Tackling The Jobs Crisis: What’s To Be Done?


by Gerd Schwartz and Ruud de Mooij

Faced with a jobs crisis, policymakers the world over are digging deep into their policy toolkits to generate more employment. A recent study by the IMF’s Fiscal Affairs Department argues that reforms of tax and expenditure policies offer great promise in helping countries confront the jobs crisis, including in the short term.

The study argues that improving employment outcomes, over and above what could be achieved through policies aimed at supporting the demand for goods and services by consumers and investors, requires actively supporting labor demand, strengthening incentives (or reducing disincentives) to work, and expanding training and job assistance, while preserving equity objectives.

The labor market challenge

The economic and social consequences of job losses since the onset of the global crisis have been enormous. However, as bad as the crisis has been for jobs, unemployment was already elevated before the crisis in many advanced and emerging economies. This would suggest that labor market challenges will not go away as the global economy recovers, and that policy measures are needed both to address structural employment issues and to improve the employment outlook in the short term.

Continue reading

Africa and the Great Recession: Changing Times


By Antoinette Sayeh

(Version in Français)

In previous global downturns, sub-Saharan Africa has usually been badly affected—but not this time around.

The world economy has experienced much dislocation since the onset of the global financial crisis in 2008. Output levels in many advanced economies still remain below pre-crisis levels, while unemployment levels have surged; growth in emerging market economies has slowed, but remains quite high.

But in sub-Saharan Africa, growth for the region as a whole has remained reasonably strong (around 5 percent), except for 2009 – where the decline in world output and associated shrinking of world trade pushed Africa’s growth down to below 3 percent.

Some better than others

Of course, sub-Saharan Africa is a diverse region, and not all economies have fared equally well. The more advanced economies in the region (notably South Africa) have close links to export markets in the advanced economies, and have experienced a sharper slowdown, and weaker recovery, than did the bulk of the region’s low-income economies.  Countries affected by civil strife (such as Cote d’Ivoire, and now Mali) and by drought have also fared less well than other economies in the region.

So why has most of sub-Saharan Africa continued to record solid growth against the backdrop of such a weak global economy?  And can we expect this solid growth performance to continue in the next few years?

Continue reading

How to Get the Balance Right: Fiscal Policy At a Time of Crisis


By Anders Borg and Christine Lagarde

Last autumn was a turbulent time for Europe. The debt crisis deepened and financial markets became embroiled in turmoil, driven by fears of widespread restructuring of public debt. The crisis has harmed growth, increased unemployment, and left a large number of people less protected.

We are now seeing some signs of stabilization. Most countries are reducing their deficits and even if debt ratios are still rising, the return back to fiscal health has begun.

The International Monetary Fund and the Swedish Ministry of Finance are hosting an international conference in Stockholm on May 7-8, with the purpose of sharing knowledge and providing guidance on the best way to achieve fiscal consolidation, and on the role that effective fiscal policy frameworks and institutions can play in this endeavor.

Continue reading

Saudi Arabia: a Key Regional and Global Player


By Christine Lagarde

(Version in عربي)

I have just returned from Saudi Arabia, where I was welcomed with exceptional warmth and hospitality. It was my first visit as the Managing Director of the IMF.

It was a pleasure to be in Saudi Arabia, a country with rich heritage and culture. And a country that is seeking to chart a path that balances the drive for greater economic development and closer integration into the global economy with the strong desire to preserve the traditions and values of its people.

I had the privilege of meeting H.M. King Abdullah, senior government officials, and representatives of the private sector. Our discussions were productive and constructive, and we traded views on current global, regional, and domestic developments. Continue reading

Meeting the Employment Challenge in the GCC


By Masood Ahmed

(Version in عربي)

The issue of how to create more jobs is high on the minds of policymakers everywhere. The economies of the six Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—are no exception.

By many measures, these economies are doing very well. Abundant oil and gas reserves are producing large budget and external surpluses, growth is up, and considerable strides have been made on social indicators.

Yet, economic activity is dominated by the oil/gas sector and—given that many GCC countries have proven reserves of at least another 50–100 years at current rates of production—will remain so. However, that sector creates relatively few jobs directly—it employs less than 3 percent of the region’s labor force.

Continue reading

Bringing the Informal Sector into the Fold


By Masood Ahmed

(Version in عربي)

Unemployment rates in the Middle East and North Africa have remained above 10 percent over the past decade, the highest in the world. For the young the rates are even more daunting, at a persistent 25 percent: one in four of the region’s young people are without work. Many people who cannot find jobs in the formal economy are relegated to working in the informal sector, for lower wages and without the protections and opportunities that workers enjoy in the formal economy.

The informal economy is large and pervasive—and, often, ignored; however, the experience of those who work in the informal sector came under the media spotlight when Tunisian street vendor Mohamed Bouazizi set himself on fire that fateful day in December last year, sparking the Arab Spring protests.

Estimates indicate that the informal economy in the oil-importing countries of the Middle East and North Africa is substantially larger than in several Asian and Latin American countries. In Morocco, for example, the informal economy is estimated at 44 percent of officially measured GDP. In most other oil importers, it is estimated at close to one-third.

Continue reading

Christine Lagarde on Sovereign Debt, Growth and Social Instability


by iMFdirect

The IMF chief gave a speech in New York City today that sets out how the IMF can help countries tackle this troika of challenges to the global economy.

 Watch the speech

 

No Time to Waste: IMF Managing Director Christine Lagarde


by iMFdirect

The IMF’s managing director Christine Lagarde gave her first press conference today, in which she outlined three focal issues for the institution:

Our analysis of the connections between and among countries’ economies and financial sectors

The credibility of our analysis to countries must be candid and evenhanded

A comprehensive approach to our work that includes employment and social issues to help create stable economies.

Lagarde told the assembled reporters she had arrived in Washington soon after her selection because “there are many issues to address that cannot wait for a summer holiday.”

In an interview the day before, Lagarde said sovereign debt and capital flows were two of the main challenges facing the global economy.

Have a look: 

 

 

Confessions of a Dismal Scientist—Africa’s Resilience


By Abebe Aemro Selassie

(Version in Français)

Like many economists, I tend to fear the worst. I have witnessed phenomenal changes for the better in sub-Saharan Africa over the past 20 odd years. Part of me still worries that this trajectory will not endure. But, the more I see of the region’s economic performance and outlook, the more I’m changing my tune.

Old anxieties set aside

Until my latest source for anxiety took hold a few months ago (more on this in a moment), I’d worried about the impact of the global financial crisis on sub-Saharan Africa. The crisis hit just as many countries in the region were starting to enjoy a hard-earned period of economic growth, their best since at least the 1970s. I did not want this to be derailed by the crisis. Continue reading

Raising Competitiveness: Recipe for Tapping into the Middle East’s Growth Potential


By Masood Ahmed

(Version in  عربي )

With the global economy on the mend, countries in the Middle East and North Africa are witnessing a pickup in trade and economic growth. Aided by rising oil prices and production levels and supportive fiscal policies, economic growth for the region as a whole is projected to exceed 4 percent in 2010, almost double what it was in 2009.

In contrast, and unlike many emerging markets elsewhere, the region’s oil-importing countries saw only a mild slowdown in economic growth last year to 4½ percent and are likely to see growth nudge up to around 5 percent this year. However, as our October 2010 Regional Economic Outlook for the Middle East points out, that growth rate is well below the average of 6½ percent a year required to create the 18 million jobs needed over the next decade to absorb new labor-market entrants and eliminate chronically high unemployment. Continue reading

Follow

Get every new post delivered to your Inbox.

Join 670 other followers

%d bloggers like this: