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Keeping the pace of export earnings during post-LDC graduation, has captured the thoughts and consideration of the Bangladesh government. The exportable items would be deprived of Duty Free-Quota Free (DFQF) facilities from European Union (EU) markets after the graduation. According to provisions set by the World Trade Organization (WTO), the existing trade-related facilities would be scrapped as a result of losing the status of LDC. It is true that LDC graduation will help Bangladesh to be on a whole new development trajectory. However, the problem concerning country’s export earnings will continue to pose challenges. The solution lies, inter alia, in acknowledging the need for growing labour productivity, as well as in doing the needful to increase the labour productivity to a certain global standard.
In terms of labour productivity, Bangladesh lags far behind its peer economies. What is worrying that Bangladesh ranked lowest among some Asian nations in the matter of labour productivity. According to media reports, per-worker annual productivity level of Bangladesh is $ 10, 400 whereas it is $ 12,700 in Vietnam, $ 15, 500 in Pakistan, $ 15,800 in India, $ 23,500 in China, $ 23, 900 in Indonesia, $ 30, 800 in Thailand, $ 31,900 in Sri Lanka . Productivity level is measured as GDP at constant basic prices per workers in 2018 using 2017 purchasing power parity.
If labour force is trained up adequately and appropriately considering current competitive export markets, it will be to the benefit of the economy. Many leading economies of the world have benefited by prudently increasing labour quality. Employers’ threat, physical violence, mass-level dismissal are causes behind degrading labour productivity. Besides, the workers gradually become unproductive due to lack of training, lack of nutritious food, unhealthy living condition, low wages, lack of proper environment for women workers. According to the Asian Productivity Organization (APO) 2020 data, the average garment labour productivity is lower in Bangladesh than all its competing countries except Cambodia.
Currently, Bangladesh economy is fetching around $50 billion of foreign currency annually. This notable pace of foreign currency inflow can largely be attributed to the vital role played by the workers, working in export-oriented sectors. Moreover, Bangladeshi expatriates are working as driving force of Bangladesh economy by sending foreign remittance worth billions of dollars annually. Clearly therefore, export earnings and foreign remittance are the two potent forces of Bangladesh economy, even with the presence of low and unskilled labour force.
If productivity among labour force is not enhanced right now, Bangladesh economy will have to struggle to survive in near future with knowledge gap labour force. The 6th FYP (2011-2015) changed employment structure mainly for enhancing labour productivity. The objective of changing employment structure was to transform labour force from agriculture to manufacturing and formal service sectors- regarded as higher productivity jobs. The need for carrying out skill development programmes for untrained workers is a must in order to keep pace with developed economies in the world. The 7th FYP was able to create 7.4 million jobs against target 12.9 million. Of them, about 2.8 million workers got overseas jobs.
The targets undertaken during 7th FYP was 1) Effective employment policies to enhance employability through skill development including for green growth 2) Promotion of safe and clean working environment for all workers and in compliance with core international labour standards 3) Promotion of fundamental principles and rights at work through social dialogue and tripartism 4) Promotion of social protection for all workers and vulnerable groups including against climate change.
The labour force in Bangladesh is predominantly involved in service, industry and agriculture sectors. The educational qualification of the people who are working in these sectors are awfully below standard. According to Labour Force Survey 2016-17, about 45 per cent workforce serving in the agriculture sector, 24 per cent in industry sector and 23 per cent in service sector come with no education.
The share of workforce in agriculture sector is about 40.6 per cent, 20.4 per cent in Industry sector, 39 per cent in Service sector- PRI in Dhaka revealed this in 2019. But, in recent times, the people linked with farm sector are being found to change the ways of earning for livelihood. The industry sector, for the last couple of years, has become viable for many reasons. The share of GDP in the country’s industry sector is significant, no doubt. It is a matter of pride that Bangladesh is ranked second in terms of exporting apparel products. The country’s industry sector is now employing both skilled and semi-skilled workers on condition of paying low wages and salary. Discrimination in wages in Bangladesh is not a new phenomenon. Setting of standard level of wages for the workers is pivotal to increasing their productivity.
The International Labour Organisation (ILO) in its study titled “Global Wage Report 2020-21” stated that the real minimum wage in Bangladesh saw a negative 5.9 per cent growth between 2010 and 2019. Among the countries that have experienced an increase in real minimum wages, the highest average annual increases were observed in Vietnam by 11.3 per cent, Laos by 10.1 per cent and Cambodia by 9.7 per cent, the study said. The ILO study suggested that Bangladesh’s negative 5.9 per cent was followed by Sri Lanka with negative 4.5 per cent and Afghanistan with negative 0.6 per cent. In case of labour productivity growth, Myanmar saw the highest growth by 5.9 per cent in the region followed by Bangladesh with 5.8 per cent, India 5.5 per cent, Pakistan 2.2 per cent, Nepal 4.3 per cent, Sri Lanka 4 per cent and Afghanistan 1.7 per cent -The study also noted.
Bangladesh, which is recognised as one of the fastest growing economies in the world, should also focus adequately on enhancing labour productivity. Considering 4th Industrial Revolution, the workers must be brought at the cutting edge of technologies. If existing workers cannot equip themselves with technological knowhow, 4th Industrial Revolution era would be a curse for them. The state has a role to make the labour force fit ahead of entering the automation period. The sooner, the better.
The Writer is an economic affairs analyst. He can be contacted at mazadul1985@gmail.com
