Lately there has been a lot of talk about Bangladesh's forthcoming "demographic dividend" that could transform our country's fortunes in the years to come. Demographic dividend is accelerated economic growth resulting from a country's declining mortality and fertility rate and subsequent changes in the age structure of the population. It occurs when the majority of the population is of working age and can contribute to the country's economy, so the economy grows. As per the latest population census, 33 per cent of our population now belong to age group 0-14 years, while 18.8 per cent to age group 15-24 years and 37.6 per cent to age group 25-54 years. It means that, after 15 years, most of our population will be in the workforce. This massive bulge of young working people, if provided jobs, will definitely generate massive amounts of economic activity.
We need to understand demographic dividends are not automatic. To realise the dividends, there are some key challenges related to those seemingly favourable demographics. Such as where will productive jobs for all this extra workforce come from? What will be the sources for higher economic growth? What is the capacity of agriculture to feed the growing population? Do we have enough resources to make adequate investments in education and health to ensure a healthy, skilled and productive future workforce? These are some of the challenges. The ability to seize the opportunities available to our young population will depend on the success of its efforts and how we address them.
Unfortunately, for the last several years, we have been suffering from economic growth stagnation with GDP (gross domestic product) growing between 5.0 per cent and 6.8 per cent, and the investment-GDP ratio has stood at 24 per cent-26 per cent for a decade. Though public investment has increased nearly 1.0 percentage point in five years, private investment has declined this year. Investors' confidence has been shaken due to the recent political instability and businesses are suffering from insecurity too. Private-sector investment in the country remains at a low ebb, which resulted in a surplus liquidity in the banking sector. So if we want to achieve higher economic growth then the government should give top priority to restoring investors' confidence because overall investment, which is now at 22 per cent of GDP, should be 36 per cent of GDP for higher growth.
It is true in the recent past we have made certain economic progress and strides in many areas of human development and we have also made significant progress in achieving the Millennium Development Goals (MDGs), particularly relating to eradicating extreme poverty and hunger, promoting gender equality and empowering women, ensuring universal primary education and reducing child mortality. Life expectancy has also increased by 10 years, infant mortality has declined by nearly two-thirds, and female literacy has doubled. Though apparently it all sounds good, but on closer examination, certain issues cause serious concern - we still remain one of the poorest, overpopulated and inefficiently governed countries in the world, with about 45 per cent of the population employed in the agriculture sector. More than a quarter of the population (26 per cent) earns less than $2.0 a day, and two in every five children are malnourished. According to a US Aid report, at least 15 per cent of primary school-age children never entered the educational system and together with the 25 per cent primary school dropout rate, it means 40 per cent of Bangladeshi children never received a full primary education.
Also our education system is not yet pro-poor and the curriculum does not serve the goals of human development and poverty eradication. There is a lack of communication and collaboration between the government, academia and industry, and as a result we are not producing quality or skilled persons for modern industry. Industry insiders says that beside poor infrastructure, lack of land, acute shortage of power and gas for new industries, finding the right people and getting them to work productively are the biggest problems of Bangladesh today. Therefore, we need to adopt policies and programmes placing more emphasis on skills development to build human capital.
According to The Asian Development Bank (ADB), Bangladesh is expected to have 78 million workers by 2025, up from 56.7 million in 2010, of whom two-thirds have only minimal education and 4.0 per cent have received any kind of training. Different studies also show that around 2.2 million people enter the job market annually, while nearly 1.0 million get jobs and the rest remain unemployed or under-employed and currently, 47 per cent of graduates are unemployed. Moreover, our employment structure is characterised by the predominance of low-productivity and low-wage, and around 80 per cent of the total labour force were employed in the informal sector, which is insecure, poorly paid and has no social security which, in turn, cannot contribute much to economic development.
In 2004, United Nations Population Division (UN PD) revealed that our population would reach 218 million by 2050, but later upgraded the figure to 243 million by taking into account the decade-long fertility plateau (1993-2002). Therefore, let's assume that our population in 2050 will be 230 million. This means that every year, we are adding 1.8 to 2.0 million people to the national population for which we are losing 1.0 per cent of agricultural land every year. Currently, there are 8,774 million hectares of cultivable land available, of which 88 per cent is cultivated, so there is limited scope to expand the cultivated area and on top of that if we lose 1.0 per cent land per annum, soon we will not have much land to cultivate. The question is: what is our plan to accommodate and feed the extra population who will join soon?
It seems unless we invest massively in education, health and nutrition, infrastructure, and create favourable environment for local and foreign investment, we will not be able to take advantage of this demographic transition. Because only new and enhanced infrastructure will provide jobs, increase attractiveness for foreign direct investment (FDI), improve productivity and urbanisation, and ultimately, connect us to the global economic markets which we desperately need to access. Therefore, we need to adopt an expansionary economic policy so that we can increase production, productivity and consequent employment generation for future workforce through higher investment in above-mentioned sectors. If we succeed, we will ensure the prosperity of our people. And if we fail, our demographic dividend can become a demographic disaster.
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