International Development Committee Inquiry submission on

Sustainable Development Goals

Written evidence submitted by

David R. Woollcombe, President, Peace Child International (PCI)

 

Peace Child International is a UK-based development INGO focused on creating jobs and improving livelihoods for young women and men in the world’s most disadvantaged regions. We provide entrepreneurship and green economy training, encouraging young people to get informed and acquire the skills and support they need to lead sustainable change in their own lives and in their communities. We submit written evidence to this Inquiry because we believe DFID should be encouraged to lead the efforts to achieve the bold targets catalogued in SDG Goal 8. (david@peacechild.org)

 

1. S U M M A R Y

 

1.      Which SDGs should DFID prioritise and how? DFID should prioritise Goal 8 and its target of full employment by 2030. This fits with DFID’s ‘Smart Aid’ policy which SoS Justine Greening defines thus: “Ultimately it’s all about jobs. It’s inclusive growth for women and men, and it’s enterprise that will defeat poverty for good. We are doubling our investment in economic development as we think economic development is the key to enabling countries to stop being dependent on aid in the long term ….” 

 

2.      A Goal 8 priority also speaks to DFID’s, and your committee’s, “Beyond Aid” priority. It chimes with the appetite we find amongst many of the young Africans we train who want to ‘work their way out of poverty’ not depend on hand-outs. Also, achieving the Goal 8 targets for ‘7% GDP growth’ and ‘improved resource efficiency’ are keys to the achievement of the other 16 goals.

 

3.      A Goal 8 Priority requires an answer to the question, “How it will be implemented?” – and here, DFID struggles to find policies commensurate to the size of the problem. In her July 2015 ODI speech, SoS Greening asserted: “There is an absolutely fundamental jobs challenge - in particular, jobs for young people. 600 million people will enter the job market in the next 15 years where, as it stands, there is little waged work….” In their OECD Study, Filmer & Fox, identify just how “little waged work” there is likely to be: “83% of young people will only find work in farm and non-farm household enterprises….” So only 17% will find waged employment – roughly half in government, and half in large companies.

 

4.      Though it is vital for DFID to grow the waged sector through investments in programmes like the CDC in large private sector start-ups, it is equally vital for it to find ways to support the 83% who will have to find work in self-employment, micro-SMEs or Household Enterprises.

 

5.      From 2011 to 2013, DFID’s Innovations Department developed an excellent policy initiative to do just that: called “Start-Up,” it proposed a 10-year programme designed to ease start-ups’ access to finance and also to training, mentorship, business plan creation support – in ways very similar to those recommended in Chapter 8 of your predecessor Committee’s Report on Jobs & Livelihoods.

 

6.      Sadly, DFID shelved the initiative - a shame because DFID is, in many ways, ideally placed to give leadership to the Goal 8 effort to achieve “full and productive employment for all young women and men by 2030.” That leadership is sorely lacking from other ODA agencies. And the UK has a wealth of job creation experience to support DFID, from the government’s own ‘Start-up Loans Company’ managed by BIS, to NGOs like the Prince’s Trust, Youth Business International, and PCI’s Be the Change Academies which serve highly disadvantaged un- and under-employed youth. Together, we could help DFID’s SoS lead the world in addressing that “absolutely fundamental jobs challenge.”

 

7.      Recommendation: PCI urges this committee to instruct DFID to prioritise and give donor leadership to the achievement of SDG Goal 8 through a Smart Aid strategy that resurrects ‘Start-Up,’ encourages education for self-employment, and provides increased support for initiatives like YBI and PCI’s BTCAs that give the 83% of job-seekers unlikely to find waged employment the skills to secure productive self-employment or start profitable small enterprises.

2. Goal 8 – the Context

8.      The context for the SDGs was set by the Report of the Secretary General’s High-level Panel (HLP), skillfully co-chaired by Prime Minister Cameron. This became the most-read report of its kind in UN history and the SDGs flow naturally from its wide-ranging conclusions. Goal 8 includes economic goals like: LDCs must achieve “at least 7%  GDP growth per annum” and “higher levels of economic productivity through technological innovation.” It also has social and environmental goals for -

By incorporating all three pillars of sustainable development – economic, social and environmental – Goal 8 distils the essence of the SDGs and provides a lodestone which can lead the achievement of the others. The addition of targets to end child labour and child soldiers gives Goal 8 a human rights dimension which is one of many reasons that PCI feels they are a superior document to the MDGs – worthy of the focus DFID, and this committee, is giving them.

 

9.      However – the SDGs are not a contest: it is not about one Goal winning and others losing – they all flow into the first, main goal of eliminating absolute poverty by 2030. But the Committee’s instincts are correct: to focus on all of them risks achieving none – so we encourage DFID to focus on Goal 8 because it prioritises the bold challenge of ‘full employment’ which, as PCI agrees with SoS Greening, is a major key to ending aid dependency. Also, achieving the 7% GDP growth rate and improved resource efficiency will give LDC governments the wherewithal to achieve the other SDGs

 

3. The Global Challenge

10.  Using World Bank and ILO data, your Jobs and Livelihoods Report neatly summarised the global jobs challenge thus: “620 million youth are not in training or seeking work and another 600 million will enter the job market in the next decade with only 200 million jobs awaiting them. A million jobs a month have to be created in Africa alone. The Zambian Minister of Finance Alexander Chikwanda called youth unemployment “a ticking time bomb for all of us.”   World Bank official Justin Lin points out that the youth bulge can be transformed into a demographic dividend, and the demographic bomb can be defused.”

 

11.  DFID’s detailed plan for Start-up provides a searching analysis of the challenge:

1. Start-up businesses are an important conduit to delivering 3 core goals of private sector development:

a)              generating jobs and wealth,

b)              boosting productivity and creating market competition - and –

c)              bringing innovative products and services to the market, particularly for Base of the Pyramid (BoP) communities.

2. There is a desperate need to create productive jobs in the developing world where labour markets feature high under-employment and low productivity and earnings. This challenge is heightened by a growing youth population – a trend that will dominate labour markets over the coming decades but also presents an opportunity to put the skills of a young and dynamic population to use.

3. In South Asia and Africa alone, one million jobs must be created every month for the next 10 years just to keep pace with youth entering the labour force.

a. This provides a unique window of opportunity to achieve faster economic growth and human development.

b. Small firms and particularly young ones are the main contributors to job creation and productivity growth in developing economies. However, in many parts of sub-Saharan Africa, these entrepreneurs currently fail to contribute significantly to economic growth.

4. The process of market competition and creative destruction - when it works well - drives ever- increasing efficiency in resource use within an economy.

a. In developed countries, young enterprises (most of which are small) either close down or grow. Competitive pressures reallocate resources to more productive businesses so enterprises tend not to stagnate. This trend is weaker in developing countries with many small firms failing to demonstrate growth as they mature but also not closing down. A lack of better job opportunities means that when an individual’s business fails, they keep it going for lack of alternatives, thereby tying up valuable resources in unproductive businesses.

5. New private sector start-ups can find better ways to deliver affordable products and services to people living in poor countries, including those living at the base of the income pyramid.

a.               In BoP markets, frugal innovation ensures the affordability, the reach and the scalability of products and services required to improve living conditions over the longer term, particularly for the very poorest.

 

12.  This passage is worth quoting at length because it suggests that DFID already has policy solutions to the challenges that SoS Greening articulated so deftly in her ODI speech:

“It’s said we’re reaching ‘peak youth.’ Today’s youth generation is the largest in history and almost 9 out of 10 of them live in developing countries. In Africa, half the population is under 18. What happens if just a small percentage come to Europe? The current problems we’re having with migration today may seem small-scale.

“I’ve talked about the youth challenge and the short window we have to create jobs for those young people. But the flip side is, if they have productive work, income levels could increase faster than at any other time in their history. So, peak youth needs to be able to equal peak growth.”

 

4. How Peak Youth can equal Peak Growth?

13.  Chapter 8 of the Predecessor IDC’s Report on Jobs & Livelihoods went a long way to answering this question. Recommending that DFID “more explicitly target youth employment,”(Para 161), it went on to list some of the programmes that DFID should target, including PCI’s Be the Change Business Plan Creation Academies, YBI’s business start-up programmes, Fundacion Paraguaya’s Self-sustainable schools, Junior Achievement and others.

 

14.  The Report also identified the key strategies DFID should pursue:

A. Encouraging Entrepreneurship:  Para 147 quotes YBI: “Entrepreneurship is part of the youth employment solution – particularly in developing countries where the informal sector makes up a substantial share of the economy.”

B. Education and skills training for the informal economy: Para 155 lists many policy options:

C. Cross Government Working: Para 159 quotes both PCI and YBI recommending DFID “better coordinate across the different sectors – public, private and civil society – identifying targeted, value-add roles for bilaterals and others.”

 

  1. The Report’s Recommendations intelligently summarise what DFID needs to do:

 

17.  This last recommendation is particularly appropriate in light of the Conservative Party’s 2015 Manifesto Commitment to ‘Triple in size’ the ICS programme.

 

18.  As far as we can gather, none of these recommendations from your Committee have been implemented. Though we are pleased that DFID is holding a Youth Summit on the SDGs this month,  our efforts to enter into a dialogue about these specific recommendations have so far been unsuccessful. We therefore urge your Committee to renew their call to DFID to implement them. 

 

5. What others are doing – and not doing?

  1. DFID is not alone in its failure to support at scale, or with the urgency needed, the bold ambitions of SDG Goal 8. Indeed, its SoS, and your Committee, should be congratulated for so clearly articulating the challenges and the opportunities inherent in the problem. Few agencies have got that far.  The problem that all of them face is the lack of “coherent, comparable youth job creation data” identified in Para. 163 of your Jobs and Livelihood Report. Given that SDG Goal 8 calls, in Target 8b, for governments to “… develop and operationalize a global strategy for youth employment by 2020,” they must find those metrics. Without them, no one can create, let alone operationalize, a coherent global strategy. And though we, and others, are making efforts, none of us have succeeded in creating a simple, comprehensive job creation statistic that we can all use to compare different interventions in the field.  Neither the World Bank’s Solutions For Youth Employment (S4YE) Coalition nor the IFC’s “Let’s Work” campaign are taking a lead on this.

 

  1. With one of the finest research departments in the world, DFID is well-placed to take such a lead. That would be an excellent way for DFID to start a leadership role on Goal 8 implementation – and YBI, PCI and others would be delighted to help.

 

  1. S4YE’s recently published Strategic Plan 2015-2020 is a disappointment: practical “Solutions” are conspicuous by their absence: there’s no mention of Goal 8 (it targets ‘considerable reduction’ of youth unemployment, not Goal 8’s bold target to eliminate it completely by 2030); no focus on the needs of LDCs nor on green jobs.  Instead, it offers a succession of wonk-ish commitments to “Frameworks for Action,”  “Frontier  Areas” (Digital Impact, Skills Gap, Entrepreneurship and Quality Jobs,) – and a vague hope that it will attract ‘enablers’ who can supply the ‘solutions’ they lack. As a major investor in the World Bank, DFID should look at how it can improve the S4YE.

 

  1. Another disappointment has been the World Bank’s Umbrella Trust Fund(UTF) for Youth Employment. This had $10m available for ‘innovative youth employment’ programmes. PCI youth groups from Nepal, Pakistan, Sierra Leone and Liberia applied but fell at the first fence because they could get no response to their efforts to contact their World Bank Country Offices who had to sign their UTF proposals. This made the S4YE Plan’s commitment to “make youth meaningfully present in the operational and strategic guidance of their coalition…” ring rather hollow.

 

  1. The IFC programme, like the ILO Youth Employment Network, works in a handful of lead countries – where pilot programmes often deliver excellent solutions. Throughout the field, there is no shortage of these: the World Bank has counted 32,400 – but most lack coherent impact measurement rendering them valueless for the development and operationalisation at scale of the evidence-based “Global Strategy” which Goal 8 demands.

 

6. What do young people want?

  1. In 30 years of working with young people, PCI has found youth solutions to youth concerns always worth listening to. For its 2nd Intl. Youth Job Creation Summit, PCI created a Youth Task Force of, mostly, young African leaders to prepare a Road Map to Full Youth Employment by 2030. The Youth focus on 4 major areas:

 

  1. Other agencies, notably the Mastercard Foundation and the International Youth Foundation have done excellent assessments of what youth want with findings broadly similar to PCI’s. The only quibble PCI and its African partners have with them is their focus on online job opportunities for net-preneurs and e-lancers: we don’t dispute such opportunities exist but, for the disadvantaged youth with whom we work – who struggle to find a phone signal or power to charge their mobiles – such job opportunities lie many years in the future. Immediate jobs are likely to be low-tech – and DFID should focus on these.

 

 

7. Conclusion

  1. To achieve Goal 8, DFID has to do much, much more in the job creation field – empowering governments in its target countries to ‘embed entrepreneurship education for self-employment’ in their national education provision. Appointing a capable senior policy advisor on Youth employment would enable DFID to map out a strategy for how to achieve the Goal 8’s bold targets within the existing Private Sector Development plans. The SoS clearly wants to advance this idea as part of her Smart Aid / Beyond Aid focus. The IDC should encourage her in this and persuade her to ‘specialise in the specific area’ of Youth Job Creation.

 

  1. According to the World Bank, full youth employment would add $3 to $5 trillion to the World Economy and achieve the 7% growth target. If this job creation effort were conducted alongside an effort to train youth to build the foundations of a green, sustainable, resource-efficient economy, it would achieve a significant environmental goal. Most important, helping millions of young people into satisfying jobs and, thereby, stabilizing communities and making migration and militant Islam less attractive, would go a long way toward achieving the SDGs’ main social goals.

 

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