Jobs as a cornerstone of development. SECO s commitment

Transcription

1 Federal Department of Economic Affairs, Education and Research EAER State Secretariat for Economic Affairs SECO Jobs as a cornerstone of development SECO s commitment

2 Contents Jobs at the heart of development policy 4 The role of SECO 7 Focus on employment creation 8 Areas of intervention 9 Promote labour market studies 9 Develop efficient framework conditions 10 Create jobs 12 Improve employee skills sets 14 Effectiveness 15 Contact State Secretariat for Economic Affairs SECO Economic Cooperation and Development Holzikofenweg 36 CH-3003 Bern info@seco-cooperation.ch Phone + 41 (0) Year of publication:

3 Jobs at the heart of development policy Poor, unemployed, or both: the International Labour Organization (ILO) in Geneva estimates that almost 1.1 billion people of workable age are unemployed or earn so little that they live below the poverty line. Some 600 million jobs will have to be created worldwide over the next decade simply to cover the backlog of unemployment. In the light of the growing world population, a similar number of jobs will be needed over the next 15 years, in order to keep the current employment rate. Employment promotion has therefore become a key issue in development policy. Through the creation of jobs with fair wages and reasonable social benefits, wide layers of society in developing and emerging countries can benefit from the economic growth, with significant progress made in poverty reduction. Poor employment opportunities and prospects for the future tend to lead to frustration and social exclusion, especially among the young. In many countries, young people are particularly subject to unemployment, low pay and insecure jobs. In the Middle East and North Africa, for example, youth unemployment is up to four times as high as among the adult population. Disproportionately high youth unemployment and underemployment Pakistan Chile India Indonesia Brazil Ghana Ukraine Thailand Tanzania Source: World Bank, World Development Report 2013 not in school or labor force unemployed Share of youth population between years (in percent) 4 5

4 Jobs that ensure human dignity and fair pay («decent work») mean more than a life without poverty: enabling people to work productively and earn a decent livelihood also helps to build selfesteem and social cohesion. Employment forms the basis for higher living standards, productivity gains and social interaction and thus contributes to a country economic and social development. This is why employment promotion was made one of the United Nations Millenium Development Goals in The World Bank has made jobs the focus of its World Development Report Here, a broad-based study funded in part by SECO, shows how a targeted combination of conventional and innovative labour policies can generate sustainable growth and create jobs, taking each country s prevailing institutional, economic and demographic framework conditions into account. Jobs as a basis for economic and social development Development The role of SECO Living standards Productivity Jobs Social cohesion The overriding objective of Switzerland s international cooperation is sustainable global development that will reduce poverty and global risks. Accordingly, SECO s economic and trade policy measures strive to integrate its partner countries into the global economy and foster economic growth that is both socially responsible and environmentally friendly. To meet this goal, SECO promotes measures that create new jobs and improve labour productivity. To carry out this task, it can build upon a wealth of expertise in economic, trade, education and labour market policy within SECO and the Federal Department of Economic Affairs, Education and Research (EAER). 6 Source: World Bank, World Development Report

5 Overall goal Reduction of poverty of international Beschäftigung als Teilziel der wirtschaftlichen Zusammenarbeit and global risks cooperation SECO s objective SECO s strategy Employment as a subgoal of economic cooperation Competitive domestic economy Sustainable growth Productive employment 1. New jobs 2. Higher productivity Integration into the global economy Areas of intervention SECO bases its activities on its specific areas of competence and experience in promoting economic and fiscal policy, urban infrastructures and utilities, private sector and entrepreneurship, sustainable trade and climate-friendly growth. SECO s areas of intervention are: Promote labour market studies Develop efficient framework conditions Create jobs Improve employee skills sets Promote labour market studies Alongside information on foreign trade, inflation and domestic growth, reliable data on employment is also an important prerequisite to analyse and determine economic policy. However, such basic information on the employment situation is severely lacking in SECO s partner countries. One of the main reasons for this is the extent of the informal sector, which varies between 50 and 90 percent of those employed, depending on the country. As informal businesses are not officially registered, they are not (or not fully) included in the statistics and they do not pay direct taxes. Very few of their workers enjoy stable jobs with social security benefits, making it difficult for the poorest in society to access education, loans, health services, etc. This undermines their labour market integration and limits productivity. Policy-making is also hindered by weak public institutions. The formal sector is crucial to the Source: Message on International Cooperation Focus on employment creation SECO pursues a number of different approaches to labour market and employment policy within international cooperation in an effort to improve the framework conditions, strengthen institutions, promote a job-creating private sector and provide targeted training for employees. They also seek to ensure equal development opportunities for men and women. SECO s measures are incorporated into the country strategies of its partner countries to ensure they best meet that country s specific needs and priorities. SECO also works closely with interna- tional partners, including the multilateral development banks, especially the World Bank Group with its International Finance Corporation (IFC), as well as various UN organizations such as the ILO and the United Nations Industrial Development Organization (UNIDO). Labour market information in policy-making Despite its considerable economic progress, Colombia saw very few new formal-sector jobs created in the past decade; a situation that has widened the income gap in the country even more. Recognizing the problems this was creating, the Colombian government made job creation in the formal sector a matter of priority. A loan programme granted by the Inter-American Development Bank (IDB), cofinanced by SECO, supports the government during the implementation of this initiative. The programme seeks to reinforce the institutional structure in the educational sector and to set up labour market information systems that will record the capacities available, the economic momentum and the requirements of the private sector using company surveys, among others. The objective is to adapt the training offer more closely to the needs identified in the private sector. 8 9

6 education. Aside from encouraging competition, this should also help to close the skills gap of university graduates arriving on the labour market. development of stable public authorities and a state under the rule of law. SECO therefore promotes targeted labour market studies so that the employment policies of its partner countries can be geared to their development priorities, including poverty reduction. It supports a joint ILO/World Bank project that records, in an international database, the measures taken by 77 countries to combat the economic crisis and unemployment. This user-oriented tool is applied to compare different measures with each other and to highlight and share more effective approaches. Develop efficient framework conditions Given the impact of a country s institutional and regulatory framework on the supply and demand of the labor market, SECO aims to make these conditions more efficient. Economic structural change should remain socially acceptable and in particular benefit the poorest. Regulation should ensure better functioning labour markets that improve employees working and living conditions. SECO is also committed to worldwide implementation of the core ILO labour standards, recognized as generally applicable human rights. The focus is on placing local businesses on a more competitive standing in global value chains. If the core labor standards are respected, satisfaction and commitment among employees grow. Greater job security helps prevent or decrease social tensions in the affected countries and companies. These are important foundations for sustainable growth. In North Africa and the Middle East, SECO is supporting a ground-breaking initiative implemented by the International Finance Corporation (IFC). The Education for Employment (e4e) programme strives to improve the business environment for private providers of postsecondary training and More competitive through better working conditions Other key instruments for improving the labour market are collective bargaining mechanisms, unemployment insurance, job centres and occupational pension schemes. These support networks are often poorly developed in partner countries, at times completely lacking or only available to certain segments of the population. SECO is therefore considering additional measures in these areas. Consumers and those operating in international trade are increasingly demanding worldwide adherence to generally accepted human rights such as employees rights, the freedom of association and the right to collective bargaining, the elimination of forced labour, the abolition of child labour, no discrimination in employment and the workplace, social security as well as job security. Together with the ILO and other partners, SECO formulated a programme for implementing these fundamental principles at company level. The SCORE programme (Sustaining Competitive and Responsible Enterprises) trains local trainers to instruct small and medium-sized enterprises (SMEs) in labour standards as well as workplace health and safety, quality management and environmentally friendly production methods. For example, thanks to the SCORE programme, there are now 60 per cent fewer workplace accidents at participating companies in Colombia. In Indonesia, several hundred new jobs were created in the 67 participating SMEs

7 Create jobs SMEs are important employers worldwide. To increase the demand for labour in partner countries, SECO supports projects that cut red tape or improve access to capital and market opportunities. Promoting SMEs is not an end in itself: it helps to create jobs and keep many families above the poverty line. Such support measures also reach disadvantaged groups of society, such as women and young people. In addition, improvements to the basic infrastructure help to promote growth and thereby employment in the medium term. An affordable and reliable source of electricity, for instance, allows companies to raise their production levels and hire more staff. SMEs as important sources of work SECO uses a number of different measures to increase employment levels of SMEs. For example, the basic business skills needed to set up a company, get it off the ground and grow the business are taught in various entrepreneurship programmes. These also help to facilitate access to external financing. In particular, the long-term SME financing available to growth-oriented firms from the Swiss Investment Fund for Emerging Markets (SIFEM) and the SECO Start-up Fund (SSF) has helped to create many new jobs. In SECO s partner countries in the western Balkans, for example, the SSF offers funding and advice to mediumsized businesses of 100 to 250 employees working in areas such as precision engineering and furniture production to name but a few. In addition, farming businesses and small firms have benefited from tradepromotion measures to open new markets, diversify their offer, expand production and thereby create more jobs or set up new production sites

8 Improve employee skills sets Despite high levels of unemployment in SECO s partner countries, there is still a lack of skilled workers in many sectors. While there may be strong demand for labour, the skills required are often simply not available. Such imbalances tend to stifle economic development and the sector-based diversification needed for sustainable growth. SECO therefore promotes the specific skills and know-how needed in the labour force to enhance productivity and company earnings, bringing workers and their families better living standards and more security. The snowball effect of training programmes In Vietnam, SECO supports the financial sector with training programmes for bank employees. The banking sector plays an important role by granting loans to companies, enabling them to expand and create more jobs. This programme aims to improve bank employees skills and knowledge of the business. For example, a train-the-trainer project for Vietnam s two largest universities training banking experts is instructing 19,000 students in the latest developments in banking. They also offer on-the-job training as part of the programme. Effectiveness SECO attaches great importance to the effectiveness and efficiency of its programmes and projects. Each project is assigned clear objectives and indicators. Continuous monitoring and evaluations are used to verify whether the objectives have been attained, how effective the projects have been and whether the funds provided have been used efficiently. Some concrete examples of indicators of result are the number of jobs retained or created or the number of entrepreneurs and companies that have received training

9 Federal Department of Economic Affairs, Education and Research EAER State Secretariat for Economic Affairs SECO