Hiren Pandit: According to the World Economic Forum’s Global Risk Report-2022 report, the main problem of Bangladesh’s economy this year is the employment and livelihood crisis. Moreover, environmental disasters, cyber security, and digital inequality are also on the list of economic risks. It should be noted that the organization identifies the four main risks of more than a hundred countries in this report based on discussions with about 1,000 experts and leading people from various sectors. In addition to economic risks, social, political and environmental risks have also been raised. Besides employment and livelihood, another major risk for Bangladesh is the geopolitics of strategic assets.
The world situation is always changing in exact order. This may have become the norm. As the world changes, so do our lifestyles. After the Covid period, the global situation has changed a lot. Again, we hear the new normal situation or the changing world of our life journey. Compared to 2020, commodity prices in the world have now increased by 30 percent. Due to the conflict between Europe, Russia and China over the energy crisis, the situation continues to deteriorate. A supply crisis is the main reason for the high inflation that is now happening all over the world. That means inflation is not demand-driven, but supply-driven. Since Bangladesh is not outside the global scale, various risks have been created here as well.
Meanwhile, due to the impact of Covid, many people’s income has decreased, and many have lost their jobs. One thing is clear in various surveys on employment and poverty, the income of many people in the country has decreased. Many people are forced to switch from relatively high-skill jobs to low-skill jobs. In addition to development, there is no room for disagreement about the fact that the inequality gap is increasing in the country. In this situation, the corona outbreak has created a crisis in employment and livelihood. That is, the encouraging growth of the country is not fully contributing to the elimination of inequality. If there is inequality, society is not sustainable. As a result, a large part of the population is excluded from their contribution to society if they are out of the job market. Effective measures are necessary to end this situation. That is why we must emphasize employment-based growth. Livelihood security must be ensured. The main problem of the economy of Bangladesh this year is the employment and livelihood crisis. Apart from this, environmental disasters, cyber security, and digital inequality are also on the list of economic risks.
The dynamics of the ongoing food and energy crisis around the world, the rise and fall of prices, depending on the persistence of the Russia-Ukraine war. The ongoing war has not only disrupted the supply of food, energy and goods, but it has also disrupted agricultural production, shrinking the scope of human work. The end of this ongoing global crisis depends on the resolution of the war, thus on stability. Meanwhile, various international organizations including United Nations, World Food Program, UNICEF, World Bank, and IMF have expressed such fears in recent surveys. The International Food and Agriculture Organization says famine is coming. Climate change is disrupting agricultural production. Besides, floods and droughts are increasing as weather changes.
Especially due to the impact of this war, the dollar crisis, high fuel prices, inflation, fear of food shortage, climate change, war and corona situation in Bangladesh are already putting the country and people in trouble. According to research organization CPD, food prices in Bangladesh are the highest in South Asia. Meanwhile, the FAO has said that famine is coming to the world. So obviously it will have an impact in Bangladesh as well. Tax concessions on the import of certain products, breaking up syndicates controlling the market, taking measures to raise the minimum wage, subsidizing fertilizers to increase production, and increasing allocation to the renewable energy sector. It is also said to take short, medium and long-term steps to deal with the situation.
Keeping in mind the Russia-Ukraine war, and the ongoing global economic crisis, it is necessary to be cost-effective, and cautious in all areas, stop the implementation of less important projects, curb the import of luxury goods, and fruits, and discourage government employees from traveling abroad. In addition, it is necessary to take special measures similar to the way a special ‘economic incentive package’ was given to keep people’s employment and economy going.
Climate change is a major risk for Bangladesh. No matter how much growth, all our achievements will fail unless we address the effects of climate change. People with higher incomes are getting more digital benefits. For the sake of the implementation of Digital Bangladesh, the government should focus on reducing overall digital inequality. As digital technology expands, so does inequality. In the early stages of any technology development, there will be this disparity. But effective steps must be taken to reduce the digital divide. Unemployment in Bangladesh is compounded by high inflation. In this, the poor and underprivileged people of the country are in trouble. As a result, these people have reduced food expenditure, which affects children. Most people are pessimistic about the global situation. 84 percent of people who participated in the survey expressed concern and worry about the world situation. Only 4 percent of people are optimistic. Due to the disruption of economic activities due to Corona, there is some stagnation in investment. Opportunities to create new areas of work are also diminishing. Many have been fired. Salary has decreased. Creating new job opportunities and retaining the current job is now a major challenge. Altogether, the country’s economy is in danger of falling into a livelihood crisis. In addition to the country, there is a danger that the crisis of livelihood will become evident in the global economy as well.
The biggest risk for Bangladesh’s economy is new job creation and livelihood crisis. There is no alternative to creating new employment to overcome this crisis. It is necessary to change the education system based on the skills needed in any sector, and how will the development of the sector be in the next 20 years. Otherwise, the supply of workers cannot be provided according to the demand of the private sector. Right now, there is a shortage of skilled workers and high-level workers.
Taking these into consideration, the educated population should be planned and made suitable for work. This requires advanced planning. The economy is facing a livelihood crisis due to the slow pace of employment. This crisis must be overcome first. For this, investment should be increased, and small and cottage industries should be developed. Due to Corona, while many people could not retain their previous employment, new employment is also decreasing. This creates instability in the labor market. In 2020 and 2021, no new jobs were created in the private sector due to Corona. There has been very less job creation in the government sector as well. An average of 26 to 27 lakh people enter the labor market every year. According to this, 52 to 54 lakh people have come in two years. Most of them have no employment. According to the ILO, 3.5 crore people were unemployed earlier. Altogether, the number of unemployed now stands at 4 crores. Besides, many people have lost their jobs. In the last two years, several posts have been recruited in the health cadre. There have been some recruitments in Banks and other government sectors on a very limited basis. Which is very less than the demand.
The last Labor Force Survey was conducted in 2017. According to that survey, the working population is 6 crore 35 lakh among the total labor force. Among them, 6 crore 8 lakh men and women work. The remaining 27 lakh are unemployed. This survey has not been done for 6 years. However, according to the decision of the cabinet, the survey should be conducted every two years. BBS also shows those engaged in agricultural labor as employed. But most of them are disguised.
More than 2.7 million educated young people are unemployed. Employment will be a big challenge in 2023 as well. According to Bureau of Statistics data, 3.8 percent of total employment is in government jobs, 14.2 percent in institutional private jobs, 60.9 percent in non-institutional privately owned enterprises and 21.1 percent in other sectors. There is no alternative to increasing investment in job creation. Instead of taking capital from the country to invest abroad, the capital can be given the opportunity to invest in the country itself. It will increase employment. Unemployment will decrease. It is not right to give the opportunity to invest abroad without solving the country’s unemployment first. This will further increase economic inequality.
According to the BIDS survey, the unemployment rate among the highly educated in the country is 34 percent at the post-graduate level, and 37 percent at the graduate level. According to their report, without a projection of what kind of workers an industry will need and what kind of skills will be needed in the next ten years, it will not be possible to provide workers according to the needs of the industry. Under existing conditions, many graduates will be produced, but it will not be possible to produce the required workforce.
According to the Economist Intelligence Unit (EIU), Bangladesh has the highest rate of educated unemployment. 47 out of every 100 graduates are unemployed. That is, one is unemployed between two. Currently, one in three youths aged 18-28 is unemployed. Bangladesh has a lower employment rate than other South Asian countries. Note that workers are not available as per demand in garments. That is why many foreign workers now work in skilled and senior positions in the garment industry. It is now essential to develop skilled and experienced staff for senior positions.
Hiren Pandit is a columnist
and a researcher.