Selim Jahan: First of all, every government sets employment targets. Such targets are typically included in election manifestos. Later, when a government is formed, they are reflected in the national budget and development plans.
Therefore, I believe that setting such targets can support human development and the development of human resources.
The second issue concerns the target itself—whether it is creating jobs for 10 million people or one million people.
The question is: what will be the strategy?
Some may argue that the approach should be to increase economic growth, assuming that employment will follow.
However, from Bangladesh’s experience as well as that of other countries, we have seen that growth often increases without generating sufficient employment.
An alternative strategy could be to focus directly on expanding employment, with the expectation that higher employment will subsequently boost economic growth.
The advantage of this second approach is that it directly addresses job creation, which can then contribute to growth over time.
So the government needs to clarify its strategy: will it pursue growth-led employment, or employment-led growth? That is the first issue.
The second issue is who will actually create these jobs. In any economy, employment is typically generated in three ways: through the public sector, the private sector, and self-employment.
We need to examine all three avenues.
The first question is how much capacity the government truly has to expand public-sector employment. Another related issue is financing. Creating jobs in the public sector requires funding. Where will that funding come from? We already know that public finances are under significant pressure. There are at least two major sources of this strain.
First, before leaving office, the interim government introduced several measures with substantial financial implications—for example, increasing the salaries and allowances of public employees, which requires additional resources.
Second, external debt has reached a level where substantial funds are needed for debt servicing. Moreover, subsidies have reached a point where they are becoming increasingly burdensome for the economy.
Therefore, if the government speaks about expanding employment or creating new jobs, it must first clarify where those jobs will be created—especially when many qualified candidates are already waiting for public-sector appointments—and second, how the necessary financing will be secured at a time when public finances are already under pressure.
Turning to the private sector, the government cannot directly create jobs. What it can do is offer incentives—encouraging and supporting private enterprises through various policies.
If we look at the past 18 months, despite repeated claims and data, private-sector investment has not been forthcoming.
Foreign investment is not coming in, and domestic producers and entrepreneurs are also hesitant to invest. The lack of investment is partly due to policy issues and partly due to external economic factors.
For instance, in terms of policy, Bangladesh Bank has not reduced interest rates over the past 18 months.
Their argument is that lowering rates would increase inflation.
But the consequence is that because interests rates remain high, loans are not accessible to the private sector, and without loans, investment does not happen.
There has been no effective policy to incentivise private-sector investment, and without such investment, employment cannot grow.
The second factor is that even if incentives are provided, will employment actually increase?
One reason investment is lacking is economic and social instability. In society and in the economy, extortion is increasing, there is violence, we are witnessing mob violence, and there are reports of looting in business establishments.
Syndicates are interfering with normal business operations, preventing entrepreneurs from conducting their trade freely.
In other words, beyond policy, social and extrinsic economic conditions—instability and violence—discourage investment. And if investment does not occur, we cannot generate employment.
Finally, within the private sector, there are self-employed entrepreneurs. The same principle applies: they will not invest if the socio-economic environment is not conducive. Also, if loans are required to invest, there must be low-interest credit available, especially for small entrepreneurs. Without such an environment, incentives and policies will not be effective.
To conclude, setting employment targets—whether for 18 months or two years—is commendable and well-intentioned. But the real question is whether the public sector has the financial capacity to meet these targets, and secondly, whether policies exist to incentivise private-sector investment.
Simply stating a target without specifying the means, policies, or resources to achieve it will not succeed.
