1 / 13

The context

Managing without growth: challenges confronting the Syrian labour market Iyanatul Islam Email: i.islam@griffith.edu.au UNDP-IPC International Conference on employment Brasilia, January 11-12, 2005. The context. Syria – low middle income [about US$1000 p.a.] and oil dependent economy

PamelaLan
Download Presentation

The context

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Managing without growth: challenges confronting the Syrian labour marketIyanatul IslamEmail: i.islam@griffith.edu.auUNDP-IPC International Conference on employmentBrasilia, January 11-12, 2005

  2. The context • Syria – low middle income [about US$1000 p.a.] and oil dependent economy • Expected to run out of oil reserves in about 10-12 years • Faces uncertain international climate • Seeking closer ties with EU and Arab states to offset frosty relationship with US • Struggling to recover from recession of 1999, with per capita growth in recent years less than 1 per cent p.a. • Yet, maintained respectable progress in human development and expected to reach most of the MDGs by 2015 • Labour market caught in a ‘double squeeze’, with rapid labour force growth and slow economic growth. • Labour market policies will have to be more astute than in the past.

  3. Labour market-poverty linkage • The public sector-private sector divide is a defining feature of the Syrian labour market • 27 per cent work in the public sector, the rest in the private sector • Within the private sector, the relative size of the informal economy is 36 per cent • 66 per cent of employed university graduates and 82 per cent of all employed graduates from intermediate institutions work in the public sector • The proportions are even higher for female workers • Gender wage gap much higher in private than in public sector • The sectoral distribution of workers with higher educational qualifications lies at the core of the labour market-poverty nexus in Syria • The private sector accounts for 85 per cent of the share of poverty • Incidence of low paid workers are much higher in the private sector than in the public sector [53 per cent vs 26 per cent] • Public sector wages are 1.5 times private sector wages

  4. Unemployment, underemployment and poverty • Unemployment rates for 2003 vary from 7 per cent to 16 per cent, with labour force survey [LFS] suggesting 12 per cent • Ministry of Social Affairs and Labour endorses LFS figure, but the State Planning Commission prefers to work with a ‘range’ of estimates. • Significant share of unemployment [47 per cent] may be attributed to those with elementary education • 75 per cent of the total stock of unemployed in the 15-29 age group • Female unemployment lower than males in the 15-19 age group as well as for cohorts with elementary education, but the converse is true for other groups • Duration of unemployment is high – 65 per cent of total experience a spell of unemployment lasting one year • Multiple job holdings reported to be widespread but not reflected in data • ‘Gross’ underemployment afflicts 52 per cent of the labour force

  5. Unemployment, underemployment and poverty – con’td • Unemployment-poverty nexus quite close for those with elementary education, but not for other cohorts • At the regional level, only four governorates account for 50 per cent of total stock of unemployment • But these are not the regions with the highest poverty incidence • Also, areas with high underemployment rates are not synonymous with high poverty rates • In general, the correlation between poverty, unemployment and underemployment at the regional level is either statistically insignificant or of the ‘wrong’ sign • Hence, regional unemployment map constructed by the Syrian government in 2003 likely to be an unreliable guide for identifying impoverished regions.

  6. Child labour and poverty • In recent years, child labour has become a prominent and contentious issue in Syria • Coincides with publication of a major report by UNICEF • Incidence of child labour around 18 per cent • Child labour much higher in poorer rural areas [64 per cent] than in urban areas [36 per cent]. • It is also higher in agriculture [56 per cent] than in manufacturing [18 per cent] • Child labour rates much higher in regions with an extensive rural and agricultural base • Girls represented disproportionately in urban based agriculture, but the gender gap is less conspicuous in rural based agriculture.

  7. Policy issues – growth, investment and employment • Government and other stakeholders agree that rapid, investment-led growth is key to durable employment creation and poverty reduction • State Planning Commission maintains that 185,000 jobs need to created to maintain ‘flow’ equilibrium in the labour market, but others [eg World Bank, CAIMED] suggest much higher figures • State Planning Commission maintains that growth of 6-7 per cent required to reach job creation target, but Damascus Chamber of Commerce and others maintain growth rate of 8 per cent required • State Planning Commission recommends investment ratio of 47 per cent of GDP to sustain growth rate of 7 per cent, but this threshold has historically never been reached • Less attention seems to have been paid to employment elasticity, although global evidence shows link between poverty reduction and high employment elasticity • Modest improvements in employment elasticity can reduce required growth to meet job creation targets from 8 per cent to 6 per cent

  8. Policy issues – growth, investment and employment • Lack of a modern financial system that is able to tap new investment funds is a major institutional impediment • Legislative initiative in place for setting up a stock market • Trade liberalization is on the policy agenda, but privatization is not • Rigorous assessment required for monitoring employment consequences of liberalization-cum-privatization • Global evidence shows that such a reform agenda can engender negative employment consequences in the short run, but not in the long run • Hence, prudent management of policy reform required

  9. Policy issues – The Agency for Combating Unemployment [ACU] • ACU set up as supra-ministerial agency to deal with unemployment • Granted mandate to disburse US$ 1 billion and create 440,000 jobs over five years [2001-2005] • Policy instruments include credit for business start-ups, microfinance and training and re-training, esp. self-employment • According to ACU’s own forecasts, at best 250,00 jobs will be created by end 2005. • Maintains that this is due to funding shortfall and acknowledges that ultimately job creation will depend on investment-led growth • Given heavy investment of human capital in ACU [more than 70 PhDs], the agency could be transformed into a policy advisory unit working on labour market-poverty linkages • Collaborative arrangements between, ACU, State Planning Commission and Ministry of Social Affairs and Labour need to be designed

  10. Policy issues – child labour • Syria has ratified the ILO convention on eliminating the worst forms of child labour • Current approach is to penalize firms and families using child labour • Ministry of Social Affairs and Labour is arguing for an alternative incentive-driven approach • The aim is to design schemes that will provide financial incentives for poor families to invest in children’s education • A resolution of alternative policy approaches is required

  11. Policy issues – employment security and social protection • About 19 per cent of Syrians are vulnerable to at least a transient spell of poverty. Also the incidence of both seasonal employment/intermittent work is quite high • Hence, employment security and social protection are high on the Syrian policy agenda • Need a combination of policy instruments – such as unemployment insurance, public works and microfinance • Syria does not have unemployment insurance, but uses stiff anti-firing legislation as a surrogate • Such legislation is both ineffective and a source of contention with investors • Cross-country evidence suggests that unemployment insurance can be fiscally affordable and designed to mitigate disincentive effects • Both public works and microfinance part of the ACU’s role, but they need to be a regular feature of labour market policy • Given that these initiatives are in their infancy, Syria can learn from best practice elsewhere

  12. Policy issues – wage disparities and wage policy • In May, 2004 public sector wages increased by 20 per cent, private sector urged to adopt pay increases between 5 to 20 per cent, while minimum wages are poised to increase by more than 40 per cent • Given that the wage gap is currently in favour of the public sector, such wage policy will worsen wage disparities • It could help those employed in the formal sector, bypass those in the informal sector and hurt those seeking work • An effective solution to improving wages in the private sector is to improve its human capital endowment • This requires reform of education and training system to produce graduates with skills pertinent to private sector needs and by fostering in-firm training • Promising initiatives in place – reform of VET and conclusion of ‘EFA assessment’, industrial scholarship schemes and private sector-public sector collaboration in industrial training • Minimum wages should be indicative rather than mandatory and used to monitor conditions of ‘working poor’

  13. Policy issues – labour market flexibility • Engendering labour market flexibility is now a major part of the policy agenda • There is a good deal of support among key stakeholders to reform labour laws that have remained largely unchanged over the last 40 years • At the same time, Syria has ratified the core ILO conventions on fundamental principles and rights at work • In pursuing an agenda of labour market flexibility, some issues need to be kept in perspective • Comparative data show that, apart from high firing costs, Syria is not too far out of line with international norms • More importantly, international evidence shows that the benefits of labour market flexibility have probably been oversold • The challenge for Syria is to combine reform of labour laws with its commitment to uphold labour rights

More Related