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CARTEGENA, (CMC) – A new joint report by the Development Center of the Organization for Economic Co-operation and Development (OECD), the United Nations Commission for Latin American and the Caribbean (ECLAC) and the Development Bank for Latin America (CAF) says that regional Gross Domestic Product (GDP) will shrink by between 0.9 per cent and one per cent this year.

ECLAC says this will be the second consecutive year of negative growth and a rate of contraction the region has not seen since the early 1980s.

According to the Latin American Economic Outlook 2017, the region should, however, recover in 2017, but with modest GDP growth of between 1.5 per cent and two per cent, still below expected growth in advanced economies.

The report says the prolonged economic deceleration could jeopardize the region’s socio-economic progress.

opportunities to ignite economic growth and build a solid basis for long-term progress.
The Outlook shows how social, ethnic, gender and geographical conditioning impacts individuals.

It says nearly 30 million young people in the region are neither working nor engaged in education or training (NEET), which is 21 per cent of the people in this age group, compared with 15 per cent in OECD countries.

It says another 19 per cent of youths are in informal jobs.

The report notes that women are particularly disadvantaged, making up 76 per cent of NEETS and occupying mainly unpaid jobs.

It adds that at least six out of 10 youths living in poor households are NEETs, or working in the informal sector, and four out of 10 youths living in vulnerable middle-class households are NEETs, or in informal jobs.

This compares to only two out of 10 from middle-class households, ECLAC said.

“The region can gain from better including youth and offering quality education, skills and entrepreneurship opportunities in order to foster growth and inclusion,” said Alicia Bárcena, ECLAC’s Executive Secretary, at the launch of the report here at the 25th Ibero-American Summit.

“The lack of good employment opportunities and the poor transition from school to work are hindering youth inclusion and disappointing expectations in our region,” she added. “Too many young people are left out of access to public services, savings and social mobility.”

Although education in Latin America and the Caribbean has improved significantly in the last decade, the report says few students advance far enough up the education ladder to be productive later in life.

The report says two out of three young people are not equipped to meet labor market needs for sophisticated technical, professional and management skills.

At the same time, it says 50 per cent of formal firms in the region report having difficulty filling jobs, compared to 36 per cent in OECD countries.

The report says countries must identify low performing students, improve the transition to higher levels of education and strengthen technical education and training.

“Training programs should combine classroom and workplace learning to transition to formal jobs.”

In this context, the report says 26 per cent of young entrepreneurs turn to entrepreneurship out of necessity, “because they have no better options for work,” compared with 16 per cent in OECD countries.

The report says barriers to entrepreneurship are 59 per cent higher in Latin America and the Caribbean than in the OECD on average.

“The integration of young entrepreneurs in the region into global value chains is still limited, and they face challenges accessing financing, improving capacity building, developing business networks and an entrepreneurial culture, accessing new markets, and overcoming regulatory barriers, even more so than their adult counterparts,” the report says.

The Outlook recommends multi-dimensional policy support, such as complementing micro-credits with lower regulatory barriers, linking young entrepreneurs with business networks, and expanding managerial and financial training.

“Supporting access to broadband services, infrastructure and affordability to help youth make the most of the digital economy is also paramount,” ECLAC said.

“Policy makers need to collect information and evaluate youth programs to design policies taking on board the current technological, political and social transformations that are metamorphosing the world of work and the environment, notably cities where 9 out of 10 youths in LAC (Latin America and the Caribbean) will live by 2050,” said Enrique García, CAF President and Chief Executive Officer.

“At the same time, these investments should be programmed within a credible and sustainable fiscal framework,” he added.

For more on this story go to: http://m.jamaicaobserver.com/mobile/news/New-report-says-regional-GDP-will-shrink-in-2016