That Bangladesh is now partially reaping demographic dividend is amply evident from the crucial role the country's expatriate workers are playing in the country's economy. Remittances increased by 19.6 times - from US$ 764 million in 1991 to US$ 14.9 billion in FY2016. The country's policy-makers are now expressing grave concerns over falling remittances. This only highlights its crucial role in welfare of households and the nation.
Inflow of overseas wage-earners' income has already triggered multiplier effect in the economy through expenditures being made out of this income. These have increased the aggregate demand. The manpower export sector has already contributed to incremental employment generation and investment. It has been working as a major cushion for balance of payments and stable foreign exchange reserves.
It was due to demographic dividend that the country today has emerged as a major exporter of skilled, semi-skilled and unskilled workers to more than 22 countries. The number of Bangladeshi workers going abroad each year has increased by five times - from 1,50,000 in 1991 to 7,60,000 in 2016. Currently, remittances received by Bangladesh constitute 6.7 per cent of its Gross Domestic Product (GDP). During 1991-2016 period, wage earners' remittance to Bangladesh registered a growth of 12.6 per cent a year which is well above its annual GDP growth at around 7.0 per cent at present. The gap between remittance inflow and foreign aid disbursement has been increasing due to consistent growth of remittance inflow and decline in foreign aid as a percentage of GDP, Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue, has pointed out.
But the fact remains that Bangladesh is yet to exploit full potential of demographic dividend. It is really sad as well as alarming that one-fourth, or 11 million, of the country's 43.43 million youth population is neither in education nor in the labour force. Males outnumber females in this group, according to Rushidan Islam Rahman, executive chairperson of the Centre for Development and Employment Research. The figure implies that a huge chunk of the youth population is unutilised, she said at a recent seminar on 'Bangladesh Employment and Labour Market Watch, 2017'. The number of youth population aged between 15 and 29 years rose to 43.43 million in 2013 from 39.25 million in 2010. The number of youth labour force increased to 23.35 million in 2013 from 20.90 million three years ago, implying positive growth of potential demographic dividend.
Different chambers of commerce and industry are now expressing major concern over the quality of the youth force. While young workers are joining industries in Bangladesh in relatively small numbers, their productivity in the jobs continues to be low. While the share of employment in services has been growing, the share of value addition is lower than in most other Asian developing economies. As a result, per capita income in Bangladesh has not benefited as much from inter-sectoral migration of workers out of agriculture as in other Asian countries. This has raised a question as to how many workers will industry and services sectors in Bangladesh have to absorb in the next decade.
The challenge today is to create conditions for faster growth of productive jobs in manufacturing and in services in the formal sector. Otherwise, the demographic dividend could turn into a huge demographic burden. The country should now draw up a well-thought-out strategy to deal with high unemployment among graduates and postgraduates. Questions are being raised about the quality of education being offered by universities in the country. Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue once ruefully said the saying 'those who study ride cars' no longer holds true given the high unemployment rate among educated youths. "It is very worrying".
It is really painful that youths are desperately looking for jobs but employers say that they do not get quality human resources. The existing education system does not match the requirements of the market. "This is a paradoxical situation because the education sector is not able to meet the demand," said Zahid Hussain, lead economist of the World Bank's Dhaka office, adding that employers do not get the skills that they are looking for. The employment challenge is daunting as nearly 2,00,000 people join the workforce every year, he said, while calling for free movement of labour globally just like free trade and free flow of capital.
In fact, various types of skilled training can be useful to utilise these young people who have dropped out of school and are not employed. This can be done through investment in public-private partnership programmes and in collaboration with prospective employers, who will generate demand. Investment in skills training can be made targeting young people who aspire to get jobs overseas. There must be public-private partnership to develop skilled workforce for industries as well as for overseas jobs.