The Financial Express

Skill training key to reaping demographic dividend

| Updated: October 19, 2017 09:15:02

Skill training key to reaping demographic dividend

Bangladesh has entered an age of demographic dividend with wider slabs for working-age people in population pyramid. It has overtaken baby-boom of the 1970s and has now more youths after three decades, which will continue for the next four decades. It is high time for us to move forward learning from the development experiences of other economies. A few international firms like JP Morgan, Goldman-Sachs and Coface applauded our potential with demographic opportunity and macroeconomic stability.
However, the gain from booming youths depends on their full employment in high productivity sectors. Economists John Maynard Keynes and William Arthur Lewis earlier identified positive correlation between population boom and economic growth in the developed world. We envision turning onto a developed nation as our Vision 2041.
The reality here is that our domestic labour market is incapable of employing 1.33 million youths being added every year. Its major part, accounting for 0.71 million, was employed overseas in 2016. If we look at the official unemployment rate of 4.3 per cent keeping disguised ones behind the scene, it does not reveal any problem. However, its viciousness was addressed in a World Bank report titled 'Toward solutions for youth employment'. It stated that about 41 per cent of the 29 million youths aged between 15 and 24 years were NEET (not in employment, education or training). Most of them are busy for nothing but proactive in social media. They are neither employed nor unemployed who are also known as 'inactive' or 'people not in labour force'.
Meanwhile, the number of our inactive people increased from 38.9 million to 45.6 million during 2010-2013 period. Our disguised pattern was rooted with an addition of 10 million in the last three years.  Economically inactive people are burden to families and to the economy as well. American economist Arthur Melvin Okun in 1962 explored that every 1.0 per cent fall in unemployment rate leads to 2.0 per cent growth in real GDP (gross domestic product). However, our unemployment rate declined, albeit officially, from 4.5 per cent to 4.3 per cent during 2010-2013.
Our economy is factor-driven and has competitiveness in labour-intensive production as of the global competitiveness index. The factor endowment theory in international economics also guides us to export orientation with labour-intensive technology. Our ready-made garment and knitwear industry has been developed creating jobs for 4.5 million people. Why couldn't other labour-intensive industries absorb abundant labour? Economic theories insist on creating effective demand for labour with huge investment in potential industries.  
Employment usually shifts from farms to non-farm sectors for gaps in pay-off. This shift to services was higher than that of industries in the 1980s when any 3.0 per cent shift to service sector added 2.17 per cent to the GDP growth. However, any shift to industry added more in the 1990s and 2000s. Nonetheless, the industrial employment rate was doubled during 1981-2013 period but it still accounts for 21 per cent of the total. This pay-off for services again turned higher than that of industrial employment.
Some easy accessible services have experienced disguised unemployment. If our industries fail to create jobs, our economic structure will be unable to employ all. We were far away from achieving the MDG (millennium development goals) target of 'achieving full and productive employment and decent work for all, including women and young people'. Shall we remain happy just with our status of medium human developed country as per the human development index?
Bangladesh has invested a lot to create a base for human development. A few public incentives like tuition fee waiver, free books and stipends have contributed to progress in primary education. Free books are also distributed at secondary level. In addition, girls get special advantages from tuition fee waiver and stipends, which could remove inequality with gender parity index of 1.06 in 2005. However, our progress is very slow in women employment. The extent of inactivity is also alarming because 62 per cent of young women are inactive non-students.
Moreover, female labour force participation rate declined to 33.5 per cent following an escalation until 2010. This inactiveness is undesirable in our economy passing the stage of 'higher economic growth and faster social development'. Our hibernating youths will be a barrier to achieving number 8 of the sustainable development goals (SDGs) - 'decent work and economic growth'.
We have agreed on a slogan 'hands, not lands' to employ more people in non-farm activities. Both government agencies and NGOs have supported it with their development and extension programmes. This writer was astonished to find two bachelor graduates as hauler drivers (locally known as Nosimon) in his survey village in 2004. Last month it was not unusual to see a smart boy pulling rickshaw van once carrying our Prime Minister. The youths at large accept any type of works as jobs as they are exhausted with book-burden since childhood. Our non-accredited education system is not in a position to produce quality workforce for the labour market at home or abroad. Has our technical education flourished with up-to-date know-how? If our youth grows unskilled, won't their hands remain useless? Doesn't the tardiness and de-motivation throw them into inactiveness? Now is the time to change our slogan to 'human capital, not just hands' and to revitalise cultural motivations as well.
Human capacity is needed for workers who just move overseas with hands. We are far behind our competitors from India, Sri Lanka, Nepal, China and the Philippines in terms of technical and language skills. Shouldn't our expatriates be equipped with what others have? Doesn't our government have any moral responsibilities to do a little for quality development of youths entering overseas job market? Notably, seven million wage-earners have strengthened our economic base with foreign remittances over US$ 14 billion in a year. Could our usual programmes under polytechnic institutes and technical training centres support migrants much? It is necessary to undertake special programmes for developing technical hands and professionals using the 'national skills development fund'. Another key obligation is to oversee all activities of our overseas recruiting agents who are often overactive regardless of workers' abilities.
Above all, youths' entry into overseas labour market is badly needed as our domestic market is too small to absorb them.
Dr. M. Aminul Islam Akanda is Associate Professor, Department of Economics, Comilla University.
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