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Opinion | Why World Bank action on looming jobs crisis points to a better way

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Opinion | Why World Bank action on looming jobs crisis points to a better way

During the next 10 years, the bank suggests, an unprecedented 1.2 billion young people in the Global South will become working-age adults. Meanwhile, the job market is only expected to create 420 million jobs, leaving nearly 800 million young people without obvious employment opportunities and a clear path to prosperity.
The council will be headed by Singapore President Tharman Shanmugaratnam and co-chaired by former Chilean president Michelle Bachelet. It will include experts from government, business, civil society and academia “to offer thought leadership and actionable strategies for creating large-scale employment opportunities”.
Singapore President Tharman Shanmugaratnam, second right, and his wife Jane Yumiko Ittogi, second left, pose for a selfie as he meets Singapore athletes during his visit to the Olympic Village in Paris on July 24. Photo: Reuters
What this means is that strategies developed within the World Bank Group will be examined with a view to trying them out in countries to test real world applications. Those proving successful will be scaled up in the future to effectively address the jobs challenge.
This is a cooperative and ambitious agenda. It reflects the same willingness that the World Bank has already shown under Banga to bring together major public institutions with financial and corporate sector players to devise collective strategies in tackling climate change.
We need much more of this kind of thinking that capitalises on the institutional and legal capabilities that well-managed public bodies can display in coordinating society’s resources in pursuit of the common good. Strategies that seek to leave things to the market and trumpet the virtues of small government should be consigned to history.

The market-driven approach of the United States, in particular, is relevant only to a nation that is still quite recently established compared to those of Europe and Asia. The latter countries have evolved systems of social cooperation that transcend narrow sectoral interests such as those of business and finance.

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As the existential challenges facing mankind and the planet grow in size and intensity, it is becoming increasingly obvious that the market cannot cope with the task of marshalling the physical and financial resources needed to tackle climate change, infrastructure deficiencies and major socioeconomic demands of a similar nature.
The same goes for creating employment opportunities on a scale that matches the demand created by the pursuit of universal education. Some myopic individuals might claim that the market or the corporate sector can take care of all these challenges, but that is a vain and naive belief.

All credit to Banga and the World Bank for devising a formula that could provide a model for bridging ideological and economic gaps between East and West or between the nations of the Global South and those of the Global North. Of course, that is provided political leaders are willing to lay aside national and cultural prejudices and pool collective wisdom.

The World Bank’s new jobs council has yet to specify the economic sectors it will prioritise in creating employment, although the focus will obviously be on young people, including women. Its assumption that growing demand for higher education will attenuate job demand initially suggests that the focus will be on higher-skilled employment.
World Bank President Ajay Banga listens during a task force meeting of the Global Alliance against Hunger and Poverty, in Rio de Janeiro, Brazil, on July 24. Photo: Reuters

Likewise, the council has not yet specified which geographical areas, if any, it will focus on. The “working structure” of the new body has yet to be finalised, a World Bank official in Washington told me. Even with the precise structure yet to be determined, the announcement of the concept sends an important message.

The World Bank quoted Bachelet as saying, “The challenge [of job creation] is unprecedented in modern history: we must provide meaningful job opportunities for hundreds of millions of young people and women in the Global South.”

Or as Shanmugaratnam put it, “Good jobs are at the core of aspirations everywhere, but also a growing challenge in the face of rapidly advancing technologies, geoeconomic uncertainty and climate threats.”

At a time when some world leaders seem intent on promoting division, competition among groups of allies and rival economic structures, perhaps our only hope for progress is to look to multilateral institutions such as the World Bank for a lead. Bigger minds seem to be at work there than in national capitals.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs

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