BANGLADESH’S economic growth though mesmerising, it has been proved over the past decade that jobs could not be created proportionately for the youths keeping adjustment with the growth. Besides, female participation in the labour force shrank in the last nine years, especially in rural areas. As a result employment elasticity, which indicates the ability of an economy to generate employment opportunities for its population, gradually declined in 2005-18.
Between fiscal 2005-06 and 2009-10, the country’s employment elasticity was 0.55. It plunged to 0.25 between fiscal 2010-11 and 2017-18, when the economy averaged 6.6 percent GDP growth. A government study shows that in case of agriculture, manufacturing, construction and services sector, the employment elasticity is lower than 1, indicating that employment generation is not very sensitive for growth. The service sector is the only sector that saw an increase in employment elasticity: from 0.27 in fiscal 2009-10 to 0.40 in fiscal 2017-18. Government spending has increased in the construction sector but the expenditure is for big projects like Dhaka Metro Rail and Padma Bridge, which are capital intensive in nature, failed to sustainably contribute to job creation.
The study attributes the decline to two simultaneous phenomena: the structural transformation in the economy from agriculture to industrial sector, and industrial sector being more capital intensive. The garment and textile industries account for a major chunk of the country’s manufacturing sector, and both are becoming more capital intensive rather than labour intensive. The non-garment part of the manufacturing sector has remained static. Employment elasticity in agriculture turned negative as the demand for farm labour dropped with rapidly growing mechanisation of agricultural production processes. Despite sustained expansion in agricultural activities, employment in agriculture declined from 26.2 million in 2010 to 25 million in 2018 while employment in services increased from 19.8 million to 23.8 million respectively. Growth of labour demand in the industry was weak because of low investment, higher capital intensity of industrial production processes and the spread of automation.
We are surprised how the government claims its series success when thousands of youths remain jobless! What’s most frustrating is that — there is no government initiative yet to expand job sector. If the trend continues, the big projects would be appeared as big burdens for the nation.
