WB Rep Flags Economic Diversification As Golden Ticket For Job Creation And Stability

(MENAFN- Trend News Agency) ALGIERS, Algeria, May 22. Economic diversification is a critical factor for creating jobs, reducing economic instability, and ensuring fiscal sustainability, said the World Bank's Director for the Maghreb and Malta, Ahmadou Moustapha Ndiaye, Trend 's special correspondent reports.

Speaking during a panel discussion on "From Vision to Action: Economic Diversification as a Lever for Structural Transformation" at the Annual Meetings of the Islamic Development Bank (IsDB) Group in Algiers, Ndiaye stressed the urgent need for action.

"I would like to start by launching an alert message so that there is a sense of urgency. Because today, when we look at the next ten years, there will be 1.2 billion young people who will enter the labor market. The estimates of the World Bank show that we will create, if we maintain the current pace, even more than 70 million jobs. So there are 800 million young people who will enter the labor market and who must find work. So there is a sense of urgency. This is where I would like to evoke the dynamics and the importance of economic diversification," he emphasized.

Ndiaye suggests that economies with a bit of variety in their mix are in a better position to roll out the welcome mat for job creation, draw in private investment, provide steady work, and slip seamlessly into the global value chains.

"In some countries there has been a shift in employment in agriculture towards sectors of higher added value. These are countries that have allowed productivity to create a much higher participation rate in employment and to create jobs," he noted.

She also highlighted two additional key aspects of diversification: reducing economic volatility and strengthening fiscal stability.

"We have seen that economies that are diversified are less volatile. In fact, economies that are dominated by a narrow number of sectors, such as the sectors of natural resources, are economies that are subjected to a strong fluctuation and a strong volatility. The latest report of the World Trade Organization, Commodity Outlook, estimates that for the year 2025, the prices of commodities will drop by about 12 percent. And this drop will continue in 2026, where we estimate that the drop will be around 6 percent. So economies that are dominated by commodities will be subjected to a strong volatility," he explained.

Diversification, he continued, helps countries mitigate fiscal risks by increasing revenues from sources beyond oil, gas, and coal.

"So, to sum up, three good reasons for the importance of economic diversification are the urgency to create jobs, the question of reducing economic volatility, and also to ensure fiscal stability," concluded Ndiaye.

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