A WORLD Bank estimate that about half of the youth who entered the labour market in Bangladesh did not find jobs in the past decade comes as a reminder that whatever economic progress the country made did not ensure employment. A World Bank release, issued on March 17 in connection with a three-day visit by the global lender’s vice-president for South Asia in Dhaka, says that in the past decade, 14 million youth entered the labour market, competing for only 8.7 million jobs, adding that young women face particularly steep barriers in finding employment. The estimate also brushes aside the official claim, which continues to put the unemployment rate below or around 4 per cent. The official claim becomes even more troubling given the contested nature of the official definition of employment. Current government metrics count anyone working for at least an hour a week as ‘employed’ and, thereby, dilute the unemployment situation and obscure the economic distress experienced by millions. Independent studies, by contrast, estimate the unemployment rate at 20–25 per cent, exposing a far more dire reality than the one captured in official reports. The growing number of unemployed university graduates has become a major concern, too.
The unemployment situation is, as the World Bank says, driven by slowdowns in both private and informal sectors, which absorb the overwhelming majority of the work force. Even the once-reliable apparel industry, which propelled Bangladesh onto the global stage as a manufacturing hub, has registered negligible job growth in recent years. At the centre of this stagnation lies the slowdown in private investment and the fragile banking sector. Private investment has shrunk to an alarming degree, revealing deep confidence issues within the business community. The contraction of private sector credit to a 23-year low, falling to 6.03 per cent in January, highlights both the severity of the crisis and the harsh impact of a large volume of non-performing loans. Equally concerning is the jobless growth of the economy. An earlier South Asian Network on Economic Modelling report shows that the number of jobs grew by only 0.9 per cent a year, or less than one-eighth of the rate at which the economy expanded. Successive governments have failed to address the issue and to undertake and implement projects and programmes aimed at creating new jobs at home or facilitating employment overseas. This is reassuring that the government now has at least acknowledged the problem and pledged to act on it.
The government must, therefore, prioritise rebuilding business confidence, promoting investment in labour-intensive industries, enforcing discipline in the banking sector and facilitating migration to address the unemployment problem. Ensuring consistent policies and maintaining political stability will also be essential for attracting both domestic and foreign investment.
