SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

make this a key aim of national development
strategies. Job creation efforts should be backed
by adequate resources, reinforced with timelines
and targets, and the mandate should lie not only
with the Ministry of Labour. Strategies need to
be implemented jointly with multiple ministries
and departments, including finance, labour,
commerce, industrial development, manufacturing,
agriculture, trade, youth and women, as
well as in close coordination with the private
sector. Without a well-developed action plan and
clearly defined employment targets, it will be
difficult for countries to make progress. Some
ways to stimulate pro-employment growth are
briefly described below.
Foster growth of labour-intensive sectors. Countries
in the region need to promote sectors that
create jobs. Nations with large low-income
populations, big agriculture sectors and high
rural-urban migration could focus on specific
industries, particularly in manufacturing, that
yield large numbers of low to semi-skilled jobs. 22
This switch has been key to high job growth in
China, leading to a significant decline in poverty.
In India, in contrast, the manufacturing base
is still small, contributing to only 15 percent of
GDP and 11 percent of employment. 23 Manufacturing
in general drives innovation, increases
productivity and helps economies transition out
of a heavy dependence on agriculture. Since
manufactured goods are tradable, they can also
reach large markets abroad.
Service sectors such as tourism, retail trade,
shipping, IT, banking and finance, and other
specialized industries have historically generated
more employment in the region. The growth
of IT in India and telecommunications in the
Philippines are excellent examples, having provided
employment to large numbers of youth.
Governments need to open doors for new industries
that will create new opportunities for
the growing population of workers, as well as
build long-term development plans for specific
economic sectors based on changing skill sets.
Diversify the economy: Concentrating economic
activities in a few areas, as several countries in
Asia-Pacific have done, has major implications
for job creation and resilience to shocks. It
means that the market demands only a few
types of skills. In Bhutan, for example, the
hydropower industry accounts for more than
half of GDP and three-quarters of total exports.
While this creates some jobs in construction
and engineering, it undercuts diversification in
the job market, which is not well positioned to
absorb growing numbers of Bhutanese youth.
Countries reliant on extractive sectors such as
oil, gas and mining similarly fall short on job
creation. While Mongolia enjoyed double-digit
growth during 2011-2013, spurred by extractive
businesses, very few jobs were created, and youth
unemployment, in particular, remains worryingly
high. In Papua New Guinea, the main sources
of national and export earnings are minerals
and energy extraction, which yield few jobs;
most labour earnings come from agriculture,
forestry and fishery.
Other issues relate to vulnerability to shocks,
such as a slowdown in external demand. These
can be devastating to countries with only a few
types of businesses, such as textiles and readymade
garment manufacturing in Bangladesh, or
fisheries and tourism in Maldives. One consequence
is a sudden steep rise in unemployment
as workers who have lost jobs are unable to find
new ones.
Unless Asia-Pacific countries diversify,
through cultivating new domestic businesses
and new links with external businesses, for example,
they may be unable to generate enough
decent employment to meet demands, over time
and in the face of inevitable shocks. Several
countries have done well in managing extractive
sectors as well as diversifying their economies to
increase jobs in alternative sectors. Experiences
from Botswana, Chile, Indonesia and Malaysia
demonstrate how proper management of
extractive industries and a strategy to diversify
can help economies transform.
Strengthen the macroeconomic environment:
A thriving business environment depends very
much on the macroeconomic environment.
Businesses will start, create jobs and thrive in
well-managed, stable economies, knowing property
and investments are secure. This requires
improved political stability, stable exchange
rate regimes, controlled inflation, well-managed
fiscal and monetary policies, and strong
financial infrastructure, among other priorities.
Tourism, retail
trade, shipping, IT,
telecommunications,
banking and finance,
have generated more
decent employment
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