United States Institute of Peace

International Network for Economics and Conflict

Creating Inclusive Youth Employment in Fragile States

The importance of youth employment programs in fragile states is gaining increased awareness. None of these states are expected to meet any of the Millennium Development Goals in 2015 and whereas many developing countries have impressive growth figures, fragile states lag seriously behind - caught in a vicious cycle of instability and underdevelopment. Youth unemployment plays a key role in maintaining this cycle by offering a large pool of recruits for armed formations and crime groups.

Contrary to popular belief, ideology is not the most important reason youth join armed formations. When asked by researchers for the World Development Report 2011, 39.5% of young militia members said they joined such formations to escape unemployment, whilst only 13% claimed to have joined for ideological reasons. With youth unemployment rates often over 50-60% in such states, this is not ‘merely’ a human tragedy; it’s a threat to state stability. Creating jobs, especially for former combatants is a key component to a sustainable solution.

At SPARK we are working in eight fragile states, mostly in Africa and the Middle East to create youth employment opportunities in support of stabilization. We work on three levels to create jobs. First, we work on direct entrepreneurship support activities with local partners, aiming to rapidly create jobs and demonstrate peace dividends. Secondly, we build capacity of local partners to enable them to operate programs independently and increase efficiency and effectiveness. Finally, we help strengthen the ability of interest groups to encourage their government to improve the business environment. Especially in fragile states, we pay special attention to supporting governmental agencies in order to avoid undermining the capacity of the state with parallel NGO programing. Such support also enables the organizations to engage in policy discussions and (over time) mediation initiatives. Our experience is remarkably in line with the Six+Six model of Koltai & Company posted here and further developed in this USIP peace brief.

Over the years we have learned a number of important lessons, often the hard way, and we are still struggling with several challenges.

The most important challenge is to find a balance between reaching the poor whilst focusing on businesses that have real growth and job creation potential. Obviously, the success rate of businesses with growth potential depends on the quality of the entrepreneur and the quality and size of the market. Often the best entrepreneurs are not the vulnerable and poor in rural areas, but the educated in the urban centers. It is through supporting such successful businesses that we aim to reach and create employment for the poor and excluded. All too often, in our experience, well intended enterprise development initiatives have led to unsustainable social enterprises or micro-enterprises with no job creation potential. On the flip side, supporting successful business in the capitals will seldom lead to positive spillover effects in the rural and poor areas. A program targeting the rural areas and focusing on agricultural value chains is thus required as well. For example, the business center SPARK established in Pristina, Kosovo has had remarkable success in terms of business survival rate, and has demonstrated a loan repayment rate of 90% for start-up entrepreneurs. However, it has had limited success in reaching minority communities in rural areas, which for stabilization and poverty reduction reasons would be desirable. It thus was complemented with rural centers that were linked to it. On the other hand, we are currently planning a center in eastern Libya that will focus on rural areas. However, the likely downside will be that the cost per job created will be higher and more difficult to attain.

An ever larger challenge is to constantly assess how our intervention affects the localities in which we operate. Misinformed interventions can seriously worsen local conflicts. Support channeled wrongly can, for example, support a local militia or further marginalize already excluded communities or women. In some instances local crime groups have ended up controlling aid programs thereby worsening conflict potential. In one example, a leading international donor agency looked the other way, noting informally that although they were aware of the conflict insensitive choice of channeling their funds, staying close to a certain organized crime group would mean ‘the job gets done’. Obviously this does not stimulate long-term sustainable development.

A third challenge is to switch from rapid job creation and immediate support to a more long-term sustainable economic development agenda. The SMEs we support initially after a conflict often grow rapidly at the outset, but then stall in their development. Oftentimes agencies either operate on a quick impact, post-recovery agenda, or use a more sustainable development approach. The interface between these is becoming increasingly important in our work. Successful programs need to evolve in approach and content between the immediate intervention after conflict, into the post-conflict recovery phase, and –thereafter- adjust to a more sustainable development phase. Our program in Kosovo has managed to move through all three phases. In other fragile states stalling between phases or backtracking has occurred, it is thus by no means a linear process. Comparing experience in dealing with the transition between the phases is a challenge we intend to tackle with several other players in the field in 2013.

Aside from challenges, great opportunities arise as well. Delivering programs that create jobs and other essential services cultivates the trust of the community and builds respect and entry points with the government. This trust and respect can be utilized to engage in policy debates and conflict mediation later on, especially in sectors in which the aid organization has delivered tangible results. In fact, real long-term impact may only occur once an organization manages to capitalize on its technical achievements and successfully uses them to support conflict transformation. For example, after ten years of delivering tangible results for the communities, the SPARK program aimed at supporting entrepreneurship education reform in Kosovo and Serbia was able to be involved in the design and implementation of one of the first three concrete EU brokered agreements between the two former warring parties since the end of hostilities in 1999.

As this particular agreement facilitates labor mobility through the acceptance of tertiary education diplomas, the eventual impact on job creation is likely to be much larger than 10 years of project interventions. This strongly convinces us that despite the day to day challenges we face, long-term commitment and making the connection between aid and diplomacy can make a real difference in the communities we serve.

Comment #1

From where I sit, I believe the challenge of urban youth unemployment--not just in fragile states, but everywhere--will only become manageable with a volunteer service component.  Indeed, properly structured, this can be the first step in nurturing entrepreneurial interests and building capacity.  Research being done in connection with the Brookings Initiative on International Volunteering and Service is looking for scalable programs along these lines.

Comment #2

Dear Lex Rieffel,

I would be very interesed to hear more on this initiative and its lessons learned. Potentially we could pilot this approach in the locations we are working. Could you email me details at y.du.pont@spark-online.org ?

Kind regards,

Y

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