The New Nation - Internet Edition

Staff Reporter

Employment opportunities have narrowed down in the country due to rapid trade liberalisation, done by the successive governments in submission to the pressure from donor countries and multinational lending agencies.

A study of the Centre for Policy Dialogue (CPD) revealed this. The study report on 'Impact of trade liberalisation on employment in Bangladesh' was unveiled at a dialogue organised jointly by CPD and International Labour Organisation (ILO) at BRAC Centre Inn in the City yesterday.

However, Finance and Planning Adviser Dr Mirza Azizul Islam, who was the chief guest at the dialogue, opposed the findings of the study, though economists and stakeholders supported those.

Employment in general has suffered due to rapid trade liberalisation. Agriculture and manufacturing sector have experienced average negative growth, the report states adding, "growth in real wages lagged behind that of productivity."

"The labour force was growing at a faster rate compared to the rate of creation of new job opportunities, resulting in a rise in unemployment rate. From the second phase of trade liberalisation the unemployment rate has been increasing more rapidly in all sections of the population," the study says.

It says, "Because of tariff liberalisation a number of import substituting industries like sugar, yarn, edible oil, paper, pharmaceuticals, tobacco cigarette, cloth, mill-chemical, fertiliser, iron and steel, metal products, machinery and transport equipment industries have faced a decline over the last two decades."

But the Finance Adviser denied the link of trade liberalisation with the decreasing trend of employment. "Unemployment occurs due to the technological changes, rather than trade liberalisation," he said.

About the sluggish scenario in the jute sector, Dr Aziz blamed the inefficiency of the management, not the trade policy. "Trade policy was formulated to encourage efficient industries and discourage the inefficient ones," he said.

While moderating the dialogue, CPD chairman Rehman Sobhan stressed on "highly diversification of the economy" and suggested protective measures for the industries, where necessary.

He said rapid liberalisation cast a negative effect on many sectors in Bangladesh ultimately squeezing the labour market. Developed countries also pursued protectionism to boost their industries before going for trade liberalisation.

"India was able to disgrace Bangladesh in jute sector through high degree of protectionism, the prominent economist of the country observed and suggested the Government to be cautious before any further trade liberalisations.

Citing the findings of the study CPD executive director Prof Mustafizur Rahman said negative impact was found in the sectors where the liberalisation was rapid.

The Government should offer necessary supports to the domestic industries side-by-side of liberalisation, he said adding, "Comparative advantages should be translated into competitive advantage."

Special Adviser of ILO Dr Rizwanul Islam said rather than going for sweeping trade liberalisation, it would be important to adjust the policy to suit the situation of the country.

Appropriate measures would be needed to provide social protection and facilitate alternative sources of livelihood for those who might lose out in the process of adjustment.

He suggested introducing active labour market policies that would combine unemployment benefits, training and assistance in job search for the retrenched workers.

Veteran labour leader and an expert on the jute sector Shahidullah Chowdhury in his deliberation depicted the gloomy and painstaking lifestyle of labours. "Garment labours lack any social security and so their future is very bleak. No gratuity, no pension," he said.

He demanded minimum trade union rights in the prevailing state of emergency situation.

Dr Zaidi Sattar, Dr Wajedul Islam, Dr Gaur Gobinda Guaswami, Faruk Ahmed, Dr Naznin Ahmed, and Saiful Islam took part in the discussion among others.