December 20, 2012 -- As governments struggle with how to create and sustain jobs in volatile economies, India offers one model that has reached millions of poor citizens. Its Mahatma Gandhi Rural Employment Guarantee Scheme—one of the most ambitious jobs programs ever implemented-- provides 100 days of paid work per year to anyone who requires it.
About 1.2 billion households in India have registered for work through the program, and its impact on health and well-being is well-documented: In a government survey, 69% participants said it helped them avoid hunger, while 47% said it helped their family cope with illness.
“The program has given a choice to landless rural poor,” said Reddy Subrahmanyam, Principal Secretary for India’s Department of Rural Development. “It has brought them increased bargaining power. It has enhanced the wage rate in the labor market. It has slowed migration within India, and strengthened democracy.”
But could it work elsewhere? More than 260 policymakers and practitioners from 61 countries discussed that question—and many other country approaches—at a week-long South-South Learning Forum on the role of labor and social assistance policies, convened last month in Hyderabad, India, where Subrahmanyam spoke.
On the heels of the October 2012 release of the Bank’s 2013 World Development Report, the jobs challenge was foremost in participants’ minds – specifically, how to train and connect job seekers with employers; how to support self-employment and entrepreneurship; and how to link jobs with social protection programs, such as health insurance or pensions.
Through “global café” roundtable discussions, field visits and a Google Chat session that virtually connected job creators in Nairobi, Kenya and Bangalore, India, participants were eager to learn what has worked, and what could be adapted to meet their own country’s needs.
Different Contexts, Different Strategies
Liberia, for example, is focused on creating jobs for youth, the majority of whom are unemployed and lack opportunity as the country recovers from a 14-year civil war. The government has created 7,000 short-term jobs through public works schemes, and its 3-year Economic Empowerment of Adolescent Girls and Young Women project trained 2,491 girls in job, life and business development skills. Weekly earnings more than doubled among the girls participating in the project, most of whom were illiterate when they enrolled.
Youth employment has been a priority for Liberian President Ellen Johnson Sirleaf and is a pillar of the country’s development strategy, said Deputy Minister for Gender and Development Andrew Tehmeh. “Liberia is not going to reach middle-income status if we leave the vulnerable folks behind,” he said.
Kastriot Sulka, deputy minister for labor for Albania, said his country has developed a package of incentives to jumpstart employment, from steadily increasing the minimum wage to reducing the labor tax by half to building better roads and IT networks. “We are now launching new policies encouraging social enterprises. Social businesses can … fight some of the social problems like poverty, unemployment and even environmental issues and health issues,” he said.
Many of the case studies discussed during the Forum’s “global café” sessions centered on the links between labor and social assistance programs, and how the two can be mutually reinforcing.
Sher Khan, Federal Secretary of Pakistan’s Benazir Income Support Program, described how his country’s safety net program—initially targeted to 2.2 million poor women -- provides 4- to 6-month vocational training courses to one boy or girl from each beneficiary family, each of whom receives a certificate upon completion. The program also helps participants to start small businesses, providing US$3000 interest-free loans, with 15-year repayment terms.
Participating families receive free medical treatment and health insurance, and children, aged 5-12, must be enrolled in primary school. One year after a participating woman gains employment, she “graduates” from the program.
Delegates said the forum was a rare opportunity to learn about social protection and labor market innovations happening across the world, and to foster a “community of practice” among development practitioners and policymakers.
Ilze Zvidrina, head of labor market policy for Latvia’s Ministry of Welfare, said she found parallels in regions different from her own.