Economic growth and employment
The interest rate hikes by the US Federal Reserve (Fed) and the European Central Bank (ECB) are not only having an impact on the respective currency areas, they are also impacting global markets. Developing countries and emerging economies in particular often find themselves in financial difficulties through no fault of their own.
The current edition of “Development in Brief” shows the effects of recent financial decisions on the situation of developing countries and emerging economies, and how these should be addressed.
Interest rate explosion – are developing countries and emerging economies the losers?(PDF, 49 KB, accessible)
The labour markets of the less developed countries currently lack employment prospects and the situation is getting worse. In Africa alone, 25 million new jobs would have to be created every year to provide people with opportunities and to strengthen their resilience. This situation is already inherently difficult but it has been exacerbated by the negative consequences of additional shocks such as natural disasters and the COVID-19 crisis. Profound changes leading to a green economy are also affecting employment opportunities. A “Just Transition” is designed to ensure that the significant benefits of this transition are shared widely while supporting those who are economically disadvantaged. One possible method for promoting sustainable employment is the internationally recognised “integrated approach to employment promotion” discussed in the current issue of “Development in Brief”.
Harnessing the potential of an integrated approach to employment promotion(PDF, 268 KB, accessible)
The topic of private sector development (PSD) is eliciting an increasingly positive response in international circles and among those involved in development policy. Although the private sector's role in reducing poverty has been widely recognised since the 1980s, the past decade has seen an increasing number of voices viewing PSD as the key to success, also in fragile contexts and areas affected by conflict. In its recently published strategy on “Fragility, Conflict and Violence (2020-2025)”, the World Bank also assigns private sector development a central role in its future work in such contexts. However, since PSD is still a comparatively young and complex development area, which has not been tried and tested much, there is a question around its potential to promote peace and reduce fragility and how this potential can be realised.
How can the private sector contribute in fragile contexts?(PDF, 38 KB, non-accessible)
Since the UN Conference on Financing for Development 2015 in Addis Ababa, there seems to be no doubt that the private sector plays a central role in financing the Sustainable Development Goals. However, in order to mobilise the resources required from the private sector, an enabling business environment needs to be created, including incentives for investment.
The current issue of Development in Brief discusses by which means an enabling business environment can be achieved in developing countries and highlights the support which can be provided by development cooperation.
The importance of a good business environment for a thriving private sector
In the past, the problem of youth unemployment was primarily viewed as an urban phenomenon, meaning that strategies designed to tackle this problem were mainly focused on urban areas. Only lately, most recently at the G20 Conference on the future of rural areas, has there been more consensus that an important part of the cause of unemployment can also be found in rural areas and measures to stimulate rural job creation can therefore play a key role in solving the problem.
The current issue of Development in Brief summarises the state of the debate, describes the close correlations between rural and urban youth unemployment and outlines potential approaches to solving the problem in rural areas.
Solutions to youth unemployment: rural areas are just as important as cities
The financing of small and medium-sized enterprises is traditionally a significant focus of German Financial Cooperation (FC). At present, it represents 40 % of the total financial-sector portfolio in FC and so plays by far the greatest role ahead of micro, as well as energy and environmental financing (27 % and 18 % respectively of the total volume). There is also considerable general interest in this sector, because of its major significance in terms of the development and stabilisation of national economies.
PDF for download:
SME Financing: Successful Cornerstone of Financial Cooperation(PDF, 648 KB, non-accessible)