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DEVELOPMENT AND EMPLOYMENT:

A POLICY FRAMEWORK

Proposed by Fred Fluitman, Presented by Mostefa Boudiaf

International Training Centre of the ILOTurin , Italy, 2007

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the usual suspects:

• development• economic growth• national income• gross domestic product• production factors• technique and technology• employment

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development =more than mereeconomic growth

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economic growth isthe relative increasein the national income

the so-called real GNP

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the national income isclosely related to total output of the economy

the so-called GDP

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gross domestic productmeasures the outputproduced with domestic inputs, or production factors

notably capital and labour

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these production factorsmay often be used indifferent combinationsthat are equally efficient

that is, from a technical point of view

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such combinations arealso known as techniques;

the range of techniquesis known as technology

according to economists

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choice of technique is,theoretically at least,decided on the basis of factor costs

or economic efficiency

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economic growth isexplained by an increasein the quantity or qualityof production inputs

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economic growth isan essential ingredient

of development

but…..

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development =more than mereeconomic growth

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development =economic growththat is sharedand sustainable

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development =economic growthwith social change

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development =economic growthwith poverty reduction

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development =economic growthwith more & better jobs

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development depends on:

agreed objectivesa conducive environmentpertinent policieslong-term investmenteffective institutions

on each and all of the above

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investment

institutions

policies

income

growth

external factors

infrastructure

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agreed objectives

• economic growth• social equity• rural development• basic education for all• clean air• safe work• -----

such as:

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agreed objectives

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a conducive environment

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a conducive environment

• peace and stability• health and safety• fertile land and good weather• relevant infrastructure• favourable external factors• -----• -----

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pertinent policies

• macro-economic adjustment• employment promotion• social protection• poverty reduction• gender equity• environmental protection• ----

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long-term investment

• human capital– health– education and training

• physical capital– infrastructure– plant and equipment– repair and maintenance

• -----

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effective institutions

• policy making• education and health• legal system• civil society• business services• -----• -----

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African labour markets

urban rural

wage-employed

mostlyself-employed

informal sector

formal sector

mostly agricultural non-agricultural

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there are, by far, not enoughformal sector wage-jobsfor all who are seeking one

a majority of the labour force are underemployed, as own account workers in subsistence farming or in the informal sector

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no work meansno income, meanspoverty

very few labour force participants in Africa can afford to be unemployed

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low productivity meanslow income, meanspoverty

the working poor represent a majority in the labour force of most African countries

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reducing poverty means: achieving growth in

output, by increasing both the

quantity and the quality of labour

inputs the labour force in most African countries grows at 2.5 per cent per year or more

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reducing poverty means: achieving growth in output by creating additional jobs and raising productivity

the labour force in most African countries grows at 2.5 per cent per year or more

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O = +OW

W

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more output

more and better jobs

more productive workers

related policies:

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fiscal and monetary reformremoving trade restrictionsbroadening access to credit as well as access to

technologyinvesting in infrastructure

more output

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promoting the use of efficient, yet employment-intensive techniques

reallocating investment in favour of labour-absorbing sectors

targeting the disadvantaged improving conditions for small and micro-

enterprises

more and better jobs

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education and trainingheath and nutritionappropriate technologysafety at work

more productive workers

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INstructionvestmentnovationstitutionsfrastructurecentives

where policy comes in

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that’s all thanks

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International Training Centre of the ILO,Turin, Italy

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