By: Shaheen Waqibeen
The situation of Afghanistan is today undermined by the convergence of demographic, social, economic, and of course, political challenges. Recent figures released by the World Bank and the Afghan Ministry of Finance indicate that the total amount of aid for 2010/2011 amounted to approximately US$15.7 billion, which is close to the overall GDP. As such, both the income of the Afghan government and the precarious economic equilibrium of the country are directly dependent on donors’ contributions and the country could thus suffer an economic downturn and severe uncertainties as a consequence of a reduction in development assistance funds.
In this context, this study calls for a longer term approach to socio-economic development in Afghanistan, in which employment and decent work take a central role. While this is indeed a major challenge given the economic and political uncertainties facing the country, a balance needs to be found between the urgency of stabilization and creating more sustainable jobs that lift people and their families out of poverty.
Economic context and labour market overview
Economic activity: The local economy mainly relies on the informal sector (including illicit activities), which accounts for 80 to 90% of the total economic activity and largely determines the real income of Afghan households. For this reason, the labour market is still dominated by:
1) An agricultural sector, which performs poorly in providing decent work and income; and
2) a services sector, which has been the main driver of the strong Afghan growth but will probably suffer the most from the progressive reduction of international financial inflows.
Economic prospects: In the long- and medium-run, economic and social prospects will depend on:
1) A satisfactory handover of security responsibilities to Afghan national police and army;
2) A continuous and adequate financial commitment by the international community to stay engaged in support of the country’s long-term development; and
3) A positive and actual impact of the promising extraction and mining activities on the local economy, to better foster development in services and productivity gains in the agriculture sector.
Lack of decent work deficits : The predominance of underemployment, precarious/casual employment and working poverty are in fact better indicators of the poor state of the Afghan labour market, as reflected by:
i) 60% of the employed workforce are in agriculture working in low-productivity and subsistence-type production;
ii) ii) the urban labour market, which is characterized by skills mismatch and problems of job quality in both the informal and the small formal sectors; and
iii) iii) most jobs, that have been generated by international development assistance, tend to be casual or temporary and are clearly not sustainable without continuing aid inflows.
Vulnerable and marginalized groups
Youth: With the labour force increasing by over 400,000 each year, Afghanistan has an increasing need to generate employment opportunities for its new labour market entrants, along with those individuals who are already un- and underemployed. Young employees generally occupy temporary and precarious positions as “apprentices” or “trainees” in a labour market with no contractual or regulatory obligations for employers.
Women: Since mobility outside the home is limited for cultural reasons, women – especially in rural areas – are primarily involved in home-based income-generating activities like carpet weaving, sewing, tailoring, agricultural work and taking care of livestock and selling dairy products. However, even if women are often more involved in basic unskilled pastoral and agricultural activities in rural districts, it should be noted that the female employment-to-population rate in Afghanistan is higher than the South Asian average (based on the NRVA 2007/8).
Child labour : Though the legal age of employment in Afghanistan is 15, enforcement of this restriction is weak, with UNICEF estimating that 30% of Afghan children work. Children tend to work more significantly in rural areas (pastoral and agricultural activities); though, in urban and peri-urban areas, young children – especially boys – from poor households also tend to contribute to the family income (in brick kilns, carpet weaving factories, and also through begging).
Returnees: Since 2002, over 5 million Afghan refugees returned ‘home’ causing increased pressure on local absorption capacities. On average, family members survive on less than $1 a day and one third of the labour force surveyed falls under the category of unstable and unskilled labour (seasonal daily labour in the agriculture or construction sectors).
IDPs : At a time of record lows in the repatriation of refugees, increased internal displacement and irregular cross-border migration, access to the labour market has become one of the central drivers of mobility. IDP household heads have substantially lower literacy rates and levels of education, directly impacting their labour market outcomes. Subsequently, IDPs’ employment opportunities are primarily in construction, and low quality and unsafe jobs in general.
Challenges and trade-offs
Lack of reliable data and information system: Aside from the NRVA data, which methods and data collection have often been criticized, there is neither nationwide data on employment, nor reliable information on skill supply and demand, which clearly undermines the adequate assessment of the current situation.
Lack of long-term thinking : Programmes are too often characterized by short-term initiatives, which are:
1) conducted with limited involvement of key institutions for sustainability; and
2) overly dependent on donors’ funding cycles.
Lack of coordination: There is a clear lack of interaction and coordination between the various Afghan ministries and agencies, which should be working together on the issue of employment. The Ministry of Labour, Social Affairs, Martyrs and the Disabled (MoLSAMD) has developed an employment generation and capacity-building policy within the frame of the National Priority Program (see NPP 1). However, these intentions still need to be translated into a long-term financial commitment from donors and tangible acts from governmental counterparts.
Lack of linkage with the labour market: The link between employment and “political stabilization”, which has been a cornerstone of employment programmes in Afghanistan,has not been successful in creating sustainable jobs. Moreover, a key weakness theexisting capacity development and job creation programmes – international and local,public or private, governmental or non-governmental – is the poor link to the labour market. Government TVET training initiatives, as well as international and nongovernmental organisations tend to exclusively focus on direct and visible outputs (e.g.participation in training), without taking into account longer term employment outcomes.
Focus on casual jobs : In addition, most local and international stakeholders have not sought to identify unmet demand in the labour market and are too often focus on strategies that mostly result in the creation of casual and short-term jobs, rather than leading to sustainable employment generation.
Lack of financial capacity: The on-going transition is likely to significantly impact on government employment and capacity building strategies, as socio-economic priorities still lag behind security and civil service wage bills. In the long run, the lack of financial capacity on the skills supply-side may significantly hamper national employment strategies.
Bad Effects of Unemployment on Economic Growth;
Unemployment is a big problem which effects the economic growth of the country. It has following bad effects:
(i) Exploitation of labour: Due to unemployment labourers are exploited. They have to accept low wages and work under un-favourable conditions.
(ii) Industrial disputes: Industrial disputes arise because of unemployment. It has adverse effects on employer-employee relations. Due to industrial disputes, the unemployment rises.
(iii) Political instability: There is political instability in the country due to unemployment. Unemployed persons engage themselves in destructive activities. They consider Govts, worthless. Economic development becomes difficult under conditions of political instability.
(iv) Social problem: Many social evils like dishonesty, gambling and immorality etc. arise due to unemployment. It endangers law and order situation of the country. It causes social disruption in the society.
(v) Increase in poverty: Under the situation of unemployment a man has no source of income. Unemployment causes poverty. Burden of debt increases. Economic problems increase.
(vi) Loss of human resources: Due to unemployment, human resources go waste. No constructive use of labour force is made. If human resources are properly used, economic growth of the country will increase.
What is the impact of unemployment on society?
Unemployment, if it is high enough, can have many impacts on society. These impacts can be economic, but they can also be seen in areas like crime and the family.
The most obvious impact of unemployment is that it hurts the economy. People who are unemployed have less money to spend. They are able to buy fewer goods and services, thus making businesses less profitable. This can lead, in turn, to even more unemployment. High unemployment, then, has very negative economic impacts.
Unemployment can impact society in ways that go beyond its economic impact. For example, unemployment can be very psychologically hard on a worker. It can make that person doubt his or her value as a person. This can lead to stress within that person’s relationships. Unemployed people are less likely to get married and more likely to get divorced as their lack of work puts stress on them. Stress can also lead to poorer health in the unemployed, which is exacerbated if they have less access to health care than they previously did. Finally, unemployment can potentially lead to crime. A person who has no job still needs the necessities of life. Such a person may turn to crime to be able to get the things he or she needs.
There are many other ways in which unemployment impacts society. In general, it can have both an economic impact and an impact that is more social than economic.
By: Shaheen Waqibeen