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Bangladesh Looking Beyond Garments Employment Diagnostic Study BANGLADESH LOOKING BEYOND GARMENTS EMPLOYMENT DIAGNOSTIC STUDY BANGLADESH LOOKING BEYOND GARMENTS EMPLOYMENT DIAGNOSTIC STUDY Co-publication of the Asian Development Bank and the International Labour Organization, Regional Office for Labour and the Pacific. Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) © 2016 Asian Development Bank and International Labour Organization Asian Development Bank International Labour Organization 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines 4 route des Morillons, 1211 Geneva 22, Switzerland Tel +632 632 4444; Fax +632 636 2444 Tel +41 (0)22 799 6111; Fax +41 (0) 22 798 8685 www.adb.org; openaccess.adb.org www.ilo.org Some rights reserved. Published in 2016. Printed in the Philippines. ISBN 978-92-9257-561-8 (Print), 978-92-9257-562-5 (e-ISBN) Publication Stock No. RPT168372-2 Cataloging-In-Publication Data Asian Development Bank and International Labour Organization.. Bangladesh: Looking beyond garments. Mandaluyong City, Philippines: Asian Development Bank and International Labour Organization, 2016. 1. Economic development. 2. Employment diagnostics. 3. Bangladesh. I. Asian Development Bank and International Labour Organization. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank or its Board of Governors or the Secretariat of the United Nations or the International Labour Organization or the governments they represent. ADB and ILO does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB and ILO in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB and ILO does not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. This CC license does not apply to non-ADB and non-ILO copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB and ILO cannot be held liable for any claims that arise as a result of your use of the material. Attribution—You should always acknowledge ADB and ILO as the source using the following format: Author. Year of publication. Title of the material. © Asian Development Bank and International Labour Organization. [license]. Translations—Any translations you create should carry the following disclaimer: Originally published by ADB and ILO in English under the title [title in italics]. © ADB. [URL or DOI] [license]. The quality of the translation and its coherence with the original text is the sole responsibility of the translator. The English original of this work is the only official version. Adaptations—Any adaptations you create should carry the following disclaimer: This is an adaptation of an original work titled [title in italics]. © ADB. [URL or DOI][license]. The views expressed here are those of the authors and do not necessarily reflect the views and policies of ADB or its Board of Governors or the Secretariat of the United Nations or the International Labour Organization or the governments they represent. ADB and ILO does not endorse this work or guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. Please contact [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. For permission to use the ILO logo, please contact [email protected]. Notes: In this publication, “$” refers to US dollars. ADB recognizes “Korea” as the Republic of Korea. Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda Foreword Bangladesh has enjoyed robust growth since the early 2000s—consistently greater than 6%—exceeding trends in other similar developing countries. Yet, the impact on employment has been less positive. Instead, the economy is still beset by underemployment, widespread informal employment, low productivity and earnings, and poor working conditions. Taken together these factors, limit the impact that strong growth has had on poverty reduction. Indeed, the proportion of workers employed in the informal sector—where high underemployment, low earnings, and poor working conditions are common—actually rose to 87.1% in 2013, from 78.4% in 2005–2006, where they experience high underemployment, low earnings, and poor working conditions. Meanwhile, gender disparities persist and compound the situation. While increasing employment opportunities alone benefits the poor, the nature and the challenges of the present employment situation need to be carefully examined. In addition, it is essential to shift workers to more highly productive sectors through structural economic transformation. To address the challenges, this study argues for still stronger growth with more rapid industrialization. It stresses the need for substantial diversification of production and employment within the manufacturing and agriculture sectors. It examines the ongoing need for significant numbers of Bangladeshi workers to continue finding employment overseas. It also underscores the importance of upgrading education and skills so that people can be productively employed at home. Key challenges include raising the quality of all levels of education, increasing enrollment in technical and vocational education and training, and addressing the issue of skills mismatch. A team from the Economic Research and Regional Cooperation Department of the Asian Development Bank (ADB) of the Asian Development Bank (ADB) under the supervision of Cyn-Young Park, and later Edimon Ginting, director, Economic Analysis and Operational Support Division conducted the study, in collaboration with the International Labour Organization (ILO), under the supervision of Panudda Boonpala, director, ILO Decent Work Team and ILO Country Office, New Delhi. The team consisted of Sakiko Tanaka, Valerie Mercer-Blackman, and Lilibeth Poot from ADB; Sher Verick and Catherine Saget from the ILO; and experts including Rizwanul Islam (Lead Consultant), Ronald Miller, Sewin Chan, and Selim Raihan. Sunhwa Lee, Tania Rajadel, Rudi Van Dael from ADB; Manas Bhattacharya, Gabriel Bordado, Paul Comyn, T.I.M. Nurunnabi Khan, Rossana Merola, and Seeta Sharma from the ILO, Laurent Bossavie, Yoonyoung Cho, Simon Davies, Thomas Farole, and Manjula Luthria from the World Bank provided useful inputs and valuable comments in the report’s finalization. Research assistance was provided by Megan Thomas, with additional support provided by Regina Baroma and Maricor Muzones. The report was edited by Eric Van Zant and proofreading was done by Tuesday Soriano. Michael Cortes did the layout, cover design, and typesetting. Ricasol Cruz-Calaluan, Gee-Ann Burac, and Maria Carmela Teves provided administrative support. iii Foreword We would also like to acknowledge the excellent support provided by the ADB Bangladesh Resident Mission led by Kazuhiko Higuchi, country director, in facilitating dialogue and collaboration with the government. Md. Golam Mortaza and Barun Dey of the resident mission provided tremendous support in the conduct of the study. We would especially like to acknowledge the collaboration with the ILO Country Office for Bangladesh led by Srinivas Reddy, director, ILO Country Office, Dhaka. As part of its preparation, the study team conducted a number of ADB–ILO missions (from November 2014 to May 2016) and undertook a series of consultations with key stakeholders, including government, employers’ and workers’ organizations, leading academicians, and development partners on the study framework, approach, and findings. Through the consultations a number of key employment challenges were identified and later became the thematic areas the study covered, including (i) diversification of the economy, (ii) skills development, (iii) women at work, and, after later consultation, (iv) overseas employment. Feedback from the different sectors greatly benefited the report, and enhanced its relevance and applicability to the development needs of the country. The study team would also like to thank the Government of Bangladesh for its invaluable support, without which this study would not have been possible. In particular, we are grateful for the excellent collaboration and insights from the Ministry of Finance Economic Relations Division, Ministry of Labour and Employment, Ministry of Expatriates’ Welfare and Overseas Employment, Ministry of Education, Bangladesh Bureau of Statistics, National Skills Development Council, and employers’ and workers’ organizations. Shang-Jin Wei Tomoko Nishimoto Chief Economist and Director General Assistant Director-General and Economic Research and Regional Cooperation Department Regional Director for Asia and the Pacific Asian Development Bank International Labour Organization iv Contents
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