Jobs are the reason ‘it’s the economy, stupid!’

Bangladesh’s economy has made massive strides since 1971. After independence, the initial challenges that the economy faced were enormous. And while Bangladesh managed to overcome most of them, many new challenges emerged in the years that followed.

Economic difficulties often arise from external factors independent of the actions and decisions that are made within a nation. Nevertheless, good policies and visionary thinking should always anticipate and aim to mitigate those. At other times, economies need to undergo structural change, as Bangladesh did during the last five decades by gradually moving from an agrarian to a more industry- and services sector-based economy.

Today, one of the biggest challenges that we have is to create enough employment opportunities for our people. Although the current unemployment rate stands at 4.2 percent (which is not very high), according to the Labour Force Survey 2016-17, the youth unemployment rate stands at an astonishingly high 12.3 percent. The inactivity rate—i.e. the proportion of working age population not in the labour force—is also high, at 41.8 percent, which is one reason why the unemployment rate looks deceptively low on paper and doesn’t give an accurate picture of the real unemployment rate, which is surely higher than 4.2 percent.

What is more concerning, especially for policymakers, is that job creation slowed down in recent years despite Bangladesh recording impressive GDP figures during that time. Between 2013 and 2016-17, while the average annual GDP growth was 6.6 percent, the average annual growth of jobs was only 0.9 percent. And as Dr Selim Raihan pointed out in an article in The Daily Star, the decline in the employment elasticity over the last decade, from 0.54 during 1995-2000 to 0.25 during 2010-2018, further reflects “the slow growth in job creation.” He says one of the major aspects of creating jobs is “the need for economic diversification,” but “the manufacturing sector in Bangladesh is highly concentrated around low value-added readymade garments.” And new businesses remain reluctant to open shop and sell different products given that Bangladesh has still one of the least business-friendly environments in the world, ranking 176th among 190 countries in the World Bank’s 2019 Doing Business index.

By consistently ranking poorly, Bangladesh has proven itself to be unadaptable and slow in making changes even when they are badly needed. And this is a big problem, particularly in light of a recent study conducted by Access to Information (a2i) programme under the ICT Division, along with local and international experts, which estimated that around 53.8 lakh jobs spread across five specialised industries—garments, food and agriculture, furniture, tourism and hospitality, and leather and footwear—are at serious risk because of the impending fourth industrial revolution. Of the five, the garments sector is expected to be the worst hit with as many as 27 lakh jobs disappearing by 2041, followed by 13.8 lakh jobs in the furniture sector, 6 lakh jobs in the food and agro-processing and tourism and hospitality sectors, and 1 lakh jobs in the footwear industry. This leaves the economy very little time to undergo another round of structural change, one that will strengthen it enough to absorb the blow of losing all these jobs without collapsing under the weight of rising unemployment, and other socio-economic unrest that may occur as a result.

Steps should be taken to shift workers from sectors that are bound to become more machine-intensive to others. Greater numbers of people should be trained to operate advanced machineries that will have to be adopted in the near future. However, a major drawback here that experts continue to mention is that our education system is nowhere near capable of adequately providing that training, nor is it sufficiently flexible to incorporate the latest methods and ideas into its curricula fast enough.

In addition to woes in the domestic job market, Bangladesh’s overseas employment has also dropped by 18 percent in the first six months of the current year, following a reduction in recruitment by Middle Eastern nations, according to official data. Whereas a total of 332,754 workers went abroad during the period between January and June this year, 392,002 workers left the country during the same period last year, according to data of the Bureau of Manpower Employment and Training. This decline has happened consistently in the last years: in 2018, Bangladesh sent 734,181 workers abroad compared to 1,008,525 in 2017. Manpower recruiters believe reversing this trend will be difficult considering the realities prevailing in those countries, and because demand for low-skilled workers, which is what the vast majority of Bangladeshi workers in the Middle East are, has been waning.

The combination of these factors means there is a perfect “storm” that is brewing slowly—and has, in fact, been “gathering” for some time now. One of the biggest problems we have when it comes to our government, its institutions and officials, is their slow recognition/admission that not everything is always hunky-dory, as their natural tendency has become to first attempt to fool the public into believing that everything is, and admit the truth only as a last resort. As a result of such childish delay, the kind of policy and administrative interventions that are necessary often arrive late. And by then, the issue at hand tends to snowball into something much bigger.

When it comes to matters related to employment/unemployment, that game plan is certainly a recipe for disaster. Firstly, the number of young and working-age people in the country is now round about at its peak. These people are going to do something. If they do not find proper employment, many of them might resort to a life of crime. Secondly, in addition to the different types of social costs, there are various kinds of economic losses that we, as a nation, will incur if we cannot incorporate these people into the larger economy and society.

Yet what needs to be understood most crucially is the fact that, in this century and the last, high unemployment, particularly among young people, has been one of the foremost catalysts that sparked social upheaval, violence, revolution, civil wars, and all sorts of other unsavoury situations. In fact, when we look at other catalysts such as foreign intervention and instigation, we will see that instigators rely primarily on the existence of such conditions, as anyone who wants to create social disharmony knows what impact employment and unemployment levels can have on the broader public psyche.

The challenge of creating more jobs, therefore, is not restricted to only GDP or any other isolated issue or statistic. It wouldn’t be an exaggeration to say that it is much more than that, as we can see from numerous examples around us—Syria: where US diplomatic cables show how US officials were working to stir up the young unemployed Syrian population against their government; Greece: where around 50 percent of the youth are unemployed, and its parliament and other government buildings are regularly surrounded by angry mobs setting whatever they can find on fire; France: where the Gilet Jaunes (Yellow-Vests) have been swarming the streets every weekend since November 17, 2018, despite getting beaten to a pulp by the extremely brutal French police.

With all these alarms ringing, one would hope the government and its various institutions would move swiftly to address this coming crisis from every possible angle. However, given the record of irrationality and apathy governments usually tend to portray, it may not be wise to just settle for that.

Here, while citizens should whole-heartedly try and persuade the government to take the right course of action when it comes to policies and decisions that concern job creation, as well as their implementations, other important and influential stakeholders in society should also step forward and find their ways to help—whether that be through funding educational institutions that can develop the high-skilled Bangladeshi workers of tomorrow, or establishing a business that would thrive and create employment opportunities for thousands of people, or some other means that best suits them.

Eresh Omar Jamal is a member of the editorial team at The Daily Star. His Twitter handle is: @EreshOmarJamal.