2 Background to jobs and livelihoods
The
problems
5. The 2013 World Development Report found that:
Worldwide 200 million people, a disproportionate
share of them youth, are unemployed and actively looking for work.
An estimated 620 million youth, the majority of them women, are
neither working nor looking for work. Just to keep employment
rates constant, around 600 million new jobs will have to be created
over a 15-year period.[7]
It also highlighted that the problem in many developing
countries was that although unemployment rates could be low only
a minority of workers were wage earners:
More than 3 billion people are working worldwide,
but almost half of them are farmers or self-employed. Most of
the poor work long hours but simply cannot make ends meet.[8]
In addition for those in work it found that "the
violation of basic rights" was "not uncommon".[9]
6. DFID evidence told us that most of the 600 million
new jobs that were needed globally for a growing working age population
were in developing countries. Population growth predictions now
look to be even higher as we discuss in Chapter 7. Currently only
16% of people in sub Saharan Africa work in waged employment in
services or industry-less in the poorest countries. 900 million
people who are working are living in poverty.[10]
7. The problems in relation to job creation, retention,
and quality in developing countries, were summarised by DFID as:
i) There
are too few productive waged jobs in modern, formal sectors;
ii) Most people
are engaged in very low productivity, seasonal or subsistence
work in both rural and urban areas;
iii) There
are large gaps in job opportunities for women, youth and marginalised
groups;
iv) Much work
is in poor conditions or is unsafe or risky-including in formal
employment; and
v) Many labour
market-related institutions are ineffective, including skills
institutions.[11]
8. It is also the case that economic growth alone
is not enough to create jobs and improve livelihoods. This growth
needs to be inclusive and sustainable. For example Sierra Leone
before the Ebola outbreak had one of the highest national growth
rates at 15% in 2012 and an estimated 13% in 2013.[12]
However this was based on natural resource extraction which created
minimal numbers of jobs.[13]
History of economic development
work
9. DFID's current economic development focus is not
a new phenomenon. Donor agencies have concentrated on economic
growth in the past—in 1990 82% of Development Assistance
Committee (DAC) Overseas Development Assistance (ODA) was directed
to agriculture, industry, economic infrastructure and the private
sector. However following the introduction of the Millennium Development
Goals in 2000, by 2004 health, education and governance accounted
for 51% of total DAC aid.[14]
We asked the Secretary of State about this. She said that:
the focus had shifted away from economic development
perhaps over the last 15 to 20 years. What we are seeking to do
is get back that balance that is required. If you are going to
invest in the health and education systems, and see those numbers
of primary children in school and have countries in a position
to continue that, and ultimately to be aidindependent, then
increasing the work that we are doing on economic growth is absolutely
vital.[15]
She also said:
I believe that people will look back on the times
when DFID was doing less economic development and just see it
as quite an odd thing that we were not doing as much as we possibly
could. Certainly for the countries that we work with, the feedback
that we are getting is that this is transformative for our relationship.
They wish we had been doing this with them so much earlier and,
indeed, many of them have been asking us for years to step more
into the economic development agenda and their economic growth
agenda.[16]
10. We were interested to know what had changed to
make economic development re-emerge as a priority on the development
agenda. Stefan Dercon, Chief Economist at DFID told us:
we live in quite a different world from 20 years
ago. […] We are coming up to 2015, where quite a lot of countries
have been achieving really dramatic progress in health and in
education as well. We are getting now a huge generation of young
people coming on to the labour market who do need to be absorbed.[17]
Can aid create economic growth?
11. We were also interested as to whether aid could
help create economic growth and as a result jobs. Professor Gollin
of University Oxford said:
It is very difficult to know how far aid is driving
growth in general and in specific country cases. One reason is
that, by design, DFID is focusing on poverty. It is focusing on
poverty alleviation in countries where poverty is most severe,
in many cases. Those are countries that have all kinds of problems
and so, in some ways, trying to achieve growth in the most difficult
places is a very difficult thing to do. It is hard to know what
the counterfactual is; what would have happened without the aid?[18]
12. However Professor Sir Gordon Conway of Imperial
College London was far more positive about the effects of aid
on growth:
If you look at countries like Thailand, the Philippines
and Indonesia, you can see quite clearly where aid, both technical
and investment, really had a difference. Those countries have
all grown. They have grown agriculturally and they have grown
economically at the same time. If you look back, there are some
great success stories there, and there was a role for aid in those
success stories, even though they were driven by indigenous people
and indigenous presidents.[19]
13. Stefan Dercon was pragmatic, he told us:
Stimulating growth with aid is not selfevident,
but the Department has quite a good record, even before the shift,
to work around lots of specific things around the enabling environment
and working with policymakers in the international space. In many
ways, this is scaling up some of the things we were doing to go
to a larger scale with a real ambition of trying to deliver more
of that transformation, the actual job creation that is needed
and the income opportunities that are needed.[20]
14. 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, notably the World Bank and DFID but there
seems to be a lack of passion in attempts to address it.
7 World
Development Report 2013, Moving Jobs Centre Stage, Main Messages Back
8
World Development Report 2013, Moving Jobs Centre Stage,
Main Messages Back
9
World Development Report 2013, Moving Jobs Centre Stage,
Main Messages Back
10
Department for International Development Back
11
Department for International Development Back
12
International Development Committee Sixth Report of Session 2014-15
Recovery and Development in Sierra Leone and Liberia HC 247 Back
13
International Development Committee Sixth Report of Session 2014-15
Recovery and Development in Sierra Leone and Liberia HC 247 Back
14
Mawdsley, E. DFID, the private sector, and the re-centring of
an economic growth agenda in international development. Global
Society Back
15
Q188 Back
16
Q233 Back
17
Q189 Back
18
Q162 Back
19
Q162 Back
20
Q189 Back
|
