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Youth unemployment in developing countries a ticking timebomb threatening unrest

24 March 2015

Rapidly increasing populations of young people with no real prospect of employment pose a risk of increasing unrest if more is not done to support private sector development to create jobs, say MPs.

The shortage of full time jobs and the difficulty in earning a livelihood are one of the greatest global problems. Increasing population, especially in Africa, looks much less likely to stabilise than experts complacently believed until recently. World-wide 600 million young people will enter the job market in the next decade, with only 200 million jobs awaiting them. The failure to address the issue will have serious consequences and threatens widespread social and political unrest. The situation is recognised by donors, but there seems to be a lack of passion in attempts to address it.

The private sector is the driver of economic growth and will produce 90% of new jobs. DFID plans to spend £1.8 billion on economic development by 2015-16, more than doubling the amount to spend in 2012-13, but the Committee is concerned that DFID may not be sufficiently prepared to spend this large sum effectively.

The Committee concludes:

  • The apparent fall from fashion of labour-intensive sectors should be reversed: there is a particular need to focus on agriculture where many of the poor currently work, and it has the most potential to feed into other, value added industries such as food processing
  • Informal is the new normal in employment: this must be recognised and those in informal employment given better protection, such as extending social security programmes
  • There needs to be a new focus on teaching young people entrepreneurial skills in recognition of the reality of future job creation trends: most future jobs will be via self-employment
  • DFID needs to increase its involvement in tourism, supporting the work of other donors. It has been predicted that 73 million jobs could be created in travel and tourism over the next decade.
  • There are also a considerable number of jobs which could be created in the health and education sectors where there are a dearth of health care workers and teachers.
  • As the balance of interventions will vary from country to country, it is essential that decisions are made locally.  There also needs to be much stronger collection of data on what works to create jobs for young people.
  • DFID should not do everything and investment in some areas such as infrastructure is best undertaken by its partners which have a comparative advantage. However, poor urban planning is a serious obstacle to development and DFID should reassess the priority it is given.
  • The creation of decent jobs is important; working conditions can be improved without losing jobs, as the experience of the Bangladesh garment industry shows. We recommend that DFID insist that any multinational company receiving its funds respect international standards set out in the OECD Guidelines for Multinational Enterprises and that any other company complies with local standards. We further recommend that DFID reinstate its core funding for the International Labour Organisation. DFID’s work should be joined up with anti-slavery and anti-corruption work being done across the UK Government

Sir Malcolm Bruce MP, Chair of the Committee, said:

“No one, not national governments nor donor agencies, are doing enough to diffuse the ticking time bomb of youth unemployment in developing countries across the globe.  The complacent assumptions about population growth slowing are being proven wrong and we need to see that this is now a situation that needs to be addressed with the same kind of passion as children’s vaccinations or humanitarian emergencies.”

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