Invest in Youth: It's Time to Act

YouTube was created in February 2005 and by May of this year, was capturing three billion views a day, and 48 hours of new video were being uploaded each minute. In December 2006, Facebook had more than 12 million active users. Almost five years later, it has more than 800 million active users – an increase of more than 6,000 percent. Earlier this year, an Egyptian man named his newborn daughter ‘Facebook.’

Extraordinary change has also been incurring in the global economy. In 2006, the investment firm Lehman Brothers reported a net income of $4 billion, on assets worth more than $500 billion. Several years later, the firm declared bankruptcy. Lehman’s North American holdings were purchased by Barclay’s for $1.3 billion; its assets in Europe and the Middle East were purchased for $2 by Nomura Holdings of Japan. Lehman’s assets in 2008 were worth less than one-half of one percent of their value just two years earlier.

These are fundamental changes to the way the world and the global economy work, especially for young people. Messages, democratic ideals, information and misinformation can travel across borders and spread across populations far more quickly and efficiently than in the past. Think of the role of social media IN the events of the Arab Spring.

Reports of joblessness and disaffection among young people are growing throughout the world, from China to Egypt to London to New York. There are growing populations of “ninis” (ni trabajar ni estudiar), “hittistes” (a portmanteau word from French and Arabic meaning those who lean against a wall), or “NEETS” (the English term for “not in education, employment, or training”). Does this mean that unemployed young people are prone to violence to achieve their goals and redress grievances?

Frustration and anxiety yes, but in spite of the popular conjecture, there is no evidence that youth unemployment necessarily leads to violence. So why is it so important that young people have jobs? It matters hugely for welfare, for equity, for productivity and growth, and for personal and collective identity, and for social cohesion. These are some of the profound reasons why governments, employers, development partners, and others must spur opportunities for the millions of young men and women around the world who have problems negotiating their transition to adulthood and joining their local communities.

The costs of prolonged unemployment in young people are potentially enormous in terms of lifetime earnings. In the Middle East and North Africa, there are countless stories of unemployment leading to delayed marriage and staring families, delays in achieving the productive identity which marks the successful transition from youth to adulthood.

How is the World Bank responding to this crisis? Bank financing for children and youth development work tripled in the ten years from 2000 to 2010. The value of that loan portfolio grew from $950 million in 2000 to over $4.8 billion in the same period. There are now youth employment and empowerment projects in every region – even in Eastern Europe and Central Asia, where the share of young people in the population is declining.

The World Bank has joined forces with the Nike Foundation and other donors to set up the Adolescent Girls Initiative to pioneer employment projects for girls in post-conflict and fragile environments around the world. The Bank is also preparing large youth development programs in countries as diverse as Mexico, Sierra Leone, El Salvador, Papua New Guinea, and Nepal to enhance the opportunities available to young people and the employability of young people who enter the labor market.

The Bank is also working in partnership with the International Labor Organisation’s (ILO) Youth Employment Network, with leading NGOs and Civil Society organizations, and with the broader donor community to improve our global knowledge on effective youth employment interventions that will succeed even after the crisis has subsided.

We know that countries that invest in their young men and women end up with greater economic growth and social cohesion. Governments that encourage their students to stay in school see significant national returns on each additional year of schooling. This is especially true when countries invest in educating their adolescent girls to secondary school level and beyond. Governments are working more intensively with the international donor community, NGOs and corporate sponsors to champion new models of youth employment programs that focus on a more comprehensive market-driven approach – with relevant job and life skills training, internships, and job placement opportunities.

Governments are also forming partnerships with private companies to finance and expand effective job-training programs which can groom young people for the demands of a global economy that requires more highly skilled workers.

For example, in the Dominican Republic’s Juventud y Empleo project, comprehensive job training has increased young people’s salaries by as much as 10 per cent. The returns on the investment in the young beneficiaries are expected to exceed the program costs within two years of their graduation. Such returns are observed in youth employment programs around the world.

To be sure, the global recovery is taking longer than anticipated. It will take time for countries to restore confidence and encourage trade and investment, to create jobs, enhance productivity and spur renewed growth. But we cannot wait until the crisis ends to pay serious attention to the plight of today’s young people.

Young people today constitute the largest youth population in human history – more than one billion people between the ages of 15 and 25 – the vast majority of them in developing countries. Sub-Saharan Africa, according to the US-based Population Reference Bureau, is home to the world’s largest population of young people and is projected to stay this way for decades.

If we do nothing to address these issues, the consequences will be severe. Even if there is no violence, too little investment in young people costs countries as much as 2 per cent of their GDP every year, even at the best of times.

As a result, fewer young people will be able to contribute to the economic growth that will fuel a widespread and sustainable global recovery. Now is the time for governments and donors to act. Young people must be empowered to take charge of their own lives and discover their full potential. Whether they succeed has everything to do with whether we succeed as a world, and as a society. But they cannot do so alone.