The global economy must create an additional 600 million new jobs between 2005 and 2020 in order to absorb a growing number of youth – mainly from Africa and Asia – entering the work force, said the World Bank in its latest report on Monday.
According to the World Development Report 2013 , around 200 million people around the world are now unemployed – of which 40 percent are under the age of 25.
"The youth challenge alone is staggering," said Report Director Martin Rama in a statement cited by MoneyControl.
"More than 620 million young people are neither working nor studying. Just to keep employment rates constant, the worldwide number of jobs will have to increase by around 600 million over a 15-year period,” he said.
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The report said that governments’ top priority today should be on how to create more high-value jobs for its citizens in order to boost peoples’ lives and reduce social conflict at the same time.
"The jobs with the greatest development payoffs are those that make cities function better, connect the economy to global markets, protect the environment, foster trust and civic engagement, or reduce poverty," said Jim Yong Kim, president of the World Bank. "Critically, these jobs are not only found in the formal sector – depending on the country context, informal jobs can also be transformational."
As a start, the World Bank recommends a three-stage approach by governments, namely: to put in place policy fundamentals that include macroeconomic stability, a business-friendly environment, investments in human capital and the rule of law; design labour policies to ensure growth translates into employment opportunities; and identify the jobs that do most for development, removing the obstacles that prevent the private sector from creating those jobs.
"Jobs are instrumental to achieving economic and social development," it said. "They lie at the heart of many broader societal objectives, such as poverty reduction, economy-wide productivity growth, and social cohesion."
"Governments play a vital role by ensuring that the conditions are in place for strong private sector-led growth," the report added.
According to the bank’s chief economist Kaushik Basu, separate governments can also work together to create a ‘global pool of labour’ by easing migration policies.
"The scope for a global cooperation is there in virtually every economic field," said Basu, as cited by Reuters. "The need is there. The world is a very, very open place."
Related: Unemployment and Labor Migration