Background of Project

Over the last two and half decades, Bangladesh economy has been increasingly integrated with the global economy through international trade. The trade-GDP ratio increased to 40.5 per cent during FY2010 from 29.9 per cent in FY2000 due to both import penetration and export orientation in the first part of 2000s. While trade openness has increased, its linkages with employment are still confined to a limited number of activities. A large part of agriculture and service related activities, which together provide about 87 per cent of total employment, are less exposed to trade. Employment in services sector has increased by 5.8 per cent per year during 2000. Trade-orientation of the manufacturing sector has seen a significant rise over the past years and this sector has experienced rise in labour absorption and labour productivity.

Like many developing countries Bangladesh lack the skills and productive capabilities that would enable it to take advantage of new economic opportunities and the potential for employment creation created from global trade. The vast majority of the workers are engaged in informal employment where productivity, occupational safety and health and legal and social protection are inadequate. In terms of wage, significant disparity exists between the male and female workforces. In addition, labour market policies and institutions that can minimize trade related adjustment challenges - such as unemployment insurance, employment services, and training scheme – are weak or non- existent in Bangladesh. This emphasizes the need for designing medium term and long term trade and employment policy to looks at greater policy coherence and institutional reforms that can have positive impact on employment effects of trade reforms.

Project Description

The project will develop global knowledge tools that can support the formulation of coherent trade and labour market policies that address the adjustment challenges and expand opportunities for the creation of decent employment at the national level, based on sound data and diagnosis and with the involvement of the social partners. Actions will be taken at the global level and in four pilot countries including Bangladesh (others countries are Indonesia, Benin and Guatemala), to strengthen the capacity of policy makers, researchers and the social partners to assess, address and monitor the effects of trade on employment.

Donor

The European Union

Budget

EUR 3,397,590

(The budget covers a global project and four local projects in Indonesia, Bangladesh, Guatemala and Benin)

Geographical Coverage

National

Major Activities in Bangladesh

• Reviewing existing literature on trade and employment and available statistical data for assessing the effects of trade on employment;
• Building capacity of the policy makers of relevant government departments and social partners to assess the effects of changes in trade policy on employment and to support the formulation of coherent trade and labour market policy;
• Establishing a tripartite policy working group to facilitate policy dialogue on trade and employment link;
• Conducting study of the effects of trade on employment and of complementary labour market policies and strategies to address the employment effects;
• Initiating tripartite social dialogue between relevant policy makers, representatives from employers’ organizations; trade unions and other institutions on the outcome of assessment/study; and
• Recommending policies, strategies and programmes to mitigate trade related adjustment challenges and to enhance opportunities for employment creation.

Project Objectives

Overall objective

Analysing and supporting the formulation of effective and coherent trade and labour market policies that address the adjustment challenges that workers and employers face and expand opportunities for the creation of decent employment in developing countries.

The specific objectives

Specific objective-1

Develop global knowledge tools that can support the formulation of coherent trade and labour market policies at the national level, based on sound data and diagnosis, with the involvement of the social partners.

Specific objective-2

Enable the design of effective and coherent trade and labour market policies that maximize employment-related opportunities created by trade and minimize the adjustment costs of trade-induced economic restructuring.

Key Strategic Partners

• Ministry of Labour and Employment
• Ministry of Commerce
• Employers
• Trade Unions
• Others Government and International Organizations

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