Job creation: How much FY24 budget will do

The budget speech, which was presented in the parliament on Thursday, mentioned the word "employment" 64 times and "job" 12 times. The two terms were mostly used in association with other issues, while only a few references were about addressing job crisis.

The key measures for employment generation include a special allocation of Tk100 crore for research and innovation, exploring new destinations for overseas employment, continuing skills development programmes and so on.

Are they enough? What do stakeholders and analysts say?

"The issue of employment generation was not reflected properly in this year's budget. There were no major initiatives for the unemployed, especially graduates. We just heard about the continuation of old initiatives. This is not enough at all," said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue.

The government had the opportunity to fight inflation through rapid employment generation, but it did not happen, he told TBS.

The number of unemployed individuals in Bangladesh increased to 2.59 million in the first quarter of 2023, up from 2.32 million in the last quarter of 2022, says a Labour Force Survey released by the Bangladesh Bureau of Statistics (BBS) last month. The survey showed that the unemployment rate is currently 3.51%.

Out of an estimated 144.7 million people in the country's labour force, 73.6 million are employed in blue-collar jobs, while 71.1 million are in white-collar ones, it added.

"I think the discussion about employment generation was not so strong in the budget speech. These were some wishful thoughts only," said Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem).

"The announcements about employment in the budget is neither new nor impressive," he told The Business Standard and noted that challenges of job creation will continue until the country's economy gets proper shape.

"Growth in employment in Bangladesh depends on the private sector where I cannot be very optimistic. The budget expected a rapid surge in investment in the private sector but it did not explain how the dramatic progress will happen over the next year," he said, adding that the major financing to the private sector comes from banks.

"As the government wants larger amounts of loans from the banking sector, there would be lower private sector credits," he added.

The government estimated that private sector investment will increase to 27.4% of GDP in FY24 while it remains at 21.8% in FY23, meaning that additional Tk4,04,097 crore or 41.8% growth is required in private investment.

"Is the private investment figure estimated residually only to match a higher economic growth?" CPD asked in its budget review. It also said similar to the previous fiscal years, important projects like industrial park establishment and economic zones, which have the potential to generate direct employment, lacked adequate funding in FY24.

Besides, the conditionality imposed by the IMF to increase revenue generation has exerted pressure on the removal of tax incentives from the private sector which could potentially result in reduced job creation, it added.

According to the budget documents, allocations to ministries which mostly work for job creation and skill development have decreased significantly in FY24. Of them, the budgetary allocation to the employment ministry fell by 24% compared to the revised budget for FY23, while that to the youth ministry dropped by 22% and the industries ministry by 32%, according to the budget documents. Only the overseas employment ministry saw a 39% increase in budget allocation.

"We expected major initiatives for job creation and increased allocations for skill development in the budget, but it did not happen," said Shams Mahmud, former president of the DCCI.

"Only Tk100 crore for IT skill development is new while all other things are just to continue existing efforts. I say this is just to show off," he told TBS and added that even the government could come up with ideas for preparing the workforce for under-construction economic zones but it also missed out.

"Even no mentionable support came for boosting small entrepreneurship," he added.

Nurul Islam, former director (Training) of the Bureau of Manpower, Employment and Training believes that coordinated efforts from every level of the government is more important than allocations for job creation.

"We have to be more proactive to capture the international market. Actually the budget is available if you want but the initiative is less."

Ali Haider Chowdhury, secretary general of the Bangladesh Association of International Recruiting Agencies (Baira) told TBS that the country has the scope to reduce unemployment faster with skill development and overseas employment.  "We need experienced people for overseas employment. Training is required. The manpower being produced from Bangladesh is not able to meet the demand of the international market. Skilled people are needed all over the world but we are not working accordingly," he added.

According to the budget speech, during the last decade and a half, the Awami League government created 2,35,00,000 fresh jobs. In 2023, the total number of jobs was estimated to be 7,11,00,000.

"Employment opportunities for 20 lakh people have been created in the IT, freelancing, software and hardware industry, BPO, e-commerce, ride-sharing, fintech, edu-tech, and internet services sectors. The number of these people will be increased to 30 lakh by 2025," Finance Minister AHM Mustafa Kamal said.