Worrying unemployment
Saturday, 8 September 2007
Abu Zafar
THE growth of unemployment in the country, now running at a pace higher than that of the last decade when, according to a study of the International Labour Organisation (ILO), the average annual growth thereof was 1.9 per cent, is a disconcerting development. The ILO figures show Bangladesh in the twelfth position among the top twenty countries in the world where unemployment is rising. The number of the unemployed in Bangladesh now is estimated at 30 million. The way the rate of unemployment is increasing, it is feared that at this rate unemployment would soar to some 60 million by 2015. According to another estimate, every year some 2.7 million young persons are becoming eligible for jobs whereas only about 0.7 million of them are getting employment. Thus, nearly 27 per cent of the country's population remain unemployed. The number of the 'disguised unemployment' -- an economic term meaning underemployed people or employed to a degree less than their potential -- is some 32 per cent.
The huge number of the unemployed in the workforce gives an idea of the number of the parasitic ones in the population. Employed persons not only consume from the economy but they also contribute to the economy through production-oriented activities and discharge of various services. The unemployed people in contrast only live off the economy or their families and society. They are an absolute burden on the state. Not only being liabilities in the economic sense, politically and socially they are considered to be a source of tension and turmoil. The linkage between unemployment and crimes is obvious. Therefore, all governments in Bangladesh will need to address the unemployment issue very seriously, indeed before it turns worse. The recent flooding of the country and the on-going reforms programme leading to retrenchment of workers from state operated enterprises, is adding to unemployment. Government will have start up urgently different work programmes like road building and repairs, reconstruction of infrastructures, etc., specially in the rural areas and continue them for some time, to mitigate the worst woes of the jobless ones at the grass roots level.
But for the medium and longer terms, the present interim government which is doing pathbreaking works in vital areas, should also adopt a plan of action to tackle unemployment. It can start such a plan and leave gradual implementation of it to successor governments. Insufficient investments have been frustrating the creation of new employment opportunities in Bangladesh. Government here needs to identify each of the factors that can contribute to a better investment climate. The same would include improvement of law and order, much lowering the interest rate on borrowings, addition to and upgradation of infrastructures, fiscal policies that create level playing fields for local entrepreneurs in relation to foreign competitors, fiscal incentives such as tax reduction and tax exemption etc.
Government will need to act imaginatively and effectively in relation to each of the above factors and more to improve, overall, the investment climate in the country that in turn would accelerate economic activities and make the desired impact on the unemployment situation. However, there is also a need to be clear about the policies to be pursued to create employment. New enterprises will absorb the unemployed. But capital intensive enterprises will employ a smaller number than labour intensive ones which will understandably employ a greater number. Thus, enterprise with labour intensive character should be identified and encouraged.
Government can make a big contribution toward reducing unemployment by also building and operating a large number of training institutions to train the jobless ones in different vocations for them to be fit enough to take up employment in the country, to go abroad for doing jobs or to engage in self-employment. Government's ample spending for skill development is all the more necessary because the private sector may prefer not to invest in this area out of a consideration of low profits. The high cost of skill training under the private sector is also likely to exclude most seekers of such training on the ground of their inability to pay for the training. Thus, government's role as a skill trainer is very important. But it can expect to recover the investments it will make in this area by receiving regular payments in instalments from people who would get jobs after such training.
THE growth of unemployment in the country, now running at a pace higher than that of the last decade when, according to a study of the International Labour Organisation (ILO), the average annual growth thereof was 1.9 per cent, is a disconcerting development. The ILO figures show Bangladesh in the twelfth position among the top twenty countries in the world where unemployment is rising. The number of the unemployed in Bangladesh now is estimated at 30 million. The way the rate of unemployment is increasing, it is feared that at this rate unemployment would soar to some 60 million by 2015. According to another estimate, every year some 2.7 million young persons are becoming eligible for jobs whereas only about 0.7 million of them are getting employment. Thus, nearly 27 per cent of the country's population remain unemployed. The number of the 'disguised unemployment' -- an economic term meaning underemployed people or employed to a degree less than their potential -- is some 32 per cent.
The huge number of the unemployed in the workforce gives an idea of the number of the parasitic ones in the population. Employed persons not only consume from the economy but they also contribute to the economy through production-oriented activities and discharge of various services. The unemployed people in contrast only live off the economy or their families and society. They are an absolute burden on the state. Not only being liabilities in the economic sense, politically and socially they are considered to be a source of tension and turmoil. The linkage between unemployment and crimes is obvious. Therefore, all governments in Bangladesh will need to address the unemployment issue very seriously, indeed before it turns worse. The recent flooding of the country and the on-going reforms programme leading to retrenchment of workers from state operated enterprises, is adding to unemployment. Government will have start up urgently different work programmes like road building and repairs, reconstruction of infrastructures, etc., specially in the rural areas and continue them for some time, to mitigate the worst woes of the jobless ones at the grass roots level.
But for the medium and longer terms, the present interim government which is doing pathbreaking works in vital areas, should also adopt a plan of action to tackle unemployment. It can start such a plan and leave gradual implementation of it to successor governments. Insufficient investments have been frustrating the creation of new employment opportunities in Bangladesh. Government here needs to identify each of the factors that can contribute to a better investment climate. The same would include improvement of law and order, much lowering the interest rate on borrowings, addition to and upgradation of infrastructures, fiscal policies that create level playing fields for local entrepreneurs in relation to foreign competitors, fiscal incentives such as tax reduction and tax exemption etc.
Government will need to act imaginatively and effectively in relation to each of the above factors and more to improve, overall, the investment climate in the country that in turn would accelerate economic activities and make the desired impact on the unemployment situation. However, there is also a need to be clear about the policies to be pursued to create employment. New enterprises will absorb the unemployed. But capital intensive enterprises will employ a smaller number than labour intensive ones which will understandably employ a greater number. Thus, enterprise with labour intensive character should be identified and encouraged.
Government can make a big contribution toward reducing unemployment by also building and operating a large number of training institutions to train the jobless ones in different vocations for them to be fit enough to take up employment in the country, to go abroad for doing jobs or to engage in self-employment. Government's ample spending for skill development is all the more necessary because the private sector may prefer not to invest in this area out of a consideration of low profits. The high cost of skill training under the private sector is also likely to exclude most seekers of such training on the ground of their inability to pay for the training. Thus, government's role as a skill trainer is very important. But it can expect to recover the investments it will make in this area by receiving regular payments in instalments from people who would get jobs after such training.