Göran Hultin, CEO Caden Corporation and Vice- Chair, World Economic Forum s Global Agenda Council on Migration Local Content and Diasporas Side Event IDM 2013 : DIASPORA MINISTERIAL CONFERENCE International Conference Centre Geneva (CICG) 18 June 2013 Leveraging local content policies for broader economic development
Overview High demand for natural resources driving new finds and investment Public policy concerns to ensure resource exploitation benefits local economy and citizens Risks with some short-term, narrowly defined policy options What can go wrong labour market distortion How to get it right - examples Conclusion and takeaways
Global demand boon for raw material rich economies but short term policies lead to labour market distortions and loss of economic opportunity Capturing broad based opportunities requires broad based policies for jobs and growth for economywide development for new skills for new jobs to draw talent from the indigenous workforce, diaspora and migrant workers
Inter-sector labour mobility from service to oil & gas Alberta 2006 Labour Shortage Labour Surplus Business, Building and Other Support Services Information, Culture and Recreation Accommodation, Food Services Retail Trade Educational Services Othere Services Transportation and Warehousing Professional, Scientific and Technical Services Health Care, Social Services Financial, Insurance, Real Estate and Leasing Public Admin Wholesale Trade cross sector hiring Services Producing Sector 2.5% Construction Mining, Oil and Gas Extraction Manufacturing Utilities Forestry, Logging and Support Activities Agriculture 0 1 2 3 4 5 6 7 8 9 Unemployment rate Goods Producing Sector 3.0% Source: Alberta Employment, Immigration and Industry 2007 Labour Market Outlook
In absence of access to right skills Employers fill jobs with under-qualified staff Alberta 2006 Attempts to solve hiring difficulties Recruited outside of Canada Other Recruited outside province Acquired new technology Im proved training Use overtim e Hired tem porary help Im proved salary/benefits Ignored new business opportunities Passed responsibilities to other com panz Hired under qualified people 0 10 20 30 40 50 60 70 Source: Alberta SME Survey
Oil & gas leads in economic growth but not in labour productivity Alberta 2006 Declining labour productivity Agriculture, fishing, forestry and hunting -30.65-30.25 Mining, oil and gas Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information and cultural industries FIRE Professional, Scientific and Technical services Administrative, support services, waste management Educational services Health care and social assistance Art and entertainment Accommodation and Food services Other services Public administration 5.21 22.66 13.22 29.17 5.12 10.42 0.32 18.7-1.6 10.76-8.21 12.79 36.34 29.22 72.58 79.27 per worker per hour -60-40 -20 0 20 40 60 80 100 Source: Centre for the Study of Living Standards
Thousand togs (at 2005 constant prices) Oil & gas leads in economic growth but not in labour productivity Mongolia 2007 Labour Productivity, Mining Sector Mongolia 17,000 16,800 16,600 16,821 16,595 Mining and Quarrying 16,400 16,200 16,000 15,800 15,822 15,600 15,400 15,200 2004 2005 2006 2007 15,267
Conclusion Capturing broad based opportunities requires broad based policies and understanding cross-sector economic and employment linkages the transition from project activity to ongoing operation how to respond to short-term specialty skill needs while building skill base for a longer term economy wide development
Takeaways Mainstream migration in development: use local content to drive diaspora engagement (skills and investment) Policy coherence: diaspora ministers need to be round table with colleagues devising comprehensive solutions to development challenges Work with private sector and diaspora: find durable solutions Think outside national box: regional approach to supply side local content challenges?