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More and Better Jobs

Eliana Cardoso's picture

Forget the Homo Sapiens and the Homo Economicus. The guy who traces our destiny is the Homo Ludens, the man who plays. Johan Huizinga, a professor of history and linguistics, in his 1938 book, says that art and culture originate from our propensity to dance and have fun. But to enjoy life, play and build a peaceful world, you need a productive job that removes you from the daily struggle of making ends meet.

South Asia is unique in the multiplicity of its challenges and opportunities to generate productive employment. Start counting: many workers are stuck in low productivity agriculture and informal employment; there is low female labor force participation; the skill base is low; the countries in the region struggle with pervasive vulnerability and uncertainty, large economic and social disparities, and persistent conflict and violence.

Yet, there is no work that looks at all these factors in an integrated manner for the region. This is the reason why the World Bank’s first South Asia Region flagship report will focus on More and Better Jobs. This blog will keep readers informed on the progress of the report during next year.

Reema Nayar and Pablo Gottret (Lead Economists at the World Bank) say that, “An effective job-creation strategy has to go beyond interventions in the labor market. The macroeconomic environments, governance, security, investment climate, education, training and social protection systems all have a role."

The report will look closely at key constraints on the full and productive use of South Asia’s labor resources, identifying priority policy options to create better job opportunities for the current and future workforce.

We have three questions in mind:

• What explains South Asia’s much slower transition of labor out of agriculture and rural areas relative to countries at similar levels of development?

• What economic factors keep firms small and informal and trap the majority of workers in low-productivity jobs?

• How do the particular issues of inequality, low spatial mobility and conflict make the challenge of creating more and better jobs more daunting in South Asia?

Do let us know about your thoughts on these questions.

Comments

Submitted by Prajwol on
I recently found this blog online, and I liked it so far, and I hope to continue reading it. I also look forward to that World Bank’s first South Asia Region flagship report keenly. I am not an economist, but I do have a layman perspective on above three questions. My answers are based primarily on my living experience in those regions and my changing perspective after moving abroad. The biggest issue, for all above questions, is the failure of people to see/think outside the box. The inability to recognize the possibilities and being confined to the status quo by embracing fatalism is one of the biggest hindrances. There are two reasons for this failure: 1) Not having enough exposure to know something else too exists, 2) Dogmatic about any changes. On top of exposure/education, socio-cultural and political issues also have some significance on those two reasons. Changes and development shouldn’t be forced upon; they should evolve from the community itself. The facilitator should never go beyond their role of a catalyst. Besides being sound and sustainable, any scheme for development should bear the ownership stamps of the local community. Without that feeling of ownership, there won’t be any lasting changes. Finding community leaders (not political) among the target community is the best way forward to carry out any schemes. I would not want to change agricultural and labor market, but promote and further enhance them. Somebody somewhere has to be the producers. Occupation of a farmer can not only bring riches, but the occupation itself should be made hip for more people to embrace it. Over the years, there has been significant decline in agriculture in the region, with people choosing to migrate elsewhere for foreign employment. Besides the social conflicts due to separation of families, this has hurt the productivity of the whole nation. The remuneration from workers abroad can help the nation in foreign exchange, and their family back home to build their houses, but beyond the walls of their property, it can do nothing to enhance the community (eg. sewer system, roads, etc). Agriculture and the wise use of natural resources is the biggest investment one can make in these regions for job creation, this should always be the frontrunner along with any other economic schemes. When we talk about development and jobs, we think about education, which is very true. But the problem here is not just education, but an effective education. An education model that promotes technical knowledge along with entrepreneurial skills is a must. Many professionals (doctors, engineers, and scientist) have migrated aboard because they know their subjects and have ability to work in any established venture, but they don’t have any know how on setting up one, or tweaking and diversifying their credentials based on the ground scenarios. The text book education is not always closer to reality.

Thank you for your comments. Yes, education and skills. But we should not forget that most of our skills are acquired in jobs. We learn by doing.

Submitted by Dibya Raj Pokhrel on
In my opinion addressing to the transitional situation, enhancement of competency and institutional building are some measure to stregnten the capabilities of poor people to bring them out from traditional job to contemporary job. In the mean time positive discrimination can help to uplift the people from their vicious circle. In this regard, Political instability and mismatch of priority of different countries are affectig factors on transformation. Principally fighting for subsitence through making hand to mouth arrangement and poverty circle are those factor which compell poor to be poor and the low level of skill, ignorance and less address of their voice at policy level fertilized it to grow. More investments in education,health ,development programmes and participatory development approach can provide opportunity to make the people getting out from this circus. the decentralization of development activities can developed democratic institution that ultimately create ownership and people can transform their way of living with obeying rule of law.

Submitted by TTCUSM on
Here are my thoughts on some of the questions posed in the article: • What explains South Asia’s much slower transition of labor out of agriculture and rural areas relative to countries at similar levels of development? I don't believe that an agricultural based economy is necessarily a bad thing, but there should be ways to make agriculture more productive and profitable. • What economic factors keep firms small and informal and trap the majority of workers in low-productivity jobs? The relative informality of firms is partly due to the legacy of colonialism. Western institutions in India don't have that much credibility due to their poor implementation. For example, the court system (which is modeled after the Anglo-Saxon system) suffers from a severe backlog, and rarely delivers justice.

An increase in agricultural productivity releases workers for activity in the industrial and service sectors. These sectors must grow to create enough jobs to employ the labor force.

Submitted by IS on
As a development practioner, I am more concerned about the fact that there is movement of labour out of agriculture. For countries in South Asia, this is a serious matter, as our food security depends on our agriculture productivity. We must look at the reasons for the labour movement out of agriculture, and those reasons are due to the inability of farmers to earn a substantial income, due to the heavy costs they must incur as a result of the high price of agricultural inputs. Multi Nationals and Globalization have played a role in South Asian farmers being driven into debt and thus out of agriculture work. Perhaps what needs to be studied is how can agriculture be made productive so that farmers can continue to earn a steady income and still compete in the market. While it is important to look at efficiency in agriculture productivity, we must also look at how we protect our food soveriegnty and diversity. With GM seeds coming into the market, what we are seeing is the nutrition levels of families declining as they no longer receive a staple diet that used to consist of grains, millets etc. Thus, we need to change our outlook on how we view Agriculture. In terms of the second question, what I have seen is that rural producers do not have access to larger markets or the resources to compete in larger markets. The lack of good transportation facilities and access to quality materials are also factors that means firms remain small or informal. As a result rural producers must rely on middlemen to sell their products. Thus the profits are earned mainly by these middlemen, and not by the producers themselves. One method of ensuring that products can compete is to look at methods of creating cooperatives among local producres, whereby they are able to provide a steady supply of goods to larger urban markets. One of the key factors that can help rural producers break out of the informal sector is also education. Educating producers on obtaining credit facilities, branding, packaging, marketing and maintaining quality standards can all help towards enabling these producers to become more competitive. If you look at women who do household based production, one of the factors that prevent them from expanding their business is often the lack of mobility, and the fact that the division of labour between women and men mean that women do not have the time required to focus completely on their business, in order to make it competitive in a larger market. For women, the fact that they are burdened with other responsibilities means that their livelihoods will remain informal. In a globalized world, where often cheap imports enter a market, local products find it difficult to compete. Global products have the resources and capabilities to advertise and have the advantage of economies of scale, while local producers do not have the resources required to compete with these global products.

Submitted by Sirimal Abeyratne on
Re-directed development startegies and reversed macroeconomic economic policies of Sri Lanka in the past few years have created a 'feeling-good' economic spurt, but undermined long-term, sustainable job creation. Increasing number of people are nailed down to unproductive domestic agriculture sector, which has created 118000 new jobs compared to the loss of 217,000 jobs in the industry and service sectors by the 2nd quarter of 2009. During 2006-2008, over 75% of new jobs were created in the public sector. The government has been undertaking many things that the private sector can perform so that the private sector expansion appears to be slowing down in the context of a gloomy business environment. The end of the conflict has brought about a rare opportunity for Sri Lanka to end its deep-rooted fundamental weaknesses in development strategy and economic policy. However, I am not sure whether Sri Lanka is going to 'miss the bus' this time too.

Yes, it is very important that politics work in favor of reconciliation to guarantee that Sri Lanka makes good use of the peace dividend.

Submitted by Neeraj Verma on
I agree with the thoughts that the workers, specially youths find themselves stuck as and when minimum skill sets are expected, the problem becomes acute in case of those who have certain physical or mental disability (PwDs)where inequality and low spatial mobility put them in more vunarable situation. Transition may have few contours of the respective socio-geographic profiles hoowever, other external factors such as industries, the governemnt and the support institution network also needs to be considered when an enabling environment for skilled workforce is considered. India may have better developed in case of the support mechansim (if it is comapred only in S Asia)however the kind of skills people at different levels and segments carry in other parts of the world, including S Asia, is very low.

Submitted by Anonymous on
In India, the aspirations of young people are soaring. Almost all the adolescents in urban slums I have talked to - both boys and girls - want to learn English and Computers to get a 'good job'. But leapfroging from the squalor and rough living of their slum homes (drugs, violence etc) into the enticing new world that is beamed into their homes everyday through the tv seems like an almost impossible dream for many of them. Most have only studied upto middle school - if at that - and have rudimentary reading writing and math skills. What will happen when their hopes and ambitions remain unfulfilled?

The honest answer to your question is "we do not know". Yet I believe the opportunities for the young Indians’ hopes and ambitions to be fulfilled increase as the country reforms and development gains ground.

Submitted by Anonymous on
I want to say that rural development is the key factor of improving the poverty and as well-as fate of the poor people case in Bangladeshi perspective i watch one thing that is many of the village people come in the city for the work why because they cant get enough thing or work in the village so rural development via improve infrastructure can change the fate of the poor people and the labor also .....

Yes, but... Opportunities in manufacturing are vital for job creation and the rural-urban migration at the core of development and poverty reduction.

Submitted by Alena on
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often. Alena

Thank you. Come back and do leave your comments and suggestions.

Submitted by Rukmini Shrinivasan on
Thanks very much for these posts. I am a development journalist and I work for an English-language newspaper in New Delhi. It's always good to find food for thought! I'd be very keen to write about this report in particular, when it comes out. Who would you suggest I get in touch with?

Submitted by Joseph Christie... on
Deer Ms. Shrinivasan, Since my comments on your article, "Rich getting richer: 120k Indians hold a third of national income" was expunged by your Newspaper (ET?) I am proving the same here for YOUR BENEFIT: "To get a fix on just how rarefied a level it puts them in, we did some simple calculations that threw up stunning numbers. It would take an average urban Indian 2,238 years, based on the monthly per capita expenditure estimates in the 2007-8 National Sample Survey, to achieve a net worth equal to that of the average HNWI. And that's assuming that this average urban Indian just accumulates all his income without consuming anything. A similar calculation shows that an average rural Indian would have to wait a fair bit longer — 3,814 years! " This is some gobbledygook and inane calculations by a totally crazy Rukmini Shrinivasan, of TNN, who has the temerity to publish her stupid nonsense. With such " economists" parading on the Indian landscape, Nobel Laureates like Amrita Sen will surely be forced take the backseat, expounding on Indian economy to the outside world. Hope this well-meant, albeit, severe criticism will help you to write articles with more relevance to ground realities, rather than some imaginary cockamamie statistical analysis or that leads us nowhere.

I totally agree that most of our skills are acquired in jobs, and that we learn by DOING. Most folks excel when given an opportunity to try.

Submitted by CharithaR on
Having been focusing on the agriculture sector in my work recently, I wonder whether the three questions are answered somewhat by the fact that countries such as Sri Lanka have a large "floating" labor pool that not only holds down one or more jobs in urban areas, but also takes leave to return to their villages to participate in seasonal agricultural work. -slow transition of labor? Many may not in fact be transiting at all! -low-productivity jobs? Some workers may prefer the flexibility afforded by a little less emphasis on productivity -spatial mobility isn't as great an issue in Sri Lanka, though inequality may be institutionalized by the labor pattern that has emerged Paddy is a classic example where, the way it is practiced in many places may seem below potential - low labor input, not enough focus on better material inputs - but in effect we get a labor pool holding down two or three "jobs" at the same time. Should this be changed for a better specialization of labor, making room for better productivity? Would that even work, given the nature of the rural activities we're talking about? Do we really want to change the labor pattern too suddenly or too drastically, taking away the safety nets ad social and economic networks that have emerged as a result of these labor patterns? My instinct veers to the negative. An alternative I am working on is to change some of the incentives and re-balance the equilibrium back home on the village farm - make it more profitable to focus on farming more effectively, and change current attitudes that farming should only be attempted for subsistence or as a large industry - with little effort or experimentation on anything in between. Appreciate thoughts.

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