Cross-linked with Bertelsmann Stuftung – Future Challenges’ blog
The developing world has the potential for major economic growth, but first it must prepare its young people for the burgeoning jobs market
The need for quality employment in the developing world underlies the success of almost every other development initiative. Job creation has become one of the most pressing issues on the road towards fueling the economic engine and impacting complex and intertwined poverty issues such as education, nutrition, health care and housing. Without the possibility of a stable, reliable income, there is little chance for the poor to engage in sustained solutions that will improve their circumstances.
A Million per Month
Job creation, however, is only one side of the equation. A report released in December by the World Bank (WB), entitled ‘More and Better Jobs in South Asia’, says that a comprehensive and multi-sectoral policy framework will need to be implemented in order to meet the “demographic dividend” opportunity. This “dividend” is the return on the region’s swelling youth population and the opening labor market for women – South Asia has the second-lowest female participation rate in the world – that will continue to enter the workforce until 2040. The challenge will be to engage these new employees in “rising levels of productivity”, and the report warns that, “an estimated 1-1.2 million new workers will join the labor market in South Asia every month over the next few decades – an increase of 25-50% over the historical average.” This means that a million new jobs need to be added each month in order to “sustain economic growth and reduce poverty in South Asia,” says an article in The Hindu.
This chronic need for employment opportunities is seen throughout the developing world. In 2005, Africa’s youth unemployment reached 21%, higher than the world average of 14.4% and second only to the Middle East and North Africa (MENA) region’s 25.6%. Youth unemployment in Africa is a problem of alarming proportions precisely because 65% of the continent’s population is under the age of 24, with over 40% of the total population below the age of 16, and about 25% aged 15-24. According to the International Labor Organization (ILO), young people make up approximately 36.9% of the total working-age population, and three in five of Africa’s unemployed are young people.
While many developing nations have enjoyed economic growth, the benefits of that growth have not been distributed evenly and the high proportion of unemployed young people undermines further economic growth. In addition to the economic costs of youth unemployment there is also the social cost – as young people face long-term or cyclical unemployment they can become disaffected and alienated from their own communities. This can lead to higher crime rates and greater involvement in underground economic activity, as well as social unrest. Continue reading