“In the absence of adequate job creation by the public or private sectors, it is more important to enhance financial inclusion, which can help create greater opportunities for self-employment instead of salaried employment.” Tameer Microfinance Bank CEO Nadeem Hussain
Pakistan is one of the top ten most populous countries in the world. Youth make up over 36 percent of the Pakistani labor force, and that proportion is projected to rise to 50 percent by 2050. According to the World Bank there will be 1.7 million Pakistanis entering the country’s labor force every year, yet, worryingly, the Pakistan labor force survey also finds that over 3.7 million people are currently unemployed. The yearly upsurge in the unemployment rate is putting additional weight on the shoulders of the Pakistan government. The government must reassess and make needed reforms in order to change the current trajectory and allow Pakistan to reap the benefits of its demographic dividend.
By Milos Djuricanin, Program Manager at Serbian Association of Managers. Duracanin was a 2014 ChamberLINKS participant.
“It is clear that youth unemployment is one of the biggest problems of our society. If we want to successfully solve the problem of unemployment, we have to listen more to the voice of the economy and private sector. This is the absolute priority of the Government of Serbia. That’s why we initiated conversations with businessmen, in order to get first-hand information on their personnel needs and to create a common set of measures which will enable increase of youth employment”– Vanja Udovicic, Minister of Youth and Sports.
The status and position of young people in the labor market in Serbia falls into the category of challenges with no quick fix. Year after year, we are faced with statistics that continue to confirm that every second, a young person is left without a job. According to data presented at the National Youth Strategy for 2015-2025, youth unemployment in August 2014 in the Republic of Serbia is 41.7 percent for people aged 15-24, and 33.27 percent for people aged 15-30 years. Young people are inactive in the labor market: last year the inactivity rate of young people aged 15-30 years was over 50 percent and in 2013, it was noted that 20 percent of young people ages 15-24 belonged to the category of young people NEET (not employed, in education or training).
One of the key issues affecting the high youth unemployment is a mismatch between the skills that young people acquire through formal education, and the knowledge and skills that employers expect them to have. According to research conducted by the Union of Employers of Serbia, young people throughout the formal education system receive and adopt only theoretical knowledge and only 4.12 percent of young people are considered to possess the knowledge and skills for real business. Eighty-six percent of young people reported that they felt they did not possess any practical knowledge.
Among the barriers for business development in Serbia, the lack of adequate staff is increasingly climbing on the list: from an 8th place ranking in 2006 to third place ranking in 2013. This is a clear indication of how difficult it is to find high quality staff.
Given this information, the Serbian Association of Managers (SAM) with the support of the Center for International Private Enterprise (CIPE) organized an event titled “Support for the youth – future for the country,” during which a Memorandum of Cooperation was signed between the Ministry of Youth and Sport and SAM aiming to increase opportunities for top university students in the country to intern for SAM’s member companies.
Youth around the world are agents of change. They are political and economic leaders and participants in their communities, and have many thoughts on how to shape their nation’s future.
As part of celebrating such individuals on International Youth Day, two recent CIPE-Atlas Corps Think Tank LINKS alumni – Fayyaz Yaseen from Pakistan and Iryna Fedets from Ukraine – analyzed two issues young people care about in their communities: youth unemployment and anti-corruption. In this week’s Economic Reform Feature Service articles, the two authors explore how to bring about democratic and economic reform changes in their respective countries.
We have all witnessed over the last two years that youth are shaping the political landscape of their countries. I have seen young people driving innovations and economic and social entrepreneurship in every region of the world. I believe the best solutions to our shared challenges will come from harnessing the energy and creativity of youth.
– Secretary of State Hillary Clinton
This year International Youth Day highlights the theme “Building a Better World: Partnering with Youth.” The importance of engaging young people in political, economic, and civic spheres is evident just by looking at the numbers: more than one in six people on the planet are between the ages of 15 and 24. Yet these adolescents and young adults are all too often neglected when it comes to opportunities to lead a fulfilling and prosperous life.
One reason is the pace of demographic change: according to the UN Population Division, the number of young people globally has been steadily increasing since 1950 and will continue to rise – with a concentration in low- and lower-middle-income countries – for at least another two decades. As the Arab Spring shows, if governments cannot provide satisfactory prospects for their growing populations, social unrest may follow.
Beyond economic exclusion, which manifests itself in high youth unemployment (or employment in the informal sector), political exclusion of youth is another reason why young people often feel neglected. In many countries political parties and state institutions remain dominated by older officials who may not understand the needs and concerns of youth, and are unwilling to seek out the views of young people. CIPE works with local partners in countries around the world to counteract the exclusion of youth in all aspects of public life and to partner with the next generation of leaders. Here are a few examples:
With a majority of its population under the age of 30, the Middle East is the youngest region in the world. Understanding the pressures that this “youth bulge” exerts on the labor market can help us gain a better understanding of a viable economic approach that responds to the needs of a growing young population in search for work.
Youth unemployment across the Middle East and North Africa hovers at around 25 percent—the highest in the world. In many MENA countries, high unemployment rates are primarily the result of young job seekers waiting and searching for work. The Middle East Youth Initiative, a project of the Wolfensohn Center for Development at the Brookings Institution and the Dubai School of Government based in Washington, DC, was established for the sole purpose of studying “youth exclusion” in the Middle East, publishing articles and reports on issues of youth unemployment, marriage, political participation and housing in the Middle East. The organization will soon release a book entitled A Generation in Waiting in which the authors discuss how this level of unemployment among the youth is creating a “waiting generation” across the Middle East as lives are stalled before they can begin their trajectory. With no job, there is no money for an apartment. Without an apartment, there’s probably no chance of getting married and tradition holds that a young man must establish a household for his bride. A generational crisis with unpredictable consequences is brewing.
The reasons for the youth unemployment crisis are many, but an important starting point is demographics. Right now, the region is experiencing an all-time peak in its youth population. The World Bank calls it a “youth bulge.” Since 1980, the population of 15- to 24-year-olds has doubled. In Egypt, 70 percent of the population is under 30. This surge in the young population is saturating the job market at a time when governments across the Middle East have been attempting to shift their labor markets to encourage private business and reduce the numbers of government employees. Many countries are also trying to open their economies to direct foreign investment and to increase trade by reducing tariffs. Yet none of these reforms have had much benefit for young people.
South Africa has made amazing strides since the end of the apartheid in 1994. Yet, even though it is the Continent economic engine, South Africa continues to suffer from poverty and inequality that have their roots in the apartheid era. The prime symptom is the country’s persistently high unemployment rate, currently of 23 percent. The global recession certainly does not help. But the core of the problem goes deeper: it is not a cyclical economic downturn that keeps the jobless rate high. Rather, it is the legacy of unequal economic opportunities in the past for the country’s majority that resulted in scores of people who, with no marketable skills, do not work and never had a formal job.
There is little consensus on a solution. But experts agree that joblessness is costly to South Africa, which helps support nearly one-quarter of the population with the developing world’s biggest welfare program. Some warn that chronic unemployment is a tinderbox for instability of the sort that flared last year, when poor South Africans unleashed a wave of violence against foreigners they accused of taking their jobs.
Ann Bernstein, executive director of the Center for Development and Enterprise in Johannesburg – a CIPE partner – adds: “Worst of all, unemployment is a terrible waste of human potential. Almost every unemployed person could and should be doing productive work that would improve their lives and develop the country.”
President Jacob Zuma, a populist elected a few months ago on promises of spreading wealth, has pledged to create half a million jobs this year and 3.5 million more by 2014. But the promised jobs are temporary public works positions that might not lead to true employment gains. And with South Africa now in recession after years of steady growth, economists say the government will have a hard enough time saving jobs, much less creating them.
Economic inclusion cannot happen overnight. But it is clear that 15 years after oppression of the apartheid ended, most South Africans still struggle with gaining access to skills needed in a modern marketplace and can’t fully participate in their country’s economy.