E N S W - United Nations Development Programme

domestic markets were not encouraged to
export and compete globally. But when they
did so, they were able to rely on capacities
built up over decades. Embraer, for example,
is now the world’s leading producer of regional
jet commercial aircraft of up to 120 seats. 25
The country’s steel and shoe industries also
grew under public ownership, with research
and development augmenting capabilities for
domestic innovation.
Prioritizing job creation
Pragmatic policies aimed at creating secure
and remunerative jobs are likely to strengthen
the link between economic growth and
human development. Evidence from Asia
suggests that countries with simultaneously
high rates of growth and poverty reduction
also rapidly expanded employment. This was
true for Malaysia and Thailand in the 1970s,
China and Indonesia in the 1980s and India
and Viet Nam in the 1990s. 26 The first generation
of fast-growing Asian economies—Hong
Kong, China (SAR), Republic of Korea,
Singapore and Taiwan Province of China—
expanded employment 2%–6% a year before
the 1990s, while raising productivity and
wages. Such patterns of growth were often
led by small-scale agriculture as in Taiwan
Province of China and by labour-intensive export-oriented
manufacturing in Hong Kong,
China (SAR), the Republic of Korea and
Singapore. 27
The success of some Asian countries—
such as the Republic of Korea and later
Thailand—holds lessons for less developed
economies, especially in Sub-Saharan Africa,
because they created jobs two to three times
faster when they were at a comparable level
of development. For example, over the past
10 years, Africa’s labour force expanded by
91 million people but added only 37 million
jobs in wage-paying sectors. 28 With proactive
government policies in labour- intensive subsectors
of manufacturing and agriculture, as
well as retail, hospitality and construction,
Africa is projected to create up to 72 million
jobs by 2020, an additional 18 million jobs
over present growth levels. 29 Such policies,
however, require not only investing in young
people’s education and training, but also
Figure 3.2
Current HDI values and previous public expenditures are positively correlated . . .
HDI, 2012
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
6 7 8 9 10 11 12 13 14
Log of public expenditure on health and education per capita, 2000
Source: HDRO calculations and World Bank (2012a).
Figure 3.3
. . . as are current child survival and previous public expenditure on health
Log of under-five mortality rate, 2010–2011
6
5
4
3
2
1
0
2 4 6 8 10 12 14
Source: HDRO calculations based on World Bank (2012a).
improving infrastructure aimed at economic
diversification and removing obstacles to private
entrepreneurship, such as lack of finance
and onerous regulations. 30
• Mauritius. The possibilities of labourintensive
growth are higher when countries
are at a lower level of industrialization.
Analysing the performance of Mauritius
Log of public expenditure on health per capita, 2000
Chapter 3 Drivers of development transformation | 71