Bangladesh has been on a path of drastic economic development, characterised by a consistent GDP growth rate hovering above 6 percent in the last decade or so. Nevertheless, economists have brought forth the key question of sustainability when it comes to assessing Bangladesh's economic future. Some have suggested that the nation's high dependency on remittance flows and an agricultural economy vulnerable to supply-side shocks are major causes of concerns for Bangladesh. On the other hand, competition from Cambodia and Vietnam are hurting Bangladesh's international competitiveness in the global RMG market. As such, the country needs to look for an alternative economic model which would ensure its continued success in the international economy. Interestingly, the answer according to many analysts lies with the high population of the country. Traditionally considered a severe impediment to development, utilisation of Bangladesh's high population through investment in human capital schemes, seems to be a plausible method to ensure the sustainability of the economy.
Human capital is defined as the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organisation or country. Popularised by the iconic American economist Gary Becker, human capital is an aggregate economic viewpoint illustrated by its intangible and sometimes indirect effects on society. Bangladesh ranks a paltry 104th amongst 130 countries, according to the 2016 Human Capital Report by the World Economic Forum. Interestingly, Bangladesh fell five places down from 2015, and one wonders what the report will suggest in 2017.
Human capital measurements include an evaluation of the levels of education, skills and employment in society. Interestingly, whereas school enrolment rates in Bangladesh have gone up significantly in the past two decades, such is clearly not represented in the global human capital measures. The current government has indeed gone on a path to increase the quantity and accessibility of education in Bangladesh, yet at the same time it is noticeable to observe a drastic stagnation, even a fall, in the quality of education provided to the citizens of this country. Noticeable printing errors in textbooks and a lacklustre national syllabus in contemporary Bangladesh undermines the quality of the prospective workforce. A high number of GPA 5.0s in the SSC and HSC examinations are not transitioning into a fully productive workforce. O-Level and A-Level graduates jump at the first opportunity to go abroad for higher education, which leads to a severe skill outflow.
A significant number of Bangladeshi youth with high levels of formal qualifications end up unemployed, work in jobs that underutilise their skills or immigrate to other countries. Today Bangladesh has a high youth unemployment rate of approximately nine percent, and this results in a misallocation and waste of resources that Bangladesh can ill-afford. Whilst criticising students for permanently emigrating to foreign nations or domestic graduates from refraining from government jobs, has some basis, at the same time there exists a severe lack of opportunities and possibilities for students to perform to the best of their potential within the Bangladeshi workforce. It is for this very reason that state-level investment in human capital should be a primary focus for our policymakers.
Whether it be allocating state capital towards skill-based training, ranging from accountancy to management, or a complete reframing of primary school syllabi, the government has the resources and ability to enhance notions of human capital growth in Bangladesh. In Canada, for example, the federal and provincial governments provide stipends to governmental institutions and private companies to recruit students and recent graduates, to improve the employability and skill-set of the youth. Engaging the younger generation in national level programmes, associated with organisations ranging from the Election Commission to the Ministry of Water Resources, will create an avenue for a greater social mobility of a capable Bangladeshi labour force. It is indeed true that Bangladesh reaps the successes of a low skilled and low wage economy, which has supported the growth of the RMG sector, but with time this country cannot encourage talented and educated students to aim for low wage jobs. This country should not encourage its professionally educated youth to work in poor working conditions in the Middle East. In hindsight, the development of a successful economy based on an uneducated labour force was a by-product of the times Bangladesh had gone through post 1971. Yet modern-day Bangladesh can create a forum and a platform to encourage its youth to aim higher and utilise themselves to the best of their abilities.
The principal benefit of investing in human capital is in its accentuation of knowledge spillovers, which occurs when information and knowledge that are collected and shared for an activity ultimately generates supplementary prospects for application in other environments. The spillover serves as the catalyst for the development of new ideas and vibrant intellectual discussions, often in ways that were never anticipated initially. As such, a highly skilled, trained, motivated and employable labour force will not only generate more ideas individually, but support an economy based on learning and experience, whilst allowing others around them to reap the benefits of knowledge sharing. This has been the case with the Malaysian economy of the 1980s and the modern-day Singaporean economy. Knowledge creates further knowledge, and as such to foresee a diverse, vibrant and versatile Bangladeshi economy can only be possible if the government supports the development of its youth. We already observe this with the progress of small-scale software developers in Bangladesh and the ICT Ministry's tangible support to such entrepreneurs in this regard. One only hopes that this can stem onto other sectors as well, as the external benefit derived from state-supported human capital growth has historically been immense in other parts of the world.
Bangladesh does not operate based on a purely welfare economy. It does not provide handouts to people, neither does it commend lethargy. We live in a society which has an excess supply of labour who are willing and able to work. It is high time that we highlight the resource, rather than the industries those resources partake in, to ensure long-term sustainable economic development. As such, the prioritisation of this country's greatest national resource, its people and especially its younger generation, cannot and should not be ignored by the government.
The writer is a third year undergraduate student of Economics and International Relations, University of Toronto. Email: firstname.lastname@example.org