Economy Archive

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Electrification Financing Initiative ElectriFI invites proposals

The Electrification Financing Initiative, ElectriFI opens its doors on 15 April and interested parties can submit their project proposals through www.electrifi.org. ElectriFI is an innovative mechanism to unlock, accelerate and leverage investments providing access to affordable, reliable, sustainable and modern energy. The initiative was launched by the European Commissioner for International Cooperation and Development, Mr Neven Mimica, at the 21st Conference of Parties to the United Nations Framework Convention on Climate Change and was also acknowledged by the G7 Leaders’ Declaration. The implementation of the initial € 75 million allocation to ElectriFI was entrusted to the European Development Finance Institutions led by the Dutch Development Bank. This first EU contribution to ElectriFI will support investments that can improve the lives of more than six million people living principally in rural, underserved areas, promote rational use of energy for productive uses and social services benefiting the bottom of the pyramid. For […]

The Electrification Financing Initiative, ElectriFI opens its doors on 15 April and interested parties can submit their project proposals through www.electrifi.org.

ElectriFI is an innovative mechanism to unlock, accelerate and leverage investments providing access to affordable, reliable, sustainable and modern energy.

The initiative was launched by the European Commissioner for International Cooperation and Development, Mr Neven Mimica, at the 21st Conference of Parties to the United Nations Framework Convention on Climate Change and was also acknowledged by the G7 Leaders’ Declaration.

The implementation of the initial € 75 million allocation to ElectriFI was entrusted to the European Development Finance Institutions led by the Dutch Development Bank.

This first EU contribution to ElectriFI will support investments that can improve the lives of more than six million people living principally in rural, underserved areas, promote rational use of energy for productive uses and social services benefiting the bottom of the pyramid.

For further information

More information on ElectriFI can be found on www.electrifi.org including the application form. This is the first round of Invitation to submit project proposals for ElectriFI and will be followed by another round in the last quarter of 2016.

More information on the EU development cooperation in sustainable energy.

Information on the European Development Finance Institutions and on the Dutch Development Bank FMO.

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How to increase the positive impact of trade on rural development

Trade is a means by which poor countries can leverage economic growth, reduce their levels of poverty and even meet the SDGs. For example, SDG 2 on ending hunger and food insecurity points towards correcting and preventing trade restrictions and distortions in world agricultural markets as an indicator towards its achievement. Trade has furthermore emerged as a means to finance development – a position catalyzed by significant reductions in ODA by traditional donors – as it was featured in the FFD3 outcome document.

As part of the Platform’s growing work on trade in agriculture and rural development (ARD), the Annual General Assembly, held on 20th January, posed the following question participants: Are agricultural trade and rural development playing a duet or a solo? This is because the governance issues surrounding agricultural trade lead to a number of debates, particularly surrounding how trade can work better for smallholder farmers and even how trade could help deliver food and nutrition security. Overarching such discussions is one on which instruments and support mechanisms exist and offer practical solutions and opportunities?

A panel session during the AGA discussed a number of institutional and legal opportunities to increase the positive impact of trade in ARD. The main messages, according to each panelist, were:

Christophe Bellman (ICTSD) spoke about the critical role trade flows that legally binding trade agreements play in allowing frameworks that make sure trade flows happen easily and remove distortions. We must ask ourselves what trade restrictions are legitimate, as it is not just about liberalization.

Three main priorities for food security are:

  1. Policy instruments to deal with excessive price volatility and make sure your population can access food.
  2. Consciousness about the impact of policies to support national food production. Countries want to ensure productivity, but how does this affect other (poor) countries?
  3. Market access, reducing tariffs and Sanitary and Phyto-Sanitary (SPS) measures. There needs to be a realization of which of these measures are legitimate and which may be disguised protectionism.

The topic of Sanitary and Phyto-Sanitary (SPS) measures and technical standards was discussed in more depth by COMESA representative Martha Byanyima, because in the majority of COMESA countries, agriculture is still a leading economic activity. Protection of plants and animals from pests and invasive species ensures food and nutrition security and prevents diseases.

SPS regulations on countries have to speak to international trade, but also ensure they serve domestic needs as well. Some overarching debates remain on the harmonization of standards, whether they should be harmonized towards international or regional standards. COMESA believes that there should be direct support to regional SPS and Standards programmes under regional integration. For this, it is essential to enhance the institutional capacities of African institutions charged with CAADP implementation (AUC, NEPAD, RECs). Linking these efforts to country level actions will ensure that trade/customs reforms and investments are directly supporting initiatives to enhance food and nutrition security.

The Enhanced Integrated Framework (EIF) for Trade-Related Assistance supports the Least Developed Countries supports (LDCs) to better integrate into the global trading system and to make trade a driver for development. EIF representative Ratnakar Adhikari described its functions which include mainstreaming trade into national development strategies, setting up new structures or strengthen existing institutions needed to coordinate the delivery of trade-related technical assistance and building capacity to trade, similar to some of the discussions covered by COMESA and ICTSD.

The EIF is a mix of traditional and emerging donors. It is managed through a trust fund which builds capacity for developing countries to contribute to the multilateral trade agreements. Third parties, such as GIZ, implement the programs.

Philippe Jacques from the European Commission spoke about the Aid for Trade (A4T) initiative, specifying that we may consider five areas as requiring priority attention under the A4T initiative for the agricultural sector:

  • Technology transfer and utilisation – one reason for the lack of agriculture competitiveness in developing countries is the low productivity land and labour, as well as the low adoption of new technologies by the vast majority of small and medium-scale farmers.
  • Rural infrastructures – the ability of the existing value chains to respond to new trade opportunities, as well as for the emergence of new value chains, is highly conditioned by the availability of adequate rural infrastructures.
  • Investment in water Management – in conjunction with the two factors mentioned before, it can offer pay-offs to public and private sector investment in agriculture
  • Technical standards of products – activities in this field are being completed within the framework of the WTO Agreements on SPS measures and Technical Barriers to Trade
  • Capacity for trade negotiations and trade policy Analysis – in addition to multilateral trade negotiations, most countries have engaged or concluded trade negotiations at regional, bilateral and preferential levels. That places a significant burden on the capacity needs to be built in order to implement these agreements, for responding to trade disputes and for adopting and complying with rules and standards.

Source: https://www.donorplatform.org/about/aga/latest/1523-how-to-increase-the-positive-impact-of-trade-on-rural-development

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2015 Human Development Report – Rethinking Work for Human Development

“Address challenges and seize opportunities of the new world of work”, UNDP urges

2 billion people lifted out of low human development, in last 25 years, now focus on work is needed to galvanize progress, alerts the 2015 Human Development Report.

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Addis Ababa, 14 December 2015 (UNDP) — Fast technological progress, deepening globalization, aging societies and environmental challenges are rapidly transforming what work means today and how it is performed. This new world of work presents great opportunities for some, but also profound challenges for others. The 2015 Human Development Report, released today at a ceremony in Ethiopia, urges governments to act now to ensure no one is left behind in the fast-changing world of work.

The report, titled ‘Work for Human Development’, calls for equitable and decent work for all. In doing so, it encourages governments to look beyond jobs to consider the many kinds of work, such as unpaid care, voluntary, or creative work that are important for human development. The report suggests that only by taking such a broad view can the benefits of work be truly harnessed for sustainable development.

Speaking at the launch, Prime Minister Hailemariam Dessalegn of the Federal Democratic
Republic of Ethiopia, said “Employment can be a great driver of progress, but more
people need to be able to benefit from sustainable work that helps them and their families
to thrive.”

The need for more inclusive and sustainable work opportunities was also emphasized by United Nations Development Programme Administrator Helen Clark who said: “Decent work contributes to both the richness of economies and the richness of human lives. All countries need to respond to the challenges in the new world of work and seize opportunities to improve lives and livelihoods.”

With better health and education outcomes and reductions in extreme poverty, 2 billion people have moved out of low human development levels in the last 25 years, the report says. Yet in rder to secure these gains and galvanize progress, a stronger focus on decent work is needed.

830 million people are classified as working poor who live on under $2.00 a day. Over 200 million people, including 74 million youth, are unemployed, while 21 million people are currently in forced labour.

“Human progress will accelerate when everyone who wants to work has the opportunity to do so under decent circumstances. Yet in many countries, people are often excluded from paid work, or are paid less than others for doing work of the same value”, said report lead author Selim Jahan.

Women do three out of every four hours of unpaid work

The report presents a detailed new estimate of the share of all work, not just paid work, between men and women. While women carry out 52 percent of all global work, glaring inequalities in the distribution of work remain.

Women are less likely to be paid for their work than men, with three out of every four hours of unpaid
work carried out by women. In contrast, men account for two of every three hours of paid work. Since
women often carry the burden of providing care services for family members, the report warns that this
disparity is likely to increase as populations age.

When women are paid, they earn globally, on average, 24 percent less than men, and occupy less than a
quarter of senior business positions worldwide.

“To reduce this inequality, societies need new policies, including better access to paid care services.
Ensuring equal pay, providing paid parental leave, and tackling the harassment and the social norms
that exclude so many women from paid work are among the changes needed. That would enable the burden of unpaid care work to be shared more widely, and give women a genuine choice on whether to
enter the labour force”, Helen Clark said.

Globalization and the digital revolution are double-edged swords

Globalization and technological changes are producing an increasingly polarized world of work. “There
has never been a better time to be a highly skilled worker. Conversely, it is not a good time to be unskilled. This is deepening inequalities”, said report author Selim Jahan.

Highly skilled workers and those with access to technology, including to the internet, have new
opportunities in the types of work available and the way that work is done. Today, there are seven billion mobile phone subscriptions, 2.3 billion people with smart phones, and 3.2 billion with internet access. This has brought about many changes in the world of work – for example, the rise of e-commerce and the mass outsourcing of banking, ICT-support, and other services. Despite new opportunities, however, more jobs are now becoming vulnerable and a wide digital divide remains, the report notes.

In 2015, 81 percent of households in developed countries have internet access, but only 34 percent in developing regions and 7 percent in the least developed countries have that access. Many types of outine work, such as clerical jobs, are predicted to disappear or be replaced by computers, or have already disappeared, the report warns, while many more workers face other insecurities. According to the International Labour Organization, 61 percent of employed people in the world work
without a contract, and only 27 percent of the world’s population is covered by comprehensive social
protection. The report calls on governments to formulate national employment strategies that take into account the many challenges emerging in the rapidly changing world of work.

Sustainable work, opportunities both for present and future generations

The report stresses the key roles that work can play in achieving the Sustainable Development Goals.
“The types of work many of us do will need to change if our economies and societies are to make genuine
progress towards a low emission and climate-resilient future. These changes will influence what the
labour market of tomorrow looks like”, the report states. With green growth, new jobs will be created, the nature of others will be transformed, and others will end altogether. These changes ideally should be supported by systems of social protection and safety nets.

The report argues that work opportunities can be fostered by the global goals. It estimates, for
example, that around 45 million additional health workers will be needed to meet the health objectives of the Sustainable Development Goals. That would see the global health workforce increase in size from 34 million in 2012 to 79 million by 2030.

Setting the new agenda for work

While policy responses to the new world of work will differ across countries, three main clusters of
policies will be critical if governments and societies are to maximize the benefits and minimize the
hardships in the evolving new world of work. Strategies are needed for creating work opportunities and
ensuring workers’ well-being. The report therefore proposes a three-pronged action agenda:

  • A New Social Contract between governments, society, and the private sector, to ensure that
    all members of society, especially those working outside the formal sector, have their needs taken into account in policy formulation.
  • A Global Deal among governments to guarantee workers’ rights and benefits around the world.
  • A Decent Work Agenda, encompassing all workers, that will help promote freedom of association, equity, security, and human dignity in work life.
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Corruption on the rise in Africa poll as governments seen failing to stop it

Transparency International estimates 75 million Africans paid a bribe in the past year BERLIN, Germany, December 1, 2015 ()TI/APO) – A majority of Africans say corruption has risen in the past 12 months and most governments are seen as failing in their duty to stop the abuse of power, bribery and secret deals, according to a new opinion poll from Transparency International (http://www.Transparency.org). In the report People and Corruption: Africa Survey 2015, part of the Global Corruption Barometer, Transparency International partnered with Afrobarometer, which spoke to 43,143 respondents across 28 countries in Sub-Saharan Africa between March 2014 and September 2015 to ask them about their experiences and perceptions of corruption in their country. The majority (58 per cent) of Africans in the surveyed countries, say corruption has increased over the past 12 months. In 18 out of 28 countries surveyed a large majority of people said their government is doing […]
Transparency International estimates 75 million Africans paid a bribe in the past year
BERLIN, Germany, December 1, 2015 ()TI/APO) – A majority of Africans say corruption has risen in the past 12 months and most governments are seen as failing in their duty to stop the abuse of power, bribery and secret deals, according to a new opinion poll from Transparency International (http://www.Transparency.org).

In the report People and Corruption: Africa Survey 2015, part of the Global Corruption Barometer, Transparency International partnered with Afrobarometer, which spoke to 43,143 respondents across 28 countries in Sub-Saharan Africa between March 2014 and September 2015 to ask them about their experiences and perceptions of corruption in their country.

The majority (58 per cent) of Africans in the surveyed countries, say corruption has increased over the past 12 months. In 18 out of 28 countries surveyed a large majority of people said their government is doing badly at fighting corruption.

Despite these disappointing findings, the bright spots across the continent were in Botswana, Burkina Faso, Lesotho and Senegal. Citizens in these countries were some of the most positive in the region when discussing corruption.

For the first time, people reported business executives as highly corrupt. Business ranked as having the second highest levels of corruption in the region, just below the police. The police regularly rate as highly corrupt, but the strongly negative assessment of business executives is new compared to previous surveys.

Many Africans, particularly the poor, are burdened by corruption when trying to get access to key basic services in their country. 22 per cent of people that have come into contact with a public service in the past 12 months paid a bribe.

Of the six key public services that we asked about, people who come into contact with the courts and police are the most likely to have paid a bribe. 28 per cent and 27 per cent respectively of people who had contact with these services paid a bribe. Across the continent, poor people who use public services are twice as likely as rich people to have paid a bribe, and in urban areas they are even more likely to pay bribes.

“Corruption creates and increases poverty and exclusion. While corrupt individuals with political power enjoy a lavish life, millions of Africans are deprived of their basic needs like food, health, education, housing, access to clean water and sanitation. We call on governments and judges to stop corruption, eradicate impunity and implement Goal 16 of the Sustainable Development Goals to curb corruption. We also call on the people to demand honesty and transparency, and mobilize against corruption. It is time to say enough and unmask the corrupt,” said Transparency International Chair José Ugaz.

It is increasingly clear that citizens are a key part of any anti-corruption initiative. However, the survey finds that corruption reporting mechanisms are often seen as too dangerous, ineffective or unclear. More than 1 out of 3 Africans thinks that a whistleblower faces negative consequences for reporting corruption, which is why most people don’t report.

“Our work as civil society is clear: we have to spread a message of hope across the continent. Corruption can be tackled. People need to be given the space to stand up against it without fear of retaliation and governments need to get serious about ending the widespread impunity.”

Transparency International recommends:

– Governments strengthen and enforce legislation on corrupt business people and anti-money laundering to curb the high volume of illicit flows from the continent. This could address the negative perception of business if those profiting are held to account.
– Governments establish right to information and whistle-blower protection legislation to facilitate the role of civil society in making public institutions more transparent, accountable and corruption-free.
– Governments show a sustained and deep commitment to acting on police corruption at all levels by promoting reforms that combine punitive measures with structural changes over the short- and medium-term. Cracking down on petty bribery has direct impact on the most vulnerable in society.
– The African Union and its members provide the political will and financing needed to implement the review mechanism established for its anti-corruption convention.

Unless it’s stopped, corruption slows development and economic growth while weakening people’s trust in government and the accountability of public institutions.

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WTO and UNCTAD commit to further help poor countries integrate into the global economy

Geneva, 12 October 2015 (UNCTAD) – The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) have pledged to work together towards the integration of developing countries, especially the least-developed among them, into the world economy and the multilateral trading system. WTO Director-General Roberto Azevêdo, and UNCTAD Secretary-General Mukhisa Kituyi signed a joint declaration, as they marked the twentieth anniversary of the WTO at its headquarters in Geneva on 12 October. The agreement further strengthens the collaboration between the UNCTAD and WTO in key areas of their work, and builds on Memoranda of Understanding signed by the organizations in 2003 and 2013. UNCTAD and the WTO believe that trade should play a key role in supporting the implementation of the outcomes of the Third International Conference of Financing for Development, in the achievement of the global Sustainable Development Goals and, above all, in fostering inclusive […]

Geneva, 12 October 2015 (UNCTAD) – The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) have pledged to work together towards the integration of developing countries, especially the least-developed among them, into the world economy and the multilateral trading system.

WTO Director-General Roberto Azevêdo, and UNCTAD Secretary-General Mukhisa Kituyi signed a joint declaration, as they marked the twentieth anniversary of the WTO at its headquarters in Geneva on 12 October. The agreement further strengthens the collaboration between the UNCTAD and WTO in key areas of their work, and builds on Memoranda of Understanding signed by the organizations in 2003 and 2013.

UNCTAD and the WTO believe that trade should play a key role in supporting the implementation of the outcomes of the Third International Conference of Financing for Development, in the achievement of the global Sustainable Development Goals and, above all, in fostering inclusive economic growth for poverty alleviation.

The organizations plan to reinforce their cooperation on issues such as trade related-technical assistance, trade facilitation, trade and investment, debt and finance, global value chains, commodities, standards, non-tariff measures, and e-commerce, as well as the establishment of a Geneva Trade Statistics Hub.

Dr. Kituyi said: “The signing of this declaration will deepen our collaboration in helping the least developed countries. As we celebrate twenty years of achievement, we recognize that many least developed countries are still commodity dependent, which therefore exposes them to the vulnerabilities of the boom and bust cycle.”

Mr. Azevêdo said: “Our organizations share a common goal of helping developing countries, and especially the least-developed countries, integrate into the global economy. This declaration reaffirms and strengthens the collaboration of our two organisations to keep on promoting trade as a tool for development.”

After the signing ceremony, Dr. Kituyi and Mr. Azevêdo jointly opened the event Twenty years of supporting the integration of least developed countries into the multilateral trading system (https://www.wto.org/english/tratop_e/devel_e/ldcwtoat20-121015_e.htm) which looked at the key developments and decisions taken in favour of the 48 least developed countries (LDCs), the institutional support provided and the trade capacity-building initiatives put in place. Participants also discussed how the international community could help the LDCs better integrate into the multilateral trading system.

Background

UNCTAD was formed in 1964 to help poor countries adopt policies that would integrate them into the world economy and boost prosperity. UNCTAD is based at the United Nations Office at Geneva, Switzerland, and has representative offices at the United Nations in New York and in Addis Ababa, Ethiopia. It works at the behest of 194 member States and employs 500 people.
The WTO deals with the global rules of trade between nations. Among its main functions, it ensures that trade flows as smoothly, predictably and freely as possible.

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Results Measurement for Sustainable Private Sector Development – MDF

The course will introduce the principles, steps and practices that wil enable you to apply the Standard, developed by the Donor Committee for Enterprise Development (DCED), within your organization.

Registration is open for the 5-day course on Measuring Results for Sustainable Private Sector Development that wil be held from the 17th to the 21st of August in The Netherlands.
Contact hans@hposthumus.nl for more information, or register on-line viawww.mdf.nl or mail registration@mdf.nl .

Results Measurement for Sustainable Private Sector Development – MDF.

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Key indicators of OECD and G20 countries


Select your topic and compare on key indicators with OECD and G20 countries.

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ILO warns of widespread insecurity in the global labour market

How is the world of work changing? Are permanent contracts the norm or the exception? Discover the new World Employment and Social Outlook 2015 (WESO).

Raymond Torres, Head of the ILO Research department, introduces the new annual flagship report “World Employment and Social Outlook 2015: The Changing Nature of Jobs” to be launched by the International Labour Organization.

GENEVA, 19 May 2015 (ILO News) – Only one quarter of workers worldwide is estimated to have a stable employment relationship, according to a new report by the International Labour Organization (ILO).

The World Employment and Social Outlook 2015 (WESO)   finds that, among countries with available data (covering 84 per cent of the global workforce), three quarters of workers are employed on temporary or short-term contracts, in informal jobs often without any contract, under own-account arrangements or in unpaid family jobs.

Over 60 per cent of all workers lack any kind of employment contract, with most of them engaged in own-account* or contributing family work in the developing world. However, even among wage and salaried workers, less than half (42 per cent) are working on a permanent contract.

Focus of the report

The 2015 edition focuses on the way in which changing forms of work and workplace organization are having an impact on enterprises, workers and the broader world of work.

It presents the latest statistics on wage and salaried employment, both globally and regionally, and captures the share of fixed-term and part-time contracts.

The report also looks at global supply chains and provides statistics on the number of workers involved.

Finally, it includes policy recommendations on how to reduce growing inequalities through social protection and labour regulation.

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More pressure on African governments to have stronger enforcement of anti-bribery and corruption regulation 

“The way that things have always been done” is changing in many African countries   LAGOS, Nigeria, March 13, 2015/ — 57.6% of companies see the development of policies and procedures that can be practically applied in all countries as the most challenging internal anti-corruption and compliance issue. This is one of the topics discussed today at a webcast with Uche Orji, CEO and Managing Director, Nigerian Sovereign Investment Authority (NSIA), hosted by Control Risks’ CEO Richard Fenning (https://www.controlrisks.com).   • While FCPA and UKBA still lead anti-bribery and corruption regulation, in a number of African countries the governments feel increasing pressure to join the current trend of stronger enforcement of anti-bribery and corruption regulation in developing countries   • An integrated, global approach to mitigate corruption risk is important, but local adjustment is key   •  “The way that things have always been done” is changing in many African countries and often […]

“The way that things have always been done” is changing in many African countries
 
LAGOS, Nigeria, March 13, 2015/ — 57.6% of companies see the development of policies and procedures that can be practically applied in all countries as the most challenging internal anti-corruption and compliance issue. This is one of the topics discussed today at a webcast with Uche Orji, CEO and Managing Director, Nigerian Sovereign Investment Authority (NSIA), hosted by Control Risks’ CEO Richard Fenning (https://www.controlrisks.com).
 
• While FCPA and UKBA still lead anti-bribery and corruption regulation, in a number of African countries the governments feel increasing pressure to join the current trend of stronger enforcement of anti-bribery and corruption regulation in developing countries
 
• An integrated, global approach to mitigate corruption risk is important, but local adjustment is key
 
•  “The way that things have always been done” is changing in many African countries and often management determination and the acceptance of “wasted” time and higher costs can avoid the need for bribes to secure business.
 
•  Only 66% of internationally operating companies have policies in place that forbid facilitation payments
 
Tom Griffin, Managing Director West Africa, Control Risks, comments on the discussion:
 

“Often companies try to roll-out a global anti-bribery and corruption programme from Western headquarters and are then surprised that it is not effectively implemented in other markets – this is not unique to African countries. Companies need to adapt the policies and initiatives to the local culture, for example the type of training for employees. Some of our clients with their headquarters in Africa are more effective in their fight against bribery and corruption than those headquartered elsewhere, as they have an anti-bribery and corruption programme very focussed on the specific issues of their market.”
 
“Knowing the local market and the country you are operating in is key to implementing a successful anti-bribery and corruption programme.”
 
“Control Risks sees a change in ‘how things have always been done’ in many African countries. The fight against corruption is higher on the political agenda than ever before and when we discuss the corruption problems in operating in these countries, we need to acknowledge this.
 

* Source: International business attitude to corruption, Control Risks, 2015. Distributed by APO (African Press Organization) on behalf of Control Risks.

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Latin American Economic Outlook 2014 calls for better education and skills

Better education and skills are key to shift the economy up a gear, says latest Latin American Economic Outlook Veracruz, Mexico, 9 December 2014 – Latin America’s GDP growth rate has slowed down in 2014, dropping below 1.5%. This is the first time in a decade that the region grows less than the OECD average, according to the OECD Development Centre, the Commission for Latin American and the Caribbean (UN-ECLAC) and the development bank for Latin America (CAF). Given the projections in the past weeks, any recovery in 2015 is likely to be challenging. In their jointly produced Latin American Economic Outlook 2015, the three organisations call for action to address this slowdown, focusing on the role of education and skills, and noting that despite some recent progress, more needs to be done to raise educational standards and address persistent and substantial socioeconomic inequalities. “If we want to avoid a […]

Better education and skills are key to shift the economy up a gear, says latest Latin American Economic Outlook

Veracruz, Mexico, 9 December 2014 – Latin America’s GDP growth rate has slowed down in 2014, dropping below 1.5%. This is the first time in a decade that the region grows less than the OECD average, according to the OECD Development Centre, the Commission for Latin American and the Caribbean (UN-ECLAC) and the development bank for Latin America (CAF). Given the projections in the past weeks, any recovery in 2015 is likely to be challenging.

In their jointly produced Latin American Economic Outlook 2015, the three organisations call for action to address this slowdown, focusing on the role of education and skills, and noting that despite some recent progress, more needs to be done to raise educational standards and address persistent and substantial socioeconomic inequalities.

“If we want to avoid a decade of low growth in Latin America, we must improve education standards, enhance skills in the workforce and boost innovation. Policymakers need to undertake ambitious efforts to unleash higher and more equitable growth”, OECD Secretary-General Angel Gurría said while launching the Outlook at the Ibero-American Summit in Veracruz on 9 December.

Structural change – such as the diversification of the economy towards knowledge-intensive sectors – is needed to supply the increasing demand for skilled workers. As noted by Alicia Bárcena, Executive Secretary of ECLAC, “without the transformation of the production structure there will be a link missing in the chain that connects education, productivity and innovation.”

Such a link has important implications for income distribution. Diversification implies the creation of quality, better-paid jobs, which in turn entails less informality and underemployment – and hence less inequality. Policies for learning and diversification should be at the top of the agenda in the coming years in Latin America and the Caribbean.

“In the absence of an exceptionally favourable external environment, the region needs to deepen regional integration and address the structural challenges of development, to support its growth potential, primarily in the areas of innovation and production patterns, and education and technical capacities that these require”, said Enrique García, CAF President and Chief Executive Officer.

The Outlook notes that, on average, the gap in education performance for a student in secondary school in Latin America relative to an OECD student is still quite high: the equivalent of 2.4 additional years of schooling. Furthermore, socioeconomic inequalities strongly influence both access and education outcomes in the region. Only 56% of students in the poorest quarter of the population attend secondary school, versus 87% of students in the wealthiest quarter.

Limitations in the quality of education are also reflected in the skill shortages and mismatches in the labour market, severely impacting the competitiveness of Latin American companies. The region’s businesses face greater challenges in finding appropriately skilled employees than any other region in the world. The Outlook shows that the probability of a Latin American firm facing obstacles in finding staff with the adequate capabilities is three times higher than a similar firm in South Asia and 13 times higher than a firm in Pacific Asia. The issue is particularly prevalent in key sectors such as the automotive industry and machinery.

To tackle these acute skills shortages, targeted policies are needed in pre-primary, secondary, technical and professional education. Policymakers need to provide more and smarter investment in pre-primary education, where important soft-skills development takes place, such as socialisation and learning perseverance, which are of critical importance in the labour market. Policies are also needed to ensure that resources are redistributed to reduce socio-economic inequalities. Classroom practices need adaption to ensure better performance, including tutoring, managing teacher expectations and student motivation. Increasing the quality of teaching also relies on monitoring and evaluation, and better incentives.

Finally, government and the private sector should work together to better connect technical and vocational training with the demand for skills in a changing world economy.

The Latin American Economic Outlook

Published for the eighth consecutive year, the Latin American Economic Outlook 2015 features a macro-economic analysis of trends in the region and a focus education, skills and innovation for development. The content of the report will be available online on 9 December 2014 on www.latameconomy.org.