Conclusions and recommendations
Background to jobs and livelihoods
1. 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. (Paragraph 14)
DFID policy
2. DFID
recognises that the private sector is the driver of economic growth
and will produce 90% of new jobs. Its approach to economic development
is centred on its Economic Development Strategic Framework. This
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
such as girls and women. The choice and balance of interventions
depends on the particular circumstances of each country. The basic
approach was supported by many witnesses. (Paragraph 33)
3. However, there
are several concerns. Spending on economic development has increased
greatly in recent years. 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, but we
urge DFID to publish regularly a list of achievements from the
money spent on its economic development programmes. A £1.8billion
budget needs to demonstrate year on year outcomes and results.
We agree with ICAI that DFID should be clearer about the areas
in which it has a comparative advantage relative to other stakeholders
and where it can actually make a difference. (Paragraph 34)
4. As the balance
of interventions will vary from country to country, it is essential
that decisions are made locally. 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 should be well-integrated with them. Country
offices should be properly consulted about centrally managed programmes
to be run in their country. (Paragraph 35)
5. Economic development
work can and should be done in fragile and conflict affected states.
We recommend that DFID continues the difficult challenge of creating
jobs and improving livelihoods in fragile and conflict affected
states as it is successfully doing in the DRC.
(Paragraph 36)
Creating space for the Private Sector to invest
6. 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 in this area. However, as we saw in both
Dar es Salam and Kathmandu poor urban planning is a serious obstacle
to development and is relatively neglected by donors. We recommend
that DFID reassess the priority it gives to urban planning.
(Paragraph 52)
7. It is important
for DFID to use its influence with recipient governments to encourage
them to focus on the investment climate especially to reduce corruption.
We recommend that DFID maintain its focus on improving the enabling
environment in the areas where it has its competitive advantage.
(Paragraph 53)
8. We are encouraged
that CDC has followed our recommendations and has refocused on
job creation. (Paragraph 54)
Engaging with business
9. DFID
has recognised that if it is to spend large sums on economic development
and engage with the private sector, it needs to recruit people
who have worked in that sector. We welcome the progress made,
but recommend that DFID recruit people who have set up businesses
themselves or have run businesses in developing countries to work
in the private sector department. (Paragraph 80)
10. DFID must ensure
it has put sufficient emphasis on economic growth which creates
jobs and improves livelihoods. It needs to be open to working
in a wide range of economic sectors which have the potential to
create large numbers of jobs. This should include tourism and
the creative industries. We recommend that DFID and the FCO
make tourism a greater focus of its work, both in programmes which
support the industry and in engaging with governments; this might
include in Tanzania encouraging the Government to increase efforts
to combat poaching. (Paragraph 81)
11. 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
other companies fully respects local standards. We welcome the
Secretary of State's commitment to review DFID's relationship
with the International Labour Organisation as part of its reconsideration
of the Multilateral Aid Review. In light of the much greater involvement
of DFID in jobs we recommend that it should reinstate its core
funding to the International Labour Organisation. (Paragraph
82)
12. We recommend
that as part of DFID's growth diagnostic consideration should
be given to the presence or potential for forced labour, debt
bondage and slavery in its priority countries. An explicit part
of DFID's economic development programme in a country should be
working to ensure labour contracts are freely entered into and
the end of forced or bonded labour, on the understanding that
this is a condition for economic development in the same way as
secure property rights or access to capital.
(Paragraph 83)
13. 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. We welcome the Secretary of State's
support for new forms of finance along the lines we recommended
in our report on Development Finance. We look forward to seeing
greater use of returnable and recyclable capital alongside more
traditional grant aid develop further. (Paragraph 84)
Improving livelihoods
14. The
majority of people working in developing countries are not in
formal waged employment but are eking out a living in the informal
economy. As one of our witnesses told us 'informal is now normal'.
We recommend that DFID make working with those in the informal
economy a priority. Social security funding should be extended
to those in the informal economy along the lines of the National
Social Security Fund in Tanzania.
(Paragraph 102)
15. We support DFID's
focus on agriculture as the most likely sector to help raise people
out of extreme poverty. It is a job intensive industry and the
sector that most poor people currently work in. Agricultural processing
and the food industry has the greatest potential for many African
countries as the raw materials and market are local. We look forward
to the publication of DFID's agricultural strategy and recommend
that our successor Committee inquire into this new agricultural
strategy in the next Parliament. (Paragraph 103)
Marginalised groups
16. We
recommend that DFID think more creatively how it can support small
organisations and charities doing exceptional work especially
with marginalised groups such as women and girls in Lower Income
Countries. (Paragraph
112)
17. DFID needs specific
interventions for marginalised groups if these groups are to benefit
from wider economic growth. We welcome DFID s positive response
to our report on disability. We recommend that DFID should
help raise awareness of disability issues and the rights of people
with disabilities within work as well as broader society. It should
also work with national partners to share learning and expertise
on creating inclusive work environments; accessible training and
working facilities. (Paragraph 128)
18. Older people
are increasingly the agricultural workers and decision makers
in smallholder farming. DFID must ensure that its agricultural
livelihoods programmes properly engage with all age groups and
does not exclude older farmers. (Paragraph
129)
19. 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. We recommend
that DFID stress the importance of supporting women in business
and giving them the same access to land and business rights as
men. Women are very reliable with money and returning money they
have borrowed through micro-finance. We believe the key to micro-credit
is to provide it alongside livelihood programmes as BRAC does.
(Paragraph 130)
20. Fertility rates
remain high in many parts of Africa, exacerbating the problem
on un- and under-employment. We are, therefore, surprised that
DFID has reduced its spending on reproductive health. We recommend
that expenditure in this area be significantly increased and that
DFID assess whether the main problem is access to or attitudes
towards contraception. (Paragraph 131)
Youth unemployment
21. Given
the importance of DFID's International Citizen Service programmes,
we believe it is justified for them to be the subject of an inquiry
either by ICAI or our successor Committee in the new Parliament
so that their full effects can be evaluated.
(Paragraph 144)
22. Youth unemployment
is a great challenge and is a potential cause of social and political
unrest. 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. Currently, donors,
the private sector and developing country governments 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
into the thinking and planning. (Paragraph 161)
23. The majority
of young people entering the labour market in developing countries
will be self-employed and in informal employment. They need to
be supported in this position as young entrepreneurs. DFID needs
to ensure the education in schools is focused on creating the
skills young people will need to enter the world of work especially
self-employment. In rural areas schools should focus especially
on agricultural skills for example animal husbandry. DFID should
encourage recipient developing country governments to introduce
sandwich courses in higher education institutions. In our Beyond
Aid inquiry we stressed the importance of better policy coherence
and in particular UK government departments working together.
We again highlight the need for DFID to work with BIS on expanding
its support to further and higher education in its priority countries.
(Paragraph 162)
24. We also recommend
a number of small, immediate, practical actions. We recommend
that DFID officials meet with BIS officials to discuss which of
the BIS youth programmes could be transferred to developing countries.
To ensure it gives greater priority to youth unemployment, we
recommend DFID creates the position of a senior adviser on youth
employment. As the focus on this area becomes more acute there
is an urgent need for far more data to be collected and examined
to fully understand the problem and solutions so that targeted
programs can be developed. We encourage DFID to work with organisations
such as Peace Child International and Youth Business International
to create and pilot innovative ways of collecting and measuring
youth job creation data. (Paragraph 163)
25. 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. (Paragraph 164)
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