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#4 from 2016: What is your challenge? Creating Jobs and Livelihoods for the bottom 40%

Parmesh Shah's picture
A farmer harvests mung beans in Cambodia's northern province. Our Top Ten blog posts by readership in 2016. This post was originally published on February 12, 2016.  

Extreme poverty in the world has decreased considerably over the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1.25 a day. This rate has dropped dramatically to 21% in 2010. Moreover, despite a 59% increase in the developing world’s population, there were significantly fewer people living on less than $1.25 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). However, 1.2 billion people still live in extreme poverty—an extremely high figure, so the task ahead of us remains herculean.

Among the poor, 78% live in rural areas, and 500 million of these are small farmers. Of these, 170 million are women farmers. Globally, 2.5 billion are dependent on small farms as a source of livelihood and employment.  Agriculture contributes one third of GDP in Africa and more than 65% of the workforce depends on this sector. There has been significant progress in increasing agricultural production and expansion of livelihood and economic opportunities in rural areas. There are about 40 million enterprises, from very small to medium-sized, involved in agribusiness. 

Results-based financing links masses of youth with employment in Nepal

HELVETAS Swiss Intercooperation's picture

Building electrician training, NepalBettina Jenny and Sonja Hofstetter of Helvetas Swiss Intercooperation, Switzerland and Gisela Keller of Helvetas USA explain how a skills development program in Nepal has trained over 100,000 youth— with more than 75,000 of them gainfully employed.

In Nepal, about 500,000 young people enter the Nepalese labor market every year. Most of them are unskilled and have not completed formal education. Moreover, the private sector in Nepal is weak, and a ten-year-long civil war (1996-2006) and subsequent ongoing political instability have contributed to the worsening economic and social situation. In short, getting a job is a huge challenge for many young people in Nepal.

Good intentions are not enough. Future employment and earning outcomes are the key indicator to measure the success of skills training. Many development actors provide skills training with the goal of making personal and economic perspectives available to youth in countries with high unemployment. Such programs tend to focus more on training delivery than on employment, and graduates of these kinds of youth skills programs often discover that their newly acquired skills do not meet market demands.

We do things differently. In 2007, the Swiss Agency for Development and Cooperation (SDC) joined with HELVETAS Swiss Intercooperation to establish the Employment Fund to create new and effective ways to scale up approaches addressing the alarming scope of youth unemployment in Nepal. Funded by the Swiss Agency for Development and Cooperation, the Department for International Development (DFID) and the World Bank, the Employment Fund began its operations in 2008. The Employment Fund offers training in about 80 occupations in construction, hospitality, garments and textile, agriculture, and electronics – to name a few -- in locations all over Nepal. The Employment Fund received a prize for good practice in youth employment awarded by the International Labour Organisation (ILO), and was among the ten finalists for the OECD DAC Prize for Taking Development Innovation to Scale.

Unlike many other skills training programs, the Employment Fund applies a results-based financing approach that has proven to effectively lead to gainful employment upon the completion of training. Training providers are paid based on their success in training youth and subsequently connecting them with the labor market. The key result is gainful employment.

Blog post of the month: What is your challenge? Creating Jobs and Livelihoods for the bottom 40%

Parmesh Shah's picture

Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion. In February 2016, the featured blog post is "What is your challenge? Creating Jobs and Livelihoods for the bottom 40%" by Parmesh Shah.

A farmer harvests mung beans in Cambodia's northern province. Extreme poverty in the world has decreased considerably over the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1.25 a day. This rate has dropped dramatically to 21% in 2010. Moreover, despite a 59% increase in the developing world’s population, there were significantly fewer people living on less than $1.25 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). However, 1.2 billion people still live in extreme poverty—an extremely high figure, so the task ahead of us remains herculean.
 
Among the poor, 78% live in rural areas, and 500 million of these are small farmers. Of these, 170 million are women farmers. Globally, 2.5 billion are dependent on small farms as a source of livelihood and employment.  Agriculture contributes one third of GDP in Africa and more than 65% of the workforce depends on this sector. There has been significant progress in increasing agricultural production and expansion of livelihood and economic opportunities in rural areas. There are about 40 million enterprises, from very small to medium-sized, involved in agribusiness. 
 
Nevertheless, they are too small in size and quality to make the kind of dent in jobs and employment that is needed.  Agriculture accounts for 32% of total employment globally, according to the ILO’s Global Employment Trends Report 2014.  In 2013, 74.5 million youth – aged 15-24 - were unemployed, an increase of more than 700,000 over the previous year. That same year, the global youth unemployment rate reached 13.1%, which was almost three times as high as the adult unemployment rate. One contributing factor in these rates is the lack of interest in agriculture among youth cohorts.  Simply put, agriculture is not a preferred job and livelihood option for young people.
 

What is your challenge? Creating Jobs and Livelihoods for the bottom 40%

Parmesh Shah's picture
A farmer harvests mung beans in Cambodia's northern province. Extreme poverty in the world has decreased considerably over the past three decades. In 1981, more than half of citizens in the developing world lived on less than $1.25 a day. This rate has dropped dramatically to 21% in 2010. Moreover, despite a 59% increase in the developing world’s population, there were significantly fewer people living on less than $1.25 a day in 2010 (1.2 billion) than there were three decades ago (1.9 billion). However, 1.2 billion people still live in extreme poverty—an extremely high figure, so the task ahead of us remains herculean.
 
Among the poor, 78% live in rural areas, and 500 million of these are small farmers. Of these, 170 million are women farmers. Globally, 2.5 billion are dependent on small farms as a source of livelihood and employment.  Agriculture contributes one third of GDP in Africa and more than 65% of the workforce depends on this sector. There has been significant progress in increasing agricultural production and expansion of livelihood and economic opportunities in rural areas. There are about 40 million enterprises, from very small to medium-sized, involved in agribusiness. 
 
Nevertheless, they are too small in size and quality to make the kind of dent in jobs and employment that is needed.  Agriculture accounts for 32% of total employment globally, according to the ILO’s Global Employment Trends Report 2014.  In 2013, 74.5 million youth – aged 15-24 - were unemployed, an increase of more than 700,000 over the previous year. That same year, the global youth unemployment rate reached 13.1%, which was almost three times as high as the adult unemployment rate. One contributing factor in these rates is the lack of interest in agriculture among youth cohorts.  Simply put, agriculture is not a preferred job and livelihood option for young people.
 

Why those promoting growth need to take politics seriously, and vice versa

Duncan Green's picture

Nicholas Waddell, a DFID Governance Adviser working on ‘Governance for Economic Development’ (G4ED) explores the links between governance and economic growth. 

Should I play it safe and join a governance team or risk being a lone voice in a sea of economists and private sector staff? This was my dilemma as a DFID Governance Adviser returning to the UK after a stint in East Africa. I gambled and joined the growth specialists in DFID’s newly created Economic Development arm.  A year in, I now think differently about the relationship between growth and governance.

Man working inside a large reinforced steel tube, PhilippinesEradicating poverty will not be possible without high and sustained growth that generates productive jobs and brings benefits across society. Historically, this has included boosting productivity within existing sectors as well as rebalancing economies towards more productive sectors (e.g. from agriculture to manufacturing). Such structural change or economic transformation has lifted millions from poverty.

Economic transformation can have a strong disruptive effect on political governance – giving rise, for example, to interest groups that push for accountable leaders and effective institutions. As countries get richer, more effective institutions also become more affordable. Over time, economic transformation can therefore advance core governance objectives.

But this is easier said than done. Economic development is an inherently political process that challenges vested interests. Often the surest ways for elites to hold onto power and profit aren’t in step with measures to spur investment, create jobs and foster growth. Shrewd power politics can be bad economics.

Weekly wire: The global forum

Roxanne Bauer's picture
World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.
 

State of Civil Society Report
CIVICUS alliance
The scale of the threats to civic space should not be underestimated. CIVICUS’ analysis suggests that, in 2014, there were serious threats to civic freedoms in at least 96 countries around the world. If you take these countries’ populations into account, this means that 67 years after the Universal Declaration of Human Rights guaranteed our freedoms of expression, peaceful assembly and association, 6 out of 7 humans live in countries where these freedoms were under threat. And even the most mature democracies are not exempt

6 Astounding Ways Africa Is Paving the Way for the Future of Technology
Open Mic
Every week, the American tech sector uses the most advanced mobile technologies in the world to create some new meaningless distraction. Tinder for dogs, Airbnb for boats, Yo — all sorts of luxury convenience tools created to manufacture and solve problems that don't exist and extract some in-app purchases along the way. Meanwhile, in Africa, a budding generation of technologists, coders and entrepreneurs are rising to solve their continent's most pressing problems. Entire new industries around payment solutions, crowdsourcing and entertainment media are springing up in tech hubs in Kenya, Nigeria and other countries.  This is the rise of Silicon Savannah — and a few ways it's going to change the global face of technology.

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week

Remittances to developing nations to hit $500 billion in 2015 - U.N. official
Reuters
An estimated 230 million migrants will send $500 billion in remittances to developing countries in 2015, a flow of capital expected to do more to reduce poverty than all development aid combined, a senior official of the U.N. agricultural bank said. Ten percent of the world's people are directly affected by this money, Pedro De Vasconcelos, programme coordinator for remittances with the International Fund for Agricultural Development, told a conference on Tuesday. "Migrants are investing back into poor regions," Vasconcelos said, adding that about $200 billion is expected to go directly to rural areas.

The Aid Industry- What Journalists Really Think
International Broadcasting Trust
There has been growing media criticism of the aid industry in recent years. Some of this has been ideologically driven and some opportunistic but it also appears that journalists are more insistent on holding aid agencies to account than they have been in the past. This is a good thing but often the aid sector has appeared unduly defensive in the face of criticism. This report seeks to understand what a broad range of journalists – both specialists and generalists – think about aid and the agencies that deliver it. The criticisms are wide ranging but several themes emerge. There’s a consensus that the aid sector as a whole needs to be more open and transparent.  Since media reporting of the aid industry undoubtedly has a big influence on public opinion, it’s important that we take the views of journalists seriously. A better understanding of what journalists really think will also enable those working in the aid sector to deal more effectively with media criticism.

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

#Davosproblems: The financial crisis isn‘t over, and the inequality crisis is just beginning
Quartz
The World Economic Forum’s annual meeting has kicked off in Davos, Switzerland under the banner of “The New Global Context.” Falling in the long shadow of the financial crisis, the WEF’s theme reflects as much hope as a creeping sense that economic turmoil is the new normal. Some seven years into the current crisis, the participants at Davos are acutely aware that the world economy still hasn’t recovered its past momentum.

The Power of Market Creation, How Innovation Can Spur Development
Foreign Affairs
Most explanations of economic growth focus on conditions or incentives at the global or national level. They correlate prosperity with factors such as geography, demography, natural resources, political development, national culture, or official policy choices. Other explanations operate at the industry level, trying to explain why some sectors prosper more than others. At the end of the day, however, it is not societies, governments, or industries that create jobs but companies and their leaders. It is entrepreneurs and businesses that choose to spend or not, invest or not, hire or not.

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Focus on Migration: Rising migration is a myth
SciDevNet
Hardly a week goes by without media coverage of the fears, in developed nations, that immigrants from poorer countries are overwhelming them. A recent story in the British newspaper The Telegraph — describing how open borders, the “ravages of globalisation”, and a welfare economy have given rise to social resentment — is just one example. [1] Such narratives tap into the popular myth that globalisation has led to a one-way, free flow of migrants from poorer countries — making migration a political issue almost everywhere in the industrialised world.

Facebook is more important to news distribution than you think, and journalists are freaked out
Poynter
Facebook’s Liz Heron answered for a litany of perceived sins and slights last week during a conversation with The Atlantic’s Alexis Madrigal and attendees at the Online News Association conference in Chicago. Journalists are anxious about being left out of the loop about how Facebook works, and they want answers. Does Facebook play favorites in the News Feed Algorithm? Nope, according to Heron, the company’s head of news partnerships. In other words: If you want to be successful on Facebook, don’t get caught up in the nuts and bolts of what it favors or disfavors about posts (and it won’t tell you much about those nuts and bolts anyway, so that works out).

What Will it Take to End Poverty in Cities?

Abha Joshi-Ghani's picture

Postcards from the World Urban Forum in Medellin, Colombia

From April 5th to 11th, in Medellin, the World Urban Forum (WUF) brought together a diverse group of urban thinkers and doers to discuss the world’s most urgent urban challenges. With participants meeting under the theme of “Urban Equity in Development – Cities for Life,” the overall atmosphere was one of cautious optimism. On the one hand, participants were highly aware of the vast challenges facing cities and their inhabitants. Cities remain home to shocking levels of inequality and highly pernicious forms of social and economic exclusion. In that respect, hosting the Forum in Medellin helped drive the point home—as UN-Habitat Executive Director Jon Clos observed before the event, “We want a realistic world urban forum, we want a forum in a real city that has real issues.” On the other, attendees were buoyed by the conviction that today’s rapid urbanization represents an unprecedented demographic and economic opportunity. Medellin itself has made astounding progress in recent years, focusing on improving transport and mobility, inclusive governance, and education.

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