Severe employment crisis in Bangladesh: World Bank’s deep concern

Special Correspondent

Despite sustained economic growth, an uneasy cloud has descended on Bangladesh’s labor market. The World Bank has warned that despite growth, employment is shrinking, especially with a large decline in women’s participation. At the same time, the poverty rate has also increased.

In a report released at a press conference titled ‘Bangladesh Update’ organized by the World Bank’s Bangladesh office in Dhaka on Tuesday, October 7, the organization said that the country’s national poverty rate has increased to 21.2 percent in the 2024-25 fiscal year, from 20.5 percent in the previous fiscal year. In other words, despite maintaining growth, poverty is not decreasing; rather, the risk of social inequality is increasing due to declining employment.

The report says that stagnant employment is now one of the biggest policy crises for Bangladesh. Unless the participation of young people and women in productive sectors increases, it will be difficult to sustain growth in the future.

According to World Bank data, the country’s labor force participation rate fell from 60.9 percent to 58.9 percent between 2023 and 2024. Female participation declined the most during this period. In addition, the employment-population ratio also fell by 2.1 percentage points to 56.7 percent.

On the other hand, the unemployment rate has increased to 3.7 percent.

More worryingly, at this time, nearly 3 million working-age people were outside the labor force, of which 2.4 million were women.

The World Bank report says that despite growth in the industrial and service sectors, new jobs are not being created; rather, the number of existing jobs is decreasing. Overall, employment has decreased by an average of 2.6 percent, of which the decline in the service sector is the largest.

The organization noted that in recent years, the direct relationship between growth in the industrial and service sectors and jobs has weakened. That is, even as GDP increases, employment is not increasing at the same rate. Only the agricultural sector is showing some positive trends, where relatively more workers have been added.

The World Bank has warned that if this trend continues, Bangladesh’s economy could fall into the trap of ‘jobless growth’—where the economy grows but the livelihoods of ordinary people do not improve.

“Job creation is now the most important challenge for Bangladesh,” says the World Bank’s Bangladesh Update Report.