Job creation: an empty promise
Although Bangladesh is witnessing a golden hour in terms of demographic dividend, a lack of decent employment opportunities in the country is leading to rising unemployment among educated youths, according to experts.
Besides, the pandemic dampened opportunities in the local job market as most non-essential economic activities were put on hold for the past two years due to Covid-19, they said.
In addition, Bangladesh Bank recently tightened the money supply to contain runaway inflation but the move may slow private investment and subsequently impact job creation as loans will become costlier.
Considering the circumstances, Finance Minister AHM Mustafa Kamal yesterday focused on employment generation in his budget proposal for fiscal 2022-23.
However, he did not include any new steps in this regard and instead opted for continuing the previous training and skills development projects.
There are mainly three ministries working for training and skills development in the country, namely the Ministry of Youth and Sports, Ministry of Industries, and Ministry of Labour and Employment.
And although the allocation for the Ministry of Youth and Sports increased by 1.42 per cent compared to the revised budget for fiscal 2021-22, the other two ministries saw their funding slashed by 31 per cent and 0.83 per cent respectively.
The government usually sets lofty goals for job creation in its annual national plan but the proposals almost never translate into real allocations or projects, said Professor Sayema Haque Bidisha, research director of the South Asian Network on Economic Modeling.
She suggested the government boost employment by providing incentives and rebates to large, labour-intensive industries.
"But there should be a tracking system to see whether the steps taken actually contribute towards job creation," she added.
Bidisha, also a professor of economics at the University of Dhaka, went on to say that the government could announce some specific projects and allocations with a view to creating market access for rural women entrepreneurs.
She also proposed forming a fund for lending to startups.
"Some projects and allocations should have been made available to reduce the skill mismatch of educated unemployed youths by equipping them with the skills industries need," Bidisha said.
Rizwanul Islam, a former special adviser for the employment sector of the International Labour Organization in Geneva, said that while the country's economic growth accelerated in pre-pandemic years, employment growth slowed down and resulted in inadequate job creation.
On the supply side, there is sometimes a mismatch between educational qualifications and the requirements of the labour market.
"A comprehensive employment strategy is needed with a particular focus on youth employment," Islam said.
According to Labour Force Survey 2016-17 by the Bangladesh Bureau of Statistics, the national unemployment rate is 4.2 per cent while the youth unemployment rate stands at 10.6 per cent.
The unemployment rate seems to be high among youths with higher educational qualifications. For instance, the unemployment rate is 13.4 per cent among youths having a tertiary level of education while it is 28 per cent among youths with secondary level education.
"Macroeconomic and sector-level policies need to be geared towards the growth of more labour-intensive industries in addition to the garment industry," Islam said.
"The government can provide support to potential migrants and returning migrant workers in their efforts to find jobs or be self-employed," he added.
For boosting startups, the government proposed exempting the businesses from the bindings of all other types of financial reporting aside from income tax returns.
It also recommended fixing the turnover tax rate at 0.1 per cent in place of the current 0.6 per cent.
As per the proposed national budget, the government has taken up a plan to raise employment in the information and communication technology sector up to 30 lakh by 2025.
For the purpose of job creation and establishing a central database for employment generation with education and training, steps are being taken to create a "Directorate of Employment".
In last year's budget proposal, the government planned to set up an "employment bank" and internship programmes in the private and public sectors for new graduates.
However, no updates in this regard were seen in the proposed budget for 2022-23.