mozambique. HOJE empowers young women and men to earn an income through entrepreneurial know-how and linkages to the labor market. With the COVID-19 pandemic spreading, Inês Ali, like many others, was confronted with a steep drop in demand and the existential insecurity that accompanied it. However, with the skills she acquired thanks to Helvetas, she seized the opportunity to produce individual protective masks for personal and family use, which she now sells locally. This enables her to continue generating income for her family.

Sustainable cocoa processing in Bolivia

According to the IMF, Bolivia has the world’s largest informal sector as a percentage of its total economy, accounting for 62 percent. Many workers in the informal sector face an impossible choice between adhering to lockdown measures and the need to generate income. Although many food supply chains are still largely functional, this does not make the situation any easier for food producers. For example, cocoa producers in the Amazon region are facing a lot of restrictions to sell their produce due to transport restrictions.

In order to increase incomes and resilience of cocoa farmers, Helvetas is working on value chain development and supporting them in with new marketing strategies. Farmers like Dacner Morales Flores are among the indigenous cocoa producers who have begun to process cocoa into cocoa paste. The paste has a longer shelf life and can be sold at higher prices. COVID-19-related transport restrictions prompted many smallholder cocoa farmers to follow Dacner's example and thus secure their income and save their harvests from being wasted.

Mobilizing harvest workers in Bangladesh

The consequences of the COVID-19 pandemic for Bangladesh's informal sector have led to many street vendors leaving Dhaka and returning to rural areas in the hope of greater food security. The formal economy is also affected. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported cancelled orders, which resulted in a loss of revenue of around USD 3 billion and affected 2.24 million workers.

The country's food production is also facing stress tests. In the wetlands on the north-east part of the country, the rice harvest is due begin. The harvest depends heavily on workers from neighboring regions, and the lockdown measures do not allow them to travel to rice fields outside their region. This prevents the rice harvest from taking place, which has serious implications for the economy and food security in the region. Helvetas' regional office in Bangladesh is helping local partners and governments to create the conditions for the safe mobilization of workers and the rice harvest.

Strengthening the resilience of those affected

As the OECD has pointed out in a recent report, women are most affected by the health, social and economic impacts of the COVID-19 pandemic. In the health sector, they are particularly exposed to the risk of infection. At home they bear the larger share of the burden caused by the closure of schools and childcare facilities. This adds to the already unequal division of the unpaid housework. The OECD report states that women are more prone to lose jobs and income due to the COVID crisis, and they are at risk of violence, exploitation, abuse or harassment. After being laid-off, women usually have great difficulty finding alternative sources of employment and income.

People like Inês Ali or Dacner Morales are inspiring examples of how women can counter the economic impact of the COVID-19 pandemic. Helvetas is supporting women and men to increase their resilience and develop measures to ensure health and safety while at the same time securing their livelihoods.

 

Paulo Rodrigues has been working for Helvetas since April 2020 as an advisor and expert on market systems in fragile contexts.