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Addressing the enigma of 'jobless growth'

Shahiduzzaman Khan | July 12, 2018 00:00:00

Finance Minister AMA Muhith did admit that the country was having a jobless growth in a unique situation where macro-economy experiences growth but level of employment either remains static or records decline.

According to a FE report this week, the finance minister described the data on jobless growth in the country as an enigma, claiming that many sectors are still facing difficulty in hiring workers. Sectors like agriculture find it hard to employ labourers to cultivate crops, he said.

Mr Muhith felt that people were somehow busy doing other jobs. His observation came in the backdrop of official statistics that the growth of employment in recent years declined despite a robust economic growth.

According to the official statistics, more than 85 per cent of the jobs in 2016-17 were informal which cannot be considered good quality jobs. On an average, gross domestic product (GDP) in Bangladesh grew annually by 6.6 per cent, and there has been a net increase of 2.8 million new jobs on top of the 60.7 million jobs that existed in the economy in 2013.

Such a situation suggests that the number of jobs grew by only 0.9 per cent per annum or less than one-eighth of the rate at which the economy grew during those five years. The country is, thus, having growth without an expansion of jobs.

According to the Labour Force Surveys, over the past five years, jobs declined by 1.5 million in agriculture. Out of the new jobs created in the economy, the services sector accounted for the bulk-3.9 million. Of these, industry accounted for only 0.3 million jobs.

During the same period, jobs in agriculture declined by 1.1 per cent against output growth of 3.2 per cent; jobs in the industry grew by only 0.5 per cent even as output grew by a robust 9.8 per cent, while services sector jobs grew by around 4.0 per cent against output growth of around six per cent.

Despite strong output growth of 10.4 per cent, the manufacturing jobs declined by 0.77 million-from 9.53 million in 2013 to 8.76 million in 2016-17-an annual average decline by 1.6 per cent. Economists consider it as a most alarming feature for the country's growth.

While male manufacturing jobs registered a rise by only 0.17 million, female manufacturing jobs saw a big drop by 0.92 million. This suggests that much of the pride of generating female employment in the manufacturing sector over the past few decades in Bangladesh is now dwindling.

As the high economic growth is not creating enough employments, the country is in need of structural economic reforms. The service sector should be streamlined, as manufacturing sector is not expected to be a major generator of jobs in future.

The country's economy largely depends on manufacturing and agriculture sectors. But the number of workers in clothing industry is shrinking steadily for increasing use of artificial intelligence (AI) tools in production unit. The same development holds true to the agriculture sector, as mechanisation drives manual labour force out of crop production.

However, according to analysts, service sector can be a major driving force for employment generation. But it is still largely an informal employment sector in Bangladesh. If it could be transformed into a formal one, it will be a major achievement. In this respect, specific areas need to be identified where the country has opportunities. A plan should be chalked out to harness its potential.

In spite of huge unemployed manpower, the country largely depends on foreign experts due to shortage of skilled hands in many sectors. Due to lack of quality education, many youths could not be engaged in highly valued jobs. To this end, there is an urgent need for enhanced investment in education for strengthening skill development.

Achieving a high rate of economic growth alone, in terms of a mere increase in the GDP growth rate, can't be termed a good growth. The quality of growth is the most vital factor. Such growth must be able to produce jobs and livelihoods for as many people as possible. With a view to bypassing 'jobless growth', its strategies, pattern and structure have to be changed.

The economy of the country is growing, but the number of jobseekers is growing far more rapidly. The economy needs to be diversified to cope with the economic reforms -- from agriculture to manufacture and service sectors.

Young entrepreneurs should be provided with easy loan and required training. Dissemination of innovative ideas is also crucial. The youth should explore their inherent talents to turn them from job-seekers into job-givers.


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