Covid-19 leaving 20m youth labour force in the lurch: Sanem

Tougher times lie ahead for youths entering the job market after completing their education, with the fate of 20 million young workers in various sectors across the country hanging in balance amid the Covid-19 pandemic.

Even those yet to leave their academic careers behind have much to be concerned about, as 53 percent of the employed youth population in Bangladesh will fall below the poverty line due to income shocks caused by the novel coronavirus.

The South Asian Network on Economic Modeling (Sanem) came forth with these revelations in their recent study. Sanem and ActionAid Bangladesh jointly presented the findings on Saturday at a virtual seminar, titled "Development of Young People: Reflection of Proposed Budget FY2020-21."

According to the study, assuming a 25 percent income shock due to the pandemic, 48 percent of the youth population will fall below the poverty line.

Besides, 89 percent of employed youths engaged in the informal sector are facing the highest risk of job loss. Young workers will also become permanently unemployed or underemployed due to factory closures and reduced production. 

The study further revealed that Bangladesh's 20 million youth labour force is currently at risk of permanent wage moderations or no income. 

Youths working in the ICT sector (such as freelancing jobs) are expected to experience long-term income losses, while young workers involved with SMEs (agriculture, handicrafts, light engineering industry) will be hit the hardest by the pandemic shock. 

Under these circumstances, experts present at the virtual seminar stated that it is imperative to ensure training, ease the process of getting loans, and increase budget allocation to help create more entrepreneurs.

They also spoke in favour of forming a "Youth Council"– led by the Prime Minister's Office and comprising 22 officials from the relevant ministries – to supervise this process.

Addressing the event as special guest, former governor of the Bangladesh Bank Dr Atiur Rahman said, "At first, we must reform the health sector. Unless we free ourselves from the coronavirus, the youths will not come forward to become entrepreneurs.

"However, there are opportunities for the young to become health sector entrepreneurs by producing masks and other products to fight the pandemic."

He continued, "Brac – a non-government development organisation –has involved lakhs of youths in the healthcare sector amid the pandemic. So, there is an opportunity to employ youths in the 14,000 community clinics across the country."

Dr Atiur Rahman added that alongside the incentive package, the government has allocated Tk2,000 crore more to create entrepreneurs from among youths who returned from abroad amid the pandemic. 

He further pointed out, "The process needs institutional reform. The Ministry of Youth and Sports can take this responsibility. These expatriates must be trained and then attached to the Karmasangsthan Bank or any other banks to get support and training. 

"New schemes must be introduced to ease the process of granting loans to small entrepreneurs."

Sanem's Executive Director Selim Raihan said, "We are unable to utilise our demographic dividend, but do our policy makers understand this? We will not be able to benefit from the demographic dividend unless more allocations are made in the health and education sectors.

"The government had emphasised the issue in the sixth and seventh five-year plans, but did not provide adequate allocations."

Selim Raihan continued, "Policy makers believe that they are receiving the benefits of the demographic dividend in two sectors –readymade garments and remittance –and that is enough. And so they do not feel the need to utilise the youth population in any other sectors.

"Opportunities provided by the demographic dividend are nearing an end, but we are still not utilizing them fully."

Addressing the web seminar as the chief guest, Nahim Razzaq, lawmaker for Shariatpur-3 constituency, said, "The government is moving forward with a strategy geared to boosting youth development by increasing institutional capacity.

"Entrepreneurs engaged in economic diversification should get proper support."

The lawmaker continued, "There are no accurate data regarding people newly falling below the poverty line. We need to identify them. If a 'Youth Development Council' is formed, it would be easier for the 22 ministries concerned to supervise the process.

"However, we must bring institutional reform to the youth development sector, or it will be difficult to achieve this goal.

Sanem's Research Director Dr Sayema  Haque Bidisha, who is a professor at the Department of Economics of the University of Dhaka, moderated the programme.

Dr Sayema commented, "Serious reform is needed in the education and vocational system to turn youths into entrepreneurs. Without such steps, we will not be able to take advantage of the demographic dividend."

Chairing the programme, ActionAid Bangladesh Country Director Farah Kabir said, "The coronavirus has put everyone in a difficult situation regarding their lives and livelihoods. It will be difficult to recover the country's economy even in the next six months.

"We need a 'Youth Council' to tackle the situation. The education system must be reformed. Alongside with institutional reform, the curriculum must be changed accordingly. I am urging students and youths to work on new innovations."

Sanem's Research Fellow Mahtab Uddin, a lecturer in the Department of Economics, said, "The hardest hit sectors amid the Covid-19 pandemic are education and employment. 

"In the budget for the fiscal year 2019-20, the government had allocated Tk100 crore for job creation, but this is missing in the proposed budget for this year. I think credit flow in the SME sector should be increased further."

Nazmul Ahsan, ActionAid's Manager for Young People, pointed out that the budget for the fiscal year 2020-21 allocated only 0.05 percent to cover 50 million young people in Bangladesh.

Sanem's Research Associate Eshrat Sharmin presented the keynote paper at the web seminar.