Friday, 31 July 2009

Where there is no employment advisor

The BBC has run features on Sierra Leone here in the UK in the last couple of days. Here is one of them. A radio report last night talked of the high rates of youth unemployment.

In a modern economy with reasonably efficient markets, school leavers enter into the workforce and can find work eventually by adjusting their wage demands. In a low income developing country, the jobs may not be available at any wage rate, if they are not created by the school leavers themselves. They often do; African cities are full of young entrepreneurs trying to survive any way they can. A problem arises if the demand for their services and products is not sufficient to provide them with enough to live on, which can happen if the market is not well developed.

Development assistance should aim to move the market to a state where it is well enough developed to allow everyone to earn a living wage. The aim is achieved by setting the economy on its way to economic growth, which involves continuous improvement in one of growth's determinants. The determinants include domestic capital accumulation, educational achievement, market networks, and infrastructure quality. The developmental quality of temporary aid should be judged on whether it starts sustained accumulation of domestic improvements in one or more of the determinants. The quality is not independent of conventional humanitarian aid quality - people are probably not accumulating if they are starving or fighting - but does not necessarily perfectly coincide with it.

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