5:16 pm - Friday May 23, 5417

Employment slows down as investments sluggish

Employment in the formal sector has slowed down considerably in the past one year because of sluggish private and public investments against the backdrop of prolonged political unrest over the holding of the general elections.

‘It is obvious that the unemployment rate has increased,’ said former caretaker government adviser Mirza Azizul Islam.

One cannot expect an increase in employment without new investments, he said, adding that the main reason for the growing unemployment was the lacklustre private investments.

No-VacancyThe private sector is the main employer of about 2.7 million young people who become eligible for jobs every year.

A third of them could be absorbed a year and the rest remain under-employed or self-employed while a large number of them seek jobs overseas, mainly in the oil-rich Arab countries.

But the number of overseas job-seekers declined in 2013 to 3,99,333 as of the December 22, 2013 data the Bureau of Manpower, Employment and Training gave; 6,07,798 sought overseas employment in 2012.

Experts and chamber bodies said that the scope for employment generation narrowed after the private sector credit growth, until June 2013, had marked an all-time low in 13 years to 11 per cent.

There had been no improvement in credit growth to the private sector in the following four months which left the banks with idle money to the tune of Tk 70,000 crore, according to an estimate by the finance minister, Abul Maal Abdul Muhith, in October 2013.

Credit to the private sector from foreign sources also decreased in 2013 to $1.1 billion against $1.5 billion loan in 2012 which, according to experts, suggests that the unemployment rate was increasing.

The government is going to compromise on the development budget in the current financial year because of a sharp increase in non-development expenditure. An amount of Tk 10,000 crore is likely to be slashed from the projected annual development programme of Tk 65,780 crore in the current financial year.

The inflow of remittances decreased to $13.83 billion in the just-concluded year from $14.17 billion in 2012.

Leading think-tank Centre for Policy Dialogue in an assessment in October 2013 said that import payments had declined by 4.1 per cent in 2012–13 showing a weak demand for industrial raw materials and capital machinery.

It said that investment proposals registered with the Board of Investment had declined by 24.1 per cent in the past financial year that ended in June 2013.

BoI officials said that the number of proposals had dropped further as only seven proposals were put forth in October against 15 in September in 2013.

The number of local investment proposals also declined to 75 in October from 81 in September.

There is no specific data on the existing rate of unemployment.

The World Bank said that the unemployment rate had been at 5 per cent in the country since 2009. The labour force survey conducted in 2009 by the Bangladesh Bureau of Statistics puts the rate at 4.5 per cent.

Azizul Islam, however, said he had doubts about the BBS data on employment.

He said that the actual picture could be found only when a registration system for job seekers could be introduced. He, however, said that registration would be a big task providing the fact that 54 per cent workforce are engaged in the agricultural sector.

Operators of job-related web portals where private banks, hotel, restaurants, hospitals, transport companies, realtors, manufacturing units and corporate entities give advertisements for employment acknowledged the decline in employment.

AKM Fahim Masroor, chief executive officer of the job portal called bdjobs.com, said that the year 2013 was the most unfavorable year for job seekers.

He said that advertisements for new jobs had declined by at least 15 per cent in the just concluded year. Many investors held back their investments because of uncertainty amid political unrest, he said.

Masud Khan, general manager of BDjobshop, said the lull in advertisement for hiring manpower had declined very low in the past year. He, however, said that things were improving a little bit from the current month.

The Metropolitan Chamber of Commerce and Industry, the country’s oldest chamber body, in it latest outlook said that a lacklustre situation prevailed in the investment arena mainly because of political uncertainty.

The ongoing political unrest, accompanied by shortage of power and energy and scarcity of land, discouraged entrepreneurs to make investments, worsening the employment scenario, it said.

Ahsan H Mansur, executive director of the Policy Research Institute, expressed doubts about the projected growth of 7.2 per cent with the declining public and private investments. Both the indicators are in a sorry state, he said

The Least Developed Countries Report 2013 by the United Nations Conference on Trade and Development said that a declining trend in employment in formal sectors needed proper attention in Bangladesh where 62 million people are in vulnerable employment.

UNCTAD said that despite the preponderant role of agriculture in rural employment, the sector cannot fully absorb the growing rural labour force or generate sufficient income to reduce poverty.

It said that main drivers of change in the rural economy of Bangladesh are technological innovations in agriculture and increased linkage between rural and urban areas with improved transport, communications, electrification, growing market linkage and skills development.

–         Shakhawat Hossain, The New Age.