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13 February, 2019 11:15:14 AM / LAST MODIFIED: 13 February, 2019 11:19:40 AM
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Investment-friendly environment essential

A country of 170 million people is supposed to be a lucrative and wide market for the foreign investors as labour is very cheap here
Prof. Sarwar Md. Saifullah Khaled
Investment-friendly environment essential

Bangladesh is presently enjoying a geopolitical advantage. Consequently it will enjoy the advantages of Indo-China policy of investment strategy centering the Asian countries. To enjoy this advantage what Bangladesh needs is to implement some infrastructural development projects like deep sea port facilities, Asian highway, Padma bridge etcetera. In the field of garment industry Bangladesh is globally occupying the second position after China. If China leaves this labour intensive commodity production industry to Bangladesh then it has the possibility of occupying the first position in the world garment sector. The surplus labour of Bangladesh working abroad is already sending US$15 to US$18 billion remittance money per year. But side by side with these advantageous forces of the Bangladesh economy are also going on its inability of flourishing the private sector investments. This is because of the lack of investment friendly environments due to continuous political uncertainty prevailing in the country for the past few decades. Moreover, apart from this are the factors like the severe lack of financial transparency and accountability in government expenditures.

As Bangladesh is an overpopulated agrarian economy with limited scope for absorbing the growing labour force in the dominant agricultural sector, both the number and the rate of unemployment is soaring. Especially the growing unemployment of educated youths is a matter of great concern. The International Labour Organization (ILO) has prepared a list of 20 countries of the world where labour unemployment is on the rise; Bangladesh ranks 12 among them. As job opportunities are not being created to cope with the rise of population the problem of unemployment has become acute. Currently the rate of youth unemployment in the country is 8.1 percent of the total youth labour force while it was on an average 7.5 percent of the youths in the age group of 15-29 as per another estimate made by the Bangladesh Bureau of Statistics (BBS) in 2010. The number of youth labour force in the country is 22.7 million. The BBS data shows that 70 percent of the total unemployed of the country are youths.

Such a picture of youth unemployment in the country is undoubtedly horrifying. It is evident that the effort to engage the youth force in the production process for accelerated growth is lagging behind. Many of the economists hold the prevailing education system as responsible for such poor results of youth employment and gradual rise in the youth unemployment situation. They maintain, it is true that the youths are in increasing numbers obtaining certificates in different disciplines of knowledge but that do not come to any use in the field of employment. The prevailing education system does not at all help the youths to acquire professional skills by flourishing their inherent talents in any of the field of employment. Although the numbers of educated youths have risen rapidly in recent years but the opportunities to employ them has not comparatively increased that much. The problem of increasing unemployment has been agreed upon by the BBS data. The BBS say, unemployment has gone up by 1.6 percent in the last one decade but by that time the creation of job opportunity has seen a drop by 2 percent.

About 2.7 million people enter the Bangladesh job market every year. Of them it is possible to gainfully employ nearly 0.2 million (186 thousand) of the people at present. The rest of the people have to remain unemployed. Although Bangladesh is considered as a country of immense possibilities, the rise of unemployment in the face of fall in the creation of job opportunities is unfortunate from all considerations. A country of 170 million people is supposed to be a lucrative and wide market for the foreign investors as labour is very cheap here. Even after that, foreign investors are not confident enough to invest in the country because of some infrastructural disadvantages and lack of sufficient energy facilities like gas and electricity; and the internal political instabilities that prevail. These are major hindrances to not only foreign investments but to domestic investments as well. Both domestic and foreign investors are suffering from lack of confidence due to overall absence of investment climate and adequate infrastructural facilities in the economy.

The main source of employment creation is private investments. Private investments in the country are still trapped at the level 19 percent of gross domestic product (GDP). Moreover, whatever private investments are being made now here is not congenial to job creation. The type of technology that is being used presently is not befitting from the view point of wide range of prevailing unemployment situation and demand of the economy. Because of the existing structural limitations the use of modern capital intensive investment technology is more labour saving than labour absorbing, making the unemployment situation worse. The private investors are attracted more to invest in the industries where the profit margin is higher even though the possibility of creation of job opportunities are less.  

Basically the Planning Commission is supposed to look after such anomalies in the investment activities of prospective investors. But, unfortunately, it is not doing its job satisfactorily. We have industrial policy, commercial policy but we don’t have investment policy. We should have policy regarding the extent to which we can allow the flourishing of modern technology keeping in view the unemployment situation of the country. Side by side our democratic system of governance and rule should also be conducive and responsible in this regards. If politics is violent, political turbulences and unrests are the go of the day then we cannot expect necessary and sufficient investments from both the domestic and foreign investors. In the absence of such investments we are to carry the burden of ever increasing unemployment problem in the country.

The rate of increasing unemployment is a matter of great concern for the nation.  Unemployment is now being considered as a direct threat to the political stability of the country. The creation of required employment opportunities by paving the way for more and more both domestic and foreign investments is the necessary and sufficient conditions to thwart unemployment and come out of the concerns centering the political instability.

We are now trapped in a vicious cycle of lack of investment for generating employment opportunities resulting from the lack of infrastructural facilities and lack of infrastructural facilities resulting from the lack of investment opportunities. We need to apply ingenuity to break through this vicious cycle causing unemployment situation in the country.

The writer is a retired Professor of Economics, BCS General

Education Cadre  

 

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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