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7 February, 2018 00:00 00 AM

Demographic dividend and Bangladesh

If the benefits of demographic dividend are attained, per capita income will rise and with more people economically active, the savings rate will also increase
Dr. Md Shamsul Arefin
Demographic dividend and Bangladesh

Investing in young people is critical for seizing the demographic dividend. South Korea, Singapore, Taiwan, and Thailand experienced spectacular economic growth during the second half of the 20th century, much of which was due to the demographic dividend. The economy of Bangladesh has been showing improvement. Therefore, Bangladesh can take full advantage of the demographic dividend. However, many developing countries, including Bangladesh will not be able to achieve this economic benefit without appropriate policies and substantial investments in some areas.

The demographic dividend is the economic growth resulting from country’s declining mortality and fertility and subsequent changes in the age structure of the population. Demographic dividend occurs when the majority of the population is working age and can contribute to the country’s economy. Economists have identified four possible ways for the benefits of the demographic dividend. The first is the increased labour supply; however, the magnitude of this benefit will depend on the ability of the economy to absorb and productively employ the additional workers. The second is increased savings (resulting from reduced dependency ratio). The third is human capital. The fourth is the growth in domestic demand caused by the rise in per capita income and the reduced dependency ratio. Now in Bangladesh total population is 158.5 m. Working age population is 106.1 m. Actual Labour force is 62.1 m (59.5 m employed in both public and private sectors, 2.6m is still unemployed) and outside labour force people gossiping in tea stalls are 44.0m. Youth labour force (15- 29 years) is 20.8 m. The rate of unemployment is 4.2 per cent and the labour force participation rate is 58.5 per cent. In agriculture sector disguised underemployment is season-based and employment is 1.8 m.

Outside Bangladesh, it is 108 m. (Ref: Quarterly Labor force Supply Report 2015-2016 of Bangladesh Bureau of Statistics). The jobs still are inadequate for 106million working-age population in Bangladesh.

Now women have fewer children than before; they can take jobs outside the home; they also have a trend to be better educated than older cohorts, and they are, therefore, more productive in the labour force. Adult working-class trends to earn more and can save more money than the very young. The shift away from a very early age distribution favours greater personal and national savings. Personal savings grow and serve as a partial resource for industrial investments that fuel economic growth. Having fewer children improves the health of women. Their participation in the labour force develops their social status and personal independence. Parents are under less strain to provide financial support to many children. Family income can be focused more on better food for infants, including girls who are often given less to eat. Incomes can be utilised for higher education for teenagers of both sexes to improve their life status.

Favourable policies are required to en-cash demographic dividends in Bangladesh. The demographic dividends are not automatic. To realise the dividends, Bangladesh will need educated, healthy and productive labour force. These partly depend on the policies of the government to build human capital, create a favourable environment for investment and encourage savings.

A high share of Working-age people (both male and female) is beneficial if only those people are employed. If they are unemployed, the outcome will likely be problematic. Women who are educated are more likely to work outside the home and, they are increasing the size of labour force and the potential for economic development. Enforcing policies that enable girls to go to school and equip them with skills to compete for higher-paying jobs is an important step toward gender equity that also fosters economic growth. Sound macroeconomic management is the critical issue. An economy that has persistently high inflation is unlikely to be able to take the best possible advantage of a large segment of working-age people.

However, demographic dividend depends on the policies the country chooses and on its political and economic relationships with rest of the world. The political leaders have to move fast to formulate education strategy and comprehensive financial plan to capture the once-in-lifetime opportunity.

Policy Recommendations:

a)    Arrangement for the Clustering ministries like Labour and expatriate Ministry (LEM), Ministry of Foreign Affairs (MOFA), Ministry of Finance (MoF), Ministry of Education (MoE), Ministry of Youth and Sports (MYS), Ministry of Home (MoH) are to be made in one cluster.  

b)    Ministry of Labour and expatriates will fix up target in exporting skilled human resources for the financial year. Respective Embassy/High Commission under the guidance of MOFA will assess the need of skilled labour in their specific jurisdictions. They will sit together with their foreign counterpart (G 2 G basis) for their assessment of demand of skilled and unskilled, agricultural, medical, technical, nurses and other sector specific labour forces.

c)     Ministry of Home will arrange quick passport delivery for the young people free from any kind of charges including any fees (aged between 18-30 years) from the outlet of Provost office of University Hall, Principal of a College, Head Master of a High School or even Manager of a local Bank, or a local nearby post office to receive passport application, process and deliver it to the student within 15 days from the date of application.  If the passport office wants to handle this huge arrangement, it may take much longer time to get a passport.

d)     Any other passport related work like extension of time, any valid application for information or data changes in the passport which may be needed with the passage of time, any corrections should be allowed to apply from the abroad online and that has to be done online and make available to the applicant within three working days.    

e)     Ministry of Education will need to sign a Memorandum of Understating (MoU) with the British Council, or TOEFL, GRE, or Pearson’s English testing centres or conducting authority in Bangladesh for an arrangement so that any Bangladeshi student, who desires to appear at their test examination centres, should be allowed to sit for the exam without any fees or charges. The government should prioritise to focus on global standard education to enable Bangladesh to compete in the international market.

f)    Ministry of Public Administration and the Ministry concerned for managing Private Sector employments need to issue a Circular that any Bangladeshi employee working in the public sectors or private sectors in Bangladesh is entitled and allowed to have a two years experience certificate from their supervisors or employers after having their said experiences on production of their application. Because for an application for skill migration, it is an important document.

g)     Police clearance certificate needs to be available online at a free of charges. After submission of application for police clearance certificate, within three working days it must be available online and downloadable and printable so that applicant does not need to visit Police Station in person.

    For that the Special Branch of Police Department should prepare a database of all students (aged between 18-30 years) well ahead of time from taking support from NID office or Election Commission within this year.

h)     Attestation of academic certificates by the officials of Ministry of Foreign Affairs must be decentralised. Now one single desk in the MOFA is assigned to do this. But for 106 million young people, MOFA should send one officer in each Divisional city to do that or they can delegate this kind of authority to the concerned Deputy Commissioners offices.  

i)    Ministry of Labor and the Ministry of Expatriate Welfare should be given a target each year for exporting Human Resources like agricultural labour, Labor for construction, cleaning, gardening, homework under G2 G basis. Again they can also explore agricultural labor under cost sharing basis or under PPP with different foreign countries.

j)    For easy incoming and outgoing movement from Bangladesh or into Bangladesh through the land, air and sea, ports should be redesigned so that Bangladeshi workers employed abroad can be treated as VIP for saluting their hard earned foreign currency. They should be given due respect during their departure and arrival in dealing with them by the Custom Officers or by Emigration police.

k)    A different VIP Lounge can be established for upholding their pride and respecting self-dignity and different immigration desks may be established to expedite their exit or entry.

l)     The government should take export strategy for agriculture products, capital goods, and raw materials so that the producers could get incentives for providing further employment in the country.

m)    Bangladesh government should expand the vocational training activities as well as the pre-departure orientation (PDO) program on technology and foreign language for the labour to be exported.

n)     To get the demographic dividend, policies should go beyond antipoverty programs to focus on childcare, transportation and removing legal restrictions on women’s work. Government need to formulate a proper strategy on agro-industrial linkages, increasing the crop productivity, increased access to agro-industries, providing agricultural credit, having access to advanced technology, developing the wastelands, development of biomass power and biofuels, which in turn can create bountiful opportunities and sustained generation of employment in home and abroad.

o)    Administrative changes and decentralisation, transparency in each department, anti-corruption strategies, and strategic assistance to multilateral organisations are some of the matters in which the government has to look deliberately to achieve demographic dividend.

p)    Financial inclusion of the young people must be ensured. Each and every student need an opportunity to open an account with their preferred bank branch even if there is no balance in their account.

q)    Commission for sending money can be made zero level, so that they can encourage sending their hard earned income through bank or formal channel.  Again the exchange rate (money conversion rate) should be kept as low as possible through a MoU with the counterpart state.

r)    The demographic dividend is not automatic. It is achieved only if the correct human resource policies are pursued. The dividend appears as an addition to the growth that could be expected by capital investment in infrastructure, improved technology, manufacturing plant, or by trade policy, market liberalisation etc. If the benefits of the first demographic dividend are attained, per capita income will rise and with more persons economically active, the savings rate will also increase and finally the GDP of the country will be double digit in a shortest possible time.  

The writer is secretary, Anti-Corruption Commission Bangladesh



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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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