Demographic dividend: seize the opportunity
Faruque Hassan |
July 10, 2021, 8:30 p.m.
The ready-to-wear industry is a unique industry in Bangladesh to play a central role in using the dividend for the greater benefit and prosperity of our nation and our economy, it is viewed and managed – as a burden or a resource. This rightly applies to Bangladesh as the country is going through a golden age in terms of a demographic dividend. In this year 2021, we celebrated 50 years of independence, which is a source of great pride for us. As a young nation, we have a number of achievements that make us proud, and our economic progress over the past 10 years has made Bangladesh a development surprise to the world. We have been able to consistently maintain GDP growth above 8% over the past few years, before Covid-19 hit the world. As in previous years, it can be expected that manufacturing industries will also be at the forefront of growth in the years to come.
Population and demographics are essential for the livelihood of labor-intensive industries like RMG. Among all other resources such as infrastructure, water and energy, human resources are the most critical resource on which the economy of Bangladesh has thrived so far. The basis of export-oriented manufacturing industries is the human resource, and it will remain our main force to accelerate economic development in the years to come.
We live in the age of the demographic dividend. Out of 163 million people, approximately 63.2 million are part of our workforce. And each year, around 2 million people join this workforce. It portrays the image of a young and energetic nation, which is essentially a key comparative advantage and a force for the future of manufacturing-led industrialization. This is particularly the case for the RMG industry which directly employs 4.4 million workers and indirectly about 10 million workers, who contribute to earn $ 34 billion through exports.
Based on the current industrial portfolio and taking into account the extent of sector diversification, the vision of higher growth would require more people in this sector and, above all, would require efficient, versatile and technological adaptation.
Now, given that we live in an era of demographic dividend, this won’t last forever. According to the United Nations, the era of the demographic dividend began in Bangladesh in 1978 and will begin to slow down in 2033, so we have already passed 78% of our demographic window of opportunity. This means that the availability of a younger population will start to decline from 2033, so we have 12 years to use this window of opportunity before our population begins to age. Let me add here that according to a recent Asian Development Center (ACD) survey report, the average age of garment workers is 25.9 years old, so a change in the profile age of workers will be inevitable over the next 15 years.
As we plan our investments in advance, government and private sector need to prioritize the skills development agenda and strategize for capacity building initiatives.
A general assessment is that so far we have not been able to make adequate use of our demographics. 29.8 percent of our youth are not in education, employment or training (NEET). On top of that, Covid-19 has brought an unprecedented challenge to our economy. In the past year and a half, there has been almost no new investment and no new jobs in the industry. However, as we try to cope and cope with the damage caused by the pandemic, we must address the root cause of our inability to properly use the demographic dividend and how best to make the most of the time remaining. . In my opinion, there are few gaps that need to be filled in the first place. These include: (i) lack of market-driven skills training, (ii) skill levels produced by different initiatives do not largely match industry requirements, (iii) technical and vocational education has not been popularized so far, (iv) the lack of in-company training, and (v) the lack of links between universities and industry.
We need to take these macroeconomic issues into account while planning for future investments in the manufacturing sector. In addition, we need fiscal and non-fiscal interventions from governments to encourage business-based training. In addition, we need to focus on the fourth industrial revolutions, technological upgrading and future skills building which will add more value and efficiency to the industry.
To achieve this, we need a skilled and efficient workforce in manufacturing sectors. To train our human resources, together with government, we all need to work within our capabilities and take outbound initiatives to train people in different skill categories. In this case, we can follow the pattern of countries like China, Vietnam, South Korea and Thailand, which have taken their growth and standard of living to a new high through effective use of the demographic dividend.
Not only workers, but we lack appropriate professional skills in mid-level management. Every year our educational institutions produce a good number of graduates, but they lack a certain professionalism and certain skills. In addition to preparing professionals, we also believe that raising awareness and awareness among entrepreneurs and senior management will also be helpful in synchronizing with contemporary management philosophy and global developments.
BGMEA has established the Innovation Center where management training will be provided to mid-level professionals and there will be occasional sessions for senior management. Retraining programs would include business, finance, market development, management processes and marketing to inspire senior management, while technicians would be trained in different categories such as innovation, business improvement efficiency, virtual model creation, 3D design, environmental sustainability, worker relationship management, grievance management, worker welfare, occupational safety and health and leadership development.
The ready-to-wear industry is an industry unique to Bangladesh to play a pivotal role in using the dividend for the greater benefit and prosperity of our nation and our economy. Because we still only have 6.8% of the global apparel market and we have huge growth potential. We have the people, but not the right skills and the efficiency. Proper use of demographics through upgrading skills could only accelerate our path to economic development.
Faruque Hassan is president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). [email protected]