Bangladesh is on course to availing $250 million in loans from the World Bank this fiscal year to bring in reforms to address jobs challenges by modernising trade and investment environment, strengthening systems that protect workers and improving policies that enhance access to jobs for vulnerable populations.
The finance ministry has completed the final negotiations with the Washington-based multilateral lender on May 18, said an official requesting anonymity.
The proposal might be placed at the board of the bank on June 19 for approval, according to a document of the WB.
The proposed financing under the WB's Bangladesh Second Programmatic Jobs Development Policy Credit reflects Bangladesh's priorities as articulated in the 7th Five-Year Plan. However, the programme has also been adapted to support the country's capacity to respond to and recover from the COVID-19 crisis.
Despite Bangladesh's remarkable development progress, availability of good jobs remains a persistent challenge, said the Washington-based multilateral lender.
Job quality is poor, with high levels of vulnerability, including unpaid, agricultural workers, day labourers, and overseas migrants; moreover, workers are at risk from lack of application of basic occupational health, safety, and environmental standards.
Gender disparities are acute, with just 36 per cent of females in the labour force versus more than 80 per cent of males, and one in three working women are engaged in unpaid work versus 5 per cent of working men.
While GDP growth exceeded 7 per cent over the past three years, the pace of job creation slowed sharply, putting further pressure on labour markets, particularly for women and youth.
Bangladesh's structural challenges to creating good jobs are now aggravated by the increasing impact of the pandemic.
Jobs and income losses in both the informal and formal sectors have put livelihoods of several million at risk in both rural areas and urban spaces.
The COVID-19 crisis has highlighted the risk of relying on a single sector, with garment manufacturers caught first by the supply shock from China and then later the demand shock from European and American buyers.
As of early April, more than $3 billion in existing garment export orders had been cancelled and most large global buyers have suspended future orders.
This has forced the closure of hundreds of large factories, putting a million or more jobs at risk in the garment sector alone.
"Diversifying will require a significant increase in both FDI [foreign direct investment] and domestic investment," the WB said.
In the context of the Covid-19 crisis, there is an urgent need to protect the earnings of both formal and informal workers, particularly those who are not already covered by social safety nets, it said.
"Mobility restrictions and the collapse in domestic demand from the continued lockdown since late March is having even more widespread impacts."
To secure the loans, the government has had to implement several conditions and remove many complexities to a better investment climate in the country.
When the WB approved its previous budgetary support, it set a condition for the government to draw up a law one-stop service. Under the new financing, Bangladesh would have to implement the law.
Bangladesh has issued a gazette notification on 54 rules and regulations, eliminating barriers standing in the way of investment.
The government has also taken steps to make a bonded warehouse facility available for non-garment firms. So far, the facility was limited to only garment sector companies.
The cabinet has approved the Customs Law and now it would be passed in parliament.
It has also approved in principle the law on daycare centre to help working mothers continue to jobs while their kids are taken care of. The bill would now be passed into law at parliament.
Bangladesh is set to amend the Company Act to allow a single individual to set up a company.