6 years ago

Employment generation and sustained economic growth

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The progress of Bangladesh against some socio-economic indicators has been lauded nationally and internationally. It attained quite a number of targets of Millennium Development Goals (MDGs). One of the important targets, employment-to-population ratio, however, could not be achieved. Sustainable growth in employment is a pre-condition for sustainable reduction in poverty. The poverty rate in Bangladesh has declined to 24.8 per cent and the rate of the ultra-poor people has dropped to 6.5 per cent of the population in 2016. This reduction is attributed to higher GDP (gross domestic product) growth. The contribution of human capital to growth has been small, according to experts and economists. 
Official estimates suggest that Bangladesh has 3.0 million unemployed youth population. Every year a work force of about 2.0 million enters the labour market. In this context, it may be pertinent to refer to a news item published in some dailies recently that quoted the report on employment situation released in a seminar by a research organisation named "Centre for Development and Employment Research." The organisation has surveyed and analysed the employment situation and labour market in Bangladesh. Its report released two uncomfortable pictures about the prevailing employment situation. First: unemployment rate is very high in the highly educated group; and second: about 11 (eleven) million youth of the age group 15-29 are totally inactive. They form 25 per cent of the youth force. They are neither in the labour market nor in education. Apart from this observation, there is an estimate that says number of day labourers in Bangladesh is 10.6 million, who have no security as to their every day job. 
This writer has field level observation. When going to the village, the writer finds many people unemployed. Some of them tell that they find jobs during the planting and harvesting seasons. For the rest of the year they remain unemployed. A large number of these people survive on charity. There is another group of unemployed people, known in common parlance as cadres. There are several groups of cadres. They resort to extortion, violence and feuds. Social peace is threatened by them. They enjoy the blessings of local big political leaders. These leaders usually belong to the ruling party. Obviously, these are the people who are neither in labour market nor in education.
The statistics provided by various research organisations are not unfounded. Official statistics suggest that the industrial sector cannot accommodate more than 30 per cent of the active labour force. More than 40 per cent of the labour force is employed in the agricultural sector majority of whom remain idle for half of the year. The rest is in the service sector. No doubt, service sector is the largest employment provider in Bangladesh.
The information regarding 11 million people of the age group 15-29 who are neither in job market nor in education rings an alarming signal for the economy. It is not in conformity with the success story of growth in Bangladesh. It speaks of the sad story that Bangladesh in incapable of reaping the present demographic dividend. Demographic dividend refers to a situation when the share of the working age population (15-59 years) is larger than those of the non-working age group. According to demographic projection, Bangladesh can enjoy the benefits of demographic dividends until 2030 after which there will be an acceleration in the numbers of the elderly people (60 years and above). By creating employment, the benefits of demographic dividend can be reaped. 
There is no denying the fact that employment and income generation depend on capital investment in infrastructure, dynamism in agriculture, improved technology, improved means of production and human resource development. All these require an appropriate and comprehensive policy regime covering investment, trade, education and training, health and governance. 
Investment is fundamental to development and employment. Apart from readymade garments, investment in diversified sectors is needed. In spite of many positives like political calm, low inflation rate, huge idle money in the banks and comfortable foreign exchange reserves, investment remains stagnant over the years. Illicit capital outflow is allegedly on the rise. The banking sector is far short of being a good performer. Besides the much talked about reserve heist of the central bank, default bank loans stood at Tk. 660 billion and about Tk. 450 billion got written off. According to various international rankings, Bangladesh is not investment friendly. 
Despite all these, there is no choice for Bangladesh but to become investment-friendly. Cost of doing business should be lessened through good governance. Investment in education, health and skill development is the crying need of the hour. Skill development has been getting importance in various seminars and international conferences. European Union and ILO has recently announced an Euro 20 million project, known as "skills 21 project" for training the young people in different sectors in Bangladesh. For sustainable growth and socio-economic development there is no other alternative to employment generation.
The writer is an economist and a former secretary to GOB.  
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