Editorial
Rise in unemployment rate
Diversification of the economy holds the answer
A report in the Tuesday's issue of this paper that says there has been a 28 per cent increase in the unemployment rate over three years between 2006 and 2009 is undoubtedly disconcerting. That is more so against the backdrop that the per capita real Gross Domestic Product (GDP) has increased by 15.2 per cent in the same period. So, the question that naturally arises is why has this GDP growth not been reflected in the employment scenario?
A World Bank economist in the same report, however, pointed out that increase in the size of the labour force at 8.5 per cent in this period stands in contrast to the rate of increase in the employment rate at 7.6 per cent. And that increase is attributable to the ever decreasing labour absorption capacity of agriculture, which was once the highest job creating sector, compounded by the fact that this sector has actually shed jobs in those years and a fresh crop of entrants, who could not be fully employed, have joined the labour market. Worse still according to the Bangladesh Bureau of Statistics (BBS), the manufacturing, construction, finance, business and real estate sectors together registered a 33 to 50 per cent fall in employment rate. To cope with these apparently irreconcilable factors, experts have suggested that the economic growth rate has to be made faster than it is now.
To absorb the surplus labour force, the need for increasing the productivity of agriculture as well as of the manufacturing and service sectors cannot be overemphasised. At the same time, efforts should be redoubled to expand the overseas market for manpower. One can see that that the government is expanding its safety net programme to accommodate some of this additional labour force.
Arguably, this is but a stopgap measure. Doling out money to the unemployed at the expense of the public exchequer, for example, cannot go on for eternity. So, it would be necessary to increase the capacity of the private sector as the engine of job creation. The government may well stimulate this sector with incentives so that it can expand its activities in the Small and Medium Enterprises (SMEs) as well as in agriculture.
On this score, the agriculture will need special attention from the public as well as the private sector. To offset agriculture's falling capacity to absorb the rising size of labour force, it would need overhauling through diversification of its production mode and technology so that it may draw more investment from the private sector. This will create the scope for more agro-based industries on a par with the manufacturing and the service sectors.
To be precise, neither a stopgap, nor a piecemeal approach to address the rising number of unemployed will work. In fact, nothing short of speeding up the existing pace of economic growth will be necessary to solve the problem.
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