The Syrian crisis has now become one of the largest humanitarian crises of our time. The numbers are staggering. About half of the Syrian pre-conflict population has been displaced, over 200,000 people have been killed, millions of Syrians have been injured or traumatized and millions more have fled to neighboring countries and elsewhere. Yet, we know surprisingly little about the actual living conditions of those who are suffering from the crisis. For the people who have remained in Syria, information is either very scarce or unavailable. For the people affected by the Syrian crisis who have migrated to Europe, we have mostly anecdotal information that mixes victims of the Syrian crisis with other types of migrants. For those Syrians who have fled to neighboring countries and registered as refugees, we have a substantial amount of information but to date this information has been little exploited to study the welfare of refugees.
Firmin gets by doing small odd jobs. One day he is a street vendor, the next day a carpenter, and on other days he’s a gardener. He arrived in Abidjan two years ago with high hopes of joining the National Police Academy. His story resembles that of thousands of Ivorians who join the domestic workforce each year. Today, there are about 14 million people of age to work in the country, and by 2025, there will be approximately 22 million - all of whom seek a secure well-paying job.
In late 2014, the World Bank’s Competitive Cities team visited the Moroccan city of Tangier, to carry out a case study of how a city in the Middle East & North Africa Region managed to achieve stellar economic growth and create jobs for its rising population, especially given that it is not endowed with oil or natural gas reserves like many others in the region.
In just over a decade, this ancient port city went from dormant to dominant. Between 2005 and 2012, for example, Tangier created new jobs three times as fast as Morocco as a whole (employment growth averaged 2.7% and 0.9% per year, respectively), while also outpacing national GDP growth by about a tenth. Today, the city and its surrounding region of Tanger-Tétouan is a booming commercial gateway and manufacturing hub, with one of Africa’s largest seaports and automotive factories, producing some 400,000 vehicles per year (with Moroccan-made content at approximately 35-40%, and a target to increase that share to 60% in the next few years). The metropolitan area now boasts multiple free trade zones and industrial parks, while also thriving as a tourist destination. As in our previous city case studies, we wanted to know what (and who) drove this transformation, and how exactly it was achieved.
Greater competition is crucial for creating better jobs, although there may be short term tradeoffs.
Job creation on a massive scale is crucial for sustainably ending extreme poverty and building shared prosperity in every economy. And robust and competitive markets are crucial for creating jobs. Yet the question of whether competition boosts or destroys jobs is one that policymakers often shy away from.
It was thus valuable to have that question as a central point of discussion for competition authorities and policymakers from almost 100 countries – from both developed and developing economies – who recently gathered in Paris for the 14th OECD Global Forum on Competition (GFC).
According to World Bank Group estimates the global economy must create 600 million new jobs by the year 2027 – with 90 percent of those jobs being created in the private sector – just to hold employment rates constant, given current demographic trends.
Yet the need goes further than simply the creation of jobs: to promote shared prosperity, one of the urgent priorities – for economies large and small – is the creation of better jobs. This is where competition policy can play a critical role.
Competition helps drive labor toward more productive employment: first, by improving firm-level productivity, and second, by driving the allocation of labor to more productive firms within an industry.
Moreover: Making markets more open to foreign competition drives labor to sectors with higher productivity – or, at least, with higher productivity growth. Making jobs more productive, in turn, generally increases the wages they command.
That’s in addition to cross-country evidence on the impact of competition policy on the growth of Total Factor Productivity and GDP, and the fact that growth tends not to occur without creating jobs. Thus there’s compelling evidence that – far from being a job killer, as skeptics might fear – competition (over the long term) has the potential to create both more jobs and better jobs.
The key question then becomes whether such long-term benefits must be achieved at the expense of short-term negative shocks to employment – especially in sectors of the economy that may experience sudden increases in the level of competition.
Progress toward better jobs is driven partly by the disappearance of low-productivity jobs, as well as the creation of more productive jobs in the short run. Competition encourages that dynamic through firm entry and exit, along with a reduction in “labor hoarding” in firms that have previously enjoyed strong market power.
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.
Eradicating 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.
“India has the maximum number of young people and these young people will enter the labor market in the next two decades.” These words by the World Bank’s Managing Director and Chief Operating Officer Sri Mulyani Indrawati at the Malaviya National Institute of Technology campus, Jaipur, on September 23, 2015, had all of us listening with rapt attention.
Unprecedented economic growth in the last three decades propelled East Asia into an economic powerhouse responsible for a quarter of the world’s economy.
Hundreds of millions of people across the region, including in China, Indonesia, Malaysia, Thailand and Vietnam, lifted themselves out of extreme poverty and enjoyed greater prosperity, largely because of more labor-intensive and inclusive growth.
The success didn’t come without challenges. As of last year, 100 million people in East Asia still live on $1.25 a day. About 260 million still live on $2 a day or less, and they could fall back into poverty if the global economy takes a turn for the worse or if they face health, food and other shocks at home. Their uncertain future shows the increasing inequality of East Asia’s galloping growth.
In 1965, Gordon Moore — co-founder of Intel Corporation — hypothesized that the number of transistors on an integrated circuit will double every 18 to 24 months. This came to be known as Moore’s Law, the ramifications of which are hard to ignore in almost any aspect of our everyday lives. Information has become more accessible to people at lower costs. Today’s work force is globalized and there are few domains that are still untouched by technology.
Yet the very ubiquitous and rapidly evolving nature of information and communication technologies (ICTs) gives rise to fears of displacing more workers and potentially widening the economic gap between the rich and poor. Technological evolution and artificial intelligence are fast redefining the conventional structure of our society.
- Artificial Intelligence
- wage stagnation
- inequality and shared prosperity
- Income Inequality
- information and communication for development (ICT4D)
- jobs market
- Private Sector Development
- Labor and Social Protection
- Information and Communication Technologies
- The World Region