SDGs and structural challenges ahead

On 25th September, leaders of 193 countries of the world unanimously adopted the post-2015 international development agenda for the period 2015-2030. Termed Sustainable Development Goals (SDGs), they are meant to provide the framework for global development after the terminal year (2015) of the Millennium Development Goals (MDGs). With 17 goals and 169 targets SDGs represent a bold new agenda to end poverty, fight inequality, tackle the adverse effects of climate change and ensure a sustainable future for all.
It may be recalled that the High Level Panel of Eminent Persons on the Post-2015 Development Agenda that was appointed by the UN Secretary General had, in 2013, recommended an agenda that should be driven by five basic considerations: (i) leave no one behind, (ii) put sustainable development at the core, (iii) transform economies for jobs and inclusive growth, (iv) build peace and effective institutions, and (v) forge a new global partnership. A look at the 17 SDGs would show that they have their roots in the five basic drivers mentioned above. They cover inclusive economic and social development, environmental sustainability, and building peace.
Apart from the simple fact that SDGs contain a much larger number of goals covering a broader set of issues compared to MDGs and hence make the agenda more challenging, there are a number of significant differences between the two.
* SDGs are meant for all countries -- not just for developing countries;
* A look at some of the goals and targets of SDGs -- especially those relating to growth, employment, education, health, indicates an emphasis on qualitative aspects of development;
* As for fighting poverty, in addition to the income dimension, non-income dimensions are also emphasised;
* In a few instances, e.g., with respect to economic growth and industrialisation, quantitative targets are specified for least-developed countries (LDCs).
The implementation of the post-2015 development agenda embodied in the SDGs will be particularly challenging for LDCs, not only because of the inadequacy of resources that will be required for pursuing the goals but because of the fact that many goals involve structural transformation of economies. The success would also critically depend on overall approaches and strategies adopted. Then again some of the goals appear unrealistic if past development history is taken into consideration. Goals relating to economic growth, industrialisation and employment could be used to illustrate the above observations.
A major challenge is to attain 7.0 per cent GDP growth per annum
To start with, take goal 8: "Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all". Under target 8.1, the goal is to "sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7.0 per cent gross domestic product growth per annum in least developed countries".
Sustaining per capita economic growth in accordance with national circumstances is quite general and acceptable as a target. But the target of "at least 7.0 per cent GDP growth in LDCs", though desirable, raises questions. How feasible is this target for all LDCs? Although serious research is needed in order to come up with a proper answer to this question, some rough idea could perhaps be formed by looking at the recent experience of the LDCs. Table 1 presents data on GDP growth per annum for all LDCs taken together, for Asian LDCs as well as for Bangladesh.
Several points may be observed from the figures of Table 1. First, LDCs as a whole are still way below the 7.0 per cent GDP growth mark. Moreover, there has been considerable fluctuation in growth rates. Second, Asian LDCs have not performed better in all years. Third, the performance of developing countries as a whole is no better. In fact, in most years, growth rate of this group has been lower than that of LDCs. Fourth, and a fact that is well-known, growth in Bangladesh has been hovering around 6.0 per cent mark for some years. If one looks at the experience of economic growth around the world for a longer term period, one will note that very few countries of the world have been able to attain annual GDP growth of 7.0 per cent on a sustained basis.
As for Bangladesh, there is continued discussion on how economic growth can be accelerated; and yet, there is still no indication that the country is poised for breaking out of the 6.0 to 7.0 per cent regime. For 2015-16, the World Bank has projected 6.5 per cent GDP growth, which implies that the country is going to miss the target for the first year of the Seventh Five Year Plan as well as for the first year of the SDG period.  
Can the manufacturing sector of Bangladesh create more than a million jobs per year?
Goal 9 which is on industrialisation, innovation and infrastructure rightly puts emphasis on the importance of industrialisation. Target 9.2 suggests promoting "inclusive and sustainable industrialisation and, by 2030, significantly raising industry's share of employment and gross domestic product, in line with national circumstances". The same target goes on to suggest a more specific figure for LDCs: doubling the sector's share in least-developed countries. While industrialisation in developing countries is not without challenges, the specific target set for LDCs raises more serious questions relating to structural transformation of economies alongside economic growth.
Economists writing on economic growth and structural transformation point out that as an economy develops, the share of traditional sectors like agriculture in GDP declines and the shares of other sectors like industry and services increase. At the same time, it is also pointed out that the share of industry increases up to a certain stage of development and then declines. At what point the share of industry declines can vary from country to country. But experiences of countries that have succeeded in recent times, e.g., Republic of Korea, China, and Taiwan, could be indicative. The peak shares of manufacturing in GDP and employment attained by Korea were 29 and 23 per cent respectively (in 2000). In China the figures were 32 and 16 per cent respectively (in 2005). In Taiwan, the figures were higher -- 33 and 32 per cent respectively (in 1990).
In Bangladesh, the share of manufacturing in GDP was 20 per cent in 2014. And in employment, the sector's share was 16.4 per cent in 2013. If they were to double by 2030, the figures would have to be 40 and 33 per cent. With respect to the share in GDP, no other country in the Asian region has attained this level during their period of growth. As for employment, it is only Taiwan who could attain that level. These comparative figures indicate that if Bangladesh were to attain the SDG target of industrialisation, it would have to surpass the successful countries of Asia.
What would the above mean for Bangladesh? Very rough back-of-the-envelope estimation by the present author indicates that if the share of manufacturing in total employment were to double by 2030, the sector would need to create additional employment of nearly 1.2 million per year from now. During 2006-2010, the sector added about 400,000 jobs per year. Of course, the number has increased substantially in recent years. Whether it can climb to over a million and sustain at that level for a decade and a half would be critical for attaining the SDG target relating to industrialisation.  
The target of full and productive employment needs to be elaborated further
One of the SDG targets stipulates that by 2030, all countries should achieve "full and productive employment and decent work for all women and men". The challenging nature of this target can be appreciated when it is broken down into its elements. First, it focuses not just on full employment, but also emphasises the productivity aspect of employment. Second, it underscores that all women and men (i.e., those who are in the labour force) must be employed. Third, it would be essential to go beyond productive employment and achieve "decent work" for all.  What do all these imply?
If one talked only about "full employment", one could argue that it already prevails in Bangladesh because the rate of open unemployment is only around 4.0 per cent of the labour force which, in a developed economy would be considered to be indicative of full employment. However, it is well-known that for a variety of definitional and practical reasons, unemployment rate in developing countries like Bangladesh does not provide a real indication of the labour market situation. Many of the employed people in these countries are engaged in low productivity work which may not even generate adequate earnings for moving above the poverty line. And hence the rider "productive" to the term employment. But the question is how one measures productivity of work and what would be the indicator "full productive employment"? Clearly, more work would need to be done on this and the target would need to be made operational in a way that real progress can be monitored.
Since the employment target mentions "all women and men", it would be necessary to devote some attention to this. It is well-known that in Bangladesh, the rate of women's participation in the labour force is much lower compared to men and lower than in many countries of East and South East Asia. Although women's participation in labour force has gradually increased in Bangladesh, there is still a long way to go. So, it would not be adequate to just aim at employing all women who are in the labour force; the target has to be interpreted in the sense of raising their participation in the labour force and ensuring productive employment at a higher rate of participation.
Pursuing the goal of decent work for all would involve a challenging agenda
The goal of "decent work" involves a notion that is broader than productive employment and encompasses social protection for workers as well as rights at the place of work. These are areas in which developing countries in general have a long way to go, and Bangladesh is no exception.  In the area of social protection, the first step is to move away from the notion that it is dole to be handed out to the poor. We need to understand that everybody needs to make provision for old age, for health services, for ensuring an income during periods of no work, and so on. While some fortunate ones may be able to make these provisions from their own assets and resources, for most people, some arrangement would have to be made. The job of social protection is precisely to make such provision.
As for rights at work, Bangladesh has ratified the major international conventions concerning freedom of association and collective bargaining. And yet, in new industries like ready-made garments, very small percentage of the workers are unionised. Moves to allow formation of trade unions in the industry remain hesitant. Right to form trade unions in the export processing zones has also remained an unresolved issue. It is thus clear that pursuit of the target of productive employment and decent work for all will involve a challenging agenda.
The author, an economist, is former Special Adviser, Employment Sector, International Labour Office, Geneva.
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