Approximately 800 million young people entering the labour market in developing economies over the next 15 years could be left without jobs unless governments take action, the head of the UN Development Programme (UNDP) warned on Tuesday.
The warning came as the agency launched two initiatives aimed at boosting investment and employment in developing countries.
“If you look at the next 15 years, there will be 1.2 billion young people graduating from school, going into the labour market,” UNDP Administrator Alexander De Croo told a press briefing in New York from Bangkok, where he is attending the World Bank Group-International Monetary Fund (IMF) Annual Meetings.
“Unfortunately, for only 400 million of these, there will be jobs. For 800 million of these, there will not be jobs,” he said.
De Croo said the gap was driven by demographic trends, noting that the median age in many developing countries ranges from 18 to 25. He added that the projections were based on the current state of technology.
“That is not going to go by itself. This is the result of policy,” he said.
From Investment to Jobs
One of the two initiatives, the Investment Accelerator, will help governments improve investment policies and legal frameworks, develop a pipeline of investment-ready projects and move them from preparation to implementation.
The other, the Jobs for Prosperity Facility, will help countries identify sectors with strong job-creation potential, align skills development with employers’ needs and address barriers to business investment and hiring.
Asked whether artificial intelligence (AI) was a factor in the projections, De Croo said the outlook could change through active labour-market policies. He noted that sectors such as care, agriculture and tourism would continue to generate substantial employment even as AI advances.
“Job creation is actually the only real sustainable way for people to grow out of poverty,” he said.
Both initiatives are supported by expanded partnerships with the World Bank Group, the European Investment Bank and the European Bank for Reconstruction and Development. Pilot initiatives are already underway in Nepal, Yemen, Haiti, Lebanon and Ghana.
A ‘Triple Shock’
The initiatives were launched as many developing countries face what De Croo described as a “triple shock”: high energy costs, one of the most pronounced El Niño events since 1950, and very high borrowing costs.
According to a new UNDP report, No Time to Recover, the median developing country now spends 9.5 per cent of its total government income on interest payments alone.
For the first time since 2010, the number of people living in multidimensional poverty has increased. The measure considers not only income but also access to electricity, water, healthcare and education.
“Those numbers should absolutely be a wake-up call to all of us,” De Croo said.
Although the global economy has proved more resilient than expected, he said the benefits of that resilience were not shared equally.
“Some countries have still quite strong economic fundamentals. Others do not have the fundamentals to withstand further shocks,” he added.