Creating jobs through international cooperation

15 April 2013
ITC News
Strengthening jobseekers’ skills and government policies helps stimulate sustainable development in developing and emerging economies.

The creation of sufficient and decent employment is a major challenge in international cooperation. Worldwide, 200 million people are unemployed, according to the International Labour Organization (ILO). Over the next 10 years, a further 400 million people will enter the global labour market. This means that 600 million new jobs need to be created over the next decade. But it is not only the number of jobs that is important. Nearly half of those in work around the world are in vulnerable employment, including small farmers and traders or employees in informal microenterprises. Globally, nearly one-third of employees and their families earn less than two dollars a day per head. These are the working poor.

It is young people and women who gain least in today’s job market. The ILO reports the unemployment rate of young people between the ages of 15 and 24 as much higher than that of adults, and the Arab Spring serves as a clear reminder of the potency of a young generation left without prospects. The employment rate of women is significantly lower than that of men, and female employees very often earn less and have to work harder than their male counterparts.

Gesellschaft für Internationale Zusammenarbeit (GIZ) is one of the major implementing agencies in the field of international cooperation for sustainable development and works on behalf of the German Federal Government and other commissioning parties. Economic development and employment is one of the organization’s core areas of activity and, together with partners in developing and emerging economies, GIZ is championing an integrated approach to employment promotion. This involves creating new and better employment opportunities, developing the skills of jobseekers, delivering better job placement services and providing advice to support the development of jobs-focused economic policies. GIZ is not doing this on its own; it is working to develop the capacities of partner organizations so they can successfully design and implement policies.

By July 2012, a total of 85 international, GIZ-supported economic development programmes had been implemented and helped create jobs or increase employability. In regional terms, GIZ’s work focused on sub-Saharan Africa (30%), Eastern Europe, the Caucasus and Central Asia (27%), Asia (27%) and the Middle East and North Africa (14%). More than half of this portfolio is targeted at young people.

The vast majority of new jobs are created by developing the private sector, in particular promoting micro-, small- and medium-sized en- terprises (MSMEs). International trade and the integration of existing and new enterprises into international value chains can contribute greatly to the endeavour of creating jobs, although in many cases producing for local markets is the best and most promising first step. 

Employment and entrepreneurship go hand in hand, as GIZ’s experiences show. Consider, for example, the following programmes supported by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development.

GIZ in Sierra Leone

In Sierra Leone, GIZ is working to increase employment opportunities for young people between the ages of 15 and 35 by developing the private sector, increasing the employability of young people, particularly in rural areas, and, ultimately, matching supply and demand in the labour market. In so doing – and with the support of other GIZ work streams – the organization is strengthening the value chain for high-quality cocoa from production to export. Sierra Leone’s farmers are rehabilitating the cocoa plantations abandoned during the 10-year civil war that ended in 2002. They are receiving intensive training in producing, processing, storing and marketing their high-quality cocoa. GIZ is also helping them set up associations and cooperatives.

A central element of GIZ’s work in Sierra Leone has been improving the quality of cocoa. The organization is supporting farmers' associations with the fair-trade certification process and is also working to develop a national body as a certification agent. This has contributed to improving the standing of Sierra Leonean cocoa in the world market and successfully establishing links with European importers.

The outcomes achieved since 2009 are noteworthy: a total of 14,750 young people have increased their annual incomes by around €250; some 20,000 young farmers have received training on improved techniques for cocoa production, processing and marketing; around 600 people have been employed in newly established processing centres; more than 2,000 young people were provided with temporary employment rehabilitating cocoa and coffee plantations; and more than 11,000 farmers have boosted their yearly incomes by around €650 through increased cocoa and coffee production and improvements in the quality of their produce. Along supported value chains, more than 100 small businesses have been created, with 25% of these set up by women.

Working in Nepal

The main challenge of GIZ’s work in Nepal is considering how the private sector and its institutions can help create more jobs and increase people’s incomes in a balanced and inclusive way. The focus is on three main areas: building entrepreneurship, developing value chains, and supporting public-private dialogue.

To build entrepreneurship, GIZ is enabling 1,500 new entrepreneurs to start or expand a business, find a new job, or become involved in gainful activity. Operating over two years in four districts in Nepal, this scheme focuses on increasing economic opportunities and creating sources of income for the unemployed and underemployed. These are essentially young people, women, people with disabilities, conflict victims, ex- combatants, illiterate people and members of disadvantaged groups.

New and existing entrepreneurs are provided with pre and post start-up support involving individual or group mentoring, entrepreneurship development training and links to business service providers and financial institutions through one-stop shops and start-up agencies. To achieve this, GIZ is supporting cooperatives and district chambers of commerce and industry to deliver better services to their members. One-stop shops provide information on government regulations and registration requirements, as well as business development services. Nepal’s new entrepreneurs are receiving training in a wide range of activities, including detergent making, dressmaking, hosiery production, tailoring, plumbing, electrical maintenance, computing, mobile phone repair, housekeeping and hospitality.

Tackling unemployment in Tunisia

In Tunisia, existing approaches to modernization have not succeeded in establishing a national framework for innovation or in improving the innovative capacity of SMEs. Further, unemployment among university graduates is rising and tertiary education is failing to provide people with the knowledge and skill sets the labour market needs. To tackle this, GIZ is helping to strengthen demand-driven innovation processes and promote business start-ups and enterprises.

GIZ’s work focuses on university graduates who are supported through mentoring schemes, an inter-university network, national agencies for business start-ups and entrepreneurs, and the integration of entrepreneurship education into university curricula. Students from both natural and social sciences are encouraged to prepare graduation theses in cooperation with businesses. They are also invited to prepare and present their business ideas and plans, and competitions are being organized to promote these entrepreneurial pitches. One impressive example is a young biotechnology student who prepared her bachelor’s thesis in cooperation with a local tomato processing business. She invented – and has now patented – a method of extracting cooking oil from tomato seeds, which are currently a waste product of tomato processing. She is now looking for partners and capital to start a business, and the programme is supporting her by providing coaching and expert guidance.

These examples from Sierra Leone, Nepal and Tunisia clearly demonstrate the link between employment and entrepreneurship. The World Bank’s World Development Report 2013, which focuses on jobs, states that the private sector is the main engine of job creation and is the source of almost nine out of every 10 of the world’s jobs. Promoting and cooperating with the private sector is one of the main pillars of GIZ’s work. However, private-sector development can only occur in a healthy business environment and with the right incentives for innovation and structural change. Moreover, for the private sector to deliver the large-scale impacts on employment that are required, any approach must be supplemented with skills development, good labour market policies and jobs-focused economic policies. Germany has a lot to offer in these key areas; where Germany’s experiences are useful for partner countries, they form an integral part of the approach GIZ takes to cooperation.