Tariff cuts on intermediate inputs to create jobs, says WB economist

While adoption of artificial intelligence would affect the job market in different ways, rational tariff cuts on intermediate inputs would benefit younger and more skilled workers in South Asian countries including Bangladesh, according to a latest World Bank (WB) report.

Chief Economist of South Asia Region (SA) of the World Bank Dr. Franziska Ohnsorge presented a keynote at the launching ceremony of the WB latest report titled "South Asia Development Update".

The launching event was jointly organised by the WB and the Policy Research Institute of Bangladesh (PRI) at the latter's office in the city on Tuesday.

The WB also shared the latest 'Bangladesh Development Update' in a separate event at its office on the day.

Presenting the keynote paper, SA Dr. Franziska said: "Tariff cuts on intermediate inputs are likely competitiveness-enhancing and job-creating, especially for higher-skilled, younger workers and in manufacturing firms."

She also said adoption of time-befitting policies could help workers move occupations, firms, locations by improving connectivity, upskilling, removing obstacles to firm growth, expanding access to finance.

"Growth prospects are robust in the South Asia (SA) region by leveraging tariff reform and optimum use of AI," she added.

PRI Chairman Dr. Zaidi Sattar presided over the ceremony while the think-tank's Vice Chairman Dr. Sadiq Ahmed delivered the opening remarks.

Dr. Fahmida Khatun, Executive Director of Centre for Policy Dialogue (CPD) and Habibullah N. Karim, Vice President, Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) spoke on the occasion as panel discussants.

Dr Zaidi Sattar said the average tariff in the region is 16 per cent-- higher than the global average- whereas it is 28 per cent in Bangladesh.

Regarding the AI evolution, he said certainly it will displace many jobs, but it would be overcome by overall job creation as it happened in previous tech revolutions.

The PRI chairman also said migratory jobs will also ease the pressure on domestic market jobs.

Ishrat Husain, Economist and Former Governor of State Bank of Pakistan, Kamran T. Rahman. President, Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI) Chairman and owner of East Coast Group Azam J. Chowdhury, among others, were present.

Ishrat Husain highlighted on making the education system time-befitting for coping with the changing situations.

"While graduates remain unemployed in the region, demand for technical jobs like plumbers and nurses increases," he said.

Citing an example of China, he underscored the need for both technical education and special focus on the academic field of Science, Technology, Engineering, and Mathematics (STEM).

Dr. Fahmida Khatun highlighted the unemployment growth in Bangladesh.

She said the recent uprisings in Bangladesh, Sri Lanka and Nepal have happened mainly due to the presence of inequalities.

"South Asia is one of the fastest growing regions, but unfortunately it does not generate an adequate number of jobs for young people," she added.

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