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Agriculture as Panacea for Global Jobs Crisis

12 Feb 2013

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The International Labour Organisation (ILO) says investment in agriculture would create productive employment for a significant share of Africa job seekers, despite the intensity of the global jobs crisis, Linda Eroke writes

The International Labour Organisation (ILO) recently warned that the dire job situation is far from over despite the measures taken by governments across the globe.

This comes as the ILO urged African countries to make agriculture its priority, stating that this would provide more productive jobs for a significant share of Africa’s youth and raise the much needed foreign exchange currently used to import food.

Global Employment Trends
Director General of the ILO, Guy Ryder, revealed that over four million jobs losses were recorded in 2012, stressing that it could go higher if policy makers fail to take the necessary step to stem the situation.

According to him, a quarter of this increase (of 4.2 million) in global unemployment in 2012 has been in the advanced economies, while three quarters has been in other regions, with marked effects for developing economies in East Asia, South Asia and sub-Saharan Africa.

He added that there are over 28 million more unemployed people around the world today than in 2007, noting that “if we account for both jobseekers as well as the estimated 39 million workers who have given up hope and dropped out of the labour market, we estimate that since the beginning of the crisis 5 years ago, the global jobs gap has reached 67 million people”.

“Year 2012 saw a resurgence of the crisis, in the form of slower growth than expected in all regions, lower than in 2011, and an associated worsening of unemployment and labour markets, which the  Global Employment Trend 2013 report calls a second jobs dip.

“We know that the slowdown was most notable in Europe, which entered back into recession, and in other advanced economies such as the United States and Japan. And we know that through trade and financial channels the effects quickly spread out geographically, weakening growth in nearly every region over the course of the last twelve months.

“Our first finding is that, because of these developments, and the policies that led to them, unemployment and labour markets are worsening again. The report finds that following two years of declines in the number of unemployed around the world, global unemployment surged again in 2012 by 4.2 million,” Ryder stated.

Citing Spain’s unemployment rate, which has hit a record-high 26 per cent, Ryder said the unemployment figures across the globe are absolutely appalling, adding that there are no signs of an upturn.

He warned that while the intensity of the financial crisis may appear to be receding, jobs’ markets are giving completely different signals noting that nations are faced with a continuing global jobs crisis.

“We lost over 4 million jobs – 4 million more unemployed in 2012. For 2013 it’s another 5 million and it carries on. The horizon is not in sight as we are faced with a continuing jobs crisis. I think we should not go too quickly into the notion that the crisis is over. For the people in the jobs’ queue, the crisis is very much with us and the queue is getting longer,” he said.

Stating that it is essential to address growing mismatch in labour markets, the ILO boss explained that though the bulk of the unemployment crisis is cyclical, policy makers will need to tackle structural problems that intensified with the crisis, such as skill and occupational mismatches that some countries are facing.

“Governments should step up their efforts to support skill and retraining activities and to address long-term unemployment. Re-activation and job counselling measures should also be enhanced. In developing countries it is important to take measures to promote structural change and where employment in agriculture is significant, governments are advised to pursue measures to accelerate productivity growth in that sector and diversify the work and investment opportunities in rural areas,” he added.

Addressing Growth Challenges in Africa
The ILO boss further emphasised that much work needed to be done to raise productivity levels and expand the number of quality jobs in order to spur the growth of the developing world including African countries.
He also called on policy makers to promote youth employment following the call for action agreed by governments, workers and employers at the June 2012 International Labour Conference.

The ILO, in its 2013 global unemployment trend put the unemployment rate in sub-Saharan African at 7.5 per cent. It however observed that the labour force participation in the region remained high, reflecting the vulnerability of workers who cannot afford to leave the labour market.

According to available statistics from the ILO, the proportion of workers in vulnerable employment in the region has decreased, but remains extremely high at 77 per cent in 2012, while labour productivity remained very low, particularly in the informal economy.
“Given the large share of workers in subsistence agriculture in this region, structural change has been an important source of growth; but there has been a slowdown of sectoral re-allocation during the crisis,” the report stated.

It pointed out that the growing purchasing power of the emerging middle class in many developing countries is a positive development that could increasingly become an important growth engine for the world economy.

Investment in Agriculture
Against this background, the ILO urged African countries to make agriculture its priority stating that this would provide more productive jobs for a significant share of Africa’s youth and raise the much needed foreign exchange currently used to import food that should be grown in Africa.

The ILO, which observed that agriculture on the continent has been neglected by governments, international development lenders and policy advisers alike, noted that this has translated to a high cost of food importation.

“The reality is that agriculture in Africa has been neglected by governments, international development lenders and policy advisers alike. This carries a high cost: Per capita food production has barely grown over the last 50 years, at a pace of 0.06 per cent a year. With the population rising at 2.6 per cent a year, food imports have increased at an annual rate of 3.4 per cent since 1980, with cereals accounting for the largest share. Africa receives close to half of the world’s total cereal food aid.

“Africa needs to focus on raising food output per unit of land among the large majority of small-holders. An “agriculture first” strategy - widely discussed in the 1970s - would raise much needed foreign exchange currently used to import food that should be grown in Africa; it would protect the continent from the vagaries of volatile food prices and it would raise incomes in rural areas, reducing poverty and raising demand to boost growth. This would provide more productive jobs for a significant share of Africa’s youth,” the ILO explained.

According to the international labour body, economic growth in Africa is forecast to continue at a robust rate, slightly above the recent trend of 5 per cent a year and, Africa is urbanising fast, with an average of close to 40 per cent of the population living in cities, as such, it may seem paradoxical to suggest that agriculture should be Africa’s number one priority, especially when it comes to employment.

It expressed concern that Africa imports close to $50 billion worth of food every year, mostly to feed its rapidly expanding urban population stressing that this amount is equivalent to what Africa receives in official development aid, and over five times more than the amount invested in future economic growth by the African Development Bank (ABD).

“Africa can learn from its own varied experiences, from the lower yields of Senegal or Sudan, to the higher yields of Malawi or Zambia. Trade can play an important role. The priority must go to trade within Africa to raise exchanges between food surplus and deficit countries. At present, food imports are favoured from regions with large subsidies to producers, thus artificially depressing world prices.
“Sustained and broad-based growth in Africa cannot take place without robust agricultural growth underpinning employment and incomes for the large majority of the employed population. Turning this agenda into reality is a major task for the next 10 to 20 years,” it added.

Tags: Business, Nigeria, Featured, Agriculture, Panacea, Global Jobs Crisis

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