1. Youth and Rural Development in ACP countries
The Challenges of Youth Employment
in ACP Countries: A Global Perspective
Brussels Briefings
16th June 2010
Bruno Losch

2. General Positioning
Youth in ACP countries like in many developing countries are often unemployed and they mainly participate in the informal labor market: they face high economic insecurity and poverty rates
Youth represent around 20% of the total population BUT more than 30% of the active population (EAP or group):
=> 37% in SSA, 32% and 28% in Pacific and Caribbean regions
Answering the youth employment challenge is critical for poverty reduction and the future of DCs
While targeted solutions are useful, they must be part of broad development strategies addressing the structural transformation of economies and societies

3. Basics 1: Demographic Transition
ACP countries face a large demographic growth: this is firstly the case of SSA and also of the Pacific while the Caribbean will slow down rapidly
In SSA: from 860 million people today, to 1.3 billion in 2030 and 1.8 billion in 2050 = + 103% = the last demographic transition in the world
In the Pacific: from around 10 million in 2010 and 17 million in 2050 = + 73% with sub-regional differences
In the Caribbean: from 40 million to 47 million in 2050 = +18% (but 80% of the population in Cuba, Haiti, Dominican Rep.)

4. Basics 1: Demographic Transition
A rapidly changing demographic structure
Activity ratio has remained extremely low throughout the past decades in SSA
This structure weighted heavily on growth
Growth of the economically active population presents a significant opportunity… “the demographic dividend”
… but also a source of significant tensions if economies do not generate sufficient jobs

6. Basics 1: Demographic Transition
The present tensions on the labor market might intensify with the arrival of growing new cohorts:
A “big push” in SSA: approximately 17 million / year at present, 24 million in 2025, 31 million in 2050
From 200,000 to 300,000 people between today and 2050 in the Pacific
But 700,000 new entrants / year in the Caribbean and already decreasing
The ability of African economies to absorb this additional workforce is a crucial question

7. the World Bank
the World Bank

8. The example of Mali
Evolution of Population
(in Millions)
Evolution of Active Population (in Thds)
The yearly cohort of new entrants in the labor market is 300,000 people today and will be 520,000 in 15 years (240,000 for rural EAP)
The Malian economy will have to create 6,2 millions “new jobs”
These new entrants have already been born

9. Basics 2: Economic Transition
Developing countries are at different stages in the structural transformation process characterized by a progressive shift from agriculture to industries and services
Within this process, the role of agriculture in GDP and in employment decreases
The major vehicles of transformation are:
The development of the rural non-farm economy
Rural depopulation and migrations to cities (or abroad). The viability of this process implicates employment opportunities.

10. The Three Worlds of Agriculture (WDR08 )

11. The Evolutionary Path

12. Basics 2: Economic Transition
For most of the ACP countries the economic transition has been very slow
The population remains broadly rural and will remain rural till the 2030s
Agriculture has often a central role in GDP, trade, and particularly in employment
60-80% of the active population live from agriculture in SSA
It means that most of the youth are rural and many are involved in agriculture

14. SSA’s Economic Transition: a Major Challenge
African economies are characterized by a low level of diversification
Rapid urbanization with a low level of industrialization
Increased difficulties to develop a sufficient industrial sector in a context of strong international competition
Consequences:
Limited creation of formal employment vs. absorption by the informal sector
Economic and geopolitical constraints to international migration
For a long time to come agriculture will remain the main employer
Manufacturing % GDP
Agriculture % GDP

15. Agriculture, Transition & Employment
The role of agriculture:
Contributes directly to food security, income creation and poverty reduction
Is the major source of employment so far:
this is too often forgotten in the existing debates
It plays a central role in the economic transition
The lessons learnt from past transitions remind:
the decisive role of farm income increase in the development of a rural demand
Rural demand is the necessary step for the emergence of the rural non-farm economy (RNFE)
Both agriculture and RNFE are critical for youth employment: their development will automatically facilitate the inclusion of young people

16. Prioritization, Targeting and Sequencing
Many targeted programs can be efficient for youth employment . However, there is a need for reengaging in development strategies based on long term vision, identification of opportunities and constraints , shared diagnostics and prioritization
the size of the yearly cohorts of young people entering the labor market is a strong reminder
Every country, region has its own development trajectory, comparative advantages and binding constraints, and heterogeneity is the rule: it means tailor-made policies instead of one-size-fits-all

17. Prioritization, Targeting and Sequencing
Two main issues can be raised:
A recurring binding constraints in many rural areas is risk: risk encourages self-consumption and prevents diversification. Addressing risks is critical.
Many instruments can be finely designed and efficient but have a limited impact in terms of numbers: the objective is to address the big numbers through inclusive policies and programs, selecting options which are employment intensive.
The future of youth is part of this general approach