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Youth unemployment set to rise for first time in three years

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With global youth unemployment expected to rise in 2016 for the first time in three years and the equally disturbing high levels of young people who work but still live in poverty, the United Nations labour agency called for greater efforts to achieve sustainable economic growth and decent work.

Releasing its World Employment and Social Outlook 2016: Trends for Youth, the International Labour Organization (ILO) estimated that the global youth unemployment rate is expected to reach 13.1 per cent in 2016 and remain at that level through to 2017 (up from 12.9 per cent in 2015). As a result, the number of unemployed youth is set to rise by half a million this year to reach 71 million – the first such increase in three years.

Of greater concern, says ILO, is the share and number of young people, often in emerging and developing countries, who live in extreme or moderate poverty despite having a job. In fact, 156 million or 37.7 per cent of working youth are in extreme or moderate poverty (compared to 26 per cent of working adults).

“The alarming rise in youth unemployment and the equally disturbing high levels of young people who work but still live in poverty show how difficult it will be to reach the global goal to end poverty by 2030,” said Deborah Greenfield, ILO Deputy Director-General for Policy in a press release on report.

Calling for redoubled efforts to achieve sustainable economic growth and decent work, she also noted that the report highlights wide disparities between young women and men in the labour market that need to be addressed by ILO member States and the social partners urgently.

The ILO goes on to point out that Global economic growth in 2016 is estimated to stand at 3.2 per cent, 0.4 percentage points lower than the figure predicted in late 2015. “This is driven by a deeper than expected recession in some key emerging commodity-exporting countries and stagnating growth in some developed countries,” said ILO Senior Economist and lead author of the report Steven Tobin.

“The rise in youth unemployment rates is particularly marked in emerging countries” he adds as the report notes that in such countries, the rate is predicted to rise from 13.3 per cent in 2015 to 13.7 per cent in 2017 – a figure ILO says corresponds to 53.5 million unemployed in 2017 compared to 52.9 million in 2015.

In Latin America and the Caribbean, for example, the unemployment rate is expected to increase from 15.7 per cent in 2015 to 17.1 per cent in 2017; in Central and Western Asia, from 16.6 to 17.5 per cent; in South Eastern Asia and the Pacific, from 12.4 to 13.6 per cent.

The report also finds that globally, the share of young people between 15 and 29 years old who are willing to move permanently to another country stood at 20 per cent in 2015. The highest inclination to move abroad, at 38 per cent, is found in sub-Saharan Africa and Latin America and the Caribbean, followed closely by Eastern Europe at 37 per cent.

unemployment

The working poor

The poor quality of employment continues to disproportionately affect youth, albeit with considerable regional differences. For example, sub- Saharan Africa continues to suffer the highest youth working poverty rates globally, at almost 70 per cent. Working poverty rates among young people are also elevated in Arab States (39 per cent) and Southern Asia (49 per cent).

At the same time, in developed economies, there is growing evidence of a shift in the age distribution of poverty, with youth taking the place of the elderly as the group at highest risk of poverty, defined for developed economies as earning less than 60 per cent of the median income.

For instance, in 2014, the share of young workers in the European Union-28 categorized as being at a high risk of poverty was 12.9 per cent compared to 9.6 per cent of prime-age workers (aged 25–54). The challenge is particularly acute in some countries where the at-risk-of-poverty for young workers exceeds 20 per cent.

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ADB Project to Improve Fiscal Management, Develop Capital Markets in Armenia

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The Asian Development Bank (ADB) has approved a $40 million-equivalent policy-based loan attached to reforms that help strengthen fiscal sustainability and develop the financial and capital markets in Armenia. These are crucial enablers of private sector development.

Armenia’s economic growth over the last few years has been hampered by low levels of investment, both foreign and domestic, given the high costs of local currency finance and related constraints in the financial system. Efficiency-promoting upgrades in public investment and fiscal management are also needed to ensure sustained improvements in fiscal outlook and sovereign risk pricing.

“Financial markets remain nascent in Armenia, which limits the development of the country’s private sector and the banking industry,” said ADB Senior Financial Sector Economist for Central and West Asia Mr. João Farinha Fernandes. “This also constrains public finance and fiscal management, while exposing the economy to financial stability risks. ADB’s assistance is intended to help ensure that Armenia develops a conducive fiscal and financial intermediation environment where private sector players, both big and small, can contribute to growth and development.”

ADB approved a $50 million policy-based loan in November 2018 as part of an ongoing programmatic engagement on financial reforms to strengthen public debt and fiscal risk management, and to develop financial markets in Armenia.

The Second Public Efficiency and Financial Markets Program continues these reforms by strengthening the effectiveness of the government’s fiscal risk management function; promoting the development of fiscally responsible public–private partnerships; and enhancing market transparency and predictability in public debt management. The program will also improve the infrastructure of the government securities market and money market infrastructure, enhancing the sustainability and resilience of Armenia’s finance sector.

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Bangladesh Can Boost its Exports with Better Logistics

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To meet the needs of its growing economy and to boost export growth, Bangladesh needs to improve its transport and logistics systems, says a new World Bank report launched today. 

The report Moving Forward: Connectivity and Logistics to Sustain Bangladesh’s Success, finds that by making logistics more efficient, Bangladesh can significantly boost export growth, maintain its position as a leading ready-made-garments and textile producer, and create more jobs. The report notes that congestion on roads and in seaports, high logistics costs, inadequate infrastructure, distorted logistics service markets, and fragmented governance hamper manufacturing and freight, further eroding Bangladesh’s competitive edge and putting its robust growth path at risk. 

“Bangladesh’s congested transportation and often unsophisticated logistics systems impose high costs to the economy,” said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan. “By making its logistics more efficient, Bangladesh can significantly optimize its connectivity, business environment, and competitiveness, putting the country on the right path to become a dynamic upper-middle-income country.”

Efficient logistics, the report argues, has become one of the main drivers for global trade competitiveness and export growth and diversification. For Bangladesh, improving its logistics performance provides an opportunity to increase its world market share in garments and textiles, which account for 84 percent of its total exports, expand into new markets, and diversify its manufacturing and agriculture into high-value products. 

The report notes that improving Bangladesh’s logistics requires a system-wide approach based on greater coordination among all public institutions involved in logistics and with the private sector, increasing the effective capacity of core infrastructure, and removing distortions in logistics service markets to reduce costs and improve quality. At a regional level, harmonizing its logistics systems and aligning its customs with that of its neighbors could turn Bangladesh into an important node for regional freight flows and further boost its trade. 

“There’s no doubt that reforms and investments for better transport and logistics will yield Bangladesh substantial economic benefits and strengthen its competitive advantage,” said Matías Herrera Dappe, Senior Economist at the World Bank and author of the report. “But the solution to logistics is not just to invest more but to invest better, by focusing on the service gap, and creating the incentives for high quality and competitive logistics services.”

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New development models to drive growth and employment for youth in Africa

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The United Nations Environment Programme (UNEP) today launched the Global Environment Outlook-6 (GEO-6) for Youth in Africa report on the margins of the 17th session of the African Ministerial Conference on the Environment (AMCEN).

The report analyses the economic opportunities that Africa’s natural resources can provide for job creation and sustainable development. It also provides a package of solutions to tackle Africa’s youth unemployment through the Green Economy.

“This Publication is anchored substantively in the UNEP’s sixth Global Environment Outlook (GEO-6) Regional Assessment for Africa,” said Juliette Biao Koudenoukpo, Director of UNEP’s Regional Office for Africa. “This Assessment has a very clear message; Africa has an opportunity to use its large young population to drive its growth.”

Africa’s youth remains the most hit by unemployment. One-third of Africa’s 420 million youth aged 15 to 35 are unemployed. Of these, 35 per cent are vulnerably employed and 19 per cent are inactive. These numbers will increase dramatically unless urgent actions are not taken.

The report recommends that Africa’s natural capital should be managed sustainably to enhance the livelihoods of African young population, create more sustainable and decent jobs as well as increase social and economic cohesion.

“The Green Economy calls for a paradigm shift in the way that we produce and consume. If young people are the centre of such a shift, they will secure a sustainable future replete with sustainable livelihoods,” said Professor Lee White, Minister for Environment, Forest and Oceans of Gabon and outgoing President of AMCEN. “The Global Environment Outlook-6 for Youth, Africa: A Wealth of Green Opportunities digs deep into that future and shows young people how they can secure their livelihoods through green jobs.”

Natural resources remain a key source of employment in Africa. Eight out of ten people’s employment on the continent are supported by natural resources. Nearly six million Africans are employed in the fisheries and aquaculture sector, ten million people work in the wildlife sector and an average of 54 per cent in the agricultural sector.

The report includes case studies and success stories on African youth who have invested in natural resources to develop entrepreneurship, improve their knowledge and skills as well as create jobs and sustain their livelihoods.

The report calls on governments to encourage youth to invest in green economy through creating platforms for innovation in sustainable development. While confirming the potential of youth in leading green growth in Africa, the report strongly establishes the correlation between green economy and decent jobs.

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