Labour Market Challenges to Regional Integration in West Africa and How they can be overcome: A Political Economy Analysis by Franklyn Lisk University of Warwick, UK and CREPOL, Dakar

Outline Diversity and contrast of ECOWAS member states and rationale for regional integration Overview of labour market challenges to regional integration Why a ‘political economy’ approach? Regional solutions to labour market constraints on integration Focus and sequencing of interventions to address labour market constraints on regional integration Way Forward

Diversity and contrast of ECOWAS and need for economic integration 15 ECOWAS countries characterised by enormous diversity and contrast in terms land area, demography, macroeconomic valuation, resource endowment, etc. Diversity is both a challenge and an opportunity from a sustainable development perspective: impediment to change and economic transformation but also means for benefiting from globalization in an evolving multi-polar world order Consensus on the relevance of economic integration for building markets, creating robust economies and attracting new sources o investment finance to generate and sustain high rates of growth and increased productive employment opportunities Regional economic integration in ECOWAS (and Africa) is judicious at a time when the economies of the old world order (Europe and N. America) are stagnating and those of Africa are on the rise – new frontier for growth and market opportunities in the global economy

Labour Market Challenges to Regional Integration Challenges linked to problems in macroeconomic environments which impose restrictions on the capacity of national economies to grow rapidly and create sufficient productive and remunerative employment simultaneously (inappropriate growth policies and patterns, infrastructure constraints, poor business and investment climate, underdeveloped financial markets, mismanagement of natural resources, etc.) Challenges relating to inadequacies of institutional frameworks and arrangements which stifle policy implementation and prevent the achievement of desirable change and necessary transformation of processes and forms in economic, social and political spheres (weaknesses of education and training systems, poor statistical infrastructure for data collection and analysis, absence of arrangements for social dialogue, non-involvement of private sector and civil society in development planning process, etc.)

Why a ‘Political Economy ‘ Approach? Need to situate interventions for policy and institutional change within an understanding of prevailing economic and political processes which impact on labour market conditions and broader development outcomes Realization that solutions to regional economic integration in ECOWAS is not so much about adoption of summit declarations and signing technical consensus agreements, or even about laws and regulations; real challenge is about “vested interests” versus “public goods” – what economists elegantly call ‘political economy’ Importance of the relevance of key institutions required for getting things done efficiently and correctly, and understanding why those institutions do not function as they are obliged to by law and agreement, and why public goods that imply societal benefit are ignored by governments and policy-makers Political economy approach complements conventional economic analyses of labour markets that focus on factors such as human capital accumulation and technological advancement, and less on political structures and economic institutions, as drivers of change in labour market conditions

Regional solutions to labour market challenges Illustration from problem of youth unemployment in the ECOWAS region, and the role of labour market conditions in enhancing employability of young people Supply side interventions: specialization of universities and higher-level training institutions across countries –science, technology and innovation skills; knowledge exchange and transfer between countries, including tapping on Diaspora resources; regional cooperation in collection and analysis of labour market information and improvements of labour market information systems (LMIS); targeting and mobilising creativity of youth through regional scientific and cultural events Demand side interventions: cross-border investments in infrastructure (transport, energy, water); harmonisation of policies and processes across countries to facilitate intra-regional trade - free movement of goods, services and people; reform of administrative structures aimed at standardisation of procedures and regulations across countries; regional cooperation on economic transformation focusing on agribusiness and agro-industry, and mineral extraction; collaboration on location and modernisation of key production structures across countries.

Focus and Sequencing of interventions to remove labour market constraints Macroeconomic environments: short-term – labour-intensive public works incorporated into local and cross-border infrastructure projects; medium to long-term – capacity building for formulating pertinent policies on basis of appropriate diagnosis of problems and major constraints via regional training institutions, such as IDEP, WAIFEM, AERC, ACBF, AFRISTAT, academic institutions and think tanks like CREPOL Institutional frameworks: timely reform of education and training institutions and curricula on regional basis to reflect current and future employment demand; standardisation and accreditation of professional and TVET qualifications for employment purposes including apprenticeship schemes; improvements in labour market institutions such as public employment services (PES), LMIS, and arrangements for social dialogue and settling of labour disputes, trade unions and chambers of commerce, within and across countries; social protection; harmonisation of population and human resource policies in relation to macroeconomic management

Way Forward: Key Issues Demographic transition and dividend including trans- national migration: youth employment Drivers of policy and institutional change: political will, state capability, human capacity, and regional and international competitiveness Enhancing and strengthening ECOWAS organs to better fulfil its role: promoter and facilitator of regional economic integration and catalyst for fuller integration of the region in the global economy, through harmonisation and coordination of national policies and programmes. Innovative and transformative partnerships: collaboration with other RECs in Africa; South-South cooperation; trilateral economic development cooperation