KEY POINTS
- The UN Development Programme (UNDP) says 800 million young people entering the labour market in developing economies over the next 15 years could be left without jobs.
- The agency has launched two initiatives to help countries attract investment, identify job-creating sectors and address barriers to employment.
- UNDP also warns that rising energy costs, climate-related pressures and expensive borrowing are worsening economic conditions in developing countries.
MAIN STORY
The United Nations Development Programme (UNDP) has warned that about 800 million young people entering the labour market in developing economies over the next 15 years could struggle to find jobs unless governments take deliberate action to expand employment opportunities.
UNDP Administrator Alexander De Croo gave the warning on Tuesday while announcing two initiatives designed to attract investment and strengthen job creation.
Speaking at a press briefing in New York from Bangkok, where he is attending the World Bank Group and International Monetary Fund Annual Meetings, De Croo said projections showed that 1.2 billion young people in developing countries would reach the labour market over the next 15 years, but only about 400 million jobs would be available.
“If you look at the next 15 years, there will be 1.2 billion young people graduating from school, going into the labour market,” De Croo said.
“Unfortunately, for only 400 million of these, there will be jobs. For 800 million of these, there will not be jobs.”
He attributed the projected shortfall partly to demographic pressures, noting that the median age in many developing countries is between 18 and 25. He said the estimates were based on current technological conditions and argued that policy decisions would determine whether countries could improve the employment outlook.
“That is not going to go by itself. This is the result of policy,” he said.
The UNDP’s two initiatives are the Investment Accelerator and the Jobs for Prosperity Facility.
The Investment Accelerator will support governments in improving investment policies and legal frameworks, developing pipelines of investment-ready projects and moving those projects from preparation to implementation.
The Jobs for Prosperity Facility will help countries identify sectors with strong employment potential, align workforce skills with employers’ needs and remove barriers that discourage businesses from investing and hiring.
Responding to a question about artificial intelligence, De Croo said employment projections could change if governments adopted active labour policies. He identified care services, agriculture and tourism as sectors expected to continue generating jobs despite the growing use of AI.
“Job creation is actually the only real sustainable way for people to grow out of poverty,” he said.
The initiatives are backed by expanded partnerships with the World Bank Group, the European Investment Bank and the European Bank for Reconstruction and Development. Pilot programmes are already underway in Nepal, Yemen, Haiti, Lebanon and Ghana.
The announcement comes as developing economies contend with what De Croo described as a triple shock: high energy costs, one of the most pronounced El Niño events since 1950 and very high borrowing costs.
A new UNDP report, No Time to Recover, says the median developing country now spends 9.5 per cent of total government income on interest payments alone.
The report also highlights a reversal in multidimensional poverty, which measures deprivation beyond income to include access to electricity, water, healthcare and education. For the first time since 2010, the number of people living in multidimensional poverty has increased.
“Those numbers should absolutely be a wake-up call to all of us,” De Croo said.
He added that the global economy had proved more resilient than expected, but the recovery remained uneven, with some countries better equipped than others to withstand further economic shocks.
THE ISSUES
The projected jobs gap presents a challenge for governments seeking to turn a growing young population into an economic advantage. Without sufficient employment opportunities, young people may struggle to earn stable incomes, while businesses may face weaker consumer demand and countries may find it harder to reduce poverty.
The problem extends beyond the number of jobs available. Businesses also need investment, supportive regulations and access to workers with relevant skills. The UNDP’s initiatives seek to address these constraints by connecting investment planning with sectors capable of generating employment.
High interest payments create another obstacle. When governments spend a large share of their revenue servicing debt, they have less fiscal room to fund infrastructure, education, healthcare and other services that support productivity and employment.
For developing countries, including Nigeria, the challenge is to attract productive investment and expand employment while managing borrowing costs and other economic pressures. However, the UNDP’s global projections do not establish how many of the 800 million young people without projected jobs will be in Nigeria.
WHAT’S BEING SAID
- “That is not going to go by itself. This is the result of policy.” – Alexander De Croo, UNDP Administrator
- “Job creation is actually the only real sustainable way for people to grow out of poverty.” – Alexander De Croo, UNDP Administrator
- “Those numbers should absolutely be a wake-up call to all of us.” – Alexander De Croo, UNDP Administrator
WHAT’S NEXT
The effectiveness of the Investment Accelerator and the Jobs for Prosperity Facility will depend on whether participating governments can translate policy changes and investment pipelines into operational projects and sustained hiring.
The pilot initiatives in Nepal, Yemen, Haiti, Lebanon and Ghana will provide an early test of the programmes’ ability to improve investment conditions and connect economic activity with employment. Their implementation and results will be important indicators of whether the initiatives can help narrow the projected jobs gap.
BOTTOM LINE
The UNDP’s warning is that demographic growth alone will not create economic opportunity. Governments must attract investment, address barriers to business expansion and develop sectors that can employ young people at scale, or millions entering the labour market could face a future without adequate work.
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