Promoting career opportunities through industry linkages for those who complete technical and vocational education is now a reality in Bangladesh. The local shipbuilding industry is thriving with strong growth potential. Currently, the demand for technically skilled workers in Shipbuilding industry is high. The industry is likely to become a major employment provider for the technically skilled workers in Bangladesh. Not surprising, that 55 of the 72 welders who had completed their training from Khulna Shipyard Technical Training Centre (KSYTTC) were absorbed by a private shipbuilding and light engineering firm, Khulna Shipyard Limited (KSY) in August 2014. The same company will hire 30 more in the coming month.
How much social mobility is there in South Asia? The intuitive answer is: very little. South Asia is home to the biggest number of poor in the world and key development outcomes – from child mortality to malnutrition – suggest that poverty is entrenched. Absence of mobility is arguably what defines the caste system, in which occupations are essentially set for individuals at birth. Not surprisingly, the prospects for people from disadvantaged backgrounds to prosper are believed to be gloomier in this part of the world.
And yet, our analysis in Addressing Inequality in South Asia, reveals that economic and occupational mobility has become substantial in the region in recent decades. In fact, it could even be comparable to that of very dynamic societies such as the United States and Vietnam. The analysis also suggests that cities support greater mobility than rural areas, and that wage employment – both formal and informal – is one of its main drivers.
When splitting the population into three groups—poor, vulnerable, and middle class—upward mobility within the same generation was considerable for both the poor and the vulnerable. In both Bangladesh and India, a considerable fraction of households moved above the poverty line between 2005 and 2010. Meanwhile, a sizable proportion of the poor and the vulnerable moved into the middle class. In India, households from Scheduled Castes and Scheduled Tribes – considered together – experienced upward mobility comparable to that of the rest of the population.
Watching export growth across South Asia surge in the recent past leads one to ask the obvious but crucial question: Will this trend continue in the longer term and is South Asia on its way to become an export powerhouse, or has it just been a short term, one-off spurt provoked by external forces?
Clearly, the rupee depreciation following tapering talk in May 2013 and the recovery in the US constituted favorable tailwinds; however, our analysis in the fall 2014 edition of the South Asia Economic Focus finds that there are more permanent factors at play as well. South Asia is no exception to the trend across developing countries of increasing importance of exports for economic growth. While starting from a low base, the region saw one of the starkest increases in exports to GDP, pushing from 8.5 percent in 1990 to 23 percent in 2013.
The Bangladesh Bureau of Statistics (BBS) has just released a Survey on the Use of Remittances. The survey provides interesting update on the demographic and economic characteristics of the 8.6 million Bangladeshi workers currently working abroad. Conducted during 12-23 June 2013, the survey enumerated 9,961 Remittance Receiving Households (RRHs) from all the seven divisions of the country.
Overall, the survey mostly reaffirms findings from previous surveys and studies about migration and remittance behavior of Bangladeshis.
Who are the migrants?
The overwhelming majority (97.4 percent) of migrants are males, married (67.1 percent), Muslims (97.8 percent) most of whom (78.2 percent) are less than 39 years old with majority (61.5 percent) having less than ten years of education.
The majority (over 57 percent) of the migrants have been staying abroad for over 5 years and a significant (22.3 percent) proportion (largely from Sylhet) have been staying abroad for over ten years. Most (91 percent) work as blue colored labor in Saudi Arabia, UAE, Malaysia, Oman, Kuwait, South Korea and Singapore. Most of them (87.8 percent) received no formal training before leaving the country.
South Asia’s Commerce Ministers meet in Thimphu on July 24. Getting there would not have been easy for many of them, with no direct flights between Thimphu and four of the seven capitals. In June, when some of us convened for a regional meeting in Kathmandu, our Pakistani colleagues had to take a 20 hour flight from Karachi to Dubai in order to get to Kathmandu! This is symptomatic of the overall state of economic engagement within South Asia—in trade in goods and services, foreign direct investment and tourism.
South Asian countries’ trade policies remain inward-looking compared to other regions, and there are even bigger barriers to trade within the region. Today, South Asia today is less economically integrated than it was 50 years ago. Figure 1 below shows that intra-regional trade in South Asia accounts for less than 5 percent of total trade, lower than any other region.
To address this gap, Wasil started offering a Sharia-compliant microfinance package aimed specifically at smallholder farmers.
Wasil is an example of how microfinance and Islamic finance can be successfully combined.
An estimated 650 million Muslims live on less than $2 a day. Examples like Wasil show that Islamic microfinance can play a key role in bringing the poor into the financial mainstream in a way that doesn’t force them to choose between their religious practices and their wallets.
But despite an impressive increase in the number of financial service providers that offer Sharia-compliant microfinance products in Muslim countries, Islamic microfinance is still limited to a few countries. The range of offerings is narrow as well – most are largely focused on the cost-plus-markup product known as murabaha, which is geared toward asset purchases.