By building on successful international strategies and investing in the employability of young people at home, Bangladesh’s unemployment problem can become an opportunity for innovation and growth.

Strong economic growth, attraction of foreign investment and industrial development are essential pillars of national progress. Without a skilled and fully engaged workforce, these advances risk failing to reach their potential.

Closing this gap highlights the urgent need for targeted workforce development, including through skills training closely aligned with industry requirements. Such alignment would help workers improve their employability and directly contribute to sustainable economic growth.

Why it’s more important now to tackle this ’employability’ gap

Despite its economic progress, Bangladesh continues to face rising unemployment. The unemployment rate rose to 3.51% from 3.27% at the end of 2023, adding around 240,000 people to the pool of unemployed and bringing the total to 2.59 million.

This increase disproportionately affects educated young people and women, revealing deeper structural problems in the labor market that economic growth alone cannot solve.

The post-Covid pandemic recovery has been uneven, with many industries still struggling to return to pre-pandemic levels. Around 61% of the workforce, particularly in the informal sector, lost their jobs during the pandemic.

Although some recovery has occurred, job creation in key areas like agriculture and services remains slow. This slow recovery in these sectors limits employment opportunities, especially for those who rely on these industries for their work.

Global factors such as the war between Russia and Ukraine have further complicated the employment landscape in Bangladesh by disrupting industrial production, thereby exacerbating the employment crisis. These disruptions have particularly affected the agriculture and services sectors, which are the main sources of employment for a large part of Bangladesh’s workforce.

The intertwined effects of pandemic recovery challenges and global tensions are putting significant pressure on employment prospects in these sectors.

Youth unemployment is emerging as a pressing problem, with 15.7% of young people unemployed in 2023. Nearly 30% of people aged 15 to 29 are NEET (not in education, employment or training), which represents a substantial missed opportunity for economic growth. .

Among educated youth, women face even greater obstacles, with an unemployment rate of 24.62% in 2023, significantly higher than that of men. Women’s labor force participation remains disproportionately low, with an unemployment rate of 7.5% in 2023, much higher than that of men.

This gender gap in employment highlights the need for employment opportunities that are better matched to the qualifications of young people. And at the same time, it highlights the need for initiatives designed to empower women to enter and remain active in the workforce.

Without harnessing the potential of women in the economy, Bangladesh’s economic aspirations will remain limited. It is therefore crucial to address these gender disparities to promote inclusive and sustainable growth.

Leave or stay?

The previous administration set an ambitious goal for 2024: creating 1.52 million jobs domestically and sending 610,000 workers overseas.

Although overseas employment opportunities have increased significantly, particularly in Malaysia and the Middle East, domestic job creation has struggled, particularly among small and medium enterprises (SMEs).

Investment constraints and infrastructure challenges continue to hamper the growth of SMEs, which are essential for strong job creation and economic diversification.

Expanding overseas employment offers short-term relief, but aligning domestic skills with global labor market demands will help ensure that Bangladeshi workers remain internationally competitive.

In fact, sustainable development relies on strengthening the national labor market.

The caretaker government should prioritize creating an enabling environment for SMEs, as these businesses are key to job creation and provide long-term stability to the economy. A targeted approach to SME growth will be essential to foster economic resilience and reduce dependence on foreign labor markets.

Ways forward

Many countries have successfully tackled youth unemployment by aligning education with market demands and promoting entrepreneurship. Germany, for example, implemented the dual education system, which combines classroom learning with practical work experience, thereby reducing the skills gap and leading to low youth unemployment.

Similarly, South Korea’s investments in job training and technological innovation have produced a highly skilled workforce that has fueled its rapid economic growth.

Singapore’s Startup SG initiative, which provides financial support and mentoring to fledgling businesses, is another model that has fostered a vibrant startup ecosystem and boosted youth employment.

These global examples provide valuable insights to Bangladesh as it strives to engage its youth and combat unemployment.

By building on these successful international strategies, Bangladesh can turn the problem of unemployment into an opportunity for innovation and growth.

The interim government, which is currently considering educational reforms, must prioritize vocational training aligned with the demands of modern industry. A curriculum rooted in practical, real-world experience will ensure graduates are work-ready and well-prepared for changing workforce demands.

Investing in skills development, especially among youth, is essential to combat rising unemployment rates and ensure Bangladesh’s competitiveness in the global economy.

High-growth sectors like technology, renewable energy and digital services hold considerable potential for job creation, making them ideal areas for workforce training. Focusing on professional skills in these areas can give Bangladesh’s youth the expertise needed to thrive in a changing economic landscape.

In addition, supporting youth entrepreneurship will allow them to create jobs not only for themselves but also for others, thus promoting an autonomous economic model.

The caretaker government should also prioritize supporting entrepreneurship by providing financial incentives and mentoring programs, especially for startups in technology-driven fields. Startups play a crucial role in driving innovation and job creation while building economic resilience.

The focus should be on reforming the education system to prioritize vocational training, help industries create domestic jobs, and promote entrepreneurship as a viable career path.

If Bangladesh effectively engages its youth in the workforce, the country will be well placed to achieve sustainable economic growth.

Sketch: SCT

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Sketch: SCT