Creating good, inclusive jobs is particularly crucial in situations affected by fragility, conflict, and violence. Jobs drive growth and are key to poverty reduction. They can also help promote social cohesion and stability. But at the same time, the jobs environment is particularly challenging in fragile situations. Fragility, conflict and violence can affect all levels of society—people and communities, firms and entrepreneurs, as well as institutions. For workers, these impacts can mean reduced opportunities for wage and self-employment, and reduced human capital. As economic activity slows and firms struggle to grow, fewer jobs are likely to be created. For the private sector, fragility results in a highly risky business environment shaped by pervasive market and government failures, which increases costs, reduces demand, and compromises investment returns.
The jobs framework offers four policy implications in designing interventions for countries affected by conflict, fragility and forced displacement:
- Jobs can have important social externalities in fragile contexts, and integrated policy approaches are needed to help realize them. The potential benefits on social cohesion and stability need to be factored into evaluations of the broader effectiveness of policy choices. The traditional siloed approach misses the potential for synergies across policies that can reinforce success.
- Interventions at the level of economy-wide ‘fundamentals’ need a ‘jobs and fragility lens’ to make visible how reforms impact the creation, quality and accessibility of jobs. Failing to take into account potential trade-offs will not avoid their impact; at issue is whether policy choices are being informed by the potential trade-offs—and thus, whether or not supporting adjustments are made. Explicitly taking into account the expected impact on jobs is integral to expanding economic opportunities and promoting stability.
- Short-term, targeted interventions need to be designed with an eye both on the nature of FCV challenges in the short run, and on longer term goals. Progress on jobs in fragile situations is hard-won, and interventions with limited reach are crucial tools for emergency relief, stabilization, and starting momentum in private sector recovery. But they must be designed to facilitate, and not constrain, structural reforms and economic transformations. This is true for livelihood programs, as well as programs targeting investments in certain sectors, regions or firms.
- The World Bank Group needs to do more to re-establish domestic markets, address risks, and increase expected rates of return on private investments, including those of smaller domestic actors. This will help to leverage additional resources and know-how to accelerate productivity and expand job opportunities. Targeted actions to support private sector jobs need not wait for investment climate reforms to take hold. However, they must guard against capture, and aim at investments that yield externalities, are potentially competitive, and are jobs-intensive.