Some countries in the South Asia and Pacific region are experiencing a rapid increase in the number of working-age people. This will create some opportunities as it will contribute to reducing the dependency ratio and increasing the possibilities for social cohesion policies. But if these people fail to find decent jobs, then per capita income may slow down. With less income, people face lower living standards and difficulties accumulating capital and assets. For young people, these changes potentially bring significant challenges. Take, for example, youth in Cambodia.
By Martha Alter Chen, Harvard University and WIEGO Network
Learn more about this timely topic at the upcoming
Global Forum on Development on 5 April 2017
The informal economy consists of economic activities and units that are not registered with the state and workers who do not receive social protection through their work, both wage-employed and self-employed. The reality of the informal economy in Africa cannot be denied. In fact, informal employment accounts for two-thirds (66%) of non-agricultural employment in Sub-Saharan Africa. But, variation within the region is significant. Informal employment accounts for a smaller share of non-agricultural employment in southern Africa (33% in South Africa and 44% in Namibia) relative to countries in other sub-regions (82% in Mali and 76% in Tanzania) (Vanek et al 2014). Informal employment is a greater source of non-agricultural employment for women (74%) than for men (61%) in the region overall. In seven cities in West Africa with data, informal employment comprises between 76% (Niamey) and 83% (Lomé) of employment. In all seven cities, proportionally more women than men are in informal employment (Herrera et al 2012).
By Juan Carlos Benítez, Economist at the Latin American and Caribbean Unit, and Angel Melguizo, Head of the Latin American and Caribbean Unit, at the Organisation for Economic Co-operation and Development (OECD)
Informality equals vulnerability. In emerging economies and particularly in Latin America, informal is normal. On average, 55% of workers in the region did not contribute to pension or healthcare programmes in 2013. Although informality rates vary significantly across countries (Figure 1), a common feature of informality is its large prevalence amongst the poor and low-middle income workers (e.g. Jutting and De Laiglesia, 2009). On average, 85% and 73% of households in the lowest earning quintiles do not have any member contributing to social security schemes. Furthermore, informality is “one of the most striking differences, within the middle sectors, between the vulnerable population and the consolidated middle class” (Lustig and Melguizo, 2015).
By Greg Foster, Area Vice-President, Habitat for Humanity, Europe, Middle East and Africa
Africa will have some of the fastest growing cities in the world over the next 50 years. Unless something is done, and done soon, millions more will flood into unplanned cities and live in already overcrowded informal settlements and slums. It would appear as if the United Nation’s Habitat III conference, which happens every 20 years, and New Urban Agenda couldn’t come at a better time.
Habitat III’s goals sound simple — develop well-planned and sustainable cities, eradicate poverty and reach full employment, and respect human rights. Being able to leverage the key role of cities and human settlements as drivers of sustainable development in an increasingly urbanised world, the meeting will seek political commitment to promote and realise sustainable urban development. This could be a watershed moment for Africa’s cities. But critical challenges stand in the way of making Africa’s cities economic powerhouses, centres for exchanging ideas, and places that meld cultures and peoples. Three actions are needed. Continue reading
A generation ago, private capital flowing into developing countries was a small fraction of aid dollars. In recent years that ratio of aid to investment has flipped, and the amount of investment flowing to the developing world far exceeds aid dollars.
This significant increase in private investment comes at a good time. The cost of addressing the world’s most urgent development challenges outlined last year in the 2030 Agenda for Sustainable Development is in the trillions of dollars. Compare that to the estimated USD135 billion per year in total global aid flows.
Development finance institutions like the U.S.-based Overseas Private Investment Corporation (OPIC) were built on the understanding that the challenges the world faces are greater than any government can address on its own. They also reflect the conviction that business can serve as a force for good in development. OPIC works to mobilise private capital to support entrepreneurship and expand access to housing, education, financial services, energy and more. Continue reading
By Juan R. de Laiglesia and Caroline Tassot, OECD Development Centre
Wolfgang von Kempelen built an impressive chess-playing automat in 1770 known as the “mechanical Turk.’’ Dressed in its fancy turban, the “Turk’’ would move the pieces on the chessboard, playing (and beating) such notables as Napoleon, Catherine the Great and Benjamin Franklin. The unfortunate use of this national stereotype (which we in no way support) was meant to enchant imaginations with exoticism in the face of the automat’s extraordinary prowess in 18th century Europe. As suspected, the automat was an elaborate hoax, although this was discovered only much later. Several chess grandmasters operated it during its rather long history until its demise in a Philadelphia fire in July 1854.
What’s the relevance? In 2005, Amazon’s catalogue started to get unwieldy, and the Internet company realised that it needed better tagging on its items for sale. For example, if one searched for a crimson shirt, shirts labelled “red” should be displayed as well as those tagged as “crimson.” Even Amazon faced tasks that computers could not do more quickly and accurately than people. Continue reading