Faster Growth Needed to Create 1.5 million jobs annually in Bangladesh

February 28, 2012

DHAKA, February 28, 2012 – Bangladesh along with other South Asian countries has seen steady job growth and a substantial decrease in poverty over the past three decades. Accelerating growth in Bangladesh’s per capita income has added nearly 1.2 million new jobs every year and improved job quality between 2000 and 2010. According to the report, More and Better Jobs in South Asia, Bangladesh will need to create up to 1.5 million new jobs each year for the next twenty years.

South Asia will be the largest contributor to the global workforce over the next two decades. Economic growth, which has been second only to East Asia, needs to be sustained to create more and better jobs and reduce poverty, says the report launched today in Dhaka. The demographic transition will result in more than 350 million people to enter the working age population over the next two decades.

The South Asia region—defined by the World Bank as Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka,—will need to add between 1 and 1.2 million additional jobs every month for the next twenty years, equivalent to about 40 percent of the increase in the global labor force. Despite growth, the region is still home to the largest number of the world’s poor—a half billion people. Since labor is the primary asset of the poor, having more and better jobs is the key employment challenge facing the region.

It’s not only the quantity of jobs but the quality of the jobs being created in the region that is relevant,” said Kalpana Kochhar, Chief Economist for the World Bank’s South Asia Region. “There has not been much change in the composition of employment, that is between casual laborers, the self-employed and regular and salaried wage earners, but there has been an increase in real wages and poverty reduction within these categories.  However, the share of wage employment and high-end self-employment are stagnant.”

Wage workers in Bangladesh have seen their wages adjusted for price increases rise by nearly 2 percent a year.  Poverty rates among the self-employed have fallen.  While quality of jobs has improved, little upward mobility has seen across the three broad employment types -- the self-employed, casual laborers, and regular wage or salaried earners.

The challenge for Bangladesh is to create jobs of higher quality,” said Ellen Goldstein, Country Director, World Bank Bangladesh. “ Investing in education, health and nutrition , and infrastructure, along with a renewed thrust to economic reforms would help in creating more and better jobs for Bangladesh. But the greatest payoffs to improving skills and the consequent ability to access better jobs may well come from interventions before children enter formal school.”

The report suggests that, among other things, sustained attention to electricity, education, and encashing the demographic dividend can make an important difference. Education is the key to labor mobility.

South Asia has the highest rates of malnutrition in the world. India, Nepal Pakistan, and Bangladesh have among the world’s highest prevalence of malnutrition in children under five. Malnutrition rates are higher even than Sub-Saharan Africa. High prevalence of malnutrition in children results in lower productivity in their later years.

Since the demand for labor is derived from businesses, it is important to address electricity shortages, which affect the functioning of virtually all firms in Bangladesh. The report suggests that improvements in the regulatory framework and governance are as critical as investments in the sector.

The working age (15—64) population in Bangladesh is growing more rapidly than the dependents.  The resources that would have been required to support an otherwise larger dependent population are thus potentially available for the high-priority physical and human capital investment needed to create better jobs. 


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