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Seventh Plan: Focus on job creation, employment expansion

Shamul Alam | Published: September 10, 2017 22:18:25 | Updated: October 22, 2017 02:41:51


The core theme of the 7th Five Year Plan (FYP 2016- 20) is 'accelerating Growth, empowering citizens' with strong emphasis on creating more jobs in the economy and accelerating gross domestic product (GDP) growth to 8.0 per cent for faster reduction of poverty. The other important focus of the Plan document is to ensure equitable income distribution to improve income inequality situation by ensuring large trickledown effect of higher national income and empowering the citizens.

 

 

The 7th Five Year Plan encapsulates a strategy for inclusive growth which empowers people by creating employment opportunities, fostering the scope for greater labour force participation, particularly of women, supporting skill development in response to market demand, enabling access to credit for micro, small and medium enterprises, and improving quality of education for human resources to be more productive.

 

 

One of the important features of the 7th FYP is that it proposes a private sector-led growth strategy. The document estimates a private sector investment of Taka 24.6 trillion or 77 per cent of the total investment outlay of Taka 31.9 trillion. It is a well-known fact that private sector can create jobs much faster than the public sector and is always quick to adopt newer technologies to maintain its competitiveness and improve quality of products. The second-generation entrepreneurs of Bangladesh are very much innovative and resilient. Competition in the productive sector leads to resiliency (e.g., crop agriculture, garments manufactures). Efforts of the entrepreneurs, particularly of the second generation, have helped Bangladesh to become one of the largest exporters of readymade garments of the world. This particular sector employs more than 3.5 million jobs, most of whom are women. Bangladesh has emerged as a reliable source of pharmaceutical products. Domestic demand for electronics and electrical goods is largely met by domestic entrepreneurs. Heavy industry like ship building is also fast emerging.

 

 

Innovation as well as innovative ideas will be the key to maintenance of competitiveness in the ever-changing global scenario. The advantage that Bangladesh enjoys in apparel export may erode in future with the introduction of three dimensional technologies or with the onset of fourth industrial revolution (machine automation and robotics). Bangladesh is very mindful of this development and therefore encourages the private sector to innovate. For this the private sector must come up with adequate funding for research and development. Employment generation is also the cornerstone of the economic and social development policies as rapid jobless growth is not envisioned.

 

 

Private sector through its entrepreneurial activities is more prone to innovation and creativity. Industrial entrepreneurs now-a-days are spending increasing amounts on research and innovation for improving product quality. The government is encouraging business for more spending through corporate social responsibility (CSR) and to incentivise that, the government allows reduced tax rates for the funds used as CSR. This encourages profitability and employment.

 

 

EMPLOYMENT STATUS: According to the Labour Force Survey 2013, total domestic employment increased from 54 million in 2010 to 58 million in 2013. The number of male workers grew from 37.9 million in 2010 to 41.2 million in 2013 and female workers from 16.2 million to 16.8 million over the same period. Manpower exports abroad averaged 0.5 million per year during this period. As a result, the total number of additional workers who found employment in the domestic market or abroad exceeded the number of those actively seeking work in the domestic economy making a significant dent on underemployment.

 

 

It is estimated that some 12.9 million additional jobs will be available during the 7th FYP period, including some 2.0 million jobs abroad for migrant workers. The 7th FYP estimates that during the same period total new labour entrants in the economy would be 9.9 million.  Thus job creation, both domestic and foreign, will exceed the additional labour force in need of work. It will help to reduce backlog of under-employment significantly provided the GDP growth target is achieved.

 

 

The Sixth Plan's employment strategy emphasised structural change in production whereby the GDP and employment shares of manufacturing and services increase and the relative share of agriculture falls. The policy planning under the Seventh Plan has maintained the same philosophy and the strategy of structural transformation of the production and employment structures as the fundamental basis to impact poverty.

 

 

Creation of additional non-farm employment opportunities, via non-farm diversification activities in rural areas and rapid urban growth sustained by robust flows of overseas remittance and manufacturing export growth, led to increased urban migration (seasonal and permanent) of labour. Migration contributed to the rise in agricultural/rural wages for workers who lagged behind in agriculture/expansion of rural growth centres.

 

 

A major objective of the Sixth Plan was to create jobs in a way so that average labour productivity also improves the economy, especially agriculture. This is in recognition of the fact that productivity increases are the only sustainable way of increasing real income of the workers.  There is a noticeable increase in average labour productivity during the Sixth Plan, 3.5 per cent per year.  Importantly, average labour productivity in agriculture is also estimated to have increased by 3.6 percent per year. 

 

 

The government is also committed to promoting research at all levels. Conducting research and innovative activities to introduce new technology is one of the cardinal principles of our growth strategy. Grants on research assistance and fellowships are given highest priority. In the nuclear energy sector, nuclear power training and educational institutes will be established which will develop qualified and trained manpower.

 

 

It is believed that the promotion of Information and Communications Technology (ICT)-based model targeting micro, small and medium enterprises (MSMEs) will play an important role in fostering entrepreneurships in the country. To take advantage of this potential, SME Foundation has undertaken a project to study growth potentials of software companies and constraints limiting the exploitation of those potentials.

 

 

The goals and targets of the 7th Plan relating to employment and innovation include:

 

 

  • Creating good jobs for the large pool of under-employed and new labour force entrants by increasing the share of employment in the manufacturing sector from 15 per cent to 20 per cent and raising the share of industrial sector to GDP 35 per cent.

 

  • Technical and vocational training institutions would be established in the lagging districts to create opportunities for the people to be semi-skilled and get employment by internal migration to industrial districts of Bangladesh.

 

  • The human capital base will be prepared in such way so that they are able to respond to the anticipated needs generated by a growing and changing economy. Accordingly, greater emphasis is being placed on secondary and higher education, as well as vocational and technical education, skill development training for employment and life skills training programme.

  

  •  Expanding market opportunity through greater reliance on world trade.

 

 

  • Enhancing the quality of the workforce.

 

 

  •  Raising public spending on Research and Development from 0.6 per cent to 1.0 per cent of GDP.

 

 

Dr. Shamsul Alam is Member (Senior Secretary), General Economics Division (Government focal point for Poverty and SDGs), Planning Commission, Ministry of Planning.

sabau47@yahoo.com

 

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