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The three most important challenges and opportunities for the decade ahead

Shanta Devarajan's picture

 1. Jobs

Throughout the developing world, productive-employment-intensive growth remains a challenge. In Africa, it is almost a crisis, with most of the labor force working in low-productivity, informal-sector jobs, and 7-10 million young people entering the labor force every year. That the unemployment rate in South Africa—the continent’s largest economy—has remained around 25 percent is particularly troubling.

2. Fragile states

One group of African countries—numbering 20 at last count—are missing out on development because of conflict, war or serious governance problems. Even more disturbing is the fact that these countries have remained fragile states for a long time: The probability that a fragile state in 2000 was still fragile in 2008 is 0.96. The development community needs to rethink its approach to these countries.

3. Politics and pro-poor reforms

After one or two decades of multi-party democracy in some countries and the increased voice of domestic civil society (thanks partly to the information revolution), the climate for pro-poor reforms in Africa is improving. Note the almost total absence of populist (and ultimately anti-poor) policies such as price and exchange rate controls in response to the food, fuel and financial crises of the past two years. As policymakers are increasingly being held accountable by the people—the majority of whom are poor—there is a better chance that they will take decisions that benefit the poor.