Law and Regulation
The correlation is simple: Job creation is the hinge connecting the three pivotal elements of economic development: living standards, productivity gains, and social cohesion. Promoting access to the labor market for all, including traditionally marginalized groups, is therefore paramount to achieving real, sustainable growth.
Following the success story of "Women, Business and the Law," which focuses on legislative gender discrimination and its impact on the economy, the World Bank Group is now launching a new initiative that will develop a set of indicators measuring discriminatory legislation on the basis of racial and ethnic origin, religion and sexual orientation. The project was presented externally for the first time on November 11 by Federica Saliola, Program Manager and Task Team Leader of the project, speaking at Sexual Orientation and Gender Identity & Development: International Human and Economic Development, LGBT Rights and Related Fields conference, organized by The Williams Institute at UCLA.
In her speech, Ms. Saliola reminded the audience that, despite the rapid growth in emerging economies, not all sectors of society have benefitted equally, income inequality has risen, and 1 billion people are still left under the poverty line. In the coming three years, the new project will thus expand the knowledge base of laws, regulations and institutions that discriminate against ethnic, racial, religious and sexual minorities and will collect data across a number of economies covered by the Global Indicators Group.
In my previous post I showed that Poland has become a country with the highest share of temporary contracts in Europe – now around 26.9% of workers. I argued that this process wasn’t triggered by interactions between several labor regulations. In particular, the use of civil law contracts (as opposed to those based on the labor code) has become increasingly common, resulting in a dual labor market, in which one segment of the work force is better off (in terms of wages, income, and training) than the other. The Polish government has labeled these contracts “junk contracts” but so far it has failed to truly address the issue. What can be done to overcome the current deadlock on this issue?
Half the world’s energy subsidies are in the Middle East and North Africa Region. These subsidies have been criticized on grounds that they crowd out public spending on valuable items such as health, education and capital investment. Egypt for instance spends seven times more on fuel subsidies than on health. Furthermore, the allocation of these subsidies is heavily skewed towards the rich, who consume more fuel and energy than the poor. In Yemen, the portion of fuel subsidies going to the richest quintile was 40 percent; the comparable figure in Jordan was 45 percent and in Egypt, 60 percent.
The political and economic transition of post-communist Central and Eastern European (CEE) countries brought substantial improvements in GDP per capita, productivity, incomes and standard of living. But certain worrying phenomena emerged on the labour markets. One of these was a rise in temporary employment, which has created a “dual labor market” – that is, a segmented market with workers in one segment more privileged than those in the other. For the CEE economies – especially Poland – the onset was in the 2000s. A variety of possible solutions exist, but so far the Polish government has done little to improve the situation.
Hopes are high for Tunisia’s economy to improve after Tunisians voted for a new parliament in October. Pre-election polls consistently highlighted that the economy was the foremost preoccupation of Tunisians. Yet, political debates in the run up to the elections largely ignored longstanding economic problems.
Absurdly complex regulations divide the Tunisian economy between a protected “onshore” sector that sells to Tunisian consumers and a competitive “offshore” sector that exports, mostly to Europe. "It's pointless trying to understand the logic of it - there is no logic," says Belhassen Gherab, head of Aramys, one of Tunisia's largest textile and clothing groups. He gives an example: "Suppose I have a machine that breaks down because one small circuit board needs replacing. If I'm an offshore company, I call up DHL and have it delivered within 24 hours. If I'm an onshore business, I'll have to bring it in through customs. I may be waiting 30 days, with my entire production halted, just for that one circuit board."
If you’re not already interested in livelihoods, you should be. Because livelihoods are the bottom line of development. Millions are spent on trying to build more effective states around the world, but development isn’t really about state capacity. At the end of those long causal chains and theories of change, there’s a person – an average Jo (sephine), a ‘little guy’. Making things work a little better for that person, making it easier for them to make their own choices and carve out a decent living…that is the why of development.
- Jobs and Development
- Social Development
- Public Sector and Governance
- Private Sector Development
- Law and Regulation
- Labor and Social Protection
- The World Region
- South Asia
- Middle East and North Africa
- Latin America & Caribbean
- Europe and Central Asia
- East Asia and Pacific
- United Kingdom
- United States
- Congo, Democratic Republic of
The recent acceleration in growth rates across much of sub-Saharan Africa may not be purely commodity-driven, but for many of the region’s economies macro-economic stability is still dependent on prudent management of natural resources. For this reason, a strategic shift is required to shield African economies from commodity boom-burst cycles.
For much of the last half century, the dominant political economy model of natural resource management in Africa was this: states received royalties from mostly private mining companies and then were supposed to invest in public goods such as roads, hospitals, and schools. Private mining companies, for their part, would pick up the slack whenever states failed. Most of the time this happened through corporate social responsibility (CSR) initiatives, as a way of buying the social license needed to operate in specific communities.
This model has proven to be a complete failure in nearly all resource-rich African states, for a number of reasons.
If the deluge of trend pieces tell us anything, it’s that the millennials are the most fussed over demographic in history. But behind the hype, there is real a tectonic shift. We are now witnessing the largest youth bulge in history. Over half the world’s population is now under thirty, with the majority living in developing and middle-income countries.
A youthful population can be source of creativity, innovation and growth –but only if employed and engaged in their societies. Unfortunately, for much of the world’s young people, reality is very different.
A number of hurdles prevent young people from contributing as productive, socially responsible citizens. As Emma Murphy of Durham University notes, “Poor education limits their skills, poor employment limits their transition to adulthood and political obstacles limit their voice and participation.”
The longer young people are excluded from participating in their economic and political systems, the further we are from realizing the ‘demographic dividend’.
It’s a no-brainer. A youth agenda, focusing on the issues that affect young people, must be a critical piece of any post-2015 framework. Where do we start?
Editor's Note: "Notes From the Field" is an occasional feature where we let World Bank Group professionals conducting interesting trade-related projects around the globe explain some of the challenges and triumphs of their day-to-day work. The views expressed here are personal and should not be attributed to the World Bank Group. All interviews have been edited for clarity.
The interview below was conducted with Mariam Diop, a Senior Economist with the World Bank Group. Mariam is based in the country office in Ouagadougou, the capital of Burkina Faso, where she carries out work in the WBG’s new Macro and Fiscal Management Global Practice. Mariam has been deeply involved with the country’s Diagnostic Trade Integration Studies (DTIS), which has helped to identify a number of key restraints on economic growth and shared prosperity in Burkina Faso. The Trade Post spoke with Mariam about what brought her to the country, where she sees opportunities, and how the DTIS has helped on the ground.