Bangladesh has been experiencing consistent, robust economic growth for the last two decades with a simultaneous increase in per capita income—from $1,419 in 2000 to $4,372 in 2018—in terms of purchasing power parity (PPP). In 2015, Bangladesh formally entered the club of lower-middle-income countries and aspires to become a middle-income and, eventually, a high-income country within the next few decades.
Along with growth, the country has seen a rapid decline in poverty. Almost half of the population was living below the upper poverty line at the start of the century; it came down to 21%. Extreme poverty rates came down from 34 to 11%. Several other indicators of wellbeing also improved—infant, child, and maternal mortality rates; life expectancy, attainments in primary and secondary education; stunting rate among the children under five, and so on.
Starting from the early eighties, Bangladesh has become the second-largest RMG exporter in the world. But our RMG sector predominantly serves the lower end of the global market, riding on the abundant unskilled/semi-skilled, mostly female, labour force. The main competitive advantage of Bangladesh has been price, and this price-based competition, combined with the growth of fast fashion, is continuously pushing the price downwards. The RMG sector must diversify and produce high-value products, but even in the current state, the industry is facing a simultaneous shortage of skilled labour as well as mid- and high-level management professionals. The RMG sector in Bangladesh has one of the lowest labour productivities in the world and a large number of mid- and high-level management positions are held by foreigners.
Low productivity and shortage of highly skilled workers and professionals is not a problem unique to the RMG sector, rather it is the general scenario of the economy of Bangladesh. The overwhelming majority of the migrant workers from Bangladesh are unskilled, working in the Middle East at a minimum wage—lower than the average wage of migrant workers from most other developing countries.
Bangladesh desperately needs to upgrade its human capital merely to remain relevant in the increasingly technology-dependent, hyper-productive global economy. Becoming a thriving and prospering nation in the era of globalisation would require a complete transformation of people’s capabilities.
During the formative stages of life, namely childhood and adolescence, humans acquire basic cognitive, social, and life-skills required to become productive adults. Deficiencies during childhood and adolescence often cause irreversible damage to the productivity of a human. So, it is imperative to support children and adolescents so that they can harness their full potential as adults.
Immediate attention should also be on developing productive and employable skill base, and the youth should be at the centre of any skill development initiative in the country. About a third of the population of Bangladesh are young, who are the main drivers of our economic growth. A particular focus should be on the female youth. Overall, productive and employable skills among the youth in Bangladesh are low, as revealed in BIGD’s Youth Survey 2018. But female youth are doing much worse. In general, female participation in the labour force, particularly in the formal economy, is very low. Inclusive growth would not be possible without paying special attention to women.
Speaking of inclusion, Bangladesh also needs to make sure that no one is left behind, including the marginal and vulnerable communities—poor, disabled, or old. There is an indication that the growth so far has benefitted the “better-off” poor more than the poorest. For example, agriculture sector had a crucial contribution in the remarkable rate of poverty reduction in recent years, but the reduction was disproportionately concentrated among the large and medium farms households, a 2016 World Bank study found; the poorest and marginal farmers did not benefit as much. And already, the rate of decline in poverty is slowing down despite increasing growth in per capita income, which indicates a possible increase in inequality.
Skill development is relevant to the poor as well, particularly to those who are young and live in urban areas. A large percentage of the 18 million extreme poor in Bangladesh live in remote areas with limited options. Many of the extreme-poor people are also old or disabled. These vulnerable groups need a comprehensive support package and social protection.
Under the broad theme of economic development and growth, BIGD focuses on discovering what works in the area of human development, particularly skill development as well as early childhood and adolescent development. BIGD also focuses on identifying solutions for equitable economic development, ensuring no one is left behind—women, elderly, disabled, and the extreme-poor.
Photo credit: “Sparks” is copyright (c) 2013 Jabid Ishtiaque and made available under a CC BY-NC-ND 2.0 license
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