Overcoming the barriers to decent employment for youth

In order to deal with Bangladesh's labour market challenges and address the requirements of providing decent work, with inclusivity and in a comprehensive manner, actions will need to be taken to deal with a number of areas of concern. These are: (a) High youth unemployment and underemployment; (b) High proportion of youth 'not in employment, education, or training (NEET)' (c) Challenges facing overseas employment; (d) Dominant informal sector and lack of decent jobs; (e) Low female labour force participation; (f) Prevalence of vulnerable employment; (g) Skills mismatch and behavioural bias; and (h) The future of work and attendant challenges.

The above mentioned issues were discussed yesterday. Here are the recommendations to address the concerns.

ALIGN EDUCATION SYSTEM WITH LABOUR MARKET NEEDS: To address the labour market needs, a number of initiatives were taken by the government till date. The National Skills Development Authority (NSDA) was established as a significant player to cater to the skills development needs of the youth. Besides, the Skills for Employment Investment Program (SEIP), also focuses on enhancing employability of the youth. The government is also set to launch the Economic Acceleration and Resilience for NEETs (EARN) initiative, with WB funding, to reduce the youth NEET rate to 15 per cent by FY2025 and below 5 per cent by FY2031. However, alignmentof the education system with the labour market needs in Bangladesh requires a comprehensive approach that considers the current and future demands of the job market.

l Implement regular skills gap assessment, collaborate with industries to identify emerging job market requirements, and align the relevant curricula accordingly.

l Encourage universities to introduce flexible, industry-relevant courses and incentivise the establishment of strong ties between academia and industries and businesses in the form of regular exchanges, internships and job placement programmes.

l Universities may consider adopting the COOP model, in place in many countries, with a view to blend classroom-based education with practical work experience.

l Concerned authorities should explore how the current TVET system could learn from and be remodelled after the Dual Education System of Germany, which blends vocational education with on-the-job training. The German system helps prepare a skilled workforce which is able to meet the shifting demands of the industrial sector.

l Put in place a dedicated support programme for NEET youths who lack pre-qualification requirements for TVET institutions because of dropping out of school. Take advantage of the aforementioned World Bank-supported EARN programme to address the attendant challenges.

l Provide scholarships and financial incentives to students from marginalised background to ensure equitable access to quality education and vocational training.

l Create an ecosystem approach to skills-to-employment transition. Incentivise prospective employers to provide apprenticeship opportunities to job-seekers with the help of fiscal-financial support measures.

ADDRESS CHALLENGES ASSOCIATED WITH OVERSEAS MIGRATION: The Bureau of Manpower, Employment and Training (BMET) provides short pre-departure training programmes for prospective migrant workers. Wages Earners' Welfare Fund was created to extend support to migrant workers. However, the quality of training and skills-upgradation of migrant workers and the support they receive leave much scope for improvement.

l Enact and strictly enforce stringent regulations to oversee the work of recruitment agencies to protect the rights of migrant workers.

l Negotiate bilateral agreements with destination countries to ensure fair treatment, standardised contracts and access to legal recourse for the migrant workers.

l BMET needs to plan, design and implement skills development and training programmes for potential migrants in line with emerging demands in major destination countries. For this, a thorough and comprehensive overseas jobs demand survey should be undertaken with the help of experts and labour market specialists.

l Either redesign the Wage Earners' Welfare Fund or develop a migrant workers' welfare trust fund so that it has the capacity to provide effective support to migrant workers, financial assistance, legal assistance, and healthcare benefits for Bangladeshi workers abroad. The mandate could be similar to the Philippines' Overseas Workers Welfare Administration (OWWA).

l Establish a "Migration Resource Center" in major labour-sending regions for legal counselling, remittance services and others, similar to Sri Lanka's Bureau of Foreign Employment (SLBFE).

l Put in place a system of reskilling and upskilling of long-term migrant workers during their home-country visits and between different overseas jobs.

ADDRESS INFORMAL SECTOR CHALLENGES: While some parts of the informal sector could be brought under a formal structure, it has to be kept in mind that a large part of the informal sector will continue to remain informal over the foreseeable future. To formalise online/digital informal businesses, the government has introduced the Digital Business Identification (DBI) Number and has set up a digital registration portal and app where online informal businesses can apply for a DBI. This has created an opportunity to monitor activities in this particular segment of the labour market and ensure that the interests of concerned entities are safeguarded.

The task at hand is to raise the quality of work and create decent work environment in the informal sector. No doubt, transitioning from the informal sector to the formal economy will enhance job security and provide social protection to job market participants. This will involve the offer of incentives and benefits to promote formalisation. At the same time, measures will need to be put in place to secure and safeguard the interests of informal market participants.

l Similar to the DBI, provide unique business identification number to informal businesses, which will help businesses gain access to formal banking services, promote financial inclusion and also help the government with fiscal mobilisation. At the same time, this will help monitor and ensure accountability with respect to labour market practices in the informal sector.

l Launch public awareness campaigns highlighting the advantages of obtaining a DBI and business registration. In this regard, emphasise the ease of doing business, access to credit, and legal recognition that come with formalisation.

l Incentivise formalisation and ensure that labour market participants are able to enjoy the benefits of formal sector gradually.

PROMOTE ENTREPRENEURSHIP: The government has launched the "Startup Bangladesh" initiative to support and fund startups, drawing inspiration from the Indian government's "Startup India" initiative. This initiative has the potential to expand opportunities for youth employment by promoting youth entrepreneurship and start-ups. However, the remit of its activities needs to be expanded to provide more comprehensive support and facilitate access to mentors and investors.

l Establish a National Entrepreneurship Fund to provide direct grants and, encourage equity investment, and support mentorship for startups. This may be modelled after Singapore's "Startup SG Equity" programme.

l Encourage public-private partnerships to create innovation hubs. This may be modelled after successful entrepreneurial ecosystems such as the ones in Silicon Valley and Bengaluru in India.

PROMOTE ICT AND HIGH-TECH SECTORS: Fostering innovation, investing funds in the required infrastructure and imparting training to the workforce are all part of promoting ICT and High-Tech sectors. Indeed, these are the sectors where a large part of the future jobs will be created. Initiatives under the "Digital Bangladesh" programme aim to advance the interests of information and communication technology (ICT) and provide digital services. While some progress has been made in attaining the objectives, these fall far short of the expected goals.

l Encourage effective collaboration between government, academia and private sector to advance the interests of the ICT and High-Tech sectors. Make targeted investments in Research and Development (R&D) to promote and foster the growth of the country's high-tech industry.

l Incorporate coding and digital literacy into early childhood education to build the workforce of the future.

l Design a comprehensive plan to develop the needed human resources equipped with necessary skills and innovative capacities, which will be aligned with the demands of the 4IR and the 5IR.

AGRICULTURAL MODERNISATION: Modern agro-processing and agribusiness ventures and investments to raise agricultural productivity can lead to significant employment opportunities in farming, agro-processing marketing, and distribution. In recent years, a number of initiatives have been taken, such as the "Krishi Digital Platform", which is geared to provide digital services to farmers. Low-cost credit financing facilities for the agro-processing industry are being provided by the Bangladesh Bank.

Although about two-fifths of Bangladesh's labour force is employed in agriculture, labour productivity remains low. On the other hand, there are significant opportunities to create employment through modernising agriculture, strengthening agro-industry linkage, promoting efficient marketing systems and by supporting various rural services. There is a need for concerted efforts and greater investment to realise the potential opportunities of modernisation and commercialisation of agriculture. In fine, initiatives are needed to make agriculture a profitable enterprise for entrepreneurs, farmers and investors so that more decent jobs are created in the sector.

l Invest in rural infrastructure building, including those that support the establishment of backward and forward industries.

l Establish storage facilities to reduce post-harvest losses.

l Expand access to credit for agribusiness entrepreneurs and put in place insurance programmes for small-scale farmers.

Adopt precision farming technologies using the Internet of Things (IoT) to promote the marketing of agricultural and aquaculture products similar to the 'e-Choupal' of India.

ADDRESS GENDER DISPARITY IN LABOUR FORCE PARTICIPATION

l Addressing cultural and social barriers is crucial to eliminating gender disparity in labour force participation. To break social taboos, the government, in collaboration with the media and NGOs, should launch awareness campaigns and community engagement programmes to change perceptions about the participation of women in the workforce.

l Implement family-friendly policies such as flexible working hours and day-care facilities to enable women to balance work and family life.

l Invest in women's education and vocational training, more particularly in fields traditionally dominated by men, to empower them with in-demand skills. For example, India's "Save the Daughter, Educate the Daughter" campaign aims to improve the education and skills of girls, thereby enhancing their employability. Bangladesh can think of something along similar lines.

l Ensure that security and rights of migrant female workers are secured. Negotiate and sign agreements with appropriate authorities in destination countries to address their concerns and safeguard interests and safety.

l Scholarships and residential facilities should be extended to young women so that they are able to go for vocational training and other training programmes to enhance their employability and upgrade their competencies.

l Implement and enforce strong legislative measures and safeguard against workplace discrimination and harassment of women.

ENSURE DECENT WORKING CONDITIONS: The Department of Inspection for Factories and Establishments (DIFE) is in charge of labour and safety inspection. However, DIFE suffers from significant shortage of human and financial resources which do not allow it to work efficiently and effectively to secure safe working environment for workers.

l Create an independent labour ombudsman's office to investigate and resolve labour rights abuses and disputes.

l Build DIFE's capacity to enable it to perform its mandated responsibilities adequately.

l Ensure that workers are able to exercise their trade union rights. Towards this, take initiative to strengthen the capacity of labour courts for speedy resolution of labour disputes.

l Involve labour unions and promote signing of collective bargaining agreements to safeguard workers' interests and as a tool for resolving labour-related disputes in a participatory manner.

PREPARE THE YOUTH FOR FDI-DRIVEN JOBS: To create opportunities for the young workforce, it is important for the economy to create decent jobs in the manufacturing sector. Manufacturing sector will need to expand at an annual rate of 12-15 per cent over the coming years to accommodate the growing labour force. Export and supply-side diversification will play an important role in this backdrop. Attracting FDI, particularly in the planned hundred Special Economic Zones, is expected to play an important role in this regard. The success of the twin strategies of attracting FDI and manufacturing-production diversification will hinge on the availability of a skilled and employable workforce with needed competencies. It is from this vantage point that a youth-centric job market strategy has assumed such heightened importance in the current context.

Bangladesh has made tangible progress in addressing some of the binding constraints relating to investment. These concerns increased availability of electricity, improved infrastructure and better access to finance. However, lack of access to reliable and quality energy, bureaucratic delays, lax enforcement of labour laws, corruption, bureaucratic red tape and high cost of doing business continue to discourage foreign investment flows to Bangladesh. Skills gap, as noted earlier, has also emerged as a major barrier in this context.

The 7th FYP had put an ambitious goal: increasing FDI flow to the country from $1.57 billion to $9.6 billion by the end of the plan period (FY 2020). FDI was $3.48 billion in 2022. Efforts of investment promoting agencies such as the Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA) and others are not giving the expected result. The provisions of the One Stop Service (OSS) Act of 2018 are yet to be implemented in full.

l Pursue two interlinked strategies: Develop a comprehensive strategy to attract FDI, and prepare the youth to meet the labour market demands originating from expected FDI flow.

l Develop a digital platform for FDI promotion, offering investors real-time information, e-services, and personalised investment roadmaps inspired by Singapore's "Invest Singapore" platform.

l Establish a dedicated "Investor Concierge Service" to assist foreign investors with regulatory approvals, site selection, and post-investment support, similar to the "Invest Japan" initiative in Japan.

l Develop an FDI promotion strategy centered on key sectors, including manufacturing, technology, and renewable energy, that highlights Bangladesh's potentials as an investment destination and competitive advantages. Vietnam's proactive approach to attracting FDIs by offering preferential tax rates, streamlined approvals, effective institutional support and targeted incentives may serve as a model for Bangladesh.

l Establish specialised "Manufacturing Parks" that cater to industries such as electronics and information technology, taking inspiration from Malaysia's successful initiatives such as the Multimedia Super Corridor (MSC) and Bio-Xcell Biotechnology Park.

l Undertake a comprehensive review of the type of investment that foreign investors are keen on, through a review of MoUs, and prepare a skills development plan in view of this.

CONCLUDING OBSERVATIONS: To address the complex and pressing concerns as regards youth employment and labour market dynamics in Bangladesh, a well-defined and comprehensive strategy needs to be designed. Bangladesh's demographic dividend provides a unique opportunity to capitalise on the potentials of its young people. It needs to be noted that the window of opportunity is gradually becoming narrow.

In order to address labour market challenges and realise the possibilities, an effective public-private partnership will be required. The Policy Brief has proposed a number of concrete steps to help ready Bangladesh's youth of today for job markets of tomorrow: attracting FDIs to promote expansion and diversification in the manufacturing sector, changing overseas employment scenario, aligning education with the labour market demands; encouraging entrepreneurship, particularly in modern manufacturing sector; securing worker's rights in the informal sector and embedding elements of formal sector to reduce vulnerabilities faced by informal labour market participants; eliminating gender disparity in labour market; ensuring decent working conditions through various initiatives. Bangladesh must do the needful to attain SDG-8, by leaving no one behind. An inclusive labour market, with employable and well-trained labour force, must be seen as a precondition for this. Bangladesh's policymakers must see attaining SDG-8 and reaping the potential benefits of Bangladesh's demographic dividends as closely entwined development objectives. [Concluded]

The paper is the last part of the policy brief which is prepared by a team of experts with Mr Syed Nasim Manzur, Core Group Member, Citizen's Platform and Managing Director, Apex Footwear Limited as Chair and Mr Tanvir Sobhan, Senior Lecturer, Department of Economics and Social Sciences, BRAC University serving as the Penholder Expert.Other team members are :Mr A K M Fahim Mashroor, Chief Executive Officer, Bdjobs.com Limited; Mr Amzad Hussain, Chairman, SAARC Chamber Young Entrepreneurs Forum and Former Director, Federation of Bangladesh Chambers of Commerce & Industries (FBCCI); Mr Mohammad Sahab Uddin, Vice President, e-Commerce Association of Bangladesh (e-CAB); Mr Nazmul Ahsan, Manager - Young People, ActionAid Bangladesh; Dr Sayema Haque Bidisha, Professor, Department of Economics, University of Dhaka and Honorary Research Director, South Asian Network on Economic Modeling (SANEM); Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and Executive Director, SANEM; Mr Shale Ahmed, Executive Director, Bandhu Social Welfare Society; Mr Shams Mahmud, Managing Director, Shasha Denims Ltd; Dr Suborna Barua, Professor, Department of International Business, University of Dhaka and Dr Zahid Hussain, Former Lead Economist, The World Bank.

The Policy Brief exercise is the outcome of an initiative of the Citizen's Platform for SDGs, Bangladesh hosted by the Centre for Policy Dialogue (CPD). The issues were identified and prioritised through nation-wide consultations with local level people and organisations. The initiative was led by Dr Debapriya Bhattacharya and Professor Mustafizur Rahman, Distinguished Fellows at the CPD. [email protected]