Reaping demographic dividend

Dhaka,  Fri,  21 July 2017
Published : 16 Jun 2017, 21:18:08
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Reaping demographic dividend

The Finance Minister, while presenting the proposed 2017-18 budget in parliament, recognised the pertinent need to turn the population into a vast resource. That is why he charted out a plan to develop skills of the working population, writes Rahman Jahangir
Bangladesh is yet to reap 'demographic dividend' despite the fact that the country is overpopulated. Millions, who passed school and college examinations in the past one decade, now crowd the job market. But the saddest part of the story is that most of them do not possess any skills. Many who graduated from colleges with BA degrees are now found in the long queues for jobs as peons or clerks in offices. It's better not to refer to their qualifications in getting degrees as certificates they received belie the real picture of low quality education. 

Happily, Finance Minister AMA Muhith while presenting the proposed 2017-18 budget in parliament, has  recognised the pertinent need to turn the population into a vast resource. That is why he charted out a plan to develop skills of the working population. He quite rightly highlighted its importance saying:  "At a certain stage of development, growth slows down. At this stage of economic growth, development needs to be productivity and innovation-driven. Skill development of available human resources is crucial for this purpose."

Mr Muhith claimed, Bangladesh has reached such a stage of economic development that retaining competitive edge globally and sustaining the uptrend in growth so far achieved would be almost impossible without skill development of existing labour force.  "Moreover, adoption of knowledge- and technology-based production strategy is imperative for attaining 8.0 percent or more economic growth," the Finance minister added.

In fact, a study presented at the BIDS Research Almanac 2016 revealed that the country's major industrial sectors, including garment, suffer from a large shortage of skilled workers. The country will need to train more than 4.0 million by 2021 to meet the requirements of the growing economy. The garment industry itself needs 1.5 million trained workers, it said. The Research Almanac is an annual event organised by the Bangladesh Institute of Development Studies, where researchers present their recent studies in front of an audience. 

According to BIDS Director General KAS Murshid, by 2025, more than 5.6 million people have to be trained. "The scale of the problem is enormous and it is set to get even bigger. Innovative approaches are needed to fast-track those. The traditional approaches will not deliver," he said, citing the government's GDP growth targets and development goals for the coming years.

It has been found that the existing shortages, especially of skilled workers and technical occupations, are quite large. The projections indicate a substantial demand emerging over the next 5-10 years. The paper studied nine major sectors -- garment, agro-food, construction, health, hospitality and tourism, ICT, leather goods, light engineering and shipbuilding -- and found the skills gap to be quite large. The highest skills gap was found in the agro food sector followed by garment. The overall skills gap in the agro food sector is 76 per cent, while the apparel sector faces a shortage of 119,479 skilled workers and 48,130 semi-skilled workers. 

"The picture of the health sector is dismal," Murshid said, while citing the need for nurses and technicians. The situation is similar in case of construction, hospitality and tourism sectors, he added.  In another presentation, former BIDS Research Director Rushidan Islam Rahman said healthcare, IT and hospitality are dependent on trained workers. The labour supply is projected to be 82.9 million in 2025. "Training must be given to the workers to reap the advantage of demographic dividend that Bangladesh now enjoys," she said, adding that results show a vocational or technical diploma has a significant positive impact on wage or salary. Better job availability for trained persons will encourage the youth to sign up for training programmes, she added.

But Bangladesh needs to have higher levels of investments to register increasing economic growth. As the level of investment remains less than the target, efficiency and skill development may help increase productivity. The government has planned to form a fund for skill development and bring the pertinent activities of the 23 ministries and agencies under one umbrella.

The Asian Development Bank has recognized the need for attaining 8.0 per cent economic growth annually to absorb the surplus labour in the economy in the next 15 years. The Bank said, "While manufacturing will continue to be the engine of growth and a major source of productive employment, the manufacturing base will need to diversify, and the sector will have to grow about 12-15 per cent over the next 15 years". More labour-intensive sectors, including garment, will have to continue to grow. Agriculture should also diversify to create more productive employment. The policy regime has to be neutral for non-garment industries with the same growth potential, according to the study. 

The construction sector also has great potential for employment, although in recent years the sector has shown some degree of instability. The study also suggested improving labour productivity and increasing the real wages.

While Bangladesh has done well in maintaining a steady outflow of migrant workers, the study found there is potential to raise this number and change the skills and occupational composition of workers. For Bangladeshis to find more jobs abroad, it would be necessary to tap both existing destinations such as Bahrain, Oman Qatar and Singapore and new ones such as Jordan, Lebanon and the Republic of Korea.

Different destinations and their prospects can be studied by employing various means such as analysis of the economies and their business prospects and intensifying bilateral contacts.

arjayster@gmail.com



 
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