Bangladesh faces new job burden as industrial sector faces gloom, says ILO

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A Z M Anas
Bangladesh is expected to employ only 0.4 million new workers this fiscal as the country's industrial sector faces uncertainty amid one of the worst global recessions in modern history, said the International Labour Organisation (ILO).
But the Geneva-based UN agency has said that a slowdown in manpower exports means the domestic labour market would require creating jobs for an additional 0.3 million people a year.
"Incremental employment in industry sector is projected to be lower, only 0.4 million new industrial employment is to be added to the job market," the ILO said in an assessment of the impact of global crisis on Bangladesh's labour market.
The bulk of workers would be absorbed in agriculture and service sectors, but the ILO report said, "The concern is a large part of this newly absorbed labour force in the agriculture sector would work at less than optimal level, increasing underemployment in the field."
Bangladesh has a total labour force topping 51 million and the agriculture sector continues to be the biggest employer.
Even though the share of the farm sector in terms of Gross Domestic Product has waned over the years, agriculture absorbed some 24.1 million workers in 2008 financial year, according to estimates by local think tank Centre for Policy Dialogue.
Of the labour force, around 7.6 million serve the industrial sector while another 19.5 million are working in the services sector.
"Bangladesh's biggest demographic challenge is to provide jobs for 2.0 million new faces who enter the employment market each year," Zahid Hossain, senior economist at the World Bank said in an interview Wednesday.
To reap the demographic dividend, the economist noted Bangladesh must ensure "productive" employment for the increasingly young labour force-either through fostering growth in the domestic economy or harnessing the overseas job market.
Bangladesh's unemployment rate continued to hover at 3.6 per cent in 2009 financial year, according to the CPD, as the global recession damped down new job opportunities in the industrial sector.
The ILO report, however, said Bangladesh's labour market fared relatively well and showed resilience, as did its economy in the face of the worst economic crisis in decades.
The country's economy managed to grow 5.88 per cent in the fiscal 2009 amid the stinging global recession that hammered the world's major economies.
Only the country's overseas employment market has faced increasing strain, with more than 40,000 Bangladeshi workers returning home since the onset of the crisis, mostly from the Gulf and Southeast Asian nations.
Manpower exports are also on the consistent path of decline, as 327,359 Bangladeshis found jobs in eight months to August this year, down from 530,604 in the same period last year.
As the global recession has pummelled the country's industry sector, the ILO report urged the government to scale up investments in the farm sector to foster job creation.
The country's total budgetary allocation for the farm sector is US$1.3 billion, down by 14 per cent from the fiscal 2009 revised budget.
The government has set aside $245 billion for agriculture sector under the annual development programme (ADP) of 2010 financial year, about 9.0 per cent lower than a year earlier.
"Importance should also be placed on creating employment opportunities in non-farm sector."
The ILO report said since most of the growth in the apparel industry is volume-driven and employment in the sector has been mostly sustained.
But the sector remains particularly vulnerable to buyers' demands for further reduction of cost of cutting and making and discount on deferment of orders.
The Bangladesh economy has been increasingly integrated with the global economy through trade, investment, and flow of remittances since late 1980s.