Economic development cannot be measured only by GDP
said Prof Wahiduddin Mahmud

As Bangladesh is advancing fast in its efforts to ensure sustaining economic growth, the disparities between the income of workers and employers is also widening day by day. We are noticing the per capita income increasing as well as the economic development of our country, on the other side economic discrimination is also increasing. So, Economic growth should not be measured only by Gross Domestic Production (GDP), said Prof Dr Wahiduddin Mahmud at the workshop on Formal-Informal Labour Nexus and Bangladesh’s Growth.

BIDS RAND

BRAC Institute of Governance and Development (BIGD), BRAC University and Bangladesh Institute of Development Studies (BIDS) organised the workshop at BIDS’s on March 28, 2017 in the capital. The workshop was organised in partnership with the Rand Corporation of the USA and was supported by the Department for International Development (DFID) of the UK and the Institute for the Study of Labour (IZA) of Germany.

Prof Mahmud went on saying that the labourers are still deprived of a healthy work environment and the dues, benefits and allowances they deserve. He also called upon the government to come forward to take pragmatic steps to help the labour community improve their living standard. Though we often discuss the role of readymade garment sector, we have to formalise other sectors as well, he said.

He also said that the government needs to assist small entrepreneurs so that they can step into the formal sectors.

The outcome of the study suggests that although export-led growth increases employment levels, in terms of employment shares, sectoral growth causes a reallocation away from formal and informal employment towards self-employment, said Dr Krishna Kumar of RAND Corporation where he was presenting his research paper titled ‘the Formal-Informal Labour Nexus and Growth in Bangladesh’ in the first session of the workshop.

Presided over by BIGD Executive Director Dr Sultan Hafiz Rahman, the panelists at the workshop included CPD Distinguished Fellow Dr Mustafizur Rahman, Economic Research Group Executive Director Dr Sajjad Zohir, Professor at the Department of Economics of Dhaka University Dr Selim Raihan, BIDS Research Director Dr Kazi Ali Toufique and BIDS senior Research Fellow Dr Nazneen Ahmed.

Dr Shanti Nataraj of Rand Corporation presented the second paper titled ‘What Do Workers Value about Formal Employment- Results from a Worker Survey in Bangladesh’ in the second session of the workshop. "Our studies found that policies that encourage job stability are likely to be beneficial for workers," said Dr Nataraj, adding: "It is also critical for policymakers to pay close attention to poor working conditions, particularly for informal workers."

Dr Minhaj Mahmud, Senior Research Fellow of BIDS said, It is also important to enforce existing regulations about overtime and pay in both formal and informal sectors, at his presentation of the paper titled ‘Employee and Employer Preferences for Worker benefits: Results from a Matched Survey in Bangladesh’ at the workshop.

The research team analysed existing secondary data and also conducted several surveys on employers and employees of small and medium enterprises to find the links between informality and growth while also examining worker transitions between different types of jobs and estimating the valuations of specific job benefits by workers and employers.

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