The Financial Express

Right focus on job creation

Right focus on job creation

While even in normal situation the task of creating jobs is a major concern for governments irrespective of the economic footings of countries, it is far more challenging in the circumstances we are now. The pandemic has already taken a heavy toll on people's income in terms of job cuts across the globe with the less advanced countries bearing the brunt most.  The case is manifestly so for these countries because of the total or partial shutdown of businesses which are the main source of employment. While the formal employment sector has somehow managed to keep itself afloat, the informal sector comprising heterogeneous small, medium and micro enterprises are in no position, as of now, to start full-scale business to bring back the retrenched employees or increase working hours of their staff who though still working are earning far less than they used to do because of reduced working hours.

There is no disputing the fact that in order to ride out the prevailing crisis, government doll-outs or enhanced safety net programmes cannot continue for too long, and hence it is jobs, and creation of more jobs that matter most.    Irrespective of the levels of the economies all over the globe, the bottom line for steering economic activities has invariably been the success to create jobs -- at least for the eligible job seekers. However, the grim reality is that the job market all over the world is not opening up.

Although it is not easy to decide on the right approach to quickly fetch economic returns in a country like Bangladesh, job creation is recognised as integrally tied to all other development initiatives, including increased flow of investment and exports. Economists are at one that developing an organised labour market could be critically important for Bangladesh and that the key potential for creating jobs lies in encouraging upward mobility of the relatively unskilled labour through transition from the farm to non-farm sectors.

In Bangladesh, the number of people entering the job market annually is believed to be 2.2 million, and those who are provided with jobs are less than 1.0 million. No doubt, the pandemic has left a dent even in this meagre prospect. While this remains a serious problem, there is the need for paying attention to the relatively neglected dimensions of job creation. These among others include skill development for meeting the potential demand for rewarding jobs, especially in export sectors and overseas work stations.  

Trying to bring a sea-change in the job scenario will call for a medium- to long-term strategy. That such job creation has to be in the productive sectors need not be argued. Experts have long been emphasising that Bangladesh must identify potential high-employment generating avenues to lessen the burden on a few labour-intensive sectors such as the readymade garment and agriculture. However, job creation is not an isolated affair: it takes the whole economy to create jobs.

It is often held that for a country like Bangladesh the majority of the new jobs should come from the manufacturing sector. While manufacturing for domestic needs and exports is one aspect, the other with high potential could be manufacturing for overseas companies.

In the wake of the soaring wage structures all over the world including in countries like China, a diversion is most likely to happen by way of relocation of industries to other developing countries, and in such a situation Bangladesh can in all probability be a choice destination.

To rise up to embrace the opportunity, it is crucial that there are newer avenues in the country for the manufacturing sector with job creating potential similar to RMG.

Rough estimates suggest that at present 22 per cent of the country's work force is employed in the formal sector, while the rest are absorbed in informal sectors where agriculture is still playing a predominant role, but unfortunately resulting in low productivity and low income earnings. Although the manufacturing sector is often recognised as a prospective source for job creation, agriculture and a host of agro-related sectors including poultry, fisheries and livestock must not be undermined as promising areas capable of absorbing an increased number of workforce in the days to come.

There is a general perception that agriculture is an over-saturated sector in the country with little scope to absorb additional manpower. But this does not seem to hold good for the simple reason that seeking a labour-intensive manufacturing sector as an alternative to agriculture is not a ready solution that can be materialised in the short run.

What is important is to increase the productivity of the overall agriculture sector by way of value addition -- agro-processing for example, which while providing higher returns can, in turn, fetch relatively higher wages. On the other hand, the manufacturing sector has its own limitations as an employment generator as it is becoming less labour-intensive and more skill-dependent due to increasing introduction of newer technologies. The focus for job creation should thus take into account both the sectors. And obviously, the focus should be the thrust areas.

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