Our next post from the Annual Bank Conference on Development Economics (ABCDE) is from Erwin van Veen of the OECD International Network on Conflict and Fragility
Spain’s youth is protesting in the plazas. They want jobs. Youth unemployment stands at 40% and general unemployment around 20%. It looks like a gloomy future. Now cross the Mediterranean to, for instance, Ivory Coast or Guinea.
These states do not just have much higher unemployment rates, but they are also fragile, have high corruption rates, see little investment and have booming populations and high levels of insecurity. As for unemployment, the real trouble arises here.
Globally there are about 30-40 conflict-affected and fragile states – all feature little formal employment, high poverty and, importantly, booming populations. As Samir Makdisi, of the American University of Beirut, remarked: “In these countries, even good economic policies, governance and institutions may not be adequate to absorb the additional labor that results from population growth.”
Today, the Annual Bank Conference on Development Economics (ABCDE) discussed the challenge of why job creation matters in situations of fragility and how it can be done.
It matters for two reasons.
First, jobs are likely to create stability because they make violence less attractive and increase interdependencies. Yet, there is not enough evidence to establish a clear-cut relation between the availability of jobs and the likelihood of violence, according to Chris Cramer of the University of London.
Second, employment gives people a sense of self-worth and the means to start shaping their future. Both are critical to reducing conflict and fragility. The challenge is to generate jobs fast enough in these complex and volatile settings.
Evidence and experts suggest that focus need to be on increasing agriculture productivity and public works schemes as starting points.
On the latter, Africa in particular has huge areas of virtually untapped land and a high percentage of its population already works in agriculture. Yet the sector faces underinvestment, outdated production methods and production losses because of inadequate infrastructure, storage and connections to markets.
On the former, public work schemes that improve economic and social infrastructures are good ways to rebuild communities and foster national connectivity. This lays the foundations for longer-term economic growth.
There are two challenges.
The first is that both strategies are complex. Key elements for sustainable job creation include good regulatory and fiscal frameworks, social dialogue, incentives for investment, economic infrastructure and appropriate skills training, supported by decent labour market analysis.
The second is that the international community is doing too little. It needs to scale up efforts on the basis of a common framework. For instance, the Agency for the Execution of Works in the Public Interest (Agetip) in Senegal has been instrumental in combating unemployment, says Magatte Wade, one of its founds.
International support must be grounded in the lessons that can be learned from such examples. Yet, job creation projects have often adopted a short-term outlook with limited linkages to long-term employment and income generation. It may not resolve conflict and fragility, but it certainly is a vital component of strategies to reduce it.