Addressing challenges of unemployment

The country's unemployment rate is, unfortunately, showing a rising trend. According to Bangladesh Bureau of Statistics (BBS) survey released this week, the number of the unemployed population has increased by 80,000 in the last fiscal year (FY) as compared to that of the previous fiscal.

New job creation also dropped by 0.1 million to 1.3 million in the same period. However, the number of labour force increased to 6.35 million in FY17, riding on an increase of women labour force.

Although the survey says the unemployment rate remained stable at 4.2 per cent, the actual number of unemployed people would, however, be much higher as many jobless people remain out of the calculation because of the BBS' definition criteria.

Of the 455 million employed people, a large portion was actually unemployed. But they were counted as outside labour force because of such criteria. Those who did not seek job in the reference time -- previous one month during the survey -- were not considered unemployed.

People in three criteria - without work, available for work and seeking work but do not get paid job or engage in self-employment - are defined as unemployed. According to International Labour Organisation (ILO), those who work at least one hour a week are not unemployed. The bureau also follows this criteria. The survey showed that a total of 0.9 million persons in urban areas and 1.8 million in rural areas remained unemployed.

In order to address the chronic unemployment situation, the country's economy needs to grow at a rate of 8.0 per cent to absorb the existing labour force which has been surplus for the last two decades. However, such growth in the economy is possible in the country if development strategy is changed substantially and the pattern of growth is made more employment-intensive.

There is an urgent need for diversifying the manufacturing base of the country. This sector has the potential to grow about 12-15 per cent over the next few years. More labour-intensive sectors, including garment, will have to grow to accommodate rising the jobless labour force. Agriculture should also diversify to create more productive employments.

Improving labour productivity and increasing the real wages are also vital to rejuvenate employment generation. Quality of employment needs to improve in other respects like terms of contract, social protection and workplace safety where the country has some shortcomings.

The country has, otherwise, successfully created manufacturing jobs, particularly in textiles and garments. But it has been unable to create a large pool of jobs in industries outside the garment sector. Jobs in the service sector are, for the most part, informal, particularly in wholesale and retail trade.

However, some areas of manufacturing as well as some promising service sectors such as information technology, software, machinery repair and tourism have the potential to grow further if the right incentives are given.

There are some supply-side factors that have contributed to constraining economic diversification, some of which relate to employment, like shortage of skilled workers, technological bottlenecks, and lack of entrepreneurship and management skills. Although labour in Bangladesh is abundant, a shortage in skilled workers is perceived to be a major constraint.

While Bangladesh has done well in maintaining a steady outflow of migrant workers, there is good potential to raise this number and change the skills and occupational composition of workers. For Bangladeshis to find more jobs abroad, it will be necessary to tap both existing destination points and the new ones and Africa and Europe.

Diversification of labour markets requires well thought-out measures both at home and abroad, and demands policy coherence. Capacities need to be developed to examine labour demands in the context of development plans and demographic changes in the labour-receiving countries.

Low level of quality education and weak labour productivity are the major challenges for the country's employment market. Improved infrastructure and a more diversified economy can help Bangladesh increase economic growth, create meaningful jobs and enhance the country's transformation as a thriving middle-income economy.

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