Employment: A huge challenge, at the heart of the Arab spring

Employment is one of the most demanding challenges for Southern and Eastern Mediterranean Countries (SEMCs), where 30% of the population is under fifteen. 30 to 40 million jobs will need to be created over the next twenty years to maintain the current employment rate, which is already low.

Indeed, job creation by the private sector has remained low, despite the high growth rates recorded by SEMCs in recent years. Due to tighter budget constraints, the ever-increasing number of higher education graduates, whose qualifications generally do not match the requirements of the labour market, can no longer rely on public sector recruitment to find a job as they did before. Youth and women are particularly affected by unemployment.

Persistently high unemployment and limited job opportunities – while the usual social safety nets were weakened by the increase in the price of basic necessities and budget constraints – were among the main causes of the Arab Spring. Today, communities no longer only want decent jobs in terms of pay and safety, but also social insurance systems covering risks of unemployment, illness or disability, as well as retirement systems. Moreover, there is a need for training programs to help jobseekers find work and improve their income opportunities.The Arab Spring has therefore brought employment to the fore as the overriding priority.

The AFD-CMI partnership on employment and social protection: a quick response capability

The Marseille Centre for Mediterranean Integration (CMl, www.cmimarseille.org) is a platform for knowledge sharing and joint learning gathering partners from the Mediterranean, the North (France, World Bank, European Investment Bank, German cooperation/GIZ) and the South (Morocco, Tunisia, Egypt, Jordan, Lebanon) on the issue of formulating public policies in vital sectors for the development of the region.

AFD is the leader for three programs at the CMI on water resource management (with Plan Bleu), urban transport, employment and social protection.

CMI has addressed the concerns of the Arab Spring on employment via a quick, renewed and coordinated response.

Following a first workshop on emergency social measures held in Tunis in June 2011 at the request of national authorities, a new CMI program on employment and social protection was jointly approved with Southern partners in November 2011. This new program, which meets the requests that were made, aims to define active employment policies comprising different aspects, such as promoting SMEs or self-employment, vocational training, high labor intensive public works programs, labor market information and functioning and specific instruments for access to employment, such as specialized centers, incentive programs and social networks. The two sides of the labor market – “supply” and “demand” – are therefore addressed, as well as the functioning of the market itself and measures targeting youth, women and vulnerable categories of jobseekers.

The program brings together AFD, the World Bank, International Labour Organization, African Development Bank and European Union. It involves a number of experts and practitioners from the Mediterranean and is coordinated with donors’ project portfolios in the sectors of SME financing, microfinance, vocational training and high labor intensive works. It comprises 4 components:

- Targeted research and data collection;
- The creation of an e-community of practices, launched in October 2011;
- Pilot projects to test or demonstrate certain options, which are currently being prepared;
- National workshops.

The Cairo Workshop: a further stage to inform public policies and projects

Following the Tunis Workshop, a second workshop was organized in Cairo from 1 to 3 October 2012. The aim was to support the Egyptian Government’s efforts to identify operational solutions to promote a job creating upturn in growth.

The workshop aimed to share with a wide range of Egyptian partners the many tools and practices implemented locally or internationally to address unemployment and promote employment, particularly in countries which have experienced a similar transition, and thus support the identification of active employment policies tailored to the situation in Egypt.

The workshop was opened by H.E. Khaled El Azhari, Minister of Manpower and Migration. The Minister reiterated the need to coordinate and integrate public action, given that 11 different ministries are involved in employment policies.

The proceedings of the workshop focused on four main topics: increasing employment opportunities, strengthening technical education and vocational training, improving labor market information and functioning, and supporting access to employment for youth and women.

The sessions combined presentations by researchers, experts and development practitioners and partners, which were discussed by the 60 participants from ministries and public institutions, the private sector, research and civil society communities, as well as international and Egyptian experts and practitioners. France’s experience of “second chance schools” (access to employment for youth excluded from the school system) and “France Initiative” (financing and support for SME start-ups) were capitalized on. During each session, information and reflection on the situation in Egypt were presented and discussed.

The workshop met the expectations of the organizers and participants by offering direct access to a wide knowledge base and good practices, thus building capacities via a network of expertise and multi-partner support; it led to coordination among donors and mobilized the Egyptian authorities. Finally, it fed into the strategic dialogue with the Egyptian government for the preparation of donor operations in the employment and social protection sector.

The wrap-up session highlighted the need to mainstream the current international setting in Egypt in order to enhance effectiveness and move from a sum of projects conducted separately to integrated programs implementing all the public policy instruments: regulations, financial and fiscal measures, institutional reforms, public investments, research, training and information and communication tools. Recommendations also concerned the need to establish monitoring-evaluation, with measurable indicators, and conduct impact assessments. The keywords of this session, which summed up the conclusions of the workshop, were “Not add but simplify; not only expand but transform”.

For further information:

·         Link to the CMI’s “Employment and Social Protection” program

http://cmimarseille.org/EmploymentAndSocialProtection.php (English)

http://cmimarseille.org/FR/EmploymentAndSocialProtection.php (French)

·         Link to the Tunis Workshop
 

http://cmimarseille.org/MSU_wk1.php (English)

http://cmimarseille.org/FR/MSU_wk1.php (French)

·         Link to the Cairo Workshop 
 

http://cmimarseille.org/EmploymentAndSocialProtection_wk2.php (English)

http://cmimarseille.org/FR/EmploymentAndSocialProtection_wk2.php   (French)

A rapidly developing method to finance the economy

The work of the conference reviewed the practices, products and volumes of this financing method, which is experiencing rapid development with a billion dollar turnover and an annual growth rate of 30%. It also highlighted the results of a study jointly led by CGAP and AFD.

This conference was organized in the context of the partnership agreement signed last January between AFD and the Islamic Development Bank (IsDB).

The exchanges were rich and lively and brought to light the strengths and weaknesses of these tools, which are increasingly requested in a number of countries where AFD operates. They also more clearly identified the needs of beneficiaries, financial institutions and central banks, which play an essential role in terms of the regulatory framework and regulation.

A whole host of innovative experiences in the field 

Several observations were made: the existence of a strong demand for this type of financial product, particularly from the poorest; the proliferation of innovative experiences in the field, which are often poorly identified; the need to launch benchmarking exercises in order to build technical, financial and institutional references. 

A knowledge platform on the Internet

It was agreed that the various donors and institutions concerned, including IsDB and AFD, will support this process by promoting the implementation of information and exchange tools, such as a knowledge platform backed up by a dedicated website, and by holding an annual conference. An invitation was launched for the next one to be held at AFD’s headquarters in Paris. 

Bilateral talks were held between AFD’s Chief Executive Officer, Dov Zerah, and the President of IsDB, Mr. Ali, on the sidelines of this conference, and meetings between the respective operational departments defined practical ways of implementing the agreement, notably the possibility of staff exchanges and the first cofinancing operations in the Mediterranean.

The proposals made by the study aim to reduce the average cost of migrant remittances and to optimize their impact on the development of African countries. They specifically focus on improving linked bank accounts (dual bank accounts for migrants in their country of residence and in their home country with activities coordinated between the banks of both countries), the development of innovative financial products, support for electronic payment technologies and the adaptation of regulatory and legislative frameworks.

What are the lessons learned from the study?

Due to their importance for the recipient communities, the flows of money from migrants tend to remain stable and are less sensitive to changes in the economic climate.

How to optimize remittances and their impact on development

• Reducing the cost of migrant remittances will increase their contribution to development.
• An understanding of the local context is the key to reducing the cost of remittances and informal flows.
• It would appear that the cost of remittances in the Maghreb region and franc zone has stabilized at a level that remains too high.
• While the profile of actors is becoming more diverse, there is still a need to develop the range of services in order to be more competitive.
• An overhaul of regulatory frameworks, with the aim of promoting diversification in the range of services and financial products, would help increase competition and reduce the cost of remittances.
• Four types of financial and technological services and products can contribute to reducing the cost of remittances.
• Actors, services, tools, new technologies…: there are ultimately five areas to be explored in order to expand and strengthen the range of banking and non-banking products and encourage both a reduction in the cost of remittances and co-development.

During the signing, Ibrahim Mayaki, Chief Executive Officer of the NEPAD Planning and Coordinating Agency (NPCA) and former Prime Minister of Niger, and Yves Boudot, Director of AFD’s Sub-Saharan Africa Department, had the opportunity to discuss – in addition to ICT development in Africa – the headway made by the Programme for Infrastructure Development in Africa (PIDA), an initiative led by the African Union Commission, NEPAD and African Development Bank.

AFD’s long-standing support to NEPAD’s New Information Technologies initiatives

Since 2003, AFD has been supporting NEPAD’s activities in the telecoms sector (e-Africa Program) via an earmarked grant and the joint AFD-DBSA Project Preparation and Study Fund. These funds have cofinanced preparatory services for NEPAD’s ICT operations and have provided a residential technical assistant (on assignment since July 2009) to support the project for the UMOJANET (“umoja” means “union” in Swahili) broadband transmission virtual network.

This new financing has been delegated from the European Infrastructure Fund (EU-ITF) and follows on from an €850,000 AFD grant (allocated in 2006) to support NEPAD’s initiative to develop a continent-wide broadband transmission virtual network.

Umojanet is extending Uhurunet

The grant that has been allocated will finance the study program that results from the technical assistant’s research to finish off the design of the concept and of the UMOJANET network. The aim is to extend it to the 29 countries in North, West and Central Africa. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.

This project aims to offer African operators a pan-African network of fiber-optic transmission channels. The resulting interconnection offer is required to meet criteria for comprehensiveness, guaranteed quality, open access, non-discrimination and lowest possible cost. The bid invitations will be published in February 2012.
AFD’s approach in supporting NEPAD’s activities is based on its research on promoting regional integration via the construction of major communication networks as a complement to the private sector. This strategy is in line with those adopted by other donors (World Bank, ADB, EIB, KfW, DBSA…). It previously prompted AFD to provide USD9.5m of cofinancing alongside other donors in 2007 for the Eastern African EASSy submarine cable project.

The signing of this additional financing for the implementation of the UMOJANET project should allow NPCA to present an effective implementation plan for a fiber-optic broadband network in West, Central and North Africa over the next 12 months. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.