Dhaka, Bangladesh (BBN)– Bangladesh has been extraordinarily successful in growing its economy and spreading the benefits of that growth across society.
Since the 1980s, the country has averaged 5.0–6.0 annual gross domestic product growth.
This growth was accompanied by a significant decline in poverty, an increase in employment, greater access to health and education, and improved basic infrastructure. As a result, the once poor country is now considered middle income, the Asian Development Bank (ADB) said.
The next goal is to reach upper-middle-income country status by 2021.
This ambitious initiative will require annual GDP growth of 7.5 per cent–8.0 per cent and will entail overcoming significant obstacles and seizing on new opportunities brought about by changing global circumstances.
To reach the next level, Bangladesh needs to improve the country’s reliable energy supply, revise business policies that stunt the development of non-garment exports, and improve property and land rights registry systems to protect investments, according to the recent publication, Bangladesh: Consolidating Export-led Growth.
To overcome these obstacles, strategies should be developed to decrease the economy’s reliance on low-cost exports, such as garments. This includes focusing on higher education and technical and vocational skills training, the publication noted. Bangladesh also needs to more fully embrace technology, including increasing access to the internet, cell phone banking, digital property registries, and other innovations.
Not just jobs, better jobs
Another challenge faced by the country is the problem of underemployment. The proportion of workers employed in the informal sector—where high underemployment, low earnings, and poor working conditions are common—rose to 87 per cent in 2013. Women continue to get paid less for the same work and have fewer labor opportunities.
Beyond the garment industry
Bangladesh needs to move more rapidly toward industrialization and shift workers into formal jobs, with more social protections, that are created as a result, according to the publication Bangladesh: Looking Beyond Garments.
As the country grows and diversifies its manufacturing sector, it can looks to the garment industry for some lessons, according to the report, Employment and the Labor Market in Bangladesh: Overview of Trends and Challenges. For example, instituting a minimum wage and enforcing improved safety regulations have not had a negative impact on employment opportunities in the garment industry.
Role of remittances
While the country’s economy is strong, and employment opportunities are increasing, the pull to work overseas remains strong in Bangladesh, according to the publication Overseas Employment of Bangladeshi Workers: Trends, Prospects, and Challenges.
Remittances flowing into Bangladesh from overseas employment rose to over $15 billion in 2015 or about 8.0 per cent of gross domestic product, up from less than $2.0 billion in 2000.
This has become a major driver of the economy, comparable to the importance of the dominant garment industry. About half a million people in Bangladesh find jobs abroad each year.
But the economic impact of working overseas is not being spread evenly. High costs of migration due to recruitment fees and charges by intermediaries make opportunities highly skewed in favor of people in higher-income groups. Continued government oversight of the overseas recruitment process is needed, according to the publication.