How can informed sector and trade policies support more and better jobs?

Accessing a decent job is the main route out of poverty. Yet, while recognising the need to create jobs to cover growing numbers of young people entering labour markets, policymakers are not always familiar with methodologies to promote job creation.

A specific EU funded project called “Strengthening the Impact on Employment of Sector and Trade Policies (STRENGTHEN)” is working to increase the capabilities of partner countries to analyse and design sector and trade policies and programmes to enhance the creation of more and better jobs. 

The project has developed tools and methods for assessing the impact on employment globally. The first phase focused on nine developing countries, where it has built the capacity of stakeholders to apply these tools.

The STRENGTHEN project implemented by the International Labour Organization (ILO), focused first on Benin, Ghana, Guatemala, Honduras, Cote d’Ivoire, Morocco, Myanmar, Philippines and Rwanda. Taking the examples of Guatemala and Morocco, this article explores how the project contributed to creating more and better jobs. 

The first step of the STRENGTHEN project was to identify key sectors for each partner country. For Guatemala, the selected domain of activity was the textile industry and for Morocco the automotive business.

Empowering the textile industry in Guatemala

Despite economic stability, poverty and inequality in Guatemala are still very high, with indigenous peoples and women among the most vulnerable of all. Economically, the textile industry is an important one, and it employs a vast majority of women of which many live and work in rural areas. “This is one of the most important sectors and primary target group that needs to be strengthened”, said ILO senior researcher for Guatemala Claudia Vasquez. According to her, “One of the methods proposed to measure and assess the effects on job creation (for this key area in Guatemala), is part of a project activity called ‘Trade and Value-Chains in Employment-Rich Activities’ (TRAVERA).  Its main objective is to identify opportunities and threats in the export value chain.”

Watch the following interview with Claudia Vasquez in which she outlines the research she led for the ILO-EU funded project.

The recommendations issued from the TRAVERA study will generate activities in various sectors with the support of the government. It will include public and private sectors, academia and groups of artisans, with the goal of repositioning the textile industry on the export market. By doing so, it aims at achieving decent work conditions for rural and indigenous women and preserve their colourful and ancestral embroidery techniques, which is one of Guatemala cultural and touristic flagship.

Boosting the automobile industry in Morocco

In Morocco, one of the strategic sectors is the automotive industry, with the main investments coming from the French car companies Renault-Nissan alliance and PSA Peugeot-Citroën group. This is the first export market for the country. The industry is nevertheless one of the most affected by competition and recent free-trade agreements. 

To make this sector more competitive, the STRENGTHEN project recommended to increase digitalisation, build workers’ capacities, and adapt to the current flexible working environment. “Today's skills do not meet tomorrow’s jobs requirements (in Morocco)” explains ILO senior researcher, Fatima Idahmad. 

In the following video, Fatima Idahmad explains the impact of the STRENGTHEN project for Morocco.

One of the key findings of the research on Morocco was that certain segments of the local production chain are not sufficiently connected to each other and that the final product still depends on imported material made by more qualified workers abroad. “We need to fill in this gap and we now know what to do”, concluded Fatima Idahmad.

Towards a second phase 

The tools and methods developed by STRENGTHEN contributed to enhance the implementation of national employment policies in targeted countries. The second phase is currently under development and will build on the first phase methodologies.

The new programme will focus on the employment impact of investment in Africa. With investment becoming a more important instrument for DG DEVCO, there is a need to better assess and understand mechanisms of job creation. As such, STRENGTHEN 2 will enhance job creation in Africa through investment supported by the European Commission.

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