WASHINGTON (Reuters) - The International Monetary Fund is rethinking how it reviews national economies after being criticized for glossing over high unemployment in countries such as Egypt where it led to political uprisings.
John Lipsky, the IMF’s first deputy managing director, in an acknowledgment of the societal costs of joblessness, said the Fund would include an analysis of employment issues in future assessments of its member nations’ economies.
“We think these are very important issues that need to be looked at, and not just in cases where it might result in political turmoil, but just as a matter of course in examining economic developments and policies,” he told Reuters Insider.
Until now, the IMF has not focused heavily on how policies impact employment in member countries, instead leaving that area largely to the International Labor Organization and the World Bank.
But protests against unemployment, corruption, poverty and repression that have flared in Egypt, Tunisia, Jordan, Yemen, Algeria and Sudan have highlighted the problem, especially among youth.
The World Bank focused on job-creation measures in its new strategy for sub-Saharan Africa released last week, cautioning that between 7 million to 10 million young people enter the job market each year in the region.
Lipsky noted that a regional report produced by the IMF last year highlighted high unemployment, especially among youth, as one of the big challenges for the Middle East and North Africa. It called for reforms in the employment sector to create a more equitable approach.
“We have gone back and asked ourselves, Should we set a standard of analysis of employment issues in all our country reports, rather than leaving it to be decided if in this case it’s important, and that case it is not?” Lipsky said.
“We’re looking to see if we should be standardizing our approach in that regard to make sure that these issues are clearly highlighted, even if we ourselves don’t have any expert prescriptions on how to make the labor market work better,” he added.
Lipsky said the IMF was closely monitoring developments in the Middle East and North Africa, saying, “It has been very surprising to everyone.”
“That is a region where the challenges in the near-term are going to be significant, but also perhaps let us hope these changes produce opportunities for progress that is beneficial for the citizens of those countries,” he added.
(For video on Lipsky's comments on countries reports, see: here)
Writing by Lesley Wroughton; Editing by Leslie Adler