The global economy will need to have created 600 million new jobs between 2005 and 2020 to absorb young people entering the work force, spur development, empower women and prevent unrest, the World Bank said.
In its World Development Report released yesterday, the bank said jobs should be at the top of governments’ agendas less than two years after the lack of employment opportunities helped fuel the uprisings that toppled leaders in Egypt and Tunisia. The effects extend beyond the economic sphere, making job creation a cornerstone to development, the report said.
“Demographic shifts, technological progress, and the lasting effects of the international financial crisis are reshaping the employment landscape in countries around the world,” World Bank President Jim Yong Kim said in a foreword to the report. “Countries that successfully adapt to these changes and meet their jobs challenges can achieve dramatic gains in living standards, productivity growth, and more cohesive societies.”
After weathering the worst economic downturn since World War II, many countries have yet to return to pre-crisis levels of employment just as global expansion slows. Governments have a role to play in identifying the jobs that most suit their needs and giving the private sector the incentives to invest, according to the report.
The bank said that by 2020, there will be a need for 600 million more jobs than in 2005, mainly for Asia and sub-Saharan Africa. The U.S. Census Bureau estimates the current world population at a little more than 7 billion people.
The impact that jobs have on countries’ development is familiar to Francois Locoh-Donou, who opened Cajou Espoir, Togo’s first cashew nuts processing company, eight years ago. His plant in the northern town of Tchamba, which exports to the U.S. and Europe, employs 350 people, most of whom are women.
“Before the plant, a lot of women from that region would leave Togo to go to Nigeria” to find work, Locoh-Donou, who lives in Washington and is an executive at a telecom-equipment company, said in a phone interview. “Today they stay in Tchamba and they support their family,” which has helped improve school attendance, he said.
Jobs can shape the vision people have of themselves and how they relate to others. That can have a positive effect, for instance when work is a place for employees to interact with people of different genders or ethnicities. It can also be negative when employment is not available, the World Bank said.
“Youth may turn to gangs to compensate for the absence of identity and belonging that a job might provide,” according to the World Bank report.
Challenges differ depending on countries and their level of development, their demographics and their institutional strength, according to the report.
As a result, governments need to define the types of jobs they think will have the largest impact on their development and give the private sector, the source of 90 percent of jobs in the world, the incentives to create them.
Governments also have the responsibility to provide macroeconomic stability and a favorable business environment, the bank said.
That includes infrastructure, which Locoh-Donou says he wishes was better in northern Togo, where his plant has to use its own power generator and where the national road his company uses to deliver the cashew nuts is “a catastrophe.”
The report also recommends that governments find a balance on labor policies to avoid hampering job creation without leaving the most vulnerable unprotected.