The youth can set Bangladesh's destiny: But why can't we reap the benefits of the demographic dividend?

Infograph: TBS

Today's world is divided into two demographic landscapes: one characterised by a youthful population and the other by an ageing population. Bangladesh is a member of the young one. 

According to Bangladesh Bureau of Statistics (BBS) data for 2022, 75.3% of Bangladesh's population is 41 years or less.

With this vast majority of the population being youthful, the country's destiny somewhat lies in their hands. However, this blessed period of opportunity, referred to as demographic dividend, will not last forever. According to UNDP, it will continue till 2040.

The proportion of working-age people declined to 65.08% in 2023 from 66.58% in 2021, according to a BBS survey — representing a decline in the working population.

This can be understood as a population crisis – a young and underutilised population does not inspire much hope for the future. So what are the solutions?

We looked at some of the population trends from around the world which share similarities with our demography and challenges; and spoke to experts to understand what needs to be done to reap the benefits of a "young" population against an "ageing" population in some parts of the world.

Size matters 

The population crisis varies across countries worldwide. In some regions, the problem is low fertility rates and an ageing population, while in others, it is overpopulation. For instance, the headline "North Korea's Kim Jong Un urges women to have more children" from last year highlights the severity of the fertility rate crisis there. Countries like South Korea, Japan and Italy face low fertility rate issues.

However, Bangladesh has succeeded in birth control and become a role model to the world. The total fertility rate (TFR) was over six after independence but sharply fell to 2.15 in 2022. According to a World Bank report, the yearly population growth rate of Bangladesh was 3% during the 1970s, which reduced to 1.22% in 2022, as per the sixth census of Bangladesh.

Does this mean our population crisis is on the way to being resolved? The answer is no. It extends far beyond just controlling numbers.

Bangladesh's population problem lies in terms of overpopulation which is similar to China, India and the United States. However, its youth bulge challenge aligns with that of India and some African nations.

"India is making a big mistake believing the 'hype' around its strong economic growth since there are significant structural problems that need to be fixed for the country to meet its potential," Raghuram Rajan, former Governor of the Reserve Bank of India, told Bloomberg in March this year.

The statement applies to Bangladesh too. Despite massive infrastructure-based economic growth, we are missing out on human development.

The missing link: Human development 

A large youth population can drive economic growth if they are well-integrated into the labour market. But it requires significant job creation, education and training programmes to avoid high levels of youth NEET (not in employment, education or training).

However, the youth bulge or demographic dividend is sometimes over-glorified. A large working-age population is not necessarily an asset for the country unless they are skilled and employed. For Bangladesh, it is a challenge instead.

In his book titled "The World in 2050: How to Think about the Future," author Hamish McRae argues that India's relative youth is also its 'challenge' which applies to Bangladesh and Pakistan.

"How do you ensure that young people are adequately prepared for a world that requires people to be better educated and better trained— not just for the roles that exist now, but for those that have yet to be created?" McRae wrote.

Unfortunately, 41% of Bangladeshi youth, totalling about 12.9 million individuals, fall into the NEET category. And the situation for young females is even worse, with 62% being inactive.

Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, pointed out that the education system is failing to prepare young people for the job market. "Many graduates can't find jobs because their skills don't match what employers need. This has created a paradoxical problem," he said.

Another factor to consider is "brain drain." According to the Bangladesh Bureau of Educational Information and Statistics (BANBEIS), in 2021, around 45,000 Bangladeshi students went abroad for higher education. With so many people opting to leave the country, it contributes to the unemployment rate ie the departure of skilled or qualified Bangladeshis creates a vacuum in the country.

Bangladesh can follow Africa in utilising the youth. However, unlike Africa, we have a tight deadline ie we will enjoy the demographic dividend till 2040.

The World Bank estimates that one-third of the world's population—and the working-age population—will be African by 2075. It is the only region where the workforce will grow continuously in the coming decades. This is not lost to some of the leaders in the continent.

Last year, Africa's Heads of State gathered to discuss how to accelerate human capital accumulation, leverage the youth bulge and create jobs to propel economic growth. African youths are increasingly taking an active role in shaping their future.

In cities like Accra, Nairobi, Cairo and Benguerir, thriving start-up ecosystems are revolutionising African agriculture, industry, IT and sustainability.

The two backbones: Health and education 

Timely investments in the education and health sectors can increase productivity. But sadly, these two sectors receive low allocations in the national budget. The global standard suggests a 4-6% allocation for education as a percentage of GDP.

In our new FY2024-25 budget, it is just about 2%. Although the health budget has increased by 8.8%, it actually decreases when adjusted for inflation. For the past decade, the health sector budget has stayed around 5% of the national budget, which is far below the international standard of 15%.

"To reap the benefits, we have to invest in health. If you take a look at our budgetary allocation, you will see we invest very little in health; one of the lowest in South Asia. It is the same situation when it comes to education. Our policymakers need to invest more in these two sectors," Dr Mohammad Mainul Islam, Professor and Former Chairman of the Department of Population Sciences, University of Dhaka told The Business Standard.

In this era of digital revolution, the youth have unparalleled access to information and technology. The Bangladesh Telecommunication Regulatory Commission (BTRC) data shows a consecutive surge in the number of internet users in the country — reaching 131 million at the end of December 2023, including nearly 7 million new users in the last year.

However, the digital divide remains a significant issue separating our population. Rural communities are lagging significantly behind. Only 29.7% of households in rural areas have internet access at home, compared to 63.4% in urban areas.

Skilled workers can become our asset 

In April 2019, Japan established a new status of residence, "Specified Skilled Worker (SSW)", to welcome specialists from other countries to work in certain Japanese industrial fields. This was done to counter the declining working-age population in Japan.

It is not just Japan. Finland, Italy, the United Kingdom and even the United States are some of the developed countries who seek skilled migrants to fill the gap left by their ageing population.

"Some 75% of employers in 21 European countries could not find workers equipped with the right skills in 2023," reported Euro News. With the high demand for skilled workers in developed and ageing countries like those in Europe, we have the opportunity to send our labour force to these countries and gain even greater benefits.

This 'gap' in the developed world, which is experiencing an ageing population, opens a new avenue for our youth — if aptly skilled, they can fill this gap.

The Bangladesh government aims to become a high-middle-income country by 2031, which seems nearly impossible at this point. However, for rapid development, Bangladesh can follow in the footsteps of Singapore and South Korea.

South Korea's transformation from an underdeveloped nation to a developed, high-income country within a few generations is often regarded as miraculous. Key to its success were export-oriented policies, improvements in the business environment and policies that incentivized investment in innovation.

By addressing the challenges, we can extend the benefits of our youthful population beyond our borders. Remittances play a crucial role in driving Bangladesh's economic growth and development, but they are predominantly labour-based.

Considering all these issues at play, Bangladesh seems to be on a tightrope — it needs to take effective actions to utilise its demographic dividend before time runs out.