Job creation in the garments sector has slowed as factory owners are adopting modern machinery and hundreds of small and medium factories have shut down for failure to meet compliance standards.
Total employment in the apparel sector has stagnated at 40 lakh between the years 2013 and 2016, said Rushidan I Rahman, executive chairperson of Centre for Development and Employment Research (CDER), yesterday. She was speaking at a discussion on Development and Employment: Selected Issues for Budget 2017-18, at Bangladesh Institute of Development Studies.
CDER organised the event where analysts also discussed jobs in the informal sector, consumer interest in budget making and the government's programme to distribute rice at Tk 10 a kilogram to the ultra poor under the Food Friendly Programme (FFP).
The total number of apparel makers has dropped from 5,063 in 2010 to 4,324 in 2016. However, export per worker has increased from $2,718 in 2010 to $7,023 in 2016, she said.
She linked the fall in jobs to entrepreneurs shifting to modern technologies and machinery.
At the same time, many small and medium factories have closed down for failing to comply with compliance requirements, she added.
“It is a matter of concern.” She suggested ensuring loans and training so that small and medium enterprises can become compliant, continue production and create jobs.
She also recommended export diversification for employment generation, and training and education to develop a skilled labour force.
She stressed the need for establishing child-care facilities to encourage more women to join the labour force.
Rahman suggested the government give an employment budget by incorporating goals and strategies, and provide accounts of job creation as a result of the budgetary steps and mega projects.
Ahsan H Manusr, executive director of Policy Research Institute of Bangladesh, said increased investment is needed to absorb the increased labour force.
Fahmida Khatun, executive director of Centre for Policy Dialogue, said, “Women workers become victims for the use of modern technology in the garments sector.” “I know a factory that uses robots. The tendency to use technology will rise. We now need to ensure productivity growth by keeping jobs unaffected.”
Referring to slowing export earnings in the current fiscal year, she said employment generation would be affected if the trend continues. BIDS Director General KAS Murshid suggested giving incentives to encourage the expansion of SMEs. The next round of growth should come from the SMEs, he added.
Prof Wahiduddin Mahmud, a former economics professor at the University of Dhaka, said the World Bank's Doing Business reports are prepared from the viewpoint of the formal sector, not the informal one.
An index for the business environment for small entrepreneurs should be developed, he added.
Mahmud said a lot of discussion takes places on the proposed budget. But there should be discussion on the implemented budget, he added.
Rizwanul Islam, senior visiting fellow of CDER, said an obsession with the rate of economic growth can lead to a neglect of its quality in terms of social dimensions. He cited poverty, inequality and employment in this regard.
Islam said 1.8 percent GDP growth generated 1 percent growth in employment during 2005-2010. But 2.6 percent of GDP growth was needed to produce the same outcome in 2010-2013, he said.
ATM Nurul Amin, senior fellow of CDER, said only 73 lakh people are employed in the formal sector. Informal sector provides jobs for 5.07 crore people out of 5.8 crore employed persons, added Amin, who is also a professor of North South University.
In a paper on budget and consumer interest, Consumers Association Bangladesh President Ghulam Rahman demanded that the zero duty benefit for the import of essential commodities continue.
Citing government moves to increase the prices of gas, electricity and water supply, he said, “It appears that the government has forgotten its responsibility of ensuring these basic services.”
On FFP, CDER Senior Fellow Quazi Shahabuddin said the highest amount of allocation under FFP was made in the Dhaka and Chittagong districts.
But the incidents of ultra poor are relatively smaller here, he added.
He suggested for better planning and monitoring to reach the real beneficiaries under this programme.