According to the International Labour Organization, more than 200 million people in the world were unemployed in 2011—three-quarters of them in developing countries. The most affected are those between the ages of 15 and 24, who are 2-3 times more likely to be unemployed than adults.
The World Bank estimates that between 2005 and 2020, more than 700 million jobs must be created to halve the global unemployment rate, mainly to keep up with population growth.
So the question is: Why are there so many unemployed people in developing countries and how do we create large numbers of jobs (and not just any jobs, but good jobs with sound working conditions, benefits, and opportunities for advancement)?
Jobs are scarce for many reasons—inadequate policy making, poor infrastructure, and limited access to finance. For young people, the mismatch between education and the needs of the labor market is a major hurdle. When it comes to possible long term solutions for unemployment, the private sector—which provides about 90 percent of jobs in developing countries—offers an excellent starting point.
IFC works with private sector in developing countries and emerging markets. In 2010 our investment clients provided around 2.4 million direct jobs. This may not appear to make a dent in unemployment figures, but jobs created by our clients between 2008 and 2010—net of job losses—increased by 10 percent, an important trend in an environment where job losses were the norm...and these only relate to direct jobs provided by IFC’s clients.
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