GDP growth stagnant: No new job opportunity20 June 2014 Kazi Zahidul Hasan
As the economy is battling to expand over the last few years from investment crunch, it is ultimately leaving a dire impact on job creation and poverty reduction, experts said.
About 1.8 million people join the labour market annually and creation of employment opportunity to absorb the additional labour force becomes a tough task for the government.
The GDP growth remained stagnant with 6.0 per cent for the last five years as a result of sluggish investment, they said.
"Bangladesh economy remains stagnant and it is not expanding in line with the Sixth Five Year Plan, which targets a higher economic growth of over 7.0 per cent per annum. The main cause of the sluggish growth is lack of investment," noted economist and former Bangladesh Bank (BB) Governor Dr Salehuddin Ahmed told The New Nation yesterday.
The present growth trend is not supportive to absorb the additional unemployment population, he said adding investment should be diverted to the productive sectors like labour intensive export industries and SMEs. Furthermore, steps should be taken to create easy access to finance to the SMEs, the most potential sector for creating employment opportunity.
However, he said, thousands of new jobs could be created easily if we can nourish the SME sector along with women entrepreneurs.
The government should come forward to invest more on developing human capital he said. Besides, emphasis should be given on skilled development programmes so that we can create technical and market-oriented workforce to feed the industries, he said.
"Now we have been hiring technical people from India and Sri Lanka to run textile and garments industries If we can develop technical people here it could create job opportunity for the locals," he said.
The proposed budget for the fiscal 2014-15 did not allocate adequate fund for skill development programmes and due to lack of funding support it would be difficult to create highly skilled people to support the industries, he observed.
When asked, he said, if we fail to provide jobs to the unemployed youths it could leave a negative impact on the economy. It would also create social problem and hamper the government's aspiration of rapid poverty reduction, he said.
He further said that factors like political uncertainty, infrastructure deficiency and gas and electricity crisis are standing on way to attract investment.
"Economic expansion largely depends on adequate investment," said former adviser to caretaker government Dr AB Mirza Azizul Islam.
He said, both the growth of the economy and investment remained stagnant for the last five years posing a big challenge for the government to create job opportunity as well as poverty reduction.
The Finance Minister AMA Muhith has proposed a 16 per cent increase in public spending from the previous budget. But, in my mind, the proposed public spending set for the next fiscal may not help much in attaining the 7.3 per cent growth, he added.
The proportion of investment in the GDP is now hovering at 28.7 per cent and if we want to expand the economy at 7.3 per cent the overall investment needs to be accelerated to 34.03 per cent.
If we look into the present rate of the investment, it is remaining well below the required level. So, the task to enhance the rate of investment under the present socioeconomic perspective would be a great challenge for the government, he said.
When asked, he said, investors' sentiment remained subdued due to prevailing uncertainty in the country's political arena and infrastructure bottleneck. "Investors have taken wait and see policy under the prevailing situation, which is undermining the growth prospect and job creation," he noted.
Stability in the country's political arena and good governance could help regain the confidence of the investors. Once investment climate could be improved, it would help accelerate investment, and later it could help expand the economy by creating more jobs, said Mirza Azizul Islam.