Deteriorating employment situation
Tuesday, 8 September 2009
UNEMPLOYMENT and poverty go hand in hand since one is complementary to another. The rate of unemployment is very high in Bangladesh; one in three persons is thought to be either unemployed or underemployed in the country. Despite an impressive economic growth for nearly two decades, the unemployment rate has not gone down because of the entry of a large number of new faces, an estimated 2.0 million, to the labour market each year. This problem has been persisting largely because of a low industrial base and the declining contribution of the agricultural sector to the country's gross domestic product (GDP).
However, Bangladesh faces an unusual situation this year as far as absorption of new entrants to the labour market is concerned. The industrial sector has been doing well in recent years, creating job openings for an increased number of new entrants to the job market. But because of the slowdown under the impact of the global recession, the industrial sector, according to the International Labour Organisation (ILO), is expected to employ only 0.4 million new workers this year. This means that two other major sectors of the economy, agriculture and services, would experience extra pressure from the additional workforce. But these two sectors do not have the capacity to withstand the pressure and absorb the additional workforce.
In terms of contribution to the GDP, the agriculture sector, which was at the top once, has scaled down to number three position. But the sector is still at the top in terms of its labour absorption capacity. It employed 24.1 million labourers in the fiscal 2008. However, there exist some distortions in the nature of employment. A large part of the workforce in the farm sector is underemployed and the remuneration the underemployed labourers get at the end of the day is far less than what is needed for their survival. Yet they do not have any other option but to live with that. The situation is likely to deteriorate further because of the pressure from an increased number of unemployed labourers on the farm sector this year. Moreover, the allocations made in the development budget for the current fiscal, being lower than that of the previous year, will make it difficult for the sector to absorb more than the usual number of workers. The services sector, which has a share of more than a half of the GDP, employs the second largest labour force, nearly 19.5 million, has expanded in recent years, mainly at the cost of the farm sector.
The problem has been exacerbated by the decline in manpower export, coupled with axing of jobs of the expatriate Bangladeshis, particularly in the oil-rich Middle Eastern countries. Without any major turnaround in the global economic situation and consequent rise in oil prices, the prospects for labour intake by these countries are unlikely to improve. But the government cannot remain just an onlooker in the face of a deteriorating labour market situation; it should do the needful to boost demand for new employments. In addition to putting in place right policies and incentives to encourage new investments in the real sectors of the economy including agriculture and manufacturing, the government would have to create opportunities for more seasonal employments through schemes such as food for work, test relief, 100-days employment generation and the like.
However, Bangladesh faces an unusual situation this year as far as absorption of new entrants to the labour market is concerned. The industrial sector has been doing well in recent years, creating job openings for an increased number of new entrants to the job market. But because of the slowdown under the impact of the global recession, the industrial sector, according to the International Labour Organisation (ILO), is expected to employ only 0.4 million new workers this year. This means that two other major sectors of the economy, agriculture and services, would experience extra pressure from the additional workforce. But these two sectors do not have the capacity to withstand the pressure and absorb the additional workforce.
In terms of contribution to the GDP, the agriculture sector, which was at the top once, has scaled down to number three position. But the sector is still at the top in terms of its labour absorption capacity. It employed 24.1 million labourers in the fiscal 2008. However, there exist some distortions in the nature of employment. A large part of the workforce in the farm sector is underemployed and the remuneration the underemployed labourers get at the end of the day is far less than what is needed for their survival. Yet they do not have any other option but to live with that. The situation is likely to deteriorate further because of the pressure from an increased number of unemployed labourers on the farm sector this year. Moreover, the allocations made in the development budget for the current fiscal, being lower than that of the previous year, will make it difficult for the sector to absorb more than the usual number of workers. The services sector, which has a share of more than a half of the GDP, employs the second largest labour force, nearly 19.5 million, has expanded in recent years, mainly at the cost of the farm sector.
The problem has been exacerbated by the decline in manpower export, coupled with axing of jobs of the expatriate Bangladeshis, particularly in the oil-rich Middle Eastern countries. Without any major turnaround in the global economic situation and consequent rise in oil prices, the prospects for labour intake by these countries are unlikely to improve. But the government cannot remain just an onlooker in the face of a deteriorating labour market situation; it should do the needful to boost demand for new employments. In addition to putting in place right policies and incentives to encourage new investments in the real sectors of the economy including agriculture and manufacturing, the government would have to create opportunities for more seasonal employments through schemes such as food for work, test relief, 100-days employment generation and the like.