ENGLISH dailies reported on how the informal sector of Bangladesh generates 89 percent of the country’s total employment, but unfortunately the sector’s contribution to our Gross Domestic Product (GDP) remains at only 40 percent. This was discussed in ‘Recognition of the Contribution of Informal Sectors Focus on Domestic Workers’, organised by Bangladesh Institute of Labour Studies (BILS) in association with Oxfam GB.
Experts opined that this low productivity of workers is due to a lack of education and technological knowhow and workers in many areas are also still not recognised. The news reports added that the government is yet to ratify and implement Convention 189 of the International Labour Organisation (ILO) that aims to improve working conditions of millions of domestic workers.
Various analysts urged the government to deal with the issues and finalise the domestic workers’ protection and welfare policy that was drafted in 2010. The government was also called upon to recognise the informal sector and its contribution to GDP by conducting a survey and creating a database. A member of the General Economics Division of the Planning Commission said that the informal sector’s contribution to GDP is much lower as its productivity is also lower than that of the formal sector. However, many called for the domestic workers to be considered as formal sector workers.
We consider macro-level interventions are needed to promote the formalisation of the informal sector as it will be a stepping stone in assisting informal sector entrepreneurs within the sector. Issues like ill-designed and unstable rules and regulations (particularly in relation to taxation, labour policy and business registration); a lack of well-defined and secure property rights; poor-quality or non-existent infrastructure and public services; deficient government capacity and resources to enforce laws and regulations; a lack of transparency, accountability and autonomy of the governmental institutions; as well as a high degree of macro-economic instability, unemployment and corruption need to be dealt with in an efficient manner aiming to ensure informal sector growth as well as its increased contribution to GDP.
To facilitate the informal sector’s participation in the formal economy, the government can establish transparent and inclusive mechanisms through which citizens can regularly voice their concerns, participate in policy and law-making, monitor public and private sector activities and hold both public and private sector actors accountable.
