Download Agriculture, Pro-poor Growth and Rural

Youth and Rural Development in
ACP countries
The Challenges of Youth Employment
in ACP Countries: A Global Perspective
Brussels Briefings
16th June 2010
Bruno Losch
General Positioning

Youth in ACP countries like in many developing countries are
often unemployed and they mainly participate in the informal
labor market: they face high economic insecurity and poverty
rates

Youth represent around 20% of the total population BUT
more than 30% of the active population (EAP or 15-64
group):
=> 37% in SSA, 32% and 28% in Pacific and Caribbean regions

Answering the youth employment challenge is critical for
poverty reduction and the future of DCs

While targeted solutions are useful, they must be part of
broad development strategies addressing the structural
transformation of economies and societies
Basics 1: Demographic Transition

ACP countries face a large demographic growth:
this is firstly the case of SSA and also of the
Pacific while the Caribbean will slow down rapidly

In SSA: from 860 million people today, to 1.3 billion in
2030 and 1.8 billion in 2050 = + 103% = the last
demographic transition in the world

In the Pacific: from around 10 million in 2010 and 17
million in 2050 = + 73% with sub-regional differences

In the Caribbean: from 40 million to 47 million in 2050 =
+18% (but 80% of the population in Cuba, Haiti,
Dominican Rep.)
3
Basics 1: Demographic Transition

A rapidly changing demographic structure


Activity ratio has remained extremely low throughout the
past decades in SSA
This structure weighted heavily on growth

Growth of the economically active population
presents a significant opportunity… “the
demographic dividend”

… but also a source of significant tensions if
economies do not generate sufficient jobs
4
5
Basics 1: Demographic Transition

The present tensions on the labor market might
intensify with the arrival of growing new cohorts:




A “big push” in SSA: approximately 17 million / year at
present, 24 million in 2025, 31 million in 2050
From 200,000 to 300,000 people between today and
2050 in the Pacific
But 700,000 new entrants / year in the Caribbean and
already decreasing
The ability of African economies to absorb this
additional workforce is a crucial question
6
the World Bank
7
The example of Mali
Evolution of Population 1960-2025
(in Millions)
Evolution of Active Population. 1960-2025
(in Thds)
24
500
21
400
18
15
300
12
Totale
9
200
Rurale
6
100
3
0
1960 65
70
75
Totale (NU)
80
85
90
95 2000 05
(BM)
Source : United Nations 2009 (NU) et Guengant 2010 (BM)

Rurale (NU)
15
20 2025
0
(BM)
Source : Guengant 2010 et calculs des auteurs
The yearly cohort of new entrants in the labor market is
300,000 people today and will be 520,000 in 15 years
(240,000 for rural EAP)


10
The Malian economy will have to create 6,2 millions “new jobs”
These new entrants have already been born
8
Basics 2: Economic Transition

Developing countries are at different stages in the
structural transformation process characterized by
a progressive shift from agriculture to industries
and services

Within this process, the role of agriculture in GDP
and in employment decreases

The major vehicles of transformation are:


The development of the rural non-farm economy
Rural depopulation and migrations to cities (or abroad).
The viability of this process implicates employment
opportunities.
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The Three Worlds of Agriculture (WDR08 )
0.8
BDI
Agriculture-based countries
Poverty data from Ravallion et al. 2007
Other predicted poverty data
RWA
Dynamic analysis
Agriculture's contribution to growth, 1990-2005
0.6
MWI
CMR
SDN
PRY
BEN
NER
NGA
0.4
GHA
BGR
AZE
PNG
TZA
TGO
India
CIV
SYR
ETH
BFA
MDG
ZMB
HND
0.2
PHL
BRA
UZB
UKR
ARG
Brazil
(1970-96)
CHL
0.0
CZE
BOL
MEX
DOM
SVK
TUR
SLV
ECU
ZAF
POL
HUN
AGO
MAR
MYS
COL
BLR
KEN
MOZ
ROM
70-75
GIN MLI
PAK
YEM
IRN
KHM
BGD
IDN
EGY
NPL
UGA
TCD
GTM
DZA
SEN
PER
RUS
90-96
VEN
LAO
VNM
IND
TUN
Indonesia
(1970-96)
THA
LKA
China
(1981-2001)
CHN
ZAR
TJK
Transforming countries
ZWE
Urbanized countries
-0.2
10
0.0
0.2
0.4
0.6
Rural poor/total poor, 2002
0.8
1.0
The Evolutionary Path
Basics 2: Economic Transition

For most of the ACP countries the economic
transition has been very slow

The population remains broadly rural and will
remain rural till the 2030s
Agriculture has often a central role in GDP, trade,
and particularly in employment



60-80% of the active population live from
agriculture in SSA
It means that most of the youth are rural and
many are involved in agriculture
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SSA’s Economic Transition:
a Major Challenge

African economies are
characterized by a low level
of diversification



Rapid urbanization with a low
level of industrialization
Increased difficulties to develop
a sufficient industrial sector in a
context of strong international
competition
Consequences:



Limited creation of formal
employment vs. absorption by
the informal sector
Economic and geopolitical
constraints to international
migration
For a long time to come
agriculture will remain the main
employer
50
Manufacturing % GDP
40
30
20
10
0
1965
1970
1975
1980
1985
1990
1995
2000
2005
Sub-Saharan Africa
60
Agriculture % GDP
50
40
30
20
10
0
1965
1970
China
1975
1980
Indonesia
1985
1990
Thailand
1995
2000
Sub-Saharan Africa
14
2005
Agriculture, Transition & Employment

The role of agriculture:





The lessons learnt from past transitions remind:



Contributes directly to food security, income creation
and poverty reduction
Is the major source of employment so far:
this is too often forgotten in the existing debates
It plays a central role in the economic transition
the decisive role of farm income increase in the
development of a rural demand
Rural demand is the necessary step for the emergence
of the rural non-farm economy (RNFE)
Both agriculture and RNFE are critical for youth
employment: their development will
automatically facilitate the inclusion of young
people
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Prioritization, Targeting and
Sequencing



Many targeted programs can be efficient for
youth employment . However, there is a need for
reengaging in development strategies based on
long term vision, identification of opportunities
and constraints , shared diagnostics and
prioritization
the size of the yearly cohorts of young people entering the
labor market is a strong reminder
Every country, region has its own development
trajectory, comparative advantages and binding
constraints, and heterogeneity is the rule: it
means tailor-made policies instead of one-sizefits-all
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Prioritization, Targeting and
Sequencing

Two main issues can be raised:



A recurring binding constraints in many rural areas is
risk: risk encourages self-consumption and prevents
diversification. Addressing risks is critical.
Many instruments can be finely designed and efficient
but have a limited impact in terms of numbers: the
objective is to address the big numbers through
inclusive policies and programs, selecting options which
are employment intensive.
The future of youth is part of this general
approach
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