Bangladesh will have to increase its annual labour productivity by 1.5 per cent to become a high-income country by 2050, according to a latest report of the International Labour Organisation (ILO).
At present, the growth is 4.1 per cent against an annual 6.0 per cent required to become a high-income country by 2050, says the report titled 'The Asia Pacific Employment and Social Outlook 2024' published on Tuesday.
While Malaysia and China do not require large annual labour productivity growth rates to achieve this, it added, Viet Nam would require at least 4.5 per cent.
The report also revealed persistent employment issues, calling for inclusive policies to avert ageing crisis in the region.
"While Bangladesh currently has the potential to reap massive demographic dividends from a youthful labour force, and investments are needed for modern skills and access to quality employment, it is important also to recognise that the aging population is also increasing rapidly with estimates that the country will transform into aging society in 2048," ILO Bangladesh country director Tuomo Poutiainen said in a statement.
Adequate investments in development of the care economy and social protection systems including pension schemes will become increasingly important, he added.
The report said that Asia-Pacific labour markets have recovered well since the global pandemic but face deep-seated challenges that are being compounded by the region's rapidly ageing population.
Unemployment in the region is projected to remain roughly unchanged in 2024 and 2025, at 4.2 per cent, which corresponds to 87.8 million out of work in 2024.
While the unemployment rate for the region remains below pre-pandemic levels, significant variation exists between sub regions and countries, it noted.
The region's jobs gap, which shows the total unmet need for employment, amounted to 164 million in 2023. That figure includes for example women who would like to work but are unable to search for a job because of care obligations.
Persistent issues related to working poverty and informality remains, with a substantial proportion of workers still engaged in low-quality, informal employment despite decades of economic growth, according to the report.
Two in three workers were in informal employment in 2023, an improvement of only 2.0 percentage points over the course of 10 years.
The report also highlighted how the Asia-Pacific region is undergoing rapid population ageing, with the ratio of people aged 65 years and above expected to double by 2050.
This demographic shift will significantly increase the economic dependency ratio, posing challenges for sustaining economic growth.
East Asia is projected to see the largest demographic drag on growth of 0.3 percentage points per year; South Asia is expected to see its demographic dividend decline a lot.
For Bangladesh, according to the report, the old age dependency ratio is projected to be 0.23 by 2050 from 0.09 in 2023.
Despite ageing populations, the region should be able to achieve continued income growth per capita over the coming decades if strong productivity growth can be maintained, added the report.
Labour productivity in emerging economies in Asia and the Pacific stands at less than a third of that in high-income countries in many sectors, highlighting the large potential for efficiency and income gains.
To realise these gains, structural barriers and a lack of training opportunities need to be overcome to allow the region's large pool of workers who are ready to take up better jobs at higher productivity and pay to meet their potential.
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