Volatile politics blocks investment, recruitment in private sector

Recruitment in the country's private sector has almost grounded to a halt over the last 12 months due mainly to the absence of moves for fresh investment and reinvestment by the employers, sector insiders said.
According to them, the recent political impasse and unfavourable developments in businesses have severely affected the growth of the private sector and have prompted the entrepreneurs to be cautious in making further investments, hindering the normal recruitment process.   
They said most of the manufacturers could not even utilise their existing capacity due to the adverse political situation, which had prevented them from taking any steps for expansion and new investment.
"In the last one year, new recruitment in the country's private sector has shown a downtrend due mainly to the unstable political situation," Fahim Mashroor, chief executive officer (CEO) of BD.Jobs (the online employment exchange in Bangladesh) told the FE
He said they have seen on an average 25 per cent annual growth in recruitment from 2009 to 2012, but 2013 has presented a negative trend instead of growth.
Board of Investment (BoI) data, however, revealed that overall employment had fallen by over 42 per cent during the January-December period of 2013 compared to the scenario in the corresponding period of last year.
Humaira Sharmeen, Head of Operations at Prothom-alojobs, the country's second-largest job portal, told the FE, "We have seen a 'negative trend' in fresh recruitment during the last one year compared to the previous years."
She said that in 2013 recruitment at both local and foreign companies had gone through bad times due to political uncertainty and frequent strikes.
The BoI data also show that in 2013, the country's private sector was expected to generate employment for 0.129 million persons. It was 0.3 million in 2012.
Former president of Bangladesh Employers' Federation (BEF) Fazlul Hoque told the FE that in the 2013 calendar year recruitments to the country's production and service sectors had dropped significantly mainly because of the volatile political situation.
He said the last year was not favourable to business because most of the manufacturing units could not utilise their hundred per cent capacity. The entrepreneurs could not recruit fresh workforce.
Mr Hoque said recruitments in major sectors including those of real estate, textiles, apparel products, banking and consumer-marketing have declined by more than 70 per cent in recent times.
 President of Exporters' Association of Bangladesh (EAB) Abdus Salam Murshedy said the ready-made garment (RMG), construction, engineering and service sectors are the main areas of recruitment, but last year all the sectors passed through a critical time.
He said the country's RMG industry was a large sector, and it recruits more than 0.2 million persons on an average every year. But this time the sector had left no room for fresh recruitment due to drastic cuts in new investments, he added.
According to BGMEA, more than 4.4 million workers are now employed in the country's RMG sector, and around 80 per cent are women, especially from the rural areas.
Managing Director of Evince Group Anwar-ul-Alam Chowdhury Parvez said Bangladeshi businesses had made trade deals abroad in recent months due to frequent blockade programmes and shutdowns which were discouraging buyers from coming to the country.
Tanvir Rahman, Deputy Managing Director of M Rahman & Co. Ltd, one of the leading power engineering companies, told the FE that their business had fallen significantly in 2013 due to the restive political environment.
He said new investments in the country's RMG and other sectors had dropped drastically in 2013. It led to a gradual halt to their business in electric generators.
Toufiq M Seraj, managing director of Sheltech, a leading real estate company, told the FE the sector could not make any new recruitment as they did not take up new projects.
He said construction work of over 8,000 flats remained suspended due to a significant drop in sales. As a result, there had been no further recruitment of employees in the sector.
Real Estate & Housing Association of Bangladesh (REHAB) data show the sector provides employment to 3.5 million people. The present turnover from this sector is about Tk 280 billion a year.
Rizvi Ul Kabir, general secretary of Bangladesh Ceramic Ware Manufacturers' Association, said in the ceramic ware sector, new investments worth more than Tk 6.0 billion and reinvestments remained pending owing to the lack of gas connections.
He said recruitment in the ceramic factories came to a complete halt as demands for their products fell over 60 per cent.
Nabhash Chandra Mandal, director of BoI, told the FE that the recent political deadlock had held back more than $10 billion in foreign direct investment (FDI) from several countries.
Foreign investors came to the country several times with investment proposals, but now they were following the policy of wait-and-see before taking investment-related decisions, he added.
According to BoI data, the number of investment proposals from the local and foreign sources during the period of turmoil had declined by more than 27 per cent and nearly 10 per cent respectively.