Jobs treble despite trading units decline

Despite a decline in the number of wholesale and retail trade units in Bangladesh, employment in the sector nearly trebled to 1.41 crore in the past decade, according to the provisional data of the Wholesale and Retail Trade Survey 2020.

Carried out by the Bangladesh Bureau of Statistics (BBS), the first survey in a decade finds that the number of establishments operating in wholesale and retail trade declined 4 per cent to 25.4 lakh units in 2019-20 from 26.5 lakh a decade ago.

On the other hand, the sector, one of the major pillars of Bangladesh's around $350 billion GDP, created additional 88 lakh jobs, taking the total number of employed to 1.41 crore since the last survey was done in 2009-10.

Wholesale and retail trades account for 14 per cent of GDP.

Wages or salaries from the jobs and productivity surged, and a leading economist described the change as a reflection of structural transformation in the economy.

"Supermarkets and departmental stores have replaced the traditional mom-and-pop shops," said Zahid Hussain, a former lead economist of the World Bank office in Bangladesh.

"Clearly, there has been a structural transformation in this sector over the past decade," he said, adding that the size of individual establishments had grown tremendously while the small ones disappeared.

The latter caused the number of establishments to decline, he said.

Before 2009-10, the BBS conducted a wholesale and retail survey in 2002-03. The number of units was 15.7 lakh at that time, employing 21.26 lakh people.

Gross value added (GVA), a measure of the contribution to GDP by an individual or firm, was Tk 13,627 crore in 2002-03. The amount has soared 24 times to Tk 329,520 crore since then.

Between 2009-10 and 2019-20, it grew nine times, according to the BBS survey.

Hussain said productivity increased many times, as indicated by the increase in the GVA per establishment in nominal terms. Gross value-added per worker increased by more than 3.2 times.

"These increases will remain significant even after adjusting for inflation," he said, adding that the increase in productivity was shared among workers and non-worker stakeholders.

Employees are using modern facilities such as computer, and this could be one of the reasons behind the increased productivity.

Explaining the data, the economist said, employment cost per worker was up about 5.5 times to Tk 71,380 in 2019-20 from Tk 13,000 in 2009-10.

The returns to non-working stakeholders such as owners and creditors grew about 75 times to Tk 900,627 per unit in 2019-20 from Tk 12,000 in 2009-10.

 "Capitalism has prospered in Bangladesh's wholesale and retail sector."

Kazi Iqbal, a senior research fellow of the Bangladesh Institute of Development Studies, said the increased contribution of wholesale and retail trade was good news.

"But the reasons of the decline in the number of establishments should be examined."

It might be that the size of many enterprises became larger while a section dropped out, he said.  "The question is: why had there been no growth of establishment?"

Iqbal, who follows small and medium enterprises, said the coronavirus pandemic had severely affected the traders in the sector.

As the survey was conducted before the pandemic, the BBS should carry out a further study to know the situation of the traders following the outbreak of the virus, he said.