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THE GIST of Editorial for UPSC Exams : 28 December 2019 (An agenda for decent jobs in Africa (Mint))

An agenda for decent jobs in Africa (Mint)

Mains Paper 2 : International
Prelims level : Not much
Mains level : Low paid jobs pose threat in African countries

Context:

African countries had some of the lowest unemployment rates in 2018. The reality in these countries, however, is that almost everyone must work because governments can’t support social safety nets Unemployment data:
Africa’s labour markets are the most dynamic in the world.
Yet, according to the International Labour Organization (ILO), African countries had some of the lowest unemployment rates in 2018.
They include Niger (0.3%), Rwanda (1%), Burundi (1.5%), Madagascar (1.7%), Togo (1.7%), Ethiopia (1.8%), Tanzania (1.9%), Liberia (2%), Benin (2.1%), and Chad (2.2%).
The reality in these countries, however, is that almost everyone must work to survive because governments have limited capacity and no fiscal space to support social safety nets.
At the same time, African economies also have some of the world’s highest underemployment rates, owing to erroneous policy choices, low levels of productivity, and insufficient growth, despite the commitment and hard work of an abundant labour force.

Defining unemployment:

According to the ILO, an unemployed person is a member of the labour force who was not employed during a specified recent period, and is both available for and seeking work.
The underemployed comprise the unemployed plus those who are employed part time (less than 30 hours per week) and want to work full time.
Yet, although most African economists and statisticians accept the official definitions of these terms, policymakers continue to debate their practical significance.
African per capita gross domestic product growth has been insufficient in recent decades—both in absolute terms and compared to other parts of the developing world—and employment has remained overwhelmingly informal.
Africa’s rapid population growth poses a further challenge.
TheUN expects the continent’s working-age population (those aged 15 to 64) to double to 1.5 billion by 2050, and to reach 2.8 billion in 2100.
Providing decent jobs for this massive labour force is perhaps the biggest challenge facing the world—not just Africa.

Agenda for developing countries:

Traditionally, developing-country governments have tried to tackle unemployment and underemployment by improving the business environment, typically through reforms aiming to increase labour-market flexibility.
This means making it easier for firms to hire and fire workers, scaling back employee benefits, reducing the tax wedge (the difference between the cost of employing a worker and his or her take-home pay), weakening trade unions, and pursuing active labour-market policies (including employment subsidies and training).
Unfortunately, these conventional measures generally are more appropriate for advanced economies with high levels of full-time employment and relatively expensive labour.
In developing economies with far less full-time employment and persistent labour surpluses, these measures rarely produce the hoped-for results.
And because traditional policies neglect the most glaring features of low-income countries’ labour markets—an acute shortage of good formal sector jobs and widespread informal employment—empirical evidence of their effectiveness is ambiguous at best.

Study highlights by African Development Bank:

The developing world neglected the key principle of successful job-creation strategies: ensuring that economies develop in a manner consistent with their comparative advantage and are internationally competitive.
Instead of focusing on labour-intensive sectors, African governments often tried to replicate the capital- and technology-intensive industries characteristic of high-income countries.
A misguided “modernization" drive explains why many African economies remain commodity-dependent and job-scarce six decades after independence.

Three policy priorities:

They need to gear macroeconomic policies toward ensuring external competitiveness—including the adoption of flexible exchange rates to mitigate trade shocks. Economic stability is a precondition for sustained growth and hence the creation of decent jobs, particularly in small developing countries that are most vulnerable to shocks.
Demand-boosting policies play an important role in combating unemployment, especially in economies with good fundamentals. By using fiscal and monetary policies whenever possible to support economic growth, governments can help to reduce uncertainty.
The macroeconomic policies specifically geared toward job creation make active labour-market programmes much more likely to succeed.

Labour-market initiatives:

African governments need to consider a range of labour-market initiatives to help create jobs.
When fiscal and debt conditions permit, they should accelerate the implementation of carefully designed, labour-intensive public-works programmes.
Well-targeted public infrastructure projects (whether new investment, repair, or maintenance) provide much-needed incomes, typically to the urban poor, and can help to ease social and political tensions.

Way forward:

The government-sponsored training programmes that help new and unemployed workers to gain or regain skills could boost productivity if they target the neediest segments of society, such as young people, women, and disadvantaged groups.
Youth-oriented programmes designed in close collaboration with private firms, academic institutions, and NGOs can yield good results.
To maximize such initiatives’ impact, policymakers should tailor them to the needs of competitive industries.
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Prelims Questions:

Q.1) With reference to the India and USA 2+2 Ministerial Dialogue, consider the following statements:
1. It has been decided to hold the India-U.S. joint military exercise ‘Tiger Triumph’ on a biennial basis.
2. The Industrial Security Annex (ISA) to the India-U.S. General Security of Military Information Agreement (GSOMIA) will provide a framework for exchange and protection of classified military information between the U.S. and Indian defence industries.

Which of the statements given above are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above