Boosting employment generation

Being one of the world’s most populous countries, Bangladesh is uniquely blessed with plenty of untapped human resources. Most of the country’s over 160 million citizens are young and ready to work. However, there are not enough jobs in the country to cater to the growing needs of its younger population. The growth in employment creation is necessary to match the unprecedented number of young people entering the working age. The country needs an urgent strategy to tackle the issue, which has the potential to create other social and economic problems if left unaddressed.

Prioritising employment generation should be the cornerstone of government policies. The government must take proper initiatives to create sustainable employment generation programmes. The issue is particularly important in view of the fact that a large number of people had lost their jobs and had become unemployed, while people capable of work were unable to access new jobs amid the Covid-19 pandemic. Creating opportunities for new employment and preserving existing jobs were important to the budget because they would play a vital role in recovering from the economic downturn caused by the pandemic. The government should emphasise creating employment both in the public and private sectors. The policymakers need to focus on increasing employment in the public sector and encourage investment in the private sector. The employment scene will improve only if private investment picks up. At the moment, the situation is grim on that front.

Against this backdrop, the Bangladesh Bank is now focusing on controlling imports and inflation and promoting local production to generate employment, according to a report published in The Business Post yesterday. “For this, we have announced a new Credit Guarantee Scheme on refinancing against Term Loan of Tk 250 billion of which 75 per cent is meant for cottage micro and small enterprises and the remaining scheme for medium enterprises,” said Bangladesh Bank Deputy Governor Abu Farah Md Nasser. He said this while speaking at the 10th meeting of the Financial Sector Development Working Committee (FSDWC) organised by the Business Initiative Leading Development (BUILD) on Wednesday.

With a growing population and relatively small size of the economy employment generation is a challenging task for Bangladesh. The economy of the country has undergone a structural change since its independence. It has gradually moved from an agrarian to a more industry and services sector-based economy. Bangladesh has, over the years achieved impressive sustained GDP growth. However, the growth of the economy has not been accompanied by adequate employment creation and the number of unemployed people has increased over the years. According to a report by the World Bank that Bangladesh is the only country in South Asia where growth in the labour force outpaced growth in employment during the last decade.

It is to be noted that while growth is important for employment generation, it may not be a sufficient condition. Studies have indicated that the sectoral composition of growth influences the extent and nature of employment creation. For example, manufacturing, construction and services sectors usually demonstrate higher employment elasticity compared to sectors like agriculture, mining, utilities, etc. Though the composition of growth trend in Bangladesh suggests a positive shift towards a modern economy, the pace of the shift is yet to get adequate momentum. Jobless growth is a dangerous trend—it creates social tension and disharmony. It spreads further inequality, which may lead to societal collateral damage.

Experience shows that jobless people could be dangerous to Bangladesh’s future well-being. The unemployed youth of the country can get frustrated and fall prey to drug addiction, theft, violence, and many other social vices. Another negative effect of unemployment is people getting depressed.

Enhancing growth and employment creation in Bangladesh will of course require the removal of obstacles such as infrastructural bottlenecks, institutional weakness and political instability.