WASHINGTON, Oct. 1 (Xinhua)-- Facing job challenges, governments need to play a vital role of facilitating job growth by creating business environment that stimulates demand for labor and enables employment, said the World Bank chief economist on Monday.
Governments can provide "incentives" for the private sector to accelerate job growth, the bulk of which has to come from businesses, said Kaushik Basu, the newly-appointed chief economist and senior vice president of the World Bank, in an interview with Xinhua.
Job challenges facing the world are "urgent and multifaceted", ranging from supporting the relocation of people to better jobs to creating more jobs, said the Indian national as his term started on Monday. He succeeded Justin Yifu Lin, a Chinese national, to become the second World Bank chief economist from a developing country.
In some countries, labor force grows fast as job seekers flock into the labor market. For these countries, demographic dividend can be a great opportunity, but also a challenge, Basu said.
Many others, for example, countries in eastern Europe, are facing contrasting challenges of shrinking populations and aging workforce, he added.
The global labor market landscape is changing rapidly, he said, noting that agriculture share in the global employment is falling steadily, and the employment at the service sector is growing.
"Growth generally leads to better jobs. And jobs themselves are a driver for development," said Basu, who served as the Indian government's chief economic advisor before his appointment with the Bank and was on leave from his position as professor at Cornell University.
The Washington-based global institution released its World Development Report Monday, which said that the role of government is to ensure the conditions are in place for strong private-sector-led growth, to understand why there are not more good jobs for development, and to remove or mitigate the constraints that prevent the creation of more jobs with high development payoffs.
As an economist, Basu said the global economy now is in "very difficult situation" and the weakening global growth would perplex the chronic problems of emerging economies, for example, poverty.
Basu warned that the coming year could be a difficult one, but growth is likely to pick up in 2014 if structural reform efforts continue.
In his view, sustained high jobless rates in some countries are to some extent the legacy of financial crisis and product of ongoing sovereign debt crisis. He cited the recent monetary moves by the major center banks are necessary to "inject more demand", and at the same time underscored the urgency for structural changes.
He argued that the global labor market is becoming "a common pool" in such a globalized world. Countries should mind the possible spillover effects of their labor market policies.
According to the World Bank report, job issues have taken center stage across the globe - in developed and developing countries alike. 200 million people worldwide are unemployed and actively looking for work. Around 600 million new jobs will have to be created over a 15-year period.
The report said governments should formulate prudential macroeconomic policies to ensure solid fundamentals, and make appropriate labor policies to remove obstacles to job creation. Furthermore, governments should identify which jobs would do the most for development given their specific country context.