Approximately 57% of the population is employed in Bangladesh. The 8th most populous country is also the land of one of the massive youth unemployment rates in the world, slightly ahead of its other South Asian peers like India and Pakistan. This population is able to contribute to the labour market if it is utilised wisely and appropriately. Currently, the majority of the working population comprises young people who are capable of elevating a nation’s economy and social standing through creative endeavours. According to the census report published by the Bangladesh Bureau of Statistics (BBS) in July last year, Bangladesh’s youth population is 45.9 million, which incorporates 27.82 percent of the population. The utilisation of the working population in any sector of the nation is a critical issue and challenge to make the best out of it. Thus, the demographic dividend comes into play. So, what is a demographic dividend? How can it contribute to nation-building? Why is it significant to utilise it properly on time?
Demographic dividend refers to the rapid economic development that can occur when a nation has a substantial percentage of its population of working age. This demographic transition is often caused by a combination of causes, such as a decline in newborn and child death rates, an increase in life expectancy, and a decline in fertility rates.
Due to a greater number of people who are able to work and contribute to the economy, a high percentage of working-age individuals in
a country’s population might result in improved economic development. The larger labour force may also enhance productivity since the employees are more educated, healthier, and able to engage in the global economy.
It is essential to highlight, however, that the demographic dividend is a transient phenomenon that will ultimately expire. As the number of elderly individuals in the population rises, the proportion of those of working age will fall, which will eventually hinder economic development. Consequently, it is essential for nations experiencing a demographic dividend to capitalise on this time of faster economic development by investing in the education, health, and skills of the people, as well as in infrastructure and other sectors essential for economic progress.
Bangladesh has the immense scope and potential to use its fertile demographic dividend emerging for the next some decades from now on. A nation’s demographic dividend is crucial for various reasons. Increased economic growth may result from a large percentage of working-age persons in the population since there are more people available to work and contribute to the economy. This can lead to improved production since people are more educated, healthier, and able to engage in the global economy. The enhanced economic growth caused by the demographic dividend can contribute to improved standards of life for the population, including higher income levels, better health and education, and more access to products and services. The enhanced economic development and higher living conditions brought about by the demographic dividend can aid in reducing poverty and promoting economic stability. Greater savings and investment: The increased economic growth caused by the demographic dividend can lead to increased savings and investments, which can provide the cash necessary to construct infrastructure and sustain future economic development. Increased economic growth as a consequence of the demographic dividend can help pay for improvements in public services such as health and education, therefore enhancing the quality of life for the people. The demographic dividend can boost government revenue, which can be used to invest in public goods and services, decrease debt, and finance social initiatives.
Bangladesh’s current demographic dividend provides a number of important observations. Firstly, it is essential to recognise that the demographic dividend is a transient phenomenon that will ultimately expire. As the number of elderly individuals in the population rises, the proportion of those of working age will fall, which will eventually hinder economic development. In order to make the most of this time of increased economic expansion, Bangladesh must exploit the demographic dividend while it lasts. Secondly, it is crucial to acknowledge that the demographic dividend is not a guarantee of economic development. Government and the business sector must invest in the education, health, and skills of the people, as well as in infrastructure and other sectors vital for economic growth if the nation is to maximise this opportunity. This involves giving access to high-quality education and training, supporting healthy behaviours, and investing in physical and digital infrastructure. Thirdly, it is essential to remember that the demographic dividend extends beyond the economic realm. The present demographic transition in Bangladesh has the potential to bring about social, political, and cultural changes, as well as a shift in the country’s core principles. As the number of older individuals in the population rises, for instance, there may be a greater demand for healthcare and retirement services, as well as a greater need for assistance for older people who are no longer able to work. Fourthly, Bangladesh might utilise its demographic dividend to enhance productivity and labour quality. By investing in education and training, the nation might equip its population with the skills and information required to engage in the global economy and compete in the global market. This will help Bangladesh to capitalise on the demographic dividend by boosting the number of available employees and their productivity.
A country’s demographic dividend phase typically lasts between 20 and 30 years, and it usually occurs only once in a century. By 2040, Bangladesh’s chances of attaining robust economic development through exploiting the demographic dividend will begin to decline. Approximately 65 percent of the overall population of our nation is employed now. The nation has 106.1 million working individuals. The actual labour force is 62.1 million of this total (59.5 million are used in the public and private sectors, and the remaining 2.6 million are still outright unemployed). 44.0 million of the labour force are entirely jobless.
If this demographic dividend cannot be utilised within this era, by 2040, through good management, economic growth will continue to decline, assuming all other variables remain intact. As a result of continued drops in the birth and death rates, the number of older individuals will grow once the demographic dividend era concludes.
After three to four decades, this active youth group will be regarded as a burden on society and the nation. As a result of declining birth rates and advancements in healthcare, the number of working people in the world will continue to decline in the near future, while the number of elderly people will increase. Furthermore, the world’s fertility rate has been declining for decades, so the number of elderly people will rise. The fertility rate or birth rate refers to the average number of children a woman gives birth to and the number of live births per woman. According to academics, a country’s population begins to decline when its fertility rate goes below 2:1.
If the benefits of the demographic dividend can be realised, the per capita income of Bangladesh will improve, more people will be economically active, and their savings will also rise. Now, the difficulty is determining where the demographic dividend should be utilised. It is widely acknowledged that Bangladesh’s largest export market is the apparel industry (86 per cent).
It is of the utmost importance to establish whether or not this working young may be utilised by investing in any other field. Consequently, it is necessary to build an investment roadmap by designing a curriculum for development. Then, long-term, medium-term, and short-term strategies should be developed to ensure the effective execution of the roadmap. From this vantage point, it can be stated that there is a need for quick investment in a number of areas, including information and communication technology, light engineering, tourism and hospitality, agriculture, and service industries.
Individuals, governments, enterprises, and non-governmental organisations must all work together to take advantage of the demographic dividend. There is a requirement to preserve reliable information on how many people are joining the country’s work market each year. What are the qualifications of each individual in the labour market, whether entrepreneurs are being formed in the nation or not, and if they can be hired in the developed world? It is vital to assess and continually analyse them. If the country’s working youth population can be trained in these industries in accordance with a long-term strategy, then this trained youth population will be able to establish its own place in the country and on the world stage. In this regard, Bangladesh will be elevated to a middle-income nation soon and will be well ahead of other developed countries in 2041.
Let’s discuss what went right for other Asian peers, particularly East Asia, that brought skyrocketing flourishing in multiple indicators, from the economy to human development. The demographic dividend happened in China around 1980, and they utilised this chance to achieve the pinnacle of growth. As a result, this East Asian nation’s economy is now the second biggest in the globe. China’s demographic dividend alludes to the distinctive possibilities for economic development that have arisen as a result of the country’s enormous working-age population. Starting in the 1980s, China witnessed a population change as a consequence of its one-child policy, which led to the emergence of a large number of youthful, educated employees. This large and efficient workforce has contributed to China’s recent rapid economic development. However, as China’s population matures and its labour force diminishes, the country needs help maintaining economic growth. China has adopted policies to promote greater birth rates and raise the retirement age, among other steps, to handle this issue. The success of these policies will decide whether China will continue to enjoy its population windfall in the coming years. Likewise China, Bangladesh needs to improvise their policies to get another employable generation ready after three or four decades to ensure a greater employable workforce. Reforming and adapting relevant policies are obvious to avoid such shortcomings considering that Bangladesh has its own limited resources and capacities, unlike cutting-edge nations like China and Japan.
In addition, East Asian nations are the best recipients of the demographic dividend. These nations profited by utilising the demographic dividend with their foreseeable sights and effectiveness of knowledge, experience, and technology. Due to suitable social and economic policies, including openness to trade and foreign investment, fluid labour markets, and significant and continuous investment in human capital, including education and public health. The Asian Tigers were able to capitalise on the generational dividend. Between 1965 and 1990, the demographic dividend accounted for approximately one-third of economic development in East Asian nations. East Asian nations have been able to capitalise on shifts in their age structure to boost economic output, unlike their South Asian counterparts. They were able to engage in youth development, increase access to family planning, and invest in infrastructure, public health, and education, particularly women’s education and skill development. In addition, emphasis was placed on labour-intensive and skill-intensive employment, capital, commerce, and access to foreign investment. Some nations in East and Southeast Asia have made substantial investments in human resource development, especially in education and health, in order to achieve greater economic growth during their demographic dividend due to an increase in the number of working citizens.
According to researchers, the fertility rate will decline to 1.7% in 2100 by the end of the 21st century. Consequently, the global population will shrink significantly. Researchers estimate that the world’s population will expand and reach its highest point in 2064. Why is the birth or fertility rate limit (2.1%) so crucial? According to standard arithmetic, if two children are born in each marriage, it is sufficient to maintain the current population level. However, regardless of how modern the healthcare system may be, not all children survive until adulthood. In order to maintain a stable population in the developed world, a birth rate ceiling of 2.1% has been established. The current fertility rate in our country is 1.77 per cent. In the area, this rate was 4.48 per cent in 1950 and 2.78 per cent in 2000. Similar to other nations, the birth rate in our country is falling with time.
The global population will then reach 970 million individuals. Researchers believe that by the year 2100, the global population will have decreased to 8.8 billion people. The rising engagement of women in school and the workforce, as well as the accessibility of contraceptives, are the primary reasons for this. It will have a significant influence in several nations. Let’s take Japan as a case study to understand the issues more realistically. In 2017, Japan’s population peaked at 12.8 million individuals. This country’s population has begun to decline since then. Japan has a current population of 12.64 million (July 28,, 2020) with a birth rate of 1.62 per cent. Japan’s population will decline to less than 53 million by the end of this century. Likewise, the population of Italy, Spain, Luxembourg, Malta, Greece, Finland, Cyprus, Austria, Portugal, South Korea, and Thailand would shrink significantly due to the sharp decline in birth rates. Due to a lower fertility rate or birth rate in China compared to India, China’s population will decrease more rapidly than India’s. In a similar manner, the population will fall because Bangladesh’s three-year birth rate was 1.87, 1.86, and 1.80 per cent in 2017, 2018, and 2019, respectively. The decline in workable populations in other nations allows countries like Bangladesh to capitalise on economic and social possibilities afforded by population booms. Bangladesh can export a greater number of labourers to these highly developed nations in return for enormous remittances. However, if Bangladesh cannot guarantee that all remittances are imported through appropriate channels and cannot stop Hundi, the same action could be disastrous for Bangladesh. Consequently, a number of factors influence how the eighth most populous nation in the world will maximise the demographic dividend and meet its future challenges.
Since attaining freedom in 1971 and colonisation for hundreds of years, Bangladesh is experiencing its very first demographic dividend. There are other countries that have experienced or are experiencing demographic dividends already. It allows this nation, which is 51 years old, to learn from other nations and ensure all possible developments that can result from the enlargement in the employable population. On the other hand, it is indispensable to prepare for future challenges, which will become obvious in the next three or four decades when the same employable population becomes unemployable or underemployed, as well as a burden for the economy and society.
In conclusion, Bangladesh’s current demographic dividend is a transient phenomenon that has the potential to stimulate economic growth. However, the government and business sectors must take the required steps to make the best out of the opportunities. It is also imperative to note that the demographic dividend is not restricted to the economic arena and has the ability to bring about changes in the social and political realms. Bangladesh could exploit its demographic dividend to enhance the quality of its workforce and boost productivity, therefore preparing itself to compete in the global marketplace if the proper actions are taken.
Author- MD Talebur Islam