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Trade can generate more jobs in Southern Mediterranean countries: ILO report

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Even though current crises have disrupted supply chains and severely impacted the volume of international trade and investment, they also have generated new nearshoring opportunities, which might benefit countries in the Southern Mediterranean by boosting export opportunities across different sectors says a recent ILO report.

According to The Impact of Trade and Investment Policies on Productive and Decent Work countries in the region grew by about 4 per cent in 2019 and experienced a significant economic slump due to the global COVID-19 pandemic.

The region is weakly integrated into the global economy. In 2019 the Southern Mediterranean countries accounted for less than 0.1 per cent of the global exports and for about 1 per cent of the global import of goods.

Foreign direct investment can often result in technological upgrading in host countries. However, despite significant reforms, the region’s success in attracting foreign direct investments has been limited, and this in turn has restricted growth.

The region is also characterized by low labor force participation rates, high levels of unemployment and informality, and inadequate creation of quality jobs. Women in the region face challenges in joining the labor market. Despite high levels of education, the female labor force participation rate is one of the lowest in the world. In 2019, just 22 per cent of women were in the labor market, compared to a global average of 47 per cent.

Another characteristic of the region is the high proportion of young people. More than a quarter of the population is aged 15 to 29. However, they struggle to secure quality jobs and develop their potential. Increasing and improving employment opportunities, in particular for youth, women, and in small and medium-sized enterprises, would help to improve the region’s economic prospects.

The report concludes that a more effective integration of employment issues into trade and investment policies can result in a more equal and even distribution of economic gains. Promoting dialogue and increasing technical cooperation can also play an important role and help to strengthen regional integration.

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