Unemployment soars over investment dearth
Courtesy New Age 4/12/09 Shakhawat Hossain
Unemployment is soaring because of continuous fall in private investment and sluggish trend of public investment, hindering the entry of new industries in the country's productive sectors that could absorb eligible job seekers.
The inflow of foreign direct investment dropped by 37 per cent in the first two months of the current fiscal over the same period of the last fiscal.
Public investment also went below target and the commercial banks are sitting on a pile of idle money worth about Tk 25,000 crore because of little demand for funds by the private investors.
Experts and chamber bodies termed the situation grave and contrary to the employment generation scopes when some 2.7 million young people are becoming eligible for jobs every passing year although only 0.7 million of them can be absorbed.
The labour and employment minister, Khandaker Mosharraf Hossain, told New Age such observation did not reflect the actual picture of the country's employment situation.
He pointed out that the present government had focused on the agriculture sector, which still employed a half of the country's workforce.
Mosharraf, however, said private sector investors were less interested in setting up industries because of uncertainty caused by the global financial crisis.
Experts suggested for quick and short term measures to address the problematic issue as the county's unemployment rate doubled to 3.7 per cent in recent years compared to 1.9 per cent in the 1900s.
International Labour Organisation (ILO) in a study last year pointed out that
It apprehended that the number of unemployed would hit 60 million in 2015 unless new investments were made to absorb additional manpower.
The issue is turning out to be a major cause of concern for the present government which failed to arrest the dwindling trend of investment in the industrial and infrastructure sectors in the last one year.
Unless quick and immediate short term measures are taken, the already high unemployment rate would go up further and would destabilise macroeconomic indicators and create social problems, experts pointed out.
The country's oldest chamber body—the Metropolitan Chamber of Commerce and Industry—in its quarterly review on Thursday said unemployment has surged with no increase in real sector production because of investment dearth.
The problem is serious enough to threaten the short and medium term growth of the economy, it noted.
Because of lower than expected growth in export and low contribution from the manufacturing sector, the country's gross domestic product grew 5.8 per cent in the last fiscal year, lowest in last several years.
Bangladesh Institute of Development Studies executive director, MK Mujeri, told New Age that many plans including the much-vaunted public-private-partnership and improvement of public investment scenario of the present government still stumbled at the planning stage.
He suggested for removing of the existing bottlenecks to give impetus to the public investment which is key for encouraging the private investment.
Finance minister AMA Muhith observed in his budget speech that the country needed $28 billion investment by 2014. He pointed out that the investment was needed to develop infrastructure like power and energy, and ports and transportation to help attain 8 per cent growth.
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