Covid-19 has been wreaking havoc in almost every aspect of the global economy. The moment we would finally head towards the pandemic's end, new variants appear to put us back to square one. Today, very few areas have been able to remain unaffected by the pandemic. Employment is also one of those areas. As per the ILO data, the equivalent of 255 million jobs were globally lost due to the pandemic. In 2020, global youth employment dropped by 8.7 percent while for adults, it fell by 3.7 percent. The pandemic has affected the youth more in terms of employment loss.
Bangladesh has also faced similar consequences. Even before the pandemic, one out of every three graduates were unemployed in Bangladesh as per a 2019 World Bank report. With repetitive lockdowns, a huge number of people lost their jobs. Youth unemployment is now believed to have risen to 15-18 percent. Before the start of the pandemic, it was at 12 percent. For a country that has over 80 percent of the workforce engaged in the informal economy, this was a tremendous blow.
Two major obstacles make it hard to hold on to existing jobs in Bangladesh during the pandemic. One is the skills gap. The workforce coming out of educational institutions is not taught the in-demand skills. As per the World Bank, this skills gap is one of Bangladesh's major challenges. The pandemic situation has made it even worse. There are simply not enough jobs to cater for the graduates. Educational institutions must start offering the skills that are in demand.
The second reason is a lack of employment opportunities. Bangladesh has 2 million yearly labour market entrants. Yet, this is not matched by a similar number of new jobs. Often, too many people focus on a handful of skills/subjects. This leads to crowding in a few areas, while other areas remain under-supplied. Unemployment is thus high in a few sought-after jobs. Meanwhile, other areas have too many workers with low skills. It is therefore not surprising to find so many foreign mid-level managers in Bangladesh.
To create new jobs, we need new investments. Yet, the ratio of private sector investment to Gross Domestic Product (GDP) has remained constant around 22-23 percent for some time. There is hardly any alternative to increasing this. Bangladesh has been working very hard to improve its ease of doing business. Once it improves, we can expect foreign investments to go up.
Focusing on a few areas can help in creating new jobs. The government should allocate resources for the public and the private
sector employment generation. Expansionary economic policies can be of help here. Also, female employment needs to increase further. Women should receive proper training and access to credit with flexible terms and conditions. The government needs to promote technical and vocational education and training (TVET) and artificial intelligence (AI) and its related skills. IT might be especially significant since it may well help the youth tap into the huge online freelancers' market.
The 4th Industrial Revolution will lead to the rise of many new skills. Moreover, AI is bound to replace many old skills. With the demand of the new age, our focus should be on embracing and developing an AI ecosystem. We also know that going 'contactless' can lower disease transmission risks during pandemics. Thus, we should look forward to optimal machine use and setting new benchmarks.
Although the global economic slowdown can last for some time, eventually it will start reversing. As countries inoculate more and more of the population, economies would open up, and so would the opportunities for work. Bangladesh is also set for a massive vaccination drive now that supply disruptions have stopped. As we head towards regular operations in the next few months, we must tap into the potential of our youth workforce to leap ahead once things are back to normal. Without an iota of doubt, they are the key to Bangladesh's future.
The piece originally published as Editorial of Chamber News (August 2021), the monthly flagship publication of Metropolitan Chamber of Commerce and Industry, Dhaka.