Jobs and Livelihoods - International Development Contents


Summary

The shortage of full time jobs and the difficulty in earning a livelihood are one of the greatest global problems. Increasing population, especially in Africa, looks much less likely to stabilise than experts complacently believed until recently. World-wide 600 million young people will enter the job market in the next decade with only 200 million jobs awaiting them. The failure to address the issue will have serious consequences and threatens widespread social and political unrest. The situation is recognised by donors, but there seems to be a lack of passion in attempts to address it.

As DFID notes, the private sector is the driver of economic growth and will produce 90% of new jobs. DFID's approach to economic development is centred on its Economic Development Strategic Framework, which consists of a series of wide-ranging interventions, listed under five pillars, including international trade; improving the 'enabling' environment in countries; catalysing capital flows; engaging with businesses to help their investments contribute to development; and ensuring growth is inclusive and benefits marginalised groups. The choice and balance of interventions depends on the particular circumstances of each country. This basic approach was supported by many witnesses.

However, there are several concerns. DFID plans to spend £1.8 billion on economic development by 2015-16-more than doubling the amount spent in 2012-13; is DFID geared up to spend the extra money cost-effectively? We have seen examples of successful work on our visits, and urge DFID to publish lists of achievements under these programmes.

As the balance of interventions will vary from country to country, it is essential that decisions are made locally. The DFID country offices must lead this work; this means they should determine not only their own bilateral country programmes, but also ensure that programmes run from DFID in the UK are well-integrated with them.

We support DFID's work to improve the enabling environment, to create the space for the private sector to flourish, and have seen excellent examples of its work in areas such as public financial management. DFID should not do everything and investment in some areas such as infrastructure is best undertaken by its partners which have a comparative advantage. However, as we saw in both Dar es Salam and Kathmandu, poor urban planning is a serious obstacle to development. We recommend that DFID reassess the priority it gives to urban planning.

Turning to DFID's private sector development work, we welcome DFID's support for a wide range of sectors, including both manufacturing and agriculture, including food processing. However, we are surprised that some labour-intensive sectors are unwarrantably unfashionable. We recommend that DFID seek to increase its involvement in tourism, supporting the work of other donors and that CDC examine whether investment in this sector would be a cost effective way to create jobs. It has been predicted that 73 million jobs could be created in travel and tourism over the next decade. There are also a considerable number of jobs which could be created in the health and education sectors where there are a dearth of health care workers and teachers.

DFID has been criticised in the past for its lack of understanding of the private sector. The situation has improved, but there is room for further improvement. We recommend that DFID needs to continue to develop its understanding of the private sector and to employ advisers with experience of working in the private sector, especially those who have run their own business particularly in a developing country.

DFID must ensure that it has put sufficient emphasis on economic growth which creates jobs and improves livelihoods. The creation of decent jobs is important; working conditions can be improved without losing jobs, as the experience of the Bangladesh garment industry shows. We recommend that DFID insist that any multinational company receiving its funds respect international standards set out in the OECD Guidelines for Multinational Enterprises and that any other company complies with local standards. We further recommend that DFID reinstate its core funding for the International Labour Organisation.

On our visits we saw several examples of DFID's productive involvement with private companies. However, our concerns from previous reports persist. DFID has to be careful not to distort the market by favouring one company over another. Moreover, we repeat our recommendation that in supporting private companies, DFID should make less use of grants and more of recyclable and returnable capital.

The majority of the working age population in developing countries earn their living through the informal economy. We recommend that DFID make working with the population in the informal economy a priority for its work. This will necessarily involve an emphasis on agricultural livelihoods. Social security should be extended to those in informal employment.

DFID needs specific interventions for marginalised groups if these groups are to benefit from wider economic growth. Women and girls carry a greater burden of unpaid domestic and care work than men, limiting their education and employment opportunities. We recommend that DFID take further steps to help lift this barrier.

Fertility rates remain high in many parts of Africa, exacerbating the problem of un- and under-employment. We are, therefore, surprised that DFID has reduced its spending on reproductive health. We recommend that work and spending in this area be significantly increased and that DFID assess whether the main problem is access to or attitudes towards contraception.

Young people have particular difficulty with jobs and livelihoods, and youth unemployment is, in our view, the greatest challenge. We recommend that DFID more explicitly target youth unemployment. We have seen examples of effective interventions, but have also received evidence about the need for improvement namely that far more needs to be done to encourage youth entrepreneurism. Education systems could be more effective in addressing the skills required for entering the informal economy such as financial literacy. Currently, donors, development agencies, the private sector and recipient countries are not working together on a scale to even approach meeting the challenge. The work needs to be scaled up and a sense of urgency injected.

Jobs and livelihoods is such an important issue we recommend that our successor Committee takes it up in the next Parliament to assess what progress has been made.



 
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Prepared 24 March 2015