Transcript Of President Tharman Shanmugaratnam’s Fireside Chat At The Public Event Of The High-level Advisory Council On Jobs On 24 October 2024

Question: Ajay, in August of this year, the World Bank announced the creation of this Council. Can you tell me a bit about the motivation for creating this Council and why now?

Ajay Banga: I want to start by thanking both President Tharman Shanmugaratnam and President Michelle Bachelet. It’s not that these people have a lot of time on their hands, and they still decided to devote what time they don’t have, to enabling the bank to be a better player in what I think is a global challenge.

The issue at hand is that 1.2 billion young people in the emerging markets are coming through the pipe to become eligible for a job in the coming 15 years. Most people in the emerging markets, and most of us address that as a demographic dividend for these countries. And yes, it is a dividend. If, like you and me, they grow up with clean air, clean water, health care, and education, and when they are grown up, they get access to a job.

Because a job is not just income, it’s dignity. A job is not just dignity. It fights poverty. The best way to fight poverty, the best way to put a nail in the coffin of poverty, is a job and I think the reality of a job is that it enables you to lift your life and your family. That’s why they say poverty is a state of mind as much as it is a state of being. And that’s why we’re here together, to find a way for those 1.2 billion young people, of which the current emerging markets look like they’ll only generate 400 million odd jobs in the same countries, which means we’ve got a big gap.

And, you know focus on our destiny. But it will be destiny if we don’t do something about it. So that’s the purpose. How do we create the right enabling environment? How do we create the right capital. How do we create the right human capital, the right infrastructure and the right system for the private sector, particularly small businesses, which in turn are large generators of jobs? That’s the purpose of the Council. The World Bank has many assets to bring. We understand the public sector. We understand the private sector. We understand how to enable policies. But having an outside view from practitioners and from people who have done this with great success in their life, the two of them, with the Council that put together, is to me, my biggest asset. That’s why we’ve got this going and that’s why I want to thank them again for being here.

Question: I want to know a bit about your personal motivations as well. Why is now such an important time for you to be serving as co-chairs of this Council.

President Tharman: Taking off from what Ajay said. You know the three defining challenges of our times, of the next decade and the next 30 years. First, tackling climate change. Second, keeping an open rules-based international order, so we keep trade, investment and data flowing, and keep the peace.

But third, lifting the trajectory of job creation. If we don’t do that, it’s going to be very hard to sustain domestic support anywhere (for measures to tackle) climate change. It’s going to be very hard to sustain support anywhere for an open world order.

Tackling the three challenges depends on each other. But by the same virtue, they can’t wait for each other.

We have to give urgency to job creation, and the developing world is where the challenge is the largest. That’s where you have the youth bulge that Ajay spoke about, and that’s where you have the largest underemployment of women – low labour force participation of women, but also most women being mainly in the informal labour force where their career trajectories are flat; they stay as helpers or operators reporting to male supervisors. A huge wastage of talent.

Jobs must therefore be seen as a defining challenge, that we give whole of government attention to within countries and we give international attention to.

Some of the issues that we have to address are not new. They are about what has worked well in the past in some parts of the world but are not being replicated in other parts of the world – in education, skills development, in the way in which we run an economy where the private sector job creation is enabled.

But there are also new challenges:

• Like that coming out of the AI revolution, and more broadly, the digital economy – and how we must prevent an extreme divide internationally.

• The challenge of decarbonisation – how that too must become an opportunity to create new jobs.  

• And the challenge of adjusting to new global value chains, which are not disappearing but are being reorganised. And in this new global context, what do nations in Africa, Asia, and Latin America do to plug themselves into global markets and get onto a learning curve.

I’ll make another point. Success in job creation, success in an economy, is not about reaching an end state. Success is a process. Success is about getting onto learning curves – enabling workers and firms, and clusters of firms within an industry, to learn by doing; skills begetting skills, and moving up the value chain over time. Success is about rising aspirations, and about changing the political economy of a country so that policy makers are rewarded for reform and for keeping an economy inserted in the global economy, rather than closing in on themselves.

Question: President Bachelet, let me turn to you quickly. I know that during your tenure, you worked on implementing a series of policies that were aimed at better infrastructure, supporting job growth. Tell me a little bit about what you learned during your presidency that you’re now bringing to the council, and why now is such an important topic.

Michelle Bachelet: Well, first of all, a little about my motivation to be here is because I’ve always been, I would say, a championing development and also fighting poverty and trying to alleviate also hunger and poverty. And I think that Ajay and President Tharman already mentioned a lot of factors. I’m not going to repeat that, but I do believe that job creation is essential on human dignity and respect and self-esteem, but also in terms of the possibility of getting out of that situation.

There’s a lot of challenges that we want to talk afterwards about that, and we have been speaking with the Council about that. But I think it’s mainly because I also believe that the biggest problem with underemployment, unemployment, informality is from women. It has a gender perspective that is essential, that has motivated me. In terms of – you asked me now what I have learned in my experiences in government that could help me.  It’s not a job, but this is a responsibility. I accepted it because I feel that in my experience as a minister, on one hand, as President twice, as High Commissioner for Human Rights and as UN Women Executive Director, I had to deal with many of these issues.

During the crisis, the economic crisis, we had a lot of people who got unemployed, and we have to think of new ways of how to produce jobs, create jobs with the private sector. Of course, some in the public sector, but majority of the private sector, but also, we have to think of people, how we can improve the possibility of people who are not very skilled, but they could improve their capacity and skills, and we did a lot of programmes on that as well in my country. And also, we thought on how we can support education quality on vulnerable children who could have not very quality education, but how we took them, support them so they could get into higher education, and they could really have better opportunities. I would say there’s a lot more things that I could say. Even though I’m a Latin American, I will respect the time. I won’t speak so long. Thank you.

Question: I understand the three of you just came from the first Council meeting. Could you tell me, and I’ll start with President Tharman, a bit about the Council’s membership, some key takeaways, and what you discussed today?

President Tharman: There are 18 members of the Council, spread across all regions and equally in gender, and bringing valuable experiences in policymaking, a range of business sectors, NGOs and academia.

We’ve had a very good first discussion on the key barriers to job creation, and what are some of the initiatives required. There’s no silver bullet to job creation, but there are solutions, and clusters of solutions from, one place that have to be adapted to another. And we have to learn as we go along – don’t let perfection get in the way of continuous adaptation, because that’s what success in job creation is about.

Question: Thank you, President Tharman. President Bachelet, any other key takeaways from today’s meeting?

Michelle Bachelet: The group that has been organised is really a very interesting one because many of them even say things that make me think about the way I have been thinking about jobs. I mean, because sometimes my normal way will be say, we have to finish all informality and we need to formalise. But I heard things that were really interesting. So, I would say, I think this is a very challenging task, but I think the group is fantastic. Some takeaways, I would say that we were able to identify which sectors create more jobs. And that means that we have to think. We also were able to understand and identify that obstacles were not the same in every country. So maybe we need to think on some special countries to think what they can get from them because situations are very different from some regions to other regions or inside each region. And we need, I would say to try to, as President Tharman said in the meeting, to find new ways, but also to continue working on ways that are being done, but it should be expanded, multiplied. So, I will finish there because I think there were many, many things, but we’re just starting. We need a lot of work to do in the future.

Question: Ajay, my last question is for you. So, we’re talking about the creation of jobs, but can you tell me a bit more about the quality of jobs. Do you think there’s such thing as a good job?

Ajay Banga: I mean, all jobs are good because jobs give you dignity and earnings. Some jobs are better than just good. Everybody wants to climb up the ladder of a good job. I think President Tharman today in the session made a really good point about the ladder, which has been in my mind for a long while. To climb a ladder, you have to get your hands on the bottom of the ladder so you can climb the rungs. I think what we have to do is to be careful to not prejudge everything from one eyesight, but to remember, the alternative of not having a job is a really poor alternative for young people and women. It’s not just a working job, it’s entrepreneurial opportunities.

Michelle is a great supporter of gender. We were talking along with a few other members, we’re going to be launching a great gender event tomorrow. One of the things we’re talking about, and Mamta is leading this for us, is the question of getting financing to women for entrepreneurship. Women entrepreneurs employ women as well. They liberate the idea of getting more women a chance to be productively employed in our society and our system.

There’s many things about jobs that I don’t want to qualify into good and bad, formal and informal, good and better. I want to first start with jobs. I want to start with the dignity of a job, and then I want to work our way up that ladder to always improve a person’s chance. The process that President Tharman talked about, the process is as important as the end. That’s where we’d like to go.

Question: President Tharman looks like you have something to add.

President Tharman: Three low-hanging fruit. First, tackle childhood stunting. The World Bank has been pointing this out. Several countries are now taking it seriously. In my part of the world, Indonesia, for instance, is now rolling out a nationwide nutrition plan.

Childhood stunting is a huge problem. A third of kids up to age five in low-income countries suffer from stunting, and a quarter of those who are in low and middle-income countries. . It’s about individuals having their life’s potential reduced, and about whole nations having their potential reduced. It can be tackled. We know what has to be done in nutrition, maternal health and early childhood upbringing.

Second, low-hanging fruit – the quality of education. Not just quantity, not just tracking the number of years of schooling that boys and girls put in. Again, the World Bank has been pointing this out. Learning poverty is still a huge issue. In many parts of the developing world, among kids in grade five, half of them do not have the basic reading and arithmetic skills that grade two students should have. Tackle quality – through teacher training, how we organise recruitment of teachers, and how you incentivise them. Tackle quality, not just quantity.

A third issue. The massive mismatch of skills. It’s not just a developing country problem. It’s a problem in the United States, in the UK, everywhere. But it’s a huge problem in the developing world. That mismatch of what people are trained for compared to what is in demand in the market, which can defeat aspirations.

Again, it can be fixed. We have to close the gap between employers and educational institutions. By increasing internships, increasing what’s called the dual education mode, where people study and work at the same time. And by using technology itself where possible to close the gaps between what employers need and what people get trained for – by getting a lot more granular information on what employers need, and feeding it into curricula in training institutions. Some countries are trying it out with some success, and it needs to be replicated.

Essentially, we need fairly wholesale reform in tertiary education and in skills development systems around the world to tackle this mismatch of skills.