Shame on Youth if termed as "Wasted"

Whether you believe it or not but Youth manpower across the European Union, specifically of UK, has been termed as 'wasted' by The Economist magzine in its latest Intelligence Unit. In my opinion, if youth of any country is totally dependent to get a job in govt/public/private rather to become self employed will always be wasted material rather than a "empowered manpower" Read the summary of the same

Courtsey:-The Economist 

MIND THE EMPLOYMENT GAP

High youth unemployment threatens long-term competitiveness in the UK

Youth unemployment has surged across Europe since the 2008‑09

global financial crisis, in what the German chancellor, Angela

Merkel, has described as “perhaps the most pressing problem

facing Europe at the present time.” In the UK, nearly 1m young people

(aged between 16 and 24)—or one-fifth of the youth population—are

jobless. The crisis is not just affecting individuals and society today,

but it also threatens the long-term growth and competitiveness of the

British economy.

“Young people are the future generation,” says Lena Levy, head of labour

market policy at the Confederation of British Industry, a business

lobbying group. “If they disengage, businesses eventually will have

problems recruiting. The economic costs to the country are there.”

Youth unemployment is a “time-bomb under the nation’s finances”,

concludes a 2012 report by the Association of Chief Executives of

Voluntary Organisations Commission on Youth Unemployment. It estimated

that, at current levels, the “scarring effects of youth unemployment”,

including higher welfare benefits paid out and lost potential

tax revenue, would cost the exchequer £2.9bn (US$4.8bn) per year

and result in annual lost output to the economy of £6.3bn. “The net

present value of the cost to the Treasury, even looking only a decade

ahead, is approximately £28bn,” the report said.

Meanwhile, a UK-based youth charity, the Prince’s Trust, has put the

cost of lost productivity to the UK at as much as £133m (US$220m)

per week, and for youth crime at £1.2bn a year.

Other costs are harder to quantify. Studies have shown that young

people who have been long-term unemployed experience more ill

health later in life and become more susceptible to committing crime.

Widening inequality can increase social tension and instability.

Furthermore, given the greying of Britain’s workforce, the presence of

a large group of unemployed in the new generation could undermine

the financial health of government welfare programmes and weaken

the talent pool for businesses.

“Being unemployed at a young age tends to have a big effect later

on,” says Glenda Quintini, a senior economist at the Paris-based OECD,

a club of rich countries. “Skills unused can deteriorate. [Unemployed

youths] can drift into inactivity and become disengaged. This is a very

big problem for business, because human capital is the no. 1 input.”

Youth unemployment is not a problem only in the UK. A recent report

by a global consulting firm, McKinsey & Company, notes that 75m

young people are currently unemployed around the world, and that, if

estimates for the number of underemployed were included, the total

would triple. In countries such as Greece and Spain, youth jobless

rates exceeded 50% in 2013. Poor economic prospects do not translate

only into high unemployment rates, but can also become reasons

to emigrate. In Ireland, where the economy has stagnated for most of

the past five years, well-educated young people are leaving in large

numbers. A study by University College Cork found that up to 62% of

emigrants aged between 24 and 34 have completed tertiary education,

compared with 47% for the rest of the same age group.

Even when the UK economy was booming before the crash, a growing

number of young people struggled to find work. Terence Tse, an

Written by The Economist Intelligence Unit

SUPPORTED BY

associate professor of finance at the London campus of the ESCP

Europe business school, says that one reason for this trend was

that youths lacked the basic skills that employers sought. “But the

economy was growing fast enough to absorb whomever,” he says.

This situation changed in the wake of the 2008‑09 global financial

crisis. As companies scaled back and cut jobs, first-time jobseekers,

still lacking basic skills, struggled even more to find work. Young

people who were already employed often became the first to be made

redundant, as they had less experience and the least seniority. The

number of jobless youths and NEETs—a term first coined in the UK

in the 1980s, referring to young people who are “not in education,

employment or training”—surged.

Recently, the UK economy has started to grow again, expanding by

an estimated 1.9% in 2013, and The Economist Intelligence Unit

forecasts that growth will accelerate to 2.5% this year. The overall

jobless rate has also improved, falling to 7.1% for the three months

ending November 2013, the lowest level in more than three years

(compared with 8.4% in 2011). The effects of the economic rebound

have been slower to accrue to those in the 16-24 age category, with

the unemployment rate for this group easing by 0.5 of a percentage

point to 20% compared with the previous year. This compares with an

unemployment rate among 25‑34 year olds of 6.7% between September

to November 2013, down from 7.5% for the same period in 2012.

Tony Dolphin, the associate director for economic policy at the Institute

for Public Policy Research, a London-based think-tank, says that

there is likely to be a mix of reasons for this, but he believes that the

main factor is the shifting structure of the workforce. “Due to globalisation

and technological changes, jobs that young people would be

recruited for have disappeared,” he says. These include manufacturing

jobs that have become mechanised or shipped overseas.

The government has introduced a number of policies and programmes

to address youth unemployment, but—say critics—with mixed success.

The administration has gradually raised the age for full-time compulsory

education to 18 by 2015. Jobcentre Plus, a service offered by the

UK Department for Work and Pensions, provides assistance with job

searches and building curricula vitae (CVs). However, “more intensive

support is needed for young people” says Sue Maguire, a professor at

the University of Warwick.

In addition, the government has made significant funding cuts which

have affected many programmes, including one that tracks under-18

NEETs, notes Professor Maguire. In January 2014 the prime minister,

David Cameron, suggested that he favoured reforms that would

require those under 25 to take up work, education or training, or face

losing their housing benefits and jobseeker’s allowance.

Companies are also stepping in to tackle the youth unemployment

problem, inspired by Germany’s youth apprenticeship programmes.

Close collaboration among businesses, educational institutions and

the government has resulted in Germany enjoying the lowest youth

unemployment rate in Europe. Barclays, a London-based financial

services company, has established its own apprenticeship programme

to recruit and train underprivileged youths. Other companies are

working with schools or the government to review curricula, and explore

how they might better arm graduates and apprentices with the

skills needed in the current labour market.

Business in the Community, a non-profit organisation that promotes

corporate responsibility among multinationals in the UK, has helped

to mobilise the hospitality sector to create 130,000 apprenticeships,

work-experience placements or job opportunities for young people,

backed by government funding.

Multinationals, in any case, tend to have their pick among top graduates

when recruiting, as well as the manpower and budget to provide

on-the-job training. Economists say that small- and medium-sized

enterprises are more likely to be hurt by the country’s high youth

unemployment rate; these companies are more likely to hire from the

pool of youths who do not continue into higher education.

Ultimately, however, everyone loses. Professor John Van Reenen, the

director of the Centre for Economic Performance at the London School

of Economics, says that companies might temporarily benefit from

high youth unemployment rates, as wages decline. But, in the long

term, “if fewer people are looking for jobs, wages go up.”

About the sponsor

learndirect is one of the largest integrated providers of Apprenticeships,

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ROLE OF BRICS IN GLOBAL ECONOMIC DEVELOPMENT

BRICS Ready For Cementing Position in Global Economic Landscape

Leaders from Brazil, Russia, India, China, and South Africa - collectively known as the BRICS - formally announced today their plans to launch a new development bank, in what analysts say is a move to reduce the group’s dependence on the Bretton Woods institutions. The two-day meet, held in Durban, South Africa, also raised issues such as the impact of developed country monetary policy on trade, and the importance of the next WTO chief being from a developing country.
The 26-27 March gathering - the fifth in as many years - led to the eThekwini Declaration, named after the municipality that includes Durban and its surrounding towns. The event marked the first time that the summit was held in Africa.
The final document outlines the importance of cementing the BRICS alliance further: aside from sharing an acronym, the five emerging economies have often found it difficult to reach common ground on various topics, and have varying political and economic characteristics. For instance, the inclusion of South Africa into the group just two years ago had been greeted with scepticism by some observers, as some noted that its size as an economy does not match up with its counterparts in the group.
“We aim at progressively developing BRICS into a full-fledged mechanism of current and long-term coordination on a wide range of key issues of the world economy and politics,” the final statement said, adding that today’s global governance architecture is run by institutions that were established during a different era.
“We meet during a critical time where stronger South-South trade is more compelling, with the most dynamic emerging economies leading a structural shift in the global economy,” South African President Jacob Zuma said during the event.
The BRICS together account for approximately a quarter of global GDP and 40 percent of the world’s population.
BRICS agree to establish development bank, disagree on details
The highlight of the two-day proceedings was the long-awaited announcement of whether the BRICS would be establishing their own development bank, after the group’s finance ministers were tasked last year with evaluating the idea’s feasibility.
The goal, leaders said at the time, would be for the bank to “[mobilise] resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.” (See Bridges Weekly, 4 April 2012)
The planned development bank “is feasible and viable,” leaders confirmed in a statement on Wednesday. Such a bank would “supplement the existing efforts of multilateral and regional financial institutions for global growth and development.”
However, officials speaking earlier during the summit admitted that various key details remain to be worked out before the proposed bank can become fully operational - a process that is expected to take years. For instance, disagreements have already surfaced among the BRICS on the specifics of the bank’s mandate, and how exactly the institution would be financed.
While members ahead of the gathering had said that the five countries would together contribute a total of US$50 billion of capital into the proposed institution, that number has reportedly been scaled back, and how much each individual member would give was also left unclear. Where the bank will be located was similarly left undecided during this week’s meeting.
The proposed development bank is widely being seen as an effort by the BRICS to limit their reliance on the World Bank and International Monetary Fund (IMF). The five-country group has long argued that the two international finance institutions need a substantial overhaul with regards to their governance structure - a stance that BRICS leaders reiterated in Wednesday’s communiqué.
Some analysts suggest that establishing their own bank could also allow the BRICS to place added pressure on existing international organisations - such as the IMF and World Bank - to give them more weight in decision-making processes.
The plans for a BRICS development bank have so far been welcomed by the World Bank. “Establishing a development bank is a significant undertaking,” the Washington-based institution said in a statement. “The World Bank will stand steady and work closely to partner with regional development banks in a bid to enhance the effectiveness of our collective work.”

Trade
With regards to trade, the final statement focused largely on the ongoing preparations for the WTO’s upcoming ministerial conference, which is scheduled for 3-6 December in the Indonesian island of Bali. The global trade body’s 159 members are currently trying to negotiate a small package of deliverables from the broader Doha Round of trade talks in time for the high-level event, after the overall discussions were formally declared at an impasse in late 2011. (For more on the Bali preparations, see related article, this issue)
“We are committed to [ensuring] that new proposals and approaches to the Doha Round negotiations will reinforce the core principles and the developmental mandate of the Doha Round,” BRICS leaders said. “We look forward to significant and meaningful deliverables that are balanced and address key development concerns of the poorest and most vulnerable WTO members.”
The ongoing race to replace WTO Director-General Pascal Lamy, who steps down from his post at the global trade body in August, was also referred to in the final communiqué. BRICS leaders stressed that his successor will need to show a “commitment to multilateralism and to enhancing the effectiveness of the WTO, including through a commitment to support efforts that will lead to an expeditious conclusion of the [Doha Round].”
In addition, the new global trade chief should be from a developing country, the five leaders said, though they stopped short of jointly backing a particular nominee. Of the nine candidates currently lobbying for the WTO role, eight of them are from members that are self-designated as developing countries, and one of them - Brazilian WTO Ambassador Roberto Carvalho de Azevêdo - is from a BRICS country.
A separate statement by BRICS trade ministers released on Tuesday gave additional details on the group’s concerns for the multilateral trading system. For one, it reiterated the group’s worry over “initiatives that might undermine the coherence of the Doha Development Agenda and that deviate from the principles of multilateralism,” in an apparent reference to some efforts - such as the discussions among 21 WTO members over a possible plurilateral deal on services- that are being pursued among subsets of the global trade body’s membership.
In addition, the WTO’s “single undertaking” principle, and the development mandate of the negotiations, must be respected, trade ministers said, as the global trade body continues its efforts to move the Doha talks forward.
Rich country monetary policy draws fire

Developed country monetary policy also came under scrutiny during the Durban gathering. Central banks in the US, EU, and Japan have faced criticism from some trading partners in recent months over their decisions to undertake additional rounds of monetary easing, which have sparked fears of a “global currency war.”
Many have argued that the moves by these central banks can create exchange rate misalignments that can effectively make developed countries’ exports more competitive than those of their trading partners. Advanced economies, meanwhile, have noted that these efforts are aimed not toward bettering their terms of trade, but at advancing domestic policy objectives such as reducing unemployment or fighting deflation.
“Central banks in advanced economies have responded with unconventional monetary policy actions which have increased global liquidity,” the BRICS leaders said.
“While this may be consistent with domestic monetary policy mandates, major central banks should avoid the unintended consequences of these actions in the form of increased volatility of capital flows, currencies, and commodity prices, which may have negative growth effects on other economies, in particular developing countries.”
Foreign reserves, currency swaps
In another move ostensibly aimed at reducing dependency on the IMF in a crisis, the five-member group agreed to establish a “BRICS contingent reserve arrangement” - essentially an exchange pool of foreign reserves aimed at ensuring financial stability and dealing with short-term liquidity problems that might arise. The idea was first tabled in April 2011. (See Bridges Weekly, 20 April 2011)
Earlier this week, Brazil and China inked a deal that would allow them to conduct up to US$30 billion of trade in their local currencies, rather than having to use the dollar or the euro as they have done in the past. The deal would be valid for the next three years.
ICTSD reporting; “Group of Emerging Nations Plans to Form Development Bank,” THE NEW YORK TIMES, 26 March 2013; “Deal on development bank eludes BRICS nations at summit, REUTERS, 26 March 2013.