Investing in human capital

This paper front-paged findings of a Planning Commission paper, titled `Perspective Plan of Bangladesh (2021-2041), Saturday that forecasts Bangladesh's edge in production based on cheap labour is not `guaranteed for all time'. Economists in the Commission, as well as outside of it, have all along said that such advantages diminish over time. Arguing, or getting in line with other long-held ideas, that cheap labour is not a permanent feature of an economy, innovation has been pointed out as a panacea for the gradual exit of the cheap labour-edge.  What it means is that adaptation to changing circumstances would save industries inside the country as well as reward those expecting to get employed outside. This adaptation is primarily regarding technological advances that are growing globally. This brings us to the question of skills development programmes that are needed to be executed on a national basis to keep the rate of employment in tact and going up. Skills are the answer to growing demands for increased labour productivity; and when industries require one person to do the work of two, that one person needs to be more efficient to keep up the pace. Our garments industry, our single biggest industrial bread-earner, is based on cheap labour. The comparative advantage it enjoys is not there to last for ever. It must therefore keep the door open to innovation, apart from unlocking the avenue to more and more to high-end products. 

Big China took advantage of cheap labour first. India did the same. Other countries with big populations like Indonesia, Brazil and Nigeria are doing it now. As the continent of Africa sits on a population boom at the moment, most of its countries enjoy this cheap labour edge. It is undeniable that in an open world, every development and improvement creates opportunities, as well as competitors. The United Nations and the development partners have also revealed through their reports and studies that Bangladesh requires huge investments in human capital to remain competitive and avoid the `middle income trap'. Keeping the industries inside the country operational and the flow of foreign remittance intact, or growing, would depend on the outlays that are made in this field.  A country like Vietnam, not very far from us, appears to have made  the changes needed.

The Planning Commission's latest finding and advice come as a directional trail to follow. It is no doubt encouraging that successive governments have given importance to technical education. The recent announcement that all regions and districts will have new technical institutes will only be welcome.  Besides, there are various skills advancement programmes. To overcome the growing risk posed by diminishing cheap labour, however, a whole lot of things have to be done, including not only pumping money in construction work of infrastructure building, but also looking at the curriculum that is taught at various institutions involved in raising the quality of our manpower. The outside world has to be a target of our vision, no doubt, with the domestic front being the prime priority. Towards this, we need skill development organisations and programmes in larger numbers. The untapped masses of young people hungry for advancement in life's struggle must be harnessed