Many fast-growing economies in Asia are experiencing rising youth unemployment rates.
Bangladesh, long seen as a model for development in eradicating extreme poverty, has recorded average annual economic growth of 6.5% over the past decade. However, in recent years, the country’s youth unemployment rate has risen to 16%, the highest in at least three decades, according to the International Labor Organization (ILO).
China and India have similar rates. Indonesia and Malaysia have 14% and 12.5%, respectively. In total, some 30 million people aged 15-24 in these populous countries are without suitable jobs, accounting for nearly half of the 65 million unemployed people in the same age group worldwide.
Graduates at a job fair in Suzhou, Jiangsu Province on August 18. Photo: AFP
Globally, youth unemployment tends to be higher than the overall workforce. But for Asian economies that want to promote labor- and manufacturing-led growth, this unemployment poses a greater challenge, even a “ticking time bomb.”
Although India’s youth unemployment rate has fallen in recent years, it remains higher than the global average. Analysts say poor job opportunities are a major cause.
Last year, the Chinese government stopped publishing youth unemployment figures. The most recent statistics it released showed that one in five young people were unemployed—a record high.
Indonesia’s 5% economic growth has been driven largely by the expansion of its mining and mineral processing sectors, which, however, use a lot of heavy machinery rather than a lot of workers.
Last year, 71% of employed 25-29 year olds in South Asia were in precarious employment, meaning they were freelance or temporary, not much down from the 77% recorded two decades ago.
Bangladesh has lifted itself out of poverty by becoming the world’s garment factory, churning out jeans, T-shirts and sweaters for major Western brands. Millions of its people have left the fields to work in factories.
But the South Asian nation has been stuck. Bangladesh cannot move into the sophisticated, high-value manufacturing of electronics, heavy machinery, and semiconductors that typically create better-paying jobs. It is this shift that has helped Japan, South Korea, and China soar.
The ladder to prosperity is now much harder to climb. Countries that want to succeed will have to compete with China, a country with very high productivity. Meanwhile, developed economies like the US are looking to bring manufacturing back home. Automation is also a game changer. Even Bangladesh’s main engine of economic growth, the garment industry, is increasingly using more machines than workers.
Asia also faces a workforce imbalance. More people in developing countries are pursuing higher education. They want to work in fields such as design, marketing, technology and finance. But these positions are not available in their countries.
India has developed its IT industry but has only recruited a certain number of employees, while artificial intelligence is developing and can partially replace it.
More than 40% of college graduates in India under the age of 25 are unemployed, compared to just 11% of the same age group with lower education, according to a 2023 report by Azin Premji University, Bengaluru.
“You are now more educated than your parents and you don’t want to be stuck in the same jobs as them,” said Kunal Sen, director of the World Institute for Economic Development Research at the United Nations University in Finland. “This is an issue that I think political leaders don’t fully understand.”
Frustration over worsening job prospects was a factor in unrest in Bangladesh in August. Bangladesh’s garment exports have doubled over the past decade, but job growth in the sector has been much slower.
University graduates in Bangladesh are three times more likely to be unemployed than the general population, according to a 2022 survey by officials. The library at Dhaka University, one of the country’s most prestigious educational institutions, is packed with alumni studying to pass their first, second, or even third civil service exams. Many are still living on their parents’ handouts, well into their 30s.
Aktaruzzaman Firoz, 28, who graduated with a master’s degree in sociology in 2021, has applied for 50 positions but has yet to find a job. He took the civil service exam this year, one of 500 applicants for two vacancies, according to Firoz. He made it to the final round and failed.
To make ends meet, Firoz borrowed money from his father, a low-ranking official in his hometown who had just undergone open-heart surgery. He gave up on finding a partner. “How can I get married when I can’t take care of my family?” Firoz said.
In Bangladesh, civil service is considered a stable and higher-paying job than many other professions. A government position is the dream of many young people. Protests erupted when a Bangladeshi court decided to allocate 30% of the annual civil service quota to the children of soldiers who fought for Bangladesh’s independence in 1971.
The protests turned violent and forced Sheikh Hasina to give up power and leave the country after more than 15 years as prime minister.
Asif Mahmud, the 26-year-old student protest leader, is now an adviser to the Ministry of Labour and Employment for the interim government of Bangladesh.
“One of the main reasons for the protests is the growing job crisis. The total employment opportunities are not enough for Bangladesh, considering the population size,” said Mahmud, who aims to address the problem by having universities work with industry to train students to be employable upon graduation.