Job creation holds the key - The Hindu

Rather than despair over the continuing stream of bad news on the economic front, nations should see in the unfolding crisis an opportunity to reshape policies, and put in place structures that will help a speedy recovery. The most serious consequence of the economic crisis is the impact it will have on employment. The International Labour Organisation has sounded an early warning that global unemployment could increase by anything between 18 million and 50 million this ye ar over and above the 2007 levels, depending on the severity of the economic crisis. Taken as an indicator of the real consequences of the global downturn, this daunting prospect calls for urgent and workable intervention by policy-makers. Although remedies are under way, they are in the form of monetary easing and tax cuts, both of which take time to translate into more jobs. Multi-pronged state-led economic action is the most effective choice.

As is evident, the ability of the agriculture and industry sectors to create the required mass employment immediately is questionable. The vulnerability of depending on the services sector — particularly financial services — has also been exposed by the sub-prime crisis, which triggered the current global recession. Yet hope remains. That is largely because of the untapped employment potential in two areas: infrastructure and technology. Fresh initiatives, which focus directly on job creation and can yield long-term economic benefits, need aggressive state support and popular backing. Infrastructure creation is an area that generates employment, and also has a multiplier effect. India’s focus on urban and rural infrastructure projects, actively linked to job creation, is commendable. In the case of the United States, President Barack Obama’s economic approach lays stress on infrastructure and emerging sectors such as alternative energy. For countries like India, the present global shakeout is also the occasion to reinvent a workable social security mechanism, which should include components of support for the unemployed, and help in re-skilling workers facing redundancy. These troubled times call for effective state action to protect existing jobs and create new avenues of employment in both the public and the private sectors. Hope for a quick recovery hinges on how soon governments can shift the focus to employment creation.