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World Development Report on Jobs from World Bank

Thursday, February 28
The World Bank office in Georgia held presentation by the World Bank’s Sector Director, Jesko Hentschel, on the recently released World Development Report on Jobs on February 26.

The World Development Report 2013 stresses the role of strong private sector led growth in creating jobs and outlines how jobs that do the most for development can spur a virtuous cycle. The report finds that poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict. This Report was prepared by a World Bank team of experts, the member of which is Jesko Hentschel.

Jesko, a German national from Hamburg, joined the World Bank almost twenty years ago and has, during various assignments with the Bank, focused on poverty reduction and human development.

The report’s authors highlight how jobs with the greatest development payoffs are those that raise incomes, make cities function better, connect the economy to global markets, protect the environment, and give people a stake in their societies.

In many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. In those places, most poor people work long hours but cannot make ends meet. And the violation of basic rights is not uncommon. Therefore, the quality and not just the number of jobs is vitally important.

The Report advances a three-stage approach to help governments meet these objectives:

First, solid fundamentals – including macroeconomic stability, an enabling business environment, human capital, and the rule of law- have to be in place.

Second, labor policies should not become an obstacle to job creation, they should also provide access to voice and social protection to the most vulnerable.

Third, governments should identify which jobs would do the most for development given their specific country context, and remove or offset obstacles to private sector creation of such jobs.

Policy priorities are different in agrarian societies and in urbanizing countries. Making smallholder farming more productive is key in the first case, while better infrastructure, connectivity, housing, and city planning are vital in the second. Demography matters too. In Sub-Saharan Africa, 10 million youth enter the labor force every year, but in many middle-income countries the population is aging and in some the labor force is shrinking. Skills and the removal of privilege in access to markets and jobs are needed to tackle youth unemployment. But longer working lives and affordable social protection are needed in aging societies.

Focusing on the key features of different country types can help identify more clearly the kinds of jobs that would make the greatest contribution to development in each case. This focus allows for an analysis of the potential tradeoffs between living standards, productivity, and social cohesion in a specific context. It provides clues about the obstacles to job creation and, ultimately, the priorities for policy makers as they identify the most important constraints to job creation and how to overcome them.

Policy makers should tackle these challenges by answering such questions as: Should countries build their development strategies around growth, or should they focus on jobs? Can entrepreneurship be fostered, especially among microenterprises in developing countries, or are entrepreneurs born? Are greater investments in education and training a prerequisite for employability, or can skills be built through jobs? Amidst crises and structural shifts, should jobs, not just workers, be protected?

The World Bank Group fosters job growth through its two main channels of support to the developing world -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) -- as well as through the IFC and the Multilateral Investment Guarantee Agency. Assistance comes in the form of policy advice, support for private sector development plus loans and programs to advance urbanization, infrastructure and human development (including social protection).