From crisis to opportunity: Tackling unemployment in Bangladesh
By drawing from successful international strategies and investing in youth’s employability at home, Bangladesh’s unemployment challenge can become an opportunity for innovation and growth
Strong economic growth, foreign investment attraction and industrial development are essential pillars of national progress. When a lack of a skilled and fully engaged workforce exists, these advancements risk falling short of their potential.
Addressing this gap highlights the urgent need for targeted workforce development, particularly through vocational training that aligns closely with industry requirements. Such alignment would help workers enhance their employability and directly contribute to sustainable economic growth.
Why it's more important now to tackle this 'employability' gap
Despite its economic strides, Bangladesh continues to struggle with rising unemployment. The unemployment rate rose to 3.51% from 3.27% at the end of 2023, adding approximately 240,000 individuals to the pool of unemployed and bringing the total to 2.59 million.
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This increase disproportionately affects educated youth and women, revealing deeper structural issues in the labour market that economic growth alone cannot resolve.
The post-Covid pandemic recovery has been uneven, with many industries still struggling to return to pre-pandemic levels. Approximately 61% of the workforce, particularly in the informal sector, lost their jobs during the pandemic.
While some recovery has occurred, job creation in key areas like agriculture and services remains slow. This sluggish recovery in these sectors limits employment opportunities, particularly for those relying on these industries for work.
Global factors such as the Russia-Ukraine war have further complicated Bangladesh's employment landscape by disrupting industrial output, exacerbating the job crisis. These disruptions have particularly impacted the agricultural and service sectors, which serve as primary employment sources for a large portion of Bangladesh's workforce.
The intertwined effects of pandemic recovery challenges and global tensions place significant pressure on employment prospects in these sectors.
Youth unemployment stands out as a pressing issue, with 15.7% of young people unemployed in 2023. Nearly 30% of individuals aged 15-29 fall under NEET (not in education, employment, or training), representing a substantial missed opportunity for economic growth.
Among educated youth, women face even more severe barriers, with a 2023 unemployment rate of 24.62% – markedly higher than that of men. Female workforce participation remains disproportionately low, with a 7.5% unemployment rate in 2023, far higher than that of men.
This gender gap in employment highlights a need for employment opportunities better aligned with young people's qualifications. And at the same time, points to the necessity of initiatives designed to empower women to both enter and remain active in the workforce.
Without leveraging the potential of women in the economy, Bangladesh's economic aspirations will remain constrained. Thus, addressing these gender disparities is crucial to promote inclusive, sustainable growth.
Leaving or staying?
The previous administration set an ambitious target for 2024: to create 1.52 million jobs domestically and send 610,000 workers abroad.
While there has been a marked rise in overseas job opportunities—particularly in Malaysia and the Middle East—domestic job creation has struggled, especially among small and medium enterprises (SMEs).
Investment constraints and infrastructure challenges continue to hinder the growth of SMEs, which are essential for robust employment generation and economic diversification.
Expanding overseas employment offers short-term relief but aligning domestic skills with global labour market demands will help ensure that Bangladeshi workers remain competitive internationally.
In fact, sustainable development relies on strengthening the domestic labour market.
The interim government should prioritise fostering a supportive environment for SMEs, as these enterprises are vital to job creation and offer long-term stability for the economy. A targeted approach to SME growth will be essential to drive economic resilience and reduce reliance on overseas labour markets.
Ways forward
Many countries have effectively tackled youth unemployment by aligning education with market demands and promoting entrepreneurship. Germany, for instance, has implemented the Dual Education System, which blends classroom learning with practical work experience, reducing the skills gap and resulting in low youth unemployment.
Similarly, South Korea's investments in vocational training and technology innovation have cultivated a highly skilled workforce that has driven its rapid economic growth.
Singapore's Startup SG initiative, which provides financial support and mentorship to budding businesses, is another model that has fostered a dynamic startup ecosystem and boosted youth employment.
These global examples provide valuable insights for Bangladesh as it works to engage its youth and address unemployment.
By drawing from these successful international strategies, Bangladesh can transform its unemployment challenge into an opportunity for innovation and growth.
The interim government, currently weighing educational reforms, must prioritise vocational training aligned with modern industry requirements. A curriculum rooted in practical, hands-on experience will ensure graduates are job-ready and well-prepared for the evolving workforce demands.
Investing in skill development, especially for the youth, is critical to addressing the rising unemployment rate and securing Bangladesh's competitiveness in the global economy.
High-growth sectors like technology, renewable energy, and digital services hold substantial potential for job creation, making them ideal areas for workforce training. Emphasising vocational skills in these fields can empower Bangladesh's youth with the expertise needed to thrive in a shifting economic landscape.
Moreover, supporting youth entrepreneurship will enable young people to create employment not only for themselves but also for others, fostering a self-sustaining economic model.
The interim government must also prioritise supporting entrepreneurship by providing financial incentives and mentorship programs, particularly for startups in technology-driven fields. Startups play a crucial role in driving innovation and job creation while enhancing economic resilience.
The focus must be on reforming the education system to prioritise vocational training, supporting industries to create domestic jobs, and promoting entrepreneurship as a viable career path.
If Bangladesh effectively engages its youth in the workforce, the country will be well-positioned to achieve sustainable economic growth.
Siamul Huq Rabbany is a development professional.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
