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Opinion

Rekindling the need for social capital


Bangladeshpost
Published : 03 May 2020 08:51 PM | Updated : 07 Sep 2020 04:45 PM

Sayeed Ibrahim Ahmed

Pandemics destroy the very foundation on which capitalism was built: capital. Not only does it affect businesses and governments around the globe, but it affects the livelihoods of people who rely on the strength of their human capital to subsidise their day-to-day expenditures. The current Covid-19 crisis is unlikely to be an exception.

Although it has been detrimental to physical and human forms of capital, it has sparked an outcry amongst the advocates of social capital and it’s invaluable contribution towards society. Social capital can be defined as the network between members of a community that enable the members to function in an efficient and effective manner. 

The delivery boy from FoodPanda, the shopkeeper at your local convenience store, the part-time Uber driver all seem to spark a joy nowadays when your only companions seems to be the walls of your own home and the cold, gloomy sky. The social distancing policies endorsed by governments to curb the spread of Covid-19across the world might have been expected to eradicate the fabric of social networks but the opposite has happened. 

People have united for a cause, whilst maintaining a physical distance to achieve social harmony. Even as other forms of capital have crumbled, the surge in stock of social capital has acted as a mediator for counter¬ cyclicality across communities.


What both businesses and people need to understand is that ensuring volunteer 

as well as financial support for the most vulnerable members of the crisis, would 

only help us all recover from the pandemic faster. Policymakers need to ensure 

appropriate measures are in place not only when the “sun is shining brightly” 

but even during the dull, gloomy days.


But does one ever question themselves about the environment in which these people operate in? We have been seeing little acts of neighbourly kindness at our doorsteps on the daily, but are the food-delivery workers, nurses, shopkeepers and rickshaw pullers receiving the same degree of reciprocation from their neighbours? Philanthropic movements may have risen in prominence, but the very people stabilising the current pandemic are still mostly ignored.

During the 19th century, the societal anxieties arising from the Industrial Revolution namely isolation and homelessness, triggered the development of charitable institutions. A new sector called charity was formed.The economic and social progress following the Industrial Revolution came due to the consensus amongst the private, public and social sectors.

The private sector did provide assurance of jobs, incomes and health all in collaboration with the government; and the social sector provided the support mechanism to shield communities amid a disruption to regular life.

Although social capital has provided the foundations (just as every bit as financial, physical and humancapital) on which capitalism was builtits importance has withered away with the sands of time. 

What both businesses and people need to understand is that ensuring volunteer as well as financial support for the most vulnerable members of the crisis, would only help us all recover from the pandemic faster. Policymakers need to ensure appropriate measures are in place not only when the “sun is shining brightly” but even during the dull, gloomy days. 

For example, there is an unaccounted value addition contributed by volunteering health workerswhich would otherwise have been accounted in the country’s Balance of Payments (BoP)had it been financed through other charitable institutes. This in effect makes the countries with current account deficits appear to be more solvent in BoP terms.

Former RBI Governor, Raghuram Rajan described it in his latest book “The Third Pillar” that restoring the third pillar requires greater recognition on the importance of social capital. The three pillars; the state, the markets and the community all play a pivotal role in reshaping the balance of our society. 

By and large, those extra health care volunteers, food-distributors and emergency ride-sharers will not appear in Bangladesh’s national accounts or in the company accounts of businesses. They will be statistically imperceptible. There is a dire need to reform how societies and companies value the different forms of capital. 

Regardless of whether the contributions can be quantified in monetary terms, all of the paid and/or unpaid contributions made by the citizens, will be a lesson that will be revisited by many whenever the pages of history are turned. 

Restoring social capital thus implies strengthening the infrastructure underpinning the social sector as well providing adequate financial stimulus to the new army of volunteers this crisis has spawned. No matter the race or religion, young or old the motto for every social capitalist should be “that the financial justice is the same for all”.


Sayeed Ibrahim Ahmed is a Senior Lecturer in the department of Finance at American International University-Bangladesh (AIUB)