How to make development inclusive
The Centre for Policy Dialogue's (CPD) recent seminar on February 10 brought together policymakers, both present and past, development practitioners and educationists and the focus of the talk was how to achieve inclusive growth. Development itself is a multi-dimensional process and hence we cannot look at it simply from an economic point of view. Rather, there are various dimensions involved including economic, political, institutional and social.
When we look at the ruling party's electoral manifesto, it brought forth its achievements during the preceding two terms. The manifesto also made many pledges that would be fulfilled over the coming years. On the economic front, the government must deliver on its economic pledges but to do that, it will have to consolidate on its past achievements and take actions to address "the emerging challenges with specific work plans." When we look at economic growth, the country has achieved sustained progress over the last decade with GDP growing at more than 6 percent since 2011 and in 2018, that growth reached 7.86 percent. Looking at it from another perspective, the share of population below the national poverty line shrunk from 48.9 percent in 2000 to 24.3 percent in 2015. That means under the 6th Five Year Plan (2011-2015), the country joined the lower-middle-income country (LMIC) category and met the LDC graduation criteria in 2018. Indeed, we actually crossed the LMIC inclusion threshold of USD 1,046 in 2015, six years earlier than envisaged.
Now to address some of the key challenges facing the government to make this growth trickle down to the masses, i.e. making growth "inclusive" so that not only does business prosper, but share some of that wealth with a larger part of the population. Two areas remain major headaches for policymakers. The first is that despite the higher GDP, the country is not generating adequate employment and hence the benefits of growth remains unequally distributed.
What we get from the presentations made is that the rich-poor divide is increasing while desired increase in the job market remains elusive. From 1991-92 fiscal to 2015-16 fiscal, i.e. a period of 15 years, the richest top 5 percent of the population's income increased 121 times. The issue of youth unemployment is a major worry. According to World Bank's 2013 data, 2.1 million people were expected to enter the labour force, while the latest 2018 data from our own Bangladesh Bureau of Statistics (BBS) depicts that between 2015-16, nearly 1,296,000 million jobs were created. That means that while about 1.3 million jobs were created every year, about 800,000 newly unemployed people will join the already unemployed in the country every year (provided all other factors remain constant).
The second problem is that the share of income held by the richest 5 percent of households in Bangladesh increased from 18.85 percent in 1991-92 to 27.89 percent in 2015-16. Conversely, the share of income held by the poorest 5 percent of households fell from 1.03 percent in 1991-92 to 0.23 percent over the same 15-year period. Unfortunately, the rich-poor divide leaped in 2015 when the richest 5 percent was 121 times richer than the poorest 5 percent. Addressing the rich-poor divide is a long-term affair and so for the purposes of this article, I am focusing more on the issue of unemployment.
Youth unemployment is a key issue and if we look at the pledges made in the run up to the last national elections, we find that Awami League talks about a youth plan that will take the internet to the youth in this country. Yes, internet is a key component for education, but we also need to increase the youth's access to computers in the education system and that too from an early stage. There has been talk about youth training centres at every upazila. While that is a good idea, it would make sense to incorporate technical and vocational training at upazila level so that skills can be developed nationwide. There is also the plan to allocate higher allocations to the education sector and we need to recognise that merely increasing budgetary commitments to education as a whole will not bring us the result we seek, that is, in an increasingly knowledge-based global economy; we have to improve the education system where students are able to build their analytical competence.
Getting to that point will not be easy but it is not impossible. Planning for education for various subjects needs to be aligned with national plans. There is a need to draw the right people into the teaching profession by making it attractive monetarily—only good teachers can produce good students. At the end of the day, there are no shortcuts to tackling the unemployment issue, especially when we are talking about educated unemployment. The old belief that getting a higher education will automatically put someone ahead in the race to getting a job is flawed. We need to rethink our prospects (as job seekers) and it is not just about having the right degree, but also having the skills that is in demand by industry, by business and the private sector in general. Quality education and needs based vocational training can make the difference between having a job and not having one in a scenario where supply of prospective job seekers far outweigh demand.
Syed Mansur Hashim is Assistant Editor, The Daily Star.