Background

1. The economy of Bangladesh is growing steadily benefiting from reforms and increasing openness. Annual GDP growth has accelerated from 4.1% in the period FY1973-1978 to 6.2% in FY2008-2013. Literacy rate has increased over past decades, so has school enrollment, and particularly girl and women participation in education. Population and labor force is predominantly young with more than a third in the 15-34 age group in 2010. Bangladesh is well-placed to benefit from the demographic dividend up to 2050 and perhaps beyond due to decline in fertility rates which, combined with effective policies and markets, triggers faster rates of economic growth and human development.
   
   
2. This may be reinforced by the growth of labor productivity through skill development and technological progress especially information and communication technology (ICT) driven move towards a knowledge economy. However, skill is recognized after infrastructure and energy as the prime impediment to industrial growth, productivity, export diversification and producing high value products.It needs to be mentioned here that, the Asian Development Bank’s (ADB) Bangladesh Country Partnership Strategy (for 2012–2016) identifies the low competitiveness of firms as a key constraint to growth particularly the low skills and low productivity of the workforce.
   
   
3. Foreign remittances play a very important role in Bangladesh economy. Bangladeshi expatriates are the main source of this remittance. But most of the Bangladeshisworking abroad are unskilled or semiskilled. For steady and higher remittance inflows, enhancement of skills of the aspirantmigrant works is required.
   
   
4. To coordinate existing skill development and training programmes in a holistic waythe Government has enacted National Skills Development Policy, 2011 and established National Skills Development Council (NSDC) headed by Honorable Prime Minister. An Executive Committee of NSDC (EC-NSDC) has also been established headed by the Education Secretary. It may be noted that currently 22 different Ministries/Divisions have been implementing skill development and training related activities.

Skills for Employment Investment Programme (SEIP)

5. Asian Development Bank (ADB)proposed a Multi-tranche Financing Facility (MFF) Programme in order to take a long-term and comprehensive approach to support skills development in Bangladesh given its potential contribution to higher GDP growth by skilling and up-skilling a large number of working age population on priority sectors.Swiss Agency for Development and Cooperation (SDC) also agreed to co-finance the programme.
   
   
6. Finance Division is the executing agency of the SEIP Phase-I project while three Ministries (Ministry of Expatriate Welfare, Education and Industries), Bangladesh Bank, PKSF and nine Industry Associations will be the implementing agencies. Two separate projects: (a) Skills for Employment Investment Program (SEIP)-DPP; and (b) Support to Skills Development Coordination and Monitoring Unit (SDCMU)-TPP have already been approval by the Government in this regard.
   
   
7. A Skills Development Coordination and Monitoring Unit (SDCMU) will be established under the TPP (financed by SDC grants) to act as the implementing agency. The SEIPProject (DPP) will be financed through a pool fund. The ADB and SDC have already agreed to finance first tranche of the programme and other development partners (including IDA and KOICA) and private sector organizations are expected to join in the following tranches. The total cost of SEIP for the entire period (2014 to 2021) is estimated at US$ 1,070 million. However, for tranche-I, the total cost is estimated at US$138.5 million. The estimated cost breakdown is provided in the following table:

Table 1: Financing Plan (US$ Million)

8. Tranche 1 will be implemented from FY2014-15 to FY2017-18. Expected impact of tranche 1 is increased employment in priority sectors and skills for males and females. Outcome of tranche 1 is increased inclusive access to skills training in priority sectors. There are four outputs: (i) market responsive inclusive skills training delivered; (ii) quality assurance system strengthened; (iii) institutions strengthened; and (iv) effective program management.
   
   
9. Output # 1 will support mainly two sub-outputs. First, SEIP will engage 32 public training providers under three ministries to train around 47,400 people, and 9 associations (192,600), PKSF (10,000) and Bangladesh Bank SME Department (10,000) to train over 260,000 people, initially in six priority sectors, with an average job placement of 70%. Second, it will help target 40,000 people from disadvantaged groups including people with disabilities as well as to ensure that around 30% of the total trainees are women. It will support piloting targeting schemes.
   
   
10. Output # 2 will support four sub-outputs. First, it will support development of at least five qualification packages including occupational standards, one for each priority sector, and support registration of all the participating training providers. Second, it will train trainers, industry assessors and principals and managers of the public training institutions and for the private sector. Third, it will support improvements of training facilities of participating public training providers. A public-private partnership modality will be adopted to bring together public and private training providers to maximize enrollments, share facilities and resources and address industry skills needs. It will develop criteria and mechanisms to establish centers of excellence in each priority sector. Fourth, it will strengthen the capacity for assessment and certification through partnership between Bangladesh Technical Education Board (BTEB) and the respective Industry Skills Council (ISCs) in each priority sector. It will also help establish a credible recognition of prior learning system which will help develop 20 assessment centers from the existing training centers to assess and train 20,000 trainees.
    
    
11. Output # 3 will support four sub-outputs. First, it will help establish a NHRDF under MOF as envisaged in the National Skill Development Policy (NSDP) to increase funding to substantially increase high quality skilling and up-skilling. Second, it will support the establishment of a new ministry or a skills authority with its own medium term budgetary framework for skills development by building on NSDC’s initiatives. Third, it will provide delegation of powers to participating 32 public training institutions to generate earnings which will be reflected in additional budget, hire trainers and any other resource persons, offer flexible courses, and enter into partnership with employers and enterprises. Fourth, it will strengthen industry linkages, job placement and career counseling in partnership with training providers and employers.
    
    
12. Output # 4 will support four sub-outputs. First, it will support a robust monitoring and evaluation (M&E) system to track students and training providers to ensure high quality training and job placement. It will support the NSDC secretariat in common sector monitoring, skills-gap analysis and strengthening ISCs. Second, it will strengthen sector planning and budgeting for the skills development sector to move towards a sector-wide approach (SWAp) by 2017. Third, it will establish mechanisms to strengthen governance and risk management in skills development in close partnership with NSDC secretariat. Fourth, it will support strong project management including effective management of technical assistance under SEIP particularly in targeting, quality assurance, institutional development, M&E and capacity building. 6. Tranche 1 will also undertake due diligence and project development and preparation for tranche 2.
    
    
13. SEIP will support six high growth priority sectors in the first tranche and around 15 priority sectors (including Agro-processing and Tourism) during the entire SEIP period. These sectors are inevitable to make Bangladeshi exports competitive as well as to enhance the productivity of Bangladeshi labor force and earnings in domestic and overseas markets.The SEIP will mobilize resources to support public and private training providers to meet emerging labor market needs. Initial six priority sectors are:

1. Readymade Garments and textile
2. Construction
3. Information Technology
4. Light Engineering/Manufacturing
5. Leather and Footwear and
6. Ship Building
   
   

14. SEIP will adapt training programs from overseas reputed institutions. SEIP will also establish partnerships with training authorities of various countries with successful models and proven track record to secure training programs and adapt these for use in Bangladesh.These programs would address critical and priority skills needs in Bangladesh. Selected public and privatetraining providers will be supported through the proposed twinning arrangement to achieve these results in a short period.
    
    
15. SEIP will support training of 1.5 million people including training for new entrants and up-skilling for those already working during the project life (2014-21).It is estimated that 260,000 people will be trainedin tranche-I (2014-17), of which about 70% or 182,000 will be provided with gainful jobs. The training will be provided by institutions under both public and private sector, and also by NGOs. Training curriculum will be of international standard and match the industry requirement.

Table 2: Targets by Institutions