South Asia’s job availability cannot meet working population’s demands

While there has been an increase in the working-age population in South Asia, the number of jobs available however is getting greatly outstripped, putting the region at risk of “squandering its demographic dividend.”

This is one of the comments made by the World Bank earlier this week, as employment ratios within the region have been falling.

Between the period of 2000-2023, employment rates grew 1.7% per year while the working-age population expanded 1.9% a year, data included in the report showed.

Within the region, an average of 10 million jobs a year were created but this also regularly outstripped against the average rate of 19 million a year for the working-age population.

The World Bank expects output growth in South Asia at 6-6.1% in the financial year ending March 31, 2025, largely due to strong growth in India where the economy is seen expanding at 6.6%.

India’s central bank forecasts stronger growth of 7% during this period.

While growth in India has rebounded strongly after the pandemic, thanks to government spending and the rise in the construction industry, private investment in India has remained weak, hurting job creation.

Yet, while the employment ratio in India had declined more than any other South Asian country except Nepal, preliminary data suggests a rebound in 2023 that partially reversed the earlier decline, said the World Bank.

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“Overall, during 2000–2023, employment growth was well below the average working-age population growth and the employment ratio declined,” shared Franziska Ohnsorge, World Bank Chief Economist for South Asia.

South Asian nations need to address several policy weaknesses to accelerate job creation, the World Bank concluded in its report, reported Reuters. These include policies that encourage productive firms to hire employees, streamlined labour and land market regulations, and greater openness to international trade.