See More on Facebook

Economics, Opinion

A new Asian tiger?

Bangladesh economy is growing but it’s a jobless growth.


Written by

Updated: June 4, 2018

Jonathan Garber, the markets editor at Business Insider, wrote an article addressing Bangladesh as a “New Asian Tiger” which attracted significant attention from researchers, policy-level practitioners, and many more relevant personnel. The article highlighted the strength of Bangladesh in maintaining a high GDP growth rate, over 6 percentage point, for more than a decade. In addition, political stability, stable macroeconomic performance and geopolitical support were flagged among the positive confounding factors of the country. He also mentioned some limitations of the country as reflected in its non-diverse export market, weak infrastructure and unstable financial market. However, a “New Tiger” without jobs for the unemployed, with the youth struggling to get “decent” jobs, and including a large underemployed workforce is no different from a tiger without claws and sharp teeth.

It’s important to assess Bangladesh’s youth unemployment and jobless growth in light of international standards and findings. According to the United Nations (2003) and ILO (2006), the youth, in general, are highly vulnerable to marginalisation in the labour market as they lack skills, work experience, job search abilities and financial resources. It’s common knowledge that even under normal economic circumstances, firms do not prefer hiring inexperienced young people and are less interested in investing in training for young employees. Hence, the youth may get demotivated, excluding them from the labour force, which will eventually result in lower wellbeing (Daly and Delany 2013), and higher chances for them to get involved in criminal activities (Bell et al. 2014).

Eighty-five percent of the people in Bangladesh’s labour market work in the informal sector. Between 2013 and 17, the Labour Force Survey shows, jobs in manufacturing declined by 0.77 million for both male and female. Female manufacturing jobs saw a big drop by 0.92 million. The share of youth Not in Education, Employment, or Training (NEET) has increased from 26 percent to 30 percent. Finally, youth unemployment shot up from 8.1 percent in 2013 to 10.6 percent in 2016-17.

An addition of 2.8 million jobs over five years to the existing jobs indicates a growth rate of jobs below 1 percent point per year which is a poor number if compared with the over 6.5 percent GDP growth rate on an average during the same period of time. This is highly alarming and may have unlikely consequences, as evidenced by the recent students’ protests against the quota system in public service recruitment. Lack of job opportunities, in general, has increased expectations of the youth from the government to provide them with more public jobs and make the entry process “more even” by reforming the quota system. The protest, in a way, reflects more on their frustration with the overall employment situation than on the manner of public sector recruitment.

It is high time to focus on creating jobs and encouraging the youth by involving them in skill-enhancing programmes. Labour Market Institutions (LMIs) can play a pivotal role here by improving the labour market conditions. Betcherman (2012) defined LMIs as a combination of law, practices, policies and conventions that determine the employment contracts, wage settings, unemployment benefits, social protections, collective bargaining, etc.

I strongly believe that formulating Active Labour Market Policies (ALMPs) can be the first step for Bangladesh to get rid of its “jobless growth” stigma. Training programmes, Technical and Vocational Education and Training (TVET) reform project, and other skills enhancement schemes in Bangladesh are only dealing with the supply side problems (providing training without understanding what kinds of training are demanded by the recruitment sector). So, to reduce the skill mismatch, it’s important to focus on the demand side also.

ALMPs should offer a package helping with the job search, negotiating with employers, subsidising the training courses, etc. We have job portals and job advertisements but how many of us get jobs by applying through these portals? Can’t job portals and/or training centres provide job search assistance too by, for example, providing counselling and tagging job seekers with the prospective employers? Empirical evidence demonstrates the impacts of ALMPs on youth in Europe by major components. In terms of an employment outcome, most positive effects are found for job search assistance (JSA). Even stronger positive effects are found for JSA with counselling irrespective of the involvement of monitoring.

However, apart from labour market instruments, the macroeconomic confounding factors are crucial to creating more jobs. A sluggish private sector investment that is hovering around 22-23 percent of the GDP since 2008, vulnerable financial market and weak institutions are bigger constraints in promoting business and creating new jobs.

Bangladesh, having already attained eligibility for graduation from the Least Developed Country (LDC) group, now requires comprehensive and continuous policy efforts to achieve its next target. Without addressing the labour market problems, without jobs for the youth, their “intrinsic values” and idealistic morals will only deteriorate. The extreme outcomes are observed when they resort to violence or crime out of frustration and become inactive in the labour market (i.e. they stop searching for jobs).

Mohammad Nazmul Avi Hossain is Senior Research Associate, SANEM, and presently studying applied labour economics at ITC-ILO, University of Turin, Italy.



Enjoyed this story? Share it.


Daily Star
About the Author: The Daily Star is a leading English-language daily newspaper in Bangladesh.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics, Opinion

Pakistan seals financial assistance from UAE

$3 billion financial assistance sealed as Abu Dhabi Crown Prince meets Imran Khan in Islamabad. Pakistani and United Arab Emirates leadership have met thrice now in three months. Prime Minister Imran Khan visited the UAE twice after assuming office in August to seek economic assistance. Both countries last week finalised the terms and conditions of a $6.2 billion support package for Islamabad to help address its balance-of-payments crisis. A joint statement issued after the UAE royal’s visit said Prime Minister Khan thanked the crown prince for the “generous” balance-of-payments support of $3 billion, which appears to have materialised first out of the total financial package. Crown Prince Sheikh Mohammed bin Zayed, who last visited


By Dawn
January 7, 2019

Economics, Opinion

Previewing Sheikh Hasina’s fourth term

A unanimous poll decision leaves Sheikh Hasina with many decisions to make. It is the huge gaps in the numbers of votes polled by the winners and the losers in the 11th national election that apparently unveiled a “controlled and patterned” nature of the process of polls. A foreign media commentator wondered why any “control” was exercised over BNP activists since the announcement of election schedule in September last. In his opinion, the ruling coalition or Mahajote contestants would have won by a handsome margin without keeping BNP workers at bay anyway! More so when the BNP was waffling and unprepared! In fact, a hundred BNP candidates’ deposits have been forfeited as they couldn’t even secure one-tenth of their adversaries’ tally. In BNP’s last election debacle when they had around 30 seats, deposits of only 10 contestants were forfeited. But I have


By Daily Star
January 4, 2019

Economics, Opinion

AIIB approves applications of six more countries

The total of countries with a membership in the China-led bank now stands at 93. The Asian Infrastructure Investment Bank (AIIB) announced on Wednesday that its Board of Governors has approved the membership applications of six more countries, bringing AIIB’s total approved members to 93. The new group of approved members is comprised of Algeria, Ghana, Libya, Morocco, Serbia and Togo. “Within three years, AIIB’s membership has increased from the 57 founders to 93 approved members from almost every continent. This shows our member’s commitment to multilateral cooperation and strengthens AIIB’s role in the international financial community,” said AIIB Vice President and Corporate Secretary Sir Danny Alexander. “The growing membership of the Bank in Europe and Africa also reflects the importance for growth and development of inter-regional connectivity, esp


By China Daily
December 21, 2018

Economics, Opinion

Thailand staggering back towards democracy

With political restrictions eased, confidence is stirring that the people’s voice will be heard again in two months’ time. Thailand appears to be returning to a modicum of political normalcy now that the National Council for Peace and Order (NCPO), the ruling junta, has lifted its ban on political activity. The NCPO partially repealed nine of its prior restrictions imposed following the 2014 military coup. It has effectively lifted the ban on political gatherings of five or more people and is allowing parties to organise meetings and other activities of a political nature. Prime Minister Prayut Chan-o-cha and his government had deservedly come under blistering attack from politicians who were gagged for the past four and a half years because of the junta clampdown. Much of the criticism came from politicians linked to self-exiled former premier Thaksin Shinawatra, ousted in the 2006 coup and then widely bl


By The Nation (Thailand)
December 20, 2018

Economics, Opinion

Malaysia files criminal charges against Goldman Sachs

Two ex-bankers have also been charged in connection to the 1mdb scandal. Malaysia said on Monday it has filed criminal charges at home against Goldman Sachs and two of the U.S. bank’s former employees in connection with a corruption and money laundering probe at state fund 1MDB. Goldman Sachs has been under scrutiny for its role in helping raise $6.5 billion through three bond offerings for 1Malaysia Development Bhd (1MDB), which is the subject of investigations in at least six countries. Malaysia’s Attorney General Tommy Thomas said criminal charges under the country’s securities laws were filed on Monday against Goldman Sachs, its former bankers Tim Leissner and Roger Ng, former 1MDB employee Jasmine Loo and financier Jho Low in connection with the bond offerings. “The charges arise from the commission and abatement of false or misleading statements by all the accused in order to dishon


By The Star
December 17, 2018

Economics, Opinion

Indonesia plans to make 30 percent bio-diesel blend mandatory

Studies are ongoing on the correct type of petrol. While the government expanded the mandatory use of a 20 percent biodiesel blend ( B20 ) in September, it plans to further boost domestic biodiesel consumption to absorb more crude palm oil (CPO) amid fluctuation in the global market price of the commodity. Apart from improving the distribution of the B20 blend across to the country, the government is also carrying out research to increase the portion of biodiesel in the fuels rom 20 percent to 30 percent ( B30 ) or even to 100 percent ( B100 ). The Energy and Mineral Resources Ministry’s oil and gas director general, Djoko Siswanto, was quoted by kontan.co.id on Monday as saying that B100 fuel was being tested by the ministry. State-owned oil and gas holding


By The Jakarta Post
December 16, 2018