Jobless growth a disturbing trend

For years, Bangladesh's economic trajectory has baffled economic pundits. Yes, the economy has shown impressive GDP growth for a decade, but what is now becoming increasingly clear is that it has failed to promote the requisite growth in jobs. Indeed, the largest segment of employment comes from the readymade garments (RMG), which being the pride-and-joy of Bangladesh's industrialisation racks up an estimated 85 per cent of the export receipts. Unfortunately, as latest research data shows "employment in the industrial sector fell by 3.4 per cent last year to 17 per cent which was 20.4 per cent in 2017 while its contribution to the country's GDP went up to 36.9 per cent from 32.5 per cent during the period."

This trend shows that as the RMG sector moves towards increased automation in production processes, the number of people employed is on the decline. That does not bode well for a country with a large young population since the most significant portion of the economy is moving towards a workplace setting where labour-saving technologies and automation are increasingly becoming commonplace. For years, policymakers have boasted about the cheap labour that the country possesses and which has been a cornerstone in its policy to entice much-needed foreign direct investment (FDI). Of course, RMG leaders have been voicing their opinion about wages not being cheap anymore, especially in the backdrop of the new wage board that is being implemented in stages. Hence, companies are moving towards automation which is making some functions in the industry redundant for workers.

Interestingly, while agriculture's contribution to the GDP has been on a general downturn over the years from 14.1 per cent in 2017 to 11.6 per cent in 2022, it is seen that employment in that sector has risen by a significant 4.6 per cent, from 40.6 per cent in 2017 to 45.3 per cent in 2022. It is impossible to discount the havoc Covid-19 played with employment in the country. Millions were uprooted from urban regions and forced to go back to the rural areas they hailed from. Now it seems many did not come back to work for industry and got engaged in agriculture.

There is little to rejoice from the data presented during the meeting on 'The dialogue on 'National Employment Policy and Labour Market Employment Challenges in Bangladesh', organised recently to discuss the critical challenges arising from current labour-market trends in the country and to explore effective means of addressing those through the National Employment Policy (NEP) that was formulated last year. What is clear is that employment policy needs a major rethink whereby "demand-supply gap of high potential sectors for employment and counting underemployments as crucial as unemployment." While there has been greater engagement in the agro-sector of some of the displaced workers, mechanisation is increasingly becoming a mainstay there too. This is unavoidable.

In an increasingly volatile economic situation, the government needs to shift focus on creating rural-based economic activities. It is high time authorities started zoning the country into industrial and agricultural zones. This has been demanded for more than a decade by economists because without proper zoning, no national plan for economic development can achieve stated goals in the national budget. Skills development to tap into foreign labour markets is another area that has not gotten proper policy support. Other countries in Asia are earning six to eight times what Bangladesh brings in inward remittances simply because their workers are much more skilled than ours. One can only hope that priority areas will be delineated in the government policies sooner than later.