Bangladesh economy witnessed a robust growth last fiscal and the trend will also continue to rise because of increased export and record remittance. This was disclosed in a report titled “Bangladesh Development Update October 2019: Tertiary Education and Job Skills” at a press conference at its Dhaka office on Thursday.
It mentioned remittance inflow has increased by 9.8 percent to reach a record $16.4 billion in FY19. Besides, the contribution of net export growth was positive, supported by a diversion of garment export orders from China and a decline in imports, the report said. Although, leather and leather product exports declined by 6 percent in the last fiscal, agricultural and pharmaceutical exports led non-RMG export growth, the World Bank study said.
Bangladesh's economy will continue to grow 7 plus during the FY20, thanks to the rising exports and record remittances. WB country director for Bangladesh and Bhutan Mercy Miyang Tembon said, “Bangladesh’s economy is projected to maintain strong growth backed by sound macroeconomic fundamentals and progress in structural reforms.”
She said, “To achieve its growth vision, Bangladesh will need a high-productivity economy. Human capital development that is responsive to labor market demand for higher-level skills and to rapid technological advancements will be crucial.” WB Senior Economist, and co-author of the report Bernard Haven said, “Labor market surveys repeatedly show that employers struggle to fill high-skill positions such as technicians and managers.”
He said, “To bridge the demand and supply gap, investments in skills training, equitable access for female and poor students, public funding mechanisms to develop market-relevant skills and an effective regulatory and accountability framework are needed.” World Bank former lead economist Dr Zahid Hussain warns about an uncertain global outlook and domestic risks in the financial sector.
Exchange rate appreciation is also a challenge for Bangladesh’s trade competitiveness, he said adding that, the exchange rate should not be controlled by the central bank, it is important to float the exchange rate on the basis of market demand. The depreciation of taka against US dollar will encourage expatriates to send more money home and help exporters to earn more money by fighting with global competitors, he mentioned.
The WB study said, net foreign direct investment (FDI) increased by 42.9 percent from a low baseline with investments in the power, food, and textile sectors. Private consumption grew by 5.4 percent, the report said adding that, private sector credit growth was weak and bank liquidity remains constrained.
It may be mentioned non-performing loans continued to rise in the banking sector. The WB study said Bangladesh needs to create quality jobs for about two million young people entering the labor force every year. To harness the benefits of this growing labor supply, investments in human capital are required, it said adding that, the country needs to invest significantly in teaching, learning and ICT facilities, among other areas, to create a competitive workforce.
Higher labor productivity will be essential to diversify the economy beyond garment exports and remittances, the report said. Growing sectors—such as export-oriented manufacturing, light engineering, shipbuilding, agribusiness, information and communication technology (ICT), and pharmaceuticals—will require skilled professionals in managerial, technical, and leadership positions, it informed. Tertiary graduates struggle to find jobs, indicating a major skills gap, the world bank report said adding that only 19 percent of college graduates are employed full-time or part-time.
At the tertiary level, more than a third of graduates remain unemployed one or two years after graduation, while unemployment rates of female graduates are even higher, it mentioned.
