Informal economy in Bangladesh

Helping women constriction workers learn better skills
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The informal economy in South Asia is estimated to stand at 80 to 90 per cent of the labour force. The huge scale of vulnerable employment presents a challenge to stable and sustainable development as the workforce in this sector usually engages in activities which are unregulated, unrecognized and “low productive” in nature.

In Bangladesh, 87 per cent of the labour force is employed in the informal economy according to the 2010 Labour Force Survey. Those working in the informal economy include wage labourers, self-employed persons, unpaid family labour, piece-rate workers, and other hired labour.

The sixth Five Year Plan (SFYP) of Bangladesh (2011-2015) recognizes the vulnerability of workers in the informal economy and states “This calls for changing the structure of employment by withdrawing labour from low productivity agriculture and informal jobs (also known as disguised unemployment) to higher productivity jobs in the manufacturing and formal services” (SFYP document, March 2011, p. 46).

The ILO is seeking to contribute to employment policies that facilitate formalisation of the informal economy, reduction of informality in the formal sector and promote workers’ rights in the subregion comprising Bangladesh, India and Nepal. It also seeks to emphasize knowledge management so as to fill the large knowledge gap in policy-making and to embrace the proven ILO strategy of participatory dialogue.

Major ILO initiatives currently being carried out:

Way out of informality: Facilitating Formalisation of Informal Economy in South Asia