The so-called “jobless recovery” in advanced economies has been highlighted by IMF managing director Dominique Strauss-Kahn. “The economic crisis will not be over until the unemployment rate decreases significantly”, he said.
“At the global level, growth is coming back – but growth is not enough,” Strauss-Kahn told a press briefing. “We need growth with jobs. Growth without jobs doesn’t mean much for the man in the street.”
The “jobless recovery” in advanced economies is causing policymakers a good deal of concern – but slower growth has also resulted in “tens of millions” of unemployed in the developing world, a World Bank seminar heard yesterday.
A big part of the problem is a serious shortage of skills in developing economies, Byron Auguste, director of the social sector office of consultants McKinsey & Co, US, said.
“Public job-training systems are not working, and the private sector needs to get more involved,” Auguste told the seminar on jump-starting jobs and productivity.
“What is needed in the developing world is a robust and dynamic job-training industry, which in itself would create many new jobs,” he said. “Tens of millions of people are experiencing unemployment since the crisis”, he added.
Developing countries need to invest not only in vocational training but also in primary and secondary education in order to address the skills gap, argued Denis O’Brien, chairman of the Digicel Group, Ireland, which has operations in poorer countries.
“Investing in education today will not provide jobs tomorrow” but the investment has to be made, he said. But “a big problem in the developing world is teaching people how to teach,” he added.
O’Brien argued that “some very exciting things are happening in Africa” with regard to job creation, and he cited the example of Vietnam’s emerging coffee-growing industry as another successful approach to the problem.
But much more remains to be done with regard to providing long-term training programmes and to prompting business start-ups in the developing world, he said.
Many developing countries also discourage employment-creating foreign direct investment by the bureaucracy that investors have to face in order to get started, O’Brien said.
“They need to look at how difficult it is to set up a business” and to establish fast-track approval systems, he added.