Time to address youth unemployment | The Daily Star
12:00 AM, September 22, 2019 / LAST MODIFIED: 01:05 AM, September 22, 2019

Time to address youth unemployment

Creating employment for its large young population is one of the major policy challenges in Bangladesh at this moment. According to the Labour Force Survey 2016-17 of the Bangladesh Bureau of Statistics, the national unemployment rate is 4.2 per cent. However, youth unemployment rate is 10.6 percent, more than two and a half times the national average. The survey also reveals that the share of unemployed youth in total unemployment is 79.6 percent.

Ironically, unemployment rate seems to be high among youth with higher education. For example, unemployment rate is 13.4 percent among youths having a tertiary level education and 28 percent among youths having secondary level education. This striking feature of the unemployment situation in the country indicates that education offered by our institutions cannot empower the youth with income and decent living, as one would have expected. The other aspect of youth unemployment is the existence of NEET, that is, youth who are “Not in Education, Employment, or Training”. Youth NEET is as high as 29.8 percent.

Where does the problem lie? Talk to an employer. You will learn how eager they are to make good recruitments. In desperation, they choose to hire from abroad providing high benefit packages. In a country with a large population size, we cannot find enough employable youth! One would have expected that a country such as ours, where we have a large share of young population, would benefit from “demographic dividend”. That is, with a high share of working-age population, the ratio of dependent population would decline. Thus, it is imperative that policymakers give more attention in engaging this young workforce in productive activities.

Not only can this increase economic growth further, but can solve many social problems including demoralisation, depression, social exclusion and crime. Most importantly, it will also help in reducing inequality, a phenomenon that Bangladesh has to address proactively. We should also not overlook the political threat of prolonged and high unemployment. Thus keeping the multidimensional implications of youth unemployment in purview, we have to address the issue right now.

But the recognition of youth unemployment as an emerging problem for the economy is absent in our policies. The national youth policy 2017 has paid inadequate attention on employment creation for the youth. There is no concrete plan of action for generating employment for young people in the policy. Of course, given that the private sector’s contribution is higher in the economy, the major source of employment will have to be the private sector. The government has to provide policy support towards creating more jobs there.

While talking of creating opportunities, quality of education and skills come to the forefront. Graduates coming out of universities do not meet the expectation of employers. Conversely, job seekers find jobs that are low paid and informal in nature. Youth unemployment in many advanced countries has been solved by technical and vocational skills. Not everyone has to go to universities. But in Bangladesh, poor families would even sell land and valuables—often their last resort for emergencies—to send their children (mainly sons) to universities. Little do they know that the certificate is only a piece of paper when they cannot enter the highly competitive job market with the type of education they receive. This mentality has to change. We should rather focus on the comparative strength of every individual. The need for skill development is being pronounced loudly.

There is the National Skills Development Council, there are private sector and non-government sector initiatives for skills development. But here again, expectation of employers is not met fully. Skills are not forward-looking—which not only would think of the country’s job market, but also outside Bangladesh, and not only for the present, but for the future. We have to take into account the emerging realities, such as the fourth industrial revolution which threatens to take away many jobs, but also holds potential for creating new ones. There should also be access to information on job opportunities, and transparent recruitment policy of organisations.

Given the limited size of the labour market, self-employment should be actively promoted. Opportunities for becoming entrepreneurs ought to be accessible to all aspiring youth across the country, both in urban and rural areas. Globally, start-ups have significantly changed the landscape of job markets. We are observing such a wave in Bangladesh too, but at a rather slow pace. Access to fund and knowledge can help the dynamic and ambitious youth flourish in this arena.

Of course, one of the structural issues of job creation is the lack of adequate investment in the economy. With private investment hovering around 23 percent of Gross Domestic Product (GDP) for the last couple of years, adequate job creation is impossible. Lack of domestic private investment is not encouraging foreign direct investment (FDI). Though foreign investors are showing a lot of interest in investing in an emerging economy such as Bangladesh, the realisation of such interest is still much less. It is common knowledge that FDI flows in countries which provide enabling policies, better infrastructure, skilled human resource and corruption free environment. However, ease of doing business index for Bangladesh indicates that foreign investors are yet to be adequately confident to invest here.

Our economy, as it stands now, is on a fast-paced journey. With steady high growth in the last decade, the country has experienced positive economic and social spillovers. However, youth unemployment could hamper further progress in the medium term. The materialisation of the aspiration to become a developed country by 2041 will also depend on maximising the potential of young people, as human capital is our key resource.

Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue.

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