How to fight global unemployment through partnerships

Inscribed in stone at the entrance of the World Bank’s headquarters in Washington, D.C. are eight words that represent a central aspiration of humanity: “Our dream is a world free of poverty.”

Today, it’s no longer a dream. Over the past 30 years, more than 1 billion people have been lifted out of extreme poverty, and the opportunity to lift the remaining 1 billion is now within our grasp. But it will take a concerted effort. Businesses, governments and NGOs must work together to ensure the private sector is equipped to create more and better jobs — the surest path out of poverty.

Today, 200 million people are unemployed across the world. More than 600 million young people are neither in school nor working. Challenges of this scale can’t be tackled alone. But a partnership — built on shared values and a common vision — will ensure a faster, more effective result.

That’s the goal of the World Bank Group’s Let’s Work global partnership. We are working with several of the world’s biggest development institutions to pool knowledge and resources, reach a consensus on a strategy, and quickly implement our findings.

Creating more, better jobs

We believe that partnerships have the power to make a transformational difference.

Within the next three years, Let’s Work will test job-creation strategies in a range of countries, from fragile and conflict-affected states to low- and middle-income countries. These pilot programs will identify sectors and areas that have the most potential to create more and better jobs, help remove obstacles and get private-sector led job growth going.

Our focus is not only on the quantity of jobs created but their quality as well, such as working relations, safety and health policies, career advancement opportunities and basic human resource standards. Inclusiveness is also a vital component of Let’s Work, taking into account marginalized groups such as women and youth.

Let’s Work will also produce guidance notes, good-practice lessons, and training and learning events. It will develop and refine methods and data for estimating direct and indirect jobs. Simply put, it will harness our collective knowledge and identify concrete ways to create good quality jobs.

Transformative areas

Let’s focus on key areas, such as infrastructure.

Studies show that while energy projects also create direct jobs, many more come from increased and improved power supply. In Asia, the International Finance Corp. has invested $75 million to support power transmission from Bhutan to India. The project created about 2,000 direct, and 8,000 indirect jobs (in the value/supply chains) and induced jobs (jobs created because new direct and indirect jobs increase earning and create further demand for the rest of the economy — “ripple effect”). But the biggest impact — an additional 75,000 jobs — came from the increased availability of power for businesses in India. Greater access to power also means children will be able to study at night, use more sophisticated equipment in schools and spend less time collecting traditional fuels. It will help improve living standards, stimulate economic growth, and support private sector development.

Power is only one of many potentially transformative areas the partnership addresses. As businesses look for new markets and opportunities, interest in fragile and conflict-affected states is growing.

IFC-supported investment climate reforms helped create up to 20,000 jobs in Liberia and 16,000 jobs in Sierra Leone within a two-year span. Another important focus is on value chains: Indirect jobs in supply chains and distribution networks are often a large multiple of direct jobs in our client companies — for example 28:1 in a mining company in Ghana and 24:1 in a cement company in India — and these indirect jobs often provide opportunities for the poor. Through the Let’s Work partnership, we can deepen and strengthen the understanding of how jobs are created.

Removing obstacles to job creation

IFC’s 2013 Jobs Study provided insights into how governments, international finance institutions, the private sector, and donors can improve the job-creation effects of their activities by removing key constraints:

• Poor investment climate.

• Inadequate infrastructure.

• Insufficient finance for micro, small and medium-sized enterprises.

• Lack of skills and training.

This knowledge provides a foundation for effective action, but understanding without action is meaningless. Let’s Work is about being bold, taking risks and creating innovative partnerships.

To date, several leaders in development have already indicated they want to join the partnership: the Inter-American Development Bank, the African Development Bank, the Asian Development Bank, the International Labor Organization, the Private Infrastructure Development Group and the Overseas Development Institute. Others have expressed an interest to collaborate, including the World Business Council for Sustainable Development. We are calling on other institutions and private sector leaders to join this crucial effort.  

This is a defining moment: To use our resources to end the suffering of over a billion people living in extreme poverty. By helping to create more and better jobs, we can reduce poverty and boost prosperity.  This is not only good for development, but also makes business sense — “to do well by doing good.”

Roland Michelitsch is a confirmed speaker at the European Development Days 2013 to be held on Nov. 26-27 in Brussels. Live web-streaming of 20 high-level sessions will be available on the EDD13 website during the two days of the forum. For in-depth analysis and exclusive interviews with decision makers and thought leaders, stay tuned to Devex, an official EDD13 media partner.