As global economy moves ahead on the path of recovery, Finance Minister Pranab Mukherjee has asked G-20 countries to push for policies that create jobs and step up efforts to support investment in real sector.
On the sidelines of the Spring meeting of the IMF and the World Bank, Mr. Pranab said credible action for both short and medium-term policies to create jobs and employment needs to be a cornerstone of the G20 Framework.
Mr. Mukherjee said there is general concern over the global employment scenario, especially the falling labour participation rate and growing youth unemployment.
“Leaders had consequently tasked us to mainstream jobs and employment issues into the framework exercise. Persistent high unemployment tends to have significant long-lasting detrimental impacts on the economy, holding back economic recovery further, adding to social tensions and adversely affecting productivity and growth in the medium to long-term.”
The Finance Minister said the world has been pre-occupied with dealing with the problems in the financial sector, which was need of the hour.
“However, keeping in view the emergent situation, some members have been stressing the need to step up efforts to support investment in the real sector, and especially in infrastructure, at a global level to help revive global growth and support demand and job creation,” he argued.
“This route to reviving global growth has not received the attention that it merits. To the extent that much of this investment, including in infrastructure, will occur in developing countries, it would also help rebalance global demand, as also, redirect savings,” he said.
Some developed countries also need to increase investment and upgrade their infrastructure, he added.
“While construction works would stimulate local growth and job creation, the large demand for capital goods created for modern infrastructure would also stimulate private investment and job creation globally,” he said.
G-20 countries, he said, will need to develop a framework to assess the progress made on G20 commitments.
“Since the time between the Cannes and Los Cabos Summits is quite short, this would be an important component of our Action Plan. It is also critical for our own credibility in the eyes of the world,” he said.
The Framework Working Group has indicated that assessment in some areas is complicated by the lack of a common framework to assess progress, he said.