Slowdown may hit three sectors hard

Study sees manufacturing, real estate, construction most vulnerable to recession fallouts
A study report cautions that a slowdown or negative growth of the country’s labour-intensive industries such as manufacturing, real estate and construction is likely to have adverse consequences on employment and labour market particularly in terms of generation of employment in these sectors.
Most of the export-oriented industries, except readymade garments, are found to have experienced negative growth in recent times [July-March 2008-09 fiscal]. The rate is 13.0 per cent for frozen food, 34.6 per cent for leather, 19.6 per cent for raw jute, 18.0 per cent for jute goods, 15.9 per cent for pharmaceuticals, 9.9 per cent for ceramic products and 56.9 per cent for electronics.
Also in view of probable deceleration in remittances earning due to decline in outflow of migrant workers, the report says such a scenario could have serious repercussions in Bangladesh both in terms of its economic impact and also adverse social implications.
‘With a high level of unemployment and underemployment in the country, a slowdown in the outflow of migrant workers and rise in inflow of returned migrants will possibly have adverse impact on domestic job market creating additional pressure,’ noted the study carried out by three researchers of the Centre for Policy Dialogue.
Recognising the concerns expressed by trade union leaders that some factory owners might use the crisis as an issue to reduce workers’ wage, the study paper recommended that rationing system for low income group should be expanded beyond garment workers to cover workers from other sectors.
Quoting the Bangladesh Manpower Employment and Training officials, the study mentioned that outward migration in 2009 would be lower than the level of 2007 and 2008; they, however, expected the number to be higher compared to earlier years — 2005 and 2006.
The total number of persons going abroad during July-March 2008-09 period was about 26.4 per cent less than that of the comparable period of the previous fiscal, according to the central bank data. The month-on-month growth rate for March 2009 was negative at 27.4 per cent.
Citing the example of implications of decline in remittances, the report said if the number of remitters fell, this could hurt the labour-intensive real estate sector where about 35 per cent of the flats are sold to overseas migrants and their families.
The study report regretted exclusion of the issue of returnee migrants in the announced stimulus package although it generally appreciated such package and also fiscal incentives. The report added that these supports were expected to contribute towards boosting domestic industries and keeping the business of export-oriented industries running in view of falling prices of export products.
‘Bangladesh has fared better than most of her comparator countries in terms of GDP [gross domestic product] growth,’ observed the report on ‘Global Economic Crisis and Its Impact on Bangladesh Labour Market’ jointly prepared by Mustafizur Rahman, Khondaker Golam Moazzem and Syed Saifuddin Hossain, which is scheduled to be published in a journal soon.

Courtesy of NewAgebd