Dhaka, Thursday, 09 July 2020

New government

Challenges to increase investment & employment


For two decades, the upward trend of the growth of Bangladesh's economy has made us optimistic about the bright future of the country's economy. In recent times the analysis of various international organizations indicates Bangladesh's economy becoming more powerful in the future. The progress made in the economic and social sector of Bangladesh in the last four and a half decades. Especially for a decade, the country's economic growth rate is above 6 percent. In recent years, the growth rate exceeds 7 percent to 8 percent.

But question is there, whether the underlying problems of the economy of Bangladesh are being hidden even in this upswing rate of growth. In other words, the question of whether the high rate of growth is able to solve important problems of our economy. Note that there are many challenges ahead of Bangladesh. If everything is okay, Bangladesh will be in the developing country from the LDC country in the next few years. Bangladesh will be losing access to the kind of trade that is available in different countries as a LDC. Under the sustainable development targets, there are challenges to achieve some of the most difficult economic, social and environmental goals by 2030. It aims to reach a high-middle-income country by 2030 and Developed one by 2041.

One thing needs to be clarified that achieving the stated goals is not easy. To achieve them, there will be some extraordinary efforts beyond conventional process.

Two issues are closely related to the quality of economic growth. The first is employment and the second is discrimination. It is a matter of concern that despite a decade of economic growth, Bangladesh's success is not much in terms of employment generation and reducing discrimination.

In recent years, employment has been created very slow in terms of economic growth. According to the Bangladesh Bureau of Statistics, between 2013 and 2017, the annual average economic growth rate was 6.6 percent, while the annual growth rate of employment generation was just 0.9 percent. It is feared that around 8 lakh workers in the manufacturing sector might lose works during this time. Most of them are women workers. There has been a major change in the employment sector in the readymade garment sector. Employment in the garment sector due to technical development and labor replacement technology is decreasing.

One more worry is that young people are unemployed and a large number of young people are out of education, work or training.

The biggest driver in the field of employment generation is the private sector investment. In a decade, the investment in the private sector has increased, but the investment in this sector is stagnant in GDP ratio. To increase the rate of growth in two-digit house, the investment rate will have to be increased from 31 percent to around 40 percent in the current GDP ratio. This means that the rate of investing in the individual sector will be increased from the present 23% to 30% of the GDP ratio. This is a big challenge.

The major reasons for investment stability in individual sectors are infrastructural problems, lack of credit availability, high interest rates for loans, institutional weaknesses and lack of economic policy reforms.