Contacts:
In Singapore: Maya Brahmam
mbrahmam@worldbank.org
In Bangkok: Pichaya Fitts
pfitts@worldbank.org
In Washington: Kavita Watsa
kwatsa@worldbank.org THAILAND, March 12, 2007—Developing countries which invest in better education, healthcare, and job training for their record numbers of young people between the ages of 12 and 24 years of age, could produce surging economic growth and sharply reduced poverty, according to a new World Bank report launched today in Bangkok at Chulalongkorn University. With 1.3 billion young people now living in the developing world—the largest-ever youth group in history—the report says there has never been a better time to invest in youth because they are healthier and better educated than previous generations, and they will join the workforce with fewer dependents because of changing demographics. However, failure to seize this opportunity to train them more effectively for the workplace, and to be active citizens, could lead to widespread disillusionment and social tensions. The number of young people aged 12-24 in the East Asia and Pacific region (dominated by China) has peaked at roughly 450 million, and is set to decline. However, a few countries are peaking now (Indonesia, Vietnam); a few will peak between 2010 and 2030 (Malaysia and the Philippines); and Cambodia will not peak in the foreseeable future. “Such large numbers of young people living in developing countries present great opportunities, but also risks,” says François Bourguignon, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “The opportunities are great, as many countries will have a larger, more skilled labor force and fewer dependents. But these young people must be well-prepared in order to create and find good jobs.” The report says that young people make up nearly half of the ranks of the world’s unemployed, and, for example, that the Middle East and North Africa region alone must create 100 million jobs by 2020 in order to stabilize its employment situation. Moreover, surveys of young people in East Asia and Eastern Europe and Central Asia—carried out as research for the report—indicate that access to jobs, along with physical security, is their biggest concern. Far too many young people—some 130 million 15-24 year olds—cannot read or write. Secondary education and skill acquisition make sense only if primary schooling has been successful. This is still far from being the case and efforts have to be reinforced in this area. In 1993, the World Bank found that sound investments in primary education alone had accounted for approximately one-third of the growth rate of the East Asian boom economies between 1960 and 1985 (World Bank, 1993). Export orientation and foreign direct investment were also cited as one of the sources of growth in the "East Asian miracle.” Since then, challenges such as secondary school capacity, future access to jobs, rights of migrants from rural to urban areas, and health issues remain only partially addressed. Governments will need to continue investing in education, create more jobs, and disseminate health-related information more widely, the report says. More needs to be done to better inform youth about the benefits and costs of investing in their human capital. Successful interventions use schools and the broader media, improve the content of dissemination campaigns, and harness new technology. Thailand and Cambodia have been successful in containing the spread of HIV/AIDS in their respective countries due to structured information campaigns that worked through media and information providers. These procedures ensured those who were hard to reach and often out of school could access the information, understand it, and use it for their own benefit. Choosing to invest in skills presents substantial costs to young people. The obvious way to lift this constraint is to provide credit. Middle-income countries such as Thailand are only now starting to try such schemes, which are worth monitoring and evaluating. For countries with poorly developed income tax systems, alternatives such as targeted school vouchers and individual learning accounts, which encourage savings for education, may be better. The income constraint is binding in poorer countries even for secondary education. Young people, once resourced and informed, still have to filter and assess the information – so much more of it, given the Internet – and consider the consequences of their actions. The ability to process information starts to develop early in school. But many education systems fail because they emphasize rote learning of facts. Few emphasize thinking and behavioral skills that help individuals process information and come to sensible, informed decisions. Research from secondary schools in Thailand indicates that girls who study in single-sex environments do better in math and develop more leadership skills than girls in mixed-sex environments, a finding consistent with research in developed countries. Globally, more than 20 percent of firms in countries such as Algeria, Bangladesh, Brazil, China, Estonia, and Zambia, rate poor education and work skills among their workforce as ‘a major or severe obstacle to their operations.’ Overcoming this handicap starts with more and better investments in youth. “Most developing countries have a short window of opportunity to get this right before their record numbers of youth become middle-aged, and they lose their demographic dividend. This isn’t just enlightened social policy. This may be one of the profound decisions a developing country will ever make to banish poverty and galvanize its economy, ” says Manny Jimenez, lead author of the report, and Director of Human Development in the World Bank’s East Asia and the Pacific Department. One study attributes more than 40 percent of the higher growth in East Asia over Latin America in 1965-1990 to progressive policies on macro-economics, trade, education, healthcare, and vocational training, and the faster growth of its working-age population. Countries that miss this demographic window will find themselves lagging increasingly further behind in the global economy. The report says that most policymakers know that their young people will greatly influence their national social and economic fortunes, but nonetheless face acute dilemmas in how to invest more effectively in their youth. The World Development Report identifies three strategic policies that may enhance investment in young people: (1) Expanding opportunities, (2) improving capabilities, and (3) offering second chances for young people who have fallen behind due to difficult circumstances or poor choices. These address five fundamental transitions facing young people and affecting their whole economic, social and family life, namely getting an education, finding work, staying healthy, forming families, and exercising citizenship. • Opportunities—With broadened opportunities for better education and healthcare, young people can acquire the life skills to navigate adolescence and young adulthood safely, while improved vocational training will help them compete in the workforce. Youth political participation and involvement in social organizations is also essential for fostering young people’s civic life in their own communities and also vital for good governance. Without opportunities for productive civic engagement, young people’s frustrations may boil over into economic and social tensions, creating long-simmering disputes. For example, the ongoing ethnic conflict in Sri Lanka between Sinhalese and Tamils was initially caused by the frustration of Tamil students shut out of university places and denied other avenues for civic involvement. • Capabilities— Providing information to young people and developing their decision-making skills, especially to stay healthy and appreciate continued learning, is important. Armed with the right information and incentives, these young people can make good decisions. Analysis of India’s Better Life Options program, which provides information on reproductive and health services and vocational training to young females aged 12-20 in urban slums and rural areas, shows that youth in the program were significantly more involved in key life decisions than those who were not. • Second chances—Countries need targeted programs for young people who have fallen behind due to difficult circumstances or poor choices. These can be dropping out of school, drug addiction, criminal behavior, or prolonged unemployment. Second chances help young people rebuild their future, which has a long-term beneficial effect on society as a whole. Rehabilitation is costly, but the payoffs are highest for young people who still have a lifetime of potential productivity ahead of them. The report says that 300,000 young people under the age of 18 have recently been involved in armed conflict, and another 500,000 have been recruited into military or paramilitary forces. Experience with demobilization and rehabilitation programs shows that young combatants can reconstruct their lives with job training and also medical and psychological support. While many of these issues may not be solved easily, developing countries and their young people alike can take heart from dozens of examples where youth, supported by enlightened policies and public institutions, have not only coped but flourished. “Young people today have more education, experience greater political openness, and have increased contact with the outside world through television, the internet, and migration than any of their predecessors, and this can ease their transition into being the law-abiding, engaged citizens of tomorrow” says Mamta Murthi, co-author of the World Development Report 2007, and a Lead Economist in the World Bank’s Europe and Central Asia Department. Murthi says that channeling their knowledge and natural creativity can stimulate economic growth, and produce long-lasting beneficial effects which will have repercussions far beyond their generation. Put simply, they will influence the outcomes of the global fight against poverty over the next 40-50 years. | 
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